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We have before us two cases under the Extradition Act 2003 involving the parents of young children. In one, an Italian court has issued a European Arrest Warrant (EAW) in respect of both parents of three children now aged 11, 8 and 3, the parents having been convicted of a series of drug trafficking offences. The parents are both British nationals. In the other, a Polish court has issued EAWs in respect of the mother of five children aged 21, 17, 13, 8 and 3, who is accused of offences of dishonesty. The parents are both Polish nationals who have been living here since 2002, after the alleged offences were committed. No one seriously disputes that the impact upon the younger children of the removal of their primary carers and attachment figures will be devastating. The issue is the relevance of their interests in the extradition proceedings. The question certified by the Administrative Court in each of the two cases before us is as follows: Where, in proceedings under the Extradition Act 2003, the article 8 rights of children of the defendant or defendants are arguably engaged, how should their interests be safeguarded, and to what extent, if at all, is it necessary to modify the approach of the Supreme Court in Norris v Government of the United States of America (No 2) in light of ZH (Tanzania)? It is necessary, therefore, to consider what each of those cases decided. In Norris v Government of the United Sates of America (No 2) [2010] UKSC 9, [2010] 2 AC 487, the issue was the compatibility with the article 8 rights of both Mr and Mrs Norris of extraditing Mr Norris to the USA to face charges of conspiracy to obstruct justice. The couple were both in their mid sixties and had a long and close marriage which made them highly dependent on one another. The husband had a variety of health problems, including a history of prostate cancer and other ailments. The wife was suffering from either a major depression of moderate severity or a moderate depressive episode. The proceedings had caused her severe psychological suffering and mental deterioration which would be greatly worsened were her husband to be extradited. Lord Phillips gave the leading judgment, with which all other members of the court agreed, including those who added short judgments of their own. He agreed that there could be no absolute rule that any interference with article 8 rights as a consequence of extradition will be proportionate. On the other hand, it was certainly not right to equate extradition with expulsion or deportation in this context (para 51). It was instructive to consider the approach of the Convention to dealing with criminals or suspected criminals in the domestic context. Normally it is treated as axiomatic that the interference with article 8 rights consequent upon detention is proportionate (para 52). He rejected counsels submission that it was wrong to apply a categorical assumption about the importance of extradition in general. Such an assumption was an essential element in the task of weighing the public interest against the rights of the individual. It did not mean that the latter could never prevail, but the interference with human rights will have to be extremely serious if the public interest is to be outweighed (para 55). Thus: The reality is that it is only if some quite exceptionally compelling feature, or combination of features, is present that interference with family life consequent upon extradition will be other than proportionate to the objective that extradition serves. Instead of saying that interference with article 8 rights can only outweigh the importance of extradition in exceptional circumstances it is more accurate and more helpful, to say that the consequences of interference with article 8 rights must be exceptionally serious before this can outweigh the importance of extradition. (para 56) However, he also rejected the submission that the gravity of the offence could never be relevant. Usually it would not be. If, however, the particular offence is at the bottom of the scale of gravity, this is capable of being one of a combination of features that may render extradition disproportionate . (para 63). Furthermore, the impact upon family life was not to be considered only from the point of view of the person facing expulsion. In Beoku Betts v Secretary of State for the Home Department [2009] AC 115, the House of Lords concluded that, when considering interference with article 8, the family unit had to be considered as a whole, and each family member had to be treated as a victim. This also applied to extradition (para 64). Finally, Indeed, in trying to envisage a situation in which interference with article 8 might prevent extradition, I have concluded that the effect of extradition on innocent members of the extraditees family might well be a particularly cogent consideration. If extradition for an offence of no great gravity were sought in relation to someone who had sole responsibility for an incapacitated family member, this combination of circumstances might well lead a judge to discharge the extraditee . (para 65). Agreeing with Lord Phillips, Lord Hope also stressed that exceptionality is not a legal test and that extradition was not a special category which diminishes the need to examine carefully the way the process will interfere with the individuals right to respect for his family life (para 89). The public interest in extradition is a constant factor and will always be a powerful consideration to which great weight must be attached. Against this, those aspects of the article 8 right which must necessarily be interfered with in every case where criminal proceedings will be brought will carry very little, if any, weight. What is the extra compelling element that marks the given case out from the generality? (para 91). The only feature of this case which was not inherent in every extradition case was the delay (para 93). Lord Mance cautioned against formulations such as a high threshold, striking and unusual facts or exceptional circumstances. They could be read as suggesting that the public interest in extradition is the same in every case, when it is not, and also that the extraditee has some sort of legal onus to overcome the threshold, when in fact the competing public and private interests have to be weighed against each other (para 108). Further, such formulations may tend to divert attention from consideration of the potential impact of extradition on the particular persons involved . towards a search for factors (particularly external factors) which can be regarded as out of the run of the mill. Some circumstances which might influence a court to find that the interference was unjustified could hardly be described as exceptional or striking and unusual: Take a case of an offence of relatively low seriousness where the effect of an extradition order would be to sever a genuine and subsisting relationship between parent and baby, or between one elderly spouse and another who was entirely dependent upon the care performed by the former (para 109). He too favoured balancing the general public interest in extradition to face trial for a serious offence against the exceptional seriousness of the consequences which would have to flow from the anticipated interference with private and family life in the particular case (para 114). We can, therefore, draw the following conclusions from Norris: (1) There may be a closer analogy between extradition and the domestic criminal process than between extradition and deportation or expulsion, but the court has still to examine carefully the way in which it will interfere with family life. (2) There is no test of exceptionality in either context. (3) The question is always whether the interference with the private and family lives of the extraditee and other members of his family is outweighed by the public interest in extradition. (4) There is a constant and weighty public interest in extradition: that people accused of crimes should be brought to trial; that people convicted of crimes should serve their sentences; that the United Kingdom should honour its treaty obligations to other countries; and that there should be no safe havens to which either can flee in the belief that they will not be sent back. (5) That public interest will always carry great weight, but the weight to be attached to it in the particular case does vary according to the nature and seriousness of the crime or crimes involved. (6) The delay since the crimes were committed may both diminish the weight to be attached to the public interest and increase the impact upon private and family life. (7) Hence it is likely that the public interest in extradition will outweigh the article 8 rights of the family unless the consequences of the interference with family life will be exceptionally severe. I turn, therefore, to ZH (Tanzania) v Secretary of State for the Home Department [2011] UKSC 4, [2011] 2 AC 166. This was an expulsion case. The mother had been in the United Kingdom since 1995. She formed a relationship with a British citizen and had two children with him, born in 1998 and 2001, both of whom were British citizens and had lived here all their lives. They had a good relationship with their father, although the parents were now separated. Because of his health and other matters, their father would not be able to look after them if their mother were removed to Tanzania, so they would have to go with her. Their mother had an appalling immigration history. She had made three unsuccessful applications for asylum, one in her own name and two in false identities. Because of this she had twice been refused leave to remain under different policy concessions. An earlier human rights application had also been refused, as was the current claim, by the Secretary of State, the immigration appellate authorities, and the Court of Appeal. Before the case reached the Supreme Court, however, the Secretary of State had conceded that on the particular facts of the case removing the mother would be a disproportionate interference with the article 8 rights of the children. I gave the leading judgment, and all the other members of the court, including those who added short judgments of their own, agreed with it. The Strasbourg jurisprudence had adopted rather different approaches to the assessment of article 8 rights when considering the expulsion of, on the one hand, long settled foreigners who had committed criminal offences and, on the other hand, foreigners who had no right to be or remain in the country. In the former type of case, the best interests and well being of the children had been explicitly recognised as a factor by the Grand Chamber in ner v The Netherlands (2006) 45 EHRR 421, at para 58. In the latter type of case, this was not explicitly listed as a factor in, for example, Rodrigues da Silva, Hoogkamer v The Netherlands (2006) 44 EHRR 729, at para 39. Nevertheless, the court had in fact taken into account that it was clearly in the best interests of the child that her mother remain in the Netherlands. Significantly, the childs interests prevailed, despite the fact that the [mother] was residing illegally in the Netherlands at the time of [the childs] birth (para 44). In Neulinger v Switzerland (2010) 28 BHRC 706, the Grand Chamber had held that the Convention cannot be interpreted in a vacuum but must be interpreted in harmony with the general principles of international law (para 131). These of course included article 3.1 of the United Nations Convention on the Rights of the Child: In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. I pointed out that despite the looseness with which these terms are sometimes used, a primary consideration is not the same as the primary consideration, still less as the paramount consideration (para 25). Where the decision directly affects the childs upbringing, such as the decision to separate a child from her parents, then the childs best interests are the paramount, or determinative, consideration. Where the decision affects the child more indirectly, such as the decision to separate one of the parents from the child, for example by detention or deportation, then the childs interests are a primary, but not the paramount, consideration (para 25). As the Federal Court of Australia had explained in Wan v Minister for Immigration and Multicultural Affairs (2001) 107 FCR 133, at para 32: [The tribunal] was required to identify what the best interests of Mr Wans children required with respect to the exercise of its discretion and then to assess whether the strength of any other consideration, or the cumulative weight of other considerations, outweighed the consideration of the best interests of the children understood as a primary consideration. Although nationality was not a trump card it was of particular importance in assessing the best interests of any child (para 30). As citizens the children had rights which they would not be able to exercise if they moved to another country (para 32). We now had a much greater understanding of the importance of such issues in assessing the overall well being of the child: In making the proportionality assessment under article 8, the best interests of the child must be a primary consideration. This means that they must be considered first. They can, of course, be outweighed by the cumulative effect of other considerations. The countervailing considerations were the need to maintain firm and fair immigrations control, the mothers immigration history and the precariousness of her position when family life was created. But the children were not to be blamed for that (para 33). Lord Hope also stressed the importance of the childrens citizenship as a very significant and weighty factor in the overall assessment of what was in the childrens best interests (para 41) and, more fundamentally, that it would be wrong in principle to devalue what was in their best interests by something for which they could in no way be held responsible, such as the suspicion that they might have been conceived as a way of strengthening the mothers case for being allowed to remain here (para 44). international and domestic instruments: Lord Kerr put it even more strongly. It is a universal theme of both that, in reaching decisions that will affect a child, primacy of importance must be accorded to his or her best interests. This is not, it is agreed, a factor of limitless importance in the sense that it will prevail over all other considerations. It is a factor, however, that must rank higher than any other. It is not merely one consideration that weighs in the balance alongside other competing factors. Where the best interests of the child clearly favour a certain course, that course should be followed unless countervailing reasons of considerable force displace them (para 46). However the matter is put, therefore, ZH (Tanzania) made it clear that in considering article 8 in any case in which the rights of a child are involved, the best interests of the child must be a primary consideration. They may be outweighed by countervailing factors, but they are of primary importance. The importance of the childs best interests is not to be devalued by something for which she is in no way responsible, such as the suspicion that she may have been deliberately conceived in order to strengthen the parents case. Should Norris be modified? Mr David Perry QC, who appears for the respondent in each case, argues that nothing in ZH (Tanzania) was intended to depart from the approach to the assessment of proportionality in Norris. The extraditing judge may properly proceed on the basis that the best interests of the child are a primary consideration, but they are not the primary or the only consideration. The compelling public interest in extradition will ordinarily outweigh the best interests of the child, especially where the offence is serious. Indeed, there is no known Strasbourg case in which article 8 interests have prevailed against the legitimate aims of extradition, recognised by the court in Launder v United Kingdom (1997) 25 EHRR CD67 and Aronica v Germany, (Application No 72032/01) (unreported) given 18 April 2002. The court has recently stated that only in exceptional circumstances will an applicants private or family life outweigh the legitimate aim pursued by extradition: see King v United Kingdom, (Application No 9742/07) (unreported) given 26 January 2010, para 29; Babar Ahmad v United Kingdom (2010) 51 EHRR SE97, para 172. The appellants all argue that some modification, either of the approach in Norris or of its application, is required in the light of ZH (Tanzania). Mr Alun Jones QC, on behalf of the mother in the Italian case, argues that no distinction should be drawn between extradition and immigration cases. In Harkins and Edwards v United Kingdom (Application Nos 9146/07 and 32650/07) (unreported) given 17 January 2012, the Strasbourg Court drew no such distinction when considering whether a person would face a real risk of treatment contrary to article 3 if sent abroad (thus disagreeing with the majority in R (Wellington) v Secretary of State for the Home Department [2008] UKHL 72, [2009] AC 335). The same should apply in the context of article 8. It was wrong to treat the public interest in extradition as a constant factor or to conclude that the best interests of children could not generally override it. Mr Matthew Ryder QC, on behalf of the father in the Italian case, does not consider that it is necessary to modify the general principles in Norris, provided that primacy of importance is given to the childrens rights. But this may involve some changes in practice. Any infringement of the childrens rights which causes significant and serious damage to their development should be considered sufficiently exceptional to warrant the court considering carefully whether the infringement is justified. The court will need to examine carefully the extent of the public interest in extradition in the particular case and also whether there is any course of action which might reduce the damage to the childrens well being. Mr Edward Fitzgerald QC, on behalf of the mother in the Polish case, also argues that it is wrong to say that the public interest in extradition is always greater than the public interest in sound immigration control. It will vary. He also points out that the effects upon family relationships are far more extreme and immediate in extradition than are the effects of domestic prosecution and imprisonment. The extraditee may be sent a very long way away with little or no opportunity to maintain contact with the family left behind. The mitigating effects of wise prosecutorial or judicial discretion are less predictable when extradition is to a totally different judicial system. In the domestic context it is clearly established that a sentencing judge should have at the forefront of his mind the consequences for the children if their sole carer is sent to prison and consider whether on balance the seriousness of the offence(s) justifies their separation: see R (P) v Secretary of State for the Home Department [2001] EWCA Civ 1151, [2001] 1 WLR 2002, per Lord Phillips MR at para 79; R v Mills [2002] EWCA Crim 26, [2002] 2 Cr App R(S) 229; R v Bishop [2011] EWCA Crim 1446 and see also the South African case of M v The State [2007] ZACC 18. The Court in Norris did not have to consider the special rights of children when the extradition of their sole or primary carer will have a devastating impact upon their wellbeing. Mr Hugo Keith QC appears for the Official Solicitor as litigation friend of the children in the Italian case. He argues that the best interests of the children of extraditees should be considered first and foremost, and separately, and in a fact sensitive and meaningful way which pays regard to their individual circumstances. A conclusion that the undoubted public interest in extradition (which may not be of a wholly different order from that which arises in deportation and immigration cases) outweighs the best interests of the children should never be reached automatically or mechanically. Consideration should be given, where necessary, to any alternatives to extradition: for example, delaying the extradition of the primary carer parent; arranging for a mother to be placed in a mother and baby unit in the requesting state; seeking an assurance that speedy repatriation will be considered by both the requesting and the sending state; when available in a conviction case, arranging for the sentence to be served here; and, where possible in an accusation case, prosecuting the case here rather than in the requesting state. The court should also consider the alternative care arrangements for the child and satisfy itself that steps have been taken to protect the childs welfare if a sole or primary care giver is extradited. We have also had the benefit of valuable interventions by JUSTICE and the Coram Childrens Legal Centre. Mr Alex Bailin QC, for JUSTICE, emphasises that the requirement to interpret article 8 in the light of the Convention on the Rights of the Child (CRC) is of general application and is not limited to immigration cases. The CRC has also been enshrined in article 24 of the European Union Charter of Fundamental Rights. Article 24.2 requires that In all actions relating to children, whether taken by public authorities or private institutions, the childs best interests must be a primary consideration. Article 24.3 requires that Every child shall have the right to maintain on a regular basis a personal relationship and direct contact with both his or her parents, unless that is contrary to his or her interests. He points to recital 12 of the Framework Decision on the European arrest warrant and article 1.3, which provides that the Decision shall not have the effect of modifying the obligation to respect fundamental rights and fundamental legal principles, as enshrined in article 6 of the Treaty on European Union. Full and proper adherence to article 8 is thus entirely compatible with the EAW system. The executing state cannot rely upon the issuing state to have considered the childrens rights before issuing the warrant or to protect those rights after the warrant is executed. A bright line distinction between the public interest in extradition and the public interest in deportation could not be drawn (he too makes reference to Harkins and Edwards). As for domestic criminal proceedings, the interests of children were not infrequently a material consideration in sentencing and there were more options available to mitigate the consequences of separating parent and child. As to alternatives to extradition, articles 4.6 and 5.3 of the Framework Decision, which permit refusal to execute a conviction EAW if the sentence is to be served in the UK, or the conditional execution of an accusation EAW, have not been transposed into UK law. But it would be possible to refuse to execute an EAW, indicating that the childrens article 8 rights currently prevent this, but would be unlikely to do so in the future. Most helpfully, he points out that further guidance on the application of Norris in cases involving dependent children is necessary, because later cases show that Norris has been wrongly interpreted so as to impose an exceptionality test and applied so as to set a threshold which is unattainable in practice. They reveal a reluctance to make a detailed assessment of the effect of extradition on each child and a failure to consider the childs best interests first. The examples he gives are (in chronological order): R (Stojkova) v District Court in Okresny, Slovakia [2010] EWHC 3532 (Admin), para 31; R (Antonovic) v Prosecutor Generals Office (A Lithuanian Judicial Authority) [2010] EWHC 2967 (Admin), paras 18 and 20; Budaj v District Court of Presnov, Slovak Republic [2011] EWHC 193 (Admin), para 14; R (Bartosiewicz) v District Court Warszawa Praga, Warsaw [2011] EWHC 439 (Admin), paras 7 and 9; B v District Court in Trutnov and District Court in Liberec [2011] EWHC 963 (Admin), paras 63 and 68; Irwinski v Regional Court in Bydgoswcz, Poland [2011] EWHC 1594 (Admin), para 8; Rzeczkowski v Provincial Court in Warsaw, Poland [2011] EWHC 1698 (Admin), paras 13, 15 and 16; Semen v Legnica District Court, Poland [2011] EWHC 1960 (Admin), para 7; Smuda v District Court of Poznan, Poland [2011] EWHC 2734 Admin), para 7. A similar approach can be detected in Kudzevica v Riga Circuit Court Latvia [2010] EWHC 3505 (Admin), paras 11 and 12, and R (Gorczowska) v District Court in Torun, Poland [2012] EWHC 378 (Admin), paras 11 and 12. After the oral hearing, the court was informed that the Strasbourg Court has granted interim relief under rule 39 of the Rules of Court (2009) in the Gorczowska case, as it had already done in the case of R (B) v Regional Court of Elbag [2010] EWHC 2958 (Admin): see EB v United Kingdom (Application No 63019/10) (unreported) given 28 February 2011. This indicates that the Court is at least prepared to consider that there may be circumstances in which extradition (in that case of a breast feeding mother) would be in breach of the article 8 rights of the family. JUSTICE does not argue that any of these cases was necessarily wrongly decided, rather that they are indicative of an approach which prevents the court from taking account of the welfare of children as it is required to do. In fact, Mr Bailin suggests that there are very few cases in which the right approach would have produced a different result. He has produced a list of 75 cases decided after Norris involving article 8 and dependent children. In only five of these was the prospective extraditee the sole carer and in only one was the extradition of both parents sought. But in only one (R (Cepkauskas) v District Court of Marijampole, Lithuania [2011] EWHC 757 (Admin)) was extradition refused, and then on grounds of delay and oppression rather than because of the rights of the children. In his written submissions on behalf of the Coram Childrens Legal Centre, Mr Manjit Gill QC argues that international human rights instruments, including the Universal Declaration of Human Rights and the UNCRC, have recognised the special and unique status of children. This involves not only a negative duty to avoid doing them harm but also positive obligations to promote their development into adulthood. In this they are different from adults, even vulnerable adults, because adults have passed the growing up stage while children need special attention in order to grow up. It is not just a matter of balancing the private rights of children against the public interest in extradition, because there is also a wider public interest and benefit to society in promoting the best interests of its children. Children are (as Latey J put it in In re X (A Minor)(Wardship: Jurisdiction) [1975] Fam 47, at 52) a countrys most valuable asset for the future. More than that, promoting their proper development is in the public interest in order to prevent their becoming the criminals of the future. In addition to article 3.1 of UNCRC, he draws attention to article 3.2: States Parties undertake to ensure the child such protection and care as is necessary for his or her well being, taking into account the rights and duties of his or her parents, legal guardians, or other individuals legally responsible for him or her, and, to this end, shall take all appropriate legislative and administrative measures. Norris concerned an adult couple and so the court did not, and did not have to, consider the special position of children. It could, and did, treat the interests to be balanced as the public interest in extradition and the individuals interest in their private and family life. There is, however, a strong public interest in the protection of children which makes their case different from that of adult family members, even adults who need support on health grounds. Discussion It will be apparent from the above that, for the most part, the parties do not criticise the principles laid down in Norris. But they make two points. First, they criticise the way in which those principles have been summarised and applied in subsequent cases. Some of those criticisms might apply whether or not there were any children involved. And second, they point out that Norris did not, and did not have to, consider the special position of children. These cases give the court the opportunity to fill that gap. Two main criticisms are levelled against the approach of the Administrative Court in these and other cases after Norris. The first is the bright line distinction between the public interest in extradition and the public interest in immigration control, exemplified by the observations of Laws LJ in the Italian case at [2011] EWHC 1145 (Admin): Expulsion and deportation are matters only of domestic policy (para 62), in which the striking of reasonable balances is an inherent feature of the policy itself (para 63); whereas extradition promotes a universal public benefit (para 62), which is systematically served by the extraditions being carried into effect (para 63). An even stronger view was taken by Silber J in B v District Court in Trutnov and District Court in Liberec [2011] EWHC 963 (Admin), at para 55, when he stated that It is clear that the approach of the courts to article 8 rights has to be radically different in extradition cases . because of the very important obligation of the state to ensure that those who are to be investigated, prosecuted or imprisoned for criminal offences are returned to those countries (emphasis supplied). It is not correct that the approach of the court to article 8 rights has to be radically different as between extradition and expulsion cases. The Extradition Act 2003 imposes a structured approach upon the court, so that it will already have considered the validity of the warrant (section 2), the identity of the person arrested (section 7), whether the offences are extradition offences (section 10), whether the various bars listed in section 11 apply, and conviction in absentia (section 20), before it gets to section 21. Section 21 requires the judge to decide whether the persons extradition would be compatible with the Convention rights and to discharge the person if it would not. In answering that question, the court would be well advised to adopt the same structured approach to an article 8 case as would be applied by the Strasbourg court. First, it asks whether there is or will be an interference with the right to respect for private and family life. Second, it asks whether that interference is in accordance with the law and pursues one or more of the legitimate aims within those listed in article 8.2. Third, it asks whether the interference is necessary in a democratic society in the sense of being a proportionate response to that legitimate aim. In answering that all important question it will weigh the nature and gravity of the interference against the importance of the aims pursued. In other words, the balancing exercise is the same in each context: what may differ are the nature and weight of the interests to be put into each side of the scale. There are differences between extradition and other reasons for expulsion. Thus, as Lord Judge points out (para 122), an extradition order may be appropriate where deportation or removal would not. In particular, extradition is an obligation owed by the requested state to the requesting state in return for a similar obligation owed the other way round. There is no comparable obligation to return failed asylum seekers and other would be immigrants or undesirable aliens to their home countries (which would sometimes be only too pleased never to see them again). But there is no obligation to return anyone in breach of fundamental rights. Furthermore, although domestic immigration policy does try to strike a balance between competing interests, article 8 typically comes into play when it has not done so. That is why an exceptionality test was disapproved in immigration cases in Huang v Secretary of State for the Home Department [2007] UKHL 11, [2007] 2 AC 167, just as it was later disapproved in extradition cases in Norris. Hence, as Lord Hope observed, there are [no] grounds for treating extradition cases as falling into a special category which diminishes the need to examine carefully the way the process will interfere with the individuals right to respect for his family life (para 89). The second main criticism of the approach in later cases is that the courts have not been examining carefully the nature and extent of the interference in family life. In focussing on some quite exceptionally compelling feature (para 56 in Norris), they have fallen into the trap identified by Lord Mance, tending to divert attention from consideration of the potential impact of extradition on the particular persons involved . towards a search for factors (particularly external factors) which can be regarded as out of the run of the mill (para 109). Some particularly grave consequences are not out of the run of the mill at all. Once again, the test is always whether the gravity of the interference with family life is justified by the gravity of the public interest pursued (see also Lord Wilson, at para 152). Exceptionality is a prediction, just as it was in R (Razgar) v Secretary of State for the Home Department [2004] UKHL 27, [2004] 2 AC 368, and not a test. We are all agreed upon that. These two points clarified, what more needs to be said about the interests of children? There appears to be some disagreement between us about the order in which the judge should approach the task. I agree entirely that different judges may approach it in different ways. However, it is important always to ask oneself the right questions and in an orderly manner. That is why it is advisable to approach article 8 in the same order in which the Strasbourg court would do so. There is an additional reason to do so in a case involving children. The family rights of children are of a different order from those of adults, for several reasons. In the first place, as Neulinger and ZH (Tanzania) have explained, article 8 has to be interpreted in such a way that their best interests are a primary consideration, although not always the only primary consideration and not necessarily the paramount consideration. This gives them an importance which the family rights of other people (and in particular the extraditee) may not have. Secondly, children need a family life in a way that adults do not. They have to be fed, clothed, washed, supervised, taught and above all loved if they are to grow up to be the properly functioning members of society which we all need them to be. Their physical and educational needs may be met outside the family, although usually not as well as they are met within it, but their emotional needs can only be fully met within a functioning family. Depriving a child of her family life is altogether more serious than depriving an adult of his. Careful attention will therefore have to be paid to what will happen to the child if her sole or primary carer is extradited. Extradition is different from other forms of expulsion in that it is unlikely that the child will be able to accompany the extraditee. Thirdly, as the Coram Childrens Legal Centre point out, although the child has a right to her family life and to all that goes with it, there is also a strong public interest in ensuring that children are properly brought up. This can of course cut both ways: sometimes a parent may do a child more harm than good and it is in the childs best interests to find an alternative home for her. But sometimes the parents past criminality may say nothing at all about their capacity to bring up their children properly. Fourthly, therefore, as the effect upon the childs interests is always likely to be more severe than the effect upon an adults, the court may have to consider whether there is any way in which the public interest in extradition can be met without doing such harm to the child. One thing is clear. It is not enough to dismiss these cases in a simple way by accepting that the childrens interests will always be harmed by separation from their sole or primary carer but also accepting that the public interest in extradition is almost always strong enough to outweigh it. There is no substitute for the careful examination envisaged by Lord Hope in Norris. How the court is to go about investigating the situation of the children is a question to which I shall return. In each of the cases before the court, the interests of the children have been fully investigated. In the Polish case, this was done by those representing the mother. In the Italian case, the children have had the benefit of separate representation by the Official Solicitor. I turn, therefore, to the facts of each case, beginning with the more straightforward Polish case. F K v Polish Judicial Authority The father, MF K, and the mother, AF K, were married in 1991. They are both Polish. They have five children. A, who is now 21, B, who is now 17, and C, who is now 13 years, were born in Poland before the family moved to this country in June 2002. D was born here on 17 February 2004, so is now aged eight, and E was born here on 14 August 2008, so is now aged three years and ten months. The whole family live together in a house where they have lived since December 2007. The father works as a builder. The mother looks after the family. They applied for permanent residence here before these proceedings were begun and were granted it in 2010. The mothers extradition is sought on two European Arrest Warrants. The first in time (EAW1 issued by the Gliwice Circuit Court) is dated 10 January 2006. It alleges that she, together with her husband, misappropriated clothing entrusted to her for sale to a value equivalent to 4307, between 19 June and 24 August 2001. The second (EAW2 issued by the Katowice Regional Court) is dated 9 July 2007. It alleges three offences: (i) falsifying customs documents in relation to an imported car between 17 November 1997 and 24 January 1999; (ii) seven instances of fraud involving a total equivalent to 1160 between 19 May and 12 June 2000; and (iii) a further instance of a similar fraud, on 21 June 2000. It appears from the further information obtained from the issuing judicial authorities that the bill of indictment in relation to the offences alleged in EAW2 of July 2007 was filed at court in May 2002. It is also said that she failed to appear at court in relation to the theft offences alleged in EAW1 of 10 January 2006 despite having been instructed to do so whenever required by the district public prosecutor on 10 June 2002. AF K denied this or that she and the children left Poland later that same month in order to escape prosecution. It is, as the District Judge observed, difficult to match some of the information received from Poland to the offences in the two EAWs, and some of it appears to relate to different matters. But having heard evidence from AF K, he made a clear finding that she fled in June 2002 to avoid prosecution and that she was a fugitive from justice (for the purpose of section 14 of the Extradition Act 2003). Domestic warrants for her arrest in Poland were not issued until 9 January 2003 in respect of the customs offence in EAW2 (by the District Court in Chorzw), until 7 April 2003 in respect of the fraud offences in EAW2 (by the District Court in Bytom), and until 29 March 2004 in respect of the theft offences in EAW1 (by the District Court in Racibrz). Further information (from the District Court in Bytom, via the Circuit Court in Katowice) in relation to EAW2 states that the police informed the (Bytom) court in May 2004 that she might be staying outside Poland. The request for EAW2 was made in April 2007, three years after that, and the warrant issued that July. Further information (from the Circuit Court in Gliwice) states that the request for EAW1 was made on 1 December 2005 and the EAW issued on 10 January 2006. The international search started in January 2006. EAW2 issued on 9 July 2007 was certified by SOCA on 14 April 2008. EAW1 issued on 10 January 2006 was certified on 2 September 2008. AF K was arrested under both warrants on 10 March 2010. Senior District Judge Riddle ordered her extradition on 28 September 2010. Ouseley J dismissed her appeal to the Administrative Court on 19 January 2012: [2012] EWHC 25 (Admin). The District Judge had before him a report on the family from Dr Ruth Armstrong, a consultant clinical psychologist; Ouseley J had before him a second report from Dr Armstrong, to which was attached some literature on attachment (Dr Peter S Cook) and on the effect of parental incarceration on young children (Ross D Parke and K Alison Clarke Stewart). Both reports were based on long visits to the home, interviews, observations, psychological tests and questionnaires and information provided by the childrens school and college. In her first report, dated 2 July 2010, Dr Armstrong stated that all the children had good health and good emotional and social adjustment. The mother appeared to be at the heart of the family, providing loving warmth and nurturing of a high calibre. If she were extradited, the childrens secure attachment to her would be ruptured and many negative consequences are likely to ensue. D and E, in particular, were likely to be devastated by the loss of their mother which would be very likely to have severe detrimental consequences psychologically and for their developmental trajectories. They were reported to have reacted very badly to the mothers short absence after her arrest in 2010. The father had shown evidence of significant emotional disturbance (and even suicidal traits) on psychological testing. Without his wife he would have to give up work to look after the children and this was likely to lead to severe and crippling depression. Returning to Poland would cause a significant upheaval and damage to the older childrens education. She concluded that the potential psychological damage all the other six members of the family would be very likely to suffer and the educational setbacks for each of the children, were [the mother] to be deported, would be extreme. In her second report, of 15 July 2011, she remained very concerned for the welfare of the family should the mother be extradited. The father had had to give up work because of an earlier accident. His physical mobility had deteriorated markedly (although his physical symptoms might in part have a psychosomatic origin) and he might even be more psychologically fragile than before, although he was trying to create a good impression, and determined to keep the family together. The enormous attachment of the children to their mother means that they might be plummeted into what could be paralysing grief. There could be many risks to the young children. Apart from grief and loss, the two youngest, who are girls, would be looked after only by older males, which could pose risks in terms of inappropriate relationships developing as the family members seek comfort normally provided in an entirely appropriate way by the presence of a nurturing and competent mother and wife. There was also evidence that if extradited the mother would be detained in prison pending trial and would not be able to have her youngest child, who is still under four, with her in prison. Mr Fitzgerald drew attention to two Strasbourg decisions in which the length of pre trial detention in Poland had been held to violate article 5.3: Dyller v Poland (Application No 39842/05) (unreported) given 7 July 2009; Kumenda v Poland (Application No 2369/09) (unreported) given 8 June 2010. Discussion If we were only concerned with the three oldest children, things would be different. They would be very unhappy at the loss of their mother, and might suffer some educational setbacks as a result, but they would be able to get on with their lives with the help of their father, who is determined to keep the family together. They would be able to recall their mother while she was away, even if they were only able to see her rarely, and they would be able to look forward to her coming back. As Dr Armstrong points out, the consequences for the two youngest would be far more severe. E, in particular, would be deprived of her primary attachment figure while she is still under the age of four. Such losses can have lasting effects upon a childs development and it does not appear that her father would have the psychological resources to fill the gap or that help would be available from the social or other services to support the family. The eight year old would also suffer from the loss of her mother, might well blame herself for it, and would find it hard to look forward to her return. It is not an abuse of language to describe the effects upon these two children as exceptionally severe. Indeed, Ouseley J accepted without reservation that the impact on the two younger children would be very severe: para 44. Against that, there is the constant factor of the need to honour our obligations under the Framework Decision. But as these are subject to the need to respect fundamental rights, they do not absolve us of the duty to weigh the competing interests as required by article 8. The various offences for which extradition is sought are by no means trivial. But they are offences of dishonesty which can properly be described as of no great gravity. Furthermore, we can take notice of the fact that no prosecutorial discretion is exercised by the Polish authorities when deciding whether or not to apply for the issue of an EAW, no matter how comparatively minor the offences, how much time has elapsed since they were committed, and how respectable the life which the offender has led since then. The European Commission has criticised the lack of a proportionality check in some states before issuing an EAW: it is not suggested that an article 8 proportionality check is required, but that there should be some relationship of proportionality between the offending and the consequences. The delay in this case has been considerable. There was some delay between the offences themselves and the bringing of the Polish prosecutions; there was further delay between the appellants failure to attend court in Poland and the issue of the domestic arrest warrants; even further delay between the issue of the domestic arrest warrants and the requests for the EAWs; and again between the issue of the EAWs and the appellants arrest in March 2010. While the district judge did find that the appellant fled Poland in order to avoid prosecution, and thus was not entitled to rely upon passage of time as a bar for the purpose of section 14 of the 2003 Act, the overall length of the delay is relevant to the article 8 question. Whatever the reasons, it does not suggest any urgency about bringing the appellant to justice, which is also some indication of the importance attached to her offending. During that lapse of time, the appellant and her family have made a new, useful and blameless life for themselves in this country. Two more children have been born. D must have been conceived approximately eleven months after the family arrived here and E more than four years after that. At neither time did the parents have any reason to believe that the Polish authorities were seeking the mothers return. Whatever the relevance of deliberately conceiving children in order to strengthen the case against extradition (which does arise in the next case) it does not arise on the facts of this case. In all the circumstances, the public interest in returning the appellant to face trial and sentence upon the charges in these two warrants is not such as to justify the inevitable severe harm to the interests of the two youngest children in doing so. I would allow this appeal. HH and PH v Deputy Prosecutor of the Italian Republic, Genoa PH, the father, and HH, the mother, were married in 1996. Both are British citizens but HH was born and bred in Morocco, where they met while PH was working as a long distance lorry driver all over Europe. They bought a house in Spain in 2000. Their first child, X, was born in England on 23 November 2000, so he is now aged 11. The events which led to these proceedings took place between April and September 2003, when X was only two, and his mother was pregnant with their second child. The parents were arrested in Italy on 23 September 2003. HH, then 8 months pregnant, was released under house arrest on 20 October 2003. The child, Y, was born in Italy on 21 November 2003, and so she is now aged eight. HH left Italy in July 2004 in breach of the conditions of her release. PH remained in prison in Italy until the custody time limit ran out and he too was conditionally released on 7 October 2004. He too left Italy shortly afterwards, also in breach of his conditions. Both were formally declared to be unlawfully at large on 15 March 2005. Having heard their evidence, District Judge Evans found (in his judgment of 25 March 2009) that both HH and PH had quite deliberately breached their bail and fled Italy in the full knowledge that they were to be tried for very serious offences. They were arrested for two offences connected with drug trafficking: (1) criminal association for the purpose of drug trafficking, which carries a sentence of between ten and 24 years imprisonment; and (2) a specific act of importation, transportation, possession and supply of drugs, aggravated by being committed by more than three persons, which carries a sentence of between three and nine years imprisonment. As to (1), it was alleged that they had conspired with one another, with HHs uncle Hassan El Faria, with a courier Brian Stott, with Hassan El Farias wife, Virginia Donnarumma, with Abderrahin Fadlam, and with other people as yet unknown, to commit multiple offences of smuggling hashish. The uncle was the point of contact with the suppliers; PH and HH received the drugs, recruited the couriers and took part in the importation; Fadlam received the drugs in Italy and was in charge of trading them there; and Donnarumma was in charge of trading the proceeds and sending it back to her husband to finance further operations. These operations continued from April to September 2003. As to (2), it was alleged that they had imported over 205 kilos of hashish into Italy on 23 September 2003. It was also alleged that there had been six earlier such episodes involving similar quantities, totalling some 1613 kilos in all. These formed part of the subject matter of the later convictions, but not of the original remands in custody. The Italians had been intercepting their telephone calls and monitoring the car, rented in Spain, in which they were travelling. This showed that they were in repeated contact with the courier, Stott, guiding him into the hotel car park where they met. The couriers car had been hired by him in Italy, but paid for by PH, and the car was carrying false English number plates. After they left the car park, heading for France, Stott was arrested with the drugs. They both phoned him to find out what had happened. Once they found out that he had been arrested, they both phoned their accomplices, in particular Hassan, to explain what had happened. Hassan advised HH to take advantage of her pregnancy to avoid pre trial custody and escape from justice. On 17 December 2004, they were both convicted in the first instance court in their absence and sentenced to 14 years imprisonment. The first European Arrest Warrants (EAWs) were issued on 11 January 2006. The first instance judgment was confirmed in the second instance in the Court of Appeal in Genoa on 19 April 2006. The EAWs with which these proceedings began were issued on 1 August 2008. These were still accusation warrants, because the proceedings were not yet finally over. There was a further appeal to the Court of Cassation, which on 28 April 2009 confirmed the sentence on HH which then became final. A conviction European Arrest Warrant was therefore issued in respect of HH on 23 October 2009. This states that she has nine years, six months and 21 days of her 14 year sentence still to serve. However, the conspiracy case against PH was sent back to the Court of Appeal in Genoa to determine whether he had been organiser and instigator of the conspiracy or a mere participant. On 25 January 2010, a conviction EAW was issued in respect of PH for the seven specific importation offences, which states that he has four years of imprisonment of the original eight year sentence still to serve. On 9 February 2010, the Court of Appeal determined that he had been a lesser participant in the conspiracy and imposed a (total) sentence of nine years and four months imprisonment which became enforceable on 1 February 2011. On 21 September 2011, therefore, a new conviction EAW was issued in respect of all eight offences, which states that he has eight years and four months still to serve. According to the calculations of his legal team, however, if the collective clemency law and the potential reduction for good behaviour are taken into account, this would come down to four years and 22 days. Proceedings first began in this country on 16 July 2008, after PH was arrested pursuant to the first EAW of 11 January 2006. He was arrested again on 4 August pursuant to the EAW dated 1 August 2008. HH was arrested pursuant to the EAW dated 1 August on 8 August 2008. The proceedings have been continuing ever since. Both parents have been on bail most of the time since their arrest. Between one and two months after her arrest, HH must have become pregnant with their third child, Z. Z was born on 10 June 2009 (it is said in one of the reports that she was born one month prematurely because of her mothers diabetes) and so is now just three years old. District Judge Evans commented that It must remain an open question whether Zs conception was (irresponsibly and selfishly) intended to provide a useful argument in support of HH and PHs opposition to the extradition request (Judgment of 14 April 2010, para 44). But in the Divisional Court, Laws LJ considered this comment to be unwarranted (para 38). After a number of vicissitudes, the hearing before the District Judge was fixed for 20 February 2009. Both parents gave evidence, but it was adjourned part heard. They were told by counsel that things were not looking good and extradition was likely. This was an accurate prediction as District Judge Evans ruled on 25 March 2009 that he would have ordered extradition against both had it not been for HHs illness. He later observed that on 20 February she was able to give coherent if untruthful evidence and was not suffering from any significant ill health (judgment of 14 April 2010, para 45). HH collapsed shortly after the hearing, was taken to A & E in London, transferred to a psychiatric hospital and then admitted to a psychiatric ward in Nottinghamshire, initially under section 2 of the Mental Health Act 1983. She remained there voluntarily until discharged on 17 or 18 June 2009, a week after the birth of her younger daughter. From March 2009 she was unfit to attend court. Eventually, on 14 April 2010, District Judge Evans ordered the extradition of HH on the conviction EAW, and on 21 June 2010, he ordered the extradition of PH on both the accusation and the first conviction warrants. Their appeals were dismissed by Laws LJ in the Administrative Court on 11 May 2011: [2011] EWHC 1145 (Admin). In relation to the mothers mental health, there were reports from her consultant psychiatrist, Dr Meats, dated 20 March 2009 and 3 April 2009, finding no evidence of any psychotic illness, diagnosing a conversion disorder in association with repeated court appearances, for which a small dose of anti anxiety medication had been prescribed, and predicting that her condition would persist and become long term, but that a decision one way or the other would allow resolution of her anxiety symptoms. There was a report commissioned by the Crown Prosecution Service, from Dr Philip Joseph, dated 22 May 2009. He agreed that she had suffered an acute stress reaction after court on 20 February, but other forms of mental illness had been excluded and she was not suffering from mental disorder of a nature or degree which would prevent her extradition. There was a report commissioned by HHs solicitors, from Dr Seyyed Nabavi, dated 8 August 2009. He diagnosed post traumatic stress disorder with co morbid depressive and anxiety disorders of moderate to severe severity, precipitated by her experience of arrest and being treated inappropriately in Italy, and continued by the lengthy legal proceedings. She was unable to look after herself or her children. The prognosis was moderately poor and she was currently unfit to plead and stand trial. In a follow up report on 26 October 2009, Dr Joseph strongly disagreed with these diagnoses. He maintained the diagnosis of an acute stress reaction to the fear of being extradited to Italy and being separated from her children. If there were no court proceedings she would have no difficulty living her life and managing her family. In November 2009, there was another brief admission to hospital under section 2 of the Mental Health Act 1983, after HH walked blindly (according to PH) into the road shortly before they were due to appear in court on 10 November 2009. A follow up report from Dr Nabavi, dated 31 December 2009, maintained the view that her current mental disorder, a dissociative (conversion) disorder, was a reaction to her arrest in Italy, maintained by the continuing court proceedings. He ruled out malingering or factitious disorders and remained of the view that she was unfit to look after her family or take part in the proceedings. These reports were all before District Judge Evans on 14 April 2010. There was also a letter from Gabrielle OBrien, a mental health support worker who had been regularly visiting the home, where she found that HH appeared to be extremely unwell and withdrawing into herself on each visit, lying on a mattress and apparently unaware of her husband, her children or visitors. A witness statement from HHs solicitor described the pitiful condition in which he had found her when visiting the home in September 2009 and the unedifying events when she was (eventually) arrested on the conviction warrant and brought to court in London in February 2010. It had not proved possible to transfer her from the security van into court and the hearing had to be held in the car park. Incontinence was a feature on both occasions. The district judge heard evidence from both Dr Nabavi and Dr Joseph and found Dr Joseph the more compelling. He concluded that HH had a real condition, which she was not putting on only when she was in public, but that it appeared to be self induced and not as severe as suggested by Dr Nabavi. He had little doubt that she would recover quickly if not extradited. Similarly the realisation that the game was up could also assist in her speedy recovery. There was therefore no medical condition rendering her extradition inappropriate and it would not be oppressive to order it (judgment of 14 April 2010, paras 58 59). When the appeal came before Laws LJ, there were fresh psychiatric reports. Dr Samantha Dove was instructed by HH, whom she had visited at home. In her report of 6 December 2010, her opinion was that HHs presentation was consistent with the initial diagnosis of dissociative conversion disorder, but that the symptoms of a moderate to severe depressive disorder had now become more marked. It was likely that the stress of the current legal situation had precipitated her mental illness. This was of a nature or degree to warrant her detention in hospital as she was unable to look after herself, including taking her medication and maintaining personal hygiene. She was not fit to plead or attend court. Dr Joseph provided a further report dated 20 January 2011. He had read the records of HHs short readmission to hospital in November 2009, after which it had been concluded that her presentation was due to a current life situation rather than a mental illness. He had also discussed the case with Dr Dove, and concluded that it would not help for him to see HH again. He disagreed with the diagnosis of dissociative disorder and also that her disorder warranted detention in psychiatric hospital or that she was unfit as opposed to unwilling to take part in the proceedings. Laws LJ heard brief evidence from both doctors. He also took into account the observations of Dr Pettle, the psychologist (instructed by the Official Solicitor) who had visited the family to assess the children. The childrens comments suggested that HHs withdrawn state persisted within the family and not just when professionals visited. He considered that there was a third explanation for HHs behaviour pattern, not that it was all a deliberate pretence, or that it was the product of a mental illness, but that it was an extreme reaction to the extradition proceedings (hardly different from the notion of an unconscious fabrication spoken of by Dr Dove) (paras 44 to 46). If so, it was perhaps more likely to be resolved once the proceedings were over. Her mental condition was not such that it would be oppressive to extradite her. Further, that is not to say that I would have found the other way had I concluded she was suffering from a mental illness. There was every reason to conclude that she would be properly looked after in Italy (para 47). (It may be that Laws LJ had in mind psychosis when he referred to mental illness, for many perhaps most psychiatrists would label the mothers condition an illness.) By the time of that judgment (in May 2011), following a suggestion made in Dr Doves report, HH had already been referred by her GP to the neuropsychiatry unit at the Maudsley Hospital, where she was admitted on 11 June 2011. This Court has a report from Professor Anthony David dated 30 January 2012. He had prompted an unannounced visit in February from Gabrielle OBrien, who found HH in the kitchen talking (and not lying mute on a mattress in the lounge). HH had taken a significant overdose of diazepam and citalopram on 9 May 2011 (perhaps connected with or in anticipation of the High Court judgment handed down on 11 May 2011). On admission, she walked with a pronounced stoop, was very tearful, had difficulties with sleep, refused meals at times, showed very poor levels of self care and personal hygiene, with episodes of incontinence, showed little interest in ward activities but apparent signs of severe memory difficulties and an inability to perform routine tasks such as boiling a kettle. Her very poor performance in psychometric testing showed that she was not engaging with the tasks. Professor Davids opinion is that her initial presentation was characterised in part by regressive and pseudo demented behaviour which though variable to an extent, was persistent and highly dysfunctional. This may have been feigned or a gross exaggeration given the close temporal relationship between the onset of the disorder and court appearances connected with extradition to Italy. Once they had been able to get her to relinquish these behaviours, there was revealed a clear and genuine phobic anxiety disorder (agoraphobia with panic) associated with busy streets, policemen and women, and sirens and alarms obviously relating to her dread of extradition and separation from her children, together with an underlying affective component of low mood and hopelessness. His view is that there was a strong element to the regressive behaviour which was under conscious control but that once HH had sunk into this state it took on a life of its own. Given that there was a background of low mood and fear, complicated perhaps by a reawakening of adverse childhood experiences, it was impossible for her to simply snap out of it. The behaviours then became habitual and ingrained. It had taken three months in a specialist unit to overcome this. Further court appearances would cause major disruption in her mental state. He is convinced that the profound overt distress they would cause would soon become intractable and she would end up once again in a totally dependent and dilapidated condition. She would resist extradition and any attempt to force her to return to Italy under any circumstances would result in a catastrophic collapse. Following the proceedings in the Magistrates Court, the Official Solicitor was permitted to file evidence and make submissions on behalf of the children in the Administrative Court. Dr Sharon Pettle, a clinical psychologist, prepared a report dated 13 September 2010. X, then nearly ten, generally appeared to be a well adjusted boy, sensitive and caring, with a strong bond with his father, but he was highly anxious about the deterioration in his mothers functioning, and has no clear explanation of what is wrong. Y, then nearly seven, was a bright and articulate child who did not express anxiety about her mothers condition, and whose strongest relationship was with her father. Z, then 15 months old, was meeting all her developmental milestones and clearly looked to her father as her primary attachment figure. It was inevitable that separation for years from one or both parents would cause the children intense and long lasting distress. Being left in the sole care of their mother would be an intensely worrying experience unless she were to make an immediate recovery. Separation from their father would be acutely emotionally distressing for all the children, and their responses would vary in severity according to what other losses followed. If separated from their mother, X and Y would be likely to worry about her health and who was looking after her, but if they remained with their father, it seemed likely that he would go on looking after them well and offer them as much support as possible. To be suddenly faced with the departure of both parents, and a move to live with strangers is one of the most catastrophic events to befall any child, and represents a massive emotional and psychological challenge. The departure of both parents, even for children with some resilience, is likely to be an overwhelmingly painful experience, and their immediate reactions may be very similar to bereavement: over activity, profound sadness and distress, withdrawal and regression, anger and defiance, poor sleeping and eating, and a deterioration in their school performance. The research on children of imprisoned parents would suggest that X, Y and Z are all in a highly vulnerable group. Generally siblings should be kept together. X and Y would find it hard to understand if Z were to be cared for by their mothers family in Morocco and would worry about her. Worst of all would be if all three had to be separated, with Z in Morocco and X and Y in different foster placements. In an addendum report, dated 24 March 2011, based on an interview with PH who had brought Z with him, she described Z as a very happy and well adjusted two year old, secure enough in her attachment to her father to be able to spend time at playschool and with other familiar people. But from her fathers description, she had not formed a significant bond with her Moroccan grandmother while she was staying with the family. Based on school reports, the older children appeared to be showing signs of strain which were not apparent last year. Dr Pettle expected that they would be hopeful that their mother would return from her stay in the Maudsley Hospital more like the mother they remembered (and it would appear from Professor Davids report that such hopes have been fulfilled). If she were then to be removed to serve a prison sentence, this would be particularly difficult for them to accept. It was likely that Z would be extremely distressed at being uprooted from her family and going to live in Morocco, all her familiar routines disrupted and in a new culture with a different language spoken around her. If all the children were in foster care, there would be some advantage to all of them in being able to remain in touch with one another even if placement together were not possible. The Official Solicitor also prompted a report, dated 15 September 2010, from Gemma Manzoor, of the local Childrens Services department, who had been the childrens allocated social worker from August 2009 until June 2010. The reason for this was concern about the childrens welfare because of their mothers mental state. The case was closed in June 2010 because there were no issues about their fathers care of them. Were the extradition to go ahead, PH accepted that it might be difficult to place all three children together, so he had agreed to X and Y being looked after by the local authority, but was at that time hoping that Z would be looked after by HHs family in Morocco. However, as explained in the witness statement of the solicitor instructed by the Official Solicitor of 24 November 2010, the maternal grandmother did not feel able to look after any of the children, owing to her other responsibilities and her own ill health. Their solicitor then explored with PH whether there were other members of the family who might be able to look after the children. In his witness statement of 30 March 2011, he explains why none of the fathers four siblings or his three children by an earlier marriage is able to help. None of them has appropriate accommodation to take in three more children, all have jobs, and most have other children to look after. The solicitor has recently made further inquiries of the local authority, from which it is clear that they will not reopen the case until they are told that the parents are to be extradited, even if this means that there would then be only a very short time in which to make the arrangements. Thus the prospect of the children being placed together, and in an area close to where X and Y are at school, will not be known until the decision is made. It follows that no thought has been given to how the children will be able to keep in contact with their parents if they are extradited to Italy. Discussion Before Laws LJ, HH relied, not only on article 8, but also on section 25 of the Extradition Act, which permits the judge to discharge the person or adjourn the hearing if her physical or mental condition is such that it would be unjust or oppressive to extradite her. As by now she was wanted on a conviction warrant, the question was whether it would be oppressive (as opposed to unjust) to extradite her. Having heard the evidence described earlier, he concluded that it would not. The question certified for this court relates only to the article 8 question. It is open to the court to consider issues other than those certified: Attorney General for Northern Ireland v Gallagher [1963] AC 349. However, this court would not normally entertain an appeal on a question of fact or on the application of settled law to the facts of the case. It would be difficult for us to differ from the factual findings of Laws LJ, who heard as well as read the psychiatric evidence. His findings on the nature and causes of the mothers condition are in any event broadly consistent with Professor Davids report, although they do differ in their predictions as to the effect of extradition. That is not, however, a reason for us to differ from the conclusion reached by Laws LJ. He concluded that it would not be oppressive to extradite the mother in the condition she was then, before she had had the benefit of three months specialist treatment in the Maudsley. She is better now, and would be no worse than she was when Laws LJ reached his conclusion, even if she were to regress in the way predicted by Professor David. We cannot, therefore, reach any different conclusion under section 25. But we can, of course, take the mothers mental condition into account when we are considering the situation of the whole family under article 8. The principal focus of this appeal has been on the article 8 rights of the children, not of the adults. It is a very rare case indeed when the extradition of both parents is sought. The table prepared by JUSTICE contains only one other, apart from the case of BH and KAS v United States of America, which was heard along with this case (see Lord Advocate on behalf of Criminal Court of Lisbon, Portugal v JK and NF [2011] HCJAC 121, 9 December 2011). These are all young children, Z is just three and still at the age when the effect of breaking her most secure attachment will be severe, Y is also at a vulnerable age, and X appears to be less resilient than she. They have already had to cope with living with a mother who, on any view, has not been able to look after them properly since February 2009. The father has given up work to look after them all and by all accounts has done a very good job. They are happy and well adjusted children now, but the evidence is that separation for years from one or both parents would inevitably cause the children intense and long lasting distress. It would be akin to taking the children compulsorily into care. But whereas children are only taken compulsorily into care if they are already suffering or likely to suffer significant harm, these children have not so far suffered significant harm. On the contrary, they are doing well in difficult circumstances. It is the compulsory separation from their parents, and the move to live with strangers, which will do them harm; it is, in Dr Pettles words, one of the most catastrophic events to befall any child, and represents a massive emotional and psychological challenge. There is, of course, every incentive for parents in this position to fail to find or encourage other family members to take care of the children, so that they will have to be looked after by the local authority. But in this case we have the benefit of the enquiries made by the Official Solicitor, and it would appear that the family members whom the children know have good and genuine reasons for not being able to look after them if their parents are extradited. It is regrettable in the extreme that the local authority have apparently made no plans at all for where they will place the children if extradition is ordered. This means that no work has been done with the children to prepare them for this; that places will have to be found in a hurry; that it is quite likely that those places will be short lived; and it is also quite likely that they will be placed in separate foster homes. These too may well be short lived and unstable, not through any fault of the local authority, but because of the pressures under which they have to work. The state, however well meaning, is no substitute for the family. There has even been mention of the possibility that Z might be compulsorily placed for adoption, but Lord Wilson and I share the view that it is unlikely that a court would find that her welfare required it to dispense with parental consent in circumstances such as these. Evidently, too, no thought has been given by the local authority to how they will maintain contact with their parents while the parents are in prison in Italy. Yet such contact will obviously be essential for them. That harm would be much reduced if only one parent were to be extradited. If the mother were extradited alone, the children would no doubt grieve for her, and worry about her, but they have been used to her absence in hospital before. They have not been used to relying upon her for their day to day care and emotional support. Their father would be able to help them maintain contact with her. If their father were extradited alone, on the other hand, they would lose the mainstay of their lives to date. Z would lose her primary attachment figure. And we have been presented with no evidence that their mother is capable of looking after them alone. The plain fact of the matter, therefore, is that from the childrens point of view, the extradition of their father would be seriously damaging, but the extradition of their mother would not. Against all that there is, of course, the constant public interest in extradition and the gravity of the offences of which both parents have been convicted. We are not here dealing with comparatively routine crimes of dishonesty, but with a major drug smuggling conspiracy, persisted in over many months. As Laws LJ put it, the appellants were effectively caught red handed while escorting a consignment to its destination. The sentences imposed were lengthy, although possibly not as lengthy as the sentences which would be imposed for comparable offences here. Just as the harm to children will be greater if the father is extradited than it will be if the mother is extradited, it is also the case that the public interest in extraditing the mother is greater than the public interest in extraditing the father. The Italian courts have held that the mother played the greater part in the conspiracy and imposed a correspondingly longer sentence upon her. She fled the country having spent only three weeks in prison. Although Dr Nabavi attributed her initial mental distress to the treatment which she had received in Italy, she was in apparent good health until the hearing on 20 February 2009. By contrast, although the father has now been convicted of both the conspiracy and the seven specific smuggling offences, he has been held to have played a lesser part in the conspiracy. He also spent a year in prison in Italy before his release. He has therefore paid some part, albeit only a small part, of the debt he owes to society on account of his very serious and persistent offending. Furthermore, he has so far evaded paying the rest of that debt by breaching the conditions of his release. But the point urged most strongly upon us on his behalf is that his lawyers researches suggest that, if the family were living in Italy, he would be allowed to serve most of the rest of his sentence at home in order to look after the children. They calculate that the total sentence of 9 years and 4 months would be reduced: (1) to 6 years and 4 months, because of the Collective Clemency Bill, Law 214/06, which reduces all sentences for offences committed before 2 May 2006 by three years; then (2) to 5 years and 3 and a half months, because of the time already spent in prison; then (3) to one year and 27 days, because of the Prison Reform Law No 354 of 26 July 1975, which allows sole carers of young children who have served one third of their sentence to serve the remainder on home detention; and finally (4) to 10 months, because of the potential reduction (of 45 days per six months) for good behaviour. We have looked at the laws in question but have no expert evidence as to how they would operate in a case where the primary carer was the father rather than the mother. The position is not, however, disputed by the respondent. Thus, it is argued, if the family were living in Italy, the Italian state would not consider it in the public interest for this father to serve more than ten more months in a prison. They would prioritise the interests of his children over the serving of his sentence. It is wrong, therefore, to conclude that the public interest requires him to be sent back to Italy to serve a further four years and 22 days in prison. Against that, of course, is the fact that the Italian authorities have issued these warrants to secure his return. In common with the other members of this court, I have found the case of PH the most difficult of all the five parents in the three cases with which we are concerned. There is no doubt that the offences of which he has been convicted are very serious indeed. They are the sort of cross border offending in which international co operation is particularly important. If we were concerned only with the two older children, I would have concluded that these considerations were sufficiently weighty to justify the interference with their lives. They are old enough to retain memories of their father, and to understand that he will come back to them one day, and they would have one another. There is a better chance that they would be found a foster placement together, or even that other members of the family would be persuaded to step in after all. But Z is in a different situation. She is still at the most vulnerable age. And her presence makes finding satisfactory placements to keep the children together more difficult. It is troubling that Z was conceived so very soon after the parents were arrested on the EAWs. No court wishes to send a message that drug smugglers or other serious criminals might escape extradition by getting their partners pregnant. However, the district judge declined to make a finding to that effect, despite the generally unfavourable view that he took of the parents evidence and the information from Italy that the mother had been advised to take advantage of her earlier pregnancy to escape from justice. Laws LJ described his remark that it remained an open question as unwarranted. We must therefore approach this particular case on the basis that it has not been shown that this was a deliberate attempt to improve their position in the proceedings. If there had been such a finding, what relevance would it have had? Z did not ask to be born and is in no way to be blamed for her parents conduct. But it would have made the parents offending behaviour even more serious than it already was: it is an act of some wickedness deliberately to bring a child into the world in an attempt to evade justice. It would have added to the weight on one side of the scales, while in no way diminishing the weight to be given to the childs interests on the other. The circumstances in this case can properly be described as exceptional. The effect upon the children, but Z in particular, of extraditing both their parents will be exceptionally severe. The effect of extraditing their mother alone would not be so severe and is clearly outweighed by the public interest in returning her to Italy. But the same cannot be said of the effect of extraditing their father. I have, not without considerable hesitation, reached the conclusion that it is currently so severe that the proportionality exercise requires the court to consider whether it can be mitigated. If he is discharged in the current proceedings (and in these I would include the proceedings under the warrant issued in September 2011), it will remain open to the Italian authorities to consider whether to issue another warrant in the future, when the effect upon the children will not be so severe. In doing so, they would no doubt wish to consider whether the spirit, if not the letter, of the Prison Reform Law of 1975 reduces the public interest in having him return to Italy to serve the balance of his sentence, in circumstances were, if it were an Italian family, he would be able to serve it at home looking after his children. We do not know whether this consideration was present to the minds of the authorities when the warrants were issued. Left to myself, therefore, I would have struck the balance in that way in this very unusual case and discharged PH in the current proceedings. Postscript: Conviction in absentia Mr Jones sought to raise a further point on behalf of HH. Section 20 of the 2003 Act has not been amended to take account of the amendments to the 2002 Framework Decision made by the Framework Decision of 2009 (2009/299/JHA), which required implementation by 28 March 2011 (with a possibility of delayed implementation by March 2014). This adds a new article 4a to the Framework Decision, permitting the executing authority to refuse to execute an EAW if a person was convicted in her absence, unless she was unequivocally made aware of the date and place of the trial. The EAW in question was issued before the 2009 Framework Decision took effect and does not state that HH was unequivocally made aware of the date and place of her trial. Were this to raise a discrete point of law as to the alleged non implementation of the 2009 Framework Decision in UK law, it would in my view be quite inappropriate for this court to consider it. It has not been certified as a point of law of general public importance and it has not been fully explored in the arguments before us. Rather, the point has been argued as a technical matter concerned with the content of the EAW. It is difficult to believe that HH has been the victim of a serious injustice in this case, as she was represented by lawyers throughout the Italian proceedings, who clearly pursued every avenue of appeal on her behalf, while she had deliberately deprived herself of any additional advantage that presence at those proceedings might have given her. Indeed, given the circumstances of the arrest and the nature of the evidence against her, it is perhaps difficult to envisage what that advantage would have been. For the same reasons, it is difficult to see what this factor adds to the strength of the article 8 case on her behalf. Procedure If the childrens interests are to be properly taken into account by the extraditing court, it will need to have some information about them. There is a good analogy with domestic sentencing practice, although in the first instance the information is likely to come from the parties, as there will be no pre sentence report. The court will need to know whether there are dependent children, whether the parents removal will be harmful to their interests and what steps can be taken to mitigate this. This should alert the court to whether any further information is needed. In the more usual case, where the person whose extradition is sought is not the sole or primary carer for the children, the court will have to consider whether there are any special features requiring further investigation of the childrens interests, but in most cases it should be able to proceed with what it has. The cases likely to require further investigation are those where the extradition of both parents, or of the sole or primary carer, is sought. Then the court will have to have information about the likely effect upon the individual child or children involved if the extradition is to proceed; about the arrangements which will be made for their care while the parent is away; about the availability of measures to limit the effects of separation in the requesting state, such as mother and baby units, house arrest as an alternative to prison, prison visits, telephone calls and face time over the telephone or internet; and about the availability of alternative measures, such as prosecution here or early repatriation. Some of this information should be available from the parents, but the court may also wish to make a referral to the local Childrens Services for the childrens needs to be assessed under the Children Act 1989. If the children are to lose their sole or primary carer for any length of time, they may well have to be accommodated under section 20 of the 1989 Act and will almost certainly be children in need for the purposes of section 17(10) of that Act. In some cases, especially where there is a very young child or a child with health or developmental problems, it may be necessary to obtain a psychological or psychiatric assessment, as in fact was done in these cases. There is also the question of the childrens own views (or wishes and feelings) to consider. Article 12 of UNCRC provides: 1. States Parties shall assure to the child who is capable of expressing his or her own views the right to express those views freely in all matters affecting the child, the views of the child being given due weight in accordance with the age and maturity of the child. 2. For this purpose, the child shall in particular be provided the opportunity to be heard in any judicial and administrative proceedings affecting the child, either directly, or through a representative or an appropriate body, in a manner consistent with the procedural rules of national law. The United Nations Committee on the Rights of the Child, in its General Comment No 12 on The Right of the Child to be Heard (CRC/C/GC/12, July 2009), points out that this is one of the fundamental values of the Convention and that there can be no correct application of article 3 if the components of article 12 are not respected. This poses a problem in extradition cases, as there is no obvious machinery for ascertaining the childs views, save by making the child party to the case or (at least in the Administrative Court) by allowing the child to file evidence or make representations under CPR rule 52.12A. The Official Solicitor accepts that this will rarely be necessary, as Laws LJ observed in the postscript to his judgment (para 68), but the Coram Childrens Legal Centre submit that this understates the strength of the obligation to hear the child. They point out that the childrens views and interests do not always coincide with their parents and that, especially in criminal cases, the parents may not be able properly to put the childrens views before the court. There is the further problem, exemplified in these cases, that a loving parent may be reluctant to discuss the problem with the children, hoping to spare them the distress and anxiety involved in what may be a long drawn out process. Indeed, that problem illustrates only too well how the interests of the parents and the children diverge. The parents may wish to fight extradition for as long as and as hard as they can, thus increasing the stress and the delay which, as section 1(2) of the Children Act 1989 tells us, is bad for children whose sense of time is so different from that of adults. I share the view of the Official Solicitor that separate legal representation of the children will rarely be necessary, but that is because it is in a comparatively rare class of case where the proposed extradition is likely to be serious damaging to their best interests. The important thing is that everyone, the parties and their representatives, but also the courts, is alive to the need to obtain the information necessary in order to have regard to the best interests of the children as a primary consideration, and to take steps accordingly. Conclusion dismiss the appeal in the case of Mrs HH. I would therefore allow the appeal in the cases of Mrs F K and Mr PH, but LORD HOPE I am grateful to Lady Hale for her careful description of the facts of these cases and for her analysis of the extent to which the approach of the Supreme Court in Norris v Government of the United States of America (No 2) [2010] 2 AC 487 needs to be modified in the light of ZH (Tanzania) v Secretary of State for the Home Department [2011] 2 AC 166. I agree with her that the need to examine the way the process will interfere with the childrens best interests is just as great in extradition cases as it is in cases of immigration control. The context in which the exercise must be conducted is, of course, quite different and the nature and weight of the interests that are to be brought into the balance on each side will differ too. But I remain of the view which I expressed in Norris, para 89 that it would be wrong to treat extradition cases as falling into a special category which diminishes the need to examine carefully the article 8 issues that the separation of the parents from the children will give rise to. As Lady Hale says in para 33, this involves asking oneself the right question and in an orderly manner, following the example of the Strasbourg court. That having been said, each case will depend on its own facts and some cases will be more easily resolved than others. An exploration of the theoretical basis for the exercise can only carry one so far. Ultimately it will come down to the exercise of judgment as to where the balance must be struck between what Lord Wilson has described in para 150 as two powerful and conflicting interests. The facts are fully before us, and so are the factors that must be weighed in the balance. I agree with Lady Hale that the public interest in returning Mrs F K to Poland is not so great as to justify the severe harm that this would cause to the two youngest children. The offences of dishonesty that are alleged against her, while not trivial, are relatively minor and certainly not of the kind that could be described as seriously criminal. There has been a conspicuous delay on the part of the prosecuting authorities. The welfare of these children would be at serious risk if their mother were to be removed from them. For these and all the reasons that Lady Hale gives I too would allow this appeal. The offences of which PH and HH have been convicted are of a quite different kind. We are dealing in their case with serious professional cross border crime involving trading in narcotic drugs which there is an international obligation to suppress. As Lord Judge says (see para 137), there are very strong reasons of public policy that persons who are accused or found guilty of such crimes and who break their bail conditions abroad should not be permitted to find a safe haven in this country. I agree with Lady Hale (see para 79) that the part the mother HH played in the conspiracy was such that the effect on her children is clearly outweighed by the public interest in returning her to Italy. So I too would dismiss her appeal. This leaves the case of the father PH. Like Lady Hale, I have found this by far the most difficult of all the cases that are before us, including those of the parents in BH and KAS v Lord Advocate [2012] UKSC 24. For the reasons she has explained, the effects that the extradition of both parents would have on their children, and on the youngest child Z in particular, are likely to be deeply painful and distressing and the long term effects very damaging. Such steps as might be taken to minimise these effects and ensure that the children will be adequately cared for are unresolved and are likely to remain so until extradition takes place. The uncertainty that this creates increases ones deep sense of unease. The circumstances can, as Lady Hale puts it in para 79, properly be described as exceptional. To accord them that description is, of course, not the end of the exercise. It cannot, in itself, be the test: see Norris, para 89. What then are the factors on the other side of the balance which would justify the fathers extradition despite the effects that have been described? Are the very strong reasons of public policy referred to in para 91 above as strong in his case as they are in the case of the mother? The fact that the father was not proved to have organised or promoted the trafficking enterprise shows that he played a lesser part in it. But I cannot attach much weight to this in view of the serious nature of the other offences of which he has been convicted. He too came to this country in breach of his bail conditions. There is really not much to choose between the father and the mother in these respects. I was initially attracted by the argument that, if the family were living in Italy, the father would be allowed to serve most of the rest of his sentence at home so that he could look after the children. I was attracted too by the point that Lady Hale makes in para 79 that if extradition were to be refused now it would remain open to the Italian authorities to issue another warrant in the future when the effects on the children would not be so severe. But I have concluded that it is not open to us, as the requested court, to question the decision of the requesting authorities to issue an arrest warrant at this stage. This is their case, not ours. Our duty is to give effect to the procedure which they have decided to invoke and the proper place for leniency to be exercised, if there are grounds for leniency, is Italy. If these factors are left out of account, as I think they must be, the decision remains a very difficult one. Taking everything into account, however, the balance seems to me to lie in favour of the fathers extradition. For all the reasons that Lady Hale gives, I very much hope that leniency will be exercised in his case having regard to the interests of the children. But that must be left to the authorities in Italy. I would dismiss his appeal. LORD BROWN I have read with great admiration the draft judgments respectively of Lady Hale in favour of allowing Mr PHs appeal and Lord Judge and Lord Wilson for dismissing it. Of all the many final appeals to which I have been party, truly I have found this to be one of the most troubling, each of the two powerful and conflicting interests (per Lord Wilson at para 150) at stake carrying such obvious weight. In the end, however, sorely tempted though I confess to have been to adopt Lady Hales approach, I am persuaded by the majority judgment that it would not be right to succumb. PHs criminality here was simply at too high a level of gravity to be outweighed by the interests of his children, heart rending though in the result their plight must be. For what seemed to me ultimately the yet more compelling reasons given by Lord Judge and Lord Wilson I too, therefore, would dismiss Mrs HH and Mr PHs appeals whilst (in common with the rest of the Court) allowing that of Mrs F K. LORD MANCE I have read to great advantage the draft judgments prepared by other members of the Court. Each case falls for consideration on its own facts, but, speaking generally, I agree that there may be a closer analogy between extradition and the domestic criminal process than between extradition and deportation or expulsion (Lady Hale, para 8(1)). One difference between extradition and deportation or expulsion is that the former process is usually founded on mutual international obligations (Lady Hale, para 31 and Lord Judge, paras 120 121). Both the UN Convention on the Rights of the Child dated 20 November 1989 and the Charter of Fundamental Rights referred to in article 6 TEU make the childs best interests a primary consideration in all actions concerning children. This means, in my view, that such interests must always be at the forefront of any decision makers mind, rather than that they need to be mentioned first in any formal chain of reasoning or that they rank higher than any other considerations. A childs best interests must themselves be evaluated. They may in some cases point only marginally in one, rather than another, direction. They may be outweighed by other considerations pointing more strongly in another direction. In some circumstances, it may be appropriate from the outset to identify competing primary considerations. Thus, in Wan (Wan v Minister for Immigration and Multicultural Affairs (2001) 107 FCR 133), cited by Lord Kerr in his para 145, the court found it appropriate to refer to the expectations of the Australian community (in an effective immigration policy) as one primary consideration and the separate interests of the children of the applicant for a visa as another (see para 33 in the judgment in Wan). Under article 8 of the European Convention on Human Rights, the ultimate substantive issue, where a right to respect for family life is engaged, is whether there exist factor(s) within article 8(2) outweighing that right. It is likely to be helpful at some point to address the issue specifically in those terms. But I do not think that any particular starting point or order can or should be imposed in the way in which courts address such an issue in the context of extradition. On this I agree with Lord Judge (para 126) and Lord Wilson (para 155). So long as it is clear that the issue has in substance been addressed and answered, that is what matters, rather than how or in what order the judge has expressed him or herself. At root, therefore, what is required is a balancing of all relevant factors in the manner called for by the Supreme Courts decision in Norris v Government of the United States of America (No 2) [2010] UKSC 9, [2010] 2 AC 487. The Courts subsequent decision in ZH (Tanzania) v Secretary of the State for the Home Department [2011] UKSC 4, [2011] 2 AC 166, as explained by Lady Hale in para 15 of her judgment on the present appeal, emphasises the importance of any relevant childs interests as a primary consideration, and is consistent with all that I have already said. Taking the present appeals, I entirely agree with and have nothing to add to Lady Hales reasoning on and disposition of the appeal in F K v Polish Judicial Authority. Like other members of the Court, I have found the appeal in HH and PH v Deputy Prosecutor of the Italian Republic, Genoa much more troubling. The difficulty is not just that the considerations on each side are powerful and conflicting, but that they are entirely different in nature. Balancing them against each other is inherently problematic. Like other members of the Court, I see no reason to disturb the factual or legal assessment of the position relating to the mother HH. But, ultimately and although this will involve the extradition of both parents, I also conclude that the childrens interests are under article 8 outweighed by the very strong considerations (identified in particular by Lord Judge in para 135 and Lord Wilson in paras 163 172) militating in favour of the extradition of the father PH as well as the mother HH. I am not persuaded that the position (as to the length of time that PH would have to serve) that would apparently apply if the family were living in Italy is relevant in circumstances where it cannot be said, by any stretch, that the sentence which PH would in fact to serve following return would be objectively disproportionate to what one might expect for the offences committed. Nor do I do think that it could be appropriate to invite the Italian authorities in effect to make another application in some years time. It is not easy to fit such a possibility within the scheme of the relevant Council Framework Decision of 13 June 2002 (2002/584/JHA) and Part 1 of the Extradition Act 2003, both of which contemplate a speedy once and for all resolution of any request for surrender. But, assuming that that problem were overcome, such a procedure would mean that the shadow of extradition would hang over the father and children for an uncertain period and would require at some future point to be dissolved or resolved under different circumstances which could prove no less difficult to balance than the present. In reaching my decision relating to HH and PH, I am though this is not essential to my conclusion comforted by the hope that it may be possible for both parents to be returned speedily to the United Kingdom to serve here the balances of their sentences under Council Framework Decision 2008/909/JHA of 27 November 2008. The Court was informed that this Framework Decision has now been transposed into Italian law. Mr Perry QCs instructions were that, under the previous regime of the Council of Europe Convention on the Transfer of Sentenced Persons of 21 March 1983, repatriation from Italy took 8 to 12 months, although statistics for all repatriations from all Council of Europe countries show a longer average period of around 18 months. Whichever figure is taken, it is to be hoped that much speedier results can be achieved under the Framework Decision, the purpose of which is to limit the rupture of environmental and family links resulting from imprisonment abroad. LORD JUDGE The issue in these appeals from the Administrative Court in England and Wales is summarised in the certified questions. This reads: Where, in proceedings under the Extradition Act 2003, the Article 8 rights of children of the defendant or defendants are arguably engaged, how should their interests be safeguarded, and to what extent, if at all, is it necessary to modify the approach of the Supreme Court in Norris v Government of the United States of America (No 2) in light of ZH (Tanzania)? The same issue arose, via the devolution route, in the appeal from the High Court of Justiciary in Scotland. In Norris v the Government of the United States [2010] 2 AC 487, sitting in a constitution of nine Justices, this court addressed the impact of section 21 and section 87 of the Extradition Act 2003 (the Act) in the context of the right to respect for private and family life contained in article 8 of the European Convention of Human Rights. The case was concerned with the rights of a husband and wife, neither of whom was in good health, who had been married for many years. The interests of children were not directly involved and did not arise for consideration. Nevertheless this decision was focussed on the single issue of article 8 rights in the context of extradition proceedings. Consistently with section 21 of the Act, section 87 provides: (1) If the judge is required to proceed under this section (by virtue of section 84, 85, or 86) he must decide whether the persons extradition would be compatible with the Convention rights within the meaning of the Human Rights Act 1998. (2) If the judge decides the question in subsection (1) in the negative he must order the persons discharge. (3) If the judge decides that question in the affirmative he must send the case to the Secretary of State for his decision whether the person is to be extradited. The legislative structure of the Act clearly envisages that the extradition process should be sequential, and that the question whether the extradition of any individual would be compatible with Convention rights does not arise for consideration until the statutory requirements have otherwise been fulfilled. The procedures envisaged in the Act include an examination of the relevant material sent to the court by the Secretary of State (section 78), and the requirement for the judge to address the question whether there is any bar to extradition (sections 79 83). These include, among other considerations, whether extradition is being sought for the purpose of prosecuting or punishing an individual on the basis of his race, religion, nationality, gender, sexual orientation or political opinions, and whether at any trial in the country seeking extradition he might be prejudiced on these grounds. By section 84 itself, which applies where there has been no conviction, the judge must decide whether there is sufficient evidence to make a case requiring an answer. If, in relation to any of these stages in the process, the application for extradition is flawed, the process comes to an end. It is only when the judge is otherwise satisfied that the statutory requirements justifying extradition are established that the final hurdles remain. One is the compatibility of the extradition with Convention rights, including article 8 (section 87): another is that extradition would be unjust or oppressive because of the physical or mental ill health of the person to be extradited (section 91). Article 8 of the Convention is familiar. It provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights or freedoms of others. In Norris it was accepted without reservation, and in accordance with section 87 of the Act, that on occasions in the extradition process article 8 rights may prevail, with the result that what would otherwise be a well founded extradition application would be dismissed. All that acknowledged, the judgments are unequivocal about the importance of giving full weight to the public interest in well founded extradition proceedings: (a) Lord Phillips of Worth Matravers speaking for the Court, made clear at para 56 that these occasions would inevitably be rare: The reality is that only if some quite exceptionally compelling feature, or combination of features, is present that interference with family life consequent upon extradition will be other than proportionate to the objective that extradition serves. (b) Lord Hope of Craighead, at para 87, observed: Resisting extradition on this ground (respect for family life under article 8) is not easy. He continued by expressly agreeing with the passage from the judgment of Lord Phillips referred to in the previous paragraph: The public interest in giving effect to a request for extradition is a constant factor, and it will always be a powerful consideration to which great weight must be attached. The more serious the offence the greater the weight that is to be attached to it (para 91). (c) Lord Brown of Eaton under Heywood, at para 95, added: It will be only in the rarest cases that article 8 will be capable of being successfully invoked under section 87 of the Extradition Act 2003. (d) Lord Mance, at para 107, stated: Interference with private and family life is a sad, but justified, consequence of many extradition cases. Exceptionally serious aspects or consequences of such interference may however outweigh the force of the public interest in extradition in a particular case. (e) Lord Collins of Mapesbury, at paras 127 and 128, commented: It hardly needs to be said that there is a strong public interest in international co operation for the prevention and punishment of crime. Consequently, the public interest in the implementation of extradition treaties is an extremely important factor in the assessment of proportionality As a result, in cases of extradition, interference with family life may easily be justified under article 8(2) . (f) Lord Kerr of Tonaghmore, at para 136, addressed the exceptionality question: It is entirely possible to recognise that article 8 claims are only likely to overcome the imperative of extradition in the rarest of cases without articulating an exceptionality test. The essential point is that such is the importance of preserving an effective system of extradition, it will in almost every circumstance outweigh any article 8 argument. This merely reflects the expectation of what will happen. It does not erect an exceptionality hurdle. These observations from the Supreme Court speak for themselves. They provide the clearest, authoritative, indication of the approach to be taken to extradition proceedings where article 8 considerations are engaged. What is more, the approach is entirely consistent with the views adopted in the European Court of Human Rights itself. The jurisprudence of the European Court of Human Rights to which reference was made by Lord Phillips (with whose wide ranging judgment every member of the Court agreed) includes a number of decisions of the court where the interests of young children of the individual whose extradition was in contemplation were engaged. In Launder v United Kingdom (1997) 25 EHRR CD67 a complaint of a potential violation of article 8 if the applicant were extradited to Hong Kong was found to be manifestly ill founded. The Commission emphasised that it was only in exceptional circumstances that extradition to face charges of serious criminal offences would constitute an unjustified or disproportionate interference with the right to respect for family life. In King v United Kingdom (Application No 9742/07) (unreported) given 26 January 2010 a much more recent case, the defendant was facing serious drug trafficking charges in Australia. His extradition was ordered. He was a husband, father of two children born in 1998 and 2004, and his mother was in poor health. If convicted he faced a very lengthy term of imprisonment. The application was unanimously declared to be inadmissible: Mindful of the importance of extradition arrangements between states in the fight against crime (and in particular crime with an international or cross border dimension), the court considers that it will only be in exceptional circumstances that an applicants private or family life in a contracting state will outweigh the legitimate aim pursued by his or her extradition. If the applicant were [eventually] sentenced to imprisonment [in Australia, with the consequent impact on the rest of his family,] his extradition cannot be said to be disproportionate to the legitimate aim served. It is unnecessary to add to the authorities, but the trend has been consistent. (See, for example, Aronica v Germany (Application No 72032/01) (unreported) given 18 April 2002 and Kleuver v Norway (Application No 45837/99) (unreported) given 30 April 2002 another drug trafficking case, in which a baby was separated at birth from his mother). As far as counsel have been able to discover in the European Court itself the article 8 rights of young children whose parents have been involved in extradition proceedings, have never yet prevailed over the public interest considerations involved in their extradition. That, of course, and entirely consistently with the decision in Norris does not mean that they never will, or that they never should, (see R (Gorczowska) v District Court in Torun, Poland [2012] EWHC 378), but it does underline that there is no difference between the approach of this court in Norris and the European Court of Human Rights to the possible impact of article 8 considerations in the context of extradition. Not long after Norris was decided, in ZH (Tanzania) v Secretary of State for the Home Department [2011] 2 AC 166, this court was concerned with the implementation of immigration law in the context of a decision to remove or deport a non citizen parent of two UK citizens, who were born and had lived here throughout their 12 and 9 years. Their article 8 rights were clearly engaged because, if their mother were deported, they would inevitably have to accompany her. In the Supreme Court it was conceded on behalf of the Secretary of State that the decision to remove the mother was incompatible with article 8. Article 8, it was submitted, involved a careful evaluation of all the relevant factors, with no one factor decisive or paramount. Counsel argued that although the best interests of the child were a primary consideration, they were not the primary consideration. The issue of principle was examined in the context of immigration control, and well established principles in the House of Lords in Beoku Betts v Secretary of State for the Home Department [2009] AC 115 and EB (Kosovo) v Secretary of State for the Home Department [2009] AC 1159 and the Privy Council decision in Naidike v Attorney General of Trinidad and Tobago [2005] 1 AC 538. The Strasbourg jurisprudence, again in the context of immigration control, was also analysed. Baroness Hale identified two different situations, the first involving long settled alien residents who had committed criminal offences, and the second where an individual was to be removed because he or she had no right to be or remain in. Having described the entitlement of states to control the entry and residence of aliens as the starting point, Baroness Hale concluded that: In making the proportionality assessment under article 8, the best interests of the child must be a primary consideration. This means that they must be considered first. They can, of course, be outweighed by the cumulative effect of other considerations. She identified what she described as the countervailing considerations, which, in the particular context of ZH, did not begin to displace the best interests of the children. However the best interests of the children were not the paramount nor even the primary consideration. Lord Kerr spoke of a primacy of importance to be accorded to the best interests of a child, which although not a factor of limitless importance was said to rank higher than any other. They should normally dictate the outcome of cases such as the present. The approach of the European Court of Human Rights to the relationship between immigration control and article 8, like its approach to the relationship between extradition and article 8, is well established. Taken together, Boultif v Switzerland (2001) 33 EHRR 1179 and ner v The Netherlands (2006) 45 EHRR 421, identify no less than ten factors or guiding principles which might arise for consideration in the context of immigration control and article 8. None is given priority over any of the others, and by the same token, none is secondary to any of the others. ZH (Tanzania) was not concerned with and did not address extradition. Neither the decision in Norris, nor the judgment of Lord Phillips, nor those of any other members of the court, nor the decisions relating to extradition from the European Court of Human Rights, nor indeed the structure of the Act itself, were cited or addressed, nor was it suggested that in the context of extradition proceedings the principles identified in Norris were subject to any further amplification or modification. It seems improbable that, without doing so expressly and unequivocally, the Court in ZH (Tanzania) intended to or would have modified the way in which Norris had stated that the article 8 rights of the family of a proposed extraditee should be approached. Stripped to essentials ZH (Tanzania) decided that in the context of immigration control and the entitlement of this country to decide which aliens may reside here, the article 8 rights of a child or children should be treated as a primary consideration against which other relevant factors might countervail, whereas in Norris, in the context of extradition, it was decided that article 8 rights might prevail notwithstanding the immense weight or imperative which attached to the public interest in the extradition of those convicted or suspected of having committed offences abroad. It is of course well understood that the critical question, whether the decision arises for consideration in the context of immigration or extradition, is whether the interference is necessary in a democratic society for the prevention of disorder or crime. Unlike the absolute prohibition against torture in article 3, the right to family life involves a proportionality assessment. In this assessment public interest considerations arising from the control of immigration and the implementation of extradition obligations arise in distinct contexts. Dealing with it briefly, in the immigration process this country is exercising control over the presence of aliens. This is a purely domestic decision made subject to domestic considerations, in the light of domestic legislation, including the Human Rights Act 1998 and the Borders, Citizenship and Immigration Act 2009. An order for deportation may be wholly unconnected to any criminal activity, and even when it is consequent on criminal convictions, it usually follows after not before the appropriate sentence has been imposed and served here. On the occasions when, because of fears of persecution or prosecution abroad, an order is not made, that continues to be a reflection of domestic rather than international processes. As explained in Norris extradition is concerned with international co operation in the prevention and prosecution of crime. The objectives served by the process require international co operation for the prosecution of crimes and the removal of sanctuaries or safe havens for those who have committed or are suspected of having committed criminal offences abroad. The private and family rights of the victims of criminal offences committed abroad will themselves have been damaged by offences like rape and wounding, theft and robbery and child abduction, as well as drug trafficking and fraud. That consideration is absent from the immigration context. Consistently with this analysis, section 55 of the Borders, Citizenship and Immigration Act 2009 made specific provision which imposed an obligation on the Secretary of State to make arrangements to ensure that the welfare of children in the United Kingdom should be safeguarded and promoted in the context of immigration, asylum or nationality processes without identical responsibilities being enacted in the context of the exercise of the extradition process. And, as already noted, to date at any rate, the European Court of Human Rights has treated immigration and extradition as distinct concepts, while in the context of immigration control, enumerating guiding principles of equal importance to the balancing exercise. For these reasons, in my judgment, assuming for the sake of argument that the child or children are in identical family situations, it follows that an extradition order for one or both parents may be appropriate when deportation or removal would not. In other words, because distinct issues are involved, the same facts, involving the same interests of and the same potential or likely damage to the child or children, may produce a different outcome when the court is deciding whether to remove foreign citizens from this country or extraditing convicted or suspected criminals (including citizens of this country) to serve their sentences or stand trial for crimes committed abroad. The impact of ZH (Tanzania) and the valuable submissions made to this court founded on it in the context of the extradition process, is to highlight that Norris has been subject to a deal of misunderstanding. Norris did not decide that the article 8 rights of the family of the proposed extraditee can never prevail unless an exceptionality test is satisfied. What it suggested was that when article 8 rights were properly examined in the extradition context, the proportionality assessment would be overwhelmingly likely to be resolved in favour of extradition. This description of the likely results of the extradition process appears to have been adopted as a forensic shorthand for the test. Just because courts fully appreciate that children who are subjected to long term separation from their parent or parents will almost without exception suffer as a result, the application of a stark exceptionality test may, even if unconsciously, diminish the weight to be given to the interests of the children. The prohibited thought processes run along readily identified lines: as separation from their parent or parents inevitably causes damage to virtually every child, what is exceptional about the situation of the children involved in this particular case, and what would be exceptional about the extradition of their parent or parents? Accordingly the decision in ZH (Tanzania) provided a helpful opportunity for the application of Norris to be re evaluated, and the principles identified in the judgments to be better understood. In the end, however, the issue remains proportionality in the particular circumstances in which the extradition decision has to be made when the interests of dependent children are simultaneously engaged. With respect to those who, by reference, by example, to an international Convention like the UN Convention on the Rights of the Child or the Charter of Fundamental Rights of the European Union, or indeed article 8 of the Convention itself, take a different view, it does not seem to me appropriate to prescribe to the judges who deal with extradition cases any specific order in which they should address complex and sometimes conflicting considerations of public policy. Indeed in some cases it may very well be sensible to postpone any detailed assessment of the interests of children until the crime or crimes of which their parents have been convicted or are alleged to have committed, and the basis on which their extradition is sought have all been examined. Self evidently theft by shoplifting of a few items of goods many years earlier raises different questions from those involved in an armed robbery of the same shop or store: possession of a small quantity of Class C drugs for personal use is trivial when set against a major importation of drugs. Equally the article 8 considerations which arise in the context of a child or children while nearly adult with the advantages of integration into a responsible extended family may be less clamorous than those of a small baby of a single mother without any form of family support. Ultimately what is required is a proportionate judicial assessment of sometimes conflicting public interests. Like the sentencing decision following conviction, the extradition process arises in the context of alleged or proved criminal conduct. The sentencing decision is similarly based on statute. By section 142 of the Criminal Justice Act 2003 (the 2003 Act) the court must have regard to a number of wide ranging and sometimes inconsistent specific purposes of sentencing. Thus, they include the punishment of offenders and their rehabilitation. By section 143 the seriousness of the offence must be considered and when it is being determined, the court is required to consider the offenders culpability in committing the offence and any harm which the offence caused, was intended to cause or might foreseeably have caused. By section 166 any matters which the sentencing court considers relevant to mitigation may be taken into account. It is at this stage of the sentencing process that, among other matters of mitigation, the interests of the defendants child or children, and any of his or her or their dependants and indeed his or her health, and the health and wellbeing of members of the family usually fall to be considered. Bringing the somewhat complex statutory threads together, unless it is justified by the seriousness of the offence a custodial sentence may not be imposed, and when a custodial sentence is justified, it must be no longer than appropriate in the light of all the aggravating and mitigating features (see section 152(2) and section 153(2)). From this it follows that even if the custody threshold is passed, matters of mitigation may nevertheless result in the imposition of a non custodial sentence: and even if a custodial sentence must be imposed, it may be reduced for the same reasons. However, in accordance with statute and practice, the starting point is not usually the mitigation, whatever form it may take, but the offence and its seriousness. In the end what of course matters, whatever starting point may have been taken, is that all the considerations should have been carefully evaluated and a fair balance struck between them. Long before the enactment of the Human Rights Act 1998, sentencing courts had taken account of the likely impact of a custodial sentence on children dependent on the defendant, not in his or her interests, but in the interests of the children. The history can be traced in the first and second editions of Principles of Sentencing, first published in 1970, and by the date of publication of the second edition in 1979, based on a study by Dr David Thomas of the Institute of Criminology at Cambridge University of many thousands of judgments in sentence appeals, beginning in 1962. Dr Thomas identified what he described as a marked difference in the approach to sentences imposed on mothers with caring responsibilities. There are numerous examples; thus, in Smith (February 1965) the sentence of 18 months imprisonment for cheque book frauds by a deserted mother with four dependent children was varied to a probation order. Some ten years later, in Charles (July 1975) a woman convicted of unlawful wounding, using a pair of scissors to stab her victim, was suspended partly because the defendant was the mother of a number of small children. The continuing responsibility of the sentencing court to consider the interests of children of a criminal defendant was endorsed time without number over the following years. Examples include Franklyn (1981) 3 Cr App R(S) 65, Vaughan (1982) 4 Cr App R(S) 83, Mills [2002] 2 Cr App R (S) 229, and more recently Bishop [2011] EWCA Crim 1446 and, perhaps most recently in Kayani; Solliman [2011] EWCA Crim 2871, [2012] 1 Cr App R 197 where, in the context of child abduction, the court identified a distinct consideration to which full weight must be given. It has long been recognised that the plight of children, particularly very young children, and the impact on them if the person best able to care for them (and in particular if that person is the only person able to do so) is a major feature for consideration in any sentencing decision. Recent definitive guidelines issued by the Sentencing Council in accordance with the Coroners and Justice Act 2009 are entirely consistent. Thus, in the Assault Guideline, taking effect on 13 June 2011, and again in the Drug Offences Guideline, taking effect on 29 February 2012, among other features the defendants responsibility as the sole or primary carer for a dependant or dependants is expressly included as potential mitigation. The principle therefore is well established, and habitually applied in practice. However it should not obscure the reality that in the overwhelming majority of cases when the criminal is convicted and sentenced for offences which merit a custodial sentence, the innocent members of his family suffer as a result of his crimes. Although custodial sentences are sometimes avoided altogether where the level of seriousness is relatively minor and are sometimes reduced by reference to the needs of dependent children, care must also be taken to ensure that considerations like these do not produce injustice or disparity as between co defendants with different family commitments, or undermine the thrust towards desirable consistency of approach to sentencing decisions on a national basis, a process which began with the issue of sentencing guidelines by the Court of Appeal, Criminal Division, and now given statutory authority by the creation of first, the Sentencing Guidelines Council (by section 167 of the 2003 Act), and now the Sentencing Council itself. Accordingly, while for generations making allowances for the interests of dependent children, and what would now be described and in Bishop were described as their article 8 interests, the need to impose appropriate sentences in accordance with established, and now statutory provisions, is unchanged. As Hughes LJ has recently explained in R v Boakye and others (3 April 2012) The position of children and a defendants family may indeed be relevant, but it will be rare that their interests can prevail against societys plain interest in the proper enforcement of the criminal law. The more serious the offence, generally the less likely it is that they can possibly do so. This observation mirrors observations to the same effect in Norris in the context of extradition. The effect of this analysis is to underline that the starting point in the sentencing decision involves an evaluation of the seriousness of the crime or crimes and the criminality of the offender who committed them or participated in their commission and a balanced assessment of the countless variety of aggravating and mitigating features which almost invariably arise in each case. In this context the interests of the children of the offender have for many years commanded principled attention, not for the sake of the offender, but for their own sakes, and the broader interests of society in their welfare, within the context of the overall objectives served by the domestic criminal justice system. Sadly the application of this principle cannot eradicate distressing cases where the interests even of very young children cannot prevail. The extradition process involves the proper fulfilment of our international obligations rather than domestic sentencing principles. So far as the interests of dependent children are concerned, perhaps the crucial difference between extradition and imprisonment in our own sentencing structures is that extradition involves the removal of a parent or parents out of the jurisdiction and the service of any sentence abroad, whereas, to the extent that with prison overcrowding the prison authorities can manage it, the family links of the defendants are firmly in mind when decisions are made about the establishment where the sentence should be served. Nevertheless for the reasons explained in Norris the fulfilment of our international obligations remains an imperative. ZH (Tanzania) did not diminish that imperative. When resistance to extradition is advanced, as in effect it is in each of these appeals, on the basis of the article 8 entitlements of dependent children and the interests of society in their welfare, it should only be in very rare cases that extradition may properly be avoided if, given the same broadly similar facts, and after making proportionate allowance as we do for the interests of dependent children, the sentencing courts here would nevertheless be likely to impose an immediate custodial sentence: any other approach would be inconsistent with the principles of international comity. At the same time, we must exercise caution not to impose our views about the seriousness of the offence or offences under consideration or the level of sentences or the arrangements for prisoner release which we are informed are likely to operate in the country seeking extradition. It certainly does not follow that extradition should be refused just because the sentencing court in this country would not order an immediate custodial sentence: however it would become relevant to the decision if the interests of a child or children might tip the sentencing scale here so as to reduce what would otherwise be an immediate custodial sentence in favour of a non custodial sentence (including a suspended sentence). F K (FC) v Polish Judicial Authority The facts are fully described in the judgment of Lady Hale. They are stark, and in the present context highlight the combination of circumstances which can fairly be described as borderline. We must proceed on the basis that the appellant fled Poland knowing of the criminal charges she was due to face. The offences were not trivial, but nor were they of the utmost seriousness. The most recent occurred over a decade ago. The prosecuting authorities have been dilatory in the extreme. As far as we can tell, the extradition process began without reference to the new life the appellant and her husband have made for themselves in this country, and in particular the birth to them of two further children, one of whom is very young, and the other who is only just past the toddler stage. Given the interests of the two youngest children in the context of the current long established family arrangements in this country, and not least the uncertain health of their father, it can safely be said that an immediate custodial sentence would not be in contemplation. In agreement with Lady Hale I agree that the damage to the interests of the two youngest children would be wholly disproportionate to the public interest in the extradition of the appellant on the two European Arrest Warrants. R (HH) and R (PH) v Deputy Prosecutor of the Italian Republic Genoa. The facts are fully described in the judgments of Lady Hale and Lord Wilson. They show something of the heavy burden resting on judges responsible for the application of the Act. They are agreed that the appeal of HH should be dismissed. I, too, agree. The effect of this decision is to highlight the desperate plight which will befall the children if the appeal of PH, too is dismissed. This is movingly analysed in the judgment of Lady Hale, and no member of the Court could be unaware of it or fail to give it the full measure of importance which it commands. What, then, is the basis on which the extradition of PH is sought? HH and PH were both engaged in serious professional cross border crime. This involved not one but seven separate expeditions from Morocco across the Mediterranean into Europe for onward distribution from their eventual destination in Genoa. Although PH was not to be treated as an organiser of the enterprise in the sense required for a conviction of this offence in Italy (see the decision of 9 February 2010) in English law he was undoubtedly guilty of conspiracy to import drugs. Whether correctly described in law as a conspirator or not, PH was an active participant and member of a gang of professional criminals, with a crucial role as a trusted member of the gang, trusted to supervise and see to the safe arrival and eventual disposal and distribution of the drugs after they arrived in Italy. He was therefore crucial to the inner workings and success of the enterprise. As to the offences themselves, there was no personal mitigation. At all material times PH was a mature intelligent adult who appreciated exactly what he was doing. Unlike some of those who become involved in drug smuggling he was not under any form of pressure or compulsion, whether arising from fear of the consequences of non participation or motivated by some desperate family need for funds. In short he was no more, and certainly no less than a professional criminal. Making full allowance for the interests of his children and their welfare in the absence of their mother, in England and Wales anything lower than a 10 year sentence would be improbable. On the basis of such a sentence, imposed today he would serve 5 years, with credit given for the time spent in custody on remand before sentence. In the extradition context, but not the sentencing context, there is this further consideration. PH was granted bail in Italy and almost immediately broke his bail conditions and has now made his home in the United Kingdom. In this jurisdiction that would constitute a separate offence, normally dealt with by way of a consecutive sentence. In the extradition context it is sufficient to underline the very strong public policy consideration that professional criminals who break their bail conditions abroad should not be permitted to find a safe haven here. Taken together, I cannot avoid the conclusion that the overwhelming public interest requires the extradition of PH as well as HH, and accordingly that his appeal, like her appeal, should be dismissed. By way of further comment, I should add that I have ignored my misgiving that the youngest child may have been conceived in an endeavour by the parents to improve their position in the criminal justice and extradition processes. Of course that would neither be the fault of nor diminish the article 8 entitlements of the child. Nevertheless it would in my view have had an impact on the proportionality test adverse to the irresponsible parent who treated the conception of a child as a selfish device to evade justice. LORD KERR Should the approach of the courts to article 8 rights be radically different in extradition cases from that in deportation or immigration cases because of the very important obligation of the State to ensure that those who are to be investigated, prosecuted or imprisoned for criminal offences are returned to those countries as per Silber J in para 55 of his judgment in B v District Courts in Trutnov and Liberec [2011] EWHC 963 (Admin)? There is a principled distinction to be recognised between extradition and expulsion. The latter is performed unilaterally and is designed to protect the states national interest; the former involves compliance with an international obligation and is performed in furtherance of the suppression of transnational crime and the elimination of safe havens. But, just because the interests that require to be protected are different in the two contexts, it does not automatically follow that the approach to an evaluation of article 8 rights has to be different. It is true that the importance of protecting a system of extradition carries greater weight than will (in general terms) arrangements to expel unwanted aliens or the control of immigration. Extradition is, par excellence, a co operative endeavour and it depends for its success on comprehensive (if not always total) compliance by those who participate in the system. As a matter of generality, therefore, it will be more difficult to overcome the imperative for extradition by recourse to article 8 rights than it will be in the field of expulsion and immigration. But that is a reflection of the greater importance of the need to promote the system of extradition rather than a diminution in the inherent value of the article 8 right. The intrinsic value of the right cannot alter according to context; it will merely be more readily defeasible in the extradition context. Although there were some references in Norris (Norris v Government of the United Sates of America (No 2) [2010] UKSC 9, [2010] 2 AC 487) to article 8 considerations arising from separation from dependent relatives, these were, at most, fairly oblique. There was no discussion in ZH (ZH (Tanzania) v Secretary of State for the Home Department) [2011] UKSC 4, [2011] 2 AC 166 about extradition but I agree with Lady Hale that this does not mean that it has nothing to say about how article 8 issues involving children should be approached in the extradition context. As she has pointed out, these cases provide the opportunity to synthesise the reasoning that underlies both Norris and ZH. The debate about whether the interests of the child should be, in article 8 terms, a primary consideration or the primary consideration is a fairly arid one but I have to say that I find the notion that there can be several primary considerations (or even more than one) conceptually difficult. Primary, as an adjective, means occurring or existing first in a sequence or series of events or circumstances (Oxford English Dictionary). Its natural synonyms are main, chief, most important, key, prime, and crucial. I have found the argument about the place that childrens interests should occupy in the hierarchy of the courts consideration of article 8 most persuasively expressed in the Coram Childrens Legal Centre note submitted in the course of this appeal. It is unquestioned that in each of these cases, the childrens article 8 rights are engaged. As a matter of logical progression, therefore, one must first recognise the interference and then consider whether the interference is justified. This calls for a sequencing of, first, consideration of the importance to be attached to the childrens rights (by obtaining a clear sighted understanding of their nature), then an assessment of the degree of interference and finally addressing the question whether extradition justifies the interference. This is not merely a mechanistic or slavishly technical approach to the order in which the various considerations require to be evaluated. It accords proper prominence to the matter of the childrens interests. It also ensures a structured approach to the application of article 8. Lord Wilson says (in para 153) that there is no great logic in suggesting that in answering the question, does A outweigh B, attention must first be given to B rather than to A. At a theoretical level, I do not disagree. But where a childs interests are involved, it seems to me that there is much to be said for considering those interests first, so that the risk that they may be undervalued in a more open ended inquiry can be avoided. Lady Hale (in para 14 above) has correctly described my statement in para 46 of ZH (Tanzania) v Secretary of State for the Home Department [2011] UKSC 4, [2011] 2 AC 166 as expressing more strongly than other members of the court the importance that should be attached to their best interests in reaching decisions that will affect children. In suggesting that these should be given a primacy of importance, I did not intend to stoke the debate about the distinction between a factor of primary importance and the factor of primary importance. What I was seeking to say was that, in common with the opinion of the High Court of Australia in Wan (Wan v Minister for Immigration and Multicultural Affairs (2001) 107 FCR 133), no factor must be given greater weight than the interests of the child. This is what that court said at para 32: Provided that the Tribunal did not treat any other consideration as inherently more significant than the best interests of Mr Wan's children, it was entitled to conclude, after a proper consideration of the evidence and other material before it, that the strength of other considerations outweighed the best interests of the children. However, it was required to identify what the best interests of Mr Wan's children required with respect to the exercise of its discretion and then to assess whether the strength of any other consideration, or the cumulative effect of other considerations, outweighed the consideration of the best interests of the children understood as a primary consideration. (Emphasis added). In the field of extradition, as in every other context, therefore, the importance of the rights of the particular children affected falls to be considered first. This does not impair or reduce the weight that will be accorded to the need to preserve and uphold a comprehensive charter for extradition. That will always be a factor of considerable importance, although, as Lady Hale has said (in para 8(5)), the weight to be attached to it will vary according to the nature and seriousness of the crime or crimes involved and (at para 8(6)), delay in applying for extradition may reduce the weight to be attached to the public interest in maintaining an effective system of extradition. Following the approach that I have outlined, I have no hesitation in expressing my agreement with Lady Hale in her proposed disposal of the appeal in F K v Polish Judicial Authority. As she has pointed out, the offences, although not trivial, do not rank among the most serious in the criminal calendar. There has been substantial delay. The offences are already of considerable vintage. The public interest importance of maintaining a comprehensive system of extradition will not suffer a significant impairment if F Ks surrender to the Polish authorities is not ordered. By contrast, the adverse impact on her family and, particularly its younger members, is likely to be profound and irretrievable. I too would allow the appeal in that case. In the case of PH and HH, the consequences of both parents being extradited have been thoroughly charted by Lady Hale and Lord Wilson and need no further elaboration. The anticipated plight of these innocent children, the momentous upheaval to their lives and the inevitable emotional damage that they will suffer are indeed, as Lord Wilson has put it, heart rending. But pitted against those circumstances are the extremely serious crimes of which both PH and HH were convicted; the nature of their participation in those crimes; and the fact that they have exploited the criminal justice system in Italy in their attempts to avoid punishment. These considerations, allied to the pressing need to preserve an effective system of extradition based on international co operation and the denial of safe havens, create a formidable case in favour of the appellants extradition. Ultimately, as Lord Wilson has said (para 150), the differing conclusions as to the disposal of these appeals rests not on any difference in legal analysis but on a judgment as to where the balance of the competing interests is found to fall. For the reasons given by Lord Judge and Lord Wilson, with which I agree, I have concluded that it must firmly fall in favour of the appellants extradition. I would dismiss their appeals. LORD WILSON In her judgment Lady Hale sets out the facts of the appeals comprehensively; and analyses the law in terms to which, in most respects, I can readily subscribe. But while I agree with her, for the reasons which she gives, that the appeal of Mrs F K should be allowed and that that of Mrs HH should be dismissed, I do not agree with her that the appeal of Mr PH should be allowed. The difference between us represents no difference of legal analysis. It is a difference of value judgement upon the weight to be attached to two powerful and conflicting interests. To be more specific, our sense of proportion in relation to them is different. In accordance with that reached by Laws LJ, and now by Lord Judge, the Lord Chief Justice, with whose judgment I agree, I have reached the conclusion, heart rending in the light of its devastating effect upon his three children, that the order for the extradition of PH to Italy should stand. Section 21 of the 2003 Act provides: (1) If the judge is required to proceed under this section (by virtue of section 11 or 20) he must decide whether the persons extradition would be compatible with the Convention rights within the meaning of the Human Rights Act 1998 (c 42). The reference to sections 11 and 20 is a reference to subsections (4) of each of the sections, which relate to warrants prior to, and following, conviction respectively. What section 21(1) adds to the overarching obligation of the court under section 6 of the Human Rights Act 1998 not to act in a way which is incompatible with Convention rights is to identify the stage in its sequential consideration of an application for an extradition order under Part 1 of the 2003 Act at which it must turn to that question. It follows that the nature of the offence of which the person stands convicted or accused will already have been considered at an earlier stage or stages, in particular at that of considering pursuant to section 10(2) whether the offence specified in the warrant is an extradition offence. Where it is suggested to the court (or, in the light of its free standing obligation not to act incompatibly with Convention rights, where it appears to the court) that the defendants extradition might infringe the rights of himself and of the other members of his family to respect for their family life under article 8, the requisite inquiry under para 2 of the article is likely to reduce to one issue. There is likely to be no doubt (a) that the extradition would interfere with the exercise of their rights; (b) that, inasmuch as the application for the extradition order will have survived the earlier stages of the inquiry, the interference would be in accordance with the law; and (c) that the aim of the extradition would be one of those specified in para 2, namely the prevention of crime. The issue is likely to be whether the interference is necessary in a democratic society. [The] notion of necessity implies that the interference corresponds to a pressing social need and, in particular, that it is proportionate to the legitimate aim pursued: Olsson v Sweden (No 1) (1988) 11 EHRR 259. The concept of a pressing social need adds little, if anything, to that of a legitimate aim: in Norris v Government of the United States of America (No 2), [2010] UKSC 9, [2010] 2 AC 487, Lord Phillips, with whose judgment all the other members of the court agreed, equated them (para 10). So the court must survey the individual, or private, features of the case, namely the circumstances of the family on the one hand and of the offence (or alleged offence) on the other and, in the light also of the public interests on both sides to which I will refer in paras 156 and 167, must proceed to assess the proportionality of the interference. Is the right question whether the likely gravity of the interference with respect for family life outweighs the potency of the legitimate aim of the extradition order? Or is it whether the potency of the legitimate aim outweighs the likely gravity of the interference? Such is a question, of significance no doubt much more theoretical than practical, in which, perhaps to its credit, the European Court of Human Rights (the ECtHR) seems not much interested. It stated in Babar Ahmad v UK, (2010) 51 EHRR SE97, at para 172, that it will only be in exceptional circumstances that an applicants private or family life in a contracting state will outweigh the legitimate aim pursued by his or her extradition. As it happens, however, I agree with the submission on behalf of the Coram Childrens Legal Centre, reflective of an observation by Lord Kerr in the Norris case, at para 137, that the structure of article 8, which requires the state to justify interference, is such as to cast the question in the opposite way: does the aim outweigh the interference? In ZH (Tanzania) v Secretary of State for the Home Department, [2011] UKSC 4, [2011] 2 AC 166, Lady Hale said, at para 33: In making the proportionality assessment under article 8, the best interests of the child must be a primary consideration. This means that they must be considered first. With great respect, I do not consider that Lady Hales second sentence follows logically from her first. Nor do I discern any greater logic in a conclusion that, in answering a question does A outweigh B?, attention must first be given to B rather than to A. In my view a judge is entitled to decide for himself how to approach his task. No doubt in some cases a defendant to an application for an extradition order will invoke the article 8 rights of himself and his family in circumstances in which the judge can swiftly reject the suggested incompatibility. But in others, in particular where the defendant lives in a family with a minor child, of whom he is (or claims to be) the sole or principal carer, a full inquiry is necessary, such as was indeed conducted in the case of PH and HH by the district judge and, on appeal and with the benefit of additional evidence adduced by the Official Solicitor, by Laws LJ. Article 3.1 of the UN Convention on the Rights of the Child dated 20 November 1989 provides that in all actions concerning children. the best interests of the child shall be a primary consideration. Analogously article 24.2 of the Charter of Fundamental Rights of the European Union (2000/C 364/01) dated 7 December 2000 provides that in all actions relating to children. the childs best interests must be a primary consideration. The word concerning in article 3.1, like the phrase relating to in article 24.2, encompasses actions with indirect, as well as direct, effect upon children: the ZH (Tanzania) case, para 26 (Lady Hale). The rights of children under article 8 must be examined through the prism of article 3.1: see paras 21 to 23 of the same case. Thus, in the present inquiry, article 8 affords to the best interests of the three children a substantial weight which, following examination, other factors may earn and even exceed but with which, under the law of the article, they do not start. When we come to consider the other side of the equation, we will notice, at para 167 below, not just the importance that PH should be punished for his wrong doing but the public importance of adhering to arrangements for extradition. So, at this earlier stage, we should notice not just the grave effects of his extradition upon these three children but the public importance that children should grow up well adjusted. The principle which pervades the despatch of issues relating to children in the family courts is that, as a rule, they are more likely to grow up well adjusted if they continue to live in the home of both or at least one of their parents: see, for example, In re KD (A Minor) (Ward: Termination of Access) [1988] 1 AC 806 at p 812 B C (Lord Templeman). I agree with Lady Hales comments on this point at para 25 above. To A commentary on the UN Convention on the Rights of the Child, published by Nijhoff in 2007, Professor Freeman contributed Chapter 3, of which the title was Article 3: The Best Interests of the Child. He wrote, at p 41: There are also utilitarian arguments in favour of prioritizing childrens interests. Thus, it may be thought that giving greater weight to childrens interests maximises the welfare of society as a whole. Barton and Douglas have even argued that children are important for the continuity of order in society. Putting children first is a way of building for the future. It is significant that countries reconstructing after nightmares of rightlessness have put childrens interests in the foreground. I turn to consider the likely arrangements for the children in the event that PH, as well as HH, was to be extradited to Italy. Although there are wider members of the family, to whom I will refer in para 158, who would be likely to continue to have contact with the children, none of them is in a position to offer any of them a home. So the local authority would have to accommodate the children. In para 69 above Lady Hale criticises the authority for not having made plans for them in that event and thus for not having done work with them in preparation for it. But the parents have decided not to explain, even to X, that they might be removed to Italy so no work could have been done with the children until they had been persuaded to reverse that decision. They raise the spectre that, notwithstanding their refusal to consent, Z might be adopted. It is, however, clear to me that, in circumstances in which a loving father was to say that, following the next four years in prison, he wished to resume his care of a child, a court could not properly be satisfied that the childs welfare required it to dispense with his consent pursuant to section 52(1)(b) of the Adoption and Children Act 2002. So the authority would accommodate all three children in foster homes. Under section 22C(7)(b) and (8)(c) of the Children Act 1989 (the 1989 Act) the authority would have a duty to place all three children together so far as was reasonably practicable. My past service in the Family Division emboldens me to predict, with fair confidence, that they would succeed in placing X and Y together but that it might prove not reasonably practicable to place Z with them. The three children have a close relationship with each other and any placement of Z separately from X and Y would be highly unfortunate, perhaps particularly for Z herself. But the local authority would undoubtedly arrange regular contact between the three of them; and it is of some, if limited, comfort that, in the event of the sudden dismantling of their home life, at least the three of them would have a continuing relationship with each other to which to cling. Paragraph 15(1) of Schedule 2 to the 1989 Act would oblige the authority, so far as was reasonably practicable and consistent with their welfare, to endeavour to promote contact not only as between the children themselves, if placed separately, but also between them and their parents and other relatives. It would be nave to consider that more than about one annual visit to PH and HH in prison in Italy would prove practicable. But PHs wide extended family is close knit: both one of his sisters and the wife of one of his sons by his former marriage have, in particular, been visiting the three children on a regular basis and have expressed a wish to continue to do so. Equally HHs mother came from Morocco to help to look after the children for three months in 2011 and might well make further visits to them. Nevertheless, although she acknowledged the value of the likely continuing contact to which I have referred, Dr Pettle expressed in stark and convincing terms the emotional damage likely to be caused to the children by the extradition of PH as well as of HH. It would, she said, be likely to be catastrophic for them; a massive emotional and psychological challenge; overwhelmingly painful; and analogous to a bereavement. She predicted that the carers would need to cope with withdrawal, regression, anger and defiance on the part of the children; that they would sleep and eat poorly; and that the performance of X and Y at school would deteriorate. Although he lacked the benefit of Dr Pettles evidence, the district judge squarely confronted the effect of his order upon the children. He said that it would tear the family apart, would profoundly affect the childrens physical and emotional health and might lead to multiple future problems for them. With the benefit of her evidence, Laws LJ endorsed the district judges conclusions. In relation to Z the Official Solicitor also pressed upon Laws LJ, as he does upon this court, the statement on p 19 of the paper published by the Childrens Commissioner for England in January 2008, entitled Prison Mother and Baby Units do they meet the best interests of the child?, that Attachment between babies and their mothers or primary caregivers starts in the early stages of life and babies become attached by around six months. Severe psychological damage may occur to babies if the bond or attachment with the primary caregiver is severed between the age of six months and four years. Z will not attain the age of four until a year from now; and so the Official Solicitor suggests that consideration of PHs extradition might at least be delayed until next year. It is now clear that the law does not welcome, still less require, an examination of whether the circumstances disclosed by the inquiry under article 8 are exceptional. In the Norris case, cited above, there are helpful observations by Lord Phillips in para 56, by Lord Hope in para 89 and by Lord Mance in para 109, about the snare that, as in many other areas of the law, a test of exceptional circumstances sets: for it may lead to the wrongful downgrading of the significance of circumstances just because they happen not to be exceptional or to their wrongful upgrading just because they happen to be exceptional. Take, suggested Lord Mance at para 109, a case of an offence of relatively low seriousness where the effect of an extradition order would be to sever a genuine and subsisting relationship between parent and baby: the circumstances might not be exceptional yet the proper application of article 8 might lead to a refusal to make the order. Lord Kerr observed, at para 136, that the importance of preserving an effective system of extradition . will in almost every circumstance outweigh any article 8 argument but he explained that such was a fact which exemplified the likely result of the inquiry rather than furnished the criterion by which the issue should be resolved. I should add that I am not convinced that, in the eleven appeals to the Divisional Court cited in para 22 of Lady Hales judgment, the judges fell, as suggested, into the error of applying a test of exceptional circumstances. In his judgment in the Norris case Lord Phillips stated in para 56: Instead of saying that interference with article 8 rights can only outweigh the importance of extradition in exceptional circumstances it is more accurate and more helpful, to say that the consequences of He added in para 62: interference with article 8 rights must be exceptionally serious before this can outweigh the importance of extradition. If. the nature or extent of the interference with article 8 rights is exceptionally serious, careful consideration must be given to whether such interference is justified. In such a situation the gravity, or lack of gravity, of the offence may be material. He gave an example at para 65: [In] trying to envisage a situation in which interference with article 8 might prevent extradition, I have concluded that the effect of extradition on innocent members of the extraditees family might well be a particularly cogent consideration. If extradition for an offence of no great gravity were sought in relation to someone who had sole responsibility for an incapacitated family member, this combination of circumstances might well lead a judge to discharge the extraditee. No one suggests a need to dilute the strength of these remarks just because in the present appeal, unlike in the Norris case, the rights in play under article 8 are those of children, whose interests are a primary consideration. Nevertheless my view of the evidence in the present appeal supports a conclusion that the consequences of extradition upon the rights of the three children under article 8 would be interference with them of an exceptionally serious character. The importance of PHs extradition might therefore fail to outweigh consequences of such seriousness. But does it? On 23 September 2003 HH and PH drove across the French border into Italy. They were escorting another car, driven by a courier and containing 205.7 kg of hashish. By telephone they instructed the courier to drive to a rendezvous at which he was supposed to deliver the drugs to them for onward distribution to others. But the Italian police were intercepting their calls. When the police were about to arrest him, the courier alerted PH and HH, who, by telephone, acquainted others with what had happened and tried to drive back into France. On their way back, however, they too were arrested, charged and remanded in custody. HH and PH were charged with, and later convicted of, being concerned in the importation of cannabis into Italy from Morocco, through France, not just on 23 September 2003 but also on six earlier occasions. The details of the seven charges were as follows: 350 kg (a) 25 April 2003 94.2 kg (b) 11 June 2003 120 kg (c) 19 July 2003 310 kg (d) 6 August 2003 334.6 kg (e) 29 August 2003 200 kg (f) 13 September 2003 205.7 kg (g) 23 September 2003 Total 1614.5 kg An eighth charge was brought against HH and PH, namely of conspiracy with other persons, of whom four were named, to import cannabis into Italy. They were both also convicted under the eighth charge. But on 28 April 2009 the Court of Cassation in Rome ordered a retrial of that charge in the case of PH; and on 9 February 2010 the Court of Appeal in Genoa held that, unlike in the case of HH, it had not been proved that PH, albeit an active participant, had organised or promoted the trafficking enterprise in the sense necessary for a conviction under the eighth charge. His acquittal in this respect explains the fact that, whereas the time likely to be served by HH in prison in Italy is nine and a half years, that likely to be served by PH, following various adjustments, is four years and 22 days. I should add that the fact that, had he been resident with the family in Italy, a further significant adjustment would have been made in his favour adds yet further piquancy to the case; but it is not for the requested court to pick over the rules of the requesting court which govern the time to be served by the defendant in prison any more than it should appraise the justice of his sentence itself although it must be long enough to qualify as an extradition offence. There is an important extra dimension to the gravity of PHs conduct. Just as in 2004 HH had sought to evade justice by leaving Italy in breach of her conditions of bail, so too, later in 2004, did PH. On 7 October 2004, following a year spent in custody on remand, he was granted bail on condition that he should reside in Genoa and report daily to the police; but three weeks later he left Italy and rejoined HH in Spain. In Gomes v Government of the Republic of Trinidad and Tobago [2009] UKHL 21, [2009] 1 WLR 1038, Lord Brown, giving the opinion of the appellate committee, said at para 36: The extradition process, it must be remembered, is only available for returning suspects to friendly foreign states with whom this country has entered into multilateral or bilateral treaty obligations involving mutually agreed and reciprocal commitments. The arrangements are founded on mutual trust and respect. There is a strong public interest in respecting such treaty obligations. As has repeatedly been stated, international co operation in this field is ever more important to bring to justice those accused of serious cross border crimes and to ensure that fugitives cannot find safe havens abroad. Rolled up in Lord Browns observations are several overlapping considerations which combine to confer upon the UKs extradition arrangements their profound importance: (a) perpetrators of crimes should be punished; (b) crime is deterred by the likelihood of punishment; (c) cross border crime is increasing; (d) the movement of criminals across borders has become easier; (e) inter state co operation is increasingly necessary in order to combat crime and to bring criminals to justice; (f) states which offer sanctuary to criminals substantially undermine the efforts of the others to eliminate any advantage in remaining in, or indeed escaping to, a jurisdiction other than that of the prosecuting court; and (g) the UK should adhere to its bilateral (or multilateral) treaty obligations and its breaches or perceived breaches may generate a more widespread unravelling of them on both (or all) sides. The especial importance of adherence to arrangements for extradition is written across all the judgments in the Norris case, and one could well argue that it transcends even the importance of immigration control. Of course I accept that an effective system of removal, or deportation, from the UK of a foreign citizen who has had no right, or has forfeited his right, to remain here carries an importance which extends well beyond his particular circumstances; but the destructive effects on societies of crime are far less plainly and directly countered by immigration control than by adherence to arrangements for extradition. There is a dearth of decisions in which an order for extradition has been refused by reference to the rights of the defendant and his family under article 8. There is Ministry of Justice of Lithuania v AI, [2010] EWHC 2299 (Admin): the defendant had served eight months of a sentence of 20 months for fraud prior to her departure, in breach of the conditions of her release, from Lithuania to England, where she was forced into prostitution, suffered serious trauma and was providing valuable assistance to the police, such combination of circumstances being (said Leveson LJ at para 21) truly exceptional and from which nobody should seek to derive any wider principles. There is Jansons v Latvia [2009] EWHC 1845 (Admin): the defendant was accused of thefts to a value of about 450 and would commit suicide if extradited. Now, today in these conjoined proceedings, also arrives the unanimous decision of this court in F K v Polish Judicial Authority: the facts are set out by Lady Hale in paras 35 to 43 above and reveal not only the need of children aged eight and three for the defendants care but also, and in particular, the relative lack of gravity of the offences alleged against her, their antiquity and the delay in the seeking of her extradition. Counsel can find no evidence that article 8 has ever operated so as to bar extradition for an offence approaching the gravity of those of which PH has been convicted, whether in the courts of England and Wales or of any other member state of the Council of Europe or in the European Court of Human Rights itself. No doubt the constituency of defendants who provide the sole or main care to young children is relatively small. But in my view the principal driver behind such absence of authority is the high degree of public importance attached throughout (and no doubt beyond) Europe to the extradition of persons so that they may answer for serious crime. Indeed the Conseil dEtat in France, for example, appears even to take a step further in considering that, as a matter of principle, extradition will justify any interference with rights under article 8: the Norris case, para 50 (Lord Phillips). The effects on family life of a defendants imprisonment in England and Wales following domestic criminal proceedings, on the one hand, and of his imprisonment abroad following extradition there, on the other, are likely to be somewhat different. Visits to him by his family members would more easily be arranged if his prison was in England and Wales although whether, for his children, the positives outweigh the negatives would so I have long considered be an interesting subject for study; and special facilities, such as for a mother to have her baby with her in prison, might be available in England and Wales but not abroad. In my view, however, it remains of substantial relevance to note the extent to which rights under article 8 affect the process of sentencing in domestic criminal proceedings. In para 128 above Lord Judge quotes from para 54 of his own recent judgment on behalf of the Court of Appeal in R v Kayani, R v Solliman [2011] EWCA Crim 2871, [2012] 1 Cr App R 197. But having stressed in the passage which he has set out, the need in every case for careful scrutiny of the plight of children for whom a defendant has primarily been caring, Lord Judge continued, at para 56: Dealing with it generally, where the only person available to care for children commits serious offences, even allowing fully for the interests of the children, it does not follow that a custodial sentence, of appropriate length to reflect the culpability of the offender and the harm consequent on the offence, is inappropriate. There are a number of reported examples of sentences of immediate imprisonment, almost all measured in months, which, even before article 8 acquired the force of law, the Court of Appeal set aside in the interests of children of whom the defendant was the sole or primary carer: see, for example, R v Whitehead [1996] 1 Cr App R(S)111; and now see also R v Bishop cited above. But, on behalf of the Deputy Prosecutor of the Italian Republic, Genoa, Mr Perry made an unchallenged submission that, were PH to have been sentenced in England and Wales for offences of drug trafficking of gravity equivalent to those of which he has been convicted in Italy, he would be likely to have received a very substantial sentence of imprisonment which, in that they would have been outweighed, the rights of his children under article 8 would not have displaced. Indeed Lord Judge predicts, at para 136 above, that the sentence would be likely to have been at least ten years; and there can be no more authoritative prediction than his. In M v The State [2007] ZACC 18 the Constitutional Court of South Africa delivered judgment on the following question, posed by Sachs J at para 1: When considering whether to impose imprisonment on the primary caregiver of young children, did the courts below pay sufficient attention to the constitutional provision that in all matters concerning children, the childrens interests shall be paramount? Sachs J thereupon offered an analysis of the relevant principles; and with that part of his judgment all the other members of the court agreed. He referred, at para 10, to the classic approach to sentencing, articulated in S v Zinn 1969 (2) SA 537 (A) at 540G H, that what has to be considered is the triad consisting of the crime, the offender and the interests of society. He explained, at para 26, that, when used in s 28(2) of the Constitution, the word paramount does not mean that the interests of the children necessarily dictate the result. He proceeded as follows: 33. Specific and well informed attention will always have to be given to ensuring that the form of punishment imposed is the one that is least damaging to the interests of the children, given the legitimate range of choices in the circumstances available to the sentencing court. 34 In this respect it is important to be mindful that the issue is not whether parents should be allowed to use their children as a pretext for escaping the otherwise just consequences of their own misconduct. This would be a mischaracterisation of the interests at stake. 35. Rather, it is to protect the innocent children as much as is reasonably possible in the circumstances from avoidable harm. 36. (c) If on the Zinn triad approach the appropriate sentence is clearly custodial and the convicted person is a primary caregiver, the court must apply its mind to whether it is necessary to take steps to ensure that the children will be adequately cared for while the caregiver is incarcerated. (e) Finally, if there is a range of appropriate sentences on the Zinn approach, then the court must use the paramountcy principle concerning the interests of the child as an important guide in deciding which sentence to impose. The judgment of Sachs J draws the interests of children vividly into the foreground and it has led me to reflect again, albeit more profoundly, upon the plight of the three children of PH. It is also important to observe that the exercise mandated by article 8 is not identical to that required by the Constitution of South Africa. For we do not start, as a given, with the legitimate range of choices and then fit the interests of the children into it; under article 8 their interests may, through the proportionality exercise, help to identify the legitimate range. But, in a judgment of especial child sensitivity, the weight which Sachs J nevertheless places upon the public interest in the punishment of serious domestic crime confirms me in my conclusion, firm if bleak, that the public interest, not identical but no less powerful, in the extradition of PH to Italy outweighs the interference with the rights of his children. |
There are two issues in this case, both of them simple to state but neither of them simple to answer. First, what is the test for deciding whether a person lacks the mental capacity to conduct legal proceedings on her own behalf (in which case the Civil Procedure Rules require that she has a litigation friend to conduct the proceedings for her)? Second, what happens if legal proceedings are settled or compromised without it being recognised that one of the parties lacked that capacity (so that she did not have the benefit of a litigation friend and the settlement was not approved by the court as also required by the CPR)? Can matters be re opened long after the event or does the normal rule of English law apply, which is that a contract made by a person who lacks capacity is valid unless the other party to the contract knew or ought to have known that she lacked that capacity in which case it is voidable (the rule in Imperial Loan Co Ltd v Stone [1892] 1 QB 599)? These issues are of very considerable importance, particularly in personal injury cases. On the one hand, there is the need to protect people who lack capacity from making settlements which are disadvantageous to them. On the other hand, people are assumed to have capacity to make their own decisions and should only be deprived of the right to do so in clear cases. There is also a public interest in upholding bargains which everyone, but particularly the other party, thought were valid when they were made and in putting an end to litigation. The spectre looms of many personal injury claims which insurers thought had been settled long ago being reopened on the basis of an incapacity which they had no reason to suspect at the time. The real culprits, they would say, are the claimants original legal advisers (if she had any) against whom she will almost always have a claim for professional negligence. The history of this case On 25 June 1999, there was a road accident on a dual carriageway near the entrance to a roundabout in Goldthorpe (which is roughly half way between Doncaster and Barnsley in South Yorkshire). Mr Burgin, who was riding a motorcycle in the offside lane, struck Ms Dunhill, who was crossing the road having emerged from between parked vehicles in the nearside lane. She suffered a severe closed head injury along with soft tissue injury to both legs. On 13 May 2002, shortly before the limitation period ran out, she issued a claim for damages in the Barnsley county court. She claimed still to be suffering from a complete loss of the senses of smell and taste, some hearing loss, forgetfulness, headaches, personality change, low moods and tearfulness, anxiety, mood swings, occasional suicidal ideation and self mutilation. She claimed general damages for pain, suffering and loss of amenity, and special damages (totalling 2,262.92) for travelling expenses and 10 hours care a day for six months followed by one hour a day for two years, the total claim being limited to 50,000. It was accompanied by two reports from a consultant surgeon specialising in accident and emergency medicine. Mr Burgin denied liability and alternatively alleged contributory negligence. The case was listed for a trial on the issue of liability at the Sheffield county court on 7 January 2003. Ms Dunhill was at court, accompanied by a mental health advocate, and represented by counsel and a trainee solicitor. One of her witnesses to the accident did not arrive and negotiations took place towards a settlement. The claim was eventually compromised for the total sum of 12,500 with costs. This was embodied in a consent order, which was signed by both counsel and placed before the judge. This provided that (i) the defendant pay the claimant the sum of 12,500 in full and final settlement of her claim by 28 January 2003; (ii) the defendant pay the claimants costs, to be the subject of detailed assessment if not agreed; and (iii) there be detailed assessment of the claimants community legal service costs. On any view this was a gross undervaluation of her claim, which her current advisers would put at over 2,000,000 on a full liability basis and the defendants would put at around 800,000. In July 2006, Mrs Dunhill sought the advice of new solicitors. In December 2008, nearly six years after the consent order was made, her litigation friend issued proceedings on her behalf for professional negligence against her former solicitors and counsel. Those proceedings have been stayed pending further order. On 11 February 2009, her litigation friend issued the present proceedings. These took the form of an application in the original action, seeking (i) a declaration that the claimant did not have capacity at the time of the purported settlement of the matter on 7 January 2003, and (ii) that the consent order be set aside and directions given for the further conduct of the claim. Such applications are known as Masterman Lister proceedings, after the case of Masterman Lister v Brutton & Co (Nos 1 and 2) [2002] EWCA Civ 1889, [2003] 1 WLR 1511. It was agreed between the parties that there should first be a trial of whether or not the compromise and consent order made on 7 January 2003 required the approval of the court. This depended on two issues: (i) whether Mrs Dunhill was a patient within the meaning of Part 21 of the Civil Procedure Rules, which regulates the procedure to be adopted in proceedings involving children and (as the Rules then were) patients; and (ii) what the consequences were if she was such a patient, specifically whether this meant that the compromise and consent order should have been approved by the court under CPR 21.10. The defendant has not sought retrospective approval of the settlement. Issue (i) was tried by Silber J in February 2011: [2011] EWHC 464 (QB). The parties were agreed that the test of whether a person was a patient was whether she had the mental capacity to conduct the proceedings. They further agreed that this was to be judged by reference to her capacity to make the decisions likely to be required of her in the course of the proceedings, a test derived from the judgment of Chadwick LJ in Masterman Lister. But they disagreed as to whether this test was to be applied to the proceedings which she had actually brought, on the advice of her legal representatives, or whether it was to be applied to the proceedings as they might have been brought had her lawyers given her different advice. If it was the former, then the most difficult decision she had to take was whether to accept the sum which was offered on 7 January 2003, so in practice the question was whether she was able to understand matters well enough to make that decision. If it was the latter, the defendant concedes that she did not have the capacity to conduct the larger and much more complicated claim which should have been brought. Silber J decided that capacity was to be judged by reference to the decisions which the claimant was actually required to take in the action as drafted and not to the decisions which she might have been required to take had it been differently framed. In practice this meant whether she had capacity to make the compromise on 7 January 2003. He held that, on the evidence, the presumption that she did have that capacity had not been rebutted: [2011] EWHC 464 (QB), para 97. In the light of that decision, issue (ii) did not arise. The claimant appealed on the point of law. The Court of Appeal held that the judge should not have confined himself to the actual decision required of her on 7 January 2003, but should have considered her capacity to conduct the proceedings as they should have been framed. Ward LJ concluded at [2012] EWCA Civ 397, para 29: Since capacity to conduct proceedings includes . the capacity to give proper instructions for and to approve the particulars of claim, the claimant lacked that capacity. For her to have capacity to approve a compromise she needed to know . what she was giving up and, as is conceded, she did not have the faintest idea that she was giving up a minor fortune without which her mental disabilities were likely to increase. As a result, the case was remitted to the High Court to determine issue (ii). This was now framed as whether CPR 21.10 has any application where the claimant has brought a claim in contravention of CPR 21.2, so that in the eyes of the defendant and the court she appeared to be asserting that she was not under a disability? No doubt this reformulation was intended by the defendant to hammer home that the general rule in contract is that laid down in Imperial Loan Co Ltd v Stone. Bean J decided that where a civil claim is issued, the Civil Procedure Rules are incorporated into any agreement made to settle the case and that CPR 21.10(1) required that this settlement be approved by the court irrespective of how matters appeared at the time. Hence the settlement was void, the court order should be set aside and the case should go for trial: [2012] EWHC 3163 (QB); [2012] 1 WLR 3739. Between the hearing before Bean J in early October 2012 and his judgment in November 2012, this court had given the defendant permission to appeal against the decision of the Court of Appeal on issue (i). Accordingly Bean J certified, with the parties consent, that the conditions were met for a leapfrog appeal under sections 12 to 16 of the Administration of Justice Act 1969 on issue (ii). This was in order that both issues could be heard together if this court gave the defendant permission to appeal on issue (ii), which it duly did in March 2013. The whole question of the proper approach to the problem is therefore before this court. As so often happens, the parties do not agree on precisely how the issues should be formulated and new arguments have been introduced to bolster the decisions reached in the courts below. The defendant, in particular, has a sense of grievance at the way in which the issues and the arguments have shifted over time. But in this court we have to do our best to arrive at the right result and thus to allow all relevant arguments to be deployed before us unless this would be unfair to an opposing party. There is no unfairness here. Everyone has been well aware from the outset of what the underlying questions are and each party has had sufficient time to respond to all the arguments deployed. Indeed we are grateful to them for the assistance which we have received. The test of capacity In 2002 when this claim was launched and 2003 when it was compromised, CPR 21.1(2)(b) to the Civil Procedure Rules 1998 (SI 1998/3132 (L 17)) defined a patient as a person who by reason of mental disorder within the meaning of the Mental Health Act 1983 is incapable of managing and administering his own affairs. This was much the same definition as that in Order 80, rule 1, of the former Rules of the Supreme Court, which referred to his property and affairs; this phrase also used to appear in Part VII of the Mental Health Act 1983 as the definition of those over whose property and affairs the Court of Protection might take control; and in section 38(2) of the Limitation Act 1980 as the definition of those under a disability in respect of whom limitation periods did not begin to run. It suggests a global inability to manage and administer all ones property and affairs, whereas of course a person may be able to manage some of his affairs but not others. The general approach of the common law, now confirmed in the Mental Capacity Act 2005, is that capacity is to be judged in relation to the decision or activity in question and not globally. Hence it was concluded in Masterman Lister that capacity for this purpose meant capacity to conduct the proceedings (which might be different from capacity to administer a large award resulting from the proceedings). This was also the test adopted by the majority of the Court of Appeal in Bailey v Warren [2006] EWCA Civ 51, [2006] CP Rep 26, where Arden LJ specifically related it to the capacity to commence the proceedings (para 112). It would have been open to the parties in this court to challenge that test, based as it was mainly upon first instance decisions in relation to litigation and the general principle that capacity is issue specific, but neither has done so. In my view, the Court of Appeal reached the correct conclusion on this point in Masterman Lister and there is no need for us to repeat the reasoning which is fully set out in the judgment of Chadwick LJ. Under the Rules as amended when the Mental Capacity Act 2005 came into force (the Civil Procedure (Amendment) Rules 2007 (SI 2007/2204 (L20)), patients in rule 21.1(1)(a) has been replaced by protected parties, and in rule 21.1(2)(d) a protected party is defined as a party, or intended party, who lacks capacity to conduct the proceedings. Thus the current test is stated in the same terms as that which was applicable to these proceedings. The current rule 21.1(2)(c) defines lacks capacity to mean lacks capacity within the meaning of the 2005 Act. Given that the courts had already arrived at a test of capacity on which the 2005 Act test was closely modelled, it seems unlikely that this has introduced any differences between the old and the new law. But that question does not arise in this case, where the issue is what is meant by the proceedings which the party must have the capacity to conduct. This is a question of construing the Rules. Rule 21.2(1) provides that a protected party must have a litigation friend to conduct proceedings on his behalf. By rule 21.4(3), a litigation friend must be someone who can fairly and competently conduct proceedings on behalf of the patient. This in itself suggests a focus on proceedings in general rather than on the proceedings as framed. Furthermore it applies right at the start of any proceedings. Indeed, as will be seen later, rule 21.10 applies to claims which are settled before any proceedings have begun. Read as a whole, therefore, rule 21 posits a person with a cause of action who must have the capacity to bring and conduct proceedings in respect of that cause of action. The proceedings themselves may take many twists and turns, they may develop and change as the evidence is gathered and the arguments refined. There are, of course, litigants whose capacity fluctuates over time, so that there may be times in any proceedings where they need a litigation friend and other times when they do not. CPR 21.9(2) provides that when a party ceases to be a patient (now, a protected person) the litigation friends appointment continues until it is ended by a court order. But a party whose capacity does not fluctuate either should or should not require a litigation friend throughout the proceedings. It would make no sense to apply a capacity test to each individual decision required in the course of the proceedings, nor, to be fair, did the defendant argue for that. There are, of course, statements in the cases which might suggest a different approach. In Masterman Lister, Kennedy LJ (para 18) quoted with approval the test described by Boreham J in the limitation case of White v Fell (unreported) 12 November 1987 (which the best efforts of counsel in this case have been unable to find for us): To have that capacity she requires first the insight and understanding of the fact that she has a problem in respect of which she needs advice . Secondly, having identified the problem, it will be necessary for her to seek an appropriate adviser and to instruct him with sufficient clarity to enable him to understand the problem and to advise her appropriately . Finally, she needs sufficient mental capacity to understand and make decisions based upon, or otherwise give effect to, such advice as she may receive. Applied to the facts of this case, this could suggest that, having identified a problem and gone to a lawyer, all that is needed is the capacity to understand and make decisions based upon the actual advice given by that lawyer. The same might be said of the test as stated by Chadwick LJ at para 75 of Masterman Lister: For the purposes of Order 80 and now CPR Pt 21 the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. Equally, of course, those words could be read in the opposite sense, to refer to the advice which the case required rather than the advice which the case in fact received. In truth, such judicial statements, made in the context of a different issue from that with which we are concerned, are of little assistance. But they serve to reinforce the point that, on the defendants argument, the claimants capacity would depend upon whether she had received good advice, bad advice or no advice at all. If she had received good advice or if she had received no advice at all but brought her claim as a litigant in person, then she would lack the capacity to make the decisions which her claim required of her. But if, as in this case, she received bad advice, she possessed the capacity to make the decisions required of her as a result of that bad advice. This cannot be right. I would hold, therefore, that the test of capacity to conduct proceedings for the purpose of CPR Part 21 is the capacity to conduct the claim or cause of action which the claimant in fact has, rather than to conduct the claim as formulated by her lawyers. Judged by that test, it is common ground that Mrs Dunhill did not have the capacity to conduct this claim. The effect of incapacity It follows that Mrs Dunhill should have had a litigation friend when the proceedings were begun, as required by CPR 21.2(1). As Kennedy LJ pointed out in Masterman Lister, at para 30, Order 80 and CPR Pt 21 are worded in such a way as to indicate that in that event the litigation is ineffective and decisions made in the course of litigation are invalid see for example, Order 80, rr 2(1) and 10, CPR rr 21.2(1) and 21.10(1), but CPR r 21.3(4) does suggest a solution. It provides: Any step taken before a child or patient has a litigation friend, shall be of no effect, unless the court otherwise orders. Kennedy LJ went on to say that Provided everyone has acted in good faith and there has been no manifest disadvantage to the party subsequently found to have been a patient at the relevant time I cannot envisage any court refusing to regularise the position (para 31). But of course, everything must depend upon the particular facts. It might be appropriate retrospectively to validate some steps but not others. In this case, we have not been asked to validate anything, but no doubt we could do so of our own motion if we thought it just. I would not think it just to do so. While every other step in the proceedings might be capable of cure, the settlement finally disposing of the claim is not. For obvious reasons, we have not been asked retrospectively to validate the settlement and consent order made on 7 January 2003. CPR 21.10(1) relevantly provides: Where a claim is made (a) by or on behalf of a child or patient [now protected party] (b) against a child or . patient [now protected party], no settlement, compromise or payment and no acceptance of money paid into court shall be valid, so far as it relates to the claim, by, on behalf of or against the child or patient [now protected party], without the approval of the court. The embodiment of this settlement in a consent order did not constitute the approval of the court for the purpose of this rule. The purpose of the rule is to impose an external check on the propriety of the settlement and the accompanying practice direction sets out the evidence which must be placed before the court when approval is sought (see now 21PD.6). Given the finding that Mrs Dunhill was a patient at the time, does this automatically mean that the settlement and court order are of no effect? The defendant makes two arguments that the rule does not have that effect. The first is that the rule only applies where the patient (or protected party) has a litigation friend. Only then is the other party to the settlement put on notice that the settlement requires the approval of the court. Despite the particulars of injury given in the Particulars of Claims in this case, it has never been suggested that this defendant either knew or ought to have known of the claimants lack of capacity. As a general proposition, the other party is unlikely to be in a position to know the details of his opponents mental faculties unless these are fully explored in medical reports to which he has access. The problem with the defendants argument is that it involves writing words into the rule which are not there. If anything, the words hint at the reverse, as they refer to a claim made by or on behalf of a patient or protected party. As CPR r 21(2)(a) says, it is the task of a litigation friend to conduct proceedings on behalf of a patient or protected person. Although there are other circumstances in which a claim may be made on behalf of a child or protected party, the inclusion of by suggests proceedings conducted by the patient herself. Equivalent wording is not used in relation to claims made against a patient or protected person; but clearly the same rule must apply to settlements made by or on behalf of claimants or defendants. Defendants who lack capacity require as much protection as claimants against improvident settlements. To disapply the rule where there was no litigation friend would in each case require the words having a litigation friend to be written into the rule. Furthermore, in Dietz v Lennig Chemicals Ltd [1969] 1 AC 170, the House of Lords held that the compromise rule embodied in the predecessor to CPR 21.10(1) applied to the settlement of a claim made on behalf of a child before any proceedings were begun. Following this decision, in Drinkall v Whitwood [2003] EWCA Civ 1547, [2004] 1 WLR 462, Simon Brown LJ pointed out that the claim in CPR 21.10 must mean the cause of action rather than any proceedings in which the claim is asserted. This is clear from the wording of CPR 21.10(2), which provides the procedure whereby settlements made before proceedings are begun are approved by the court (that is, as pointed out in Dietz, by a simplified process rather than having to issue a claim in the ordinary way): Where (a) before proceedings in which a claim is made by, or on behalf of, or against a child or patient [now, protected party] (whether alone or with any other person) are begun, an agreement is reached for the settlement of the claim; and (b) the sole purpose of proceedings on that claim is to obtain the approval of the court to a settlement or compromise of the claim, the claim must (i) be made using the procedure set out in Part 8 (alternative procedure for claims); and (ii) include a request to the court for approval of the settlement or compromise. The claim at the end of (a) must necessarily predate the commencement of proceedings. If the claim in CPR 21.10(2) predates the commencement of proceedings, there is no reason why the claim in CPR 21.10(1) should not also do so. If there are not yet any proceedings, there can be no litigation friend. There is no obvious way to read a limitation to cases where the party lacking capacity has a litigation friend into CPR 21.10(1) as it applies to proceedings which have already been started but not as it applies where proceedings have not yet begun. Nor would it make any practical sense to do so. The other party is, if anything, in a rather better position to assess whether his opponent may lack capacity to conduct the proceedings after they have begun than he is beforehand. Dietz and Drinkall were both cases in which the defendant wished to resile from the compromise of a childs claim which had not yet been finally approved by the court. In Bailey v Warren, the Court of Appeal held that there was no reason to distinguish between claims involving children and claims involving patients in this respect. Hence a settlement made before proceedings began by a person who lacked capacity to conduct proceedings on his claim required the approval of the court under CPR 21.10(1) (although in that case the court gave the settlement its approval). In Bailey v Warren, the Court of Appeal also rejected the defendants second argument. This is of a more fundamental nature than his argument upon the construction of the Rules, although he uses it to bolster his construction argument, for he says that without the limitation for which he contends the rule would be ultra vires. This argument was foreshadowed by Chadwick LJ in Masterman Lister, at para 68: To my mind it is not self evident that rules 10 and 12 [the predecessors to CPR 21.10(1) and 21.11] have any application where the plaintiff brings a claim in contravention of rule 2 so that, in the eyes of the defendant and the court, he is asserting that he is not under a disability. If rules 10 and 12 were intended to apply in such a case (which I doubt) then it would be open to question whether the rule making body had power to change the substantive law expounded in Imperial Loan Co Ltd v Stone [1892] 1 QB 599 and Hart v OConnor [1985] AC 1000. In Imperial Loan Co Ltd v Stone [1892] 1 QB 599, the Court of Appeal held that a contract made by a person who lacked the capacity to make it was not void, but could be avoided by that person provided that the other party to the contract knew (or, it is now generally accepted, ought to have known) of his incapacity. As Mr Rowley points out on behalf of the defendant, this rule is consistent with the objective theory of contract, that a party is bound, not by what he actually intended, but by what objectively he was understood to intend. The rule in Imperial Loan was applied by the Judicial Committee of the Privy Council in Hart v OConnor [1985] AC 1000, a case from New Zealand, where the issue was whether this only applied if the contract was fair. Overruling prior New Zealand authority to the contrary in Archer v Cutler [1980] 1 NZLR 386, but consistently with the decision of the High Court of Australia in McLoughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243, the Board held that a contract made by a person who was ostensibly sane could not be set aside simply because it was unfair but only if there was equitable fraud which would also avail a sane person. This rule, it is argued, applies just as much to the settlement of civil claims as it does to any other sort of contract. Once the parties to ordinary civil litigation have reached agreement, it is not for the court to interfere in their bargain. If they desire to embody it in a consent order, they can do so simply by having it entered and sealed by a court officer under CPR 40.6(2). They do not have to submit it for the approval of any judicial officer. In this case, it was simply a matter of courtesy to show the order to the judge, who had (no doubt) been waiting patiently or getting on with other business while the negotiations were proceeding. Matrimonial proceedings are different, because the parties cannot oust the jurisdiction of the court, and so if they want their agreement embodied in a court order, they cannot avoid at least a degree of judicial scrutiny. Neither the Rules of the Supreme Court nor the Civil Procedure Rules can change the substantive law unless expressly permitted so to do by statute: see In re Grosvenor Hotel Ltd (No 2) [1965] Ch 1210. Thus, it is argued, section 1 of the Civil Procedure Act 1997 gave the Civil Procedure Rule Committee power to make rules governing the practice and procedure to be followed in the civil courts and as further provided in Schedule 1 to the Act. Paragraph 4 of that Schedule provides that the Rules may modify the rules of evidence, thus showing that where it is intended that the Rules could modify the substantive law, express provision is made for this. The comment made by Chadwick LJ in Masterman Lister was obiter dictum, because it was there held that the claimant did not lack capacity to litigate. In Bailey v Warren, it was pointed out that the cases of Dietz and Drinkall had not been cited in Masterman Lister. Dietz is of particular relevance, because it was there argued (on behalf of the party who was trying to uphold the unapproved settlement) that the compromise rule as embodied in the Rules of the Supreme Court, Order 80, rule 11 (the predecessor to CPR 21.10(1)) was ultra vires (see counsels reply at p 179). This argument was dealt with by Lord Pearson (with whom Lord Reid and Lord Pearce certainly agreed) as follows, at p 189: There was a suggestion made in the course of the argument that the Compromise Rule, if it meant what it appears to say if invalid means of no legal effect is ultra vires. I do not accept that suggestion. When the claim of an infant or other person under disability is before the court, the court needs, for the purpose of protecting his interests, full control over any settlement compromising his claim. In my view, the making and re making of the Compromise Rule were valid exercises of the rule making power under the Judicature Acts, which is now contained in section 99 of the Act of 1925. Mr Rowley rightly points out that Dietz was a childs claim, where the common law of contract is different, so their Lordships did not have to address their minds to the position of persons who lacked capacity. In practical terms, of course, it is a great deal easier to know whether one is dealing with a child than it is to know whether one is dealing with a patient or protected party. But the fact that a childs contracts may be avoided in rather wider circumstances than may the contracts of a patient or protected party does not alter the fact that both are subject to the same compromise rule and for the same reasons. It did not occur to the Court of Appeal to distinguish between them in Bailey v Warren. It is fair to say that Lord Pearson gives no reason for his acceptance that the compromise rule is within the powers of the rule making body. Given that it applies to claims compromised before proceedings are brought, it is carving out a substantial but quite specific exception to the common law rule in Imperial Loan Co Ltd v Stone. Nevertheless, we are bound by Dietz unless there is a very good reason to depart from it. Mr Melton, on behalf of the claimant, also points out that paragraph 1 of Schedule 1 to the Civil Procedure Act 1997 expressly provides that Among the matters which Civil Procedure Rules may be made about are any matters which were governed by the former Rules of the Supreme Court or the former county court rules . This could certainly be read as conferring an express power to make rules of court modifying the substantive law to the extent that the previous rules did so, whether or not those rules were within the powers which the previous rule making bodies had been given. Agency Having reached the conclusion that the Compromise Rule is intra vires and applies to this case, there is no need to address a further argument made on behalf of Ms Dunhill. This is to the effect that counsel was acting as her agent, rather than a mere messenger, when making the settlement on 7 January 2003. It has been held that the principals incapacity terminates a contract of agency, whether or not it is known to the agent (Yonge v Toynbee [1910] 1 KB 215), and this must logically apply also to the initial formation of a contract of agency. This means that the agent lacks any actual authority to make a contract on behalf of the incapacitated principal, whether or not the other party to the contract knows of the incapacity. Thus, it is said, the rule in Imperial Loan Co Ltd v Stone does not apply to a contract concluded by an agent on behalf of a principal who lacks the capacity to make it. Nor, it is said, could there be any apparent authority if the principal lacked capacity at the time of making the initial representation as to the agents authority, again whether or not the other party knew of this. Reliance is placed, in particular, upon a passage in Bowstead & Reynolds on Agency (19th ed, (2010) para 2 009). This argument has led the current editor of that work, Professor Peter Watts, to reconsider and disavow what is there stated. The authorities are indeed in a state of some confusion, as is amply demonstrated by A.H Hudson at (1959) 37 Canadian Bar Review 497. It would be most unwise for this court to express any opinion, one way or another, as to the present state of the law. Fortunately, the issue does not arise. Policy Much was made in the course of argument of the competing policy arguments, some of which I touched upon at the outset of this judgment. In particular, Mr Rowley emphasised the need for finality in litigation, the stresses and strains which prolonged litigation places upon both litigants and the courts, the difficulty of re opening cases such as this so long after the event, and the alternative protection given to the parties by their legal advisers, who should bear the consequences of their own mistakes. Against this Mr Melton emphasised the disadvantages of claims for professional negligence when compared with claims for personal injuries, principally the discount for the chance that the claim might not have succeeded and the inability to make a periodical payments order. He also points out that lack of insight is a common feature in head injury cases, so that the parties should be encouraged to investigate capacity at the outset. A litigant in person would, of course, have no legal advisers against whom to make a claim, but the legal position cannot differ according to whether or not a party is, or is not, represented by lawyers. Policy arguments do not answer legal questions. But to the extent that they are at all relevant to the issues before us, the policy underlying the Civil Procedure Rules is clear: that children and protected parties require and deserve protection, not only from themselves but also from their legal advisers. The notes to Order 80 in the last (1999) edition of the Supreme Court Practice stated that among the objects of the compromise rule was to protect minors and patients from any lack of skill or experience of their legal advisers which might lead to a settlement of a money claim for far less than it is worth, a sentiment which has been carried forward into the current edition of Civil Procedure. Conclusion I would therefore dismiss both appeals and uphold the order made by Bean J. On the test properly to be applied, Ms Dunhill lacked the capacity to commence and to conduct proceedings arising out of her claim against Mr Burgin. She should have had a litigation friend from the outset and any settlement should have been approved by the court under CPR 21.10(1). We have not been invited to cure these defects nor would it be just to do so. The consent order must be set aside and the case go for trial. |
The common law has long protected the liberty of the subject, through the machinery of habeas corpus and the tort of false imprisonment. Likewise, article 5 of the European Convention on Human Rights begins: Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law. In Storck v Germany (2005) 43 EHRR 6, paras 74 and 89, confirmed by the Grand Chamber in Stanev v Bulgaria (2012) 55 EHRR 22, paras 117 and 120, and adopted by this court in Surrey County Council v P; Cheshire West and Chester Council v P [2014] UKSC 19; [2014] AC 896 (commonly known as Cheshire West), para 37, the European Court of Human Rights held that there were three components in a deprivation of liberty for the purpose of article 5: (a) the objective component of confinement in a particular restricted place for a not negligible length of time; (b) the subjective component of lack of valid consent; and (c) the attribution of responsibility to the State. At the same time, the common law and equity have long recognised the authority of parents over their minor children, now encapsulated in the concept of parental responsibility in the Children Act 1989. Likewise, article 8 of the European Convention on Human Rights begins Everyone has the right to respect for his private and family life, his home and his correspondence; and, as this court recognised in Christian Institute v Lord Advocate [2016] UKSC 51; 2017 SC (UKSC) 29, paras 71 to 74, the responsibility of parents to bring up their children as they see fit, within limits, is an essential part of respect for family life in a western democracy. This case is about the interplay between the liberty of the subject and the responsibilities of parents, between the rights and values protected by article 5 and the rights and values protected by article 8, and between the relationship of parent and child at common law and the Convention rights. The principal issue can be simply stated: is it within the scope of parental responsibility to consent to living arrangements for a 16 or 17 year old child which would otherwise amount to a deprivation of liberty within the meaning of article 5? But this principal issue cannot sensibly be addressed without also considering further issues. What difference, if any, does it make that the child lacks the mental capacity to make the decision for himself? What difference, if any, does it make that the holder of parental responsibility is a public authority rather than an individual? Furthermore, although the concentration in this case is upon 16 and 17 year old children, similar issues would arise in a case concerning a child under 16. A further issue was raised by the court after the hearing: do the restrictions on placing children in accommodation provided for the purpose of restricting liberty, arising from section 25 of the Children Act 1989, apply to the sort of living arrangements in question here? We are grateful to the parties for their written submissions on this complicated issue. It is addressed by Lady Black at paras 91 to 115 of her judgment, with which I agree. The history The child in question, D, was born on 23 April 1999, and so is now aged 20 and an adult. Nevertheless, the importance of the issues is such that this court gave the Official Solicitor, who acts for him as his litigation friend, permission to appeal from the decision of the Court of Appeal. D was diagnosed with attention deficit hyperactivity disorder at the age of four, Aspergers syndrome at seven, and Tourettes syndrome at eight. He also has a mild learning disability. His parents struggled for many years to look after him in the family home, despite the many difficulties presented by his challenging behaviour. Eventually, in October 2013 when he was 14, he was informally admitted to Hospital B for multi disciplinary assessment and treatment. Hospital B provided mental health services for children between the ages of 12 and 18. He lived in a unit in the hospital grounds and attended a school which was integral to the unit. The external door to the unit was locked and D was checked on by staff every half hour. If he left the site, he was accompanied by staff on a one to one basis. His visits home were supervised at all times. In 2014, the Hospital Trust issued an application under the inherent jurisdiction of the Family Division of the High Court relating to children, seeking a declaration that it was lawful for the Trust to deprive D of his liberty and that this was in his best interests. In March 2015, Keehan J held: first, that the conditions under which D lived amounted to depriving him of his liberty (by which he meant confinement under limb (a) of Storck v Germany, para 1 above); the fact that he enjoyed living in the unit made no difference; second, that it was within the zone of parental responsibility for his parents to agree to what would otherwise be a deprivation of liberty; it was a proper exercise of parental responsibility to keep an autistic 15 year old boy who had erratic, challenging and potentially harmful behaviours under constant supervision and control; but third, once he reached 16 he would come under the jurisdiction of the Court of Protection and the different regime there, largely contained in the Mental Capacity Act 2005: In re D (A Child) (Deprivation of Liberty) [2015] EWHC 922 (Fam); [2016] 1 FLR 142. By then, the clinical team had agreed that D should be discharged from Hospital B to a residential placement. Birmingham City Council took the lead in making the arrangements for D to move to Placement B. His parents agreed to the move. On 23 April 2015, his 16th birthday, proceedings were issued in the Court of Protection. Birmingham sought a declaration that D would not be deprived of his liberty at Placement B because his parents could consent to it. On 20 May 2015, Keehan J made an order for Ds transfer from Hospital B to Placement B. This took place on 2 June 2015. D was accommodated there under section 20 of the Children Act 1989 and thus became a looked after child within the meaning of section 22(1) of that Act. It has always been common ground between the parties to this case that the arrangements under which D lived at Placement B would have amounted to a deprivation of liberty were it not for his parents consent to them. Placement B was a large house set in its own grounds, with 12 residential units in the grounds, each with its own fenced garden. D lived with three other young people in House A. The external doors were locked. If he wanted to go out into the garden, he had to ask for the door to be unlocked. He was not allowed to leave the premises except for a planned activity, such as attending his school, which was also on the site, swimming and leisure activities. He received one to one support during waking hours and staff were in constant attendance overnight. The application was heard by Keehan J in the Court of Protection in November 2015. In January 2016, he held: first, that the parents could no longer consent to what would otherwise be a deprivation of liberty now that D had reached 16; his principal reasons for doing so were that Parliament had, on numerous occasions, distinguished the legal status of those who had reached the age of 16 from that of those who had not; and that the Mental Capacity Act 2005 applied to people who had reached the age of 16. He also held that this deprivation of liberty was attributable to the state, a matter which is no longer in dispute: Birmingham City Council v D (by his litigation friend, the Official Solicitor) [2016] EWCOP 8; [2016] PTSR 1129. Birmingham City Council appealed to the Court of Appeal. Before the hearing, D was transferred to Placement C, where the arrangements were not materially different from those in Placement B. Once again, his parents agreed to his being accommodated under section 20 of the 1989 Act, to the arrangements themselves and to the restrictions on Ds liberty which they entailed. On 23 November 2016, Keehan J authorised the placement and the deprivation of liberty. There has never been any doubt that both placements were in Ds best interests but that D himself did not have the capacity to consent to them. The appeal was heard in February 2017, but judgment was not given until 31 October 2017. In the meantime, D had reached the age of 18 and parental responsibility for him ceased. However, by virtue of his age, it was now possible for a deprivation of liberty in a hospital or care home to be authorised under the deprivation of liberty safeguards in Schedule A1 to the Mental Capacity Act 2005 (which applied only to those aged 18 or over), as well as by the Court of Protection. The Court of Appeal agreed with Keehan J that Ds accommodation in Placement B and Placement C was attributable to the State. However, the appeal was allowed on the ground that Keehan J had been wrong to hold that a parent could not consent to what would otherwise be a deprivation of the liberty of a 16 or 17 year old child who lacked the capacity to decide for himself. Sir James Munby P, in a typically erudite judgment, traced the development of the common law responsibilities of parents in great detail. He concluded, first, that the approach of Keehan J did not give effect to the fundamental principle, established by the majority of the House of Lords in Gillick v West Norfolk and Wisbech Area Health Authority [1986] AC 112, that the exercise of parental responsibility comes to an end, not on the childs attaining a fixed age, but on his attaining Gillick capacity; and second, that none of the statutory provisions upon which Keehan J had relied had a bearing on the matter in hand (para 125). The position of each party to this appeal The Official Solicitor now appeals to this court on Ds behalf. The Official Solicitors primary case is that, whatever may once have been the position at common law, no person can consent to the confinement of a child who has reached the age of 16 and lacks the capacity to decide for himself. If such a child is confined, and that confinement is attributable to the state, he is deprived of his liberty within the meaning of article 5 and there must be safeguards to ensure that the deprivation is lawful. The Mental Capacity Act 2005 provides a complete decision making framework for the care and treatment of people aged 16 and above who lack the capacity to decide for themselves. His alternative case is that, even if such consent is within the scope of parental responsibility, the person giving it should apply the principles and procedure for deciding whether the arrangements are in the childs best interests set out in section 4 of the Mental Capacity Act 2005. Birmingham City Councils case is that it is within the scope of a parents lawful exercise of parental responsibility to authorise the confinement of a 16 or 17 year old child who is not Gillick competent to consent. The common law as to the scope of parental responsibility in this respect has not been eroded by the Mental Capacity Act 2005 or by any other legislation. If it affects the exercise of parental responsibility at all, it does so only by substituting the concept of lack of capacity within the meaning of the Act for the concept of lack of competence within the meaning of Gillick (to the extent that these two may differ an issue which does not arise on this appeal). The Equality and Human Rights Commission have been given permission to intervene in this court, as they did in the Court of Appeal. Their case is that, while parental responsibility can in principle extend to the age of 18, whether it applies in particular circumstances has to be judged in the light, not only of the common law, but also of statute, the European Convention on Human Rights and other international instruments. Parents should not be able to consent to the confinement of a 16 or 17 year old child, thereby removing the protections given by article 5 of the European Convention. Further, to remove those protections from a child who lacks Gillick competence because of a disability, while according them to a competent child, is unjustified discrimination on the ground of his or her disability. The Secretaries of State for Education and for Justice did not intervene in the Court of Appeal but have been given permission to intervene jointly in this court. The Secretary of State for Education has policy responsibility for children and young people and depriving them of liberty; the Secretary of State for Justice has overall policy responsibility for the Mental Capacity Act 2005 and in relation to parental responsibility generally. Their case is, first, that a child will only be confined if the restrictions on his liberty go beyond those which would be imposed upon a child of the same age and relative maturity who is free from disability; and second, that even if a child is confined, a person with parental responsibility may provide a valid consent to that confinement if the child is not Gillick competent to make the decision for himself; however, a person with parental responsibility must be acting in the best interests of the child for there to be a proper exercise of that responsibility. The Secretaries of State agree with both the Official Solicitor and Birmingham City Council that a local authority with parental responsibility by virtue of a care order or interim care order, or with any other statutory responsibilities for a child, cannot supply a valid consent to the confinement of a child (as Keehan J held in In re AB (A Child) (Deprivation of Liberty: Consent) [2015] EWHC 3125 (Fam), [2016] 1 WLR 1160; see also In re K (A Child) (Secure Accommodation Order: Right to Liberty) [2001] Fam 377, para 35 below). Only a natural person with parental responsibility can do so. Quite what the basis is for distinguishing between the content of parental responsibility according to the person who holds it is not explained: the Children Act 1989, which both defines and governs the allocation of parental responsibility, makes no such distinction. Parental responsibility This case turns on the inter relationship between the concept of parental responsibility, as defined by the Children Act 1989, the common law and other relevant statutory provisions, and the obligation of the State to protect the human rights of children under the European Convention on Human Rights. The one cannot supply an answer without reference to the other. It makes sense, therefore, to begin with parental responsibility. Parental responsibility is defined in the Children Act 1989 as all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and his property (section 3(1)). By law obviously refers to the common law, but also includes those statutory provisions which give rights etc to parents, such as the Marriage Act 1949, which gives them the right to withhold consent to the marriage of a 16 or 17 year old child (section 3). As Lady Black explains in more detail in paras 55 to 68 of her judgment, the common law and equity recognised the parental power of a father over his legitimate minor children (the mother did not acquire equal rights and authority with the father until the Guardianship Act 1972): see the valuable account of the history by P H Pettitt, Parental Control and Guardianship in R H Graveson and FR Crane, A Century of Family Law (1957, Sweet & Maxwell). The high water mark of this was the well known case of In re Agar Ellis (No 2) (1883) 24 Ch D 317, at 326, where the Master of the Rolls declared: the law of England is, that the father has the control over the person, education and conduct of his children until they are 21 years of age. That is the law. However, as Sachs LJ explained in Hewer v Bryant [1970] 1 QB 357, at 372, in passages quoted in full at para 55 of Lady Blacks judgment, a distinction was drawn between custody in the narrow sense of the right to physical possession of the child and custody in the wider sense of the right to control every aspect of the childs life, including his religion, education and property. The common law courts would enforce the former by way of the writ of habeas corpus. But they would refuse to do this against the wishes of the child, once he or she had reached the age of discretion. In the 19th century, this was regarded as fixed at 14 for boys and 16 for girls (the latter by reference to the Abduction Acts of 1557 and 1828). The Court of Chancery would enforce all parental powers and authority, but by way of the Crowns parens patriae jurisdiction rather than by way of enforcing the parents rights, potentially up to the age of majority. Parental rights were never absolute and became increasingly subject to the overriding consideration of the childs own welfare. This was put on a statutory footing by the Guardianship of Infants Act 1925, which famously declared that Where in any proceedings before any court the custody or upbringing of an infant, or the administration of any property belonging to or held in trust for an infant, or the application of the income thereof, is in question, the court, in deciding that question, shall regard the welfare of the infant as the first and paramount consideration (section 1). That remains the guiding principle in section 1(1) of the Children Act 1989, which provides that the childs welfare shall be the courts paramount consideration. Section 1, of course, deals with the position if a case about a childs upbringing gets to court. But what about the powers and authority of holders of parental responsibility before a case gets to court? Two 20th century cases show how, whatever may have been the earlier position, the common law is capable of moving with the times. In Hewer v Bryant [1970] 1 QB 357, the issue was the meaning of in the custody of a parent in the Limitation Act 1954. The High Court had held that a child remained, by law, in the custody of his father until the age of majority, applying In re Agar Ellis. The Court of Appeal held that a 15 year old living away from home and working as an agricultural trainee was not in the custody of a parent for this purpose. Custody in the Limitation Act meant the actual exercise of powers of control. But both Lord Denning MR and Sachs LJ recognised that the parents legal powers of physical control diminished as the child got older. Sachs LJ expressly referred to the parents ability to restrict the liberty of the person, which lasted until the age of discretion, and distinguished between the parental power and the courts power, which lasted until the age of majority (p 372). Lord Denning MR put it this way: the legal right of a parent to the custody of a child is a dwindling right which the courts will hesitate to enforce against the wishes of the child, and the more so the older he is. It starts with a right of control and ends with little more than advice. That dictum was approved by the majority of the House of Lords in Gillick v West Norfolk and Wisbech Area Health Authority [1986] AC 112, at pp 172, 186, 195. The issue was whether it was lawful to give contraceptive advice and treatment to a child under 16 without her parents consent if she herself was capable of giving that consent. The Court of Appeal had held that this would be infringing the inalienable and legally enforceable rights of parents relating to the custody and upbringing of their children which, except in emergencies, could only be overridden by a court. A girl under 16 was incapable either of consenting to treatment or prohibiting a doctor from seeking the consent of her parents. The House of Lords, by a majority, disagreed. The earlier age of discretion cases had established the principle that children could achieve the capacity to make their own decisions before the age of majority. It was no longer, if it ever had been, correct to fix that at any particular age, rather than by reference to the capacity of the child in question: it had already been established that a child below the age of 16 could consent to sexual intercourse so that it was not rape (R v Howard [1966] 1 WLR 13) or to being taken away so that it was not kidnapping (R v D [1984] AC 778). Parental rights and authority existed for the sake of the child, to enable the parent to discharge his responsibilities towards the child, and not for the sake of the parent. Lord Scarman put it thus (p 185): The principle is that parental right or power of control of the person and property of his child exists primarily to enable the parent to discharge his duty of maintenance, protection, and education until he [the child] reaches such an age as to be able to look after himself and make his own decisions. The consequence was that (p 188): as a matter of law the parental right to determine whether or not their minor child below the age of 16 will have medical treatment terminates if and when the child achieves a sufficient understanding and intelligence to enable him or her to understand fully what is proposed. As Lady Black explains in paras 69 to 72 of her judgment, the Gillick case is not directly relevant to the issue before us now. It had to do with medical treatment and not with deprivation of liberty. It was concerned with whether a child might acquire the capacity, and the right, to make such decisions for herself before she reached the common law age of discretion, not with whether parental authority endured beyond that age if the child lacked the capacity to decide for herself. And as Lady Black has shown, it is, to say the least, highly arguable that such authority did not extend to depriving such a child of her liberty once she had reached the age of discretion. Some support for that conclusion is supplied by the earliest legislation dealing specifically with people with mental disabilities, the Mental Deficiency Act 1913. Section 6(3) provided both for detention in an institution and admission to guardianship. Section 10(2) provided that an order that a person be placed under guardianship conferred upon the person named as guardian such powers as would have been exercisable if he had been the father of the defective and the defective had been under the age of 14. That provision remained in force until repealed by the Mental Health Act 1959, under which the powers of a guardian were defined, by section 34(1), in materially identical terms. (The powers of a guardian are now more narrowly defined in the Mental Health Act 1983.) It is highly likely that it was contemplated that a guardian might have to accommodate the person under his guardianship in conditions which deprived him of his liberty. The fact that the guardian was therefore given the powers of the father of a child under 14, rather than the powers of the father of a child of any age, suggests that it was not then thought that a father had the right to deprive a child of any age of his liberty if the child lacked the capacity to make his own decisions. Many of the people falling within the definition of mental defective would lack that capacity. Statute has also intervened to make specific provision for children who have reached the age of 16. In the Court of Protection, Keehan J referred to the following (para 64) although not in the same terms or the same order: (i) Section 8(1) of the Family Law Reform Act 1969 provides that the consent of a child of 16 to any surgical, medical or dental treatment shall be as effective as it would be if he were of full age and that where a child has given an effective consent it is not necessary to obtain the consent of a parent or guardian. That is why the discussion in Gillick related to children below that age. However, subsection (3) provides that Nothing in this section shall be construed as making ineffective any consent which would have been effective if this section had not been enacted. Lord Fraser of Tullybelton saw this as recognising that the consent of a child below that age might also be effective. Whether the consent of a parent remains effective even if a child, with capacity, has refused consent is a more controversial question (which fortunately does not arise in this case). (ii) Section 131(2) of the Mental Health Act 1983 provides that subsections (3) and (4) apply to a child of 16 who has the capacity to consent to arrangements for his own informal admission to hospital for treatment for mental disorder. Subsection (3) provides that if he does consent, those arrangements may be made even though there is someone with parental responsibility for him; and subsection (4) provides that if he does not consent, then the arrangements cannot be made on the basis of parental consent. Subsection (5) provides that capacity is to be read in accordance with the Mental Capacity Act 2005. (iii) Section 2(5) of the Mental Capacity Act 2005 provides that the powers which may be exercised under that Act in relation to a person who lacks, or is reasonably believed to lack, capacity cannot be exercised in relation to a person under 16 (although there is an exception for powers in relation to their property and affairs if it is likely that the incapacity will continue past majority: section 18). This means that the Act, including the presumption of capacity in section 1(2) and the test for incapacity in sections 2(1) and 3, applies to a person who has reached 16. The Act gives protection for people acting in connection with the care and treatment of a person whom they reasonably believe to lack capacity if they reasonably believe that it will be in that persons best interests (section 5(1)). However, the Act does not authorise any person to deprive another person of his liberty except in accordance with an order of the court or if authorised under the deprivation of liberty safeguards in Schedule A1 (section 4A). Schedule A1 only applies to people aged 18 or over. After these events, a new Schedule AA1 (not yet in force) has been inserted applying to those aged 16 and above. (iv) Section 9(6) of the Children Act 1989 provides that no court may make a child arrangements, specific issue or prohibited steps order under section 8 of the Act which is to have effect after the child reaches 16 unless the circumstances are exceptional. (v) Section 31(3) of the Children Act 1989 provides that a care or supervision order may not be made in respect of a child of 17 (or of 16 who is married). However, an order made before this point can last until the child reaches 18 (section 92(12)). (vi) Section 20(11) of the Children Act 1989 provides that a child of 16 or 17 may agree to being accommodated by a local authority even if his parents object or wish to remove him. The age of 16 is significant for various other purposes, such as leaving school, joining the armed forces or getting married (albeit that parental consent is usually required). So Keehan J was correct to suggest that the law accords children who have reached 16 a status which is in some respects different from that of children under that age. However, Sir James Munby P was also correct to hold that these provisions do not supply the answer to the issues in this case. Items (iv) and (v) are concerned with the limits on making court orders. Items (i) and (ii) relate only to children who have the capacity to make a decision for themselves, and it is quite possible that item (vi) is also so limited. Furthermore, as Gillick holds, a child may acquire the capacity to make certain decisions for himself before the age of 16. We are concerned with the extent of parental responsibility for a child who lacks the capacity to make the decision for himself. It may well be that, as a general rule, parental responsibility extends to making decisions on behalf of a child of any age who lacks the capacity to make them for himself. This would always be subject to the courts powers of intervention, whether at the behest of another parent or individual in private law proceedings under Part 2 of the Children Act 1989, or at the behest of a local authority in public law proceedings under Part 4 on the ground that the child is suffering or likely to suffer significant harm as a result of the parents decisions. The question, however, is whether there are any limits to that general rule, and in particular whether it is within the scope of parental responsibility to make arrangements which have the effect of depriving a child of his liberty. In view of the conclusion which I have reached as to the effect of article 5 of the European Convention on Human Rights, and the interaction between parental responsibility and the childs rights under article 5, it is strictly unnecessary to reach a concluded view on that question. But I acknowledge the force of the conclusion reached by Lady Black at para 90 of her judgment. As she says, it reinforces the conclusion which I have reached for other reasons. The European Convention on Human Rights Article 1 of the European Convention on Human Rights requires the High Contracting Parties to secure to everyone within their jurisdiction the rights and freedoms set out in the Convention. There can be no doubt that everyone includes minor children, or indeed that the Convention rights may require adaptation to cater for their special needs as children: see, for example, the case of Thompson and Venables dealing with the fair trial rights of children accused of serious crime: T v United Kingdom (1999) 30 EHRR 121. We are here concerned with article 5, which, as already stated, accords to everyone the right to liberty and security of person. No one shall be deprived of his liberty save in the [listed] cases and in accordance with a procedure prescribed by law. That this applies to children is made clear by article 5(1)(d) which permits the detention of a minor by lawful order for the purpose of educational supervision . That it applies to people who lack the capacity to make decisions for themselves is made clear by article 5(1)(e) which permits the lawful detention of persons of unsound mind. Article 5(1) contains within it the requirement that decisions made under it are not arbitrary and accord with the Convention concept of legality: see, for example, HL v United Kingdom (2005) 40 EHRR 32. Article 5 also contains various specific procedural safeguards, including article 5(4), which requires that everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. Prima facie, therefore, article 5 protects children who lack the capacity to make decisions for themselves from being arbitrarily deprived of their liberty. All parties to this case agree that this means that a local authority which has parental responsibility for a child cannot deprive the child of his liberty without the authority of a court. But, say Birmingham City Council and the Secretaries of State, the position is different if the parents or other individuals with parental responsibility such as special guardians agree to it. Why should that be? The facts of RK v BCC, YB and AK [2011] EWCA Civ 1305; [2012] COPLR 146, were remarkably similar to the facts of this case. A young woman aged 17 suffered from autism, attention deficit hyperactivity disorder and severe learning difficulties, as well as epilepsy. She had been looked after at home for nearly 16 years but was then accommodated by the local authority under section 20 of the Children Act 1989 in a private care home. In proceedings brought by her mother in the Court of Protection, the Official Solicitor raised concerns that her living arrangements might amount to a deprivation of liberty. Mostyn J held: first, that the provision of accommodation under section 20 could never amount to a deprivation of liberty because the parents must have agreed to it; and second, that in any event the restrictions authorised by her parents did not amount to a deprivation of liberty. In relation to the first, the Court of Appeal upheld the consensus reached at the Bar (para 14): that an adult in the exercise of parental responsibility may impose, or may authorise others to impose, restrictions on the liberty of the child. However, restrictions so imposed must not in their totality amount to deprivation of liberty. Deprivation of liberty engages the article 5 rights of the child and a parent may not lawfully detain or authorise the deprivation of liberty of a child. However, the Court of Appeal went on to hold that the restrictions imposed did not amount to a deprivation of liberty: they were no more than what was reasonably required to protect RK from harming herself or others within her range (para 27). That decision was, of course, before the Supreme Courts decision in Cheshire West, which clarified the objective elements of a deprivation of liberty (limb (a) of Storck v Germany, para 1 above). The acid test is that a person is under continuous supervision and control and not free to leave. The fact that such restrictions may be necessary in order to prevent a person from harming himself or others makes no difference. Nor does the fact that the persons living arrangements are as close to a normal home life as they could possibly be. It seems likely, therefore, that the conditions under which RK was living would now be regarded as depriving her of her liberty. But it is not clear why that should make any difference to the validity of the consensus reached at the Bar and endorsed by the court as to the scope of parental responsibility. The basis for that consensus was said to be the case of Nielsen v Denmark (1988) 11 EHRR 175 in the European Court of Human Rights, together with the Court of Appeal decision in In re K (A Child) (Secure Accommodation Order: Right to Liberty) [2001] Fam 377. It is worth looking at the case of Nielsen v Denmark in some detail. It concerned a 12 year old child of unmarried parents. The mother alone had custodial rights over him. Nevertheless, at the age of eight he had refused to return to his mother after a holiday with his father and then disappeared to live in hiding with his father for more than three years. He re appeared with his father during proceedings in which his father was attempting to obtain a change in custody. His father was arrested and his mother requested that the boy be admitted to the State Hospitals child psychiatric ward as it was clear that he did not want to stay with her. He was eventually discharged after six months and went to live with another family. However, five months after that, the Danish Supreme Court awarded custody to the father. The boy complained to the European Court of Human Rights that his rights under article 5(1) and 5(4) of the European Convention had been breached. The European Commission found, by 11 votes to one, that there had been a breach of article 5(1) and by ten votes to two that there had been a breach of article 5(4). However, the Court found, by nine votes to seven, that there had been no breach. It is not easy to identify how the majoritys decision fits into the tri partite scheme of later decisions such as Storck v Germany and Stanev v Bulgaria. The majority held that article 5 was not applicable in so far as it is concerned with deprivation of liberty by the state (para 64), a conclusion which was strongly disputed by the dissenters who pointed out that the boy was detained in a State Hospital, with the agreement of the responsible psychiatrist, and was returned to hospital by the police when he disappeared on the day that he was due to be discharged into his mothers care. Nevertheless, the majority went on to consider whether article 5 was applicable in regard to such restrictions on the applicants liberty as resulted from the exercise of the mothers parental rights (para 64). This can only be explained on the basis that, again as the minority observed, article 5 imposes a positive obligation upon the state to protect individuals from being deprived of their liberty by private persons. The majority went on to consider the boys actual situation. They found that he was in need of medical treatment for his nervous condition. The treatment did not involve medication, but consisted of regular talks and environmental therapy. The restrictions on his freedom of movement and contact with the outside world were not much different from restrictions which might be imposed on a child in an ordinary hospital. In general conditions in the ward were said to be as similar as possible to a real home (para 70). The restrictions to which the boy was subject were no more than the normal requirements for the care of a child of 12 years of age receiving treatment in hospital. They were not in principle different from those in many hospital wards where children with physical disorders were treated. The boy was still at an age at which it would be normal for a decision to be made by the parent even against the wishes of the child (para 72). Accordingly, the hospitalisation of the applicant did not amount to a deprivation of liberty within the meaning of article 5, but was a responsible exercise by his mother of her custodial rights in the interest of the child (para 73). The minority considered that the placing of a 12 year old boy who was not mentally ill for several months in a psychiatric ward was a deprivation of liberty for which the state was accountable. Whether one agrees with the majority or the minority assessment of the facts of the case, the majority judgment clearly turned on the comparative normality of the restrictions imposed upon the freedom of a 12 year old boy. In In re K (A Child) (Secure Accommodation Order: Right to Liberty), the Court of Appeal was faced with an argument that the regime for authorising the placement of a child in secure accommodation, under section 25 of the Children Act 1989, was incompatible with the right to liberty in article 5. The first issue was whether such a placement was indeed a deprivation of liberty, even though it was agreed to by the local authority, which had parental responsibility under an interim care order, as well as by the childs parents. Dame Elizabeth Butler Sloss P and Judge LJ held that it clearly was. Butler Sloss P recognised the force of the principles in Nielsen (and Family T v Austria, 64 DR 176, which followed it). Nevertheless, There is a point, however, at which one has to stand back and say: is this within ordinary acceptable parental restrictions upon the movements of a child or does it require justification? (para 28) Judge LJ was to the same effect: In short, although normal parental control over the movements of a child may be exercised by the local authority over a child in its care, the implementation of a secure accommodation order does not represent normal parental control (para 102). (They went on to hold that section 25 was not incompatible with article 5 as it fell within article 5(1)(d).) That, as it seems to me, is the crux of the matter. Do the restrictions fall within normal parental control for a child of this age or do they not? If they do, they will not fall within the scope of article 5; but if they go beyond the normal parental control, article 5 will apply (subject to the question of whether parental consent negates limb (b) of the Storck criteria, see para 42 below). Quite clearly, the degree of supervision and control to which D was subject while in Placement B and Placement C was not normal for a child of 16 or 17 years old. It would have amounted to a deprivation of liberty in the case of a child of that age who did not lack capacity. The question then arises what difference, if any, does Ds mental disability make? The answer to that question lies in the illuminating discussion by Lord Kerr in Cheshire West: 77. The question whether one is restricted (as a matter of actuality) is determined by comparing the extent of your actual freedom with someone of your age and station whose freedom is not limited. Thus a teenager of the same age and familial background as MIG and MEG is the relevant comparator for them. If one compares their state with a person of similar age and full capacity it is clear that their liberty is in fact circumscribed. They may not be conscious, much less resentful, of the constraint but, objectively, limitations on their freedom are in place. 78. All children are (or should be) subject to some level of restraint. This adjusts with their maturation and change in circumstances. If MIG and MEG had the same freedom from constraint as would any child or young person of similar age, their liberty would not be restricted, whatever their level of disability. As a matter of objective fact, however, constraints beyond those which apply to young people of full ability are and have to be applied to them. There is therefore a restriction of liberty in their cases. Because the restriction of liberty is and must remain a constant feature of their lives, the restriction amounts to a deprivation of liberty. Indeed, the principal point of Cheshire West was that the living arrangements of the mentally disabled people concerned had to be compared with those of people who did not have the disabilities which they had. They were entitled to the same human rights, including the right to liberty, as any other human being. The fact that the arrangements might be made in their best interests, for the most benign of motives, did not mean that they were not deprived of their liberty. They were entitled to the protection of article 5, precisely so that it could be independently ascertained whether the arrangements were indeed in their best interests. It follows that a mentally disabled child who is subject to a level of control beyond that which is normal for a child of his age has been confined within the meaning of article 5. Limb (a) of the three Storck criteria for a deprivation of liberty (see para 1 above) has been met. There was, however, an argument that the consent of Ds parents supplied a substitute for the consent of the person confined, so that limb (b) was not met. It suited counsel in Cheshire West (as recorded in the last sentence of para 41) to argue that Nielsen should be regarded as a case of substituted consent, because no person has the right to give such consent on behalf of a mentally incapacitated adult. But, as also pointed out in Cheshire West, it is striking that the European Court of Human Rights has consistently held that limb (b) can be satisfied despite the consent of a person with the legal right to make decisions on behalf of the person concerned: see Stanev v Bulgaria (2012) 55 EHRR 696, DD v Lithuania [2012] MHLR 209, Kedzior v Poland [2013] MHLR 115, Mihailovs v Latvia, unreported, and now Stankov v Bulgaria [2015] 42 ECtHR 276. In Stanev, the court did observe, in passing, that there are situations where the wishes of a person with impaired mental facilities may be validly replaced by those of another person acting in the context of a protective measure and that it is sometimes difficult to ascertain the true wishes or preferences of the person concerned (para 130). However, as Keehan J observed in the Court of Protection (para 118) that is very far from adopting a general principle of substituted consent. The consent of a legal guardian may have been sufficient to make the confinement lawful in the domestic law of the country concerned, but that did not prevent its being a deprivation of liberty, or guarantee that it fulfilled the Convention requirement of legality. In the cases where limb (b) has been held to be satisfied, it is because the evidence showed that the person concerned was willing to stay where he or she was and was capable of expressing that view. Parental consent, therefore, cannot substitute for the subjective element in limb (b) of Storck. As already mentioned, limb (c) of Storck is no longer disputed and rightly so. Not only was the State actively involved in making and funding the arrangements, it had assumed statutory responsibilities albeit not parental responsibility towards D by accommodating him under section 20 of the Children Act 1989, thereby making him a looked after child. Even without all this, it is clear that the first sentence of article 5 imposes a positive obligation on the State to protect a person from interferences with liberty carried out by private persons, at least if it knew or ought to have known of this: see, for example Storck, para 89. In conclusion, therefore, the accommodation of D in Placement B and Placement C did amount to a deprivation of liberty within the meaning of article 5 and the fact that his parents agreed to them did not rob the arrangements of this quality. The procedural requirements of article 5 applied. (As it happens, both placements were authorised by a High Court Judge sitting in the Court of Protection and it is common ground that they were in Ds best interests. His rights under article 5 have not, in fact, been violated.) This conclusion is consistent with the whole thrust of Convention jurisprudence on article 5, which was examined in great detail in Cheshire West. But it is reinforced by the consideration that it is also consistent with the principle of non discrimination in article 2.1 of the United Nations Convention on the Rights of the Child, which requires that the rights set out in the Convention be accorded without discrimination on the ground of, inter alia, disability, read together with article 37(b), which requires that no child shall be deprived of his liberty unlawfully or arbitrarily, and article 37(d), which requires the right to challenge its legality. It is also consistent with article 7.1 of the United Nations Convention on the Rights of Persons with Disabilities, which requires all necessary measures to ensure the full enjoyment by children with disabilities of all human rights and fundamental freedoms on an equal basis with other children. Parental responsibility and human rights But what is the relationship between holding that the placement did deprive D of his liberty within the meaning of article 5 and the view that it might otherwise have been within the scope of parental responsibility? Parental responsibility is about the relationship between parent and child and between parents and third parties: it is essentially a private law relationship, although a public authority may also hold parental responsibility. As Irwin LJ correctly pointed out (para 157) human rights, on the other hand, are about the relationship between individuals (or other private persons) and the state. It is, however, now agreed that any deprivation of liberty in Placement B or Placement C was attributable to the state. So is there any scope for the operation of parental responsibility to authorise what would otherwise be a deprivation of liberty? There are two contexts in which a parent might attempt to use parental responsibility in this way. One is where the parent is the detainer or uses some other private person to detain the child. However, in both Nielsen and Storck it was recognised that the state has a positive obligation to protect individuals from being deprived of their liberty by private persons, which would be engaged in such circumstances. The other context is that a parent might seek to authorise the state to do the detaining. But it would be a startling proposition that it lies within the scope of parental responsibility for a parent to license the state to violate the most fundamental human rights of a child: a parent could not, for example, authorise the state to inflict what would otherwise be torture or inhuman or degrading treatment or punishment upon his child. Likewise, section 25 of the Children Act 1989 recognises that a parent cannot authorise the State to deprive a child of his liberty by placing him in secure accommodation. While this proposition may not hold good for all the Convention rights, in particular the qualified rights which may be restricted in certain circumstances, it must hold good for the most fundamental rights to life, to be free from torture or ill treatment, and to liberty. In any event, the state could not do that which it is under a positive obligation to prevent others from doing. In conclusion, therefore, it was not within the scope of parental responsibility for Ds parents to consent to a placement which deprived him of his liberty. Although there is no doubt that they, and indeed everyone else involved, had Ds best interests at heart, we cannot ignore the possibility, nay even the probability, that this will not always be the case. That is why there are safeguards required by article 5. Without such safeguards, there is no way of ensuring that those with parental responsibility exercise it in the best interests of the child, as the Secretaries of State acknowledge that they must. In this case, D enjoyed the safeguard of the proceedings in the Court of Protection. In future, the deprivation of liberty safeguards contained in the Mental Capacity Act 2005 (as amended by the Mental Capacity (Amendment) Act 2019) will apply to children of 16 and 17. I would therefore allow this appeal and invite the parties submissions on how best to incorporate this conclusion in a declaration. Logically, this conclusion would also apply to a younger child whose liberty was restricted to an extent which was not normal for a child of his age, but that question does not arise in this case. The common law may draw a sharp distinction, in relation to the deprivation of liberty, between those who have reached the age of 16 and those who have not, but the extent to which that affects the analysis under the Human Rights Act is not clear to me and we have heard no argument upon it. I therefore prefer to express no view upon the question. Nor would I express any view on the extent of parental responsibility in relation to other matters, such as serious and irreversible medical treatment, which do not entail a deprivation of liberty. Some reference to this was made in the course of argument, but it does not arise in this case, which is solely concerned with depriving 16 and 17 year olds of their liberty. It follows that I agree with what Lady Black says about those last two points in para 90 of her judgment. LADY BLACK: The purpose of this judgment is two fold. It addresses the question of whether the restrictions, in section 25 of the Children Act 1989, on placing children in accommodation provided for the purpose of restricting liberty apply to the sort of living arrangements in question here. It also provides an opportunity to explain a little further why I agree with Lady Hales conclusion that the consent of Ds parents to his confinement cannot operate as a substitute for Ds own consent. Lady Hale bases this conclusion, essentially, on there being no room for substituted consent in cases such as the present, for reasons she sets out commencing at para 42 of her judgment; I agree with her on this point and I do not seek to detract from what she says there. My comments are directed at the prior issue of whether it is actually within the scope of parental responsibility to consent to living arrangements for a 16 or 17 year old child which would otherwise amount to a deprivation of liberty within the meaning of article 5. Like Sir James Munby P (at para 50 of the Court of Appeal judgment), I consider that, in order to answer this question, it is necessary to look to the domestic law, set in its proper historical context. Before us, the parties have not dwelt on the legal history in relation to parental responsibility. This is no doubt because the Official Solicitor accepts that the Court of Appeal was entitled to hold that, immediately following the decision in Gillick v West Norfolk & Wisbech Area Health Authority [1986] AC 112 (Gillick), parental responsibility was, in principle, exercisable to authorise the confinement of a 16 or 17 year old child who, for whatever reason, lacked capacity. The Official Solicitors argument is that that position has changed since Gillick with the passage of the Mental Capacity Act 2005 and the trends in international rights norms. Notwithstanding the Official Solicitors approach, I have gone back to look in detail at the old authorities, many of them signposted in the Presidents judgment. The President observed that the domestic law is far from straightforward, an observation which I have no difficulty in endorsing. At para 62 below, I have summarised an explanation given by Bowen LJ in In re Agar Ellis (No 2) (1883) 24 Ch D 317 of the terminology used in this area of the law, which might help a little in understanding the earlier authorities. Lady Hale sets out, in para 21, the themes which are to be found in the old cases. I do not disagree with what she says, but merely seek to add a little more detail to the picture and to explain that, as will become apparent (particularly from paras 88 to 90), I have reached a firmer conclusion than she has on this aspect of the case. It might be useful to set the scene by citing the passage from Sachs LJs judgment in Hewer v Bryant [1970] 1 QB 357, at 372 373, which, after his own study of the earlier authorities, the President found (para 65) to be an accurate analysis of the position: Before proceeding further, it is essential to note that among the various meanings of the word custody there are two in common use in relation to infants which are relevant and need to be carefully distinguished. One is wide the word being used in practice as almost the equivalent of guardianship: the other is limited and refers to the power physically to control the infant's movements. In its limited meaning it has that connotation of an ability to restrict the liberty of the person concerned to which Donaldson J referred in Duncans case, at p 762. This power of physical control over an infant by a father in his own right qua guardian by nature and the similar power of a guardian of an infants person by testamentary disposition was and is recognised at common law; but that strict power (which may be termed his personal power) in practice ceases upon the infant reaching the years of discretion. When that age is reached, habeas corpus will not normally issue against the wishes of the infant. Although children are thought to have matured far less quickly in the era when the common law first developed, that age of discretion which limits the fathers practical authority (see the discussion and judgment in R v Howes (1860) 3 El & El 332) was originally fixed at 14 for boys and 16 for girls (see per Lindley LJ in Thomasset v Thomasset [1894] P 295, 298). This strict personal power of a parent or guardian physically to control infants, which is one part of the rights conferred by custody in its wider meaning, is something different from that power over an infants liberty up to the age of 21 which has come to be exercised by the courts on behalf of the Crown as parens patriae, to use the phraseology in A Century of Family Law, 1857 1957 (1957), p 68. It is true that in the second half of last century that power was so unquestionably used in aid of the wishes of a father that it was referred to as if its resultant exercise was a right of the father. Indeed in the superbly Victorian judgments in the Agar Ellis case 24 Ch D 317, it seems thus to be treated: for the purpose, however, of the present issues it is sufficient to observe that if those judgments are to be interpreted as stating as a fact that fathers in practice personally had in 1883 strict and enforceable power physically to control their sons up to the age of 21, then as my Lord, the Master of the Rolls, has already indicated they assert a state of affairs that simply does not obtain today. In truth any powers exercised by way of physical control in the later years of infancy were not the fathers personal powers but the more extensive ones of the Crown (see Lindley LJ in Thomassets case [1894] P 295, 299); and hence the fathers right was really no more than that of applying to the courts for the aid he required as guardian. The reason for emphasising the word power appears later in this judgment. In its wider meaning the word custody is used as if it were almost the equivalent of guardianship in the fullest sense whether the guardianship is by nature, by nurture, by testamentary disposition, or by order of a court. (I use the words fullest sense because guardianship may be limited to give control only over the person or only over the administration of the assets of an infant.) Adapting the convenient phraseology of counsel, such guardianship embraces a bundle of rights, or to be more exact, a bundle of powers, which continue until a male infant attains 21, or a female infant marries. These include power to control education, the choice of religion, and the administration of the infants property. They include entitlement to veto the issue of a passport and to withhold consent to marriage. They include, also, both the personal power physically to control the infant until the years of discretion and the right (originally only if some property was concerned) to apply to the courts to exercise the powers of the Crown as parens patriae. It is thus clear that somewhat confusingly one of the powers conferred by custody in its wide meaning is custody in its limited meaning, namely, such personal power of physical control as a parent or guardian may have. It is, of course, custody in what Sachs LJ called its limited meaning that is material in the present appeal. In this sense, it is concerned with, as he put it, an ability to restrict the liberty of the person concerned, otherwise described as a power of physical control over an infant, and even physical possession. There are a number of earlier cases, notably Rex v Greenhill (1836) 4 Ad & E 624, R v Maria Clarke (In the Matter of Alicia Race) (1857) 7 E & B 186, and R v Howes (1860) 3 El & El 332, which deal with the common law position in relation to this aspect of custody. The context in each case is a habeas corpus application by a parent. What is important about the decisions for present purposes is that they establish, as the common law position, that (i) up to the age of discretion, the parents right to restrict the childs liberty was absolute (subject to some very limited exceptions), (ii) once the child reached the age of discretion, that right disappeared, and (iii) reaching the age of discretion was a matter of attaining the requisite chronological age, and not a matter of mental capacity. It is necessary to begin with Rex v Greenhill, although it is only in the subsequent cases that its import becomes clear. It concerned children who were all under six years of age and were with their mother. Their father obtained an order for them to be delivered up to him and their mother applied for that to be set aside. She was unsuccessful, a father being entitled to custody in the absence of any sufficient reason to separate the children from him. The four judges each gave separate short judgments, from which the following are extracts: When an infant is brought before the court by habeas corpus, if he be of an age to exercise a choice, the court leaves him to elect where he will go. If he be not of that age, and a want of direction would only expose him to dangers or seductions, the court must make an order for his being placed in proper custody. (Lord Denman CJ) The practice in such cases is that, if the children be of a proper age, the court gives them their election as to the custody in which they will be; if not, the court takes care that they be delivered into the proper custody. (Littledale J) In general, where the party brought up by habeas corpus is competent to exercise a discretion on [custody], the court merely takes care that the option shall be left free But where the age is not such as to allow the exercise of a discretion, and there is a controversy as to the custody, the court must decide (Williams J) A habeas corpus proceeds on the fact of an illegal restraint. When the writ is obeyed, and the party brought up is capable of using a discretion, the rule is simple, and disposes of many cases, namely, that the individual who has been under the restraint is declared at liberty; and the court will even direct that the party shall be attended home by an officer, to make the order effectual. But, where the person is too young to have a choice, we must refer to legal principles to see who is entitled to the custody (Coleridge J) Rex v Greenhill was relied upon in R v Maria Clarke (In the matter of Alicia Race) (1857) where Lord Campbell CJ interpreted it as having: laid down the rule that, where a young person under the age of 21 years of age is brought before the court by habeas corpus, if he be of an age to exercise a choice, the court leaves the infant to elect where he will go, but, if he be not of that age, the court must make an order for his being placed in the proper custody. The issue in the Maria Clarke case was whether the ten year old girls widowed mother, as her guardian for nurture, had a legal right to custody against the wishes of the girl, however intelligent she was, or whether the court was bound to examine the child to ascertain whether she had the mental capacity to make a choice. There was no argument but that children under seven were delivered to the guardian without any such examination; the argument was about those between the ages of seven and 14 (when guardianship for nurture ended). The court held that the guardian was absolutely entitled to the custody of the child until the age of 14, irrespective of the childs capacity. Lord Campbell said: Lord Denman, Littledale J, Williams J and Coleridge J all make age the criterion, and not mental capacity, to be ascertained by examination. They certainly do not expressly specify the age: but they cannot refer to seven as the criterion; and there is no intervening age marking the rights or responsibility of an infant till 14, when guardianship for nurture ceases, upon the supposition that the infant has now reached the years of discretion. In R v Howes (1860) 3 El & El 332, a father sought the delivery to him of a girl of 15 who was unwilling to return to him, and had been brought into court in obedience to a writ of habeas corpus and interviewed privately by the judges before they heard argument. Cockburn CJ, giving the judgment of the court, said: Now the cases which have been decided on this subject shew that, although a father is entitled to the custody of his children till they attain the age of 21, this court will not grant a habeas corpus to hand a child which is below that age over to its father, provided that it has attained an age of sufficient discretion to enable it to exercise a wise choice for its own interests. The whole question is, what is that age of discretion? We repudiate utterly, as most dangerous, the notion that any intellectual precocity in an individual female child can hasten the period which appears to have been fixed by statute for the arrival of the age of discretion; for that very precocity, if uncontrolled, might very probably lead to her irreparable injury. The Legislature has given us a guide, which we may safely follow, in pointing out 16 as the age up to which the fathers right to the custody of his female child is to continue; and short of which such a child has no discretion to consent to leaving him. The reference to the guide given by [t]he Legislature is no doubt a reference to the statutes making it an offence to take a female unmarried child under the age of 16 out of the possession of the childs father or mother. In re Agar Ellis (No 2) (1883) 24 Ch D 317 concerned a girl of 16 who wanted to spend time with her mother, contrary to her fathers directions. She and her mother argued that, given her age, her father had no right to the control or custody of her. Their petition failed at first instance and they appealed. This was not a habeas corpus application because, said Sir William Brett MR, the child is not away from her father the child is under the control of her father. It was, as Lindley LJ described it the following year in Thomasset v Thomasset (see below), an attempt to remove a girl over 16 from the care of her father. Therefore, although the habeas corpus cases were considered, they were found to be inapplicable. The court was concerned, rather, with an exercise of what Cotton LJ described as the jurisdiction which the Court of Chancery has always exercised, delegated probably from the Crown as parens patriae. The law was declared to be that the father had, as the Master of the Rolls put it, control over the person, education, and conduct of his children until they are 21 years of age. Exercising its Chancery jurisdiction, the court proceeded on the basis that it could interfere with the discretion of the father, but would not do so except in very extreme cases, of which this was not one. It is to be noted that this might have been seen by some as an overly narrow application of the Chancery approach, see the judgment of Kay LJ in R v Gyngall [1893] 2 QB 232. Sachs LJ commented, in the passage I have quoted above from Hewer v Bryant, on the use during the second half of the 19th century of the parens patriae jurisdiction unquestionably in aid of the wishes of the father, citing Agar Ellis (No 2) as an example of this, but pointing out that any powers exercised by way of physical control in the later years of infancy were not in fact the fathers personal powers but the more extensive ones of the Crown. And in Gillick, Lord Scarman referred to In re Agar Ellis (No 2) and an earlier decision concerning the same family (In re Agar Ellis (1878) 10 Ch D 49), as the horrendous Agar Ellis decisions (p 183E of Gillick). Bowen LJs judgment in In re Agar Ellis (No 2) includes an interesting explanation of how confusion had been caused by earlier law books making distinctions which were no longer adhered to. He explained that the strict common law gave the father guardianship of his children during the age of nurture and until the age of discretion (14 for a boy, and 16 for a girl), and thereafter, apart from in the case of the heir apparent (in relation to whom he was guardian by nature until 21), he had no guardianship. But he said that, for a great number of years, more especially in the courts of equity, the term guardian by nature had not been confined to heirs apparent, so that there was a natural paternal jurisdiction between the age of discretion and the age of 21, which the law will recognise. The distinction between the common law jurisdiction (concerned to declare rights between the parties) and the broader jurisdiction of the Courts of Chancery is made very clear in R v Gyngall (supra). The father of the child in that case (a girl of about 15) was dead and it was the mother who was the guardian, it seems by operation of the Guardianship of Infants Act 1886. The decision of the first instance court not to return the girl to her mother, despite there being no misconduct on the part of the mother derogating from her right to custody, was interpreted as an exercise of the Chancery jurisdiction, taking into account the welfare of the child, rather than an exercise of the common law habeas corpus jurisdiction. It is worth looking at the case of Thomasset v Thomasset, the following year, because the Court of Appeal there set out its understanding of the position that the law had now reached. Dealing first with the approach of the Courts of Common Law, Lindley LJ said (at p 298) that the father had a legal right to custody of his child until the child attained 21, but the child would not be forced to remain with the father after he or she had attained the age of discretion. He quoted the passage from Coleridge J in Rex v Greenhill which is set out above, and continued: The age at which a child is deemed to have a discretion is 14 in the case of a boy, and 16 in the case of a girl After a child has attained the age of discretion, a Court of Common Law will set it free if illegally detained, but will not force a child against his or her will to remain with his or her father or legal guardian Although the Court of Chancery would be in the same position as the Courts of Common Law when dealing with a writ of habeas corpus, Lindley LJ emphasised that it also had its much more extensive parens patriae jurisdiction. This had been exercised in aid of fathers and guardians of children who had attained the age of discretion, and also to control the rights of fathers and guardians in order to secure the welfare of infants, and it was available to the Divorce Court since the Judicature Acts. However, whilst the Divorce Court could make orders respecting the custody, maintenance, and education of infants during the whole period of infancy, that is up to 21, both members of the court expressed caution on the subject. Lindley LJ said (p 303): I do not say that a child who has attained years of discretion can, except under very special circumstances, be properly ordered into the custody of either parent against such childs own wishes. Lopes LJ said (p 306): No doubt a writ of habeas corpus could not go to compel a child over the age of 16 to return to the custody of the parent when such child was unwilling to submit to such custody It is not easy for us, accustomed to a legal system which has changed very considerably since Victorian times, to reach a perfect understanding of these cases, and I do not pretend to have done so. Like Sir James Munby P, I would settle for Sachs LJs summary, quoted at para 55 above. How does this historical perspective, as summarised by Sachs LJ, inform the present issue? It can be seen from the old cases that the mere fact that a parent had guardianship of a child did not give him a free hand to make decisions about that childs life. The extent of his ability to dictate depended upon the circumstances. At common law, the ability to restrict the liberty of the child lasted only until the age of discretion, and the age of discretion was fixed chronologically, and not by considering the attributes of the particular child. Equity had wider powers to govern a childs behaviour, but this was essentially by stepping in as the parent, and making decisions for the welfare of the child, rather than by enforcing the parents rights. Terminology has changed, of course, and what was referred to as guardianship in those days has been translated into todays parental responsibility, but I do not see this older chapter in the evolution of the scope of parental authority as irrelevant in the search for the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and his property (section 3(1) of the Children Act 1989). Equally, it is not the end of the investigation, because the common law can evolve. I turn therefore to the important case of Gillick decided in 1985. The President took the view (see in particular paras 85 and 125 of his judgment) that the fixed age of discretion, encountered in the old cases, has been replaced by a test of, as he termed it, Gillick capacity to determine when the exercise of parental responsibility comes to an end. I will look in more detail at Gillick below, but it may help to preface this examination by explaining that I do not share the Presidents confidence that the Gillick test extends to the aspect of parental responsibility with which the present case is concerned. The issue in Gillick was different in at least two important ways. First, it was not about restricting the physical liberty of the child, but concerned decision making in the sphere of medical treatment. Secondly, the question was whether the parent could lose his or her exclusive decision making powers before the child reached the age of 16, if the child was capable of making his or her own decision, not whether the parent was entitled to continue to make decisions after the child reached 16, if the child was not capable. As to the first of these differences, the considerations in relation to decisions about physical liberty are not the same as those involved in other spheres where parental responsibility may operate. In particular, article 5 of the European Convention on Human Rights was not material in the Gillick decision, but is of central importance to the present case, as can be seen from Lady Hales judgment. Moreover, it is not only in the Convention, and the cases decided by the European Court of Human Rights, that one can find special attention being given to liberty, whether of a child or a vulnerable adult. It is evident in the older habeas corpus authorities to which I have referred. And it has been firmly engrained in domestic law in certain statutes, notably in the Children Act 1989 in the secure accommodation provisions, with which I deal later in this judgment, and in the Mental Capacity Act 2005 which, by section 4A, marks out deprivation of liberty for special treatment, with more attendant safeguards than other acts performed in relation to a person who lacks capacity. Turning to the second of the differences, it has a number of components, one of which is the pivotal age of 16. Although not determinative of the question before us, I think it is far from irrelevant that, as Lady Hale puts it at para 27 (after listing various statutory provisions in her para 26), the law accords to children who have reached the age of 16 years a status which is in some respects different from children below that age. Of the provisions listed, I would single out section 2(5) of the Mental Capacity Act 2005 (para 26(iii) of Lady Hales judgment). I cannot accept the Official Solicitors case that the 2005 Act constitutes a complete decision making framework for the care and treatment of those aged 16 and above who lack capacity, not least because there is an obvious overlap between the reach of the Children Act 1989 and that of the 2005 Act, and I can find nothing in the 2005 Act that could be said to indicate a general rule to the effect that, where it applies, it does so to the exclusion of other common law and statutory provisions. However, it does seems to me that the deliberate choice of the legislature to include children of 16 to 18 years within the scope of the 2005 Act, and now (by virtue of the recent amendment to the Act, see para 49 of Lady Hales judgment) to extend a regime of administrative deprivation of liberty safeguards to them, indicates an appreciation of the different needs of this particular age group. At risk of underlining the obvious, another important element in this second difference is that Gillick was about contracting the boundary of parental responsibility and empowering the child at an earlier age, whereas the present case is about extending the boundary of parental responsibility beyond the age at which, in relation to the particular matter in issue, it would have been taken, at common law, to have ended. As can be seen from Sachs LJs analysis, the common law position at the time of Hewer v Bryant, in 1969, was that the power of physical control over an infant ended at the age of discretion. For present purposes I would take that age as 16. The common law, even in 1969, might have balked at continuing to treat a boy as reaching the age of discretion at 14, but a girl as having to wait until 16, and, if an issue about this had come up, would no doubt have evolved to iron out the difference. It is pointless to worry, in the present context, about whether it would have equalised up or down, because we are dealing here with the position of a child between the ages of 16 and 18. If the age of discretion had been raised above 16, thus extending the parents power of physical control into the age group with which we are concerned, that would have been of considerable significance to the debate, but I have seen nothing to suggest that that was done, and it would be extremely surprising if it had been. So to the detail of Gillick. Lady Hale deals with the case in para 23 of her judgment. I propose to refer to some further passages, in order to provide some substance for the views that I have just expressed about it. The Family Law Reform Act 1969 had provided that the consent of a minor who has attained the age of 16 years to medical treatment was as effective as if the child were of full age, and rendered it unnecessary to obtain consent from the parent or guardian. It was the position of a child of under 16 that was in question, and in particular whether such a child could, herself, provide the necessary consent for contraceptive treatment. It will be recalled that Mrs Gillick was arguing (see p 168D of the report) that the custody that parents have of a minor under the age of 16 necessarily involves the right to veto contraceptive advice or treatment being given to the girl, and that she failed in this argument. Giving the first speech, Lord Fraser of Tullybelton, one of the three members of the House in the majority, spoke in terms of parental rights to control a child, which he held (p 170D) existed for the benefit of the child, not the parent, and were justified only in so far as they enabled the parent to perform his duties towards the child, and towards other children in the family. Understandably, given the issue in the case, his speech is directed at diminishing control on the part of a parent as a child ages, rather than at the opposite problem of the child who needs parental input for a longer than usual period, although I accept that some of what he said is in general terms and could be applied to either situation. He spoke (p 171E) of wise parents relaxing their control gradually as the child develops, and of the degree of parental control actually exercised over a particular child varying according to his understanding and intelligence. He looked at R v Howes, In re Agar Ellis, and Hewer v Bryant (see above). As to R v Howes, where the court declined to consider a child having discretion to consent to leaving the father before she reached 16, he said that the view that the childs intellectual ability is irrelevant cannot now be accepted. He endorsed the criticism that had been heaped on Agar Ellis, dismissed the concept deployed in that case of absolute paternal authority continuing until a child attains majority as so out of line with present day views that it should no longer be treated as having any authority, and shared Lord Dennings view that the legal right of a parent to custody of a child was a dwindling right, as the child approached majority. He said (p 173D): Once the rule of the parents absolute authority over minor children is abandoned, the solution to the problem in this appeal can no longer be found by referring to rigid parental rights at any particular age. The solution depends upon a judgment of what is best for the welfare of the particular child. This abandonment of the rule of the parents absolute authority led to the conclusion that a doctor could prescribe contraceptive treatment to a girl of under 16 without the consent of her parents, provided that, amongst other things, she would understand his advice. Lord Scarman agreed with Lord Fraser but added his own speech. Having considered the earlier case law, he enunciated what he had found to be the principle of law (hereafter in my discussion of his speech the principle), saying (pp 183 184): Parental rights clearly do exist, and they do not wholly disappear until the age of majority. Parental rights relate to both the person and the property of the child custody, care, and control of the person and guardianship of the property of the child. But the common law has never treated such rights as sovereign or beyond review and control. Nor has our law ever treated the child as other than a person with capacities and rights recognised by law. The principle of the law, as I shall endeavour to show, is that parental rights are derived from parental duty and exist only so long as they are needed for the protection of the person and property of the child. The principle has been subjected to certain age limits set by statute for certain purposes: and in some cases the courts have declared an age of discretion at which a child acquires before the age of majority the right to make his (or her) own decision. But these limitations in no way undermine the principle of the law, and should not be allowed to obscure it. Later in his speech, Lord Scarman formulated the principle in slightly different ways. At p 185E, the following formulation can be found: parental right or power of control of the person and property of his child exists primarily to enable the parent to discharge his duty of maintenance, protection, and education until he reaches such an age as to be able to look after himself and make his own decisions. And at p 186D, Lord Scarman put it this way: parental right yields to the childs right to make his own decisions when he reaches a sufficient understanding and intelligence to be capable of making up his own mind on the matter requiring decision. Understandably, in his consideration of the common laws understanding of the nature of parental right, Lord Scarmans focus was upon the particular type of parental right/duty that was in issue there, as the following passage from his speech makes clear (p 184F): It is abundantly plain that the law recognises that there is a right and a duty of parents to determine whether or not to seek medical advice in respect of their child, and, having received advice, to give or withhold consent to medical treatment. The question in the appeal is as to the extent, and duration, of the right and the circumstances in which outside the two admitted exceptions to which I have earlier referred [order of a competent court, and emergency] it can be overridden by the exercise of medical judgment. Although varying ages of discretion had been fixed by statute and case law for various purposes, Lord Scarman found it clear that (p 185F): this was done to achieve certainty where it was considered necessary and in no way limits the principle that parental right endures only so long as it is needed for the protection of the child. In modern times, statute had intervened in respect of a childs capacity to consent to medical treatment from the age of 16 onwards, but neither statute nor case law had ruled on the extent and duration of parental right in respect of children under the age of 16. So, Lord Scarman said, it was open to the House to formulate a rule (p 185H). He was influenced, in so doing, by the fact that the law relating to parent and child is concerned with the problems of growth and maturity of the human personality. This disposed him against the fixed age limit of 16 (below which a girl could not give valid consent) that had commended itself to the Court of Appeal. He observed (p 186B): If the law should impose upon the process of growing up fixed limits where nature knows only a continuous process, the price would be artificiality and a lack of realism in an area where the law must be sensitive to human development and social change. He found the earlier cases no guide to the application of the principle in the conditions of today. He dealt specifically with the habeas corpus cases in these terms (p 187B): The habeas corpus age of discretion cases are also no guide as to the limits which should be accepted today in marking out the bounds of parental right, of a childs capacity to make his or her own decision, and of a doctors duty to his patient. Nevertheless the age of discretion cases are helpful in that they do reveal the judges as accepting that a minor can in law achieve an age of discretion before coming of full age The principle underlying them was plainly that an order would be refused if the child had sufficient intelligence and understanding to make up his own mind. A passage from the judgment of Cockburn CJ in R v Howes (1860) 3 El & El 332 [quoted at para 10 above] illustrates their reasoning and shows how a fixed age was used as a working rule to establish an age at which the requisite discretion could be held to be achieved by the child The principle is clear: and a fixed age of discretion was accepted by the courts by analogy from the Abduction Acts (the first being the Act of 1557, 4 & 5 Ph & M c8). While it is unrealistic today to treat a 16th century Act as a safe guide in the matter of a girls discretion, and while no modern judge would dismiss the intelligence of a teenage girl as intellectual precocity, we can agree with Cockburn CJ as to the principle of the law the attainment by a child of an age of sufficient discretion to enable him or her to exercise a wise choice in his or her own interests. After citing from R v D [1984] AC 778 (an appeal relating to the conviction of a father on indictment of kidnapping his five year old daughter) on the subject of parental right and a childs capacity to give or withhold a valid consent, Lord Scarman concluded (p 188H) that: as a matter of law the parental right to determine whether or not their minor child below the age of 16 will have medical treatment terminates if and when the child achieves a sufficient understanding and intelligence to enable him or her to understand fully what is proposed. It will be a question of fact whether a child seeking advice has sufficient understanding of what is involved to give a consent valid in law. Until the child achieves the capacity to consent, the parental right to make the decision continues save only in exceptional circumstances. The third member of the majority, Lord Bridge, agreed with what Lord Fraser and Lord Scarman had said, without adding further reasoning of his own. What the President drew from the speeches of Lord Fraser and Lord Scarman was, as he set out at paras 83 to 85, that the attainment of Gillick capacity is child specific, to be decided as a matter of fact in relation to each particular child. He said: 84. This has an important corollary. Given that there is no longer any magic in the age of 16, given the principle that Gillick capacity is child specific, the reality is that, in any particular context, one child may have Gillick capacity at the age of 15, while another may not have acquired Gillick capacity at the age of 16 and another may not have acquired Gillick capacity even by the time he or she reaches the age of 18: cf, In re R (A Minor) (Wardship: Consent to Treatment) [1992] Fam 11, at 24 and 26. Therefore, he said (para 85), after Gillick, the position of domestic law in relation to the aspect of custody described in Hewer v Bryant as, inter alia, the ability to restrict the liberty of the person was that: The parental power was precisely as described by Sachs LJ subject only to the substitution, when applying the principles set out by Sachs LJ in relation to the concept of the age of discretion, of the test of what we now call Gillick capacity in place of the previous fixed ages. So, the President concluded, Keehan J was wrong to decide that a parent of an incapacitous 16 year old may not consent to confinement which would otherwise amount to a deprivation of liberty (para 115 of Keehan Js judgment) because (para 125 of the Presidents judgment), none of the statutory provisions upon which he relied assisted on the matter and: his approach does not give effect to the fundamental principle established by Gillick: namely that, in this context (see paras 79 85 above), the exercise of parental responsibility comes to an end not on the attaining of some fixed age but on attaining Gillick capacity. In effect, Keehan J would have us go back to the approach of Cockburn CJ and Parker LJ. As I have explained (see above at para 69 et seq), I do not share the Presidents confidence that the Gillick test extends to the aspect of parental responsibility with which the present case is concerned, or that the Gillick decision can, without more, be treated as regulating the situation where the objective is not to contract the boundaries of parental responsibility, but to extend them. In my view, as I said above, it is of real significance that in Gillick, the House of Lords were dealing with a materially different issue. The respondent recognises that the focus of Gillick was specific to the issue of consent to medical treatment of children under 16, but invites this court to conclude that the test laid down there applies beyond that scope and up to the age of majority. I accept that certain things that were said in Gillick were capable of being interpreted as applying to a situation such as the present, but it would not, in my view, be appropriate to interpret them in that way, so as to draw into the Gillick net a situation which is diametrically opposed to that with which the House was concerned (not the tempering of parental responsibility in relation to the under 16 age group, but its expansion in relation to those aged 16 and 17 so as to give it a role which would not otherwise be afforded by the common law). My unwillingness to adopt this interpretation is reinforced by what I perceive to be the distinct, and rather special, features of the field of deprivation of liberty with which we are here concerned. It follows that the rights of a parent in relation to restricting the liberty of a child remain, at common law, as described in Hewer v Bryant. The inescapable result of that is, I think, that it is not within the scope of parental responsibility for parents to give authority for their 16 year old child to be confined in a way which would, absent consent, amount to a deprivation of liberty. In so saying, I do not intend in any way to water down the important changes brought about by Gillick or to alter the way in which it has been applied in many spheres of family law. I have only been concerned to consider its application in the very specific context of confinement of children of the ages of 16 to 18. The position in relation to the confinement of children who are under 16 might be different for a variety of reasons. It could be argued, for example, that the Gillick decision is more readily applicable to under 16s than to over 16s, given that this was the age group with which the House was concerned. It would then be arguable that the position in relation to that group was as the President set out at para 85 of his judgment (quoted above) ie that the parental ability to restrict a childs liberty continues to be as described by Sachs LJ in Hewer v Bryant, but with a Gillick test rather than the previous fixed ages. But the effect of this, applied to a child who lacked capacity, would not be to leave a gap in the parents powers to cater for the particular needs of a child with disability. On the contrary, the child not having attained Gillick capacity, there would be nothing to bring to an end the parents common law power to confine the child as required in the childs interests. To put it in the terms used in this appeal, it would remain within the ambit or zone of the parents parental responsibility. However, there would, no doubt, be other arguments to be aired on the point, and I have not formed even a preliminary view about it. In summary, therefore, I would hold that as a matter of common law, parental responsibility for a child of 16 or 17 years of age does not extend to authorising the confinement of a child in circumstances which would otherwise amount to a deprivation of liberty. For me, this reinforces the conclusion to which Lady Hale has come by the route she sets out in paras 42 to 49 of her judgment. She concludes, in para 50, by saying that logically her conclusion would also apply for a younger child, but I would prefer to leave this separate question entirely open, to be decided in a case where it arises. I should also stress, before moving on to the discrete issue in relation to section 25 of the Children Act 1989 and its potential application to living arrangements such as Ds, that I have been looking specifically at the common law power of a parent in relation to a childs liberty. I have not intended to cast doubt on any existing understanding about the operation of parental responsibility in different spheres of a childs life. And nothing that I have said is intended to cast any doubt on the powers of the courts, recognised in the early cases to which I have referred, and still available today in both the parens patriae jurisdiction and under statute, notably the Children Act 1989, to make orders in the best interests of children up to the age of majority, with due regard to their wishes and those of their parents, but not dictated by them. Does section 25 of the Children Act 1989 apply to living arrangements such as Ds? Where it applies, section 25 of the Children Act 1989 regulates the circumstances in which children can be placed and kept in accommodation provided for the purpose of restricting liberty and dictates that, save for very short periods, the courts authorisation of the arrangements is required. If the section applies to living arrangements like Ds, making court authorisation obligatory, the debate as to whether it falls within the scope of parental responsibility to authorise a childs confinement would be of far less practical significance. In order to set that debate in its proper context, the scope of section 25 was therefore explored. In the light of this exploration, it appears likely that a significant number of children living in confined circumstances will be outside the ambit of the section, although clearly each case will depend upon its own facts. Accordingly, the parental responsibility issue has a real practical importance. The reasons for this provisional conclusion are set out below. They deal with the law as it applies to accommodation in England; there is a separate statutory and regulatory regime where the accommodation is in Wales, albeit in similar terms. Section 25 provides as follows, omitting provisions concerned solely with Scotland: 25. Use of accommodation for restricting liberty (1) Subject to the following provisions of this section, a child who is being looked after by a local authority in England or Wales may not be placed, and, if placed, may not be kept, in accommodation in England or Scotland provided for the purpose of restricting liberty (secure accommodation) unless it appears (a) that he has a history of absconding and is (i) likely to abscond from any other description of accommodation; and if he absconds, he is likely to suffer (ii) significant harm, or (b) that if he is kept in any other description of accommodation he is likely to injure himself or other persons. (2) The Secretary of State may by regulations (a) specify a maximum period (i) beyond which a child may not be kept in secure accommodation in England or Scotland without the authority of the court; and for which the court may authorise a child (ii) to be kept in secure accommodation in England or Scotland; (b) empower the court from time to time to authorise a child to be kept in secure accommodation in England or Scotland for such further period as the regulations may specify; and (c) provide that applications to the court under this section shall be made only by local authorities in England or Wales. (3) It shall be the duty of a court hearing an application under this section to determine whether any relevant criteria for keeping a child in secure accommodation are satisfied in his case. (4) If a court determines that any such criteria are satisfied, it shall make an order authorising the child to be kept in secure accommodation and specifying the maximum period for which he may be so kept. (5) On any adjournment of the hearing of an application under this section, a court may make an interim order permitting the child to be kept during the period of the adjournment in secure accommodation. (5A) (6) No court shall exercise the powers conferred by this section in respect of a child who is not legally represented in that court unless, having been informed of his right to apply for the provision of representation under Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and having had the opportunity to do so, he refused or failed to apply. (7) The Secretary of State may by regulations provide that (a) this section shall or shall not apply to any description of children specified in the regulations; (b) this section shall have effect in relation to children of a description specified in the regulations subject to such modifications as may be so specified; (c) such other provisions as may be so specified shall have effect for the purpose of determining whether a child of a description specified in the regulations may be placed or kept in secure accommodation in England or Scotland. (d) a child may only be placed in secure accommodation that is of a description specified in the regulations (and the description may in particular be framed by reference to whether the accommodation, or the person providing it, has been approved by the Secretary of State or the Scottish Ministers). (8) The giving of an authorisation under this section shall not prejudice any power of any court in England and Wales or Scotland to give directions relating to the child to whom the authorisation relates. (8A) (9) This section is subject to section 20(8). Where applicable, the section operates to prevent a child being placed or kept in secure accommodation unless one of the two conditions set out in section 25(1)(a) and (b) is satisfied. The initial placement need not involve the court, but regulations made under section 25(2) provide that a child may not be kept in secure accommodation without court authority for more than 72 hours in any period of 28 consecutive days (regulation 10, Children (Secure Accommodation) Regulations 1991 (SI 1991/1505), hereafter the 1991 Regulations). There are limits on the period that can be authorised by the court, being three months in the first instance, and a further period of up to six months thereafter (regulations 11 and 12). There is a misconception that section 25 applies only to children who are being looked after by a local authority. These are the children to whom section 25(1) refers, but section 25(7) gives the Secretary of State power to provide, by regulations, that the section shall or shall not apply to other descriptions of children, and he did so in the 1991 Regulations. Various categories of children are excluded from the operation of the section including, by regulation 5(1), a child who is detained under the provisions of the Mental Health Act 1983, and, by regulation 5(2)(a), a child who is being accommodated under section 20(5) of the Children Act 1989 (which relates to certain accommodation in a community home of people who are over 16 but under 21 years of age). In contrast, regulation 7 widens the reach of section 25, extending it to children other than those looked after by a local authority. It provides: (1) Subject to regulation 5 and paras (2) and (3) of this regulation section 25 of the Act shall apply (in addition to children looked after by a local authority) (a) to children, other than those looked after by a local authority, who are accommodated by health authorities, National Health Service trusts established under section 5 of the National Health Service and Community Care Act 1990, NHS foundation trusts or local authorities in the exercise of education functions or who are accommodated pursuant to arrangements made by the Secretary of State, the National Health Service Commissioning Board or a clinical commissioning group under the National Health Service Act 2006, and to children, other than those looked after by a (b) local authority, who are accommodated in care homes or independent hospitals. Regulation 7(2) and (3) modify the wording of section 25 so as to reflect its widened scope in the cases covered by regulation 7(1). With regulation 7 casting the section 25 net beyond looked after children, the possibility that a child is in secure accommodation cannot be dismissed simply on the basis that the child is not being looked after by the local authority. Furthermore, the inclusion within section 25 of children in hospitals and care homes demonstrates that the traditional view that secure accommodation has a punitive quality (see for example In re AB (A Child) (Deprivation of Liberty: Consent) [2015] EWHC 3125 (Fam); [2016] 1 WLR 1160, para 31) will not always be valid, so that cannot be used as a reliable hallmark of secure accommodation either. Deprived of obvious insignia such as these, how is it to be determined whether a particular childs circumstances are covered by section 25? As established by section 25(1), the concern of the section is a child who is placed, and if placed, kept in accommodation provided for the purpose of restricting liberty (secure accommodation). This definition, which is mirrored in regulation 2(1) of the 1991 Regulations, is the only definition of secure accommodation, so the hallmark by which such accommodation has to be identified is that it is accommodation provided for the purpose of restricting liberty. The Secretaries of State argue that identification is simplified in the case of childrens homes because, they say, Parliament has provided a mechanism for determining which childrens homes have the nature of being secure accommodation. The mechanism suggested derives from regulation 3 of the 1991 Regulations. This provides that [a]ccommodation in a childrens home shall not be used as secure accommodation unless it has been approved by the Secretary of State for that use. It seems that the Secretaries of State argue that where the accommodation in question is in a childrens home, it will count as secure accommodation only if it has been approved by the Secretary of State for that use. The logical corollary of that would appear to be that no matter what the living arrangements of a child in an unapproved childrens home, he or she is not placed/kept in accommodation provided for the purpose of restricting liberty and therefore not within section 25. This argument might owe something to the regime in relation to local authority homes which was discussed in R v Secretary of State for the Home Department, Ex p A [2000] 2 AC 276 (see later). It is not necessary to determine, in the present case, whether it is correct in the different context of section 25, but it should be acknowledged that it does give rise to some questions. Whilst it can readily be accepted that the intention is that only properly authorised childrens homes are to be used as accommodation for the purpose of restricting liberty, it does not necessarily follow that, in practice, a child could not find him or herself placed or kept in a childrens home which, but for the fact that it does not have the Secretary of States approval, has every appearance of being secure accommodation. If the argument advanced by the Secretaries of State is right, such children might be doubly prejudiced ie placed in an unapproved childrens home and outside the protective regime of section 25. Given the shortage of approved secure childrens homes, highlighted by the Court of Appeal in In re T (A Child) [2018] EWCA Civ 2136, this is a risk which cannot be ignored. In In re T, the appellant was 15 years old and subject to a full care order. The local authority proposed that she be detained in a unit which was not an approved childrens home, and sought authority from the High Court for the restriction of the childs liberty, relying upon the inherent jurisdiction. It is evident from the judgment of the President of the Family Division (with whom the other members of the court agreed) that such applications are not uncommon. At para 5, he said that there are many applications being made to place children in secure accommodation outside the statutory scheme laid down by Parliament, expressing concern about the situation (see also paras 88 and 89). No question seems to have been raised as to whether it is proper for the High Courts inherent jurisdiction to be used to authorise the restriction of a childs liberty in an unapproved childrens home. This might, perhaps, have been because the childs accommodation was not in fact in a childrens home as defined for the 1991 Regulations (see regulation 2) and therefore not covered by the prohibition in regulation 3, but given the limited details available about the childs circumstances, it is impossible to know. In any event, even if the approach commended by the Secretaries of State is correct, it would not serve to identify secure accommodation in all its various settings, but only in so far as childrens homes are concerned, and it would leave unanswered questions in relation to many other children. Accordingly, there being no reliable and universally applicable shortcuts to identifying secure accommodation, it is necessary to look more closely at the wording of section 25(1) in order to determine what circumstances fall within it. The parties rightly stress the need to interpret the section with an eye to the whole scheme in which it takes its place. Local authorities have far reaching welfare obligations towards children. Notably, under section 20 of the Children Act 1989, they have a duty to provide accommodation for children in need, and they must also address the accommodation and other needs of children in relation to whom care orders have been made. The children who require help will present with all sorts of different problems, and there will be those whose care needs cannot be met unless their liberty is restricted in some way. But by no means all of these children will fall within the criteria set out in section 25(1)(a) and (b), which are the gateway to the authorisation of secure accommodation. It seems unlikely that the legislation was intended to operate in such a way as to prevent a local authority from providing such a child with the care that he or she needs, but an unduly wide interpretation of secure accommodation would potentially have this effect. It is possible to imagine a child who has no history, so far, of absconding, and who is not likely actually to injure himself or anyone else, so does not satisfy section 25(1)(a) or (b), but who, for other good reasons to do with his own welfare, needs to be kept in confined circumstances. If section 25 applies whenever a childs liberty is restricted, local authorities will not be able to meet the welfare needs of children such as this. And, of course, it is similarly possible to envisage children in hospitals and care homes who need a degree of confinement, but do not satisfy either of the limbs of section 25(1). Putting it another way, the criteria set for the placing or keeping of a child in secure accommodation might be taken to reveal something of the problems which it was anticipated that children in secure accommodation would present. This, in turn, could be taken as a pointer towards the characteristics that one could expect to find in secure accommodation being used to meet those problems. It is also worth noting, when considering how section 25 fits into the statutory scheme, that a court determining an application under the section does not have the childs welfare as its paramount consideration, as would normally be the case when the court determines any question with respect to the upbringing of a child (section 1 of the Children Act 1989). If any of the relevant criteria for keeping a child in secure accommodation are satisfied, the court is obliged to make the order authorising the child to be kept in secure accommodation (section 25(4)). It would be surprising if section 25 were intended to be interpreted in such a way as to extend this displacement of the courts welfare role beyond a relatively circumscribed group of children whose circumstances make this unavoidable. Underlining this, it is worth noting that where the position of a child of 16 or 17 is being considered in the Court of Protection under the Mental Capacity Act 2005, welfare is the touchstone, as deprivation of liberty will only be endorsed where it is in the best interests of the child. So, the challenge is to interpret section 25 in such a way as to provide the protection intended by the legislature, without getting in the way of meeting the varied needs of the children for whom hospitals, care homes, and local authorities (in the exercise of their social services and education functions) have responsibility. We are grateful to the parties for the valuable detailed written submissions they have all made to assist with this process; as, for the most part, they traverse similar ground, it is unnecessary to attribute submissions in what follows. It is unnecessary also to address all the arguments advanced, given that we are not making a definitive decision as to the operation of section 25. It is submitted that the focus should be on the accommodation and the purpose for which it is provided, rather than upon the regime within the accommodation. This would be consistent with section 25(1)(a) and (b) which, in setting the criteria for the use of secure accommodation, stipulate that the child may not be placed/kept in secure accommodation unless it appears that he is likely to abscond from any other description of accommodation or to injure himself or others if he is kept in any other description of accommodation. This contrast of secure accommodation with any other description of accommodation can be read as supporting the notion that secure accommodation is a description of accommodation, rather than a description of a regime of care. This is an interpretation which also gains support from R v Secretary of State for the Home Department, Ex p A [2000] 2 AC 276. The 15 year old offender in that case had been remanded to a local authority childrens home which was not approved by the Secretary of State for the purpose of restricting liberty, but he was subject to a curfew and other conditions whilst there. The issue was whether he should be given credit, in serving his sentence of detention in a young offender institution, for his period in the local authority accommodation. That depended on whether it was covered by section 67(1A)(c) of the Criminal Justice Act 1967 which entitled an offender to have his sentence reduced by: (c) any period during which, in connection with the offence for which the sentence was passed, he was remanded or committed to local authority accommodation by virtue of an order under section 23 of the Children and Young Persons Act 1969 or section 37 of the Magistrates Courts Act 1980 and in accommodation provided for the purpose of restricting liberty. The legislative scheme with which the House was concerned was, of course, different from the provisions which concern us. Broadly speaking, by virtue of (inter alia) section 23 of the Children and Young Persons Act 1969, a court remanding a child or young person who had committed, or was alleged to have committed, a criminal offence could release him on bail or remand him to local authority accommodation, in either case with or without conditions. In the case of certain offenders who had reached 15 years of age, the court could require [the designated local] authority to comply with a security requirement, that is to say, a requirement that the person in question be placed and kept in secure accommodation (section 23(4)). Section 23(12) defined secure accommodation as accommodation which is provided in a community home, a voluntary home or a registered childrens home for the purpose of restricting liberty, and is approved for that purpose by the Secretary of State. It will be noted that this definition differs from that in section 25 of the Children Act, in that it makes approval by the Secretary of State an integral part of the definition of secure accommodation, whereas the section 25 definition makes no reference to such approval which is, instead, the subject of regulation 3 of the 1991 Regulations. The local authority home in which the offender was accommodated on remand was not approved by the Secretary of State, so did not qualify as secure accommodation as such. But it was argued that section 67(1A)(c) was satisfied anyway, by virtue of the restrictions placed upon him whilst he was living there. A useful review of the history of the provisions as to secure accommodation in the civil and the criminal spheres can be found in the speech of Lord Clyde (with whom all the other members of the House agreed), commencing at p 285, although inevitably the law has moved on again since the decision. Then, at p 287, dealing with the construction of the phrase and in accommodation provided for the purpose of restricting liberty at the end of section 67(1A)(c), Lord Clyde said: The use of the expression accommodation provided in the statutory phraseology is to my mind significant. The word accommodation refers to the place where the person is to be accommodated. The phrase designates a particular class or kind of accommodation. It is accommodation which has been provided for a particular purpose. The phrase does not refer to any accommodation where the liberty of a person may be restricted. The reference intended by the language used is in my view not simply to a regime of some kind whereby the persons liberty is restricted, but to the nature of the accommodation itself. The phrase is looking to a category of accommodation, namely accommodation which has been provided for the stated purpose. The obvious category of accommodation which can be identified as having been provided for the purpose of restricting liberty is that which came to be referred to as secure accommodation. The same point can be taken from the repeated use of the word in which appears in relation to police detention in paragraph (a), to custody in paragraph (b) and to accommodation in paragraph (c). It is the place in which the person is situated, and in particular its nature, rather than any controls over his movements, to which the subsection is looking. Similarly, Lord Hope (with whom the members of the Appellate Committee other than Lord Clyde agreed) said, at p 282, that: the words provided for the purpose of restricting liberty appear to direct attention to the nature of the accommodation and the purpose for which it is provided, not to the effect on the persons liberty of any conditions to which he may be subjected under section 23(7) of the Act of 1969. Thus the additional requirement indicated by the word and is that the accommodation to which the person was committed must have been for that purpose and of that character. Both Lord Clyde and Lord Hope were persuaded not only by the wording of the provision but also by practical considerations that this construction was correct. By focusing on whether the offender was in what Lord Clyde called qualifying accommodation (p 289E), the institution detaining the offender would be able to apply the appropriate credit against the sentence without having to form judgments about the precise conditions under which the individual offender had been held there (see Lord Hope at p 283 and Lord Clyde at p 289). Lord Clyde was clearly equating qualifying accommodation for section 67(1A)(c) purposes with secure accommodation as defined in section 23(12), as he envisaged that all that was necessary to ascertain whether the offender had been in qualifying accommodation was to see whether it had been approved by the Secretary of State as secure accommodation. It would not be right to regard R v Secretary of State for the Home Department, Ex p A as determinative of the ambit of section 25 of the Children Act 1989. Although the phrase considered by the House of Lords there also features in section 25, the context is obviously different. There, by training the lens on the accommodation itself, the House was able to ensure that there was a simple means of identifying relevant periods on remand, merely by looking to see whether or not the particular local authority accommodation had the Secretary of States approval. Focusing on the accommodation itself does not, however, provide such a simple answer to the problem of what is secure accommodation within section 25. Section 25 extends well beyond local authority homes, and undoubtedly encompasses secure accommodation which does not have to be approved by the Secretary of State. Furthermore, the purpose of the provisions considered by the House of Lords was very different from the purpose of section 25. They were concerned with a scheme which conferred power on a court remanding a child to local authority accommodation to dictate that the child should be kept in secure accommodation as narrowly defined by section 23(4) of the Children and Young Persons Act, and confined credit for time spent in local authority accommodation to that type of accommodation. In contrast, what section 25 has to say about secure accommodation is of much wider application. It does not set out to dictate where a local authority must place/keep a particular child, but to regulate, in both local authority and non local authority settings, the circumstances in which a child can be placed/kept in secure accommodation as defined in the section. Nevertheless, given that the House of Lords were concerned with the same phrase as features in section 25, their interpretation must carry weight. Coming closer to home, we are invited to endorse the approach that Wall J took to the phrase accommodation provided for the purpose of restricting liberty in In re C (Detention: Medical Treatment) [1997] 2 FLR 180 at p 193. The case concerned a 16 year old girl suffering from anorexia nervosa. The local authority made an application for an order under the inherent jurisdiction authorising her detention in a clinic for medical treatment. Wall J was faced with the question whether the courts powers under the inherent jurisdiction were ousted by the scheme laid down by Parliament in section 25, and in addressing that issue, he needed to determine whether the clinic was, in fact, secure accommodation within section 25. Having reviewed three earlier authorities (R v Northampton Juvenile Court, Ex p London Borough of Hammersmith and Fulham [1985] FLR 193, South Glamorgan County Council v W and B [1993] 1 FLR 574, and A Metropolitan Borough Council v DB [1997] 1 FLR 767) he said (p 193): Whilst I respectfully agree that premises which are not designed as secure accommodation may become secure accommodation because of the use to which they are put in the particular circumstances of individual cases, it does seem to me that the more natural meaning of the words provided for the purpose of restricting liberty is designed for, or having as its primary purpose the restriction of liberty. The circumstances in which section 25 operates are based on the premise that the child has a history of absconding and is likely to abscond from any other description of accommodation. The alternative premise, that if he is kept in any other description of accommodation he is likely to injure himself or others once again envisages a secure regime designed to prevent self harm. I therefore prefer to look at the clinic, and ask myself: is it accommodation provided for the purpose of restricting liberty? This is, of course, as Cazalet J indicates, a question of fact. Having said that, he went on to examine the regime operated by the particular clinic, before finding that it was not secure accommodation. In his view, the purpose of placement of a child in the clinic is to achieve treatment: the accommodation provides a structure for that treatment. The fact that there was a degree of restriction on the patients liberty was an incident of the treatment programme, and the fact that steps could be taken to prevent the child from leaving the premises did not, of itself, render the clinic secure accommodation. Section 25 has played no direct role in the proceedings in the present case, and the bulk of the argument about it has occurred in writing after the conclusion of the hearing in this court. Nothing that we say about it will conclusively resolve the difficult questions that arise as to its scope and operation, and that is as it should be, because it would be undesirable that final views should be formed, without there having been an opportunity for oral argument. Furthermore, it would be better that such issues as there are about the scope of section 25 should be resolved in a case where the relevant facts have been found, so that the section can be interpreted with reference to a real factual situation. Because the issue was not under consideration at all before the appeal arrived in this court, factual findings have not been made in relation to all the matters relevant to the application of section 25 in Ds case. As, by virtue of his age, D is now no longer within the scope of the Children Act, there would be absolutely no point in remitting the case for evidence to be heard, particularly as none of the parties contends that this is a section 25 case. The exercise in which we have engaged has, however, been sufficient to persuade us that section 25 is not intended to be widely interpreted, so as to catch all children whose care needs are being met in accommodation where there is a degree of restriction of their liberty, even amounting to a deprivation of liberty. There is much force in the argument that it is upon the accommodation itself that the spotlight should be turned, when determining whether particular accommodation is secure accommodation, rather than upon the attributes of the care of the child in question. This fits with the language used in section 25(1), when read as a whole. It is also consistent with the objective of ensuring that the section is not so widely drawn as to prejudice the local authoritys ability to offer children the care that they need, and it ought to make it more straightforward to apply than would be the case if the issue were dependent upon the features of a childs individual care regime, so that the child might be found to be in secure accommodation in all manner of settings. A restrained construction of the section is also justified by the fact that, far from being concerned with the routine sort of problems that might require a childs freedom to be curtailed, the section has a last resort quality about it. It is concerned with accommodation which has the features necessary to safeguard a child with a history of absconding who is likely to abscond from any other description of accommodation or to prevent injury where the child in question would be likely to injure himself or others if kept in any other description of accommodation. Of course, training the spotlight on the accommodation itself does not provide a complete answer to the question as to what falls within the definition of secure accommodation. Some secure accommodation will be readily recognisable from the fact that it is approved as such by the Secretary of State, but that is by no means a universal hallmark, as that approval is not needed for all types of secure accommodation. Moreover, given that it is contemplated that secure accommodation might be provided in places such as hospitals, it seems likely that there will not infrequently be more than one purpose of the child being in the accommodation, and there is much to commend Wall Js approach to such a situation, that is to count within the definition of secure accommodation designed for or having as its primary purpose the restriction of liberty. Equally, the section will have to be interpreted in such a way as to allow for situations where only a part of the premises is made over to restricting liberty. LADY ARDEN: I agree with the judgment of Lady Hale on the effect of article 5 of the European Convention on Human Rights (the Convention). She has held that parental consent to a childs living circumstances is not effective to prevent a child, who has mental disabilities and cannot give any relevant consent to those circumstances, from being deprived of their liberty for the purposes of article 5 if their living circumstances mean that they are not free and the restrictions on them go beyond those which are normal for a child of their age. In this case, the child, D, is over 16 years of age. I agree with Lady Hale (para 50) that it is unnecessary in this case to express any view on the question whether there would be a deprivation of liberty for the purposes of article 5 if a child who has not yet attained that age has their liberty restricted to an extent that is not normal for a child of their age. Likewise I express no view on the question of parental consent for medical treatment or other matters outside article 5. The key case on article 5 in this context is Nielsen v Denmark (1988) 11 EHRR 175, which Lady Hale analyses at paras 34 to 38 above. As Lady Hale explains, it is the normality of the parents control over the child, as compared with arrangements for children of a similar age, that is the key to understanding this difficult decision of the European Court of Human Rights (the Strasbourg court). In the present case, the position can simply be compared with the position of other children in the UK. It might in future be necessary to have regard to the practice in other contracting states to the Convention, but that does not arise in this case. I have one qualification. Article 5 is not a qualified right and there is no scope for holding that the denial of a persons liberty engages article 5 but does not amount to a violation because it serves a legitimate aim and is proportionate and necessary in a democratic society. Exceptionally there are situations where the Strasbourg court finds that in effect those tests were met but it can only do so by holding that there is no deprivation of liberty for article 5 purposes. Thus, in Austin v United Kingdom 35 EHRR 14, the complainants were demonstrators who had been kettled by the police, that is, kept against their will within a police cordon. The Strasbourg court held that there was no violation because the need for the police to maintain order in this situation meant the denial of liberty was not a deprivation of liberty for article 5 purposes. So, too, in Nielsen, the Strasbourg court had held that there was no deprivation of liberty for article 5 purposes. It follows that there will be cases where a person loses their liberty but the acid test in Cheshire West, as Lady Hale describes it, does not apply. That conclusion is shown by observing that Ds case is about living arrangements. It is not about a child, or anyone else, needing life saving emergency medical treatment. For the reasons which the Court of Appeal (McFarlane LJ, Sir Ross Cranston and myself) gave in R (Ferreira) v Inner South London Senior Coroner [2018] QB 487, the situation where a person is taken into (in that case) an intensive care unit for the purpose of life saving treatment and is unable to give their consent to their consequent loss of liberty, does not result in a deprivation of liberty for article 5 purposes so long as the loss of liberty is due to the need to provide care for them on an urgent basis because of their serious medical condition, is necessary and unavoidable, and results from circumstances beyond the states control (para 89). I pass on to section 25 of the Children Act 1989 and to the judgment of Lady Black. So far as section 25 is concerned, this was unfortunately dealt with only on written submissions. I have read the judgment of Lady Black, in which Lady Hale concurs, with admiration. I have read it as laying down a marker for the future. I have read it conscious of the depth of experience which Lady Black and Lady Hale bring to bear in the field of family law, and particularly the circumstances in those childrens cases which may be affected by a ruling on section 25. It is evident that there is a very serious issue here, but I do not express any final view until a case arises which raises this very question. I am far from disagreeing with them, but I would like to reach a final view against the facts of an actual case. I express no view on the other issues as to the common law in Lady Blacks judgment for the same reason. It follows that I would allow this appeal. LORD CARNWATH: (dissenting) (with whom Lord Lloyd Jones agrees) Introduction As Lady Hale says, this case is about the limits of parental responsibility in the case of a young person who has reached the age of 16, but does not have the mental capacity to make decisions for himself. This arises in the context of article 5 of the European Convention on Human Rights by which: Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law. As she also explains (para 1), and as is common ground, the application of article 5 is to be tested by reference to three components: (a) the objective component of confinement in a particular restricted place for a not negligible length of time; (b) the subjective component of lack of valid consent; and (c) the attribution of responsibility to the State. This is the effect of Storck v Germany (2005) 43 EHRR 6 (Storck), followed by this court in Surrey County Council v P; Cheshire West and Chester Council v P [2014] UKSC 19; [2014] AC 896 (Cheshire West). It is further common ground that on the facts of this case, components (a) and (c) are satisfied. The area of debate is about component (b): whether on the facts of this case the exercise of parental responsibility could make up for the lack of consent by D himself. That it could do so while he was under the age of 16 was not in dispute in the courts below. That was supported by reference to the decision of the Strasbourg court in Nielsen v Denmark (1988) 11 EHRR 175 (see Lady Hale para 34). It is worth stating at the outset the reasons for this view, as stated by Keehan J, and adopted by Sir James Munby P giving the leading judgment in the Court of Appeal (para 108): The parents of this young man are making decisions, of which he is incapable, in the welfare best interests of their son. It is necessary for them to do so to protect him and to provide him with the help and support he needs. I acknowledge that D is not now cared for at home nor in a home setting. His regime of care and treatment was advised by his treating clinicians and supported by his parents. They wanted to secure the best treatment support and help for their son. They have done so. It has proved extremely beneficial for D who is now ready to move to a new residential home out of a hospital setting. What other loving and caring parent would have done otherwise? Those arrangements are and were made on the advice of the treating clinicians. All professionals involved in his life and in reviewing his care and treatment are agreed that these arrangements are overwhelmingly in Ds best interests. On the facts of this case, why on public policy or human rights grounds should these parents be denied the ability to secure the best medical treatment and care for their son? Why should the state interfere in these parents role to make informed decisions about their sons care and living arrangements? I can see no reasons or justifications for denying the parents that role or permitting the state to interfere in Ds life or that of his family. I accept the position might well be very different if the parents were acting contrary to medical advice or having consented to his placement at Hospital B, they simply abandoned him or took no interest or involvement in his life thereafter. The position could not be more different here. Ds parents have regular phone calls with him. They regularly visit him at the unit. Every weekend D has supported visits to the family home. He greatly enjoys spending time at home with his parents and his younger brother. In my judgment, on the facts of this case, it would be wholly disproportionate, and fly in the face of common sense, to rule that the decision of the parents to place D at Hospital B was not well within the zone of parental responsibility. (paras 58 64) The good sense of that appraisal has not, as I understand it, been challenged by any of the parties to this court. Nor is it suggested that, when D became 16, anything changed in practical terms, whether in respect of his own needs and best interests, or of his relationship with his parents or the public agencies involved. However, Keehan J was persuaded by the Official Solicitor that there was a fundamental change in the legal position so that the approval of the court was now required. The Court of Appeal disagreed. That view is challenged in this court by the Official Solicitor, with the support of the Equality and Human Rights Commissioner as first intervener. The Court of Appeals approach is defended by the Council as the statutory authority responsible for safeguarding Ds interests. They are supported by the Secretaries of State for Education and Justice. They have intervened as having policy responsibility respectively for the Mental Capacity Act 2005 (MCA 2005) and the Children Act 1989, and for the Court Service. They are concerned that the outcome of the appeal could have significant implications for a large number of 16 and 17 year olds, who are being held in care across a variety of settings, ranging from foster care placements to residential holiday schemes for disabled children. They also point out that the appeal takes place against the background of the Law Commissions review of the law of Mental Capacity and Deprivation of Liberty, and in particular the deprivation of liberty safeguards (DoLS) (Law Com No 372). As the Commission explained in its Consultation Paper (CP No 222, paras 2.39 40), that review was prompted by the massive and unanticipated increase in cases requiring to be dealt with under the DoLS arrangements (from 11,300 in 2013 4 to 113,300 in 2014 5), following the decision of this court in the Cheshire West case. Their review has been followed more recently by the consideration by Parliament of the Mental Capacity (Amendment) Bill (now the Mental Capacity (Amendment) Act 2019). That provides for the replacement of DoLS by a new scheme of safeguards (the Liberty Protection Safeguards) for those who lack capacity under the MCA and who are deprived of their liberty, which will extend to 16 and 17 year olds. The background to the 2019 Act was described in the Explanatory Notes: 6. In 2014 the decision of the Supreme Court in the case of Cheshire West gave a significantly wider interpretation of deprivation of liberty than had been previously applied in the health and social care context. This increased considerably the number of people treated as being deprived of liberty, and correspondingly increased the obligations on public authorities (primarily local authorities) in connection with authorising, and providing safeguards for, these extra deprivations of liberty. 7. Following Cheshire West, the Government asked the Law Commission to review this area of law. The Commissions final report, which included a draft Bill, called for the DoLS to be replaced as a matter of pressing urgency and set out a replacement scheme. The new scheme was intended to establish a proportionate and less bureaucratic means of authorising deprivation of liberty. The Law Commission noted that its remit had been limited to children of 16 or over (para 7.20). It also noted the complicating factor that in the Nielsen case the Strasbourg court had recognised the right of parents in certain cases to consent to what would otherwise be a deprivation of liberty for their children; but it also noted that Keehan J (in the present case, decided since the consultation paper) had limited that approach to children under 16 (para 7.22). When what became the 2019 Act was presented to Parliament it was limited to those over 18, but it was later extended to those over 16. That followed an amendment proposed in the House of Lords by (inter alios) Baroness Thornton. It is of interest that she referred to evidence of the Royal College of Psychiatrists which has pointed out that case law has established that the parents of children under 16 may give consent to what would otherwise constitute a deprivation of a childs liberty where the matter falls within the zone of parental responsibility, but it has been held that a parent cannot give equivalent consent for a 16 to 17 year old. It therefore argues that the Bill should be extended to 16 to 17 year olds to provide them with better safeguards, as they are not served well at present. (HL Committee Stage Day 1 Volume 792 Column 1832) It seems therefore that the fixing of the age threshold in the new Act at 16 was directly related to the then understanding of the scope of parental responsibility as reflected in the judgment of Keehan J in the present case. Parental responsibility There is no dispute about the importance of the principle of parental responsibility in the common law. As Sir James Munby P said in In re H B (Contact) [2015] EWCA Civ 389; [2015] 2 FCR 581, para 72: parental responsibility is more, much more than a mere lawyers concept or a principle of law. It is a fundamentally important reflection of the realities of the human condition, of the very essence of the relationship of parent and child. Parental responsibility exists outside and anterior to the law. Parental responsibility involves duties owed by the parent not just to the court. First and foremost, and even more importantly, parental responsibility involves duties owed by each parent to the child. Not surprisingly a corresponding principle is recognised under the European Convention on Human Rights. As the Strasbourg court said in Nielsen v Denmark (1988) 11 EHRR 175, family life in the Contracting States encompasses a broad range of parental rights and responsibilities in regard to care and custody of minor children. The care and upbringing of children normally and necessarily require that the parents or an only parent decide where the child must reside and also impose, or authorize others to impose, various restrictions on the childs liberty. Family life in this sense, and especially the rights of parents to exercise parental authority over their children, having due regard to their corresponding parental responsibilities, is recognized and protected by the Convention, in particular by article 8. Indeed the exercise of parental rights constitutes a fundamental element of family life The common law principle is given specific statutory recognition in section 3 of the Children Act 1989, which defines parental responsibility as encompassing all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and his property. A child in this context means a person under the age of 18 (section 105(1)). Neither definition is in terms modified by anything in the MCA 2005 or the 2019 Act. The judgments below The judges conclusion that the legal position changed when D became 16 turned principally on his view of the change in the statutory framework applicable to such children. He said: 103. I am entirely persuaded that Parliament has on numerous occasions, , chosen to distinguish the legal status of those who have not attained the age of 16 years, those aged 16 and 17 and, finally, those who have attained their majority. 104. I am particularly persuaded by the fact that Parliament chose to include incapacitous 16 and 17 year olds within the remit of the Mental Capacity Act 2005. An incapacitous young person under the age of 16 years is specifically excluded from the provisions of the Act: see section 2(5) (subject to the exceptions referred to [above] ). The President disagreed. As to the correct approach to article 5, and in particular the effect of Nielsen, he extracted the following propositions from the judgments in Cheshire West of Lady Hale and Lord Neuberger: 105. In the premises, and whilst acknowledging that parents still have parental responsibility for their 16 and 17 year old children, I accept that the various international Conventions and statutory provisions referred to, the United Nations Convention on the Rights of the Child and the Human Rights Act 1998, recognise the need for a greater degree of respect for the autonomy of all young people but most especially for those who have attained the age of 16 and 17 years. Accordingly, I have come to the clear conclusion that however close the parents are to their child and however co operative they are with treating clinicians, the parent of a 16 or 17 year old young person may not consent to their confinement which, absent a valid consent, would amount to a deprivation of that young persons liberty. i) Nielsen is, fundamentally, a case about Storck component (b); or, to be more precise, about the proper ambit of Storck component (b) and the extent and limit of parental authority, which between them determine whether Storck component (c) arises for consideration. ii) Whatever its implications in relation to adults, a matter which is not before us and which is not free from difficulty, Nielsen is good authority in relation to children. iii) In accordance with Nielsen, there are circumstances in which the consent by a holder of parental authority in domestic terms, someone with parental responsibility will provide a valid consent for the purposes of Storck component (b) to something which is a confinement for the purposes of Storck component (a). Those circumstances, although extensive, are not unlimited. (para 37) This led him to a discussion of the scope of parental responsibility in the context of Storck component (b), which in his view was governed by domestic law: 50. For the purpose of applying the Nielsen principle one first has to identify what are the relevant rights of the holder of parental authority, and that, in my judgment, is plainly a matter to be determined by the relevant domestic law. Understanding of the issues arising in relation to ground (1) therefore requires consideration of our domestic law before one can turn to consider the application of article 5 and the Strasbourg jurisprudence (para 50) There followed a comprehensive review of the authorities culminating in the leading modern authority in Gillick v West Norfolk and Wisbech Area Health Authority [1986] AC 112. From an extended discussion of the speeches in Gillick (paras 74ff) he derived three propositions: (in very brief summary) first, that parental rights exist for the benefit of the child not the parent; secondly, that parental rights are to be exercised in the best interests of the children, and subject to the control of the court by reference to general community standards; thirdly, the rejection of the rule that the age of discretion was fixed and the substitution of what it has now become customary to refer to as the acquiring of Gillick capacity (para 79). He concluded his discussion of Gillick with this summary: What for convenience, and in accordance with settled practice, I shall refer to as Gillick capacity or Gillick competence is not determined by reference to the characteristic development trajectory of some hypothetical typical or normal child (whatever those expressions might be understood as meaning). Whether a particular child has Gillick capacity is determined by reference to the understanding and intelligence of that child The attainment of Gillick capacity is, and has always been, treated as being child specific. This has an important corollary. Given that there is no longer any magic in the age of 16, given the principle that Gillick capacity is child specific, the reality is that, in any particular context, one child may have Gillick capacity at the age of 15, while another may not have acquired Gillick capacity at the age of 16 and another may not have acquired Gillick capacity even by the time he or she reaches the age of 18. (paras 83 84) He thought that the judges approach was inconsistent with the Gillick principle, and unsupported by the statute: On this point, in my judgment, Keehan J was wrong in law. I say this for two reasons. First, because his approach does not give effect to the fundamental principle established by Gillick: namely that, in this context , the exercise of parental responsibility comes to an end not on the attaining of some fixed age but on attaining Gillick capacity Secondly, because none of the statutory provisions upon which he relied bears either expressly or by implication upon the matter in hand which, to emphasise the obvious, is to do with the ambit and extent of parental responsibility and nothing else. It was therefore, with great respect to Keehan J, beside the point for him to observe (para 103) that: Parliament has on numerous occasions chosen to distinguish the legal status of those who have not attained the age of 16 years, those aged 16 and 17 and, finally, those who have attained their majority. No doubt, but, I ask rhetorically, where does that take us? given the rejection by the House of Lords in Gillick of this courts reliance in the same case on what was essentially the same line of thought. (para 125) In relation to the 2005 Act itself he made two points First, that in general terms the 2005 Act does not make specific provision in relation to those aged 16 or 17. Secondly, and even more important for present purposes, that with only two (in the present context irrelevant) exceptions, the 2005 Act makes no statutory provision for the role of those exercising parental responsibility. Precisely so: the matter is left to the common law, in other words to the operation of the Gillick principles. (para 127, his emphasis) He concluded that in the present context, parental responsibility is, in principle, exercisable in relation to a 16 or 17 year old child who, for whatever reason, lacks Gillick capacity (para 128). The Official Solicitors case In this court the Official Solicitor submits that the President was wrong to treat Nielsen as relevant only to limb (b) of the Storck test, having regard to the later authorities reviewed in the judgment of Keehan J. To do justice to the argument, I cannot do better than quote from the written submissions advanced by Mr Setright QC and his team. He suggests that argument about the scope of limb (a) (confinement) is to some extent, a sterile one since it is the nuancing of the meaning of confinement that allows the balance to be struck between consideration of the rights of the parents (whether under the common law or article 8 ECHR) to exercise parental control over their children as an aspect of their caring responsibilities, and consideration of the rights of the child to be recognised as an independent legal actor, those latter rights gaining greater strength the closer the child gets to adulthood (and irrespective of their disability). In the remainder of his case he puts the main emphasis on developments in the law since Gillick, in particular the 2005 Act. Indeed he accepts that the Presidents approach was undoubtedly correct as a statement of the operation of Gillick competence at common law in 1985 , but argues that it has been overtaken by developments in the law, in particular, the passage of the 2005 Act, and also the trends in international human rights norms (Case para 65). He argues that these changes justify a change in the approach of the courts: If as the Official Solicitor submits section 5 MCA 2005 provides a complete framework for the delivery of care and treatment to those aged 16 above lacking capacity, then he submits that, by operation of conventional principles, it should be seen as ousting the place of the common law. As set out above, it has already been held that, where section 5 MCA 2005 applies, the common law defence of necessity has no application. [citing Comr of Police for the Metropolis v ZH [2013] 1 WLR 3021.] The Official Solicitor submits that the same analysis applies equally to the (common law) position in relation to those aged 16 and 17 with impaired capacity. Even if the court considers that the common law has not been ousted by the passage of the MCA 2005, the great virtue of the common law is that it can respond to changing circumstances. The Official Solicitor prays in aid by analogy the approach adopted by the Supreme Court in Montgomery v Lanarkshire Health Board [2015] AC 1430 In the circumstances, the Official Solicitor respectfully submits that good practice in the clinical and caring context now recognises very considerable limits upon the ability of parents to consent to beneficent, but either coercive or very serious, interventions in relation to their children The Official Solicitor would respectfully submit that this can, and should, be the point at which the Supreme Court expressly confirms as a matter of common law that the power of a parent to consent on behalf of a 16/17 year old with impaired capacity simply does not exist, as (1) there is no requirement for it to exist; and (2) it does not reflect contemporary understandings of the rights of children; (Case paras 65.3 4) This argument is resisted by the City Council. Discussion Parental authority and the MCA 2005 Without disrespect I can deal relatively shortly with the central argument in the Official Solicitors case, because I agree essentially with the reasons given by the President for rejecting the corresponding part of the judges reasoning. Like the President I see nothing in the 2005 Act which detracts from the common law principle or from section 3 of the 1989 Act. There is a presumption that Parliament does not change the common law by implication. Certainly in respect of a concept as basic and sensitive as parental responsibility one would expect clear words to indicate the nature of the change and its practical consequences. Not only is there nothing in the 2005 Act itself to indicate such a change, but, as the Secretary of State has shown (without challenge), there is nothing in the background to the Act to indicate such an intention. On the contrary it was made clear by the Law Commission and in Ministerial statements to Parliament, that there would be an overlap between the proposed regime and the 1989 Act. That position has been reinforced by the lack of anything in the 2019 Act to undermine the common law position, as reflected in the 1989 Act. In the absence of any specific legislative change I do not see how unincorporated international instruments can add anything to the argument. I am also satisfied that this is not an area in which it would be appropriate for this court to accept the invitation to develop the law to fill a supposed gap left by the legislation, or otherwise to reflect contemporary understandings of the rights of children, as the Official Solicitor invites us to do. There is no parallel with the Montgomery case (Montgomery v Lanarkshire Health Board [2015] 1432) where a seven justice court had been convened specifically to consider whether to depart from the controversial and much criticised reasoning of the majority in Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital [1985] AC 871. Not only does the Secretary of State, who is responsible for legislative policy in this area, resist such a development, but the treatment of mentally incapacitated 16 or 17 year olds has been subject of Parliamentary scrutiny in connection with legislation passing through Parliament during the course of this appeal. In addition the experience of the Cheshire West decision should lead us to extreme caution in this difficult and sensitive area of the law. Nielsen On the question whether Nielsen was a case about Storck limb (a) or (b), I accept that, as the case was decided before the identification of the Storck components, it is a little artificial to attempt to fit the reasoning of the majority directly into that scheme. It is enough to say that, on the authorities as they stood before him, I see no error in Sir James Munby Ps approach. He referred to two passages in Cheshire West to support his view. The first (para 26) was from Lady Hale: I start with Baroness Hale of Richmond DPSC, who said this about Nielsen v Denmark (1988) 11 EHRR 175 (para 30): The seven dissenting judges considered that placing a 12 year old boy who was not mentally ill in a psychiatric ward for several months against his will was indeed a deprivation of liberty. It would appear, therefore, that the case turns on the proper limits of parental authority in relation to a child. As already mentioned (para 4 above) there is no equivalent in English law to parental authority over a mentally incapacitated adult. She added (para 41): Although Nielsen 11 EHRR 175 has not been departed from, it is to be regarded as a case of substituted consent, and thus not fulfilling component (b). The second (para 35) was from Lord Neuberger, who said of Nielsen (at para 73): The case involved a child, and was decided on the basis that his mother was exercising her article 8 rights responsibly, in good faith and on the basis of medical advice: see para 71 There was some discussion before us whether the second passage in the quotation from Lady Hale was an expression of her own opinion, or simply a recitation of counsels submission. Either way I can see nothing in the remainder of her judgment to indicate disagreement with that proposition, which also seems to me consistent with the first passage, and with the passage quoted from Lord Neubergers judgment. It also seems to me the more natural interpretation. If Storck component (a) is directed to the objective quality of confinement, it is difficult to see how that quality is affected by whether or not it has been sanctioned by the parent. It is true that the attributes of confinement may vary in relation to children of different ages, as explained by Lord Kerr in Cheshire West paras 77 79 (a passage quoted by the Lady Hale: para 38). However, I am not persuaded that the clarity of the concept would be improved by further nuancing as the Official Solicitor suggests. In this case, as I have said, it is not in dispute that component (a) is satisfied. Lady Hales judgment I need to deal separately with Lady Hales judgment in the present appeal. She takes a rather different approach from that advocated by any of the parties before us, and perhaps for that reason finds it unnecessary to address in any detail the reasoning of the Court of Appeal. She deals relatively briefly with the majority judgment in Nielsen, which she treats as turning on the comparative normality of the restrictions imposed on the freedom of a 12 year old boy (para 38). Later in the judgment (para 42), she discounts suggestions in Cheshire West that Nielsen was a case of substituted consent, because it had suited counsel so to argue. Instead she relies on later Strasbourg authorities as showing that limb (b) (that is, lack of valid consent) can be satisfied despite the consent of a person with the legal right to make decisions on behalf of the person concerned, the only exceptions being where the evidence showed that the person concerned was willing to stay where he or she was and was capable of expressing that view. She concludes accordingly that parental consent cannot substitute for the subjective element of limb (b) of Storck. Later in her judgment (para 48) she reinforces that view by equating deprivation of liberty with other fundamental human rights such as the right to life or freedom from torture. She argues that it would be a startling proposition that it lies within the scope of parental responsibility to authorise violation of such rights. I say at once, with respect, that I am not persuaded that such comparisons are fair or helpful. Ds parents were not authorising the state to commit torture or anything comparable to it. They were doing what they could, and what any conscientious parent would do, to advance his best interests by authorising the treatment on which all the authorities were agreed. That this involved a degree of confinement was an incidental but necessary part of that treatment, and no more than that. On the Presidents view, with which I agree, they were not authorising a violation of his rights, but rather exercising their parental responsibility in a way which ensured that there was no such violation. More importantly, I do not accept that the majority reasoning in Nielsen, nor indeed what was said about it in Cheshire West, can simply be brushed aside. It was not just about the relative normality of the confinement (although some might share the minoritys doubts about that description of the forcible confinement of a 12 year old child for five months in a locked psychiatric ward). As has been seen (para 147 above), in Cheshire West Lady Hale herself described it as turning, not on the normality of the arrangements, but on the proper limits of parental authority in relation to a child. More specifically Lord Neuberger said that it was decided on the basis that his mother was exercising her article 8 rights responsibly, in good faith and on the basis of medical advice . Sir James Eadie QC, on behalf of the Secretaries of State, has helpfully analysed the majority judgment in Nielsen in terms which I would in substance endorse. He accepts that, not surprisingly in a case decided before Storck, there may be some overlap between the categories. But, in agreement with the President, he sees it as primarily about limb (b). He points to the emphasis given by the majority at the outset to family life under the Convention, encompassing the broad range of parental rights and responsibilities in regard to the care and custody of minor children (para 61). He notes the following points from the judgment (paras 68 72): i) The mothers decision to have the applicant hospitalized was a lawful exercise of parental powers under Danish law and was also well founded. The Danish courts found that the hospitalization decision fell within the mothers competence as holder of parental rights. ii) The mother had taken her decision on the basis of medical advice from her family doctor and a professor, and had as her objective the protection of the applicants health. This was a proper purpose for the exercise of parental rights. iii) The mothers decision was approved by the relevant social services authorities. iv) There was no suggestion that the treatment given at the hospital and the conditions under which it was administered were inappropriate in the circumstances. The applicant was in need of medical treatment for his condition and the treatment administered to him was curative. v) There was no evidence of bad faith on the part of the mother. Hospitalization was decided upon by her in accordance with expert medical advice. It must be possible for a child to be admitted to hospital at the request of the holder of parental rights, a case which was not covered by para 1 of article 5. That the court based its reasoning principally on the exercise of parental responsibility seems to me put beyond doubt by its concluding comment: the hospitalization of the applicant did not amount to a deprivation of liberty within the meaning of article 5, but was a responsible exercise by his mother of her custodial rights in the interests of the child. Accordingly, article 5 is not applicable in the case. (para 73) In context, that comment is clearly designed to take the reader back to where this discussion began (para 61), that is to the broad range of parental rights and responsibilities recognised by the Convention under the concept of family life. The Secretaries of State further submits (without contradiction) that the Strasbourg court has not departed from Nielsen in the three decades since the judgment was delivered. That submission is confirmed by the exhaustive review by Keehan J of the Strasbourg authorities relied on by the Official Solicitor before him (paras 44 61). The case has been consistently explained by the court itself as a case about the responsible exercise by the applicants mother of her custodial rights: see Koniarski v United Kingdom (Application No 33670/96) 30 EHRR CD 139 and DG v Ireland (Application No 39474/98) (2002) 35 EHRR 33. (Notably, the fact that both those cases related to 17 year olds was not cited as a ground of distinction). In HL v United Kingdom (2004) 40 EHRR 761, it was cited with approval, but distinguished on the basis that no one had legal authority to act on the adult HLs behalf in the same way as Jon Nielsens mother (para 93). It was also cited with approval by the Grand Chamber in Stanev v Bulgaria (2012) 55 EHRR 696, where it was explained as the exercise of exclusive custodial rights over a child who was not capable of expressing a valid opinion (para 122). Keehan J (para 42) noted some doubts about the case expressed by Lord Walker in Austin v Comr of Police [2009] 1 AC 564, para 42. But no such doubts appear to have found their way into the Strasbourg jurisprudence. It was and remains the leading Grand Chamber decision on the scope of such parental rights and responsibilities in the context of article 5. It is unnecessary in my view to decide whether the case is to be regarded as a case of substituted consent so as to bring it directly with Storck limb (b) (as was hinted at in Stanev v Bulgaria [2012] 55 EHRR 22, para 130), or whether it is simply an exception to the Storck categorisation, justifiable in its own terms by reference to the scope of family life under article 8. For the present purposes, it provides amply sufficient support in Strasbourg case law for the Presidents reliance on equivalent domestic law principles to determine the present case. Lady Blacks judgment Lady Black, while agreeing with Lady Hale, has introduced a new line of reasoning based on a review of the common law authorities preceding Gillick. This leads her to reject the Presidents view of the relevance of that case to decisions relating to detention. Instead she reads those authorities as showing that in this context reaching the age of discretion was a matter of attaining the requisite chronological age, and not a matter of mental capacity (para 56, 68). As I understand her judgment (paras 71 72), she would regard 16 as the appropriate age in the modern law, taking account inter alia of the recognition by the legislature in successive Acts of that age as a pivotal turning point, most recently in the 2019 Act. This line of reasoning was not subject to detailed argument at the hearing. For the moment I remain unconvinced that the earlier cases can be relied on to limit the scope of the judgments in Gillick in the way she proposes, or that the Presidents conclusions are undermined. However, I acknowledge that this approach, if correct, may have advantages for the certainty and coherence of the law, particularly if taken with another important point which emerges from her review of the earlier cases. That is the willingness of the courts since the 19th century to take guidance from the legislature as to where to draw the lines in relation to the limits of parental responsibilities (see para 60, citing Cockburn CJ in R v Howes (1860) 3 El & El 332). In the present case there is the added consideration that, as noted above (para 130), the exclusion of those under 16 from the new legislative scheme appears at least in part to be a reflection of the legislatures understanding of the law following Keehan Js judgment, which to that extent may be seen as having the implicit endorsement of Parliament. I note with some concern that Lady Hale (para 50) has raised a question as to the logic of the differential treatment of those under 16, at least in the context of article 5 taken on its own. That does not reflect any issue between the parties. Keehan Js application of parental responsibility to those under 16 has not been questioned by any of the parties in the Court of Appeal or in this court. Nor does Lady Hale, as I understand it, suggest that there is anything in the Strasbourg law as it stands which invalidates that aspect of Keehan Js judgment. For the time being his reasoning remains the law, and as such appears to fit well with the new legislative scheme. I have nothing to add to what Lady Black says in respect of section 25 of the Children Act 1989, with which I agree. Conclusion For the reasons stated earlier in this judgment, in substantial agreement with the reasoning of the Court of Appeal, I would have dismissed the appeal. |
Section 15(1) of the Equality Act 2010 (the 2010 Act) provides that A person (A) discriminates against a disabled person (B) if (a) A treats B unfavourably because of something arising in consequence of Bs disability, and (b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim. The central issue in this appeal is the meaning of the expression treats unfavourably. The facts can be shortly stated by reference to the agreed statement. Mr Williams was employed by the second respondent (the University) from 12 June 2000 until he retired for ill health reasons with effect from 30 June 2013, at the age of 38. He suffers from Tourettes syndrome and other conditions which satisfy the definition of disability under section 6 of the 2010 Act. He had been an active member of the second respondents pension scheme (the Scheme) throughout his employment, and had over 13 years pensionable service at the date of termination. For the first ten years of his employment, he had worked full time (35 hours per week). Thereafter, he worked anything from 17.5 26 hours per week when he was fit to work. By June 2013 his agreed working hours were half of his full time hours (17.5 hours per week) and had been so for nearly two years, even though he was not at work for approximately 11 months. It is agreed that each reduction in hours of working arose from his disabilities. The variations in his working hours were made at his request as a reasonable adjustment, with the Universitys agreement. Between June 2012 and April 2013, he took unpaid leave so that he could undergo specialist brain surgery, which took place in late November 2012. He commenced a phased return to work in late April 2013. However, in May 2013 he applied for ill health early retirement (IHR) under the Scheme, and his application was successful, the agreed medical view being that he was likely to be permanently incapable of efficiently discharging the duties of his post with the University or in relation to any comparable post. He retired with effect from 30 June 2013. The Scheme provided for accrual of benefits on a final salary basis up until 1 August 2009, from which time the Scheme was amended so that accrual of benefits on and after that date was on the basis of Career Average Revalued Earnings (CARE). Under the IHR provisions of the Scheme, Mr Williams is and was entitled to, and received, the following: i) A lump sum and annuity, payable immediately, based on his accrued benefits without any actuarial reduction for early receipt. The annuity and lump sum were calculated on the basis of his actual salary at the relevant times, whether full time or part time; ii) An enhancement to both his lump sum and annuity (the enhanced element), again payable immediately and without any actuarial reduction for early receipt. The enhanced element was calculated on the basis of his actual salary at date of retirement and a period of deemed pensionable service, as though he had continued to be employed in active service to his Normal Pension Date (NPD) under the Scheme (age 67). The dispute relates solely to the enhanced element. Mr Williams contends that the reduced figure, resulting from its calculation by reference to his part time rather than full time salary, constitutes unfavourable treatment because of something arising in consequence of his disabilities, that is his inability to work full time. It therefore involves discrimination within the meaning of section 15(1)(a), unless shown under section 15(1)(b) to be a proportionate means of achieving a legitimate aim, or in other words justified. This contention was upheld by the Employment Tribunal, but rejected on appeal by the Employment Appeal Tribunal (Langstaff J) [2015] ICR 1197 and by the Court of Appeal (Arden, Briggs and Bean LJJ) [2018] ICR 233. It is common ground that if the appeal succeeds, the appeal will have to be remitted to the Employment Tribunal to consider the issue of justification under section 15(1)(b). Comparison with the previous law It is accepted by both sides that section 15 needs to be considered in the context of the previous law, as interpreted by the House of Lords in Lewisham London Borough Council v Malcolm [2008] UKHL 43; [2008] 1 AC 1399. We have been referred to the words of the Solicitor General in a Public Bill Committee on what was then clause 14 of the Equality Bill (Hansard (HC Debates), 16 June 2009, col 275): Like the provision in the 1995 Act, clause 14 is intended to provide that the disabled person demonstrates that they have been subjected to detrimental treatment because of something connected with their disability and, secondly, that the duty holder should be able to justify that treatment. However, we have revised the wording from the 1995 Act because we cannot simply carry it forward as the finding in the courts said that we did not achieve the protection that we intended. We therefore dropped the requirement for a comparator. Similarly, the Explanatory Note to section 15 of the Act states: This section is a new provision. The Disability Discrimination Act 1995 provided protection from disability related discrimination but, following the judgment of the House of Lords in the case of London Borough of Lewisham v Malcolm [2008] UKHL 43, those provisions no longer provided the degree of protection from disability related discrimination that is intended for disabled people. This section is aimed at re establishing an appropriate balance between enabling a disabled person to make out a case of experiencing a detriment which arises because of his or her disability, and providing an opportunity for an employer or other person to defend the treatment. The direct predecessor of section 15 was section 3A of the Disability Discrimination Act 1995: (1) For the purposes of this Part, a person discriminates against a disabled person if (a) for a reason which relates to the disabled persons disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply, and (b) he cannot show that the treatment in question is justified. Malcolm itself had been concerned with section 22 of the 1995 Act, directed at disability related discrimination in the management of property, including in that case by eviction. Section 24(1) defined discrimination for that purpose in similar terms to section 15. It required consideration of whether, on the assumption that the eviction was for a reason related to a persons disability, it involved treating him less favourably than others to whom that reason does not or would not apply. In Malcolm a council tenant who suffered from schizophrenia had sublet his flat in breach of the tenancy agreement. When the council sought to determine the tenancy, he argued that the reason for his action related to his illness and that the eviction constituted discrimination contrary to section 22. It is convenient to refer to the helpful summary of the background and substance of the decision by Elias LJ in Griffiths v Secretary of State for Work and Pensions [2015] EWCA Civ 1265; [2017] ICR 160 (a case directly concerned with reasonable adjustments under section 20 of the 2010 Act). As he explained (paras 52 54), one of the issues for the House was how the relevant comparison should be made: Who were the others to whom that reason does not or would not apply? This had been considered in detail by Mummery LJ giving judgment in the Court of Appeal in Clark v Novacold Ltd [1999] ICR 951. He illustrated the two competing constructions by taking the example of a blind man who wished to take his guide dog into a restaurant which had a no dogs rule. Should the comparison be with an able bodied man who wished to take his dog into the restaurant? If so, there would be no less favourable treatment because all are treated the same. The able bodied man too would be refused entry for the same reason, namely that he wished to take his dog into the restaurant. Or should the comparison be with an able bodied man who did not need to take a dog into the restaurant and would not therefore be excluded? In that case there would be unfavourable treatment. In the context of Malcolm the first approach would require the comparison with an able bodied man who had sublet, and the second with someone who had not sublet. The problem with the first analysis was that it effectively rendered disability related discrimination a dead letter and equated it for practical purposes with direct disability discrimination as Lord Brown of Eaton under Heywood recognised in terms. The problem with the second analysis was that it effectively did away with the comparison exercise altogether, as all their Lordships accepted. It requires a comparison with persons to whom the reason for the treatment does not apply; logically the claimant will always be treated less favourably than such persons. The Court of Appeal in Clark v Novacold Ltd had preferred the latter approach on the grounds that it was what Parliament had intended, but in Malcolm their Lordships held, by a majority on this point that the former was the proper comparison. So, in the view of the majority, the comparison is a like for like exercise; the comparator must be similarly placed to the disabled claimant in all relevant respects save for the disability. This is precisely what is required in direct discrimination cases. Although it is not in dispute that the wording of section 15 was intended in broad terms to reverse the ruling in Malcolm, our task is not to try to re construct the pre Malcom law. It is to the section itself, interpreted in accordance with ordinary principles, that we must look for the applicable tests in the present case. The most obvious feature, in line with the Solicitor Generals explanation, is the removal of any element of comparison. Instead, section 15 appears to raise two simple questions of fact: what was the relevant treatment and was it unfavourable to the claimant? The judgments below The Employment Tribunal (para 32) accepted as correct the case as presented on behalf of Mr Williams. Its essence appears from the passage quoted by the tribunal at para 23 of their judgment. It was argued that, in line with previous authority on the equivalent term detriment, the expression unfavourable treatment should be given a broad meaning, including any financial or economic disadvantage. The submission continued: A simple reasonable and logical analysis of the pension rules leads to the inevitable realisation that a person who retires suddenly following a heart attack or stroke would receive their deemed years of service at their full time salary whilst a disabled employee who before retiring is forced to work part time due [to] an increasing disability only receives their deemed years of service at their part time salary. The disabled employee is consequently at a substantial financial disadvantage. (para 23) On its face, that formulation appeared to re introduce a form of comparison which the new section was intended to eliminate, but this time by reference to a hypothetical comparison with the treatment of someone with a different form of disability. In the EAT Langstaff J (President) held that in this respect the tribunal had been in error (para 30). I do not understand that aspect of his reasoning to be under challenge before us. As Ms Crasnow QC says (in her speaking note for Mr Williams): Comparing Mr W to others who have different medical histories (stroke/heart attack) is the wrong approach. At the beginning of Langstaff Js judgment, he had commented on the effect of the scheme for Mr Williams, which he described as immensely favourable: Under the rules of the pension scheme applicable to him employees were entitled to a pension on retirement at age 67, but not earlier, unless retiring when their ill health was such that they were plainly incapable of continuing in work. In the latter case, employees would be entitled not only to the immediate payment of pension without actuarial reduction in respect of the work they had already done (accrued pension) but also to an enhanced pension. This was also paid without actuarial reduction for early receipt as if they had continued working until normal retirement age (in the claimants case 67) continuing to receive the salary they had been receiving when they retired. This was plainly an immensely favourable arrangement for anyone eligible for it. Those eligible for it were necessarily disabled (within the meaning of the Equality Act 2010). Any other 38 year old who left the service of the university at that age would have no prospect of receiving the payment of any accrued pension entitlement until they reached what would have been their normal retirement age, nor any prospect of receiving any enhanced pension. (para 1) In a section under the heading Unfavourably, he gave his own view of the meaning of the term (paras 27 29). He did not think the word could be equated with the word detriment used elsewhere in the Act; nor, as was agreed, did it require a comparison with an identifiable comparator, actual or hypothetical. It was to be measured against an objective sense of that which is adverse as compared with that which is beneficial. He noted that the same word was used elsewhere in the Act, in provisions which have a longer pedigree, in relation to discrimination on the grounds of pregnancy (section 18(2)). In that context it had the sense of placing a hurdle in front of, or creating a particular difficulty for, or disadvantaging a person . It was likely to be intended to have much the same sense in section 15. It was for a tribunal to recognise when an individual has been treated unfavourably, and it was not possible to be prescriptive. However, in his view treatment which is advantageous cannot be said to be unfavourable merely because it is thought it could have been more advantageous, or, put the other way round, because it is insufficiently advantageous. The determination of that which is unfavourable involves an assessment in which a broad view is to be taken and which is to be judged by broad experience of life. Persons may be said to have been treated unfavourably if they are not in as good a position as others generally would be. He cited Malcolm as an obvious example of a life event which would generally be regarded as adverse. He also disagreed with the tribunals reasons for rejecting the respondents case on justification (paras 40ff). However, he was unable to say that there was necessarily only one result to which a properly directed tribunal could come. Accordingly he ordered that the appeal should be remitted to a different panel for a full rehearing (paras 50 51). In the Court of Appeal, the leading judgment was given by Bean LJ. He adopted a similar approach to that of Langstaff J, although he also considered the application of the competing interpretations to different hypothetical examples. For the substance of his reasoning it is sufficient to refer to two passages. In the first (paras 42 43) he distinguished decided cases, including Malcolm, in which there had been an act which in itself caused disadvantage: In the leading cases cited to us the treatment complained of has been an act which itself disadvantages the claimant in some way. In Clark v Novacold Ltd the claimant was dismissed. In the Lewisham London Borough Council case Mr Malcolm was evicted. In Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] ICR 337 the claimant chief inspector had part of her duties as a manager (the appraisal of subordinates) removed. The House of Lords held that it was not necessary for her to show financial loss in order to establish a detriment; it was enough that she might reasonably feel demeaned by this decision in the eyes of those over whom she had authority. Ms Casserley [counsel for Mr Williams] placed the Shamoon case at the forefront of her argument, but I do not consider that it assists her. Mr Williams case does not turn on a question of reasonable perception. His pension is undoubtedly less advantageous or less favourable than that of a hypothetical comparator suddenly disabled by a heart attack or stroke. But it is far more advantageous or favourable than it would be if he had not become permanently incapacitated from his job. The Shamoon case is not authority for saying that a disabled person has been subjected to unfavourable treatment within the meaning of section 15 simply because he thinks he should have been treated better. Ms Casserleys argument begins by treating unfavourable as not requiring any comparator but in reality it does depend on a comparator, namely another disabled member of the scheme with a different medical history. No authority was cited to us to support the view that a disabled person who is treated advantageously in consequence of his disability, but not as advantageously as a person with a different disability or different medical history would have been treated, has a valid claim for discrimination under section 15 subject only to the defence that the treatment was a proportionate means of achieving a legitimate aim. If such a claim were valid it would call into question the terms of pension schemes or insurance contracts which confer increased benefits in respect of disability caused by injuries sustained at work, or which make special provision for disability caused by one type of disease (for example cancer). The critical question In the second (paras 48 49) he rejected what he saw as counsels implicit comparison with the treatment of different disability: can be put in this way: whether treatment which confers advantages on a disabled person, but would have conferred greater advantages had his disability arisen more suddenly, amounts to unfavourable treatment within section 15. In agreement with the President of the Employment Appeal Tribunal I would hold that it does not. He differed from Langstaff J only in respect of the disposal of the appeal, having taken the view, shared as he thought with the EAT, that the undisputed facts of this case cannot amount to unfavourable treatment within section 15 (para 52), the issue of justification did not arise, and accordingly he saw no purpose in remitting to the tribunal. Accordingly the court substituted an order simply dismissing Mr Williams claims. The submissions in this court For Mr Williams, Ms Crasnows submissions, as I understood them, had a somewhat different emphasis from the case below. I have already noted her rejection of the comparison (drawn before the tribunal) with a person with a different disability. Although her case was developed at considerable length, both in the appellants written case and in a speaking note presented to the court, her central submission can be shortly stated. In the words of her speaking note, it was unfavourable to calculate the enhanced element of his pension using his final salary (that is, the lower part time salary) given that he had been working part time: only because of his disabilities. Had he not been disabled he would have continued to work full time. The same point was expressed slightly more fully in the written case (para 51): It is submitted that if the Court of Appeal had correctly understood the meaning of unfavourable, as advocated by the appellant, it would have been bound to find that Mr Williams was treated unfavourably, suffering detriment. The unfavourable treatment was the adoption of his part time salary as the multiplier when calculating the enhanced element of his pension, when at all times he was on a full time contract and his hours had been reduced solely as a temporary reasonable adjustment by way of a phased return. The detriment was that he was unable to achieve the full payment under that scheme. The two concepts are very similar and here one is an inevitable consequence of the other. Her supporting submissions took issue with various aspects of the reasoning of the EAT and the Court of Appeal, including the suggestion of Langstaff J that the word unfavourably must be taken to have a different meaning from the word detriment as used elsewhere in the Act. She referred to the guidance given in the Equality and Human Rights Commissions Code of Practice (2011), which she said adopts a more flexible approach. Under the heading What is unfavourable treatment?, the Code states: 5.7 For discrimination arising from disability to occur, a disabled person must have been treated unfavourably. This means that he or she must have been put at a disadvantage. Often, the disadvantage will be obvious and it will be clear that the treatment has been unfavourable; for example, a person may have been refused a job, denied a work opportunity or dismissed their employment. But sometimes unfavourable treatment may be less obvious. Even if an employer thinks that they are acting in the best interests of a disabled person, they may still treat that person unfavourably. from The reference in that passage to disadvantage took her to an earlier passage dealing with the word disadvantage as it appears elsewhere in the statute (section 19): 4.9 Disadvantage is not defined by the Act. It could include denial of an opportunity or choice, deterrence, rejection or exclusion. The courts have found that detriment, a similar concept, is something that a reasonable person would complain about so an unjustified sense of grievance would not qualify. A disadvantage does not have to be quantifiable and the worker does not have to experience actual loss (economic or otherwise). It is enough that the worker can reasonably say that they would have preferred to be treated differently. Those passages, Ms Crasnow submitted, show that words such as unfavourably, disadvantage, and detriment are similar in effect. The last sentence also supports a test which is not purely objective; regard may be had to what is reasonably seen as unfavourable by the person affected. In this connection she relied also on the UN Convention on the Rights of Persons with Disabilities, which was said to require a broad interpretation of discrimination, and in particular to support the need to have regard to the subjective experience of the person concerned, albeit tempered by a reasonableness test. For the respondents, Mr Bryant QC generally supported the reasoning of the EAT and the Court of Appeal. In particular he adopted Langstaff Js interpretation (paras 28 29) of the word unfavourably: it has the sense of placing a hurdle in front of, or creating a particular difficulty for, or disadvantaging a person The determination of that which is unfavourable involves an assessment in which a broad view is to be taken and which is to be judged by broad experience of life. This objective test, he submitted, was to be contrasted with the mixed subjective/objective test held to apply when determining whether an individual has been subjected to a detriment under section 39 of the Act, that is whether the treatment is of such a kind that a reasonable worker would or might take the view that in all the circumstances it was to his detriment? (per Lord Hope in Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] UKHL 11; [2003] ICR 337, para 35). However, as he submitted, whichever test is adopted the conclusion is the same. Mr Williams had not been treated unfavourably. He had not received a lower or lesser pension than would otherwise have been available to him if he had not been disabled. If he had not been disabled, and had been able to work full time, the consequence would not have been calculation of his pension on a more favourable basis, but loss of entitlement to any pension at all until his normal retirement date. Discussion Since I am substantially in agreement with the reasoning of the Court of Appeal, I can express my conclusions shortly, without I hope disrespect to Ms Crasnows carefully developed submissions. I agree with her that in most cases (including the present) little is likely to be gained by seeking to draw narrow distinctions between the word unfavourably in section 15 and analogous concepts such as disadvantage or detriment found in other provisions, nor between an objective and a subjective/objective approach. While the passages in the Code of Practice to which she draws attention cannot replace the statutory words, they do in my view provide helpful advice as to the relatively low threshold of disadvantage which is sufficient to trigger the requirement to justify under this section. It is unnecessary to refer to more remote sources such as the United Nations Conventions. Nor do I find it useful to speculate about the application of the section or the Code in hypothetical cases which are not before the court. On the other hand, I do not think that the passages in the Code do anything to overcome the central objection to Mr Williams case as now formulated, which can be shortly stated. It is necessary first to identify the relevant treatment to which the section is to be applied. In this case it was the award of a pension. There was nothing intrinsically unfavourable or disadvantageous about that. By contrast in Malcolm, as Bean LJ pointed out (para 42), there was no doubt as to the nature of the disadvantage suffered by the claimant. No one would dispute that eviction is unfavourable. Ms Crasnows formulation, to my mind, depends on an artificial separation between the method of calculation and the award to which it gave rise. The only basis on which Mr Williams was entitled to any award at that time was by reason of his disabilities. As Mr Bryant says, had he been able to work full time, the consequence would have been, not an enhanced entitlement, but no immediate right to a pension at all. It is unnecessary to say whether or not the award of the pension of that amount and in those circumstances was immensely favourable (in Langstaff Js words). It is enough that it was not in any sense unfavourable, nor (applying the approach of the Code) could it reasonably have been so regarded. For these reasons I would dismiss the appeal. |
The central question in this appeal is whether the appellants have suffered actionable personal injury on which they can found claims for negligence/breach of statutory duty. I will refer to the appellants hereafter as the claimants as they were at first instance. The claimants worked for the respondent company, Johnson Matthey Plc (hereafter either Johnson Matthey or the company), in factories making catalytic converters. Platinum salts are used in the production process. In breach of its duty under the health and safety regulations and at common law, the company failed to ensure that the factories were properly cleaned and, as a result, the claimants were exposed to platinum salts, which led them to develop platinum salt sensitisation. Platinum salt sensitisation is, in itself, an asymptomatic condition. However, further exposure to chlorinated platinum salts is likely to cause someone with platinum salt sensitisation to develop an allergic reaction involving physical symptoms such as running eyes or nose, skin irritation, and bronchial problems. When the claimants sensitisation was detected, through routine screening by means of a skin test, they were no longer permitted by the company to work in areas where they might be further exposed to platinum salts and develop allergic symptoms. One has taken up a different role with the company but, he claims, at a significantly reduced rate of pay. The other two had their employment terminated. Each claimant therefore asserts that he has suffered financially as a result of his sensitisation to platinum salts, being unable to take work in any environment (whether with Johnson Matthey or with any other employer) where further exposure might occur. Does the platinum salt sensitisation which each of the claimants has developed qualify as an actionable personal injury, in which case the claimants have viable claims against the company for damages for personal injuries caused by the companys negligence and/or breach of statutory duty? Alternatively, if the platinum salt sensitisation is not properly categorised as an actionable personal injury, can they recover damages for economic loss under an implied contractual term and/or in negligence? The claimants lost at first instance, following a trial of the question of liability, before Mr Justice Jay. Jay J concluded [2014] EWHC 3957 (QB) that they had sustained no actionable personal injury and that their claim was for pure economic loss, for which they were not entitled to recover in tort. He also rejected their alternative claim in contract. That had been put on the basis that there was an implied term in the claimants contracts of employment which obliged the company to provide and maintain a safe place and system of work, and to take reasonable care for their safety, and that they were entitled to damages for pure financial loss for breach of that implied term. The judge, however, considered that the companys implied contractual duty was to protect employees from personal injury, not from economic or financial loss in the absence of personal injury. The Court of Appeal dismissed the claimants appeals ([2016] EWCA Civ 408; [2016] 1 WLR 4487). Lord Justice Sales, with whom the other members of the court agreed, endorsed Jay Js view that the claimants had suffered no actionable personal injury and were claiming for pure economic loss. He saw the physiological change of platinum salt sensitisation as not harmful in itself in any relevant sense (para 30) and concluded that it was not converted into actionable injury by the resulting removal of the claimants from their jobs, with detrimental financial consequences. As for the alternative claim for damages for economic loss under an implied contractual term and/or in negligence, there is, of course, no general duty of care in tort to protect against pure economic loss, and Sales LJ did not consider that a duty of care arose here from the particular circumstances of the case. His reasoning in relation to this was closely tied in with his reasoning in relation to the claim based on contract. That contractual claim failed because Sales LJ was in agreement with Jay J that there was no implied term in the claimants contracts of employment to the effect that the employer would protect them from pure economic loss, whether on the basis of this being a standard implied term in employment contracts or on the basis of features particular to the employment of the claimants. In Sales LJs view, the claimants could not succeed in a tortious claim for pure economic loss when the employer assumed no such responsibility in the employment contract. The medical position It is necessary to understand the medical evidence about the claimants condition for the purposes of the appeal. Sensitisation is a complicated process which has been explained in simplified terms for the purposes of the litigation. It involves the bodys immune system. The immune system reacts to the presence of molecules which are not normally found in the body (antigens) by producing antibodies, in the form of large molecules called immunoglobulins. In many cases, the antibody performs a useful purpose by combining with the antigen and rendering it harmless. However, in some cases, the combination of the antigen and the antibody results in adverse consequences by provoking particular cells within the body (mast cells) to release histamine. In this situation, asthma, rhinitis, eye symptoms or skin rashes may result. A person who is sensitised to platinum salts will have a particular type of antibody in their immune system (IgE antibodies). Although they may not yet have developed any physical symptoms of the sensitisation, it can be demonstrated by a skin prick test in which a minute amount of a solution containing the salts is introduced into the body. A sensitised individual reacts by developing a small raised red, sometimes itchy, lump in the skin. If exposure to platinum salts continues after sensitisation has occurred, the medical evidence is that most (but not all) people will develop physical symptoms relating to one or more of the eyes, nose, chest and skin. At this point, they are said to have developed an allergy. On the other hand, physical symptoms will not develop if there is no further exposure. A person who has been sensitised but has not yet developed symptoms is not limited in any way in their life, except that they must avoid circumstances in which they are exposed to platinum salts. Platinum salts are not encountered in everyday life, only in certain specialised workplaces. Sensitised people cannot work in jobs which involve the potential for further exposure. One of the central authorities which must be considered in determining this appeal is the House of Lords decision in Rothwell v Chemical & Insulating Co Ltd [2008] AC 281, which concerned the development of pleural plaques as a result of exposure to asbestos fibres. The doctors who provided expert medical evidence in the present case were asked to consider whether platinum salt sensitisation could be said to be akin to pleural plaques, and it is convenient to set out their response here. They were agreed that there are important distinctions between the two, namely: i) Slight further exposure to asbestos will not materially worsen pleural plaques, but slight further exposure to platinum salts is likely to increase the degree of sensitisation and may result in asymptomatic sensitisation becoming symptomatic; ii) Pleural plaques do not, themselves, turn into any other injury attributable to asbestos whereas asymptomatic sensitisation may turn into symptomatic sensitisation (allergy); iii) The presence of pleural plaques does not prevent a person from engaging in particular types of work that would otherwise be open to him or her, asbestos exposure being restricted by law in any event. In contrast, a person who has asymptomatic sensitisation to platinum salts is restricted in the work that he or she can do. Collective agreement Employees of Johnson Matthey working in factory areas in which they could be exposed to platinum salts were paid an additional shift allowance. In addition, the claimants trade union had negotiated a collective agreement with the company to address the issue of platinum salt sensitisation and allergy. The agreement provided for regular skin prick tests to take place and for employees who became sensitised to be redeployed away from platinum salt areas if possible. If an employee could no longer continue to work in a factory because of platinum allergy, the agreement provided for the company to dismiss him under special termination conditions, including what was termed an ex gratia payment of a lump sum. The collective agreement expressly acknowledged that an employee dismissed with platinum allergy would normally file a compensation claim against the company. It provided that the termination arrangements were not meant to be an alternative to such claims, and that no waiver of claim was implied in accepting the termination payment. Personal injury/harm Negligence and breach of statutory duty are not actionable per se. It is common ground between the parties that (leaving to one side claims for pure economic loss), in order to make out their claims in tort for negligence or breach of statutory duty, it is necessary for the claimants to establish that there has been damage, in the form of actionable personal injury. The terms physical injury and personal injury tend to be used interchangeably in the authorities, and in the documentation in this case, and this is reflected in this judgment, there being no psychiatric injury to complicate the matter. An exploration of the ambit of personal injury is fundamental to the appeal and depends largely on case law, in particular the two House of Lords cases of Cartledge v E Jopling & Sons Ltd [1963] AC 758 and Rothwell v Chemical & Insulating Co Ltd (supra). It is worth noting from the outset that nowhere in the authorities is there a definition of actionable personal injury, although there is some guidance as to the attributes of it. Personal injury features as a concept in various legislative provisions, again without definition, although in some of the legislation, it is expressly said to include any disease and any impairment of a persons physical or mental condition, see for example section 38 of the Limitation Act 1980. The parties are agreed that if a person were to develop a platinum salt allergy as a result of improper exposure to platinum salts at work, as opposed to mere sensitisation, he or she would have suffered personal injury of a type which would give rise to a cause of action in tort. What divides them is whether or not sensitisation on its own is actionable personal injury. The claimants rely upon Cartledge v E Jopling & Sons Ltd [1963] AC 758 as supporting their case that it is, and Johnson Matthey rely upon Rothwell v Chemical and Insulating Co Ltd [2008] AC 281 as supporting their case that it is not. In Cartledge v E Jopling & Sons Ltd, the claims were brought by steel dressers who had contracted pneumoconiosis whilst working in the defendants factory. The issue was whether their claims were statute barred and the House of Lords therefore had to consider when their cause of action first accrued. This required their Lordships to determine when the steel dressers had suffered actionable personal injury. The problem was that, in pneumoconiosis, substantial injury could occur to the lungs without the sufferer being aware of the disease, as had occurred with the plaintiffs. Amongst the arguments advanced unsuccessfully on their behalf was the argument that actionable injury did not occur until the man became aware of his disease, since a man who does not feel any symptoms or have any knowledge of his disease has suffered no injury. Addressing this argument, Lord Pearce, with whom there was unanimous agreement, gave consideration to the attributes of actionable personal injury. He observed (p 778) that no case had sought to define its borders but, in the following passage, drew what he could from the authorities to which the House had been referred: There is no case that seeks to define the borders of actionable physical injury. Your Lordships have been referred to words used in various cases. In Fair v London & North Western Railway Co [(1869) 21 LT 326, 327 DC] Cockburn CJ said: in assessing that compensation the jury should take into account two things; first, the pecuniary loss he sustains by the accident; secondly, the injury he sustains in his person, or his physical capacity of enjoying life. Again, in Haygarth v Grayson Rollo & Clover Docks Ltd [[1951] 1 Lloyds Rep 49, 52] Asquith LJ said: General damage, while usually assessed in a single global sum, ought to include loss referable to at least three factors, where all three factors are present, namely, the respective loss of earnings, pain and suffering and loss of amenity. Such observations naturally proceed on the normal basis that personal injury involves some pain or patent loss of amenity, but the unusual question before your Lordships is whether a hidden, painless injury or latent loss of amenity sounds in damages. And in no case is it laid down that hidden physical injury of which a man is ignorant cannot, by reason of his ignorance, constitute damage. Lord Pearce went on to hold that actionable harm can be suffered despite the fact that a man has no knowledge of the secret onset of pneumoconiosis and suffers no present inconvenience from it (p 778). In Lord Pearces view, as will be seen from the following quotation from p 779 of the report, the question was whether a man has suffered material damage by any physical changes in his body, and this was a question of fact in each case: It is for a judge or jury to decide whether a man has suffered any actionable harm and in borderline cases it is a question of degree It is a question of fact in each case whether a man has suffered material damage by any physical changes in his body. Evidence that those changes are not felt by him and may never be felt tells in favour of the damage coming within the principle of de minimis non curat lex. On the other hand, evidence that in unusual exertion or at the onslaught of disease he may suffer from his hidden impairment tells in favour of the damage being substantial. There is no legal principle that lack of knowledge in the plaintiff must reduce the damage to nothing or make it minimal. Although symptomless, and not causing any present physical inconvenience, the physical injury to the lungs of the steel dressers was held to constitute actionable damage and, by virtue of the terms of the Limitation Act 1939, their Lordships felt compelled therefore to find that their claims were statute barred. Rothwell v Chemical and Insulating Co Ltd involved employees who had been exposed to asbestos dust and had developed pleural plaques as a result. They were at risk of developing asbestos related diseases and suffered anxiety at that prospect; one of them had developed a depressive illness, brought on by the diagnosis of the plaques. A convenient summary of the medical position about the plaques can be found at the start of Lord Hoffmanns speech in Rothwell. He said, in para 1: These are areas of fibrous thickening of the pleural membrane which surrounds the lungs. Save in very exceptional cases, they cause no symptoms. Nor do they cause other asbestos related diseases. But they signal the presence in the lungs and pleura of asbestos fibres which may independently cause life threatening or fatal diseases such as asbestosis or mesothelioma. In consequence, a diagnosis of pleural plaques may cause the patient to contemplate his future with anxiety or even suffer clinical depression. The unanimous view of the House of Lords was that the claimants had suffered no actionable damage. As Lord Hoffmann put it, in para 2, compensatable physical injury was required to establish a cause of action and the plaques did not constitute such injury. The claimant who had developed clinical depression was in a different position, since psychiatric illness can constitute damage. However, his claim also failed, essentially because it was not reasonably foreseeable that a person of reasonable fortitude would develop a psychiatric illness in his circumstances. In considering the implications of the decision in Rothwell, it is important to have an appreciation of the attributes of the pleural plaques and of how they differ from the damage sustained by the steel dressers in Cartledge. In Cartledge, the inhalation of silica particles had damaged the lung tissue, causing minute scars and reducing the efficiency of the lung tissue. As Lord Hoffmann summarised the position in Rothwell (para 8): their lungs had suffered damage which would have been visible upon an x ray examination, reduced their lung capacity in a way which would show itself in cases of unusual exertion, might advance without further inhalation, made them more vulnerable to tuberculosis or bronchitis and reduced their expectation of life. But in normal life the damage produced no symptoms and they were unaware of it. In contrast, the pleural plaques were not in any way harmful to a sufferers health or physical condition. They were evidence that the lungs had been penetrated by asbestos fibres but they did not, themselves, give rise to actual or prospective disability. Save in the most exceptional cases (which it appears did not include any of the claimants), they would not have any effect upon health at all. They were described, for example, as symptomless bodily changes with no foreseeable consequences (para 17), as not harmful and not giving rise to any symptoms or leading to anything else which constitutes damage (para 49), and as asymptomatic and not the first stage of any asbestos related disease (para 68). In so far as the sufferer faced a risk of deterioration in his health in future, that risk arose from the exposure to the asbestos fibres, not from the plaques, which neither posed nor contributed to any risk. Similarly, it was the exposure to asbestos which caused the anxiety felt by the claimants about their future health, following the discovery that they had pleural plaques, not the plaques themselves. The speeches in Rothwell possibly shed a little further light on the identifying features of actionable personal injury. I will refer to the relevant passages here, and they contribute to my conclusions later. First, it seems to have been accepted that the concept of personal injuries includes a disease or an impairment of a persons physical condition. The term impairment is to be found in certain statutes (see above) and is used by Lord Pearce in Cartledge who referred, at p 779, to the scarring to the lungs in that case as a hidden impairment. The trial judge in Rothwell looked for a disease or impairment of physical condition and, considering the judges finding that there was nothing that could be categorised in that way, Lord Hoffmann made no suggestion that the judge had been wrong to focus on impairment (para 11). Secondly, it was underlined that to be actionable, the damage had to be more than negligible. This is expressed in various ways, including that it must be more than trivial (Lord Hoffmann, at para 8), that it must be real damage (Lord Hope of Craighead, at para 39), and that it must be material (Lord Rodger of Earlsferry, at para 87). Thirdly, following on from that, it was made clear that the mere fact that a particular physical condition might properly be described as an injury does not necessarily mean that it constitutes damage of the requisite kind. Lord Hope countenanced that the plaques could be called an injury (see, for example, at para 39), but the claimants still did not recover because, as he said: the use of these descriptions does not address the question of law, which is whether a physical change of this kind is actionable. There must be real damage, as distinct from damage which is purely minimal: Lord Evershed, at p 774 [of Cartledge]. Where that element is lacking, as it plainly is in the case of pleural plaques, the physical change which they represent is not by itself actionable. Returning to the subject at para 47, he said: It is well settled in cases where a wrongful act has caused personal injury there is no cause of action if the damage suffered was negligible. In strict legal theory a wrong has been done whenever a breach of the duty of care results in a demonstrable physical injury, however slight. But the policy of the law is not to entertain a claim for damages where the physical effects of the injury are no more than negligible. Otherwise the smallest cut, or the lightest bruise, might give rise to litigation the costs of which were out of all proportion to what was in issue. The policy does not provide clear guidance as to where the line is to be drawn between effects which are and are not negligible. But it can at least be said that an injury which is without any symptoms at all because it cannot be seen or felt and which will not lead to some other event that is harmful has no consequences that will attract an award of damages. Damages are given for injuries that cause harm, not for injuries that are harmless. Lord Hoffmann had some comments to make about the nature of damage. He said, at para 7: a claim in tort based on negligence is incomplete without proof of damage. Damage in this sense is an abstract concept of being worse off, physically or economically, so that compensation is an appropriate remedy. It does not mean simply a physical change, which is consistent with making one better, as in the case of a successful operation, or with being neutral, having no perceptible effect upon ones health or capability. Putting this formulation together with the requirement that the damage be more than minimal, he saw the relevant question, on the facts of the Rothwell case, as being (para 19), is [the claimant] appreciably worse off on account of having plaques? Although he had referred at para 7 to damage in the sense of being economically worse off, the context makes it plain that the question he was posing in para 19 was whether the claimant was physically worse off. It can be seen from the passages referred to above that, as well as the usual reference to pain, suffering and loss of amenity, personal injury has been seen as a physical change which makes the claimant appreciably worse off in respect of his health or capability (Lord Hoffmann at para 7 of Rothwell) and as including an injury sustained to a persons physical capacity of enjoying life (Fair v London & North Western Railway Co (1869) 21 LT 326, 327, quoted by Lord Pearce in Cartledge, at p 778), and also an impairment. Furthermore, it has been established that it can be hidden and symptomless (Cartledge). How Jay J and the Court of Appeal saw matters Jay J saw it as key (paras 27 and 31 of his judgment) that the scarring to the lungs in Cartledge was not neutral as to its health impacts and constituted a disease process which is real and present. He contrasted this with the situation in the Rothwell case in that the pleural plaques would never cause symptoms or increase the susceptibility of the individual to other diseases or conditions, and did not reduce life expectancy. He agreed (para 30) that there were factual differences between Rothwell and the instant case, including that the progression from sensitisation to allergy can be envisaged as being along a direct causal pathway [whereas] the pleural plaques were a biological cul de sac. But he thought it critical that the progression would not occur if an employee was removed from the source of the sensitisation and, because the claimants had all been removed from exposure to platinum salts, would not occur in their cases. The correct approach in his view (para 32) was to analyse the sensitisation in terms of the physical or physiological harm that it may be causing. The antibodies in the claimants bodies were not harmful in themselves and he considered that something more has to happen before actionable injury may be sustained. He discarded financial loss consequent upon the changes as irrelevant, and took the view that one cannot define the actionable injury by the steps which are taken to prevent it (by which he must have meant the steps taken to prevent the claimants developing an allergy). It seems to have been his view that, on the facts of this case, nothing short of actual symptoms could amount to actionable injury. In the Court of Appeal, there was a close analysis of Cartledge and Rothwell. Setting out his conclusions, between paras 30 and 32 of his judgment, Sales LJ (with whom the other members of the court agreed) concluded that the claimants have suffered no physical injury. He considered that the platinum salt sensitisation that they have developed is not harmful in any relevant sense. He saw it as analogous to the pleural plaques in Rothwell, and said that it was not a hidden impairment which has the potential by itself to give rise to detrimental physical effects in the course of ordinary life, and was therefore not like the lung scarring in Cartledge. He observed that, like the plaques, platinum salt sensitisation does not reduce life expectancy and, provided the worker is removed from an environment in which he may be exposed to platinum salts (para 27), will not cause symptoms, or increase the susceptibility of the individual to other diseases or conditions. In Sales LJs view (para 30), it did not therefore constitute actionable damage or injury. Sales LJ agreed with Jay J that the steps taken to prevent the allergy developing (removing the employee from work in an environment where further exposure may occur) should not be seen as a component of the injury and that the sensitisation had to be looked at in terms of the physical or physiological harm which it may be causing, which, without further exposure, was none. He acknowledged that the removal of the claimants from their jobs might be seen as an extra element, present in this case and not in Rothwell, but, whilst he accepted that this was detrimental to the claimants financially, Sales LJ did not consider that it converted the physiological change into an actionable injury, because he took the view that the financial detriment should be viewed separately, as a form of pure economic loss. Indeed, he was disposed to view the removal of the claimants from their jobs as a sort of mitigation of loss in advance of injury (para 32), the restriction on their work being to protect them from suffering the physical injury which would otherwise have developed. On his reasoning, as damages can only be claimed for the expenses of mitigation where there is a right to sue for a wrong in the first place, and there was no such right here, damages for the financial loss could not be recovered. The arguments in this court In summary, the claimants argue that platinum salt sensitisation constituted a physical change to their bodies which amounted to material damage in that they were worse off than they would have been but for their employers breach of duty. By virtue of their sensitisation, they were likely to develop an allergy if further exposed to platinum salts. Their bodies were now in a state that made them unfit for further work in areas where they may be exposed to salts (red zones), and this constituted a real loss of amenity and qualified as an actionable personal injury. The company supports the reasoning of Jay J and the Court of Appeal. It argues that platinum salt sensitisation is not an actionable personal injury and that the claim is in reality one for pure economic loss for which the claimants are not entitled to recover, either in tort or through the medium of a term implied into their employment contracts. The claimants cannot establish actionable personal injury, say Johnson Matthey, by adding the financial consequences of the sensitisation to the physiological changes in their bodies. The company argues that the changes in the claimants bodies do not amount to physical damage to bodily tissue or an impediment to the proper working of bodily tissues or organs, and seeks to categorise the molecular change that has occurred as entirely normal and benign in character, as a person will naturally develop antibodies in everyday life and antibodies are not themselves harmful. In the companys view, it would seem perverse and an abuse of language to describe as injured someone who merely acquired a new antibody. The companys argument seeks to align the claimants condition with that of the claimants with pleural plaques in the Rothwell case, and to distance it from the situation in Cartledge, it being asserted that sensitisation is merely an indicator of past exposure to platinum salts as the plaques were an indicator of exposure to asbestos. In addition, it is emphasised that the claimants are not limited in living their lives, except that they should avoid exposure to platinum salts. An important element in the companys argument is that platinum salts are not encountered in ordinary everyday life, only in certain specialist workplace environments. I interpose to observe that an employee should not be exposed to the salts even in the specialist workplace, but it is clear from the existence of the testing regime and the practice of not allowing sensitised individuals to work in the red zones, that exposure does take place, and of course it is admitted that the claimants in this case were in fact exposed to the salts by virtue of the companys breach of its duty under various health and safety regulations. The company says that these claimants almost certainly will not go on to develop platinum salts allergy, now that they are not permitted to work in the red zones, and are aware of the need to avoid contact in other working environments. Furthermore, the company observes that if the claimants were at any stage to develop initial allergy symptoms (which in themselves may be too minor to constitute actionable personal injury), that would be a warning to remove themselves from the source of exposure, thus avoiding significant injury. Encapsulating these elements of their argument in their written case, the company says that the claimants have molecular changes without symptoms and a theoretical but no practical risk of symptoms developing. The company also argues that it is not, in fact, the sensitisation itself that prevents the claimants from working at their old jobs, but the terms of the collective agreement which led to the employer removing them from risky areas. This is demonstrated, it is said, by the fact that the claimants must have been sensitised before the skin prick test revealed that they were, but they continued to do their jobs until the test results were known. Discussion I am not persuaded by the companys attempt to class the claimants condition as just the development of another benign antibody in the body, not a true departure from the normal, and not damaging the claimants health or physical capability. Some antibodies may do their job in the body without producing any adverse consequences. What matters, however, is the behaviour of the particular antibody which is produced in an individual who has been sensitised to platinum salts. If such an individual is subsequently exposed again to the salts, the IgE antibody involved in platinum salt sensitisation is likely, in most people, to react in a way which produces allergic symptoms of a type which, it is common ground, would be of sufficient significance to constitute an actionable personal injury. Whilst possibly simplistic, I do not think it is inappropriate to view the development of a platinum salts allergy in a person who does not, at the outset, have a sensitivity to platinum salts as having two stages: first comes sensitisation, next comes allergy. Before initial employment in the red zones, a medical screening procedure is undertaken so as to avoid employing people who have a genetic disposition to allergy. When commencing work in the red zones, the claimants were people who had the capacity to work there. At that point, their bodies were fitted for that task, still having a safety net to protect them from allergy, in the form of the sensitisation stage, which would enhance the prospect of removing them from further exposure before allergy developed. When they became sensitised, through the companys negligence and/or breach of statutory duty, that change to their bodies meant that they lost this safety net and therefore their capacity to work around platinum salts. But, on the companys argument, this bodily change which leaves the claimants worse off than they were before they became sensitised, is not actionable personal injury. From discussion in the course of argument, it became clear that Johnson Mattheys argument was not that sensitisation can never amount to actionable injury. Mr Kent QC acknowledged, on behalf of the company, that if the claimants had developed a sensitivity to something in everyday life, such as sunlight, as opposed to platinum salts, they would have sustained actionable damage because they would not be able to carry on with their ordinary life and would suffer, as he put it, a deficit which would undoubtedly be characterised as personal injury. It follows from this acknowledgment that there is no dispute that the physiological changes involved in sensitivity can constitute sufficient personal injury, sufficient damage, to found an action for negligence or breach of statutory duty. However, Mr Kent contrasts the person who develops a sensitivity to sun with the situation here because, he says, the sufferer is not sensitive to something in everyday life, but only to a dangerous chemical to which people should not be exposed, given the health and safety regulations. Certain aspects of this argument ring rather hollow in this case, given that the claimants were exposed to the salts by the company, and the risk of further exposure is considered sufficiently significant for the collective agreement to require that they be prevented from working in red zones. However, I will set that objection to one side for present purposes and consider the simple proposition that the claimants have not become sensitised to something in everyday life, like the sun. It is a proposition to which I cannot subscribe. Ordinary everyday life is infinitely variable. For these claimants, their ordinary everyday life involved doing jobs of a type which, by virtue of their sensitisation, they can no longer do. In those circumstance, I do not see how their situation can be validly distinguished from the person who has developed a sensitivity to the sun. The physiological changes to the claimants bodies may not be as obviously harmful as, say, the loss of a limb, or asthma or dermatitis, but harmful they undoubtedly are. Cartledge establishes that the absence of symptoms does not prevent a condition amounting to actionable personal injury, and an acceptance of that is also implicit in the sun sensitivity example, in which the symptoms would only be felt upon exposure to sunshine, just as the symptoms here would only be felt upon exposure to platinum salts. What has happened to the claimants is that their bodily capacity for work has been impaired and they are therefore significantly worse off. They have, in my view, suffered actionable bodily damage, or personal injury, which, given its impact on their lives, is certainly more than negligible. It can be helpful to test an approach by applying it to slightly different facts, albeit that they are not an exact parallel with the present case. Suppose that the claimants were coffee tasters, employed because they had the ability to distinguish different flavours and qualities of coffee, by smell and taste. Suppose further that, through negligence, their sense of smell or taste became impaired in a way which would be of absolutely no consequence to anyone who was not employed in this particular role, but meant that they could no longer do their jobs and had to seek other employment. I venture to suggest that there would be little difficulty in accepting that the changes to their bodies were actionable personal injury. Another example might be of claimants working in the fragrance industry, whose highly developed sense of smell was damaged. It might be that the coffee tasters, or the expert perfumers, would be able to show something which looks more like a physical bodily injury of a conventional kind, but I can see no essential difference between their situation and the present case, where bodily changes have led to the claimants, who were formerly people who could and did work around platinum salts, no longer being able to do so. I should address specifically some of the arguments which featured in the companys case. First, there is the argument that the claimants are attempting to claim for something, an allergy, that will never happen because they will not now work around platinum salts. This goes along with what might be described as the timing argument, namely that the deficit which the claimants rely upon (their inability to do their chosen jobs) did not exist prior to the positive skin tests, and was not the product of the negligent exposure to platinum salts and resulting sensitisation, but of the protective provisions of the collective agreement which required that they be removed from the red zones. Another strand of the argument is the assertion that the claimants are seeking to make what is, in reality, only a risk (the risk of developing an allergy) into an actionable injury. These arguments could only prosper, it seems to me, if the sensitisation itself is not seen as an actionable personal injury, but only as a benign and symptom free molecular change. For the reasons I have given at paras 37 to 40 above, I do not see it in that way. If the sensitisation is viewed as an injury, as in my view it should be, then it did exist before the skin test revealed it. The restrictions on the work that can be done by claimants who have tested positive are attributable to the sensitisation, to which the protective provisions of the collective agreement were a response. Those provisions reflect the fact that, because of the negligence and/or breach of statutory duty of their employers, these claimants bodies are now in such a state that they need to avoid further exposure to platinum salts which, according to the evidence, would be likely to provoke allergy in most people. But the need for sensitised individuals to avoid exposure would apply whether or not there was a collective agreement such as that which was in force in this case, and no matter whether the employer was Johnson Matthey or another employer who imposed no comparable restrictions. As for the fact that the claimants must have worked for a period after they became sensitised, but before their positive skin prick tests demonstrated that fact, I do not see that that advances the argument in any way, given that they did so in ignorance of their condition. They were lucky enough not to have gone on to develop allergic symptoms during that period of unknown sensitisation, but that does not mean that they would be safe to continue to work in red zones (or the equivalent area in another company) if not prevented from doing so by the collective agreement. Once the sensitisation is identified as an actionable injury in its own right, the companys argument that the claimants are, in reality, claiming only for their lost earnings and therefore for pure economic loss also falls away. But, the company asks, what about a claimant who was about to retire when he or she became sensitised, or no longer wanted to work in the same type of employment, and upon whom the sensitisation would therefore have no impact? This, to my mind, does not go to the question of whether actionable personal injury has been suffered, but to the quantum of damages flowing from that, which it could be expected would be reduced by this feature of the particular case. I return to the cases of Rothwell and Cartledge. Although other authorities were cited, including some relating to claims for damage to property, I have found them of little direct, or even indirect, assistance and therefore, like Jay J and the Court of Appeal, my focus has been upon these two central cases. I would distinguish this case from Rothwell. I set out earlier how the doctors saw the distinction between pleural plaques and sensitisation to platinum salts but it is, of course, ultimately a lawyers question whether the two conditions are distinguishable. As I see it, it is material that the pleural plaques were nothing more than a marker of exposure to asbestos dust, being symptomless in themselves and not leading to or contributing to any condition which would produce symptoms, even if the sufferer were to be exposed to further asbestos dust. Similarly, the sensitisation of the claimants in this case marks that they have already been exposed to platinum salts, but unlike the plaques, it constitutes a change to their physiological make up which means that further exposure now carries with it the risk of an allergic reaction, and for that reason they must change their everyday lives so as to avoid such exposure. Putting it another way, they have lost part of their capacity to work or, as the claimants put it in argument, they have suffered a loss of bodily function by virtue of the physiological change caused by the companys negligence. As Lord Pearce said in Cartledge (supra para 15), it is a question of fact in each case whether a man has suffered material damage by any physical changes in his body. It is a question of fact that must be determined in the light of the legal principles applicable to personal injury actions, and this case has provided a useful opportunity to clarify some of those principles. The process has led me, for all the reasons I have set out, to differ from Jay J and the Court of Appeal and to conclude that the concept of actionable personal injury is sufficiently broad to include the damage suffered by these claimants, which is far from negligible. In these circumstances, it is unnecessary to say anything further about the claimants alternative argument that they should be able to recover for pure financial loss. I would allow the appeal on the claimants first ground, having concluded that they do have a cause of action in negligence/statutory duty against the company. |
In this case an estate agent claims that commission became payable to him by the vendor of a number flats on the completion of the sale of those flats to a purchaser which he had introduced to the vendor. It gives rise to two issues. The first, raised on appeal by the agent, concerns the agreement between the agent and the vendor and whether it was complete and enforceable by the agent despite there being no express identification of the event which would trigger the obligation to pay the commission. The second, raised on a cross appeal by the vendor, concerns the application of section 18 of the Estate Agents Act 1979 and whether, by reason of the agents failure to comply with the requirements imposed by the Act, the trial judge ought to have dismissed the claim or discharged the vendors liability to pay the commission. The facts In 2007, the defendant, Mr Wells, a retired stockbrokers office administrator, completed the development of a block of flats in Hackney under the terms of a joint venture agreement with Mr White, a builder. By the beginning of 2008 six of the flats had been sold, one was under offer and seven were still on the market. They were being marketed by a local agency, Shaw & Co, under a contract for a sole agency and a commission of 1.75%, or 3% if the properties were sold through another agent. In late January 2008, Mr Wells mentioned to Mr Nicholson, a neighbour in Andorra, where they both lived, that he was having difficulty selling the remaining flats. Mr Nicholson told Mr Wells that he knew of a property investment company in London that might be interested in purchasing the flats and Mr Wells responded that he would be happy for Mr Nicholson to make some enquiries. On 29 January 2008, Mr Nicholson sent an email to the claimant, Mr Devani, who was trading as an estate agent in Kilburn, informing him of the flats and that seven remained unsold. He also gave him Mr Wells and Mr Whites telephone numbers and explained that Mr Wells would be coming to London very soon. Later that day Mr Devani acknowledged receipt of Mr Nicholsons email, thanked him and told him that the information he had been given might well be of interest. He also made a telephone call to Mr Wells in Andorra. The parties at trial gave strikingly different accounts about what was said in the course of this telephone conversation. It was Mr Devanis evidence that he told Mr Wells that he was an estate agent and that his commission terms would be 2% plus VAT. Mr Wells maintained that Mr Devani made no mention of any commission and gave the impression he was an investor looking to buy on his own account. The judge, HH Judge Moloney QC, preferred the evidence of Mr Devani. He found that Mr Devani thought throughout that he was acting as an agent, that he did not describe himself as a buyer or say anything intended to create the impression that he was, and that Mr Wells asked him about fees and he replied that his standard terms were 2% plus VAT. He also found that since February 2008 Mr Wells and Mr White had sought to take advantage of the absence of a written agreement with Mr Devani to deprive him and Shaw & Co of their commissions, and that they had tailored much of their evidence to reinforce their case. Shortly after this telephone conversation, Mr Devani made contact with Newlon Housing Trust which expressed some interest in purchasing the remaining flats. A meeting at the flats was arranged and attended by a representative of Newlon, Mr Wells and Mr White. On 5 February 2008, Newlon agreed to purchase the flats for 2.1m. Mr Wells thereupon telephoned Mr Devani to inform him of the sale and later that day Mr Devani sent to Mr Wells an email in which he expressed delight that Newlon had agreed to purchase the flats and continued: As per our terms of business our fees are 2% + VAT and I look forward to receiving you[r] solicitors details so that we can invoice them directly as per your instruction. He attached to that email the terms of business which provided in relevant part: I am required by section 18 of the Estate Agents Act 1979, as amended to set out our terms of business prior to you formerly [sic] instructing our company. A commission of 2% + VAT (Multiple Agency) of the eventual sale price of the property. The commission will be due on exchange of contracts with a purchaser, but payable from the proceeds of sale by your conveyance, with your written authority. The transaction proceeded to completion and Mr Devani then claimed his commission. Mr Wells refused to pay and so Mr Devani issued these proceedings in the Central London County Court. The trial Apart from the factual issues which the judge resolved in Mr Devanis favour, Mr Wells disputed Mr Devanis entitlement to any commission on two grounds which are material to this appeal. Mr Wells contended first, that he had never entered into a binding contract to engage Mr Devani as his agent because the terms of any agreement between them were too uncertain; and secondly, that Mr Devanis failure to comply with section 18 of the Estate Agents Act 1979 rendered any agreement unenforceable or that any sum payable to Mr Devani by Mr Wells should be discharged or reduced in light of the prejudice Mr Wells had suffered. The judge dealt with the first ground in concise terms. He accepted that Mr Devani only submitted his written terms to Mr Wells after he had introduced Newlon and that his claim therefore depended on what had been agreed on 29 January 2008. He also recognised that Mr Devani did not reach any express agreement with Mr Wells as to the precise event which would entitle Mr Devani to his commission. Nevertheless, he held that, in the absence of any such express agreement, the law would imply the minimum term necessary to give business efficacy to the parties intentions. Here, the judge continued, the least onerous term for Mr Wells, and the one which nobody would have disputed had it been suggested by a bystander, was that payment of the specified commission was due on the completion of the purchase of the properties by any party which Mr Devani had introduced to Mr Wells. Accordingly, he held that there was at the material time an oral contract between Mr Devani and Mr Wells entitling Mr Devani to a payment of 2% plus VAT if Mr Devani effected an introduction between Mr Wells and a prospective purchaser of the flats and that such introduction led to their sale. The judge turned next to the submissions founded upon section 18 of the 1979 Act. He found that Mr Devani had failed to comply with his obligations under the Act in that he did not expressly inform Mr Wells before their agreement of the circumstances under which he would be entitled to commission, and he did not provide Mr Wells with that information in writing until 5 February 2008. He also found that these failures were culpable but that having regard to the degree of that culpability and the prejudice Mr Wells had suffered, it would be just to permit Mr Devani to enforce the agreement but to compensate Mr Wells for that prejudice by reducing the fee he was required to pay by one third. The appeal to the Court of Appeal The Court of Appeal ([2017] QB 959), by a majority, allowed Mr Wells appeal on the issue of whether there was ever a binding contract. Lewison LJ considered the judges approach could not be justified. His reasoning ran as follows. First, a court can imply terms into a contract, but this assumes there is a concluded contract into which the terms can be implied. It is not legitimate, under the guise of implying terms, to make a contract for the parties. This is to put the cart before the horse. Secondly, the trigger event giving rise to an estate agents entitlement to commission is of critical importance and a variety of events can be specified. The identification of the trigger event is therefore essential to the formation of legally binding relations. Thirdly, it follows that, unless the parties specify that event, their bargain is incomplete, and it is wrong in principle to turn an incomplete bargain into a legally binding contract by adding expressly agreed terms and implied terms together. In his view, that is what the judge did in this case. What was more, it was not possible or permissible to support the judges conclusion in any other way. McCombe LJ agreed that the appeal should be allowed, essentially for the reasons given by Lewison LJ. He did not disagree with the judges finding that the parties intended to reach and did reach an agreement. For him the question was whether what they had agreed amounted to a binding contract. In his view, it did not, for an agreement which did not specify the event which triggered the entitlement to commission was not complete. Arden LJ, dissenting, considered that the bargain between the parties was initially a unilateral contract but that it became a bilateral contract at the latest when Newlon, having been introduced to Mr Wells by Mr Devani, completed the purchase of the flats. As a matter of interpretation of the whole contract, the commission became payable on completion. She acknowledged that the judge had arrived at his conclusion by implying a term, but this was of no matter because the outcome was the same. As for section 18 of the 1979 Act, the Court of Appeal decided unanimously that Mr Wells appeal in relation to this issue should be dismissed. Lewison LJ, with whom McCombe and Arden LJJ agreed, made some criticisms of the way the judge had dealt with the relevant elements of culpability and prejudice but concluded that he could not say the judges overall value judgment was wrong. The Court of Appeal also dismissed Mr Devanis cross appeal against the reduction in his fee. Was there a binding contract? The question whether there was a binding contract between Mr Devani and Mr Wells required a consideration of what was communicated between them by their words and their conduct and whether, objectively assessed, that led to the conclusion that they intended to create a legally binding relationship and that they had agreed all the terms that the law requires as essential for that purpose. Lord Clarke explained the relevant principles in this way in RTS Flexible Systems Ltd v Molkerei Alois Mller GmbH [2010] UKSC 14; [2010] 1 WLR 753, para 45: The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement. It may be the case that the words and conduct relied upon are so vague and lacking in specificity that the court is unable to identify the terms on which the parties have reached agreement or to attribute to the parties any contractual intention. But the courts are reluctant to find an agreement is too vague or uncertain to be enforced where it is found that the parties had the intention of being contractually bound and have acted on their agreement. As Lord Wright said in G Scammel & Nephew Ltd v HC and JG Ouston [1941] AC 251, 268: The object of the court is to do justice between the parties, and the court will do its best, if satisfied that there was an ascertainable and determinate intention to contract, to give effect to that intention, looking at substance and not mere form. It will not be deterred by mere difficulties of interpretation. Difficulty is not synonymous with ambiguity so long as any definite meaning can be extracted. But the test of intention is to be found in the words used. If these words, considered however broadly and untechnically and with due regard to all the just implications, fail to evince any definite meaning on which the court can safely act, the court has no choice but to say that there is no contract. Such a position is not often found. As I have explained, the judge had no doubt that the parties did intend to create legal relations and that they understood that Mr Devanis terms were that he would be entitled to a commission of 2% plus VAT. Mr Devani then introduced Mr Wells to a prospective purchaser, Newlon, and that introduction led directly to the completed sale. It is true that, as the judge found, there was no discussion of the precise event which would give rise to the payment of that commission but, absent a provision to the contrary, I have no doubt it would naturally be understood that payment would become due on completion and made from the proceeds of sale. Indeed, it seems to me that is the only sensible interpretation of what they said to each other in the course of their telephone conversation on 29 January 2008 and the circumstances in which that conversation took place. In short, Mr Devani and Mr Wells agreed that if Mr Devani found a purchaser for the flats he would be paid his commission. He found Newlon and it became the purchaser on completion of the transaction. At that point, Mr Devani became entitled to his commission and it was payable from the proceeds of sale. This interpretation of the parties words and conduct is in my view amply supported by authority. For example, in Fowler v Bratt [1950] KB 96, the plaintiff, a house agent, was instructed by the defendant to find a purchaser of his house and agreed to pay a commission on the price. Subsequently the defendant decided not to go through with the sale and the plaintiff brought proceedings for his commission. The Court of Appeal held that, in order to earn his commission, the plaintiff had at least to find a purchaser who was bound in law to buy, and that he had done. The case is of particular relevance to this appeal in light of this passage in the judgment of Denning LJ (at pp 104 105): I confess that I approach claims by estate agents from the point of view, which I am sure is the common understanding of men, namely, that, in the absence of express terms to the contrary, the commission of the agents is to be paid out of the proceeds of sale. If the sale does not go through, the presumption is that no commission is payable. But in point of law if an agent succeeds in finding a person who actually enters into a binding and enforceable contract to purchase, and if that contract afterwards goes off by the vendors default, the vendor is liable to pay commission. Midgley Estates v Hand [1952] 2 QB 432 concerned an agreement between the plaintiff estate agents and the defendant vendor that the agents commission would be payable as soon as a purchaser had signed a legally binding contract within a certain period of time. The agents did introduce such a purchaser who signed the contract and paid a deposit but was unable to complete. The agents thereupon sought payment of their commission. The Court of Appeal held that the terms of the agreement were clear and the court would give effect to them, and they displaced the prima facie position. Jenkins LJ, with whom Somervell and Morris LJJ agreed, described that prima facie position in these terms (at pp 435 to 436): The question depends on the construction of each particular contract, but prima facie the intention of the parties to a transaction of this type is likely to be that the commission stipulated for should only be payable in the event of an actual sale resulting. The vendor puts his property into the hands of an agent for sale and, generally speaking, contemplates that if a completed sale results, and not otherwise, he will be liable for the commission, which he will then pay out of the purchase price. That is, broadly speaking, the intention which, as a matter of probability, the court should be disposed to impute to the parties. It follows that general or ambiguous expressions, purporting, for instance, to make the commission payable in the event of an agent finding a purchaser, or in the event of the agent selling the property, have been construed as meaning that the commission is only payable in the event of an actual and completed sale resulting, or, at least, in the event of an agent succeeding in introducing a purchaser who is able and willing to purchase the property. That is the broad general principle in the light of which the question of construction should be approached; but this does not mean that the contract, if its terms are clear, should not have effect in accordance with those terms, even if they involve the result that the agents commission is earned and becomes payable although the sale in respect of which it is claimed, for some reason or another, turns out to be abortive. In Dennis Reed Ltd v Goody [1950] 2 QB 277, two home owners instructed the plaintiff agents to find a person ready, willing and able to purchase their property and agreed to pay the agents a commission upon them introducing such a person. The agents found a prospective purchaser but he withdrew before an enforceable agreement for sale had been made. The agents nevertheless claimed they were entitled to their full commission. The Court of Appeal agreed with the trial judge that they were not. Denning LJ explained (at p 284) that when an owner puts his house into the hands of an estate agent, the ordinary understanding is that the agent is only entitled to a commission if he succeeds in effecting a sale; but if he does not, he is entitled to nothing. A little later, he said this about the relationship between owner and agent: All the familiar expressions please find a purchaser, find someone to buy my house, sell my house for me, and so on mean the same thing: they mean that the agent is employed on the usual terms; but none of them gives any precise guide as to what is the event on which the agent is to be paid. The common understanding of men is, however, that the agents commission is payable out of the purchase price. The services rendered by the agent may be merely an introduction. He is entitled to commission if his introduction is the efficient cause in bringing about the sale: Nightingale v Parsons [1914] 2 KB 621. But that does not mean that commission is payable at the moment of the introduction: it is only payable on completion of the sale. The house owner wants to find a man who will actually buy his house and pay for it. All of this reasoning remains as principled and cogent today as it was when expressed and I respectfully endorse it. The case before us is another in which the parties meant by their words and actions that the agent was engaged on the usual terms, that is to say that a commission became payable not upon the introduction by Mr Devani of a prospective purchaser to Mr Wells, nor upon the exchange of contracts, but rather upon completion of the sale and then from its proceeds, for it was at that time that Newlon actually bought and paid for the property and so became its purchaser. It is true that Mr Devanis written terms of engagement made express provision for payment but neither party has suggested they are relevant to the issue before us for they were not supplied until 5 February 2008. In this connection I must also address the decision of House of Lords in Luxor (Eastbourne) Ltd v Cooper [1941] AC 108, for it is one upon which Lewison LJ placed particular reliance. An agent, Mr Cooper, sued two companies, Luxor (Eastbourne) Ltd and Regal (Hastings) Ltd, for breach of an agency agreement. The terms of their bargain were that if a party introduced by Mr Cooper were to buy certain property owned by the companies they would pay him a substantial commission. Under the terms of their agreement, the commission would become due on completion of the sale. Mr Cooper contended that he had introduced prospective purchasers who were ready and willing to buy the property. No sale took place, however, because the owners changed their plans. It necessarily followed from the express terms of their agreement that no commission was payable but Mr Cooper argued that he was nevertheless entitled to damages for breach of an implied term that the vendor companies would do nothing to prevent the satisfactory completion of the transaction and so deprive him of his commission (at p 115). The House of Lords held that no such term could be implied. In the course of his speech Viscount Simon LC observed that there was considerable difficulty in formulating general propositions on the subject of estate agents commissions for their contracts did not follow a single pattern and the primary necessity in each case was to ascertain with precision the express terms of the contract in issue, and then to consider whether they necessitated the addition, by implication, of other terms. He continued (at pp 120, 121): It may be useful to point out that contracts under which an agent may be occupied in endeavouring to dispose of the property of a principal fall into several obvious classes. There is the class in which the agent is promised a commission by his principal if he succeeds in introducing to his principal a person who makes an adequate offer, usually an offer of not less than the stipulated amount. If that is all that is needed in order to earn his reward, it is obvious that he is entitled to be paid when this has been done, whether his principal accepts the offer and carries through the bargain or not. No implied term is needed to secure this result. There is another class of case in which the property is put into the hands of the agent to dispose of for the owner, and the agent accepts the employment and, it may be, expends money and time in endeavouring to carry it out. Such a form of contract may well imply the term that the principal will not withdraw the authority he has given after the agent has incurred substantial outlay, or, at any rate, after he has succeeded in finding a possible purchaser. Each case turns on its own facts and the phrase finding a purchaser is itself not without ambiguity. But there is a third class of case (to which the present instance belongs) where, by the express language of the contract, the agent is promised his commission only upon completion of the transaction which he is endeavouring to bring about between the offeror and his principal. As I have already said, there seems to me to be no room for the suggested implied term in such a case. The agent is promised a reward in return for an event, and the event has not happened. He runs the risk of disappointment, but if he is not willing to run the risk he should introduce into the express terms of the contract the clause which protects him. Lord Russell, with whom Lord Thankerton agreed, said this (at pp 124 to 125): A few preliminary observations occur to me. (1) Commission contracts are subject to no peculiar rules or principles of their own; the law which governs them is the law which governs all contracts and all questions of agency. (2) No general rule can be laid down by which the rights of the agent or the liability of the principal under commission contracts are to be determined. In each case these must depend upon the exact terms of the contract in question, and upon the true construction of those terms. And (3) contracts by which owners of property, desiring to dispose of it, put it in the hands of agents on commission terms, are not (in default of specific provisions) contracts of employment in the ordinary meaning of those words. No obligation is imposed on the agent to do anything. The contracts are merely promises binding on the principal to pay a sum of money upon the happening of a specified event, which involves the rendering of some service by the agent. Lewison LJ thought that it was apparent from these passages that the event giving rise to an estate agents entitlement to commission was of critical importance and that a variety of events could be specified. In his view it followed that, unless the parties specified that event, their bargain was incomplete. I agree with Lewison LJ that the event giving rise to the entitlement to commission may be of critical importance but I respectfully disagree that this means that unless this event is expressly identified the bargain is necessarily incomplete. It may be an express term of the bargain that the commission is payable upon the introduction of a prospective purchaser who expresses a willingness to buy at the asking price, or it may be an express term that it is payable upon exchange of contracts. But if, as here, there is no such express term and the bargain is, in substance, find me a purchaser and the agent introduces a prospective purchaser to whom the property is sold, then a reasonable person would understand that the parties intended the commission to be payable on completion and from the proceeds of sale. I do not understand there to be anything in the speeches of Viscount Simon LC or Lord Russell which undermines this conclusion and I note in this regard that this decision preceded and was cited in each of the decisions of the Court of Appeal to which I have referred at paras 20 to 22 above. Implied term For these reasons I do not think the judge needed to imply a term into the agreement between Mr Devani and Mr Wells. However, had it been necessary and for the reasons which follow, I would have had no hesitation in holding that it was an implied term of the agreement that payment would fall due on completion of the purchase of the property by a person whom Mr Devani had introduced. In Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72; [2016] AC 742, the Supreme Court made clear that there has been no dilution of the conditions which have to be satisfied before a term will be implied and the fact that it may be reasonable to imply a term is not sufficient. Lord Neuberger of Abbotsbury PSC, with whom Lord Sumption and Lord Hodge JJSC agreed without qualification, explained (at paras 26 to 31) that (i) construing the words the parties have used in their contract and (ii) implying terms into the contract, involve determining the scope and meaning of the contract; but construing the words used and implying additional words are different processes governed by different rules. In most cases, it is only after the process of construing the express words of an agreement is complete that the issue of whether a term is to be implied falls to be considered. Importantly for present purposes, Lord Neuberger also made clear (at paras 23 and 24) that a term will only be implied where it is necessary to give the contract business efficacy or it would be so obvious that it goes without saying. The approach adopted by the trial judge was entirely consistent with these principles. He found it was necessary to imply a term to give the contract commercial efficacy. Mr Wells was having difficulty selling his flats. An approach was made to Mr Devani and a short while later he telephoned Mr Wells. In the course of their conversation, Mr Devani explained that his terms were 2% plus VAT. Both parties proceeded on that basis. Mr Devani introduced a purchaser, Newlon, which agreed to buy the flats and a short while later completion of the sale took place. In these circumstances I think the judges approach cannot be faulted for if, contrary to my view, the agreement, on its proper interpretation, did not provide for payment of the commission on completion then a term to that effect must be implied to make the contract work and to give it practical and commercial coherence. In carrying out this exercise of implication the court would be reading into the contract that which its nature implicitly requires. Put another way, to leave Mr Wells without any obligation to pay Mr Devani would be completely inconsistent with the nature of their relationship. In my judgment, the obligation to make payment of the commission on completion would be what was required to give the agreement business efficacy, and would not go beyond what was necessary for that purpose. Scancarriers How then did the majority in the Court of Appeal come to a contrary conclusion? I have outlined the steps in the reasoning of Lewison LJ earlier in this judgment. They have at their heart the proposition that, unless the parties themselves specify the event which will trigger the agents entitlement to commission, their bargain is incomplete; and that it is not possible to turn an incomplete bargain into a legally binding contract by adding expressly agreed terms and implied terms together. Lewison LJ relied in support of his reasoning upon the decision of the Judicial Committee of the Privy Council in Scancarriers A/S v Aotearoa International Ltd [1985] 2 Lloyds Rep 419. Lord Roskill, giving the judgment of the Board, said this (at p 422): the first question must always be whether any legally binding contract has been made, for until that issue is decided a court cannot properly decide what extra terms, if any, must be implied into what is ex hypothesi a legally binding bargain, as being both necessary and reasonable to make that bargain work. It is not correct in principle, in order to determine whether there is a legally binding bargain, to add to those terms which alone the parties have expressed further implied terms upon which they have not expressly agreed and then by adding the express terms and the implied terms together thereby create what would not otherwise be a legally binding bargain. Scancarriers was an unusual case. The appellants, Scancarriers, a liner company, had surplus capacity in their vessels sailing from Australasia to Europe. The respondents, Aotearoa, wished to transport waste paper from New Zealand, where they were based, to India at economic freight rates. They met and discussed the possibility of the appellants transporting the respondents waste paper by introducing a new service to Dubai which could be serviced by a short deviation from the normal route to Europe through the Suez Canal. Onward carriage to India would be provided by transhipment from Dubai. The next day the appellants sent a telex to the respondents offering what was described as a promotional rate which would be held for the next six months for the shipping of waste paper stowed in a specified way. The question to which the appeal gave rise was whether the telex, construed against the background of the discussions, gave rise to a binding legal obligation on the appellants towards the respondents. The trial judge in New Zealand held it did not, but the Court of Appeal reversed his decision. The Privy Council had no difficulty finding that the Court of Appeal had fallen into error. As Lord Roskill pointed out, the telex contained no reference to the number of shipments, nor to the dates of any suggested shipments, nor to the intervals between any such shipments. Instead, the Court of Appeal had added implied terms to the few express terms and in that way created a contractual relationship which the parties had not expressed for themselves. This was plainly not permissible. Lord Roskill went on to explain that the suggestion that, following receipt of the telex, the respondents came under any contractual obligation to the appellants involved reading into the telex provisions which were not to be found in its language. The telex was no more than a quote and the parties never intended its transmission would create a legal relationship. Lewison LJ also referred to the decision of the Court of Appeal in Little v Courage Ltd (1995) 70 P & CR 469. In that case Millett LJ, with whom the other members of the court apparently agreed, cited Lord Roskills judgment in Scancarriers as support for the proposition that it is in general impossible to imply terms (that is to say terms which impose legal obligations) into a unilateral contract for this would be to impose, by implication, a contractual obligation on a person who ex hypothesi is not yet a party to any contract and therefore not yet subject to any contractual obligations at all. In my judgment Scancarriers does not support the far reaching proposition which Lewison LJ identified and I think the passage in Lord Roskills judgment upon which he relied must be seen in the context of the particular facts of that case. I recognise that there will be cases where an agreement is so vague and uncertain that it cannot be enforced. So too, there will be cases where the parties have not addressed certain matters which are so fundamental that their agreement is incomplete. Further, an agreement may be so deficient in one or other of these respects that nothing can be done to render it enforceable. But I do not accept that there is any general rule that it is not possible to imply a term into an agreement to render it sufficiently certain or complete to constitute a binding contract. Indeed, it seems to me that it is possible to imply something that is so obvious that it goes without saying into anything, including something the law regards as no more than an offer. If the offer is accepted, the contract is made on the terms of the words used and what those words imply. Moreover, where it is apparent the parties intended to be bound and to create legal relations, it may be permissible to imply a term to give the contract such business efficacy as the parties must have intended. For example, an agreement may be enforceable despite calling for some further agreement between the parties, say as to price, for it may be appropriate to imply a term that, in default of agreement, a reasonable price must be paid. Similarly, I see no reason in principle why a term cannot be implied into an agreement between a property owner and an estate agent that the agreed commission will be payable on completion of the sale of the property to a person introduced by the agent. Indeed, a very similar term was implied in James v Smith [1931] 2 KB 317. The defendant, the owner of a hotel, wrote a letter to the plaintiff, an estate agent, saying that it would sell the property at a specified price and would pay a commission if the property was sold at that price. The plaintiff introduced a purchaser who signed a contract but was unable to complete. The plaintiff nevertheless claimed that he was entitled to his commission. The Court of Appeal, reversing the trial judge, found he was not. Bankes LJ reasoned that it was necessary to imply a term to make the contract complete, that term being that the commission would be payable upon the introduction of a purchaser who agreed to purchase the property and was able to complete; in other words, a purchaser who was not a man of straw or without means. Scrutton and Atkin LJJ agreed. Scrutton LJ construed the wording of the agreement and identified the minimum obligation on the plaintiff. Atkin LJ approached the case in much the same way as Bankes LJ. He too thought the obligation on the plaintiff had to be implied, and it was to introduce a purchaser who was able to complete at the time he signed the contract. Accordingly, where, as here, the parties intended to create legal relations and have acted on that basis, I believe that it may be permissible to imply a term into the agreement between them where it is necessary to do so to give the agreement business efficacy or the term would be so obvious that it goes without saying, and where, without that term, the agreement would be regarded as incomplete or too uncertain to be enforceable. Each case must be considered in light of its own particular circumstances. In this case the judge carried out the assessment the law requires, and he found it necessary to imply a term to give the contract business efficacy. Further, it cannot be said that, with that term, the agreement is too vague or uncertain to be enforceable. Accordingly, had I not arrived at the same conclusion by a process of interpretation, I would have upheld the judge for the reasons he gave. Finally, I must address Little v Courage. It is not clear from Millett LJs judgment whether he thought that Lord Roskills dictum in Scancarriers was only applicable to unilateral contracts. If he did not and considered it of general and unqualified application, as Lewison LJ appears to have done, then I respectfully disagree with him for the reasons I have given. As for its application to unilateral contracts, there is obvious force in Millett LJs reasoning. It cannot be right to impose by implication an obligation on a person who is not yet a party to the agreement. But here too, I think the reasoning needs some qualification because, as I have said, it is permissible to imply into an offer anything which is so obvious that it goes without saying. Nor, so it seems to me, is there any reason why a term imposing an obligation on the promisee cannot be implied if and when the contract becomes bilateral in the course of its performance. The Estate Agents Act 1979 Section 18(1) of the 1979 Act provides that before any person (the client) enters into a contract with another (the agent) under which the agent will engage in estate agency work on behalf of the client, the agent must give the client certain information. That information is of two kinds. First, by section 18(2), the agent is required to give, among other things, particulars of the circumstances in which the client will become liable to pay remuneration to the agent for carrying out estate agency work. Secondly, by section 18(1)(b), the agent is required to give such additional information as the Secretary of State may prescribe by regulations made under section 18(4), and to do so in the time and manner those regulations require. The Estate Agents (Provision of Information) Regulations 1991 (SI 1991/859) were made pursuant to this provision. Regulation 3(1) provides, so far as relevant: The time when an estate agent shall give the information specified in section 18(2) of the Act is the time when communication commences between the estate agent and the client or as soon as is reasonably practicable thereafter provided it is a time before the client is committed to any liability towards the estate agent. Regulation 4 says that the information must be provided in writing. Section 18 continues: (5) If any person (a) fails to comply with the obligation under subsection (1) above with respect to a contract, or with any provision of regulations under subsection (4) above relating to that obligation, or (b) , the contract shall not be enforceable by him except pursuant to an order of the court under subsection (6) below. (6) If, in a case where subsection (5) above applies in relation to a contract , the agent concerned makes an application to the court for the enforcement of the contract (a) the court shall dismiss the application if, but only if, it considers it just to do so having regard to prejudice caused to the client by the agents failure to comply with his obligation and the degree of culpability for the failure; and (b) where the court does not dismiss the application, it may nevertheless order that any sum payable by the client under the contract shall be reduced or discharged so as to compensate the client for prejudice suffered as a result of the agents failure to comply with his obligation. In this case, Mr Devani failed to comply with his section 18 obligation because he did not provide to Mr Wells all of the information required by subsection 2 at the time and in the manner required by regulations 3 and 4. In particular, Mr Devani did not at the outset or as soon as reasonably practicable thereafter expressly inform Mr Wells of the event which would trigger his entitlement to commission; nor did he provide any of that information in writing. The judge was therefore required to apply section 18(6). Under paragraph (a), the default position in such a case is that the contract is unenforceable. As Lewison LJ explained, the contract will only become enforceable if the court makes an order to that effect, and an agent in the position of Mr Devani, who has failed to comply with his obligations, must make an application to the court for that purpose if he wishes to recover any commission. Further, the court must dismiss the application if, but only if, it considers it just to do so having regard to the prejudice caused to the client by the agents failure to comply with his obligation and the degree of culpability for that failure. Lewison LJ held that, for the purposes of paragraph (a), prejudice and culpability have to be considered together and in the round, and the ultimate question is whether it is just to dismiss the estate agents claim to enforce the contract having regard to the prejudice to the client as a result of the failure to comply and the degree of the agents culpability. In my judgment, this is plainly the right approach. If the court does not dismiss the application then, under paragraph (b), it has a discretion whether to reduce or discharge the sum payable by the client under the contract, to compensate the client for the prejudice he has suffered. It is to be noted that, at this stage, culpability forms no part of the assessment; nor does any wider consideration of justice. The judge therefore proceeded to assess the degree of Mr Devanis culpability and the prejudice that Mr Wells had suffered. In relation to the former, he thought that Mr Devani was culpable and the fact that the matter had proceeded very rapidly was only partial mitigation. As for prejudice, the judge thought that the failure to define the event triggering the entitlement to commission was not prejudicial to Mr Wells because the court had implied the term most favourable to him. On the other hand, the failure to provide written terms was prejudicial because their provision would have led Mr Wells to consult his partner and his solicitor before agreeing to them, and, in turn, this would have led to a discussion of Shaws penalty clause. The judge was not much impressed by the possibility of a claim by Shaw, however. He thought it was a matter of speculation whether Mr Wells would be called upon to pay Shaws commission and that it was also a matter of speculation what the outcome of any claim by Shaw would be. He also thought it relevant that Mr Devani had done a good job and secured a sale of the properties, and that, so far, Mr Wells had evaded paying any commission at all. The judge expressed his final conclusion in these terms (at para 4.9): Doing the best I can, the just course balancing all the above factors is: a. enforce his contract; b. but to compensate [Mr Wells] for the prejudice he has sustained as a result of [Mr Devanis] breach of statutory requirements by making an appropriately substantial reduction to [Mr Devanis] fee. That reduction will be of one third of the fee, so that his claim is reduced to 32,900 inc VAT. to grant [Mr Devani] relief and permit him to On appeal, it was contended for Mr Wells that the judge had fallen into error in various respects and, in particular, that he ought to have dismissed Mr Devanis application and so also his claim for commission. In giving the leading judgment on this issue, Lewison LJ found no fault with the judges approach to the task he was required to carry out as a matter of principle but criticised aspects of his assessment. He found that the judge mischaracterised the effect of speed, for this was an aggravating and not a mitigating factor; that there was some force in Mr Wells argument that Mr Devanis success in finding a buyer was of little or no relevance; and that the judge did not take proper account of the uncertainty to which Mr Wells was subjected, and was wrong to brush off the possibility of a claim by Shaw and so his potential exposure to double liability. Despite these criticisms, Lewison LJ did not think it appropriate to interfere with the judges conclusion. His reasoning lies at the heart of this aspect of the appeal to this court and merits recitation: 74. In deciding whether it was just to dismiss Mr Devanis claim the judge was making a value judgment (an expression I prefer to exercising a discretion). It is, moreover, a value judgment based on a number of factors, measured against an imprecise standard. It is exactly the case in which an appeal court should be particularly wary of disturbing the conclusion of the trial judge. Although I have made some criticisms of the way in which the judge approached the question, and although I am far from sure that I would have reached the same conclusion as the judge, I cannot go so far as to say that his value judgment was wrong. Mr Butler QC, for Mr Wells, submits the Court of Appeal fell into error in two respects. He argues, first, that Mr Devanis culpability was so great as to justify dismissal of his application, irrespective of the issue of prejudice. I recognise that section 18 and the regulations are, as Lewison LJ rightly said, a form of consumer protection, and that their purpose is to ensure that a person instructing an estate agent knows what his liabilities to the agent are before he engages him. I also accept that there may be cases where the degree of culpability is so great that it justifies dismissal of the agents application even if the client has suffered no prejudice. But I am not persuaded that this is one of those cases. The judge assessed the extent of Mr Devanis culpability with care. He recognised that Mr Devani could and should have provided his terms of business to Mr Wells at the outset but also had regard to the fact that the job needed to be done urgently, that Mr Wells was abroad, that events moved very quickly and that the effective period of delay was less than one week. I would add that there was no finding that Mr Devani acted improperly in any other way. The judge assessed all of these matters and the issue of prejudice and decided to allow Mr Devani to pursue his claim but with a significant fee reduction. It is true that Lewison LJ thought the judge ought to have regarded the speed of events as an aggravating rather than a mitigating factor when considering culpability, but he was also of the view that this was not an error which justified any interference with the judges conclusion. I agree with him. In all these circumstances, I am satisfied that Mr Devanis culpability was not so great as to justify dismissal of his application, and the judge made no material error in so deciding. The second argument advanced on behalf of Mr Wells is that once the Court of Appeal had found that the judge had made errors in the course of his assessment under section 18(6), it ought to have carried out the evaluation required by that provision afresh, rather than declining to interfere. Had it done so, the argument continued, it is apparent from para 74 of Lewison LJs judgment that it is likely the court would have arrived at a different conclusion. Attractively though this second argument has been presented, I cannot accept it. It assumes, wrongly in my view, that if an appeal court finds that a trial judge has made any error, however insignificant, in the course of an evaluation of the kind required by section 18(6) then it must set that evaluation aside and carry it out again. In my judgment the law does not require such an inflexible approach. If, as here, it is found that the trial judge has made one or more errors of a minor kind which cannot have affected the decision to which he has come then in my view it is neither necessary nor appropriate for the appellate court to set that decision aside and embark on the evaluative exercise for itself. For all of these reasons, I would allow Mr Devanis appeal and dismiss Mr Wells cross appeal. I have also had an opportunity to read the judgment of Lord Briggs and I agree with the further observations he makes. LORD BRIGGS: I agree with the order proposed to be made by Lord Kitchin, and with his reasons for doing so. I add some observations of my own because we are departing from a judgment of Lewison LJ, who has a pre eminent standing in relation to the interpretation of contracts. Lawyers frequently speak of the interpretation of contracts (as a preliminary to the implication of terms) as if it is concerned exclusively with the words used expressly, either orally or in writing, by the parties. And so, very often, it is. But there are occasions, particularly in relation to contracts of a simple, frequently used type, such as contracts of sale, where the context in which the words are used, and the conduct of the parties at the time when the contract is made, tells you as much, or even more, about the essential terms of the bargain than do the words themselves. Take for example, the simple case of the door to door seller of (say) brooms. He rings the doorbell, proffers one of his brooms to the householder, and says one pound 50. The householder takes the broom, nods and reaches for his wallet. Plainly the parties have concluded a contract for the sale of the proffered broom, at a price of 1.50, immediately payable. But the subject matter of the sale, and the date of time at which payment is to be made, are not subject to terms expressed in words. All the essential terms other than price have been agreed by conduct, in the context of the encounter between the parties at the householders front door. So it is with the contract in issue in the present case. All that was proved was that there was a short telephone call initiated by Mr Devani, who introduced himself as an estate agent, and Mr Wells, who Mr Devani knew wanted to sell the outstanding flats. Mr Devani offered his services at an expressly stated commission of 2% plus VAT. It was known to both of them that Mr Wells was looking for a buyer or buyers so that he could sell the flats, and it was plain from the context, and from the conduct of the parties towards each other, that Mr Devani was offering to find one or more buyers for those flats. The express reference by Mr Devani to the 2% commission was, in the context, clearly referable to the price receivable by Mr Wells upon any sale or sales of those flats achieved to a person or persons introduced by Mr Devani. Furthermore it was evident from the fact that nothing further was said before the conversation ended that there was an agreement, intended to create legal relations between them, for which purpose nothing further needed to be negotiated. The judge decided the case by reference to implied terms. But it follows from what I have set out above that I would, like Lord Kitchin, have been prepared to find that a sufficiently certain and complete contract had been concluded between them, as a matter of construction of their words and conduct in their context rather than just by the implication of terms, such that, by introducing a purchaser who did in fact complete and pay the purchase price, Mr Devani had earned his agreed commission. Nor would I have been dissuaded by the analysis of the hypothetical question whether, if the purchase contract had been made but then repudiated by the purchaser, the commission would still have been payable. If a contract plainly creates a liability for payment in the events that have happened, a perception that a difficult issue or uncertainty as to liability might have arisen on other hypothetical facts should not stand in the way of recognising contractual rights as enforceable where, as here, no such issue arises. As Lewison LJ observed, estate agents may wish to bargain for a variety of different events as triggering a liability to pay commission. But it is difficult to imagine an estate agents contract which did not make the client liable to pay after receipt in full of the purchase price, as occurred here. I do not mean by these observations about the common law in any way to under rate the importance of the statutory duty in section 18 of the Estate Agents Act 1979 requiring estate agents to provide their clients with a written statement of the circumstances in which the client will become liable for their commission, or the judges assessment of the culpability of Mr Devani for failing to do so in good time. It is precisely because the common law will recognise an enforceable liability to pay as arising from the briefest and most informal exchange between the parties that statute protects consumers by imposing a more rigorous discipline upon their professional counterparties. |
This appeal is concerned with the obligations under the Equality Act 2010 of a charity which has been set up to provide housing in Stamford Hill in Hackney for a disadvantaged group, the observant Orthodox Jewish community comprising, in particular, the Haredi community. The charity is the second respondent, Agudas Israel Housing Association Ltd (AIHA). Its charitable objective is to make social housing available primarily for members of the Orthodox Jewish community. Such is the surplus of demand for social housing from the members of that community, as compared with the properties which AIHA has available, that in practice all of AIHAs properties are allocated to members of the Orthodox Jewish community. The first respondent is a local housing authority, Hackney London Borough Council (the Council). AIHA makes properties available to the Council, as they become vacant, to house persons who have applied to the Council for social housing and who have been identified by the Council as having a priority need for such housing. The properties provided by AIHA constitute about 1% of the stock of social housing available to the Council. In relation to the Council, there is a large surplus of demand for social housing as compared with the supply available, so applicants for social housing can spend long periods waiting for suitable properties to become available. The Council does not have any right to compel AIHA to take tenants who do not fall within the scope of AIHAs charitable objective and its selection criteria. The Council therefore nominates applicants for social housing with AIHA who fall within those criteria. In practice, this means that the Council only nominates members of the Orthodox Jewish community to be housed in property owned by AIHA. The principal appellant (the appellant) is a single mother with four small children: twin daughters and two sons, both of whom have autism and one of whom is also a party to the proceedings. She was on the Councils list for social housing and had been identified by the Council as having priority need to be housed in a larger property. She is not from the Orthodox Jewish community and so has been unable to gain access to the properties let by AIHA. While the appellant was waiting to be allocated a suitable property by the Council, large properties owned by AIHA which would have been suitable for her became vacant and were allocated by AIHA to families from the Orthodox Jewish community who had also been identified by the Council as having priority needs. The appellant had to wait longer than them to be allocated a suitable property by the Council from its other social housing resources, as they became available. The appellant commenced proceedings against the Council and AIHA in 2018 complaining that this involved unlawful conduct on their part in various respects. In particular, she complains that there has been unlawful direct discrimination against her on grounds of her religion and on grounds of her race. Her claim was dismissed by the Divisional Court (Lindblom LJ and Sir Kenneth Parker) in a judgment dated 4 February 2019: [2019] EWHC 139 (Admin); [2019] PTSR 985. Her appeal was dismissed by the Court of Appeal (Lewison and King LJJ and Sir Stephen Richards) in a judgment dated 27 June 2019: [2019] EWCA Civ 1099; [2019] PTSR 2272. In the course of the proceedings, the appellants claims have been somewhat refined. For the purposes of the appeal to this court, the issues to be decided relate to the lawfulness of the conduct of AIHA. The Council accepts that if AIHA engaged in unlawful discrimination against the appellant by its allocation policy, then the Council cannot lawfully maintain its nomination arrangements with AIHA. But there is no distinct legal claim against the Council which does not turn upon the underlying substantive question of whether AIHA acted lawfully or not. Accordingly, in what follows, the focus is entirely on the claims against AIHA. The relevant claims brought by the appellant against AIHA were based on the prohibition of direct discrimination on grounds of race or religion by any person in the provision of services, as contained in the Equality Act 2010 (the 2010 Act). AIHA relied on defences set out in section 158 and section 193 of the 2010 Act. Section 158 provides for an exemption from unlawfulness for positive action to address needs or disadvantages experienced by persons which are connected to a protected characteristic. Section 193 provides an exemption for the activities of charities under defined conditions. AIHA accepts that it distinguishes between applicants for its housing on the grounds of religion and that, subject to the statutory defences, this would constitute unlawful direct discrimination contrary to the relevant provisions of the 2010 Act. AIHA denies that it discriminates between applicants on grounds of their race. Mr Ian Wise QC, for the appellant, in his skeleton argument for the hearing in the Divisional Court, indicated to the court that since discrimination on grounds of religion was admitted by AIHA, it might be unnecessary to decide if AIHA discriminated on grounds of race. The Divisional Court took Mr Wise at his word and focused its analysis on the appellants claim of unlawful discrimination on grounds of religion. It made no finding as to whether there was discrimination on grounds of race. (This is subject to one narrow point which the Divisional Court did deal with, which is no longer a live issue between the parties: the court dealt with a submission on the part of the appellant to the effect that AIHA was not entitled to rely on a defence under section 193 of the 2010 Act by reason of section 194(2) of that Act. Section 194(2) provides that a charity may not avail itself of a defence under section 193 if it discriminates on grounds of race, in the sense of colour. The Divisional Court found that AIHA does not discriminate between applicants for housing on grounds of colour and by the time of the hearings in the Court of Appeal and in this court this was common ground.) Although the Divisional Court had been invited by Mr Wise not to deal with the allegation of discrimination on grounds of race if it was unnecessary to do so and hence did not make findings about that part of the case, on the appellants appeal to the Court of Appeal this was made into a point of criticism. Further, for the first time in his reply skeleton argument in the Court of Appeal, Mr Wise referred to Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin (the Race Directive). At that stage, the Race Directive was relied on as a potential aid to interpretation of section 193 of the 2010 Act. This was not on the footing that the appellant had rights under it as against AIHA on the findings made by the Divisional Court (which involved only discrimination on grounds of religion, which does not fall within the scope of the Race Directive), but on the basis that others might have rights under the Directive where there was discrimination on grounds of race and that these rights ought to be reflected in the interpretation of section 193, by virtue of the principle of sympathetic construction of national legislation articulated by the European Court of Justice (now the Court of Justice of the European Union: I will refer to it as the CJEU in both phases of its existence) in Marleasing SA v La Comercial Internacional De Alimentacion SA (Case C 106/89) [1990] ECR I 4135; [1992] 1 CMLR 305 (Marleasing). The Court of Appeal rejected this argument (para 54). Since the appellant could not show that she had suffered discrimination on grounds of race within the scope of the Race Directive, she could not benefit from the special interpretive obligation arising from the Marleasing case. Similarly, since the appellant had not shown that her case fell within the scope of EU law, she could not rely on the right against discrimination set out in article 21 of the Charter of Fundamental Rights of the European Union (the CFR). On the appeal to this court, the appellants position shifted again. At the hearing, Mr Wise applied to the court for permission to introduce a new argument for the appellant. According to this argument, Mr Wise invites the court to find that the appellant was in fact affected by direct discrimination by AIHA on grounds of race or ethnic origin, contrary to the Race Directive. He submits that the appellant was subject to direct discrimination on grounds of ethnic origin which was the same as that found by this court, by a majority, to have occurred in R (E) v Governing Body of JFS (United Synagogue intervening) [2009] UKSC 15; [2010] 2 AC 728 (JFS) in the context of the application of domestic anti discrimination legislation, and that this means that she must be taken to have been subjected to direct discrimination on grounds of race or ethnic origin for the purposes of the Race Directive. On that basis, Mr Wise submits that either section 193 must be read so as to be compatible with the appellants rights under the Race Directive in accordance with the Marleasing principle of sympathetic construction or, if that cannot be done, it should be disapplied altogether by virtue of the principle of direct effect of EU law. It is very unusual for this court to grant permission for a wholly new argument to be introduced at this stage. Moreover, since it is a new argument based on a legal instrument (the Race Directive) which was not pleaded by the appellant in her grounds of claim, Mr Wise should have made an application to amend those grounds, which (if allowed) would also have led to AIHA and the Council having the right to amend their grounds of defence to meet the new claim. As it is, the court was not presented by Mr Wise with any formal or clear statement of the new claim which he wished to introduce. This was highly unsatisfactory. It only emerged from the answer given by Mr Wise to a question by the court during his submissions in reply that this new case for the appellant did not involve any complaint of indirect discrimination by AIHA on grounds of race or ethnic origin. Also, the court did not have the benefit of a formally pleaded defence to the appellants new claim based on the Race Directive, which meant that possible defences had to be explored in submissions without a clear and proper focus. Also, to state the obvious, the court did not have the benefit of an examination of the new claim and those defences by the lower courts. Furthermore, the appellant should have made a formal application for permission to amend her grounds of claim and to raise the new argument in this court well in advance, rather than leaving it to be raised at the hearing, thereby taking up time which was set aside for the substantive arguments on the appeal. Despite these points, however, Mr Sam Grodzinski QC for AIHA made no strong objection to the introduction of this new case for the appellant at this late stage. He was confident that he was in a position to meet it without difficulty. Mr Matt Hutchings QC for the Council likewise made no strong objection. Having regard to their position, the court gave provisional permission at the hearing for Mr Wise to develop the new case for the appellant. The court reserved its position as to the possibility of refusing permission if, after hearing how the argument was developed, it considered that it had been advanced in a way which was unfair to AIHA or the Council. In the event, given the narrow basis on which Mr Wise sought to develop the new claim based on the Race Directive, the court considers that it is appropriate to confirm the permission given provisionally at the hearing. I will, therefore, address the appellants new claim based on the Race Directive along with her claim based on the 2010 Act. Two final matters should be mentioned in this introduction. Although at an early stage in the proceedings AIHA disputed that it carries out functions which have a sufficient public element to make it amenable to judicial review, it now accepts that it does. But AIHA does not accept that it is a public authority by virtue of carrying out functions of a public nature within the meaning of section 6(3)(b) of the Human Rights Act 1998 (the HRA). Accordingly, AIHA does not accept that it has any obligation arising under section 6(1) of the HRA to act compatibly with Convention rights of the appellant or other applicants for housing. In her pleaded case and in her submissions in the Divisional Court and in the Court of Appeal, the appellant did not assert any claim against AIHA under section 6(1) of the HRA on the basis that it was a public authority within the meaning of that Act, and no such issue was included in the agreed Statement of Facts and Issues for the appeal. In his printed case for the appeal in this court, Mr Wise did include an argument to that effect. However, in the event he did not make any application for permission to introduce it, so it is not necessary to say anything about it. The EU legislative context The Race Directive enshrines the principle of equal treatment, described in article 2 as meaning that there shall be no direct or indirect discrimination based on racial or ethnic origin. Article 3 provides that the Directive applies to to all persons, as regards both the public and private sectors in relation to a number of matters, including at article 3(1)(h): access to and supply of goods and services which are available to the public, including housing. Recital (17) to the Race Directive states: The prohibition of discrimination should be without prejudice to the maintenance or adoption of measures intended to prevent or compensate for disadvantages suffered by a group of persons of a particular racial or ethnic origin, and such measures may permit organisations of persons of a particular racial or ethnic origin where their main object is the promotion of the special needs of those persons. Article 5 makes provision to allow for the objective set out in recital (17), as follows: With a view to ensuring full equality in practice, the principle of equal treatment shall not prevent any member state from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to racial or ethnic origin. Article 21 of the CFR prohibits any discrimination based on a number of grounds, including race, colour, ethnic or social origin and religion or belief. Article 51 of the CFR states that it applies to member states only when they are implementing Union law. The domestic legislative context The 2010 Act makes various forms of discrimination unlawful. Direct discrimination is defined by section 13(1) of the Act: A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others. The relevant protected characteristics are set out in section 4. They include race and religion or belief. The meaning of these concepts is explained in sections 9 and 10, respectively. Race includes colour, nationality and ethnic or national origins. By contrast with the position in relation to indirect discrimination (defined in section 19 of the 2010 Act), there is no general defence of justification in relation to direct discrimination on the basis of these protected characteristics; but so far as is relevant for present purposes, particular defences are set out in sections 158 and 193. Service providers and persons exercising public functions are prohibited from discriminating, whether directly or indirectly: section 29. Section 158 is headed Positive action: general. So far as relevant, it provides: (1) This section applies if a person (P) reasonably thinks that (a) persons who share a protected characteristic suffer a disadvantage connected to the characteristic, (b) persons who share a protected characteristic have needs that are different from the needs of persons who do not share it, or (c) participation in an activity by persons who share a protected characteristic is disproportionately low. (2) This Act does not prohibit P from taking any action which is a proportionate means of achieving the aim of (a) enabling or encouraging persons who share the protected characteristic to overcome or minimise that disadvantage, (b) meeting those needs, or (c) enabling or encouraging persons who share the protected characteristic to participate in that activity. (4) This section does not apply to (a) action within section 159(3) Section 159 is headed Positive action: recruitment and promotion. It provides a defence where action is taken on the grounds of a protected characteristic to overcome disadvantages a person with that characteristic may face in obtaining employment or promotion. Section 159(3) provides: That action is treating a person (A) more favourably in connection with recruitment or promotion than another person (B) because A has the protected characteristic but B does not. Section 193 provides: (1) A person does not contravene this Act only by restricting the provision of benefits to persons who share a protected characteristic if the person acts in pursuance of a charitable (a) instrument, and the provision of the benefits is within subsection (b) (2). (2) The provision of benefits is within this subsection if it is a proportionate means of achieving a legitimate (a) aim, or (b) for a disadvantage characteristic. for the purpose of preventing or compensating the protected linked The Equality and Human Rights Commission (EHRC) has the power to issue codes of guidance. The court must take any such code into account in any way in which it appears to the court to be relevant: section 15(4)(b) of the Equality Act 2006. Section 3(1) of the HRA states that [s]o far as it is possible to do so, primary legislation must be read and given effect in a way which is compatible with the Convention rights. The Convention rights are those set out in the European Convention on Human Rights (the ECHR), as contained in Schedule 1 to the HRA. They include article 8 (right to respect for private and family life and the home), article 9 (freedom of thought, conscience and religion) and article 14 (prohibition of discrimination). Article 14 provides: The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. In this case, AIHA relies on defences under section 158, section 193(2)(a) and section 193(2)(b) of the 2010 Act. Success on any of these will mean that the appellants claim fails. Factual background The Council is a local housing authority with statutory functions in relation to the allocation of social housing. As well as allocating its own stock of social housing, it also discharges its functions by nominating applicants for social housing to properties owned by independent housing associations such as AIHA. The Council assesses applications for social housing using a points based system which is based on need. AIHA is a charitable housing association, established in 1986. In order to qualify as a charity, its activities must be for the public benefit: see section 4 of the Charities Act 2011 (the Charities Act). It is registered with the Regulator of Social Housing of England as a private registered provider of social housing under Part 2 of the Housing and Regeneration Act 2008. It owns property in Hackney, principally in parts of the borough which are inhabited by members of the Orthodox Jewish community. AIHAs charitable objects are set out in its rules, which state: A2 The Association is formed for the benefit of the community. Its object shall be to carry on for the benefit of the community (and primarily for the benefit of the Orthodox Jewish Community): A2.1 the business of providing housing, accommodation, and assistance to help house people and associated facilities and amenities for poor people or for the relief of the aged, disabled, handicapped (whether physically or mentally) or chronically sick people. A2.2 any other charitable object that can be carried out by an Industrial and Provident Society registered as a social landlord with the Corporation. AIHA has its own Allocations and Lettings Manual separate from the Councils allocation scheme. The manual states that AIHAs primary aim is to house members of the Orthodox Jewish Community. AIHA operates its own waiting list for its properties, but pursuant to an agreement with the Council the Council has nomination rights in respect of a significant proportion of properties owned by AIHA which become available for occupation. AIHAs criteria for selection are similar to those used by the Council, and are likewise based on need. AIHA owns 470 properties in Hackney. They amount to 1% of the overall number of 47,000 units of general social needs housing in the Councils area. AIHAs lettings each year are on average less than 1% of social housing lettings arranged by the Council. The Orthodox Jewish community tend to have large families and so have a greater need, as a community, for larger properties, including those with four bedrooms. AIHAs stock of social housing has been developed with that in mind, so it has a proportionately greater share of the stock of larger properties available for social housing in Hackney. Applicants nominated by the Council for a property owned by AIHA also have to satisfy AIHAs own selection criteria. Properties available for social housing are advertised on a portal on the Councils website. The advertisements on the portal in respect of properties owned by AIHA reflect AIHAs selection criteria under current market conditions and state: Consideration only to the Orthodox Jewish community. The appellants two sons with autism, now aged nine and five, display very challenging behaviour. In July 2018, the appellant gave birth to twin girls. The appellant is not a member of the Orthodox Jewish community. She grew up and lives in Hackney and embraces the diversity of the local community. The family were assessed by the Council as falling within the group having the highest need for re housing under its scheme for the allocation of social housing in the borough. In 2017 the appellant brought judicial review proceedings against the Council, in which she claimed that she and her sons were housed in inadequate accommodation. In consequence, the appellant and her sons were re housed in better temporary accommodation. The proceedings were settled in October 2017 on terms which included the Council agreeing to offer the appellant its next available unit of suitable social housing. Following the birth of her daughters, the appellant was moved to the offer list for a four bedroom property. Despite the Councils recognition of the familys need for suitable social housing, no offer of a suitable property was made by the time the case came before the Divisional Court. During the same period, at least six four bedroom properties owned by AIHA became available and were advertised by the Council. However, because of AIHAs practice of only letting its properties to members of the Orthodox Jewish community, the Council did not put the appellant forward for consideration; nor did the appellant apply directly to AIHA. Fortunately, between the hearing in the Divisional Court and the hearing in the Court of Appeal another four bedroom property became available to the Council and was allocated to the appellant. Accordingly, the appellant and her family are now housed in suitable accommodation. Extensive evidence about the problems faced by the Orthodox Jewish community in Hackney, and the need for it to gather together in Stamford Hill, was reviewed by the Divisional Court. It made a number of important findings relevant for the discussion below which are not challenged on this appeal: (1) Social housing is under severe pressure in the Councils area, with demand far exceeding supply (para 19). (2) Although the Jewish population in the United Kingdom is contracting and the average age is increasing, the strictly Orthodox Jewish Haredi community is growing at 4% per year, with 34% of Jews in Hackney aged 14 or under. Strictly Orthodox Jews are more likely to experience poverty and deprivation than other mainstream Jewish families. Jewish households in Hackney (which are comprised mainly of Haredi Jews) are much more likely to be in socially rented accommodation (35%) than the general Jewish population (9%). 25% of them live in overcrowded conditions, compared to 8% of the general Jewish population. Most of the Haredi community are unwilling to live outside Stamford Hill, where AIHAs properties are located, and so tend not to bid for social housing elsewhere in the Councils area. Nearly all of the Haredi community in social housing within Hackney are tenants of AIHA. Roughly 2% of applicants for social housing in Hackney self identify as Orthodox Jews (para 31). (3) The Orthodox Jewish community has a particular need for larger properties because of their large family sizes. Self identifying Orthodox Jews represent an increasing proportion of housing applicants as the number of bedrooms increases. Although they are only a small proportion of the families seeking one , two or three bedroom properties, in May 2018 they were 66 out of 459 families wanting four bedrooms, 32 out of 64 wanting five bedrooms, and 29 out of 35 wanting six bedrooms (para 32). (4) Witnesses emphasised the fact that Orthodox Judaism is not a lifestyle but a way of life, and that living as a community is a central part of this. Members of the Orthodox Jewish community need to remain proximate to that community, even if it means foregoing improved living conditions, bigger houses, or proper housing at all (para 34). The Divisional Court made these comments about the community (para 64): there are very high levels of poverty and deprivation, with associated low levels of home ownership. On the evidence before us, we are satisfied that there is a strong correlation between the evidenced poverty and deprivation and the religion. This is explained in part by the way of life, especially affecting educational and employment opportunities, which is characteristic of the Orthodox Jewish community. (5) The Orthodox Jewish community is subjected to anti Semitism, including racially aggravated harassment and assaults, criminal damage to property and verbal abuse (para 33). Volunteer security patrols in Stamford Hill, known as the Shomrim, provide physical reassurance and help to deter anti Semitic incidents, thereby fostering a sense of security within the community. The Divisional Court referred to widespread and increasing overt anti Semitism in society and an increase in reported anti Semitic crime; and to the way in which the traditional Orthodox Jewish clothing worn by the Haredi community heightens the exposure to anti Semitism and to related criminality (para 66). The court found that the community had a need to live together in relatively close proximity with a view to reducing apprehension and anxiety regarding personal security, anti Semitic abuse and crime (para 67). (6) The Orthodox Jewish community face prejudice when trying to rent properties in the private sector, on account of their appearance, language and religion (para 66). (7) The properties owned by AIHA are designed specifically for Orthodox Jewish religious needs whereby the tenants are able to follow the tenets of their faith and the rules relating to the Sabbath. AIHA provides facilities such as kosher kitchens, an absence of television aerials, Shabbos locks on the estate, and mezuzahs on communal doors. The Divisional Court acknowledged that these features are normative, rather than essential. At para 69 the court said, we would accept that, standing alone, they would be unlikely to be sufficient to justify the challenged discrimination. However, we do not believe that they should be entirely discounted. (8) The Orthodox Jewish community has a particular need to live close to community facilities, such as schools, synagogues and suitable shops (paras 34 and 68). (9) The Orthodox Jewish community in Hackney faces particular problems of overcrowding. The Divisional Court said (para 70): there was evidence in data from 2015 which showed that the average number of occupants of Orthodox Jewish households in Stamford Hill was 6.3, in contrast to the average for the whole of Hackney of 2.43, and for the UK of 2.38. In our view, this evidence demonstrates a particular need in the Orthodox Jewish community for property, which is likely to be in very short supply, that would accommodate substantially larger families, and that would significantly reduce the particular and intensified risk to such families of eviction from overcrowded accommodation. The evidence shows that, if a situation arose in which AIHA had a surplus of properties as against the needs of the Orthodox Jewish community for social housing, it would allocate the surplus properties to families from outside that community. It is in this sense that AIHA has as its charitable objective and the purpose of its allocation policy the aim of primarily meeting the needs of the Orthodox Jewish community. However, there is no surplus of supply of properties as against the needs of that community at present, nor is there likely to be one in the foreseeable future. As regards the question whether AIHA discriminates on grounds of race, although the Divisional Court made no relevant finding for present purposes, in the context of its discussion of section 194(2) of the 2010 Act (at para 86) it accepted the evidence of the principal witness for AIHA, as follows: In her evidence Mrs Cymerman Symons MBE stated that AIHA did not discriminate according to ethnic background. AIHAs housing applicants come from a variety of ethnic backgrounds. She continued at para 28 of her second witness statement: Our sole criterion is that the applicants are of the Orthodox Jewish faith. This is certainly not an issue of race; it is purely about religious observance. We respond to people from many ethnic backgrounds. The common factor is a commitment to the Orthodox Jewish way of life. This evidence has not been challenged. It is corroborated by the relevant documents produced by AIHA. The application form used by AIHA simply asks, in a box marked Personal circumstances, Would you describe yourself as Orthodox Jewish, strictly observant of Shabbath and Kashrut? and for details of which synagogue is attended and the school attended by children of the family. The application pack also includes a section for provision of details of ethnic origin which is stated to be solely for monitoring purposes, as is common form, and to assist AIHA in the development of its equal opportunities policy. The judgment of the Divisional Court The Divisional Court considered section 158 and section 193 of the 2010 Act in turn, in the light of the findings it had made. As to section 158, the court reasoned in a series of steps which are not now disputed, as follows: (i) The disadvantages faced by Orthodox Jews are real and substantial; (ii) Those disadvantages are connected with the religion of Orthodox Judaism; (iii) The needs of members of the Orthodox Jewish community are different from those who are not members of it. They have a relevant need to live relatively close to each other, with a view to reducing apprehension and anxiety regarding personal security, anti Semitic abuse and crime. They also have a need for community facilities, including schools, synagogues and shops, as well as special features of accommodation. They also have a need for property that will accommodate substantially larger families; and (iv) AIHAs arrangements for allocating housing, which place Orthodox Jews in a primary position, enable them both to avoid the disadvantages and to meet the needs referred to. The remaining question in relation to section 158 was whether AIHAs arrangements for allocating housing enabled members of the Orthodox Jewish community to avoid the identified disadvantages and meet the identified needs in a proportionate manner. On this, the Divisional Court directed itself by reference to the guidance given by Baroness Hale of Richmond in Aster Communities Ltd (formerly Flourish Homes Ltd) v Akerman Livingstone [2015] UKSC 15; [2015] AC 1399, at para 28. The case concerned a complaint of discrimination on grounds of disability, contrary to section 15 of the 2010 Act. Under section 15(1)(b), a person does not act unlawfully if he can show that the treatment in question is a proportionate means of achieving a legitimate aim: this is similar to the defence in section 158(2) and identical to the defence in section 193(2)(a) of the 2010 Act, which are at issue in the present appeal. Baroness Hale explained that the concept of proportionality as used in domestic anti discrimination law is derived from EU law. It requires application of a structured approach in relation to the measure in question, involving four stages: First, is the objective sufficiently important to justify limiting a fundamental right? Secondly, is the measure rationally connected to the objective? Thirdly, are the means chosen no more than is necessary to accomplish the objective? And, fourth: As the Court of Justice of the European Communities put it in R v Minister for Agriculture, Fisheries and Food, Ex p Fedesa (Case C 331/88) [1990] ECR 1 4023, para 13, the disadvantages caused must not be disproportionate to the aims pursued: or as Lord Reed JSC put it in the Bank Mellat case [Bank Mellat v HM Treasury (No 2)] [2014] AC 700, 791, para 74, In essence, the question at step four is whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure. The Divisional Court observed that this approach to the question of proportionality in section 158 was reinforced by the explanatory notes for that provision and the relevant guidance given in the statutory code of practice promulgated by the EHRC (the EHRC code of practice). The explanatory notes to section 158 state (paragraph 512): The extent to which it is proportionate to take positive action measures which may result in people not having the relevant characteristic being treated less favourably will depend, among other things, on the seriousness of the relevant disadvantage, the extremity of need or under representation and the availability of other means of countering them. This provision will need to be interpreted in accordance with European law which limits the extent to which the kind of action it permits will be allowed. Paragraph 10.22 of the EHRC code of practice states: The seriousness of the relevant disadvantage, the degree to which the need is different and the extent of the low participation in the particular activity will need to be balanced against the impact of the action on other protected groups, and the relative disadvantage, need or participation of these groups. At paragraph 5.32, the EHRC code of practice also refers to the derivation in EU law of the concept of proportionality in section 158. Applying this approach, the Divisional Court held that the allocation policy of AIHA was a proportionate means to achieve aims falling within section 158(2)(a) and (b). At para 73 the court rejected the submission of Mr Wise that AIHAs allocation policy was to be regarded as an illegitimate and disproportionate blanket prohibition against letting properties to persons from outside the Orthodox Jewish community. The court referred to the fact that the policy allowed for allocation to persons from outside the community, should circumstances permit. It said: AIHAs charitable objectives permit and oblige it to accord primary benefit to members of the Orthodox Jewish community. There is no unqualified restriction of benefits to members of that community, nor absolute exclusion of non members. AIHA currently has over 700 applicants on its waiting list. It has a total housing stock of 470 homes in Hackney, but the crucial consideration in this context is that, over the seven year period from 2011 to 2018, only 89 general needs properties became available for allocation, a marginal availability of only about 12 to 13 properties each year, with a huge imbalance between supply and demand. There is no evidence that that imbalance is likely to decrease markedly in the foreseeable future. At the same time there is an acute imbalance between supply and demand for social housing in Hackney generally. About 13,000 households are currently registered under [the Councils] scheme for the allocation of social housing. In 2016, [the Council] allocated only 1,229 properties for social housing. Again, there is no evidence that the imbalance is likely to decrease markedly in the foreseeable future. The Divisional Court found (para 74) that the reason why, in practice, AIHA allocated its properties to members of the Orthodox Jewish community was clear. Given the limited availability to, and pressing demand from, that community, if AIHA were to allocate any of its properties to non members, it would seriously dilute the number of properties available to Orthodox Jews, and would fundamentally undermine its charitable objective of giving primary position, in a meaningful, as distinct from formalistic, sense to Orthodox Jews. At para 75 the Divisional Court said: We also conclude that AIHAs arrangements are justified as proportionate under section 158. For the reasons we have already given, the disadvantages and needs of the Orthodox Jewish community are many and compelling. They are also in many instances very closely related to the matter of housing accommodation. We recognise the needs of other applicants for social housing, but, in the particular market conditions to which we have referred, AIHAs arrangements are proportionate in addressing the needs and disadvantages of the Orthodox Jewish community, notwithstanding the fact that in those market conditions, a non member cannot realistically expect AIHA to allocate to him or her any property that becomes available. At para 76 the court referred back to its finding that members of the Orthodox Jewish community in Hackney have a particular need for larger accommodation and observed that given the acute scarcity of such accommodation, it is readily understandable, and proportionate, that such properties are allocated to members of the Orthodox Jewish community who have need of the accommodation. At para 77 the court rejected a further submission by Mr Wise, that AIHAs allocation policy constituted unlawful positive discrimination rather than legitimate positive action falling within section 158. For this distinction, Mr Wise referred to paragraph 10.7 of the EHRC code of practice. The court pointed out that the EHRC code of practice stated that positive action in favour of a preferred group might well cause disadvantage to persons outside that group, but that the advantages to the preferred group might well outweigh the disadvantages, and thus be proportionate. The court added: In this case it is self evident that the allocation of particular accommodation to a member of the Orthodox Jewish community may well disadvantage an individual non member who may have a priority need for such accommodation. However, the relevant question, which we have dealt with above, is whether the arrangements, viewed as a whole and in the light of relevant market circumstances, address the disadvantages and needs of the Orthodox Jewish community in a manner that outweighs the disadvantage to non members of that community. The Divisional Court emphasised, at para 78, that its conclusion was reached in the context of AIHA being a small provider of social housing with only 1% of the general needs housing in the Councils area and its lettings running at less than 1% of social housing lettings in the Councils area each year (see para 29 above). The court said that it could not be assumed that the same conclusion would be reached in the case of a service provider with a large share of the available properties. At paras 79 to 83 the court addressed a further argument of Mr Wise, in which he sought to draw an analogy with the judgment of the CJEU in Briheche v Ministre de lIntrieur (Case C 319/03) [2004] ECR I 8807; [2005] 1 CMLR 4 (Briheche). That case was concerned with application of Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (the Equal Treatment Directive). Article 2(4) of that Directive allows a member state to engage in forms of positive discrimination in the area of employment in relation to recruitment and promotion, but in Briheche and other authorities the CJEU laid down restrictive conditions for the application of that provision. I discuss Briheche and the Equal Treatment Directive below. Here it suffices to say that the Divisional Court held (para 83) that the text, context and object of article 2(4) of that Directive were different from section 158 of the 2010 Act and that Briheche does not provide relevant guidance in relation to the application of section 158 or section 193 of the 2010 Act. As regards section 193 of the 2010 Act, the Divisional Court reasoned as follows: (1) AIHA did not discriminate on the ground of colour (hence section 194(2) of the 2010 Act had no application); (2) The specific protected characteristic, on the basis of which AIHA discriminated, was the religion of Orthodox Judaism; (3) AIHAs arrangements for allocating housing were authorised by or in line with its charitable instrument; and were therefore made in pursuance of it within the meaning of section 193(1)(a) (paras 93 to 101). This is now common ground; (4) For the same reasons as underpinned its conclusion in relation to section 158, AIHAs arrangements were a proportionate means of achieving a legitimate aim (section 193(2)(a)) and were for the purpose of preventing or compensating for disadvantages linked to the protected characteristic (section 193(2)(b)) (paras 103 and 104). The judgment of the Court of Appeal In the Court of Appeal, Mr Wise for the appellant submitted that the Divisional Court had erred in its proportionality assessment under section 158 and section 193 of the 2010 Act. Since, as was then common ground, the express requirements of section 193(2)(b) were satisfied and that provision is capable of providing a complete defence for AIHA and does not in terms depend upon a proportionality assessment, a new question arose for debate which had not been considered by the Divisional Court, namely whether section 193(2)(b) contained any requirement of proportionality. Mr Wise submitted that it did, for three reasons: (i) in the present context, article 14 of the ECHR, read with article 8 or article 9 of the ECHR, means that any positive action which involves discrimination has to be justified as being proportionate to some legitimate aim, and section 3(1) of the HRA means that section 193(2)(b) must be read and given effect in a way which is compatible with the appellants rights and those of her family under article 14; (ii) in some cases covered by section 193(2)(b) the Race Directive would apply; in those cases a proportionality requirement would be applicable as a matter of general EU law; and as a result of the interpretive obligation set out in Marleasing, section 193(2)(b) should be construed as containing such a requirement; and (iii) to interpret section 193(2)(b) as not containing a proportionality requirement would produce absurd consequences. Lewison LJ gave the substantive judgment, with which King LJ and Sir Stephen Richards agreed. Lewison LJ summarised the findings and analysis of the Divisional Court. At paras 34 to 62 he rejected Mr Wises submissions for the implication of a proportionality test into section 193(2)(b). This meant that the appellants appeal could not succeed. As to Mr Wises submission (i), Lewison LJ held by reference to domestic authority including, in particular, R (H) v Ealing London Borough Council [2017] EWCA Civ 1127; [2018] PTSR 541, that AIHAs allocation policy did not fall within the ambit of article 8 of the ECHR, nor did it fall within the ambit of article 9, so article 14 had no application (paras 44 52). Even if article 14 did apply, it was not possible to read a proportionality requirement into section 193(2)(b) by virtue of section 3(1) of the HRA. Section 193(2)(b) had to be read in the context of the scheme of the 2010 Act and in light of its juxtaposition with section 193(2)(a). To read a proportionality requirement into sub paragraph (b) of section 193(2) would make it redundant and hence, in effect, would disapply it, which would not be permissible under section 3(1) of the HRA. This was explained at para 53, where Lewison LJ said: The reason is a simple one. Section 193(2)(a) permits discrimination where it is a proportionate means of achieving a legitimate aim. Section 193(2)(b) does not contain the proportionality assessment required under section 193(2)(a). It is a necessary part of Mr Wises argument in support of the imposition of a proportionality requirement in section 193(2)(b) that preventing or compensating for a disadvantage linked to a protected characteristic might not be a legitimate aim. If it were a legitimate aim, it would already be covered by section 193(2)(a). So section 193(2)(b), read as Mr Wise proposes, would be entirely redundant. In the course of the argument Mr Wise accepted this; and also agreed that preventing or compensating for a disadvantage linked to a protected characteristic would be a legitimate aim. So he accepted that his interpretation made section 193(2)(b) redundant. That, to my mind, is a powerful reason why that interpretation cannot be right. As regards Mr Wises submission (ii), Lewison LJ held (para 54) that since the case had proceeded on the footing that AIHA had discriminated against the appellant on grounds of religion, which did not fall within the Race Directive, the appellant was not able to show that the Marleasing principle of sympathetic construction was applicable to allow or require any change to the ordinary meaning of section 193(2)(b). It was not open to the appellant to say that in some case other than her own there might be a conflict between section 193(2)(b) and rights under the Race Directive, where EU law might trump the domestic provision (either in the sense of requiring a conforming interpretation to be adopted pursuant to the Marleasing principle or in the sense of requiring the disapplication of the domestic provision by giving direct effect to rights under the Directive), and then indirectly to seek to take the benefit of EU law in her case, although no relevant rights of hers under EU law were in issue. Lewison LJ also rejected Mr Wises submission (iii) (paras 55 61). There was no absurdity in construing section 193(2)(b) as bearing its ordinary meaning, with no proportionality requirement. It could not be said to be absurd that section 193(1), read with section 193(2)(b), provided a defence for a charitable institution in fulfilling its charitable objects which, ex hypothesi (by virtue of the Charities Act), must be for the public benefit. The contrast between section 193(2)(a) (which incorporates a proportionality test) and section 193(2)(b) (which does not) is striking and deliberate. Where the 2010 Act requires a proportionality requirement, as it does in a number of provisions, it says so in terms. The absence of such a requirement from section 193(2)(b) must be taken to be a deliberate policy choice by Parliament, and was well within the legislatures margin of appreciation. The explanatory notes for the 2010 Act and the EHRC code of practice supported this conclusion. Lewison LJ also held (para 52) that even if section 193(2)(b) were interpreted as importing a proportionality requirement, then for reasons given later in his judgment in relation to section 158 and section 193(2)(a) of the 2010 Act, that requirement was satisfied. In relation to all these provisions, the Divisional Court was entitled to find that AIHAs allocation policy was a proportionate means of achieving a legitimate aim. Although by reason of his conclusion regarding the interpretation of section 193(2)(b) Lewison LJ held that the appeal should be dismissed, he also went on to consider Mr Wises submission that AIHAs allocation policy could not be regarded as proportionate for the purposes of sections 158 and 193 of the 2010 Act. At paras 63 68 Lewison LJ referred to the leading authorities on the role of an appeal court in considering a proportionality assessment by a lower court. This passage merits quotation in full: 63. In In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 WLR 1911, the Supreme Court considered the role of an appeal court in an appeal which involves a challenge to a lower courts appraisal of proportionality. Lord Neuberger of Abbotsbury said at para 88: If, after reviewing the judges judgment and any relevant evidence, the appellate court considers that the judge approached the question of proportionality correctly as a matter of law and reached a decision which he was entitled to reach, then the appellate court will not interfere. If, on the other hand, after such a review, the appellate court considers that the judge made a significant error of principle in reaching his conclusion or reached a conclusion he should not have reached, then, and only then, will the appellate court reconsider the issue for itself if it can properly do so (as remitting the issue results in expense and delay, and is often pointless). 64. He added that an appeal court should only interfere where the lower courts assessment of proportionality was wrong; and then went on to explain what he meant by that. Lord Wilson and Lord Clarke of Stone cum Ebony agreed with Lord Neuberger. 65. In R (R) v Chief Constable of Greater Manchester Police [2018] UKSC 47; [2018] 1 WLR 4079, the Supreme Court added a qualification to this approach. Lord Carnwath (with whom the other Justices agreed) said at para 64: In conclusion, the references cited above show clearly in my view that to limit intervention to a significant error of principle is too narrow an approach, at least if it is taken as implying that the appellate court has to point to a specific principle whether of law, policy or practice which has been infringed by the judgment of the court below. The decision may be wrong, not because of some specific error of principle in that narrow sense, but because of an identifiable flaw in the judges reasoning, such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion. However, it is equally clear that, for the decision to be wrong under CPR rule 52.11(3), it is not enough that the appellate court might have arrived at a different evaluation. As Elias LJ said in R (C) v Secretary of State for Work and Pensions [2016] PTSR 1344, para 34: the appeal court does not second guess the first instance judge. It does not carry out the balancing task afresh as though it were rehearing the case but must adopt a traditional function of review, asking whether the decision of the judge below was wrong 66. It is not enough simply to demonstrate an error or flaw in reasoning. It must be such as to undermine the cogency of the conclusion. Accordingly, if there is no such error or flaw, the appeal court should not make its own assessment of proportionality. 67. There are two further points that I should make, in view of some of Mr Wises criticisms of the Divisional Court. First, an appeal court is bound, unless there is compelling reason to the contrary, to assume that the lower court has taken the whole of the evidence into its consideration: Henderson v Foxworth Investments Ltd [2014] UKSC 41; [2014] 1 WLR 2600, para 48; ACLBDD Holdings Ltd v Staechelin [2019] EWCA Civ 817; [2019] 3 All ER 429, para 31. Second, an appeal court should be reluctant to interfere with a lower courts findings of fact, even where those findings are based on written rather than oral evidence. Having referred to earlier cases dealing with findings of fact made at trial after hearing oral evidence, Lord Kerr of Tonaghmore explained in In re DBs Application for Judicial Review [2017] UKSC 7; [2017] NI 301, para 80: The statements in all of these cases and, of course, in McGraddie itself [McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477, paras 1 3 per Lord Reed] were made in relation to trials where oral evidence had been given. On one view, the situation is different where factual findings and the inferences drawn from them are made on the basis of affidavit evidence and consideration of contemporaneous documents. But the vivid expression in Anderson [Anderson v City of Bessemer (1985) 470 US 564, 574 575] that the first instance trial should be seen as the main event rather than a try out on the road has resonance even for a case which does not involve oral testimony. A first instance judgment provides a template on which criticisms are focused and the assessment of factual issues by an appellate court can be a very different exercise in the appeal setting than during the trial. Impressions formed by a judge approaching the matter for the first time may be more reliable than a concentration on the inevitable attack on the validity of conclusions that he or she has reached which is a feature of an appeal founded on a challenge to factual findings. The case for reticence on the part of the appellate court, while perhaps not as strong in a case where no oral evidence has been given, remains cogent. In the present appeal, I consider that the Court of Appeal should have evinced a greater reluctance in reversing the judges findings than they appear to have done. 68. Those observations have particular force in the present case, where the Divisional Court were presented with a mass of demographic and sociological evidence from multiple reputable sources. In the following section of his judgment (paras 69 88), Lewison LJ followed this approach. He rejected Mr Wises submissions that the Divisional Court had failed to conduct a proper balancing exercise, comparing the detriments of AIHAs allocations policy for non members of the Orthodox Jewish community with the benefits sought to be achieved for that community. The Divisional Court had correctly directed itself by reference to the judgment of Baroness Hale in the Akerman Livingstone case. It analysed the position in accordance with propositions to be drawn from the judgment of Baroness Hale in R (Coll) v Secretary of State for Justice [2017] UKSC 40; [2017] 1 WLR 2093, at para 42, by assessing whether there was a disadvantage for non members of the Orthodox Jewish community, considering how significant that disadvantage was and considering what might be done to meet that disadvantage. At para 87 Lewison LJ summarised the analysis of the Divisional Court: (i) The disadvantage to non members of the Orthodox Jewish community was the withdrawal of 1% of the potentially available units of accommodation. (ii) The scale of that disadvantage was minuscule. (iii) The needs of the Orthodox Jewish community linked to the relevant protected characteristic were many and compelling. (iv) The allocation of properties to non members of the Orthodox Jewish community would fundamentally undermine AIHAs charitable objectives. Thus there was no more limited way of achieving the legitimate aim. (v) Weighing these factors together, AIHAs allocation policy was proportionate. In Lewison LJs judgment, there was no flaw in this analysis which would entitle an appeal court to intervene. Accordingly, the appeal in relation to AIHA was dismissed for these reasons as well. The issues on the appeal to this court The parties identified the following issues for determination on the appeal: In order for AIHA to be able to rely on section 193(2)(b) of the 2010 (1) Act, does it have to show that its arrangements are proportionate, whether pursuant to EU law or the HRA? (2) In so far as is relevant to issue (1) above, is the allocation of social housing a matter that falls within the ambit of article 8 of the ECHR for the purposes of a discrimination claim under article 14 of the ECHR? (3) Do AIHAs arrangements amount to impermissible positive discrimination as opposed to permissible positive action for the purposes of section 158 and/or section 193 of the 2010 Act? (4) Were the courts below entitled to conclude that AIHAs arrangements are a proportionate means of achieving the aims referred to in either section 158(2) or section 193(2) of the 2010 Act? To these must now be added a fifth issue: (5) Did AIHAs allocation policy involve direct discrimination on grounds of race or ethnic origin, contrary to the Race Directive? This may have implications for issue (1) above. Mr Wise also submits that the appellant has rights under the Race Directive which would require that section 193(2)(b) of the 2010 Act should be disapplied if it conflicts with the requirements of that Directive. Since the outcome of the appeal depends on whether the Divisional Courts holding regarding the proportionality of AIHAs allocation policy for the purposes of sections 158 and 193(2)(a) of the 2010 Act should be overruled, I will consider issues (3) and (4) first. Issue (3) is a dimension of the general question of proportionality raised in issue (4), so I will address them together. Then it is convenient to address issue (5). Finally, I will turn to issues (1) and (2). Issues (3) and (4): the proportionality of AIHAs allocation policy Mr Wise submits that, as explained in the Akerman Livingstone case, the relevant test of proportionality is that to be found in EU law and says that the Divisional Court erred in discounting the Briheche judgment as relevant guidance. On this appeal, Mr Wise relies on Briheche and a number of other judgments of the CJEU which he submits show that positive discrimination is only permissible under EU law if its object is equality of opportunity for a disadvantaged group rather than equality of outcome; where a disadvantaged person is given priority only in circumstances where an objective assessment has been carried out to compare their position with that of a person who does not share the relevant characteristic and the positions are found to be equivalent, so that the relevant characteristic is taken into account only as a tie break at the end of that process; and where the policy in question has a safety valve to allow priority in exceptional cases for a person who does not share the relevant characteristic. In this case, however, the Divisional Court did not assess proportionality in this way. Mr Wise submits that AIHAs policy on allocation cannot be regarded as proportionate according to this standard. It is concerned with equality of outcome rather than equality of opportunity; AIHA does not conduct assessments of the needs of non members of the Orthodox Jewish community who might apply for social housing to compare them with the needs of members of that community; AIHA does not treat membership of the Orthodox Jewish community as a final tie break, where an assessment of the needs of an applicant for social housing who is not a member of the community as compared with those of an applicant who is a member shows that they are broadly equivalent; and AIHAs policy does not include a safety valve to allow a property to be allocated to a non member of the Orthodox Jewish community in preference to members of the community in exceptional circumstances. The judgments of the CJEU relied on by Mr Wise are those in Kalanke v Freie Hansestadt Bremen (Case C 450/93) [1996] All ER (EC) 66 (Kalanke); Marschall v Land Nordrhein Westfalen (Case C 409/95) [1997] All ER (EC) 865 (Marschall); In re Badeck (Case C 158/97) [2000] All ER (EC) 289 (Badeck); Abrahamsson v Fogelqvist (Case C 407/98) [2002] ICR 932 (Abrahamsson); Lommers v Minister van Landbouw, Natuurbeheer en Visserij (Case C 476/99) [2004] 2 CMLR 49 (Lommers); Briheche; and Cresco Investigation GmbH v Achatzi (Case C 193/17) [2019] 2 CMLR 20, Grand Chamber (Cresco). He also relies on the judgment of the EFTA Court in EFTA Surveillance Authority v Norway (Case E 1/02) [2003] 1 CMLR 23 (the EFTA Surveillance case). I do not accept Mr Wises submission based on these cases. There is no general doctrine of positive discrimination in EU law, which is subject to the limitations for which Mr Wise contends. The judgments in these cases addressed the specific requirements arising under legislative instruments which are not applicable in the present case, in particular the Equal Treatment Directive. Article 2(1) of the Equal Treatment Directive states that the principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly or indirectly. Article 2(4) provides that the Directive: shall be without prejudice to measures to promote equal opportunity for men and women, in particular by removing existing inequalities which affect women's opportunities. In Kalanke the CJEU held that German legislation which provided for the automatic promotion of a woman who had the same qualifications as a man, where there was under representation of women, was incompatible with the Equal Treatment Directive. National rules which guaranteed women absolute and unconditional priority for appointment or promotion go beyond promoting equal opportunities and fall outside what is permitted by article 2(4): para 22. This was confirmed by the CJEU in Marschall (para 32), but the court held there that such a national rule which contained a saving clause which guaranteed that male candidates would be the subject of an objective assessment which would take account of all relevant criteria and would override the priority accorded to female candidates where the assessment indicated the male candidate was better would be acceptable under article 2(4): paras 33 and 35. The under represented sex could thus only be given priority by a national rule where there was an objective assessment of the respective relevant qualities of male and female candidates and the rule operated as a tie breaker where that assessment showed that they were equally qualified to do the job: see also Badeck, paras 15 23; Abrahamsson, paras 60 62; Lommers, paras 38 39; Briheche, para 23; and the EFTA Surveillance case, para 45. As the CJEU pointed out in Briheche at para 24 (reiterating a point made in Lommers, para 39): Those conditions are guided by the fact that, in determining the scope of any derogation from an individual right such as the equal treatment of men and women laid down by the Directive, due regard must be had to the principle of proportionality, which requires that derogations must remain within the limits of what is appropriate and necessary in order to achieve the aim in view and that the principle of equal treatment be reconciled as far as possible with the requirements of the aim thus pursued. This is a conventional approach to the proportionality principle. As the statement of the principle in Akerman Livingstone makes clear, proportionality analysis requires identification of a legitimate aim and then an assessment whether a measure taken to promote that aim is proportionate in its effects in pursuing it, having regard to other interests at stake. For present purposes, what is significant about the Equal Treatment Directive is that article 2(4) identifies the aim which is to be regarded as a legitimate basis for departing from the general obligation of equal treatment imposed by article 2(1), namely promotion of equality of opportunity in employment rather than equality of outcome. In the judgments referred to, rules of national law were held to be compatible with the Directive if limited to securing equality of opportunity but were held to be incompatible if they went beyond promotion of equality of opportunity and sought to achieve equality of outcome in terms of equal representation of men and women in the workforce. This tells one nothing of any significance about the proper approach to proportionality in the context of section 158 and section 193(2)(a) of the 2010 Act. In fact, separate provision is made in the 2010 Act, in section 159, governing positive action in relation to employment. In each of section 158 and section 193(2)(a), the range of permissible legitimate aims is wider than the legitimate aim specified in article 2(4) of the Equal Treatment Directive and includes seeking to achieve particular outcomes, ie enabling persons who share the protected characteristic to overcome or minimise disadvantages they suffer which are connected to the characteristic or to meet needs particular to persons with the protected characteristic, in the case of section 158; or any legitimate aim in the case of section 193(2)(a) (which includes aims recognised as legitimate under section 158). Accordingly, the correct question, as the Divisional Court and the Court of Appeal rightly appreciated, is whether AIHAs allocation policy is a measure which is proportionate to promoting such aims in relation to ameliorating the position of members of the Orthodox Jewish community. Those aims relate to improving outcomes for that community, not merely equality of opportunity of the more limited kind discussed in the cases on the Equal Treatment Directive. The judgment of the Grand Chamber of the CJEU in Cresco is more relevant. That addressed the application of article 21 of the CFR and Directive 2000/78 establishing a general framework for equal treatment in employment and occupation (the Framework Directive). Article 2 of the Framework Directive states that the principle of equal treatment shall mean that there shall be no direct or indirect discrimination as regards employment and occupation on a range of grounds referred to in article 1, including religion or belief. Article 7, headed Positive action, provides in para 1: With a view to ensuring full equality in practice, the principle of equal treatment shall not prevent any member state from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to any of the grounds referred to in article 1. The terms of article 7(1) are materially different from those of article 2(4) of the Equal Treatment Directive, and are closer to section 158 and section 193 of the 2010 Act. Cresco concerned Austrian legislation which provided that for members of specified Christian churches Good Friday was a public holiday, with the result that if they worked on that day they should be paid a supplement. Non Christians were not entitled to treat Good Friday as a day of holiday and were not entitled to any supplement for working that day; nor were any religious days of other religions treated as public holidays for them. A non Christian who worked for a private company complained that this was incompatible with article 21 of the CFR and with the Framework Directive. At paras 62 68 the Grand Chamber dealt with an argument by the Austrian Government that the law treating Good Friday as a public holiday for members of Christian churches was justified pursuant to article 7(1) of the Framework Directive, and rejected it. The Grand Chamber observed (para 63) that, in light of article 7(1), the principle of equal treatment in the Directive does not prevent a member state from retaining or adopting, in order to ensure full equality in practice, specific measures to prevent or compensate for disadvantages linked to any of the grounds referred to in article 1. The Grand Chamber also noted (para 64) that article 7(1) is designed to authorise measures which, although discriminatory in appearance, are in fact intended to eliminate or reduce actual instances of inequality which may exist in society. The objectives of ensuring full equality in practice and the elimination or reduction of instances of inequality are very different from the more limited objective of securing equality of opportunity referred to in article 2(4) of the Equal Treatment Directive. They are objectives which can include efforts to achieve equality of outcomes as well as equality of opportunity, to use the distinction urged on us by Mr Wise. At para 65, the Grand Chamber affirmed that a conventional proportionality analysis applies in relation to such aims (referring in that regard to Lommers, para 39): in determining the scope of any derogation from an individual right such as equal treatment, due regard must be had to the principle of proportionality, which requires that derogations remain within the limits of what is appropriate and necessary in order to achieve the aim in view and that the principle of equal treatment be reconciled as far as possible with the requirements of the aim thus pursued Applying the principle of proportionality, the Grand Chamber held (paras 66 68) that since there was no corresponding designation of important festivals of other religions as public holidays the law in issue went further than was necessary to compensate for the alleged disadvantage suffered by employees who are members of Christian churches and subject to a religious duty not to work on Good Friday. Accordingly, the Grand Chamber in Cresco confirmed at para 65 the point made above about the conventional operation of the proportionality principle in the context of anti discrimination legislation. The guidance in Cresco is relevant in relation to the analogous provisions in section 158 and section 193 of the 2010 Act. It confirms that the conventional approach adopted by the Divisional Court and the Court of Appeal on the question of proportionality was correct. The Divisional Court directed itself correctly as to the proportionality test to be applied. It made appropriate findings on the evidence before it regarding the needs of the Orthodox Jewish community connected to their religion and the disadvantages to which they were subject on grounds of their religion. It found that the AIHA allocation policy was a legitimate and proportionate means of meeting those needs and of seeking to correct for those disadvantages. I would endorse the observations of Lewison LJ at paras 63 68 (quoted at para 56 above) about the proper approach for an appellate court when reviewing a finding of proportionality or disproportionality of a measure such as AIHAs allocation policy. Mr Wise did not suggest this approach was wrong. Since the Divisional Court gave itself a correct self direction as to the test to be applied, its conclusion that AIHAs allocation policy is a proportionate means of pursuing the legitimate aims identified can only be set aside if the appeal court comes to the view that its conclusion was wrong in the relevant sense. It is not sufficient that an appellate court might think it would have arrived at a different conclusion had it been considering the matter for the first time. Although the word wrong is taken from what is now CPR Part 52.21, which is concerned with the powers of the Court of Appeal and certain other appellate courts, but not the Supreme Court, the arguments for a limited role for an appellate court are of general application and the same approach applies at this level. It would be a recipe for confusion if this court applied a different standard of review on appeal than that applied by the Court of Appeal. It is for that reason that I have dealt with the Divisional Courts judgment on the question of proportionality at some length. I agree with Lewison LJs assessment at paras 69 88 (see para 57 above) that there is no proper basis on which an appellate court could interfere with the Divisional Courts conclusion that AIHAs allocation policy is a measure which is proportionate to legitimate aims. Not only was that a conclusion which the Divisional Court was entitled to reach, I agree with it. Two particular points should be mentioned. First, AIHAs allocation policy operates as a direct counter to discrimination suffered by the Orthodox Jewish community in seeking to obtain housing in the private sector. The Divisional Court properly weighed up the effect of the policy in addressing needs of the Orthodox Jewish community connected with their religion and in correcting for disadvantages suffered by that community. Lewison LJ forcefully made this point at para 79 when rejecting criticisms made by Mr Wise: It is, with respect, obvious why discrimination against the Orthodox Jewish community in accessing private sector housing is ameliorated by a housing association that gives members of that community preference. The extent of the amelioration may be impossible to assess with any precision, but that does not cast doubt on the fact that amelioration there is. Nor do I accept the criticism that the Divisional Court failed to assess the disadvantage occasioned to other groups who did not share the relevant protected characteristic. On the basis of the Divisional Courts findings, the effect of AIHAs allocation policy (taken at its most restrictive) is to withdraw from the pool of potentially available properties for letting 1% of units. The remaining 99% are potentially available to persons who do not share the relevant protected characteristic. Thus the disadvantage to those persons is minuscule. Even if one concentrates on larger units, where AIHA has a larger share of units, Orthodox Jews are disproportionately represented among applicants for such units. As far as the smaller units are concerned, the evidence is that many of them are also used to house large families. I do not regard this criticism as well founded. Secondly, Lewison LJ rightly rejected (at paras 84 85) a further criticism made by Mr Wise, that the Divisional Court was wrong to dismiss his argument that AIHAs allocation policy was an illegitimate blanket policy. There is some flexibility in the policy as it is formulated, in that it allows for AIHA to allocate properties to non members of the Orthodox Jewish community if AIHA has properties surplus to the demand from that community. However, in circumstances in which demand from that community far exceeds supply, allocation to non members is not a realistic prospect in the foreseeable future. As Lewison LJ pointed out, the market circumstances are such that AIHAs allocation policy (in combination with the limited number of properties AIHA owns) does not achieve the aim of meeting the needs of the Orthodox Jewish community in Hackney, but only goes some way towards achieving that aim. There are still many Orthodox Jews in Hackney whom AIHA cannot accommodate and who still suffer the disadvantages associated with the relevant protected characteristic. Unless and until the aim of elimination of such disadvantages is achieved, it would be proportionate for AIHA to operate a simple blanket policy to allocate its properties to members of the Orthodox Jewish community as a means of promoting that legitimate aim. So even though market circumstances give AIHAs policy, in practice, a blanket effect, that does not show that it is a measure which is disproportionate to that aim. Mr Wise criticised the Divisional Court and the Court of Appeal for their focus on the minuscule impact of AIHAs allocation policy. He said that the impact on the appellant could not be so described, since she had had to wait almost 18 months for a suitable property while at least six four bedroom properties owned by AIHA became available and were advertised by the Council for members of the Orthodox Jewish community. In my view, there is nothing in this criticism. The Divisional Court and the Court of Appeal rightly took account of the small impact of AIHAs allocation policy on the group of persons outside the Orthodox Jewish community when assessing its proportionality with reference to its aim. It was proportionate for AIHA to adopt an allocation policy which aimed to meet the particular needs and alleviate the particular disadvantages experienced by members of the Orthodox Jewish community, as a group, in connection with their religion. In assessing the proportionality of the policy in the light of that aim, the courts below were entitled to weigh the benefits for that community as a group as compared with the disadvantages experienced by other groups as a result, rather than by comparing the benefits for that community with the disadvantage suffered by one person drawn from those other groups falling outside the policy. Positive action pursuant to section 158 has to address needs or disadvantages experienced in connection with a protected characteristic, and so contemplates that a group based approach may be adopted, defined by reference to one of the protected characteristics as shared with others (such as gender, disability or religion). Similarly, in the context of section 193, charities typically focus the benefits they aim to provide on defined groups. Charitable status is a way of recruiting private benevolence for the public good (subject to the public benefit test in the Charities Act), and charities focus on providing for particular groups since that is what motivates private individuals to give money, where they feel a particular link to or concern for the groups in question. It is for the public benefit that private benevolence should be encouraged for projects which supplement welfare and other benefits provided by the state, even though those projects do not confer benefits across the board. Accordingly, Parliament contemplated that the proportionality of measures falling within section 158 and section 193 should be assessed on a group basis, by comparing the advantages for groups covered by the measure in question with the disadvantages for groups falling outside it. This point is reinforced by the guidance on the question of proportionality under section 158 of the 2010 Act contained in the EHRC code of practice at para 10.22: The seriousness of the relevant disadvantage, the degree to which the need is different and the extent of the low participation in the particular activity will need to be balanced against the impact of the action on other protected groups, and the relative disadvantage, need or participation of these groups. In this context, the proportionality assessment would be distorted by simply taking the worst affected individual who is not covered by the measure and comparing her with the most favourably affected individual who is covered by it. That is in effect what Mr Wise seeks to do by comparing the appellant with a member of the Orthodox Jewish community, out of the many in need, who happened to be fortunate in having one of AIHAs properties assigned to them in the relevant period. The House of Lords in R (Ahmad) v Newham London Borough Council [2009] UKHL 14; [2009] PTSR 632 considered a broadly analogous context when assessing whether a local housing authoritys scheme made under section 167(2) of the Housing Act 1996 (as amended) for determining priority for allocation of social housing based on placing individuals within broad need based categories rather than on individualised, fine grained comparative assessment of needs was irrational, and held that it was not. Baroness Hale and Lord Neuberger of Abbotsbury, who gave the principal speeches, emphasised the dangers of distorting the analysis by seeking to compare the situation and needs of the claimant with those of a general category, in circumstances where it was legitimate for the authority to adopt a group based approach to allocation of housing: see paras 15 (Baroness Hale) and 46 48 and 60 62 (Lord Neuberger). In R (XC) v Southwark London Borough Council [2017] EWHC 736 (Admin); [2017] HLR 24 Garnham J relied on these observations in deciding that a particular category based feature of a local housing authoritys housing priority scheme (to award additional points to persons in working households or who provide community services) was a proportionate means of achieving legitimate objectives (the creation of sustainable and balanced communities and encouraging residents to make a contribution to the local community), so as to provide a defence to a claim of indirect discrimination under section 19 of the 2010 Act. The claimant suffered from disabilities which meant that she could not work. Having regard to the observations in Ahmad, Garnham J held that the priority scheme in issue was the least intrusive measure which could be used without unacceptably compromising the chosen objectives and that it struck a fair balance between securing the objectives and its effects on the claimants rights: paras 85 99. As he pointed out (para 92): Determining those matters in the context of housing allocation schemes is especially difficult. Every tweak to the scheme to benefit one individual or one class of applicant is likely to have an adverse effect on another; every exception to the operation At para 98 he said: of a preference may damage the achievement of the objective. The court inevitably concentrates on the circumstances of the claimant in front of it and it is easy to recognise the disadvantage that a claimant may suffer. But the local authority has to consider the position of all applicants and the court can have only the most attenuated understanding of their position. I can see no measure less intrusive, less likely to be detrimental to the claimant, which would not undermine the legitimate objective identified by the council and to which I have referred above. To extend the class of volunteers to include all those who, like the claimant, provide some measure of care for others living in other accommodation would inevitably reduce the ability of the council to cater for those who benefit from the reasonable preferences provided for by the scheme. To extend the class of working households to include those who cannot work because of the type of disabilities suffered by the claimant would inevitably conflict with the legitimate preference to be given to those in work. The wider the class the less valuable the benefit of being within it. So also in the present case, if AIHA changed its allocation policy to bring in people who are not members of the Orthodox Jewish community, that would inevitably dilute the impact it could have on addressing the needs and disadvantages experienced by that community in connection with their faith. In light of the unmet need for social housing for that community and the small impact on other groups, the Divisional Court was entitled to conclude that it was proportionate for AIHA to focus its efforts on that community without diluting its beneficial impact for that community in the way for which Mr Wise contends. In the context of state provision of social welfare benefits, it is well established that it is generally a legitimate approach and in accordance with the principle of proportionality for the state to use bright line criteria to govern their availability: see eg R (RJM) v Secretary of State for Work and Pensions (Equality and Human Rights Commission intervening) [2008] UKHL 63; [2009] 1 AC 311; Carson v United Kingdom (2010) 51 EHRR 13, para 62; and R (Tigere) v Secretary of State for Business, Innovation and Skills (Just for Kids Law intervening) [2015] UKSC 57; [2015] 1 WLR 3820. That is to say, the state is entitled to focus provision of social welfare benefits on a particular group, and hence exclude other groups, even though there may be little or no difference at the margins in terms of need between some particular individual in the first group and another particular individual in the excluded groups. Use of bright line criteria in this way is justified because it minimises the costs of administration of a social welfare scheme; it may be the best way of ensuring that resources are efficiently directed to the group which, overall, needs them most; it can reduce delay in the provision of benefits; and it provides clear and transparent rules which can be applied accurately and consistently, thereby eliminating the need for invidious comparisons of individual cases in all their variety, with the risk of arbitrariness in outcomes which that may involve. Lord Sumption and Lord Reed explained these points in Tigere, which concerned a challenge to the proportionality of rules which restricted the availability of student loans in the case of non nationals to those who had settled immigration status, in a general discussion of proportionality and bright line rules at paras 88 91 (albeit in their conclusion on the facts of that case they were in a minority): 88. Those who criticise rules of general application commonly refer to them as blanket rules as if that were self evidently bad. However, all rules of general application to some prescribed category are blanket rules as applied to that category. The question is whether the categorisation is justifiable. If, as we think clear, it is legitimate to discriminate between those who do and those who do not have a sufficient connection with the United Kingdom, it may be not only justifiable but necessary to make the distinction by reference to a rule of general application, notwithstanding that this will leave little or no room for the consideration of individual cases. In a case involving the distribution of state benefits, there are generally two main reasons for this. 89. One is a purely practical one. In some contexts, including this one, the circumstances in which people may have a claim on the resources of the state are too varied to be accommodated by a set of rules. There is therefore no realistic half way house between selecting on the basis of general rules and categories, and doing so on the basis of a case by case discretion. The case law of the Strasbourg court [the European Court of Human Rights] is sensitive to considerations of practicality, especially in a case where the Convention [the ECHR] confers no right to financial support and the question turns simply on the justification for discrimination. In Carson v United Kingdom (2010) 51 EHRR 369 [51 EHRR 13], which concerned discrimination in the provision of pensions according to the pensioners country of residence, the Grand Chamber observed, at para 62: as with all complaints of alleged discrimination in a welfare or pensions system, it is concerned with the compatibility with article 14 of the system, not with the individual facts or circumstances of the particular applicants or of others who are or might be affected by the legislation. Much is made in the applicants submissions and in those of the third party intervener of the extreme financial hardship which may result from the policy. However, the court is not in a position to make an assessment of the effects, if any, on the many thousands in the same position as the applicants and nor should it try to do so. Any welfare system, to be workable, may have to use broad categorisations to distinguish between different groups in need the courts role is to determine the question of principle, namely whether the legislation as such unlawfully discriminates between persons who are in an analogous situation. This important statement of principle has since been applied by the European Court of Human Rights to an allegation of discrimination in the distribution of other welfare benefits such as social housing: Bah v United Kingdom [(2011) 54 EHRR 21] at para 49. And by this court to an allegation of discrimination in the formulation of rules governing the benefit cap: R (SG) v Secretary of State for Work and Pensions (Child Poverty Action Group intervening) [2015] 1 WLR 1449, para 15 (Lord Reed JSC). 90. The second reason for proceeding by way of general rules is the principle of legality. There is no single principle for determining when the principle of legality justifies resort to rules of general application and when discretionary exceptions are required. But the case law of the Strasbourg court has always recognised that the certainty associated with rules of general application is in many cases an advantage and may be a decisive one. It serves to promote legal certainty and to avoid the problems of arbitrariness and inconsistency inherent in weighing, on a case by case basis: Evans v United Kingdom (2007) 46 EHRR 728, at para 89. The Court of Justice of the European Union has for many years adopted the same approach to discrimination cases, and has more than once held that where a residence test is appropriate as a test of eligibility for state financial benefits, it must be clear and its application must be capable of being predicted by those affected: Collins v Secretary of State for Work and Pensions (Case C 138/02) [2005] QB 145, para 72, Frster v Hoofddirectie van de Informatie Beheer Groep (Case C 158/07) [2009] All ER (EC) 399, para 56. As Advocate General Geelhoed acknowledged in considering these very Regulations in Bidar [R (Bidar) v Ealing London Borough Council (Case C 209/03) [2005] QB 812], para 61: Obviously a member state must for reasons of legal certainty and transparency lay down formal criteria for determining eligibility for maintenance assistance and to ensure that such assistance is provided to persons proving to have a genuine connection with the national educational system and national society. In that respect, and as the court recognised in Collins, a residence requirement must, in principle, be accepted as being an appropriate way to establish that connection. 91. The advantages of a clear rule in a case like this are significant. It can be applied accurately and consistently, and without the element of arbitrariness inherent in the discretionary decision of individual cases. By simplifying administration it enables speedy decisions to be made and a larger proportion of the available resources to be applied to supporting students. These points apply a fortiori in relation to a proportionality assessment in respect of a measure taken by a charity, such as AIHAs allocation policy. A charity is a private body which does not have the same responsibility as the state for ensuring equal treatment of citizens, so if the state is entitled to use bright line criteria for distribution of social welfare benefits still more will that be true for a charity. Moreover, charities do not have the same resources as the state, so if the state is entitled to use bright line criteria for distribution of benefits, still more will that be true for a charity. It is in the public interest that charities should be able to minimise their costs of administration. That is in order to ensure that maximum resources are made available to address the problems which charities seek to alleviate and since otherwise charitable giving may be deterred, if donors feel excessive amounts of what they give will be spent on administration rather than actually helping people in need. The aims of minimising wastage of resources on administration and encouraging charitable giving are themselves legitimate objectives to be brought into account in the assessment of proportionality. Mr Wise maintained that there are examples of other faith or ethnicity based housing associations (he cited three) having allocation policies which do not require them to provide housing exclusively to members of the relevant religious or ethnic community, and that there is no evidence that the aims or essential nature of these housing associations, which are presumably operating in similarly demanding market conditions to AIHA, have been unacceptably compromised thereby. However, there was no evidence about how these housing associations manage the tension between their faith or ethnicity based focus for provision of social housing and provision for other groups, no evidence that these three examples were in any way representative of the sector as a whole, and no evidence that the problems faced by the groups they seek to help or the market conditions in their areas are equivalent to those which AIHA has to address. Therefore, I did not find Mr Wises attempt to rely on these examples at all persuasive. Each case must depend on its own facts. The Divisional Court was entitled to make the assessment that if AIHA relaxed its allocation criteria it would dilute its ability to address the problems faced by the Orthodox Jewish community to an unacceptable degree. Mr Wise made vague references to the possibility that AIHA could allocate more properties to non members of that community whilst still maintaining assistance for the community, but he did not propose any concrete solution, let alone a viable one, to resolve that dilemma. In my judgment, for the reasons given above, the appellants grounds of appeal in relation to issues (3) and (4) fail. The consequence is that her appeal as a whole should be dismissed. Issue (5): The Race Directive The Race Directive requires discrimination on grounds of race or ethnic origin to be made unlawful, including in particular in relation to housing. Mr Wise submits that the JFS case shows that AIHAs allocation policy involved direct discrimination on grounds of ethnic origin. Mr Grodzinski has a short response to this new claim by the appellant: AIHAs allocation policy involves differentiation on grounds of religious observance, which is not prohibited by the Race Directive; it does not involve discrimination on grounds of race or ethnic origin; the facts in the JFS case were materially different. In my view, Mr Grodzinski is right about this. The JFS case concerned a complaint that the admissions criteria adopted by the Jewish Free School involved unlawful direct discrimination on grounds of ethnic origin contrary to the Race Relations Act 1976, one of the pieces of anti discrimination legislation which was replaced by the 2010 Act. Only children who were recognised as Jewish according to the Office of the Chief Rabbi could be admitted, such recognition being based on matrilineal descent from a Jewish mother or one who had been converted in accordance with the tenets of Orthodox Judaism. There was no requirement of practice of the Jewish faith. The school refused to accept a child whose mother had undergone conversion to non Orthodox Judaism, which was not recognised by the Office of the Chief Rabbi. By a majority, this court held that the test of matrilineal descent applied by the school was a test of ethnic origin and that therefore the schools policy involved direct discrimination on racial grounds contrary to the 1976 Act, which defined such grounds to include ethnic or national origins. As Lord Phillips of Worth Matravers explained at para 13, [i]n deciding what were the grounds for discrimination it is necessary to address simply the question of the factual criteria that determined the decision made by the discriminator. The motive of the discriminator for the discrimination in issue is irrelevant. In JFS the court considered and affirmed the guidance given by Lord Fraser of Tullybelton in Mandla (Sewa Singh) v Dowell Lee [1983] 2 AC 548, 562 regarding the meaning of an ethnic group in this context, as set out by Lord Phillips at para 28. The criteria set out by Lord Fraser include two essential conditions (that the group should have a long shared history and a cultural tradition of its own) and a number of other relevant factors; and he stated, [p]rovided a person who joins the group feels himself or herself to be a member of it, and is accepted by other members, then he is, for the purposes of [the 1976 Act], a member. In JFS this court recognised that one could define Jews as an ethnic group by reference to these general criteria without reference to matrilineal descent, but it was concerned with the particular question whether the matrilineal test applied by the school involved discrimination on grounds of ethnic origins, including as against persons who regarded themselves as Jews (as the mother and father of the child did): see, eg, paras 30 31, 33, and 43 46, where Lord Phillips, in the majority, distinguishes the criterion of matrilineal ethnic origin at issue in the case from whether someone is a member of what he describes as a Mandla Jewish ethnic group. Lord Phillips and the majority held that the application of that criterion by the school (as distinct from a criterion by reference to a Mandla Jewish ethnic group) involved direct discrimination on grounds of ethnic origin. Baroness Hale, also in the majority, emphasised at para 66 that the child was not excluded from the school by reason of his religious beliefs, but by reason of his ethnic origins, because his mother was not recognised as Jewish by the Office of the Chief Rabbi. For the new claim based on the Race Directive, Mr Wise submits that the JFS decision establishes that the criterion used by AIHA that an applicant for its properties should be a member of the Orthodox Jewish community involves discrimination on grounds of ethnic origin, and that this holds true for the concept of ethnic origin in the Race Directive itself. In my view, however, this submission cannot be sustained on the facts of this case. Unlike in the JFS case, AIHA did not make its selection on the grounds of a persons Jewish matrilineal descent, but on the grounds of whether they engage in Orthodox Jewish religious observance: see paras 37 38 above. Discrimination on grounds of religious belief or religious observance is not prohibited by the Race Directive. Since the new claim was introduced so late in the day, there has been no evidence put forward and no examination by the courts below regarding whether persons who engage in Orthodox Jewish religious observance might, by virtue of that, be regarded as part of some wider and differently constituted Mandla Jewish ethnic group according to Lord Frasers guidelines. It is possible that they might, but the question is not a straightforward one. Evidence would be required in relation to it, for instance to explore the extent that such persons would be accepted by other Jews (Orthodox or non Orthodox) to be part of their ethnic group or might be perceived as such by non Jews. Mr Wise was not given permission to introduce such a case. A range of legal issues would arise if an attempt were made to present such a case in future. These would include whether the concept of ethnic origin in the Race Directive is the same as in the 1976 Act and, now, the 2010 Act; whether a defence existed under article 5 of the Race Directive which, by contrast with the more limited positive discrimination provision in the Equal Treatment Directive, is in similar wide terms to the positive discrimination provision in the Framework Directive considered in Cresco and discussed above (and, for the reasons given above, it is likely that AIHA would have a good defence under article 5); whether the Race Directive can have horizontal effect in relation to a private body like AIHA (see Cresco, paras 72 73); whether it is possible to interpret provisions of domestic legislation compatibly with the Directive pursuant to the Marleasing interpretive obligation (see Cresco, para 74); and whether article 21 of the CFR might create rights on which a claimant could rely (see Cresco, paras 75 78). It is not appropriate to say anything further about these issues in this judgment. Issues (1) and (2): interpretation of section 193(2)(b) and the ambit of article 8 As mentioned above, it is common ground that in applying its allocation policy AIHA acts in pursuance of its charitable instrument, so that section 193(1)(a) of the 2010 Act is satisfied, and also that it provides benefits to persons who shared a protected characteristic (ie religion) for the purpose of preventing or compensating for a disadvantage linked to the protected characteristic, in the language of section 193(2)(b). The Court of Appeal held that there is no implied additional requirement in section 193(2)(b) that a charity should have to persuade a court that the measures it takes within section 193(2)(b) are proportionate. Although it is my view that the appeal should be dismissed for the reasons given above in relation to issues (3) (5), we should also address the interpretation of section 193(2)(b), which was the main ground on which the Court of Appeal dismissed the appellants appeal. In my opinion, this does not require us to reach a concluded view on the ambit of article 8 of the ECHR in the present context, for the purposes of application of article 14. That is because, even if article 14 is applicable, I consider that the Court of Appeal was right to construe section 193(2)(b) in the way it did, as not being dependent on a proportionality assessment to be conducted by the court. There are two reasons for this. For the purposes of analysis, I will make the assumption that AIHAs allocation policy falls within the ambit of article 8 so that article 14 is applicable. First, I accept Mr Grodzinskis submission that by section 193(1) read with section 193(2)(b), Parliament has itself established a regime which is proportionate and compatible with article 14. Secondly, even if that is not the case, I agree with Lewison LJ that it is not possible under section 3(1) of the HRA to read an additional proportionality requirement into section 193(2)(b). In relation to both arguments it is relevant to trace the legislative history. Charities have been subject to legal regulation for a very long time. In particular, charitable status is limited to bodies which provide public benefits of specified kinds. By virtue of section 2(1) of the Charities Act, to be charitable a purpose has to fall within section 3(1) of the Act and has to be for the public benefit, as set out in section 4 of the Act. Charitable purposes include the prevention or relief of poverty, the advancement of religion and the relief of those in need because of youth, age, ill health, disability, financial hardship or other disadvantage: sub paragraphs (a), (c) and (j) of section 3(1), respectively. The Charity Commission exercises regulatory oversight in relation to the activities of charities, to ensure, among other things, that the public benefit requirement is satisfied: see the discussion in R (Independent Schools Council) v Charity Commission for England and Wales [2011] UKUT 421 (TCC); [2012] Ch 214. The public benefit requirement will not be satisfied if a charitys activities have unduly detrimental wider effects in society: see the Independent Schools Council case, in particular at paras 64 and 105 106. The Sex Discrimination Act 1975 made forms of discrimination on grounds of sex unlawful, but section 43(1) set out an exemption for charities in relation to an act which was done to give effect to a provision in a charitable instrument for conferring benefits on persons of one sex only. The Race Relations Act 1976, which made forms of discrimination on grounds of race unlawful, contained a similar exemption. In 2008, section 43 of the 1975 Act was amended by the Sex Discrimination (Amendment of Legislation) Regulations 2008 (SI 2008/963) by the addition of subsection (2A), which provided that subsection (1) should not apply to specified types of discrimination unless the conferral of benefits is (a) a proportionate means of achieving a legitimate aim, or (b) for the purpose of preventing or compensating for a disadvantage linked to sex. This was the forerunner of what became section 193(2) of the 2010 Act. The Explanatory Memorandum for the Regulations stated that this provision was introduced to give effect in domestic law to Council Directive 2004/113/EC, implementing the principle of equal treatment between men and women in the access to and supply of goods and services (the Gender Directive). The amendment was introduced while consultation on the terms of what became the 2010 Act was in progress. Recital (16) to the Gender Directive states: Differences in treatment may be accepted only if they are justified by a legitimate aim. A legitimate aim may, for example, be the protection of victims of sex related violence (in cases such as the establishment of single sex shelters), reasons of privacy and decency (in cases such as the provision of accommodation by a person in a part of that persons home), the promotion of gender equality or of the interests of men or women (for example single sex voluntary bodies), the freedom of association (in cases of membership of single sex private clubs), and the organisation of sporting activities (for example single sex sports events). Any limitation should nevertheless be appropriate and necessary in accordance with the criteria derived from case law of the Court of Justice of the European Communities. In terms similar to those of article 7 of the Framework Directive and article 5 of the Race Directive, article 6 of the Gender Directive provides: With a view to ensuring full equality in practice between men and women, the principle of equal treatment shall not prevent any member state from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to sex. While the 2010 Act was a Bill, Parliaments Joint Committee on Human Rights sent a letter to the Government dated 2 June 2009 raising a number of queries about the Bill, including about the clause which became section 193. The Governments response by letter dated 19 June 2009 explained that the exemptions from anti discrimination law for charities were to be tightened up in the new provision in line with the model already adopted in relation to sex discrimination, so that it would no longer be sufficient for them to discriminate if their charitable instrument allowed for this; now a charity would also need to show that it was justified in discriminating. This would be achieved if it could show that such discrimination is objectively justified (ie under section 193(2)(a)) or is intended to prevent or compensate for disadvantage linked to the protected characteristic in question (ie under section 193(2)(b)). It is clear from this that in proposing the provision in section 193(2) the government intended sub paragraphs (a) and (b) to serve as distinct conditions for the operation of the charitable exemption and that it considered that satisfaction of either of them would constitute justification for discrimination which would meet the requirements of EU law under the Race Directive and the Gender Directive. Under the Race Directive (see recital (17) and article 5) and the Gender Directive (see recital (16) and article 6) it is contemplated that positive action to help disadvantaged sections of the population may be taken by bodies created for that purpose. In the English context, these obviously include charities. The general regime for regulation of charities in English law limits charitable status by reference to defined public goods as set out in section 3 of the Charities Act and, by application of the public benefit test in section 4, ensures that the benefits to be provided by a charity are balanced against any detriment from its activities. Thus, as a result of this regulatory regime, the requirement in section 193(1)(a) of the 2010 Act that the person seeking to benefit from the exemption in section 193 has to act in pursuance of a charitable instrument imposes substantive requirements that the acts in question promote the public interest. This point is emphasised in the guidance on section 193 in the EHRC code of practice, at para 13.35: The public benefit test that all charities must satisfy to gain charitable status may assist, but it will not guarantee that any such restriction meets either of the tests specified in the Act. The Charity Commission for England and Wales and the Scottish Charity Regulator will consider the likely impact of any restriction on beneficiaries in the charitable instrument, and whether such restriction can be justified, in assessing whether the aims of a charity meet the public benefit test. The effect of subsection (2)(b) is to ensure in addition that, in order to be exempt, the provision of benefits is for the purpose of preventing or compensating for a disadvantage linked to the relevant protected characteristic. In the context of general anti discrimination legislation as contained in the 2010 Act, it was abundantly obvious that issues would arise under both EU law and article 14 of the ECHR in relation to activities falling within section 193. Parliament, acting with the benefit of the explanation from the government referred to above, must be taken to have made the assessment that by this combination of conditions the regime it enacted in the 2010 Act satisfied the requirement of proportionality for the purposes of EU law. It must equally be taken to have considered that the regime satisfied the requirement of proportionality for the purposes of the ECHR, in particular as it arises under article 14. This has the benefit for charities that, where they rely on the section 193(2)(b) limb of the exemption, they do not have to produce a separate proportionality justification of their own if challenged. This means that their resources will not have to be used up in this way in meeting challenges which might be brought against them, and since section 193(2)(b) provides a defence with bright line characteristics it is likely to protect them from challenges being brought which can be seen will not succeed. In this way, this limb of the exemption in section 193, as framed, helps to ensure that the scarce resources of charities are channelled through to those who need them, rather than being diverted to meet costs of administration, legal proceedings and threats of legal proceedings. It is also relevant that this is achieved against the background that it is the states, not charities, responsibility to provide essential welfare benefits for all who need them. It is easier to say that Parliament has struck a fair and proportionate balance between the needs of charities (and, more particularly, those who benefit from their activities) and the general interests of the sections of the public who do not so benefit, where those general interests are met out of state resources where there is pressing need. The margin of appreciation to be afforded to Parliament when it has sought to strike a balance between competing interests varies depending on context. Where, as here, Parliament has had its attention directed to the competing interests and to the need for the regime it enacts to strike a balance which is fair and proportionate and has plainly legislated with a view to satisfying that requirement, the margin of appreciation will tend to be wider. A court should accord weight to the judgment made by the democratic legislature on a subject where different views regarding what constitutes a fair balance can reasonably be entertained. The context here is provision of social benefits of various kinds, to be provided by charities out of the scarce resources available to them. When the state provides social welfare benefits, the margin of appreciation afforded to Parliament is wide. Its judgment will be respected in relation to general measures of economic or social strategy unless manifestly without reasonable foundation: see eg Humphreys v Revenue and Customs Comrs [2012] UKSC 18; [2012] 1 WLR 1545, para 19 (Baroness Hale); R (SG) v Secretary of State for Work and Pensions (Child Poverty Action Group and Another intervening) [2015] UKSC 16; [2015] 1 WLR 1449, para 11 (Lord Reed); Gilham v Ministry of Justice [2019] UKSC 44; [2019] 1 WLR 5905, para 34 (Baroness Hale). I accept Mr Grodzinskis submission that this is also the relevant margin of appreciation to be applied in the context of the exemption for charities from the general anti discrimination rules in the 2010 Act. The underlying issue, of allocation of scarce resources to meet a range of needs, is similar to that which is relevant in the context of welfare benefits provided by the state. Allowing the state a wide margin of appreciation in the latter context recognises the legitimacy of such decisions of social and economic policy being taken by a body which has democratic authority and the responsibility for raising taxes and deciding how they are spent. It is also a matter of social and economic policy for Parliament to decide how best to stimulate private benevolence which will allow charities to supplement state provision of welfare benefits. The degree to which charities are given freedom to pursue objectives which their donors regard as important affects the extent to which donors will provide private resources to supplement provision by the state. If donors are not given reasonable assurance that what they give will reach the persons they intend to benefit, they will not give at all. It was a legitimate policy choice by Parliament to fashion the exemption for charities under the section 193(2)(b) limb of section 193 in the way it did, as a relatively bright line rule which would give that assurance to donors. In my judgment, having regard to the relevant margin of appreciation, the fact that charitable provision supplements basic social welfare provision by the state, the general regulation of charities to ensure they provide public benefits, the desirability of ensuring that the resources of charities are not diverted from being used to meet social needs and the way in which Parliament has carefully and deliberately framed the section 193(2)(b) limb of the exemption to meet the proportionality tests in EU law and under the ECHR, that limb of the exemption satisfies the proportionality requirement across the range of cases in which it applies. There is, therefore, clearly no basis on which it would be appropriate for the court to seek to imply into that provision an additional requirement that proportionality should be demonstrated separately by a charity in every, or any, case falling within it. Even if I were wrong in that conclusion, I agree with Lewison LJ (para 53) that it is not possible, as that term is used in section 3(1) of the HRA, to read and give effect to section 193(2)(b) by implying into it an additional proportionality requirement. To do so would make section 193(2)(b) redundant, since then a charity could always in a case covered by that provision rely on the section 193(2)(a) limb of the exemption. The point made by Lewison LJ is strongly reinforced by consideration of the legislative history, set out above. It is clear from the terms of section 193(2) and from that history that Parliament intended the two limbs to be separate and distinct, and that there should be no additional proportionality requirement in section 193(2)(b). To import such a requirement would undermine a fundamental feature of that provision and would go against the grain of what Parliament intended; therefore, section 3(1) of the HRA does not allow section 193(2)(b) to be read and given effect in this way: see Ghaidan v Godin Mendoza [2004] UKHL 30; [2004] 2 AC 557, in particular at para 33 (Lord Nicholls of Birkenhead) and paras 113 114 and 121 124 (Lord Rodger of Earlsferry). This point is reinforced by the fact that where Parliament intended a proportionality requirement to apply in any provision of the 2010 Act it clearly said so: see also the express provisions setting out a proportionality requirement in sections 13(2), 19(2), 158(2) and 159. The omission of such a requirement from section 193(2)(b) was a deliberate choice by Parliament which constituted a fundamental feature of the legislation. The same reasoning prevents the court from interpreting section 193(2)(b) as including a proportionality requirement by reason of the Marleasing interpretive obligation in EU law. As with section 3(1) of the HRA, that obligation only requires and permits a sympathetic construction of national legislation to be adopted so as to produce compatibility with EU law when it is possible for the national legislation to be interpreted in that way. The analogy with section 3(1) of the HRA is a close one and the boundaries of the interpretive obligation are essentially the same: see Ghaidan v Godin Mendoza, paras 45 (Lord Steyn), 122 (Lord Rodger) and 145 (Baroness Hale). In any event, to the extent that Mr Wise sought to rely on the Race Directive and the Marleasing interpretive obligation, his submission fails for the reasons alluded to by Lewison LJ at para 54. No right of the appellant was engaged under the Race Directive, as I have also concluded under issue (5) above. It is true that, as Lewison LJ noted, other people in other circumstances might have rights under that Directive which are affected by a charitys actions taken in reliance on section 193(2)(b); but that does not assist the appellant in her case. The proper approach to construction is that legislation should be read and given effect in a particular case according to its ordinary meaning, unless the person who is affected by it can show that this would be incompatible with their Convention rights under the HRA or some provision of EU law as applied to their case. Only then do the special interpretive obligations under section 3(1) of the HRA or under the Marleasing principle come into play to authorise the court to search for a conforming interpretation at variance with the ordinary meaning of the legislation. This means that the same legislative provision might be given a different interpretation in different cases, depending on whether Convention rights or EU law are applicable in the case or not. Although at first glance this might seem odd, in fact it is not. It simply reflects the fact that in the one case circumstances are such that an additional interpretive obligation has to be taken into account, but in the other case no such obligation is in play: see R (Hurst) v London Northern District Coroner [2007] UKHL 13; [2007] 2 AC 189, para 1 (Lord Bingham of Cornhill), paras 9 and 12 15 (Lord Rodger) and para 52 (Lord Brown of Eaton under Heywood); and Gingi v Secretary of State for Work and Pensions [2001] EWCA Civ 1685; [2002] 1 CMLR 20, paras 41 47 per Arden LJ (as she then was). If the position were otherwise, Convention rights and rights under EU law would be given disproportionate effect in domestic law, and statutory interpretation would become an exercise in the imaginative construction of theoretical cases in which such rights might be in issue in order to change the interpretation of legislation in cases where they are not. Like Lewison LJ, I have no hesitation in rejecting Mr Wises further argument that it is necessary to imply a proportionality requirement into section 193(2)(b) to avoid absurdity. As explained above, there is nothing absurd about the way in which Parliament has framed the section 193(2)(b) limb of the exemption for charities. Having reached the conclusion that the interpretation of section 193(2)(b) is clear whether or not article 14 of the ECHR is applicable, it is not necessary to reach a view on issue (2) (whether the current circumstances fall within the ambit of article 8). It has often been observed that the question of what falls within the ambit of article 8 and other Convention rights so as to bring article 14 into operation is a difficult and rather opaque area: see the review of the authorities in R (Joint Council for the Welfare of Immigrants) v Secretary of State for the Home Department [2020] EWCA Civ 542, paras 97 111 (Hickinbottom LJ). I think this question should be left to be decided in another case where it may be determinative. We were not taken to all the relevant authorities and there was little debate before us on this issue, so I do not think we should venture to try to make any definitive statement about it. However, this should not be taken as endorsement of the conclusion of the Court of Appeal that the present case falls outside the ambit of article 8. A number of factors might be relevant in relation to that issue. The fact that the appellant and her children were already housed, on which the Court of Appeal placed weight, is one. But I have reservations whether that factor is necessarily determinative in circumstances where the adequacy of the living accommodation available to them as a family, as compared with others, is in issue. On the other hand, it is also potentially relevant that AIHA is not part of the state and that no case has been made out that it is a public authority within the meaning of section 6 of the HRA, so that what is in issue is the ambit of article 8 so far as concerns positive obligations of the state under that provision to intervene in relationships between private persons. It might be argued that this makes the connection with article 8 more tenuous, and that such a tenuous connection is not sufficient. I think that we should leave the point open in this case. Conclusion For the reasons given above, I would dismiss the appeal. In summary, the judgment of the Divisional Court on the issue of proportionality, in so far as it is relevant to the statutory defences in sections 158 and 193 of the 2010 Act, cannot be faulted. Accordingly, those defences have rightly been found to apply in relation to AIHA. Further and in any event, the Court of Appeal was right to conclude that, on its proper interpretation, the statutory defence based on section 193(2)(b) of the 2010 Act does not include an implied requirement of proportionality. Accordingly, the Court of Appeal was right to conclude that AIHA benefited from that defence, whatever the position on the issue of proportionality. The appellants new claim based on the Race Directive fails. LADY ARDEN: The Court of Appeal in this case was careful to hold that in relation to the issue as to the proportionality of AIHAs allocation policy the Divisional Court was entitled to make its evaluation of the relevant factors and that there was no basis on which its evaluation could be set aside (per Lewison LJ at paras 63 to 68) for the reasons which Lewison LJ gave. Lord Sales, giving the first judgment in this case, endorses that conclusion, as do I. Lord Sales then sets out the reasons why he agrees with the Divisional Court at paras 76 to 88. What falls from my Lord is illuminating and valuable, but it does not in my judgment diminish the importance of the point made by Lewison LJ that the evaluation made by the Divisional Court was one which they were entitled to make and could not be set aside on appeal. The point made by Lewison LJ is not changed by the fact that the appellate court might have reached some other conclusion, nor yet by the fact that the appellate court would have reached the same conclusion. The function of the appellate court is simply one of review. It follows that it is not necessary for this court to express its own view, nor can its view alter the conclusion arrived at by the Divisional Court. Indeed, I would at least in the generality of cases, agree with Lewison LJ at para 66 of his judgment that if the court at first instance makes no error and there is no flaw in its judgment, the appellate court should not make its own assessment of proportionality. There may be exceptional circumstances when it is necessary to do so but for my part it has not been suggested that this case was one of them. On that basis, I agree with the judgment of Lord Sales. |
This is the judgment of the court. This case is about the proper approach to deciding who has been responsible for harming a child in proceedings taken to protect that child, and others in the family, from harm. It raises profound issues: on the one hand, children need to be protected from harm; but on the other hand, both they and their families need to be protected from the injustice and potential damage to their whole futures done by removing children from a parent who is not, in fact, responsible for causing them any harm at all. The facts of this case present us with that dilemma in an unusually stark form. The facts Because we have decided to allow this appeal and send the case back to be decided afresh, we should say only enough about the facts to explain how the dilemma arises. We shall use pseudonyms for the two children concerned, one who has been harmed and one who has not. Jason was born on 19 May 2007. On 15 June 2007, when he was just four weeks old, he was found to have bruising on his arms and face, which the doctors immediately thought was caused non accidentally and not, as the mother suggested, by the baby pinching himself or sleeping on his dummy. Jason has not lived with his family since then, although he has had frequent and good quality contact with his mother. Jason was living with his mother and father at the time and described by the doctors as thriving. Both parents said that it was the father who had got up to attend to the baby when he woke up on the morning when the bruises were noticed. The mother took the baby to the clinic that morning and pointed them out to the health visitor. It was not possible to give precise timing for the bruises but it was not suggested that they were old or of different ages. They could have been inflicted by both parents, but the judge found it more likely that only one of them had inflicted them. The bruises had not been there for so long, nor would they have caused the baby such pain and distress, that the other parent must have known that he was being harmed. This was not, therefore, a case where one parent had failed to protect the child from harm caused by the other. It was, colloquially, a pure whodunit. The other child is William, born on 12 July 2008, while the proceedings to protect Jason were in train. By then the parents had separated, although they were still in touch with one another. The father had stopped visiting Jason, had withdrawn from co operation with the social workers and with his solicitors, and played no further part in the proceedings. He has parental responsibility for Jason but not for William. William was removed from his mother shortly after birth and placed with the same foster carer as his brother. He has never been harmed. The case for removing him from his mother rests on the likelihood of his being harmed in the future if he is returned to her. The law In this country we take the removal of children from their families extremely seriously. The Children Act 1989 was passed almost a decade before the Human Rights Act 1998, but its provisions were informed by the United Kingdoms obligations under article 8 and article 6 of the European Convention on Human Rights. These affect both the test and the process for intervening in the family lives of children and their parents. As to the test, it is not enough that the social workers, the experts or the court think that a child would be better off living with another family. That would be social engineering of a kind which is not permitted in a democratic society. The jurisprudence of the European Court of Human Rights requires that there be a pressing social need for intervention and that the intervention be proportionate to that need. Before the court can consider what would be best for the child, therefore, section 31(2) of the 1989 Act requires that it be satisfied of the so called threshold conditions: (a) that the child concerned is suffering, or is likely to suffer, significant harm; and (b) that the harm, or likelihood of harm, is attributable to (i) the care given to the child, or likely to be given to him if the order were not made, not being what it would be reasonable to expect a parent to give to him; or (ii) the childs being beyond parental control. The leading case on the interpretation of these conditions is the decision of the House of Lords in Re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563. Three propositions were established which have not been questioned since. First, it is not enough that the court suspects that a child may have suffered significant harm or that there was a real possibility that he did. If the case is based on actual harm, the court must be satisfied on the balance of probabilities that the child was actually harmed. Second, if the case is based on the likelihood of future harm, the court must be satisfied on the balance of probabilities that the facts upon which that prediction was based did actually happen. It is not enough that they may have done so or that there was a real possibility that they did. Third, however, if the case is based on the likelihood of future harm, the court does not have to be satisfied that such harm is more likely than not to happen. It is enough that there is a real possibility, a possibility that cannot sensibly be ignored having regard to the nature and gravity of the feared harm in the particular case (per Lord Nicholls of Birkenhead, at p 585F). Thus the law has drawn a clear distinction between probability as it applies to past facts and probability as it applies to future predictions. Past facts must be proved to have happened on the balance of probabilities, that is, that it is more likely than not that they did happen. Predictions about future facts need only be based upon a degree of likelihood that they will happen which is sufficient to justify preventive action. This will depend upon the nature and gravity of the harm: a lesser degree of likelihood that the child will be killed will justify immediate preventive action than the degree of likelihood that the child will not be sent to school. The House of Lords was invited to revisit the standard of proof of past facts in Re B (Children) (Care Proceedings: Standard of Proof) [2008] UKHL 35, [2009] AC 11, where the judge had been unable to decide whether the alleged abuse had taken place. The suggestion that it would be sufficient if there were a real possibility that the child had been abused was unanimously rejected. The House also reaffirmed that the standard of proof of past facts was the simple balance of probabilities, no more and no less. The problem had arisen, as Lord Hoffmann explained, because of dicta which suggested that the standard of proof might vary with the gravity of the misconduct alleged or even the seriousness of the consequences for the person concerned (para 5). He pointed out that the cases in which such statements were made fell into three categories. In the first were cases which the law classed as civil but in which the criminal standard was appropriate. Into this category came sex offender orders and anti social behaviour orders: see B v Chief Constable of Avon and Somerset Constabulary [2001] 1 WLR 340 and R (McCann) v Crown Court at Manchester [2002] UKHL 39, [2003] 1 AC 787. In the second were cases which were not about the standard of proof at all, but about the quality of evidence. If an event is inherently improbable, it may take better evidence to persuade the judge that it has happened than would be required if the event were a commonplace. This was what Lord Nicholls was discussing in Re H (Minors), above, at p 586. Yet, despite the care that Lord Nicholls had taken to explain that having regard to the inherent probabilities did not mean that the standard of proof was higher, others had referred to a heightened standard of proof where the allegations were serious. In the third category, therefore, were cases in which the judges were simply confused about whether they were talking about the standard of proof or the role of inherent probabilities in deciding whether it had been discharged. Apart from cases in the first category, therefore, the time has come to say, once and for all, that there is only one civil standard of proof and that is proof that that the fact in issue more probably occurred than not (para 13). This did, of course, leave a role for inherent probabilities in considering whether it was more likely than not that an event had taken place. But, as Lord Hoffmann went on to point out at para 15, there was no necessary connection between seriousness and inherent probability: It would be absurd to suggest that the tribunal must in all cases assume that serious conduct is unlikely to have occurred. In many cases, the other evidence will show that it was all too likely. If, for example, it is clear that a child was assaulted by one or other of two people, it would make no sense to start ones reasoning by saying that assaulting children is a serious matter and therefore neither of them is likely to have done so. The fact is that one of them did and the question for the tribunal is simply whether it is more probable that one rather than the other was the perpetrator. Lady Hale made the same point, at para 73: It may be unlikely that any person looking after a baby would take him by the wrist and swing him against the wall, causing multiple fractures and other injuries. But once the evidence is clear that that is indeed what has happened to the child, it ceases to be improbable. Someone looking after the child at the relevant time must have done it. The inherent improbability of the event has no relevance to deciding who that was. The simple balance of probabilities test should be applied. None of the parties in this case has invited the Supreme Court to depart from those observations, nor have they supported the comment made in the Court of Appeal that Re B was a sweeping departure from the earlier authorities in the House of Lords in relation to child abuse, most obviously the case of Re H ([2009] EWCA Civ 1048, para 14). All are agreed that Re B reaffirmed the principles adopted in Re H while rejecting the nostrum, the more serious the allegation, the more cogent the evidence needed to prove it, which had become a commonplace but was a misinterpretation of what Lord Nicholls had in fact said. Re B was not a new departure in any context. Lord Hoffmann was merely repeating with emphasis what he had said in Secretary of State for the Home Department v Rehman [2001] UKHL 47, [2003] 1 AC 153, at para 55. A differently constituted House of Lords applied the same approach in Re D (Secretary of State for Northern Ireland intervening) [2008] UKHL 33, [2008] 1 WLR 1499. In Re B, the House also declined an invitation to overrule the decision of the Court of Appeal in Re M and R (Minors) (Sexual Abuse: Expert Evidence) [1996] 4 All ER 239. This was concerned with the stage after the court is satisfied that the threshold has been crossed. The court has then to decide what order, if any, to make. The welfare of the child is the paramount consideration: 1989 Act, s 1(1). In deciding whether or not to make a care or supervision order, the court must have regard in particular to the so called checklist of factors: 1989 Act, s 1(3), (4). These include (e) any harm which he has suffered or is at risk of suffering. In Re M and R, the Court of Appeal determined that section 1(3)(e) should be interpreted in the same way as section 31(2)(a). The court must reach a decision based on facts, not on suspicion or doubts. Butler Sloss LJ said this: [Counsels] point was that if there is a real possibility of harm in the past, then it must follow (if nothing is done) that there is a risk of harm in the future. To our minds, however, this proposition contains a non sequitur. The fact that there might have been harm in the past does not establish the risk of harm in the future. The very highest it can be put is that what might possibly have happened in the past means that there may possibly be a risk of the same thing happening in the future. Section 1(3)(e), however, does not deal with what might possibly have happened or what future risk there may possibly be. It speaks in terms of what has happened or what is at risk of happening. Thus, what the court must do (when the matter is in issue) is to decide whether the evidence establishes harm or the risk of harm. In agreeing with this approach in Re B, at para 56, Lady Hale commented that in such a case, as indicated by Butler Sloss LJ , the risk is not an actual risk to the child but a risk that the judge has got it wrong. We are all fallible human beings, very capable of getting things wrong. But until it has been shown that we have, it has not been shown that the child is in fact at any risk at all. Re M and R was also approved by Lord Nicholls in Re O and another (Minors) (Care: Preliminary Hearing) [2003] UKHL 18, [2004] 1 AC 523, a case to which we shall return. The House in Re B also recognised that courts and local authorities have different roles to play in protecting children from harm. It is worth re emphasising this, given the understandable concerns in the wake of the Baby P case that social workers and other professionals were not being sufficiently active in their protective role, and the resulting increase in the numbers of care proceedings. Social workers are the detectives. They amass a great deal of information about a child and his family. They assess risk factors. They devise plans. They put the evidence which they have assembled before a court and ask for an order. Article 6 of the European Convention on Human Rights requires that In the determination of his civil rights and obligations, . everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. The court subjects the evidence of the local authority to critical scrutiny, finds what the facts are, makes predictions based upon the facts, and balances a range of considerations in deciding what will be best for the child. We should no more expect every case which a local authority brings to court to result in an order than we should expect every prosecution brought by the CPS to result in a conviction. The standard of proof may be different, but the roles of the social workers and the prosecutors are similar. They bring to court those cases where there is a good case to answer. It is for the court to decide whether the case is made out. If every child protection case were to result in an order, it would mean either that local authorities were not bringing enough cases to court or that the courts were not subjecting those cases to a sufficiently rigorous scrutiny. The whodunit problem So far the position is plain. But the threshold criteria do not in terms require that the person whose parental responsibility for the child is to be interfered with or even taken away by the order be responsible for the harm which the child has suffered or is likely to suffer in the future. It requires simply that the harm, or likelihood of harm, is attributable to the care given to the child, or likely to be given to him if the order were not made, not being what it would be reasonable to expect a parent to give to him. Clearly, the object is to limit intervention to certain kinds of harm harm which should not happen if a child is being looked after properly. But is it also intended to limit intervention to cases where the person whose rights are to be interfered with bears some responsibility for the harm? It cannot have been intended that a parent whose child has been harmed as a result of a lack of proper care in a hospital or at school should be at risk of losing her child. The problem could be approached through the welfare test, because removal from home would not be in the best interests of such a child. However, because of the risk of social engineering, the threshold criteria were meant to screen out those cases where the family should not be put at any risk of intervention. Hence attention has focussed on the attributability criterion. In the case confusingly reported in the Law Reports as Lancashire County Council v B [2000] 2 AC 147, but in the All England Law Reports as Lancashire County Council v A [2000] 2 All ER 97, the House of Lords considered what is meant by the care given to the child. Does it mean only the care given by the parents or primary carers or does it mean the care given by anyone who plays a part in the childs care? Lord Nicholls, with whom Lord Slynn, Lord Nolan and Lord Hoffmann agreed, found that it referred primarily to the former. But if, as in that case, the care of the child was shared between two households and the judge could not decide which was responsible for the harm suffered by the child, the phrase is apt to embrace not merely the care given by the parents or other primary carers; it is apt to embrace the care given by any of the carers (p 166). Thus the criteria were satisfied in respect of a child, A, who had been injured, even though this might have been attributable to the care she had received from her childminder rather than from her parents. Lord Clyde put the test in this helpful way, at p 169C, with the same result: That the harm must be attributable to the care given to the child requires that the harm must be attributable to the acts or omissions of someone who has the care of the child and the acts or omissions must occur in the course of the exercise of that care. To have the care of a child comprises more than being in a position where a duty of care towards the child may exist. It involves the undertaking of the task of looking after the child. However, it is worth noting that the Court of Appeal had confirmed that the criteria were not satisfied in respect of the childminders child, B, because he had not been harmed at all. The only basis for suggesting that there was any likelihood of harm to him was the possibility that his mother had harmed the other child and that had not been proved: Re H applied. The local authority did not appeal against this. Re O and another (Minors)(Care: Preliminary Hearing) [2003] UKHL 18, [2004] 1 AC 523 was concerned with the more common problem, where the child has been harmed at the hands of one of his parents but the court cannot decide which. The attributability condition was satisfied. Furthermore, when considering the welfare test, the court had to proceed on the basis that the child was at risk. Lord Nicholls, with whom all other members of the Committee agreed, said this, at para 27: Quite simply, it would be grotesque if such a case had to proceed at the welfare stage on the footing that, because neither parent, considered individually, has been proved to be the perpetrator, therefore the child is not at risk from either of them. This would be grotesque because it would mean the court would proceed on the footing that neither parent represents a risk even though one or other of them was the perpetrator of the harm in question. Lord Nicholls went on, at para 32, to give the following guidance, on the assumption that the hearing would be split into a fact finding and a disposal stage and that each might be heard by a different judge: the . the judge at the disposal hearing will take into account any views expressed by the judge at the preliminary hearing on the likelihood that one carer was or was not the perpetrator, or a perpetrator, of injuries. Depending on the inflicted circumstances, these views may be of considerable value in deciding the outcome of the application: for instance, whether the child should be rehabilitated with his mother. In Re B, Lady Hale commented as follows at para 61: The decisions in In re H, Lancashire County Council v B [2000] 2 AC 147, and In re O [2004] 1 AC 523 fit together as a coherent whole. The court must first be satisfied that the harm or likelihood of harm exists. Once that is established, . ,the court has to decide what outcome will be best for the child. It is very much easier to decide upon a solution if the relative responsibility of the childs carers for the harm which she or another child has suffered can also be established. But the court cannot shut its eyes to the undoubted harm which has been suffered simply because it does not know who was responsible. The real answers to the dilemma posed by those cases lie elsewhere first, in a proper approach to the standard of proof, and second, in ensuring that the same judge hears the whole case. Split hearings are one thing; split judging is quite another. We are told that practice has now changed and that, barring accidents, the same judge does conduct both parts of a split hearing. Nevertheless, the main object of splitting the hearing is to enable facts to be found. If the threshold is not crossed, the case can be dismissed at that stage. If it is crossed, the professionals can base both their assessments and their further work with the family upon the facts found. It is not at all uncommon for parents to become much more open with the professionals when faced with the judges clear findings based upon what the evidence shows. Hence there should always be a judgment to explain his findings at that stage. These proceedings It was necessary to give the above account of the development of the law in order to understand what happened in these proceedings. The case was originally identified as suitable for a split hearing; then it was decided to hold a composite hearing; but for regrettable practical reasons, the hearing was split once more. By that stage, the father was playing no part, but for some unknown reason the local authority decided not to issue a witness summons to require his attendance. That is regrettable because the judge might well have found it easier to make clear findings had he given evidence. The mother played a full part in the proceedings and in the assessments, but only accepted that the bruises were non accidentally caused after the possibility of a blood disorder had effectively been ruled out. The judge heard evidence over three days in January 2008 and three further days in March. She handed down a detailed judgment in note form on 3 April. This was before the House of Lords decision in Re B. At the outset, under the heading Test, she directed herself as follows: The test I have applied in relation to these findings is that set out in the House of Lords case of [Re H] of 1996. The standard of proof I apply is on the balance of probability. The allegations in this case are very serious indeed and in many respects are also very unusual. When I apply the appropriate standard of proof, it has to be based on evidence of reliability and cogency equivalent to the gravity of the allegations. She then listed five questions, three of which are relevant to the issue before this Court: first, whether the child had suffered non accidental injury; second whether the perpetrator could be identified; and third even if the perpetrator cannot be identified, can either of the parents be excluded as a perpetrator? However, having concluded that the injuries were non accidental, she did not in terms ask herself whether she could identify the perpetrator. She simply listed the various factors which she took into account in relation to each parent. She indicated at the outset of her list relating to the father that there is a high index of suspicion in relation to the father and concluded that he could not be ruled out. There was no such index in relation to the mother but for a variety of reasons the judge also concluded that the mother could not be ruled out. The final hearing was listed for 5 June but could not proceed. As suggested in Re O, the judge was invited to give an indication of the relative likelihood of father or mother being responsible for the injuries, in order to assist with the assessment process. In oral exchanges she indicated that it was more likely that the father was the perpetrator than the mother. In a written Adjunct to Judgment she explained that Invidious though it is to be too specific, but to help further assessments, I am prepared to say that I feel it 60% likely that the father injured the child and 40% likely that it was the mother. The final hearing eventually took place before the same judge in December 2008 with judgment in January 2009. Part of the reason for the delay was that the mother had been unwell following the birth of her second child, William, in July. At the final hearing, the judge was invited to revisit her findings in the light of Re B, in which judgment was given on 11 June 2008. She declined to say that her finding meant that the father was the perpetrator of the injuries. She observed that: When one is deciding these issues, a judge frequently reluctantly comes to the conclusion that he cannot decide who is to blame between two parents or among more than two people who have had care of the child over the relevant period. However, although unable to form a definitive decision to the requisite standard, a judge can still have an impression, falling short of a finding, that the propensity of the parties and the surrounding circumstances make it more likely that it was one party than another. Hence the mother was not absolved as a really possible or likely perpetrator. This meant that the threshold was crossed, not only in relation to the child who had suffered harm, but also in relation to the child who had not. The fact that there was a real possibility that she had caused the injuries to Jason meant that there was a real possibility that she would injure William. After considering the welfare factors she concluded that the mothers vulnerable personality was such that she would need therapy in order to make the necessary changes so that she could provide a safe and stable upbringing for the children. Their lives could not be put on hold in the meantime. Hence the judge approved the care plan to place them both for adoption and made care and placement orders in respect of both children. She did, however, give the mother permission to appeal but this was not included in the original order drawn up by the court. Lord Justice Wall also gave permission to appeal, observing that the case provides a useful opportunity for the Court of Appeal to resolve a point which has arisen following the decision of the House of Lords in Re B, namely (1) if only parents are in the frame for having injured a child but (2) the judge cannot as between parents identify the perpetrator of the injuries, can that judge (3) apportion likely responsibility between them? Before the Court of Appeal, however, this was not the main issue. It was argued that, following Re B, the test for identifying the perpetrator was the balance of probabilities and that the effect of the Adjunct to judgment was that this judge had in fact identified the father. The appeal was dismissed: [2009] EWCA Civ 1048. Identifying the perpetrator: the standard of proof The first question listed in the statement of facts and issues is whether it is now settled law that the test to be applied to the identification of perpetrators is the balance of probabilities. The parties are agreed that it is and they are right. It is correct, as the Court of Appeal observed, that Re B was not directly concerned with the identification of perpetrators but with whether the child had been harmed. However, the observations of Lord Hoffmann and Lady Hale, quoted at paragraph 12 above, make it clear that the same approach is to be applied to the identification of perpetrators as to any other factual issue in the case. This issue shows quite clearly that there is no necessary connection between the seriousness of an allegation and the improbability that it has taken place. The test is the balance of probabilities, nothing more and nothing less. Of course, it may be difficult for the judge to decide, even on the balance of probabilities, who has caused the harm to the child. There is no obligation to do so. As we have already seen, unlike a finding of harm, it is not a necessary ingredient of the threshold criteria. As Lord Justice Wall put it in Re D (Care Proceedings: Preliminary Hearings) [2009] EWCA Civ 472, [2009] 2 FLR 668, at para 12, judges should not strain to identify the perpetrator as a result of the decision in Re B: If an individual perpetrator can be properly identified on the balance of probabilities, then . it is the judges duty to identify him or her. But the judge should not start from the premise that it will only be in an exceptional case that it will not be possible to make such an identification. There are particular benefits in making such a finding in this context, especially where there is a split hearing. Miss Frances Judd QC, on behalf of the childrens guardian in this case, has stressed that the guardian would rather have a finding on the balance of probabilities than no finding at all. There are many reasons for this. The main reason is that it will promote clarity in identifying the future risks to the child and the strategies necessary to protect him from them. For example, a different care plan may be indicated if there is a risk that the parent in question will ill treat or abuse the child from the plan that may be indicated if there is a risk that she will be vulnerable to relationships with men who may ill treat or abuse the child. Another important reason is that it will enable the professionals to work with the parent and other members of the family on the basis of the judges findings. As the Court of Appeal said in Re K (Non Accidental Injuries: Perpetrator: New Evidence) [2004] EWCA Civ 1181, [2005] 1 FLR 285, at para 55: It is paradigmatic of such cases that the perpetrator denies responsibility and that those close to or emotionally engaged with the perpetrator likewise deny any knowledge of how the injuries occurred. Any process, which encourages or facilitates frankness, is, accordingly, in our view, to be welcomed in principle. Often, it is not only the parents, but the grandparents and other members of the family, who may be the best resource to protect the child in the future but who are understandably reluctant to accept that someone close to them could be responsible for injuring a child. Once that fact is brought home to them by a clear finding based upon the evidence, they may be able to work with the professionals to keep the child within the family. Re K also suggested, at para 56, that there would be long term benefits for the child, whatever the outcome of the proceedings: . we are also of the view that it is in the public interest that children have the right, as they grow into adulthood, to know the truth about who injured them when they were children, and why. Children who are removed from their parents as a result of non accidental injuries have in due course to come to terms with the fact that one or both of their parents injured them. This is a heavy burden for any child to bear. In principle, children need to know the truth if the truth can be ascertained. If the judge cannot identify a perpetrator? The second and third questions in the statement of facts and issues ask whether judges should refrain from seeking to identify perpetrators at all if they are unable to do so on the civil standard and whether they should now be discouraged from expressing a view on the comparative likelihood as between possible perpetrators. These appear to be linked but they are distinct. As to the second, if the judge cannot identify a perpetrator or perpetrators, it is still important to identify the pool of possible perpetrators. Sometimes this will be necessary in order to fulfil the attributability criterion. If the harm has been caused by someone outside the home or family, for example at school or in hospital or by a stranger, then it is not attributable to the parental care unless it would have been reasonable to expect a parent to have prevented it. Sometimes it will desirable for the same reasons as those given above. It will help to identify the real risks to the child and the steps needed to protect him. It will help the professionals in working with the family. And it will be of value to the child in the long run. In North Yorkshire County Council v SA [2003] EWCA Civ 839, [2003] 2 FLR 849, the child had suffered non accidental injury on two occasions. Four people had looked after the child during the relevant time for the more recent injury and a large number of people might have been responsible for the older injury. The Court of Appeal held that the judge had been wrong to apply a no possibility test when identifying the pool of possible perpetrators. This was far too wide. Dame Elizabeth Butler Sloss P, at para 26, preferred a test of a likelihood or real possibility. Miss Susan Grocott QC, for the local authority, has suggested that this is where confusion has crept in, because in Re H this test was adopted in relation to the prediction of the likelihood of future harm for the purpose of the threshold criteria. It was not intended as a test for identification of possible perpetrators. That may be so, but there are real advantages in adopting this approach. The cases are littered with references to a finding of exculpation or to ruling out a particular person as responsible for the harm suffered. This is, as the President indicated, to set the bar far too high. It suggests that parents and other carers are expected to prove their innocence beyond reasonable doubt. If the evidence is not such as to establish responsibility on the balance of probabilities it should nevertheless be such as to establish whether there is a real possibility that a particular person was involved. When looking at how best to protect the child and provide for his future, the judge will have to consider the strength of that possibility as part of the overall circumstances of the case. As to the third question, times have changed since Re O. Barring unforeseen accidents, the same judge will preside over both parts of the hearing. While it is helpful to have a finding as to who caused the injuries if such a finding can be made, the guardians view is that it is positively unhelpful to have the sort of indication of percentages that the judge was invited to give in this case. Lord Justice Thorpe suggested, [2009] EWCA Civ 1048, para 17, that judges should be cautious about amplifying a judgment in which they have been unable to identify a perpetrator: better to leave it thus. We agree. The unasked question If the judge can identify a perpetrator on the balance of probabilities, what is to be done about the risk that he may be wrong and that some one else was in fact responsible? We are indeed all fallible human beings. We can make mistakes, however hard we try to pay careful attention to the quality of the evidence before us and reach findings which are rationally based upon it. However, once the court has identified a perpetrator, the risk is not a proven risk to the child but a risk that the judge has got it wrong. Logically and sensibly, although the judge cannot discount that risk while continuing to hear the case, he cannot use it to conclude that there is a proven risk to the child. But all the evidence (if accepted by the judge) relating to all the risk factors that the judge has identified remains relevant in deciding what will be best for the child. And he must remain alive to the possibility of mistake and be prepared to think again if evidence emerges which casts new light on the evidence which led to the earlier findings. It is now well settled that a judge in care proceedings is entitled to revisit an earlier identification of the perpetrator if fresh evidence warrants this (and this Court saw an example of this in the recent case of Re I (A Child) [2009] UKSC 10). The guardian also submits that the professionals will find it easier to work with this approach. It is important not to exaggerate the extent of the problem. It only really arises in split hearings, which were not originally envisaged when the Children Act was passed. In a single hearing the judge will know what findings of fact have to be made to support his conclusions both as to the threshold and as to the future welfare of the child. Moreover, cases rarely come as neatly packaged as this one does. In most cases, the injuries are such that, even if one parent was not responsible for causing them, she was undoubtedly responsible for failing to protect the child from the person who did cause them. In many cases, there are other risks to the child besides the risk of physical injury. The evidence which is relevant to identifying the perpetrator will also be relevant to identifying the other risks to the child and to assessing what will be best for him in the future. But clearly the steps needed to protect against some risks will be different from the steps needed to protect against others. And the overall calculus of what will be best for the child in the future will be affected by the nature and extent of the identified risks. There are many, many factors bearing upon the childs best interests and the identification of risks is only one of them. The conclusion in this case We have every sympathy for the judge, who was only repeating the mantra which many other judges at every level had repeated in the past. But it is clear that she did misdirect herself on the standard of proof at the fact finding hearing. Because she later said that she had simply been unable to decide, we do not think that we can accept the invitation of Mr Anthony Hayden QC, on behalf of the mother, to treat her Adjunct to judgment as a finding that the father was the perpetrator. That was not what she thought she was doing. However, that was an ex post facto rationalisation on her part. We cannot know what finding she would have made had she directed herself correctly in the first place. It is only right, for the sake of these children and their mother, that they should have the whole case put before a different judge who can decide the matter on the right basis. There is a further reason to remit the case. The judge found the threshold crossed in relation to William on the basis that there was a real possibility that the mother had injured Jason. That, as already explained, is not a permissible approach to a finding of likelihood of future harm. It was established in Re H and confirmed in Re O, that a prediction of future harm has to be based upon findings of actual fact made on the balance of probabilities. It is only once those facts have been found that the degree of likelihood of future events becomes the real possibility test adopted in Re H. It might have been open to the judge to find the threshold crossed in relation to William on a different basis, but she did not do so. The case may look very different now that the mothers life has moved on and in the mean time, thankfully, the children have been well protected from harm. The appeal is therefore allowed and the case remitted for a complete rehearing before a different judge. |
The decision of the European Court of Human Rights in Neulinger and Shuruk v Switzerland [2011] 1 FLR 122 was greeted with concern, nay even consternation in some quarters, because of its possible impact upon the application of the Hague Convention on the Civil Aspects of International Child Abduction 1980 (the Hague Convention). The Swiss Federal Court had rejected a mothers claim, under article 13b of the Hague Convention, that there was a grave risk that returning the child to Israel would lead to physical or psychological harm or otherwise place him in an intolerable situation. Nevertheless, the Grand Chamber of the European Court held that to enforce the order would be an unjustifiable interference with the right to respect for the private and family lives of mother and child, protected by article 8 of the European Convention on Human Rights (the ECHR). The Court of Appeal granted permission to appeal in the case before us, because it was high time for this prominent case to be considered by the full court [of Appeal] for the guidance of the judges of the Division and specialist practitioners: [2011] EWCA Civ 361, para 5. This Court gave permission for essentially the same reason, as we thought it inevitable that sooner or later the inter relationship of these two international instruments, both of them now translated into the law of the United Kingdom, would have to be resolved. But there were two other considerations. First, article 3(1) of the United Nations Convention on the Rights of the Child 1989 (the UNCRC) requires that in all actions concerning children, their best interests shall be a primary consideration. That obligation formed a prominent part of the Strasbourg courts reasoning in Neulinger. Its inter relationship with article 8 of the ECHR was recently considered in this Court in ZH (Tanzania) v Secretary of State for the Home Department [2011] UKSC 4, [2011] 2 WLR 148. Second, article 13b has not previously been directly in issue in this Court or in the House of Lords, although there were important observations about it in two House of Lords cases, Re D (A Child) (Abduction: Rights of Custody) [2006] UKHL 51, [2007] 1 AC 619 and Re M (Children) (Abduction; Rights of Custody) [2007] UKHL 55, [2008] 1 AC 1288. In essence, Mr Henry Setright QC, launches a three pronged argument on behalf of the abducting mother: (i) Article 3(1) of UNCRC applies just as much to the decision to return a child to her place of habitual residence under the Hague Convention as it does to any other decision concerning a child. The current approach to article 13b, at least in the courts of England and Wales, does not properly respect the requirement that the best interests of the child be a primary consideration. (ii) That argument is supported by the decision of the Grand Chamber in Neulinger, which is the principal authority on the primacy of the best interests of the child in the interpretation and application of the Convention rights. (iii) In any event, the purposes of the Hague Convention are properly achieved if article 13b is interpreted and applied in accordance with its own terms. There is no need for the additional glosses which have crept into its interpretation in English law. It is quite narrow enough as it is. In these arguments, he is supported by Baroness Scotland QC, on behalf of the half sister of the two children whose return is sought. She points out that the decision to return those children to Norway does concern their older sister, who is closely involved in their day to day care, so that their sisters welfare should also be a primary consideration. They also enjoy family life together, so that to separate them would amount to an interference in their right to respect for that family life. Ultimately, as we shall see, there is a great deal of common ground between Mr Setright and Baroness Scotland, on the one hand, and Mr James Turner QC, who appears for the father, on the other. They differ, of course, on the outcome of the case. We have also had written and oral interventions from Reunite and from the AIRE Centre and a written intervention from the Womens Aid Federation of England. All parties recognise that the context in which these cases arise has changed in many ways from the context in which the Hague Convention was originally drafted. There is every indication that the paradigm case which the original begetters of the Convention had in mind was a dissatisfied parent who did not have the primary care of the child snatching the child away from her primary carer (see, eg, TB v JB (Abduction: Grave Risk of Harm) [2001] 2 FLR 515, para 43; PR Beaumont and PE McEleavy, The Hague Convention on International Child Abduction (1999), p 3). Hence the Convention draws a deliberate distinction (in articles 3 and 5) between rights of custody and rights of access, and (in articles 3b and 13a) between rights of custody which are being exercised and rights which are not, and protects the former but only to a limited extent the latter. Including a non custodial parents right to veto travel abroad within rights of custody has been a more recent interpretation (discussed in Re D). Nowadays, however, the most common case is a primary carer whose relationship with the other parent has broken down and who leaves with the children, usually to go back to her own family. There are many more international relationships these days than there were even in the 1970s when the Convention was negotiated, so increasingly returning to her own family means crossing an international boundary. International travel is also much easier and cheaper, especially within the European Union where border controls are often non existent. It is also common for such abducting parents to claim that the parental relationship has broken down because of domestic abuse and ill treatment by the other parent. That is why she says she had to get away and that is why she says she had to do so secretly. She was too afraid to do otherwise and she is too afraid to go back. Critics of the Convention have claimed that the courts are too ready to ignore these claims, too reluctant to acknowledge the harm done to children by witnessing violence between their parents, and too willing to accept that the victim, if she is a victim, will be adequately protected in the courts of the requesting country: see, for example, M Kaye, The Hague Convention and the Flight from Domestic Violence: How Women and Children are being returned by Coach and Four (1999) 13 Int J Law, Policy and Family 191. In particular, it is said, the courts in common law countries are too ready to accept undertakings given to them by the left behind parent; yet these undertakings are not enforceable in the courts of the requesting country and indeed the whole concept of undertakings is not generally understood outside the common law world. At all events, the change in the likely identity of the abductor places a premium on the efficacy of protective measures which was not so apparent when the Convention was signed. Yet the parties also understand that there is no easy solution to such problems. The first object of the Convention is to deter either parent (or indeed anyone else) from taking the law into their own hands and pre empting the result of any dispute between them about the future upbringing of their children. If an abduction does take place, the next object is to restore the children as soon as possible to their home country, so that any dispute can be determined there. The left behind parent should not be put to the trouble and expense of coming to the requested state in order for factual disputes to be resolved there. The abducting parent should not gain an unfair advantage by having that dispute determined in the place to which she has come. And there almost always is a factual dispute, if not about the primary care of the children, then certainly about where they should live, and in cases where domestic abuse is alleged, about whether those allegations are well founded. Factual disputes of this nature are likely to be better able to be resolved in the country where the family had its home. Hence it is one thing to say that the factual context has changed and another thing entirely to say that the change should result in any change to the interpretation and application of the Hague Convention. These are issues of general principle, of importance in the great majority of Hague Convention cases, because article 13b is pleaded in the great majority of statements of defence in such cases. Yet they arise for decision in the context of a real case, involving real people, three of whom were in court while we heard the oral argument. We shall come to the detailed facts of the case when we come to consider what the outcome of the appeal should be. For the time being, a simple summary will suffice. We are concerned with two little girls, whom we shall call Livi and Milly, to make them real while respecting their anonymity. Livi is seven and Milly is four. They were born in Norway to a British mother and a Norwegian father, who married shortly after Livis birth. They have lived all their lives in Norway until they were brought to this country by their mother in September last year. Their mother has an older daughter, Tyler, who is now nearly 17 and lived with the family in Norway, going to school there and helping to take care of her little half sisters. The mother claims that they were all very frightened of the father because of his temper and his violent behaviour, especially towards their pets, although he was only once physically violent towards her. Tyler supports her mothers claims. The father denies them. The mother is suffering from an adjustment disorder, precipitated by the effect of these proceedings upon a number of pre disposing factors. A psychiatrist has warned that her condition may deteriorate into self harm and suicidality if she has to return to Norway, unless certain protective measures are in place. The trial judge, Pauffley J, decided that the protective measures were sufficient, such that there was no substance in the suggestion that because of the mothers subjective reaction to an enforced return there would be a grave risk of physical or psychological harm for the children. Indeed, from the childrens point of view, it was overwhelmingly in their best interests to return to Norway for their futures to be decided there: paras 36, 37. In the Court of Appeal, all three judgments were devoted to the Neulinger issue. As Thorpe LJ pointed out, at para 85, the appeal was necessary to provide the court with an opportunity to review the recent decisions of the European Court of Human Rights. The court reached the conclusion that those cases required no change in the current approach. The present case was a very standard Hague case (para 84). The judge had delivered an admirably fair and clear conclusion on the issues that she had to decide (para 85). Article 3(1) of UNCRC Article 3.1 of the UNCRC provides that: In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. Although the UNCRC has not been incorporated into our domestic law, there are many examples of domestic statutes requiring courts and public authorities to have regard to the welfare of the children with whom they are concerned. Sometimes, as in section 1(1) of the Children Act 1989, the court is required to treat the welfare of the child as its paramount consideration; sometimes, as in section 25(1) of the Matrimonial Causes Act 1973, it is the first consideration; sometimes, as in section 11 of the Children Act 2004 and section 55 of the Borders, Citizenship and Immigration Act 2009, a public authority is required to perform its functions having regard to the need to safeguard and promote the welfare of children. The last two, in particular, are clearly inspired by our international obligations under UNCRC. As was pointed out in ZH (Tanzania), para 25, a primary consideration is not the same as the primary consideration, still less as the paramount consideration. The Court went on to endorse the view taken in the High Court of Australia in Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273, 292, that a decision maker would be looking to the best interests of the children as a primary consideration, asking whether the force of any other consideration outweighed it. There is no provision expressly requiring the court hearing a Hague Convention case to make the best interests of the child its primary consideration; still less can we accept the argument of the Womens Aid Federation of England that section 1(1) of the Children Act 1989 applies so as to make them the paramount consideration. These are not proceedings in which the upbringing of the child is in issue. They are proceedings about where the child should be when that issue is decided, whether by agreement or in legal proceedings between the parents or in any other way. On the other hand, the fact that the best interests of the child are not expressly made a primary consideration in Hague Convention proceedings, does not mean that they are not at the forefront of the whole exercise. The Preamble to the Convention declares that the signatory states are Firmly convinced that the interests of children are of paramount importance in matters relating to their custody and Desiring to protect children internationally from the harmful effects of their wrongful removal or retention . This objective is, of course, also for the benefit of children generally: the aim of the Convention is as much to deter people from wrongfully abducting children as it is to serve the best interests of the children who have been abducted. But it also aims to serve the best interests of the individual child. It does so by making certain rebuttable assumptions about what will best achieve this (see the Explanatory Report of Professor Prez Vera, at para 25). Nowhere does the Convention state that its objective is to serve the best interests of the adult person, institution or other body whose custody rights have been infringed by the abduction (although this is sometimes how it may appear to the abducting parent). The premise is that there is a left behind person who also has a legitimate interest in the future welfare of the child: without the existence of such a person the removal is not wrongful. The assumption then is that if there is a dispute about any aspect of the future upbringing of the child the interests of the child should be of paramount importance in resolving that dispute. Unilateral action should not be permitted to pre empt or delay that resolution. Hence the next assumption is that the best interests of the child will be served by a prompt return to the country where she is habitually resident. Restoring a child to her familiar surroundings is seen as likely to be a good thing in its own right. As our own Children Act 1989 makes clear, in section 1(3)(c), the likely effect upon a child of any change in her circumstances is always a relevant factor in deciding what will be best. But it is also seen as likely to promote the best resolution for her of any dispute about her future, for the courts and the public authorities in her own country will have access to the best evidence and information about what that will be. Those assumptions may be rebutted, albeit in a limited range of circumstances, but all of them are inspired by the best interests of the child. Thus the requested state may decline to order the return of a child if proceedings were begun more than a year after her removal and she is now settled in her new environment (article 12); or if the person left behind has consented to or acquiesced in the removal or retention or was not exercising his rights at the time (article 13a); or if the child objects to being returned and has attained an age and maturity at which it is appropriate to take account of her views (article 13); or, of course, if there is a grave risk that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation (article 13b). These are all situations in which the general underlying assumptions about what will best serve the interests of the child may not be valid. We now understand that, although children do not always know what is best for them, they may have an acute perception of what is going on around them and their own authentic views about the right and proper way to resolve matters. This view, that the Hague Convention is designed with the best interests, not only of children generally, but also of the individual child concerned as a primary consideration, is borne out rather than undermined by the provisions of article 11 of Council Regulation (EC) No 2201/2003 (Brussels II revised), which strengthens and (under article 60) takes precedence over the Hague Convention in cases between member states of the European Union (apart from Denmark). Recital (12) to the Regulation points out that the grounds of jurisdiction in matters of parental responsibility . are shaped in the light of the best interests of the child, in particular on the criterion of proximity. Article 11.2 requires that the child be given an opportunity to be heard, unless this appears inappropriate having regard to his or her age or maturity; and this is now routinely done in this country, not only in EU cases, but in all Hague Convention cases, following the decision of the House of Lords in Re D. Further, article 11.4 provides that a court cannot refuse to return a child on the basis of article 13b of the Hague Convention if it is established that adequate arrangements have been made to secure the protection of the child after his or her return. As was said in Re D, para 52, this means that it has to be shown that such arrangements will be effective to protect the child. And it emphasises that the purpose of article 13b is to ensure that a child is not returned to face a grave risk of harm. But where a child is not returned because any of the exceptions contained in article 13 is established, article 11.6 to 11.8 contains a procedure whereby the courts of the requesting state may nevertheless make a decision about the custody of the child, which decision will be enforceable in the requested state. We conclude, therefore, that both the Hague Convention and the Brussels II revised Regulation have been devised with the best interests of children generally, and of the individual children involved in such proceedings, as a primary consideration. There may well be ways in which they could be developed further towards this end: see, eg, R Schuz, The Hague Child Abduction Convention and Childrens Rights (2002) 12 Transnational Law and Contemporary Problems 393. But if the court faithfully applies their provisions, as to which we shall say more later, we believe that it too will be complying with article 3.1 of the UNCRC. We note that the Strasbourg court has reached the same conclusion: see, eg, Maumousseau and Washington v France, App no 39388/05, 6 December 2007, para 68. The ECHR and Neulinger Until recently, it has mainly been the left behind parent who has complained to the Strasbourg court that the failure to return his child under the Hague Convention has been in breach of his rights under article 8. The court has held that the positive obligation under article 8, to bring about the reunion of parent and child, must be interpreted in the light of the requirements of the Hague Convention. Hence if the requested state has not sufficiently complied with its obligations under the Hague Convention, the court has found a breach of article 8: see, eg, Ignaccolo Zenide v Romania (2000) 31 EHRR 212, paras 94, 95; Monory v Romania and Hungary, App no 71099/01, 5 July 2005; cf the follow up to Re D, Deak v Romania and United Kingdom [2008] 2 FLR 994, where there was no breach of article 8 because both the requesting and the requested states had complied with their Hague obligations. In Maumousseau and Washington v France, on the other hand, the complaint was that the effective operation of the Hague Convention, in ordering the return of the applicants daughter to her habitual residence in the United States, the mother having taken her to France for the holidays and refused to return her afterwards, was in breach of their article 8 rights. The Court disagreed. The positive obligation of reuniting parents with their children had to be interpreted in the light of the requirements of the Hague Convention and the UNCRC (para 60). In deciding whether the interference was necessary in a democratic society, the decisive issue was whether a fair balance between the competing interests at stake those of the child, of the two parents, and of public order was struck (para 62). There were a number of aspects comprised in the primary consideration of the best interests of the child (para 66): for example, to guarantee that the child develops in a sound environment and that a parent cannot take measures that would harm its health and development; secondly, to maintain its ties with its family, except in cases where the family has proved particularly unfit (para 67). The concept of the childs best interests was also a primary consideration in the context of the Hague Convention procedures (para 68). The Court was entirely in agreement with the philosophy underlying the Hague Convention (para 69). It could not agree that the domestic courts interpretation of article 13b was necessarily incompatible with the notion of the childs best interests (para 71). There was no automatic or mechanical application of a childs return once the Hague Convention was invoked, because of the exceptions based on objective considerations concerning the actual person of the child and its environment (para 72). In the present case, the French courts had conducted an in depth examination of the entire family situation and of a whole series of factors, in particular of a factual, emotional, psychological, material and medical nature, and made a balanced and reasonable assessment of the respective interests of each person . In doing so, [they] did not identify any risk that [the child] would be exposed to physical or psychological harm in the event of her return . (para 74). The Court was therefore satisfied that the childs best interests, which lay in her prompt return to her habitual environment, were taken into account in the French courts (para 75). Accordingly, there was no breach of article 8, considered in the light of article 13b of the Hague Convention and Article 3.1 of the UNCRC (para 81). Then came Neulinger, where once again the complaint was that to enforce an order under the Hague Convention for the childs return to Israel would be in breach of article 8. This time, it came before the Grand Chamber, which agreed. It repeated much of what had been said in Maumousseau. The obligations of article 8 had to be interpreted taking account of the Hague Convention (para 132). But the Court was still competent to review the procedures of the domestic courts to see whether, in applying the Hague Convention, they had complied with the ECHR, and in particular article 8 (para 133). The decisive issue was whether a fair balance had been struck between the competing interests of the child, the parents and of public order, bearing in mind that the childs best interests must be the primary consideration (para 134). The childs interests comprised two limbs: maintaining family ties and ensuring his development within a sound environment, not such as would harm his health and development (para 136). The same philosophy is inherent in the Hague Convention, which requires the prompt return of the abducted child unless there is a grave risk that the childs return would expose him to physical or psychological harm or otherwise place him in an intolerable situation. In other words, the concept of the childs best interests is also an underlying principle of the Hague Convention. Some national courts have expressly incorporated it into their application of article 13b (para 137). Then come the two paragraphs which have caused such concern: 138. It follows from article 8 that a childs return cannot be ordered automatically or mechanically when the Hague Convention is applicable. The childs best interests, from a personal development perspective, will depend on a variety of individual circumstances, in particular his age and level of maturity, the presence or absence of his parents and his environment and experiences. For that reason, those best interests must be assessed in each individual case. That task is primarily one for the domestic authorities . 139. In addition, the court must ensure that the decision making process leading to the adoption of the impugned measures by the domestic court was fair and allowed those concerned to present their case fully. To that end the court must ascertain whether the domestic courts conducted an in depth examination of the entire family situation and of a whole series of factors, in particular of a factual, emotional, psychological, material and medical nature, and made a balanced and reasonable assessment of the respective interests of each person, with a constant concern for determining what the best solution would be for the abducted child in the context of an application for his return to his country of origin (see Maumousseau and Washington, para 74). It will be seen, as Aikens LJ pointed out in the Court of Appeal (paras 105 to 107), that in para 139 the Court has taken the factual description of what the French courts did at para 74 of Maumousseau and turned it into a requirement. In doing so, the Court gives the appearance of turning the swift, summary decision making which is envisaged by the Hague Convention into the full blown examination of the childs future in the requested state which it was the very object of the Hague Convention to avoid. Furthermore, in countries which are party to the Brussels II revised Regulation, the court of the requested state would not have jurisdiction to make that decision. It is of interest that the principles adopted in Neulinger were summarised in almost exactly the same terms as we have summarised them above in two later cases: Raban v Romania, App no 25437/08, 26 October 2010, where a father was complaining that the Romanian courts had not ordered the return of his daughter when in his view they should have done; and Van den Berg and Sarri v The Netherlands, App no 7239/08, 2 November 2010, where a mother was complaining that the Dutch courts had ordered the return of her daughter and had rejected her case under article 13b. There is another more recent case along similar lines, Lipkowsky and McCormack v Germany, App no 26755/10, 18 January 2011. But in all of these cases, the Strasbourg court did not find a violation of article 8 indeed it found the complaints inadmissible. It was not the Courts role to question the judgments reached by the national courts under article 13b, and in examining whether the outcome was in breach of article 8, it was clearly prepared to accord the national court a wide margin of appreciation in assessing the facts of the concrete case. It becomes important, therefore, to understand what the Grand Chamber in fact decided when holding that there would be a breach in the Neulinger case. The Swiss courts had been divided in their opinions as to whether the return of the child to Israel would put him at grave risk of harm, especially in the light of the mothers adamant refusal to return with him. But they eventually concluded that it was reasonable to expect her to do so. It is important to realise that the Grand Chamber held that this decision was within the margin of appreciation afforded to national authorities (para 145). The mother however applied to Strasbourg for interim measures to prevent the enforcement of this order, which were granted. The Swiss did not enforce the order and the Grand Chamber did not decide the case until three years after the Swiss Courts decision and five years after the childs removal from Israel. In those circumstances, and given the subsequent developments in the applicants situation, the court was not convinced that it would be in the childs best interests for him to return to Israel and the mother would sustain a disproportionate interference with her right to respect for her family life if she were forced to return with him (para 151). As the President of the Strasbourg court has acknowledged extra judicially (in a paper given at the Franco British Irish Colloque on family law on 14 May 2011), it is possible to read paragraph 139 of Neulinger as requiring national courts to abandon the swift, summary approach that the Hague Convention envisages and to move away from a restrictive interpretation of the article 13 exceptions to a thorough, free standing assessment of the overall merits of the situation. But, he says, that is over broad the statement is expressly made in the specific context of proceedings for the return of an abducted child. The logic of the Hague Convention is that a child who has been abducted should be returned to the jurisdiction best placed to protect his interests and welfare, and it is only there that his situation should be reviewed in full. Neulinger does not therefore signal a change of direction at Strasbourg in the area of child abduction. The President has therefore gone as far as he reasonably could, extra judicially, towards defusing the concern which has been generated by, in particular, para 139 of Neulinger. It is, of course, as Aikens LJ pointed out in the Court of Appeal, not for the Strasbourg court to decide what the Hague Convention requires. Its role is to decide what the ECHR requires. The most that can be said, therefore, is that both Maumousseau and Neulinger acknowledge that the guarantees in article 8 have to be interpreted and applied in the light of both the Hague Convention and the UNCRC; that all are designed with the best interests of the child as a primary consideration; that in every Hague Convention case where the question is raised, the national court does not order return automatically and mechanically but examines the particular circumstances of this particular child in order to ascertain whether a return would be in accordance with the Convention; but that is not the same as a full blown examination of the childs future; and that it is, to say the least, unlikely that if the Hague Convention is properly applied, with whatever outcome, there will be a violation of the article 8 rights of the child or either of the parents. The violation in Neulinger arose, not from the proper application of the Hague Convention, but from the effects of subsequent delay. It is possible to imagine other, highly unusual, cases in which a return might be in violation of the ECHR. As the AIRE Centre point out, a person cannot be expelled to a country where he will face a real risk of torture or inhuman or degrading treatment or punishment or the flagrant denial of a fair trial (a possibility discussed in Maumousseau). That could, in theory, arise where the abducting parent would face such a risk and the child could not safely be returned without her. In such a case, as the House of Lords pointed out in Re D, para 65, and again in Re M, para 19, it would be unlawful for the court, as a public authority, to act incompatibly with the Convention rights. But that is a far cry from the suggestion that article 8 trumps the Hague Convention: in virtually all cases, as the Strasbourg court has shown, they march hand in hand. With that conclusion we turn at long last to article 13b of the Hague Convention. Article 13b Article 12 of the Hague Convention requires a requested state to return a child forthwith to her country of habitual residence if she has been wrongfully removed in breach of rights of custody. There is an exception for children who have been settled in the requested state for 12 months or more. Article 13 provides three further exceptions. We are concerned with the second: . the requested state is not bound to order the return of the child if the person, institution or other body which opposes its return establishes that (a) . ; or (b) there is a grave risk that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation. In considering the circumstances referred to in this Article, the judicial and administrative authorities shall take into account the information relating to the social background of the child provided by the Central Authority or other competent authority of the childs habitual residence. (emphasis supplied) As was pointed out in a unanimous House of Lords decision in Re D, para 51, and quoted by Thorpe LJ in this case: It is obvious, as Professor Prez Vera points out, that these limitations on the duty to return must be restrictively applied if the object of the Convention is not to be defeated: [Explanatory Report to the Hague Convention] para 34. The authorities of the requested state are not to conduct their own investigation and evaluation of what will be best for the child. There is a particular risk that an expansive application of article 13b, which focuses on the situation of the child, could lead to this result. Nevertheless, there must be circumstances in which a summary return would be so inimical to the interests of the particular child that it would also be contrary to the object of the Convention to require it. A restrictive application of article 13 does not mean that it should never be applied at all. Both Professor Prez Vera and the House of Lords referred to the application, rather than the interpretation, of article 13. We share the view expressed in the High Court of Australia in DP v Commonwealth Central Authority [2001] HCA 39, (2001) 206 CLR 401, paras 9, 44, that there is no need for the article to be narrowly construed. By its very terms, it is of restricted application. The words of article 13 are quite plain and need no further elaboration or gloss. First, it is clear that the burden of proof lies with the person, institution or other body which opposes the childs return. It is for them to produce evidence to substantiate one of the exceptions. There is nothing to indicate that the standard of proof is other than the ordinary balance of probabilities. But in evaluating the evidence the court will of course be mindful of the limitations involved in the summary nature of the Hague Convention process. It will rarely be appropriate to hear oral evidence of the allegations made under article 13b and so neither those allegations nor their rebuttal are usually tested in cross examination. Second, the risk to the child must be grave. It is not enough, as it is in other contexts such as asylum, that the risk be real. It must have reached such a level of seriousness as to be characterised as grave. Although grave characterises the risk rather than the harm, there is in ordinary language a link between the two. Thus a relatively low risk of death or really serious injury might properly be qualified as grave while a higher level of risk might be required for other less serious forms of harm. Third, the words physical or psychological harm are not qualified. However, they do gain colour from the alternative or otherwise placed in an intolerable situation (emphasis supplied). As was said in Re D, at para 52, Intolerable is a strong word, but when applied to a child must mean a situation which this particular child in these particular circumstances should not be expected to tolerate. Those words were carefully considered and can be applied just as sensibly to physical or psychological harm as to any other situation. Every child has to put up with a certain amount of rough and tumble, discomfort and distress. It is part of growing up. But there are some things which it is not reasonable to expect a child to tolerate. Among these, of course, are physical or psychological abuse or neglect of the child herself. Among these also, we now understand, can be exposure to the harmful effects of seeing and hearing the physical or psychological abuse of her own parent. Mr Turner accepts that, if there is such a risk, the source of it is irrelevant: eg, where a mothers subjective perception of events leads to a mental illness which could have intolerable consequences for the child. Fourth, article 13b is looking to the future: the situation as it would be if the child were to be returned forthwith to her home country. As has often been pointed out, this is not necessarily the same as being returned to the person, institution or other body who has requested her return, although of course it may be so if that person has the right so to demand. More importantly, the situation which the child will face on return depends crucially on the protective measures which can be put in place to secure that the child will not be called upon to face an intolerable situation when she gets home. Mr Turner accepts that if the risk is serious enough to fall within article 13b the court is not only concerned with the childs immediate future, because the need for effective protection may persist. There is obviously a tension between the inability of the court to resolve factual disputes between the parties and the risks that the child will face if the allegations are in fact true. Mr Turner submits that there is a sensible and pragmatic solution. Where allegations of domestic abuse are made, the court should first ask whether, if they are true, there would be a grave risk that the child would be exposed to physical or psychological harm or otherwise placed in an intolerable situation. If so, the court must then ask how the child can be protected against the risk. The appropriate protective measures and their efficacy will obviously vary from case to case and from country to country. This is where arrangements for international co operation between liaison judges are so helpful. Without such protective measures, the court may have no option but to do the best it can to resolve the disputed issues. To this Mr Setright would add that it would be even more helpful if there were machinery in place for recognising and enforcing protective orders (and, between common law countries at least, undertakings given to the courts) made in the requested state in order to protect the children on their return to the requesting state at least until the courts of the requesting state are seized of the case (if they ever are). The Brussels II revised Regulation clearly contemplates that adequate measures actually be in force and without some such machinery this may not always be possible. We therefore take this opportunity to urge the Hague Conference to consider whether machinery can be put in place whereby, when the courts of the requested state identify specific protective measures as necessary if the article 13b exception is to be rejected, then those measures can become enforceable in the requesting state, for a temporary period at least, before the child is returned. We turn, therefore, to the application of these simple principles to the facts of this case. Application to this case The parents met in Spain in 2001 and set up home together in Norway. Tyler lived with them. The father has been married before and has three older children living in Norway, who were frequent visitors to the family. Livi was born on 19 May 2004 and they married on 16 December 2004. Milly was born on 10 April 2007. Tyler left Norway in August last year to live with her maternal grandparents in England. Shortly afterwards, on 7 September, the mother also left, bringing the children here with a view to staying here permanently. The father was working in Sweden at the time and she did not seek his permission. It is common ground that this was a wrongful removal within the meaning of the Hague Convention. The father applied to the Norwegian central authority on 17 September 2010 and these proceedings were launched on 6 October. The mother relies on article 13b to resist the childrens return. She (with support from Tyler) makes allegations against the father which, if true, amount to a classic case of serious psychological abuse. She says that he was never physically violent towards her (apart from one incident when he knuckled her head), but that she always felt that he was on the verge of extreme violence and that if he was violent he would kill her. She recounts incidents of physical violence towards other people, and towards property, of ill treatment of pets, killing the familys cat, spraying the familys budgies with bleach, and killing a rabbit which Tyler kept as a pet while they were away. She alleges that the father was domineering and controlling, buying the familys food, keeping her short of money, and not wanting her to work outside the home. She says that the children were frightened of his anger, that he was rough with them and smacked them too hard, and she recounts one particular incident when he lost his temper with Livi and kicked her bottom with his workman boots so hard that she flew up into the air and landed in the snow. The father denies all these allegations, although he accepts that he can get angry from time to time and that he did kill the cat which had become dangerous and Tylers rabbit because the mother had asked him to do so. In turn he says that he had become increasingly concerned about the mothers drinking and use of drugs. He suggested that she seek help from their GP. But the GP says that there is nothing about this in either his or her records. Nor is there any record of complaints about domestic violence either to the GP or the police. Although the father does not accept that he has subjected either the mother or the children to any physical or emotional abuse, he has been prepared to make arrangements and give undertakings to reassure her. He would withdraw the complaint he had made to the police about the abduction; he would not use or threaten violence to, or harass or pester or molest the mother, or contact her save through lawyers; he would not remove or seek to remove the children from her care pending an order of the Norwegian court or by agreement; he would vacate the matrimonial home pending an order of the court in the child custody case, and would not go within 500 metres of it without the courts permission; he would pay all household costs and 1,000 Norwegian krone to the mother as child support, less any benefits which she received. He has deposited 4,000 krone with his solicitors to make good this promise for four weeks. On 5 November 2010, Pauffley J gave two directions. One was that Tyler be joined as a party to the proceedings. Her main reason for doing so was the mothers mental state. There was support for the suggestion that Tyler herself had precipitated the familys move here. She had a day to day protective role in relation to the younger children. And she may be able to add to the judges sum of knowledge in a way that her mother because of her depression and depletion, perhaps will not. At the same time, the judge gave permission for the mother and father jointly to instruct a psychiatrist to report upon the mothers current psychiatric or psychological condition, the impact upon her of a return to Norway and what might be done to ameliorate it. The parties instructed Dr Kolkiewicz, who provided a principal psychiatric report and three short supplementary reports. She also gave oral evidence at the final hearing of the fathers application, which took place on 24 and 25 November 2010 before Pauffley J. Dr Kolkiewicz diagnosed the mother as suffering from an adjustment disorder. This is a state of severe distress and emotional disturbance arising from a period of adaptation to a significant life change. Individual vulnerability plays a greater role than in other psychiatric disorders. The mother was pre disposed towards developing this disorder as a result of early separation from her father, long term exposure to severe domestic violence by her step father towards her mother, witnessing her mothers inability to break away from this, and rejection by her father as a teenager. She adopted a philosophy of anything for a quiet life which left her unable to confront the problems in her own marriage. The final stressor was the bringing of these proceedings. In the doctors opinion, the disorder currently had a minimal impact upon the mothers ability to look after the two younger children. If an order were made for their return and appropriate support were not put in place, there was a high risk of the severity of the Adjustment Disorder worsening, resulting in psychological decompensation associated with deliberate self harm or suicidality. It would also significantly increase the risk of the disorder evolving into a depressive disorder. With appropriate support and a quick resolution of the issues concerning the care of the children, however, the disorder was likely to follow an uncomplicated course and resolve within six months. The specific protective measures which she recommended were: on going psychological interventions, such as counselling or cognitive behavioural therapy (CBT); a court order preventing the father from knowing her address and physically approaching her; and support from close family, in particular her mother, and statutory agencies. These would need to be put in place before any return to Norway. Much would depend upon how long it took to resolve matters in Norway. During the hearing, Dr Kolkiewicz spoke to the familys GP in Norway, who indicated that he would be able to arrange for the mother to see a psychiatrist within a week and that she would be able to receive the necessary counselling or CBT. During the hearing, the judge also sought information about the legal position in Norway from the Norwegian international liaison judge. Judge Selvaag replied, in summary: if both parents have parental responsibility, relocating the children to another country is not possible without agreement; but it is possible to apply for sole parental responsibility in order to do this; normally a mediation certificate is required but an interim order can be made without this; the court can prohibit a parent from visiting the property, in order to protect the children; there is also a power to prohibit this in the Marriage Act (presumably in order to protect the wife); and it is possible to ask the local police for a restraining order. Means tested legal aid is available. Pauffley J also asked what view the Norwegian courts would take of undertakings offered to the English court so as to ensure a soft landing for the childrens return but it is fairly clear from the answer that the question was not understood: this was that the courts are not involved in the actual return of children under the Hague Convention. It was suggested that this be clarified but Thorpe LJ (in his role of arranging this international co operation) indicated that he would be unwilling to ask further questions of a no doubt very busy Norwegian judge. Pauffley J herself considered that the information provided about the remedies available to keep a parent away from the home largely dealt with the issue. The mothers principal argument in resisting return was and remains that the risk to her own mental health is such that, as she is and has always been the childrens primary carer, there is a grave risk that they would be placed in an intolerable situation unless there are real and effective protective measures in place. The judge addressed that argument on its own terms and considered the evidence as to whether the protective measures available would be sufficient to avoid the risk. As to the first of Dr Kolkiewiczs recommendations, she was satisfied that the psychological interventions were available and would be in place within a few days of the mothers return; as to the second, the fathers series of undertakings satisfied her that there would be a safe and secure home for the mother in which she could feel adequately protected from the fathers unwelcome attention; she considered it a near certainty that the mothers family would ensure that she was adequately supported in Norway both during the initial stages of return and at important points along the way as the court proceedings unfold. She was further reassured by the Norwegian judges account of the legal position there, the signs that legal aid would be available and the fact that a Norwegian lawyer had already been identified to act for the mother. She was also confident that, even if Tyler remained living in England, she would be back and forth regularly to see her mother and sisters. All in all therefore, Pauffley J found no substance in the suggestion that because of the mothers reaction to an enforced return there would be a grave risk of physical or psychological harm to the children. She also concluded, at para 37, that it is overwhelmingly in their best interests to return to Norway for their futures to be decided there. They are very young children. By no stretch of the imagination could it be said that they have put down roots in this country. They will be returning to an environment where both parents will be living, albeit at a little distance from one another. I consider their welfare needs point emphatically to a summary return. The Court of Appeal, having disposed of the Neulinger argument, obviously thought this a straightforward case. Although the judge directed herself, at para 8, that the risk must be grave and the harm serious, which is not quite what article 13b says, it is apparent that she was following the sensible and pragmatic course advocated before us in cases of alleged domestic violence. She declined to resolve the disputed allegations between the parents. But she accepted that the risk of deterioration in the mothers mental health, if she were forced to return to Norway, might also constitute a grave risk to the children. She therefore examined with some care how the protective measures recommended by Dr Kolkiewicz might be put in place. We have no reason to doubt that the risk to the mothers mental health, whether it be the result of objective reality or of the mothers subjective perception of reality, or a combination of the two, is very real. We have also no reason to doubt that if the mothers mental health did deteriorate in the way described by Dr Kolkiewicz, there would be a grave risk of psychological harm to the children. But the judge considered very carefully how these risks might be avoided. The highest the case can be put is that part of her conclusion relies upon undertakings given to the English High Court, which could not be enforced in Norway, rather than upon any orders yet made in the Norwegian courts. But the judge was reassured by the answers given by Judge Selvaag as to the remedies which would be available if need be. Nor is there anything in the history to suggest that the father is not a man of his word. The judge trusted him to abide by the solemn promises which he was asked to make to her; he was asked to make them because the judge thought it in the best interests of the children he loves so much for him to do so; however little he understands or accepts the mothers feelings, he must accept what the judge thought best for his children. It is certainly not the task of an appellate court to disagree with the judges assessment. Tyler, of course, is not the subject of these proceedings. No one is ordering her to go back to Norway. She has, however, a keen interest in the outcome of the proceedings. Her evidence both supports her mothers case on the climate of fear within the family and adds some further reasons of her own for having wanted to leave. If it is ordered that her sisters return, her mother will undoubtedly return with them. Tyler will then be torn between her concern for her mother and her little sisters and her desire to lead her own life here. We are told that she too is under a great deal of stress but that she has decided that she cannot face going back to Norway and intends to remain here. This situation undoubtedly engages her article 8 rights, as well as the obligation under article 3.1 of UNCRC to make her welfare a primary consideration. But in the overall balance of all the article 8 and article 3.1 rights involved, the interference with her rights can readily be justified in the interests of the rights of others, and in particular those of her little sisters. She is at an age when she might well have left to come to college in this country whatever the situation at home and she will have ample opportunities of keeping in close touch with both her mother and her sisters whether they remain in Norway or, as she and her mother hope, eventually move lawfully to this country. Tyler could, of course, simply have filed evidence in support of her mothers case. Rule 6.5(e) of the Family Proceedings Rules 1991 (SI 1991/1247) (in force at the relevant time; see now rule 12.3 of the Family Procedure Rules 2010 (SI 2010/2955)) provides that any other person who appears to the court to have a sufficient interest in the welfare of the child shall be a party to child abduction proceedings. It was for the judge to weigh whether she had such a sufficient interest. Clearly, she had an interest; and the judge deemed it sufficient because of the mothers depleted mental state. It is not for us to disagree. Conclusion In summary, therefore, the whole of the Hague Convention is designed for the benefit of children, not of adults. The best interests, not only of children generally, but also of any individual child involved are a primary concern in the Hague Convention process. We agree with the Strasbourg court that in this connection their best interests have two aspects: to be reunited with their parents as soon as possible, so that one does not gain an unfair advantage over the other through the passage of time; and to be brought up in a sound environment, in which they are not at risk of harm. The Hague Convention is designed to strike a fair balance between those two interests. If it is correctly applied it is most unlikely that there will be any breach of article 8 or other Convention rights unless other factors supervene. Neulinger does not require a departure from the normal summary process, provided that the decision is not arbitrary or mechanical. The exceptions to the obligation to return are by their very nature restricted in their scope. They do not need any extra interpretation or gloss. It is now recognised that violence and abuse between parents may constitute a grave risk to the children. Where there are disputed allegations which can neither be tried nor objectively verified, the focus of the inquiry is bound to be on the sufficiency of any protective measures which can be put in place to reduce the risk. The clearer the need for protection, the more effective the measures will have to be. We would only add this. We start from the proposition that all parents love their children and want what is best for them. Even if the parents fall out with one another, they should be able to work out what will be best for the children. They, and not the courts, are the experts in their own children. They should be able to see their childrens interests separately from their own. They should be able to negotiate the least detrimental solution for them, with the help of a skilled mediator if they need it. But they will only be able to do this if they are prepared to accord one another equal respect. Mediation will not work if one party is allowed to dominate or bully the other. That is why it is usually thought unsuitable in cases of alleged domestic violence or abuse. Whatever the rights and wrongs between these parents, this is a mother who will need a great deal of understanding and support. But we continue to hope that, once the trauma of these proceedings is behind them, these parents can be helped whether through the good offices of our colleagues in the family justice system in Norway or in some other way to reach a sensible and practical solution for the good of the whole family. We would dismiss this appeal. |
On 11 September 2014, the Cleveland Meat Company Ltd (CMC) bought a live bull at the Darlington Farmers Auction Mart for 1,361.20. The bull was passed fit for slaughter by the Official Veterinarian (OV) stationed at CMCs slaughterhouse. It was assigned a kill number of 77 and slaughtered. A post mortem inspection of both carcass and offal was carried out by a Meat Hygiene Inspector (MHI), who identified three abscesses in the offal. The offal was not retained. Later that day, the OV inspected the carcass and, after discussion with the MHI, declared the meat unfit for human consumption, because pyaemia was suspected. Accordingly, the carcass did not acquire a health mark certifying that it was fit for human consumption. The consequence of this was that it would have been a criminal offence for CMC to seek to sell the carcass (under regulation 19 of the Food Safety and Hygiene (England) Regulations 2013 (the Food Hygiene Regulations)). CMC took the advice of another veterinary surgeon and challenged the OVs opinion. It claimed that, in the event of a dispute and its refusal to surrender the carcass voluntarily, the OV would have to seize the carcass under section 9 of the Food Safety Act 1990 (the 1990 Act) and take it before a Justice of the Peace to determine whether or not it ought to be condemned. The Food Standards Agency (FSA) replied that there was no need for it to use such a procedure. Having been declared unfit for human consumption by the OV, the carcass should be disposed of as an animal by product. On 23 September 2014, the OV, acting for the FSA, served on CMC a notice for the disposal of the carcass as an animal by product (the disposal notice) (under regulation 25(2)(a) of the Animal By Products (Enforcement) (England) Regulations 2013 (the Animal By Products Regulations) and Regulation (EC) No 1069/2009). The disposal notice informed CMC that failure to comply with the notice could result in the Authorised Person under the Regulations arranging for compliance with it at CMCs expense and that it was an offence to obstruct an Authorised Person in carrying out the requirements of the notice. The disposal notice also stated: You may have a right of appeal against my decision by way of judicial review. An application for such an appeal should be made promptly and, in any event, generally within three months from the date when the ground for the application first arose. If you wish to appeal you are advised to consult a solicitor immediately. These judicial review proceedings are brought by the Association of Independent Meat Suppliers, a trade association acting on behalf of some 150 slaughterhouses, and CMC (the claimant appellants) to challenge the FSAs assertion that it was unnecessary for it to use the procedure set out in section 9 of the 1990 Act and to claim in the alternative that it is incumbent on the United Kingdom to provide some means for challenging the decisions of an OV in such cases. They failed in the High Court and Court of Appeal and now appeal to this Court. There are three main issues in the proceedings. The issues in the case The first revolves around an issue of domestic law. Is the procedure contained in section 9 of the 1990 Act available in these circumstances and does it have to be used by the OV or the FSA, if the carcass owner refuses to surrender the carcass voluntarily, so as to afford the carcass owner a means of challenging decisions of the OV with which it disagrees? The Food Hygiene Regulations provide that section 9 is to apply for the purpose of those Regulations. Under section 9, if it appears to an authorised officer of an enforcement authority such as the FSA that food intended for human consumption fails to comply with food safety requirements, he may seize the food and remove it in order to have it dealt with by a Justice of the Peace (who may be either a lay magistrate or a legally qualified District Judge, but who will be local to the slaughterhouse and readily accessible at all hours). If it appears to the Justice of the Peace, on the basis of such evidence as he considers appropriate, that the food fails to comply with food safety requirements, he shall condemn it and order it to be destroyed at the owners expense. If he refuses to condemn it, the relevant enforcement authority must compensate the owner for any depreciation in its value resulting from the officers action. Under section 8(2), food fails to comply with food safety requirements if it is unsafe within the meaning of article 14 of Regulation (EC) No 178/2002: ie injurious to health or unfit for human consumption (see para 12 below). The procedure in section 9 of the 1990 Act is not framed in terms of an appeal from the OVs decision. It sets out a procedure whereby an officer of a food authority or an enforcement authority can refer the question of destruction of a carcass to a Justice of the Peace for decision. Normally, we are told, the owner accepts the OVs decision that an animal is not fit for human consumption and voluntarily surrenders it. But if the owner does not, the claimant appellants say that this procedure provides both (i) a way in which the OV or the FSA can take enforcement action consequent upon the OVs decision and (ii) a means whereby the owner can subject that decision to judicial scrutiny and ask the Justice of the Peace to decide whether or not the carcass did in fact comply with the food safety requirements. They accept that the Justice of the Peace cannot order the OV to apply a health mark. However, they argue that the OV can be expected to respect the decision and apply a health mark accordingly. Further, compensation may be payable under the 1990 Act if the Justice of the Peace refuses to condemn the carcass. In the claimant appellants view, this procedure has been part of the United Kingdoms food safety regime since the 19th century, and continues to operate under the European Unions food safety regime contained in the suite of Regulations coming into force in 2006. The FSA agrees that the procedure under section 9 of the 1990 Act would be available to it as one possible means of enforcement if the operator of a slaughterhouse attempted to introduce into the food chain an animal carcass which had not been given a health mark by an OV. However, it does not accept that this procedure would be suitable, still less obligatory, to resolve a dispute as to whether the carcass is or is not fit for human consumption. A Justice of the Peace has no power to order an OV to apply a health mark and, moreover, the FSA says that he would have no power under section 9 to do anything other than condemn for disposal a carcass bearing no such mark. Although not raised by the FSA in argument, the Court observes that it would be open to the operator of a slaughterhouse such as CMS to bring judicial review proceedings in the High Court to challenge the OVs decision that the meat of a carcass was unfit for human consumption, and thus to deny a health mark, or to quash a disposal notice. The High Court may quash a decision of an OV on any ground which makes the decision unlawful, including if he acts for an improper purpose, fails to apply the correct legal test or if he reaches a decision which is irrational or has no sufficient evidential basis. The High Court does occasionally hear oral evidence and make mandatory orders, and has power to award compensation for breaches of the rights under the European Convention on Human Rights (ECHR). However, contrary to what was said in the notice quoted in para 3 above, judicial review is not an appeal on the merits of the decision. The main reason advanced by the FSA why the section 9 procedure is not also applicable is that such a procedure, operated in the way the claimant appellants say that it can be operated, in effect as an appeal against the merits of the OVs decision, would be incompatible with the regime contained in the suite of EU food safety Regulations which came into force in the United Kingdom in 2006. Hence, the second issue is whether use of the procedure in section 9 of the 1990 Act is compatible with the food safety regime laid down by European Union law, specifically by Regulation (EC) No 852/2004 on the hygiene of foodstuffs; Regulation (EC) No 853/2004 laying down specific hygiene rules for food of animal origin; Regulation (EC) No 854/2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumption; Regulation (EC) No 882/2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules; and Regulation (EC) No 1069/2009 on health rules as regards animal by products. Also relevant is the prior Regulation (EC) No 178/2002 laying down the general principles and requirements of food law. The third issue is whether Regulation (EC) No 882/2004 mandates an appeal procedure and if so whether such an appeal should be capable of challenging the OVs decision on the full factual merits or whether the more limited scope of challenge involved in judicial review of the OVs decision and of a disposal notice as referred to above is sufficient to comply with the requirements of Regulation (EC) No 882/2004. Relevant European Union Law Under article 2 of Regulation (EC) No 178/2002, food means any substance or product intended to be, or reasonably expected to be ingested by humans. It is common ground between the parties that carcass 77 was food when it was slaughtered and remained so after the OV formed the opinion that it was unfit for human consumption and declared it as such. Article 14 of Regulation (EC) No 178/2002 provides that food shall not be placed on the market if it is unsafe. Food is deemed unsafe if it is considered to be (a) injurious to health, (b) unfit for human consumption. Article 5.1 of Regulation (EC) No 853/2004 provides that food business operators (FBOs) such as slaughterhouses shall not place on the market a product of animal origin unless it has a health mark applied in accordance with Regulation (EC) No 854/2004 (or an identification mark if a health mark is not required by the latter Regulation). Regulation (EC) No 854/2004 lays down specific rules for the organisation of official controls on products of animal origin (article 1.1). The application of the official controls which it requires is without prejudice to the primary legal responsibility of FBOs to ensure food safety under Regulation (EC) No 178/2002 (article 1.3). The controls are of several types. Article 4, for example, deals with official controls to verify an FBOs general compliance with the Regulations, including detailed audits of good hygiene practices. Article 5 requires member states to ensure that official controls with respect to fresh meat take place in accordance with Annex I. Under article 5.1, the OV is to carry out inspection tasks in, inter alia, slaughterhouses in accordance with the general requirements of section I, Chapter II of Annex I and the specific requirements of section IV. Under article 5.2, the health marking of domestic ungulates, such as cattle, is to be carried out in slaughterhouses in accordance with section I, Chapter III of Annex I; the criterion for applying health marks is stated thus: Health marks shall be applied by, or under the responsibility of, the official veterinarian when official controls have not identified any deficiencies that would make the meat unfit for human consumption. Annex I lays down detailed rules about ante mortem and post mortem inspections, how they are to be done and by whom, the application of health marks and the communication of results. Chapter IV of section III lays down detailed requirements for the qualifications and skills of Official Veterinarians and their auxiliaries (such as MHIs). Regulation (EC) No 854/2004 does not define official controls nor does it lay down any specific enforcement measures or sanctions for non compliance with the controls which it mandates. Article 1.1a provides that it applies in addition to Regulation (EC) No 882/2004 and article 2.2(b)(a) provides that the definitions in Regulation (EC) No 882/2004 shall apply as appropriate. Regulation (EC) No 882/2004 lays down general rules for the performance of official controls for a variety of purposes, including preventing risks to humans and animals and protecting consumer interests in the feed and food trade (article 1.1). It is without prejudice to specific Community provisions concerning official controls (article 1.3). Official control means any form of control that the competent authority or the Community performs for the verification of compliance with feed and food law, animal health and animal welfare rules (article 2.1). Non compliance means non compliance with feed or food law, and with the rules for the protection of animal health and welfare (article 2.10). Recitals (41) and (42) to Regulation (EC) No 882/2004 state, inter alia, that breaches of food law may constitute a threat to human health and therefore should be subject to effective, dissuasive and proportionate measures at national level, including administrative action by competent authorities in the member states. Recital (43) states: Operators should have a right to appeal against the decisions taken by the competent authority as a result of the official controls, and be informed of such a right. The Court notes that in the French language version of the Regulation the relevant phrase used is Les exploitants devraient avoir un droit de recours and in the German language version Unternehmer sollten Rechtsmittel einlegen knnen . Title VII of Regulation (EC) No 882/2004 deals with enforcement measures and Chapter I is concerned with national enforcement measures. Article 54.1 requires the competent authority, when it identifies non compliance, to take action to ensure that the operator remedies the situation. In deciding what action to take it shall take account of the nature of the non compliance and that operators past record with regard to non compliance. Article 54.2 gives a non exhaustive list of the measures which must be available where appropriate. These include (b) the restriction or prohibition of the placing on the market of food; (c) if necessary, ordering the recall, withdrawal and/or destruction of food; and (h) any other measure the competent authority deems appropriate. Article 54.3 requires the competent authority to provide the operator concerned with written notification of its decision and the reasons for it and information on rights of appeal against such decisions and on the applicable procedure and time limits. The Court notes that in the French language version this text appears as des informations sur ses droits de recours contre de telles decisions, ainsi que sur la procedure et les dlais applicables and in the German language version the phrase sein Widerspruchsrecht is used. Article 55 requires member states to lay down the rules on sanctions applicable to infringements of feed and food law and to take all measures necessary to ensure that they are implemented. The sanctions provided for must be effective, proportionate and dissuasive. The parties arguments The claimant appellants argue that the procedure in section 9 of the 1990 Act is applicable in cases such as this and is not incompatible with the regime laid down by the EU Regulations; indeed it or something like it is contemplated by the terms of article 54 of Regulation (EC) No 882/2004. In summary, they assert that: (1) The section 9 procedure was applied during the very similar regime adopted pursuant to the EU Directives before the coming into force of the suite of Regulations referred to above. There is no evidence that this caused any practical difficulties. If it was not thought inconsistent with that regime, there is no reason to think it inconsistent with the current regime. Indeed, in 2006, when the Regulations came into force, the Meat Hygiene Service Manual of Official Controls stated (and continued to state until shortly before these proceedings began) that where the OV was not satisfied that the meat was fit for human consumption and voluntary surrender was not forthcoming, the OV must seize the food under section 9 and take it before a Justice of the Peace for it to be condemned. At the very least, this is an indication of past practice under the very similar regime which preceded the current EU Regulations and of what the FSA, as competent authority, initially thought the position to be under the Regulations. (2) The official controls in Regulation (EC) No 854/2004 are in addition to the more general provisions in Regulation (EC) No 882/2004. They are specific to food of animal origin. But they contain nothing about enforcement and sanctions. Thus it is not surprising that they do not provide for a right of appeal against the decisions of the OV and competent authority. Enforcement and sanctions are provided for in Regulation (EC) No 882/2004. Regulation (EC) No 854/2004 is intended to work in combination with Regulation (EC) No 882/2004. Recital (43) to Regulation (EC) No 882/2004 indicates that a right of appeal is required in a case such as this. Articles 54 and 55 are applicable to all kinds of non compliance with Regulation (EC) No 854/2004, including non compliance with article 5 in individual cases as well as the more general non compliance dealt with by article 4. The references to prohibiting placing on the market and ordering destruction in article 54.2 are clearly apt to deal with non compliance under article 5. Article 54.3 should apply to action to deal with all kinds of non compliance. These articles, read together with recital (43) mandate a right of appeal against the OVs decision. (3) There is nothing in any of the Regulations to prohibit a procedure such as that laid down in section 9. This not only provides a means whereby the competent authority can enforce the requirements of Regulation (EC) No 854/2004 in relation to non compliance but also provides the operator with a means of challenging the decision of the OV that a carcass is not fit for human consumption on its merits. The Justice of the Peace can (and should) hear expert evidence to determine the matter. While only the OV can apply the health mark, on the claimant appellants interpretation of section 9 the Justice of the Peace can make a ruling which may result in an award of compensation if the mark is wrongly withheld. (4) At the point when the OV inspects the meat and forms the opinion that it is unfit for human consumption and declares it as such, the carcass is still food within the meaning of the above Regulations. It has not become an animal by product within the meaning of Regulation (EC) No 1069/2009, laying down health rules as regards animal by products. Animal by products are defined as entire bodies or parts of animals, products of animal origin or other products obtained from animals, which are not intended for human consumption (article 3.1). Until the process of condemnation is complete, the FBO still intends the carcass for human consumption. (5) Providing a mechanism for judicial oversight of the process of condemnation is required by article 17 of the Charter of Fundamental Rights of the European Union (CFR) (equivalent to article 1 of the First Protocol to the ECHR) which protects the right to property, read with article 47, which requires an effective judicial remedy for everyone whose rights and freedoms guaranteed by community law are violated. It would be a violation if an FBO were deprived of the property in the carcass or required to dispose of the carcass in such a way as to render it valueless without proper justification or compensation. Judicial review does not constitute an appeal which satisfies the (6) requirement in Regulation (EC) No 882/2004 that there be a right of appeal. Regulation (EC) No 882/2004 requires that there be a right of appeal against the decision of an OV on the merits going beyond what is possible in judicial review. Against this, the competent authority, the FSA, argues that it would be incompatible with the regime established by the Regulations if resort were made to the procedure under section 9 of the 1990 Act in order to challenge the decision of the OV under article 5 of Regulation (EC) No 854/2004 on its merits. The FSA accepts that the lawfulness of the decision can be challenged in judicial review proceedings as set out above. In summary, the FSA asserts that: (1) The requirements of Regulation (EC) No 854/2004 are a lex specialis in relation to products of animal origin. Regulation (EC) No 882/2004 is without prejudice to specific Community provisions regarding official controls (article 1.3). Regulation (EC) No 854/2004 therefore takes precedence over Regulation (EC) No 882/2004 where it is necessary to do so. (2) There is a distinction between the roles undertaken by the OV under article 4 of Regulation (EC) No 854/2004 and those undertaken under article 5. The former concerns the audit of an FBOs general practices and compliance with food hygiene requirements. It is accepted that article 54 of Regulation (EC) No 882/2004 is capable of being applied to that role. However, it should be noted that, despite the wording of recital (43), article 54.3 stops short of positively requiring that there be a right of appeal. (3) The role of inspecting and health marking individual carcasses under article 5 is quite different from the audit role under article 4. The OV alone (with the assistance permitted under the Regulation) has responsibility for deciding whether or not to apply a health mark, which is a necessary prerequisite to placing the meat on the market. Nobody other than the OV can perform this task. This can only be done when official controls have not identified any deficiencies that would make the meat unfit for human consumption. That weighted double negative test is consistent with the overall aim laid down in article 1.1 of Regulation (EC) No 178/2002, of the assurance of a high level of protection of human health and consumers interest in relation to food. It may be that the meat remains food even after the OV has decided not to apply a health mark, but it cannot thereafter be lawfully intended for human consumption. (4) The qualifications and experience of the OV are carefully specified so as to ensure that he or she is properly qualified to undertake that decision making role (with the assistance permitted under the Regulations). It would be incompatible with the requirements of Regulation (EC) No 854/2004 for a person or body other than the OV as referred to in article 5.2 and which does not have those qualifications and experience, such as a Justice of the Peace acting pursuant to section 9 of the 1990 Act, to decide whether a carcass should have had a health mark applied to it, even if adjudicating with the benefit of expert evidence presented by each side. (5) Article 17 of the CFR (and article 1 of the First Protocol to the ECHR) permit control of the use of property if this is a proportionate means of achieving a legitimate aim (reference is made to Booker Aquaculture Ltd (trading as Marine Harvest McConnell) v Scottish Ministers (Joined Cases C 20/00 and C 64/00) [2003] ECR I 7411). The above aim is undoubtedly legitimate and the means chosen proportionate. Article 17 does not mandate a right of challenge to the imposition of such controls. (6) If there is a requirement that there be a right of appeal in relation to the decision of an OV under article 5.2 of Regulation (EC) No 854/2004, it is satisfied by the availability of judicial review as set out above. Judicial review also satisfies any requirement under article 17 of the CFR (or article 1 of the First Protocol to the ECHR) of a possibility of judicial control of the actions of an OV. Conclusion (1) Do Regulations (EC) Nos 854/2004 and 882/2004 preclude a procedure whereby pursuant to section 9 of the 1990 Act a Justice of the Peace decides on the merits of the case and on the basis of the evidence of experts called by each side whether a carcass fails to comply with food safety requirements? (2) Does Regulation (EC) No 882/2004 mandate a right of appeal in relation to a decision of an OV under article 5.2 of Regulation (EC) No 854/2004 that the meat of a carcass was unfit for human consumption and, if it does, what approach should be applied in reviewing the merits of the decision taken by the OV on an appeal in such a case? For the purposes of this reference, the Court of Justice of the European Union is asked to assume that the claimant appellants interpretation of section 9 of the 1990 Act is correct, and that a Justice of the Peace has power to give a ruling which may result in an award of compensation if he considers that a health mark ought to have been applied to a carcass. In order to determine this appeal, this Court refers the following questions to the Court of Justice of the European Union: |
The mistreatment of migrant domestic workers by employers who exploit their employees vulnerable situation is clearly wrong. The law recognises this in several ways. Depending on the form which the mistreatment takes, it may well amount to a breach of the workers contract of employment or other employment rights. It may also amount to a tort. It may even amount to the offence of slavery or servitude or forced or compulsory labour under section 1 of the Modern Slavery Act 2015 or of human trafficking under section 2 of that Act. If a person is convicted of such an offence and a confiscation order made against him, the court may also make a slavery and trafficking reparation order under section 8 of the Act, requiring him to pay compensation to the victim for any harm resulting from the offence. But such orders can only be made after a conviction and confiscation order; and remedies under the law of contract or tort do not provide compensation for the humiliation, fear and severe distress which such mistreatment can cause. Such a remedy could be found if the employers conduct amounts to race discrimination under the Equality Act 2010 or its predecessor the Race Relations Act 1976. This would have the added advantage that proceedings for the statutory tort of race discrimination can be brought in an employment tribunal, at the same time as proceedings for unpaid wages and other breaches of the contract of employment and for unfair dismissal. The issue in this case, therefore, is whether the conduct complained of amounts to discrimination on grounds of race. In both the 1976 and 2010 Acts, at the relevant time, the definition of race also covered nationality and ethnic or national origins. In the two cases before us, the employment tribunals both found that the reason for the employers mistreatment of their employees was their victims vulnerability owing to their precarious immigration status. The principal question for this court, therefore, is whether discrimination because of, or on grounds of, immigration status amounts to discrimination because of, or on grounds of, nationality. The subsidiary question is whether the employers conduct amounted to indirect discrimination against persons who shared that nationality. Ms Taiwos case Ms Taiwo is a Nigerian national of Yoruba and Nigerian ethnicity. She is married and has two children but was living in poverty in Nigeria. She entered the United Kingdom lawfully in February 2010 with a migrant domestic workers visa obtained for her by Mr and Mrs Olaigbe, her employers. Mr Olaigbe is also a Nigerian of Yoruba ethnicity, but comes from a wealthy and influential family. Mrs Olaigbe is a Ugandan. They have two children (and at the time were also fostering two other children). They had manufactured a history of Ms Taiwos previous employment with Mr Olaigbes parents so that she would qualify for a domestic workers visa. They had also fabricated a contract of employment, which Ms Taiwo never saw, and which provided for more favourable terms of employment than Ms Taiwo had understood. On arrival in the United Kingdom, Mr Olaigbe took her passport and kept it. The employment tribunal found that Ms Taiwo was expected to be on duty, during most of her waking hours and was not given the rest periods required by the Working Time Regulations 1998 (SI 1998/1883). She was not paid the minimum wage to which she was entitled under the National Minimum Wage Act 1998. For April, May and June 2010, she was paid the sum of 200 per month which she had been promised, and there was a further payment of 300 in August. But in October she was forced to hand over 800 to the employers. She was not given enough to eat and suffered a dramatic loss of weight. She was subjected to both physical and mental abuse by Mr and Mrs Olaigbe and Mr Olaigbes mother, who was living with them for some of the time. She was slapped and spat at; she was mocked for her tribal scars and her poverty, and called a crazy woman. She was not allowed her own personal space and shared a room with the employers two children. The Employment Appeal Tribunal characterised her situation as systematic and callous exploitation. Eventually, through a sympathetic worker at the childrens playgroup, she was put in touch with social services and other agencies. These enabled her to escape in January 2011 and supported her thereafter. In April 2011 she brought a claim in the employment tribunal. In January 2012, the tribunal upheld her claims under the National Minimum Wage Act 1998, for unlawful deduction from wages under section 13 of the Employment Rights Act 1996, for failure to provide the rest periods required by the Working Time Regulations 1998 and for failure to provide written terms of employment under section 1 of the 1996 Act. In February she was awarded 30,458.85 under the National Minimum Wage Regulations, 1,520 for failure to provide written particulars of her contract of employment, and 1,250 for failing to provide rest periods. However, the employment tribunal dismissed her claims of direct and indirect race discrimination under the Equality Act 2010 (in fact some of her employment was covered by the Race Relations Act 1976, as the relevant provisions of the Equality Act 2010 only came into force on 1 October 2010, but it makes no material difference). The tribunal found that Ms Taiwo was treated as she was because she was a vulnerable migrant worker who was reliant on the respondents for her continued employment and residence in the United Kingdom. She had not been treated as she was because she was Nigerian. Another migrant worker whose employment and residence in the United Kingdom was governed by immigration control and by the employment relationship would have been treated in the same way. Mr and Mrs Olaigbe might have chosen to employ a Ugandan and there was no reason to think that a Ugandan would have been treated any more favourably than Ms Taiwo had been. Hence there was no direct discrimination on grounds of race. The Employment Appeal Tribunal upheld the employment tribunals conclusions on direct discrimination. They found that the tribunal had not properly approached the claim of indirect discrimination, because it had not tried to identify the provision, criterion or practice (PCP) which put the group to which the claimant belonged at a comparative disadvantage; but no tenable PCP had been put forward. Hence the appeal on discrimination was dismissed. Ms Onus case The facts of Ms Onus case are similar. She too is Nigerian. She entered the United Kingdom in July 2008 on a domestic workers visa obtained for her by her employers, Mr and Mrs Akwiwu. She had previously worked for them in Nigeria, but they too had supplied false information to the United Kingdom authorities in order to obtain the visa. Mrs Akwiwus mother later drafted a contract for her in Nigeria which provided that she would neither leave nor abscond from them within a year and that if she did she would be reported to the UK police and immigration authorities. They had taken away her passport on arrival and did not tell her where it was kept. She was not provided with a written statement of her terms and conditions of employment. She was required to work, on average, for 84 hours a week, looking after the home and the couples two children, one of whom was a prematurely born baby who required special care. She was not given the required rest periods or annual leave. She was not paid the minimum wage. She was threatened and abused by her employers. She was told that she would be arrested and imprisoned if she tried to run away. She was also told that the police in the United Kingdom were not like the Nigerian police, by which was meant that she would be arrested and put in prison for minor matters. She was not registered with a general practitioner. Ms Onu fled her employers home in June 2010, walking some eight miles to the home of a Jehovahs Witness whom she had met on the doorstep of the home because she had no money. She was put in touch with a charity which assists trafficked migrant workers. In September 2010 she brought proceedings making the same claims that Ms Taiwo made, to which she later added claims for harassment and victimisation under the Equality Act 2010. The employment tribunal upheld the same claims as had the tribunal in Ms Taiwos case and also held that Ms Onu had been constructively and unfairly dismissed. They further held that her employers had directly discriminated against her and had harassed her on grounds of race. They found that the employers had treated her less favourably than they would have treated someone who was not a migrant worker. They had treated her in the way that they did because of her status as a migrant worker which was clearly linked to her race. At the later remedy hearing, she was awarded 11,166.16 for unfair dismissal, including the failure to provide a statement of terms and condition; 43,541.06 for unpaid wages; 1,266.72 for unpaid holiday; and 25,000 for injury to feelings and 5,000 aggravated damages. The Employment Appeal Tribunal allowed the employers appeal in respect of the discrimination claim. They held that no part of the employers treatment of Ms Onu was inherently bound up with her race but rather with her subordinate position and the relative economic benefits of her work in the United Kingdom compared with the poverty of her situation in Nigeria. They also rejected a claim for indirect discrimination based on a PCP of the mistreatment of migrant domestic workers, because it was not a neutral criterion which disadvantaged some of those to whom it applied disproportionately when compared with others to whom it applied. The Court of Appeal The Court of Appeal heard the appeals of Ms Taiwo and Ms Onu on the discrimination issues together: [2014] EWCA Civ 279; [2014] 1 WLR 3636; [2014] ICR 571. On the direct discrimination claim, there were two issues: the grounds issue and the nationality issue. On the grounds issue, the court held that this was not a case in which the employers had published or applied a discriminatory criterion (an example would be that women required higher qualifications for employment than did men). It was therefore necessary to examine the employers mental processes to discover whether the employees immigration status formed part of the reasons for treating them so badly. It did not have to be the sole reason as long as it played a significant part. In this case it did so. That holding is not under appeal. On the nationality issue, the court held that immigration status was not to be equated with nationality for the purpose of the Race Relations and Equality Acts. There were many non British nationals working in the United Kingdom who did not share the particular dependence and vulnerability of these migrant domestic workers. On the indirect discrimination claim, the court found that the mistreatment of migrant workers was not a PCP. This factual situation had nothing to do with the kind of mischief which indirect discrimination is intended to address. Ms Taiwo has permission to appeal to this court on the nationality issue. Ms Onus case has been heard with hers as an application for permission to appeal with appeal to follow if permission is granted. In view of the importance of the issue, permission to appeal is granted. The court is particularly grateful to counsel for appearing for Mr and Mrs Akwiwu at very short notice, following the tragic and untimely death of Mr Jake Dutton who had represented them in the Employment Appeal Tribunal and the Court of Appeal. We are also grateful to counsel and their instructing solicitors for appearing pro bono for both Mr and Mrs Olaigbe and Mr and Mrs Akwiwu. Given that the Anti Trafficking and Labour Exploitation Unit is, quite properly, supporting the claims of Ms Taiwo and Ms Onu, it was particularly important that the contrary arguments were also fully presented to the court. Direct discrimination Section 13(1) of the Equality Act 2010 provides that A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others. By section 4 of the Act, race is a protected characteristic. By section 9(1) race includes (a) colour, (b) nationality, and (c) ethnic or national origins. By section 39(2), An employer (A) must not discriminate against an employee of As (B) (a) as to Bs terms of employment, (b) in the way A affords B access, or by not affording access, to opportunities for promotion, transfer or training or for receiving any other benefit, facility or service, (c) by dismissing B, (d) by subjecting B to any other detriment. The previous provisions of the Race Relations Act 1976 were to the same effect. There can be no doubt that the conduct of these employers would amount to unlawful direct discrimination if it was on racial grounds (under the 1976 Act) or because of race (under the 2010 Act), which includes nationality. These employees were treated disgracefully, in a way which employees who did not share their vulnerable immigration status would not have been treated. As the employment tribunals found, this was because of the vulnerability associated with their immigration status. The issue for us is a simple one: does discrimination on grounds of immigration status amount to discrimination on grounds of nationality under the 1976 and 2010 Acts? On the face of it, the two are different. What basis is there for saying that they are the same? Mr Robin Allen QC, who has said all that could possibly be said on behalf of the appellants, makes two basic points. First, he argues that immigration status is a function of nationality. It is indissociable from it. British nationals have a right of abode here which cannot be denied. All non British nationals are potentially subject to immigration control. They require leave to enter and leave to remain. These can be granted for limited periods and on limited terms. Even those granted indefinite leave to remain may have that status withdrawn. Secondly, he points to the flexible approach which has been adopted to the concept of nationality in other contexts. Thus, article 14 of the European Convention on Human Rights forbids discrimination in the enjoyment of the convention rights on any ground such as national or social origin or other status. In R (Morris) v Westminster City Council [2005] 1 WLR 865, it was held incompatible with article 14 of the European Convention on Human Rights, read with article 8, to deny a priority need for accommodation on the ground that a non British child was subject to immigration control while her British mother was not. By section 28 of the Crime and Disorder Act 1998, an offence is racially aggravated if the offender shows at the time, or is motivated by, hostility towards members of a racial group to which the victim belongs or is assumed to belong. By section 28(4) a racial group means a group of persons defined by reference to race, colour, nationality (including citizenship) or ethnic or national origins. In Attorney Generals Reference (No 4 of 2004) [2005] EWCA Crim 889; [2005] 1 WLR 2810, calling a doctor an immigrant doctor was enough to establish that an assault was racially motivated: the epithets Indian and immigrant were both clearly referable to his nationality and national origins. In R v Rogers [2007] 2 AC 62, it was held that calling people bloody foreigners, although without reference to a specific nationality, amounted to racially aggravated abuse. Mr Allen also points out that the United Kingdom Border and Immigration Agencys Code of Practice, Prevention of Illegal Working, Guidance for Employers on the Avoidance of Unlawful Discrimination in employment practices while seeking to prevent unlawful working (2008), gives as an example of direct discrimination on racial grounds, giving an employee with limited leave to remain more degrading forms of work in comparison with employees with unlimited leave (para 3.2). None of these examples is very helpful in deciding the issue which we have to decide. Article 14 of the ECHR contains an open ended list of characteristics which may result in unjustified discrimination in the enjoyment of the rights protected by the Convention, ending in other status. Foreign residence has been held to be a status for this purpose, so it is quite clear that immigration status also qualifies. There was no need to distinguish between this and nationality in the Morris case and so the fact that it was regarded as nationality discrimination is neither here nor there. The courts were not required to address their minds to the difference, if any, between the two, as we are here. Similarly, when deciding whether an offence is racially aggravated for the purpose of the 1998 Act, the distinction is unlikely to be relevant. Bloody foreigners is in any event a reference to nationality. Attorney Generals Reference (No 4 of 2004) is closer to this case, but it is easy to justify a liberal approach to a statute which recognises that some forms of criminal behaviour are more hurtful to the victim and more damaging to society than others. The courts had recognised this in their sentencing policies before the 1998 Act was enacted. The Equality Act 2010, and its predecessors, are very different. Generally speaking, the suppliers of employment, accommodation, goods and services are allowed to choose with whom they will do business. There is freedom to contract, or to refuse to contract, with whomever one pleases. The 2010 Act limits that freedom of contract (and also the freedom of suppliers of public services). It does so in order to protect specified groups who have historically been discriminated against by those suppliers, shut out of access to the employment, accommodation, goods and services they supply, for irrelevant reasons which they can do nothing about. In that context, the dividing line between which characteristics are protected and which are not protected is crucial. Parliament could have chosen to include immigration status in the list of protected characteristics, but it did not do so. There may or may not be good reasons for this certainly, Parliament would have had to provide specific defences to such claims, to cater for the fact that many people coming here with limited leave to remain, or entering or remaining here without any such leave at all, are not allowed to work and may be denied access to certain public services. So the only question is whether immigration status is so closely associated with nationality that they are indissociable for this purpose. Mr Allen is entirely correct to say that immigration status is a function of nationality. British nationals automatically have the right of abode here. Non British nationals (apart from Irish citizens) are subject to immigration control. But there is a wide variety of immigration statuses. Some non nationals enter illegally and have no status at all. Some are given temporary admission which does not even count as leave to enter. Some are initially given limited leave to enter but remain here without leave after that has expired. Some continue for several years with only limited leave to enter or remain. Some are allowed to work and some are not. Some are given indefinite leave to remain which brings with it most of the features associated with citizenship. In these cases, Ms Taiwo and Ms Onu had limited leave to enter on domestic workers visas. It was the terms of those visas which made them particularly vulnerable to the mistreatment which they suffered. At the relevant time, such visas were granted to workers who had already been working abroad for the employer, or the employers family, for at least a year; typically they would be granted for a year, though renewable; and the employee would have to seek the approval of the immigration authorities for any change of employer while here. In practice, therefore, such workers were usually dependent upon their current employers for their continued right to live and work in this country. The Independent Review of the Overseas Domestic Workers Visa (2015), commissioned by the Home Office, identified ten reasons for these workers particular vulnerability: their motivation and mentality is one of desperation, born of their inability to find work or earn enough to support their families in their home country (sometimes having left that country to work elsewhere before being brought to this country); they are without the safety net of friends and family and other support networks; they are often unfamiliar with the culture and language, which represents a significant barrier to wider social interaction; they often work long hours; they often do not know their legal rights; they mainly work in private homes, which are less easy to regulate; their work is often part of an informal economy, paid in cash and not declared to the tax authorities; their permission to be here depends upon their employers want or need of them; they have no recourse to public funds; and those employed by diplomats may have to combat claims of diplomatic immunity. Those, like the claimant in Hounga v Allen [2014] 1 WLR 2889, who have come here as visitors without permission to work and stayed here illegally, are even more vulnerable. Clearly, however, there are many non British nationals living and working here who do not share this vulnerability. No doubt, if these employers had employed British nationals to work for them in their homes, they would not have treated them so badly. They would probably not have been given the opportunity to do so. But equally, if they had employed non British nationals who had the right to live and work here, they would not have treated them so badly. The reason why these employees were treated so badly was their particular vulnerability arising, at least in part, from their particular immigration status. As Mr Rahman pointed out, on behalf of Mr and Mrs Akwiwu, it had nothing to do with the fact that they were Nigerians. The employers too were non nationals, but they were not vulnerable in the same way. That, in my view, is enough to dispose of the direct discrimination claim. But it is consistent with the approach of this court in the cases of Patmalniece v Secretary of State for Work and Pensions [2011] 1 WLR 783, which in turn applied the approach of the European Court of Justice in the cases of Schnorbus v Land Hessen (Case C 79/99) [2000] ECR I 10997 and Bressol v Gouvernement de la Communaut Franaise (Case C 73/08) [2010] 3 CMLR 559, and Preddy v Bull [2013] 1 WLR 3741. These were cases, not about whether a particular characteristic fell within the definition of a protected characteristic in the 2010 Act, but about whether the conduct complained of amounted to direct or indirect discrimination. There was no doubt that it was one or the other. Patmalniece was about whether a residence requirement, which all British nationals, but not all non British nationals, could meet was directly discriminatory on grounds of nationality. In Schnorbus, Advocate General Jacobs had said this (para 33): The discrimination is direct where the difference in treatment is based on a criterion which is either explicitly that of sex of necessarily linked to a characteristic indissociable from sex. It is indirect where some other criterion is applied but a substantially higher proportion of one sex than of the other is in fact affected. This concept of indissociability was taken up by Advocate General Sharpston in Bressol, where the facts were very similar to those in Patmalniece, and formulated thus (at para 56): I take there to be direct discrimination when the category of those receiving a certain advantage and the category of those suffering a correlative disadvantage coincide exactly with the respective categories of persons distinguished only by applying a prohibited classification. In all three cases, the discrimination was held to be indirect rather than direct (the Court of Justice disagreeing with the Advocate General in Bressol). There was not an exact correspondence between the advantaged and disadvantaged groups and the protected characteristic, as some of those distinguished by their nationality were not disadvantaged, although others were. The same approach was adopted in Preddy v Bull, where Christian hotel keepers would deny a double bedded room to all unmarried couples, whether of opposite sexes or the same sex. That would undoubtedly have been indirect discrimination, as same sex couples were not then able to marry and thus fulfil the criterion, whereas opposite sex couples could do so if they chose. But the majority held that it was direct discrimination, because the hotel keepers expressly discriminated between heterosexual and non heterosexual married couples. The couple in question were in a civil partnership, which for all legal purposes is the same as marriage. Mr Allen argues that these cases can be distinguished, because they were cases in which an express criterion was being applied, be it nationality or heterosexuality, whereas these appeals are not concerned with such a criterion or test, but with the mental processes of the employers. But that makes no difference. In mental processes cases, it is still necessary to determine what criterion was in fact being adopted by the alleged discriminator whether sex, race, ethnicity or whatever and it has to be one which falls within the prohibited characteristics. The point about this case is that the criterion in fact being adopted by these employers was not nationality but, as Mr Allen freely acknowledges, being a particular kind of migrant worker, her particular status making her vulnerable to abuse. Indirect discrimination Mr Allen accepts that this is not a case of indirect discrimination. It is direct discrimination or nothing. In my view he is wise to do so, but the fact that these cases cannot be fitted into the concept of indirect discrimination is further support for the view that the mistreatment here was not because of the employees race but for other reasons. Indirect discrimination is defined in section 19 of the 2010 Act thus: (1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of Bs. (2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of Bs if (a) A applies, or would apply, it to persons with whom B does not share the characteristic, it puts, or would put, persons with whom B (b) shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it, (c) it puts, or would put, B at that disadvantage, and (d) A cannot show it to be a proportionate means of achieving a legitimate aim. The concept in the 1976 Act was differently worded, but the basic principle is the same. An employer or supplier has a rule or practice which he applies to all employees or customers, actual or would be, but which favours one group over another and cannot objectively be justified. Requiring all employees to sport a moustache is obviously indirectly discriminatory against women. The problem in this case is that no one can think of a provision, criterion or practice which these employers would have applied to all their employees, whether or not they had the particular immigration status of these employees. The only PCP which anyone can think of is the mistreatment and exploitation of workers who are vulnerable because of their immigration status. By definition, this would not be applied to workers who are not so vulnerable. Applying it to these workers cannot therefore be indirect discrimination within the meaning of section 19 of the 2010 Act. In disclaiming any reliance on indirect discrimination in these cases, Mr Allen urges the court not to rule out the possibility that, in other cases involving the exploitation of migrant workers, it may be possible to discern a PCP which has an indirectly discriminatory effect. I am happy to accept that: in this context never say never is wise advice. Conclusion It follows that these appeals must fail. This is not because these appellants do not deserve a remedy for all the grievous harms they have suffered. It is because the present law, although it can redress some of those harms, cannot redress them all. Parliament may well wish to address its mind to whether the remedy provided by section 8 of the Modern Slavery Act 2015 is too restrictive in its scope and whether an employment tribunal should have jurisdiction to grant some recompense for the ill treatment meted out to workers such as these, along with the other remedies which it does have power to grant. |
Traders who wish to appeal against assessments to Value Added Tax (VAT) in the United Kingdom are required, by section 84 of the Value Added Tax Act 1994, first to pay or deposit the tax notified by the assessment with HMRC, unless they can demonstrate that to do so would cause them to suffer hardship. Otherwise, their appeal will not be entertained. This pay first requirement is a feature of the procedural regime for appealing assessments to a number of other types of tax, including Insurance Premium Tax, Landfill Tax, Climate Change Levy and Aggregates Levy. But it is not a condition for appealing assessments to Income Tax, Capital Gains Tax (CGT), Corporation Tax or Stamp Duty Land Tax (SDLT). VAT is, in the UK and elsewhere in the European Union, regulated by the provisions of EU Directives, currently of VAT Directive 2006/112. An appeal against an assessment to VAT is therefore a claim based on EU law. All the other taxes and levies referred to above are regulated by domestic law, so that appeals against assessments to any of them are based on domestic law. The appellant Totel Ltd (Totel) seeks to appeal a number of assessments to VAT but has been unable to demonstrate that a requirement to pay or deposit the tax in dispute would cause it hardship. But Totel claims that the requirement to pay or deposit the disputed tax as a condition for its appeals being entertained offends against the EU law principle of equivalence. In outline, this principle requires that the procedural rules of member states applicable to claims based on EU law are not less favourable than those governing similar domestic claims. It is submitted that appeals against assessment to Income Tax, CGT and SDLT are claims which are similar to appeals against assessment to VAT and that, because a VAT appeal is subjected to the pay first requirement whereas those other appeals are not, then the UKs procedural rules for VAT appeals are less favourable than those governing similar domestic claims. In the course of a convoluted but irrelevant procedural history Totel first raised its challenge based upon the principle of equivalence when (successfully) seeking permission to appeal from the Upper Tribunal (Tax and Chancery Chamber) to the Court of Appeal. In December 2016 the Court of Appeal rejected that challenge on two grounds. Logically the first (although the second to be dealt with in the leading judgment of Arden LJ) was that none of the domestic taxes (Income Tax, CGT and SDLT) relied upon by Totel were true comparators with VAT for the purpose of the application of the principle of equivalence. The second ground was that, even if they were, there were other domestic taxes (namely those described in para 1 above) which subjected appeals against assessments to the same pay first requirement, so that it could not be said that EU derived VAT appeals had been picked out for the worst procedural treatment. Accordingly, what is commonly called the no most favourable treatment proviso (the Proviso) applied so as to prevent infringement of the principle of equivalence. In this court Totel challenges both those conclusions of the Court of Appeal. For their part, HMRC challenge (for the first time) the underlying assumption that, when viewed in the round, the procedure for appeals against tax assessments is rendered less favourable to the taxpayer by the imposition of the pay first requirement in relation to only some of them. The principle of equivalence and its qualifying Proviso are creatures of the jurisprudence of the CJEU (and its predecessors), and take effect within the general context that it is for each member state to establish its own national procedures for the vindication of rights conferred by EU law: see EDIS v Ministero delle Finanze (Case C 231/96) at paras 19 and 34 of the judgment. Further, it has been repeatedly stated by the CJEU that it is for the courts of each member state to determine whether its national procedures for claims based on EU law fall foul of the principle of equivalence, both by identifying what if any procedures for domestic law claims are true comparators for that purpose, and in order to decide whether the procedure for the EU law claim is less favourable than that available in relation to a truly comparable domestic claim. This is because the national court is best placed, from its experience and supervision of those national procedures, to carry out the requisite analysis: see Palmisani v Istituto Nazionale della Previdenza Sociale (Case C 261/95) at para 38, and Levez v TH Jennings (Harlow Pools) Ltd (Case C 326/96) [1999] ICR 521, para 43. The search for a true comparator The principle of equivalence works hand in hand with the principle of effectiveness. That principle imposes a purely qualitative test, which invalidates a national procedure if it renders the enforcement of a right conferred by EU law either virtually impossible or excessively difficult. By contrast, the principle of equivalence is essentially comparative. The identification of one or more similar procedures for the enforcement of claims arising in domestic law is an essential pre requisite for its operation. If there is no true comparator, then the principle of equivalence can have no operation at all: see the Palmisani case, at para 39. The identification of one or more true comparators is therefore the essential first step in any examination of an assertion that the principle of equivalence has been infringed. Plainly, the question whether any, and if so which, procedures for the pursuit of domestic law claims are to be regarded as true comparators with a procedure relating to an EU law claim will depend critically upon the level of generality at which the process of comparison is conducted. Is it sufficient that both claims are tax appeals, or (as Totel submits) appeals against the assessment of tax, or that they must both be made to the same tribunal? Or is it necessary to conduct some more granular analysis of the different claims, and the economic structures in which they arise? Or is there some simple yardstick which would prevent claims from being truly comparable, such as, in the present case, the difference between claims arising out of the assessment of liability to direct and indirect taxes, (as HMRC submits)? Decisions of the CJEU provide considerable assistance in identifying the correct approach to this task, although the guidance to be gained from some of them is not always that which springs from an over simplistic analysis of particular phraseology. First, the question whether any proposed domestic claim is a true comparator with an EU law claim is context specific. As Lord Neuberger put it in Revenue and Customs Comrs v Stringer [2009] UKHL 31; [2009] ICR 985 at para 88: It seems to me that the question of similarity, in the context of the principle of equivalence, has to be considered by reference to the context in which the principle is being invoked. This proposition was not in dispute between counsel, and it is therefore unnecessary to cite decisions of the CJEU in support of it, although most of those to which reference is made below illustrate or mandate the conduct of a context specific enquiry. The domestic court must focus on the purpose and essential characteristics of allegedly similar claims: see the Levez case, at para 43 of the judgment: In order to determine whether the principle of equivalence has been complied with in the present case the national court which alone has direct knowledge of the procedural rules governing actions in the field of employment law must consider both the purpose and essential characteristics of allegedly similar domestic actions. To the same effect is para 35 of the judgment of the Grand Chamber in Transportes Urbanos y Servicios Generales SAL v Administracin del Estado (Case C 118/08). In Littlewoods Retail Ltd v Revenue and Customs Comrs (Case C 591/10) [2012] STC 1714, the Court at para 31 used the phrase similar purpose and cause of action, without in my view thereby intending to change the underlying meaning from that described in the earlier cases. Of particular importance within the relevant context is the specific procedural provision which is alleged to constitute less favourable treatment of the EU law claim. This is really a matter of common sense. Differences in the procedural rules applicable to different types of civil claim are legion, and are frequently attributable to, or at least connected with, differences in the underlying claim. A common example is to be found in different limitation periods. Thus, in England and Wales, the primary limitation period for personal injury claims is three years, whereas the primary limitation period for most other claims is six years. There is a 20 year prescription period for property claims in Scotland. To treat personal injury and, for example, property claims as true comparators for the purpose of deciding whether the shorter limitation period for personal injury claims constituted less favourable treatment would make no sense. This is because it is no part of the purpose of the principle of equivalence to prevent member states from applying different procedural requirements to different types of claim, where the differences in those procedural requirements are attributable to, or connected with, differences in the underlying claims. Mr Michael Firth for Totel drew the courts attention to some passages in European authorities which, he submitted, justified addressing the similarity question at a very high level of generality, in support of his broad submission that all UK appeals against tax assessments are true comparators with an appeal against a VAT assessment. He relied, for example, on the following passage in the courts judgment in the Transportes Urbanos case, at para 36: As regards the purpose of the two actions for damages referred to in the previous paragraph, the Court notes that they have exactly the same purpose, namely compensation for the loss suffered by a person harmed as a result of an act or omission of the State. Accordingly, he submitted, all claims against the state for compensation for loss were, at least in principle, capably of being truly comparable for the purposes of the principle of equivalence. Taken out of context, that citation might appear at first sight to support Mr Firths submission, but a closer analysis of that case shows that it does nothing of the kind. The claimant complained that it had been over charged to VAT, and its consequential loss could be remedied if either the charge in question was contrary to European law, or if it was contrary to the Spanish Constitution. In the former case Spanish procedural law imposed a condition requiring prior exhaustion of remedies, whereas it did not for the latter. The alternative claims were held to be true comparables for the purposes of the principle of equivalence not because they were both, viewed in the abstract, claims against the state for compensation for loss, but because they were alternative legal bases for claiming compensation for precisely the same loss. This is, in particular, apparent from para 43 of the Courts judgment. Alternative types of claim for compensation for exactly the same loss are a common example of true comparators: see eg Preston v Wolverhampton Healthcare NHS Trust (No 2) [2001] 2 AC 455. For his part, Mr Jonathan Swift QC for HMRC submitted that dicta in European and domestic authority justified a conclusion that there could never be a true comparator with an appeal against a VAT assessment, apart from some other assessment to VAT. In short, he submitted that VAT, and all claims relating to it, were sui generis, with no true comparator arising from any other type of tax. He began with the following dictum of Moses J in Marks & Spencer plc v Comrs of Customs and Excise [1999] 1 CMLR 1152, a case in which a limitation period for the recovery of overpaid VAT was alleged to offend the principle of equivalence. At paras 61 62 he said: In my judgment no comparison can be made with other types of tax such as income tax payable in respect of an individuals profits or the tax on a document imposed by stamp duty. Other forms of indirect taxation, such as excise duty, are wholly different types of tax. It seems to me that the jurisprudence of the European Court of Justice, exemplified in EDILIZIA, requires a comparison between the approach of a member state to the recovery of tax charged in breach of Community rules and the recovery of the same tax in breach of domestic rules. Any wider enquiry would invite unnecessary argument as to whether there is a true comparison. (My emphasis) Referring to the principle of equivalence, he concluded: The principle is designed to protect Community law rights: adequate protection is afforded by focusing upon the way a member state deals with the same tax in a domestic as opposed to Community context. The difficulty with this analysis, as Mr Firth pointed out, is that (as Mr Swift agreed) all claims to recover overpaid VAT are necessarily based on EU law, because VAT is a tax regulated by EU law. Moses Js analysis was approved by the Court of Appeal in Littlewoods Ltd v Revenue & Customs Comrs (CA) [2015] EWCA Civ 515; [2016] Ch 373, paras 133 134 in the judgment of Arden LJ. But it appears that her analysis was based on the same concession, namely that there could be purely domestic claims for recovery of overpaid VAT. Mr Swift obtained more persuasive assistance from Reemtsma Cigarettenfabriken GmbH v Ministero delle Finanze (Case C 35/05) [2007] ECR I 2452. It was alleged in that case that a provision limiting the identity of those who could claim a VAT repayment offended against the principle of equivalence because there was no comparable restriction in relation to the recovery of overpaid direct tax. At paras 94 and 95 of her opinion, Advocate General Sharpston agreed with the following submission of the Commission: In general a situation in that (direct tax) field is unlikely to be comparable to that in the field of VAT. In the latter it is in principle only the supplier who is in a direct legal relationship with the tax authority. Indeed, the whole system of direct taxation is unrelated to that of VAT. Since the principle of non discrimination concerns only comparable situations, it is thus not relevant here. In its judgment, the Court adopted the more general part of the Commissions argument at para 45: In the present case, the system of direct taxation, as a whole, is not related to the VAT system. Accordingly, the Court concluded that none of the EU anti discriminatory principles, including the principle of equivalence, were engaged by the comparison between VAT and direct taxation. Compass Contract Services Ltd v Comrs for Her Majestys Revenue and Customs (Case C 38/16) EU:C:2017:454 involved a comparison between different limitation periods applicable to claims to recover overpaid VAT, and claims to deduct input tax from VAT otherwise due, for the purposes of the equal treatment principle. The Fourth Chamber of the CJEU concluded that, even within the confines of the VAT regime, the two claims were not truly comparable: see paras 36 39 of the judgment. Taken together, these authorities certainly justify the exercise of very considerable caution by a national court when faced with the assertion that a VAT claim should be treated as truly comparable, for the purposes of the principle of equivalence, with a claim relating to some domestic tax, and in particular with any direct tax. But I do not consider it necessary or appropriate to go so far as to conclude that, for all purposes connected with the principle of equivalence, VAT claims must be treated as sui generis, with no possibility of there being a true comparator in a claim arising out of some other tax. My reasons follow. First, the identification of any such general rule would run counter to the context specific basis upon which it is clear that the examination of comparators for the purposes of the principle of equivalence must be conducted. It would, in particular, rule out any analysis of the question whether the particular procedural provision alleged to amount to less favourable treatment had any connection with underlying differences between VAT and some different domestic tax. Secondly, although the courts ruling in the Reemtsma case appears to come quite close to such a general conclusion, the principle of equivalence lay only at the fringe of the issues there being considered by the CJEU, with the result that, unsurprisingly, the point was addressed with what may fairly be described as extreme brevity. The case was mainly about the related principles of neutrality, effectiveness and non discrimination. Thirdly, if the Reemtsma case had established such a general rule in 2007, namely that VAT is for this purpose sui generis, with no true comparators, it is difficult to understand why this did not constitute a simple solution to the question referred to the CJEU in the Littlewoods case (Case C 591/10) [2012] STC 1714, which included the question whether the restriction of a successful claimant to a VAT repayment to simple interest offended the principle of equivalence, when compared with interest payable on other types of claim for repayment of tax under domestic law. It is evident from paras 42 to 48 of the opinion of Advocate General Trstenjak that there was a wide range of submissions as to potential comparators, including a concession from the UK government that, in principle, repayment claims under domestic indirect taxation were comparable for the purposes of the principle of equivalence, in the context of different entitlement to interest. In accordance with the Advocate Generals advice, the Court of Justice referred the comparability question to the UK courts. This must have been on the basis either that there was no rule of general application for all purposes that VAT claims could in no circumstances be treated as truly comparable with claims for repayment of domestic tax, or that the CJEU regarded claims for restitution against the state as falling within a separate category. Nevertheless, applying the context specific analysis called for by the European jurisprudence which I have described, the Court of Appeal was in my judgment correct to conclude that none of the domestic taxes (namely Income Tax, CGT and SDLT) proposed by Totel constituted true comparators with VAT for the purpose of deciding whether the imposition in the VAT context of a pay first requirement constituted less favourable treatment contrary to the principle of equivalence. This is because a trader seeking to appeal a VAT assessment is typically in a significantly different position from a taxpayer seeking to appeal an assessment to any of those other taxes, and in a manner which is properly to be regarded as sufficiently connected with the imposition of a pay first requirement. In that respect my reasoning is closely aligned with that of the Court of Appeal, as explained in para 54 of Arden LJs judgment. Subject to certain exceptions to which I refer below, VAT is a tax of which the economic burden falls upon the ultimate consumer, but which is collected by the trader from the consumer, and accounted for by the trader to HMRC. By contrast, taxpayers seeking to appeal an assessment to Income Tax, CGT and SDLT are being required to pay, from their own resources, something of which the economic burden falls on them, and which they have not collected, for the benefit of the Revenue, from anyone else. It is therefore no less than appropriate that traders assessed to VAT should be required (in the absence of proof of hardship) to pay or deposit the tax in dispute, which they have, or should have, collected, while no similar requirement is imposed upon the taxpayers in those other, and different, contexts. I do not by reference to this connection between the pay first requirement and the traders paradigm status as a tax collector rather than a taxpayer mean to suggest that it is a condition of the recognition of this important difference separating VAT from other taxes that the pay first requirement was devised for that specific reason. The evidence before the court did not show what, in fact, the reason was. The existence of a logical rather than causal connection is sufficient to justify the conclusion that VAT is different from those other taxes in this context, rather than a true comparator, regardless of the reason for the imposition of the pay first requirement. Mr Firth sought to challenge this distinction between VAT and those other taxes. First, he submitted that the portrayal of the VAT registered trader as a collector rather than a payer of tax was true only for one of the three types of liability for VAT, the other two being acquisition from other member states and imports from outside the EU. That is, I agree, true of those heads of liability, but they arise only in a cross border context, and for the purpose of making the VAT scheme work as a whole. The paradigm remains that of the trader who collects VAT from his customers and accounts for it to the Revenue. Secondly, Mr Firth submitted that by no means in every case would a trader seeking to appeal a VAT assessment already have collected the relevant tax from his customer. The appeal might be about whether his supply was subject to VAT, in circumstances where he had not charged VAT at all. That is, again, true as far as it goes, but it does not significantly impact on the paradigm. More typical are those appeals where the underlying dispute is whether the trader is entitled to deduct from tax collected on his supplies the VAT paid by him on his inputs. Thirdly, Mr Firth submitted that even if the VAT trader could generally be regarded as a collector rather than payer of tax, the same was equally true of an employer deducting and accounting for employees Income Tax under the PAYE scheme so that Income Tax was, nonetheless, a true comparator with VAT. I would, again, acknowledge that there is an element of similarity between the two, but there are important differences. First, in circumstances of wilful failure to deduct by the employer the employee remains liable to the Revenue for Income Tax whereas, in the VAT context, the only recourse of HMRC is to the trader rather than the consumer. This distinction is closely connected with the existence of a pay first condition for a VAT appeal but not in a PAYE context. Secondly, the employer has not charged and received a payment from employees creating a fund for which the employer is accountable. Thirdly, the PAYE scheme is only a sub set of the Income Tax scheme viewed as a whole, and lies nowhere near so close to the essential nature of the relevant tax structure as does the quasi collector status of the VAT trader. Finally, it was no part of Totels case that, for the purposes of the principle of equivalence, the PAYE part of the Income Tax scheme was the sole true comparator with VAT for the purpose of testing whether the pay first requirement represented less favourable treatment. Rather, Totels case was that, simply because all appeals against assessments to tax are made for the same general purpose, and to the same tribunal, they could all properly be regarded as true comparators with appeals of assessments to VAT. That requires the similarity question to be addressed at a level of generality which is so high as to place it outside the entirety of the relevant jurisprudence about the principle of equivalence. It must therefore be rejected. My conclusion on this issue is sufficient to dispose of this appeal. The issue as to the meaning and application of the Proviso has content only against the hypothetical assumption that appeals against assessment to all kinds of direct and indirect domestic tax are true comparators with VAT appeals, and the unreality of that hypothesis makes it difficult to conduct a reliable analysis of the second issue. But it has been fully argued, and it was the first plank upon which the Court of Appeal dealt with the case. I shall therefore make some limited observations about it although, had it been necessary to decide this issue for the resolution of this appeal, I might have regarded it as deserving of a reference to the CJEU. But first it is convenient to deal with the new submission of HMRC that the imposition of the pay first requirement does not in any event amount to less favourable treatment. Does the pay first requirement amount to less favourable treatment? This issue would arise if, contrary to my conclusion, there had been a truly comparable domestic tax in relation to which an appeal against an assessment was not subjected to the pay first requirement which affects VAT appeals. It is an issue which would therefore arise if any of Income Tax, CGT or SDLT had been a true comparator for the purposes of the principle of equivalence. Less favourable treatment is not, of course, established merely because the procedure for one type of claim contains a restriction or condition which is absent from the procedure for another type of claim. It is common to find that different claims are subjected to a package of procedural requirements, such that some of those affecting claim A are less favourable, but others more favourable, than those affecting claim B. A good example is to be found in Preston v Wolverhampton NHS Trust (No 2) [2001] 2 AC 455, illustrated in paras 29 to 31 in the speech of Lord Slynn. In the present case, for the first time in this court, HMRC point out that appeals against assessment to Income Tax, CGT and SDLT are subject to a procedural regime such that the tax in dispute may still be collected pending the outcome of the appeal, by processes of enforcement which may include the presentation of a winding up petition against the taxpaying company, unless the taxpayer can obtain postponement of payment, by demonstrating that there are reasonable grounds for believing that the tax in dispute has been overcharged: see, in relation to Income Tax, section 55 of the Taxes Management Act 1970 and, in relation to SDLT: paragraph 39 of Schedule 10 to the Finance Act 2003. If the taxpayer faces a winding up petition on the basis of the tax in dispute, then it may defend that petition by showing that the amount in dispute is bona fide disputed on substantial grounds. HMRC concedes that the same principles about postponement, and the defence of a winding up petition, apply also to the collection of VAT pending an appeal: see Revenue and Customs Comrs v Changtel Solutions UK Ltd [2015] EWCA Civ 29; [2015] 1 WLR 3911. Nonetheless Mr Swift submits that, in practice, a trader who has obtained disapplication of the pay first requirement by demonstrating hardship would not thereafter be subjected to any process of enforced collection of the disputed tax, pending the outcome of the appeal. Mr Swifts point is not so much that the pay first requirement in relation to VAT is balanced out by the provisions about collection and postponement pending appeal in relation to Income Tax, CGT and SDLT. Rather, he submits that, looked at in the round, the two regimes have broadly the same effect, so that the VAT regime cannot be described as less favourable. Viewed from the perspective of a trader with a good case for proving hardship, together with a reasonable prospect of success on appeal, that might in practice be so, although I would not accept that in no circumstances could a tax demand be enforced against a VAT trader who had established hardship. The two statutory tests are not the same. Nonetheless, from the perspective of a trader who cannot demonstrate hardship, the position seems to me to be rather different. Such a trader would have to raise and lodge the tax in dispute up front, before commencing an appeal. By contrast a taxpayer under Income Tax, CGT or SDLT is at liberty to initiate an appeal against an assessment, and may or may not be faced with an application for collection by HMRC. More generally, there is in my view no escape from the fact that the pay first requirement is additional to, rather than a substitute for, the regime for collection and postponement so that, in principle, it constitutes less favourable treatment for VAT appellants even if, in certain types of supposedly comparable cases, it may make no difference to the outcome, in terms of the ability to prosecute an appeal without paying the tax in dispute. The no most favourable treatment Proviso This issue arises if the search for true comparators with the EU claim discloses more than one comparable domestic claim with, viewed in the round, different levels of favourableness in procedural treatment. On almost every occasion when it has referred to the principle of equivalence the CJEU has added the proviso that the principle does not require the EU claim to be treated as favourably as the most favourably treated comparable domestic claim. In the earliest of the cases cited to this court, the EDIS case, the proviso is explained thus, at para 36: That principle (the principle of equivalence) cannot, however, be interpreted as obliging a member state to extend its most favourable rules governing recovery under national law to all actions for repayment of charges or dues levied in breach of Community law. Similar statements appear in the Levez case at para 45, in Pontin v T Comalux SA (Case C 63/08) [2009] ECR I 10467, at para 45, in the Transportes Urbanos case, at para 34 and in the Littlewoods case, at para 31. But none of these cases provide any more comprehensive explanation of how the Proviso is to be applied in practice. This may be because its detailed operation is a matter for national courts, and the CJEU considers that the Proviso as described above is sufficiently self explanatory for that purpose. The issue of interpretation of the Proviso arises in the present case on the assumption that truly comparable domestic tax claims may include appeals against assessment not only to domestic taxes like Income Tax, where the procedure does not include a pay first requirement, but also to other taxes like Insurance Premium Tax and Landfill Tax, which do. Thus VAT claims are treated less favourably than one or more true comparators, but equally favourably with others. There are only two levels of differently favourable treatment on this particular domestic spectrum of supposedly comparable claims, but it is easy to imagine a spectrum with several levels, with treatment of the comparable EU claim lying at the top, in the middle, or at (or below) the bottom of that spectrum. In Revenue and Customs Comrs v Stringer [2009] ICR 985, probably thinking of a spectrum of the latter kind, Lord Neuberger said this (obiter) about the Proviso: This is therefore not a case where it could be said that the appellants are seeking to benefit from the most favourable rules of limitation, which I understand to mean exceptional or unusually beneficial rules (as mentioned by the Court of Justice in Levez v TH Jennings (Harlow Pools) Ltd, at para 42). In para 42 of the Levez case the CJEU merely repeated the Proviso as enunciated in the EDIS case and set out above, slightly adjusting the language to suit the facts, but without any underlying change in meaning. In the present case Mr Swift submitted that the Proviso should be treated as a reflection of the underlying purpose of the principle of equivalence, namely that national procedural rules should not single out EU claims for worse treatment, and specifically not discriminate against them by reason of their EU, rather than national, origin. If therefore the procedure for any true domestic comparator gave treatment to its claimant no more favourable than given to the EU claim, then the principle of equivalence was satisfied. If in the present case Insurance Premium Tax and Landfill Tax are true comparators, then the treatment of VAT appeals does not infringe the principle of equivalence. By contrast Mr Firth submitted that once any true comparator was identified the procedure for which treated its claimants better than did the procedure for the EU claim, then the principle of equivalence was infringed, unless the better domestic treatment fell into that exceptional category identified by Lord Neuberger in the Stringer case as excluded by the Proviso. Income Tax, CGT and SDLT could not be excluded as conferring exceptionally favourable treatment, and the fact that there were other domestic tax appeals treated equally favourably with VAT was neither here or there. The fact that domestic appellants in Insurance Premium Tax cases also received less favourable treatment than Income Tax appellants did not mean that the EU based claims by VAT registered traders were not less favourably treated. One example of discrimination does not, so it is said, justify another. Both sides sought to squeeze out of the language of the CJEU decisions some titbits favourable to their sharply opposing cases on this point. For example, in the paragraph of the judgment in the EDIS case following the statement of the Proviso (para 37) is it stated: Thus, Community law does not preclude the legislation of a member state from laying down, alongside a limitation period applicable under the ordinary law to actions between private individuals for the recovery of sums paid but not due, special detailed rules, which are less favourable, governing claims and legal proceedings to challenge the imposition of charges and other levies. The position would be different only if those detailed rules applied solely to actions based on Community law for the repayment of such charges or levies. That last sentence, said Mr Swift, clearly allowed a member state to resist an allegation of breach of the principle of equivalence if any similar domestic procedure included a pay first requirement. follows: In the present case the Court of Appeal applied that dictum, at para 47, as The jurisprudence of the CJEU shows that it is open to a member state to apply any available set of rules, which are already applied to similar claims, to an EU derived claim, provided that an EU derived claim is not selected for the worst treatment. No one suggests that that is the position here. Mr Firth relied by contrast first upon dicta from the Levez case, at paras 39 to 45 of the judgment. In my view, taken in context, they are neutral on the point. The high water mark of his citations was this passage from the Pontin case, at para 56 of the judgment: If it emerges that one or more of the actions referred to in the order for reference, or even other national remedies that have not been put before the Court, are similar to an action for nullity and reinstatement, it would also be for the referring court to consider whether such actions involve more favourable procedural rules. The implication was, he said, that the discovery of any comparable domestic claim with more favourable treatment that the EU claim would offend the principle of equivalence. I do not consider that any reliable answer to this question can be found by the minute textual analysis of the CJEU authorities. Nor was Lord Neubergers instinctive conclusion about the limited meaning of the Proviso in the Stringer case intended to be a fully reasoned or comprehensive explanation of its full purpose and effect. I need reach no final conclusion in this case, but would tentatively suggest the following analysis. First, the Proviso should not be regarded as some free standing rule, separate from the principle of equivalence. Rather it is part of the Court of Justices expression of the principle of equivalence itself, directed to explaining the standard of treatment which that principle imposes upon member states when providing procedures for the vindication of rights based in EU law. What is required is that the procedure should be broadly as favourable as that available for truly comparable domestic claims, rather than the very best available. Secondly, the Proviso is, like the principle of equivalence of which it forms part, best understood in the light of its purpose. Although nowhere expressly stated, I consider that HMRC were correct to submit that it is to prevent member states from discriminating against claims based upon EU law by affording them inferior procedural treatment from that afforded to comparable domestic claims. On that basis I consider that the conclusion of the Court of Appeal on this issue, set out in the passage quoted above from the judgment of Arden LJ, is broadly correct. I would only add that this would not justify the choice of some exceptionally tough set of procedural rules already applied to some domestic claim for reasons particular to that type of claim. But such a claim would be most unlikely to be a true comparator in any event. Conclusion I would therefore dismiss this appeal, on the ground that there has not been shown to be any true comparator among domestic claims sufficient to engage the principle of equivalence in relation to the imposition of a pay first requirement upon traders seeking to appeal assessments to VAT. |
This appeal relates to the right of the Police Service of Northern Ireland (PSNI) to retain personal information and data lawfully obtained from the appellant following his arrest on 14 October 2008 for the offence of driving with excess alcohol contrary to article 16(1)(a) of the Road Traffic (Northern Ireland) Order 1995 (the 1995 Order). On 5 November 2008 the appellant pleaded guilty to that offence at Newry Magistrates Court. He was thus a convicted person. He was fined 50 and disqualified from driving for 12 months but no immediate or suspended custodial sentence was imposed on him. He was born on 23 August 1972 and has therefore been an adult throughout the period relevant to this appeal. The facts are set out in the agreed statement of facts and issues and can be shortly stated. On 14 October 2008 at approximately 1.35 am the appellant was stopped at a police checkpoint. He was arrested and taken to a police station where he provided samples of breath which were found to contain 65 milligrams of alcohol per 100 millilitres of breath. That was 30 milligrams in excess of the permitted limit. On the same day the following information or data relating to the appellant was taken from him: (a) fingerprints pursuant to the statutory power in article 61 of the Police and Criminal Evidence (Northern Ireland) Order 1989 (the 1989 Order); (b) a photograph pursuant to the statutory power to do so under article 64A of the 1989 Order; and (c) a non-intimate DNA sample by buccal swab, pursuant to article 63 of the 1989 Order. For the purposes of this appeal it is not disputed that the appellants fingerprints, photograph and DNA sample were lawfully obtained by the PSNI with the consent of the appellant. I note in passing that article 61(4) of the 1989 Order permits the PSNI to take fingerprints of a person charged with a recordable offence in circumstances where he or she does not consent. Article 63(2A) of the 1989 Order permits the PSNI to take a non-intimate sample from a person detained in connection with a recordable offence in circumstances where he or she does not consent. As to photographs, by article 64A of the 1989 Order, any person lawfully detained at a police station may be photographed even without his or her consent. There is no threshold of recordable offence in relation to photographs. As noted in para 1 above, the appellant was charged with the offence of driving with excess alcohol contrary to article 16(1)(a) of the 1995 Order, which is a recordable offence by virtue of regulation 2 of the Northern Ireland Criminal Records (Recordable Offences) Regulations 1989. He pleaded guilty to the offence on 5 November 2008 at Newry Magistrates Court and (as stated above) was fined 50 and disqualified from driving for 12 months. A DNA profile (described at paras 14 and 15 below) was subsequently taken from the DNA sample. Schedule 1 of the Road Traffic (Northern Ireland) Order 1996 provides for a maximum penalty of six months imprisonment for the offence of driving with excess alcohol, a maximum fine of 5,000, or both, together with an obligatory disqualification from driving for 12 months. Article 6 Table A of the Rehabilitation of Offenders (Northern Ireland) Order 1978 provides that a conviction for driving with excess alcohol is spent after the expiry of five years. On 15 January 2009, just over two months after the appellant pleaded guilty, his solicitor wrote to the PSNI claiming that the retention of the appellants photograph, fingerprint and DNA sample was unlawful. He requested that they be destroyed or returned to the appellant. The PSNI replied on 27 February 2009 saying that the legal consequence of the decision of the European Court of Human Rights (ECtHR) in S and Marper v United Kingdom [2008] ECHR 1169 (S and Marper) was a matter for the United Kingdom Government and that any changes to the law of the United Kingdom would be fully complied with by the PSNI. On 12 April 2010 responsibility for the DNA and fingerprint retention policy in Northern Ireland passed to the Northern Ireland administration following the devolution of policing and justice powers from Westminster. It then became a matter for the Northern Ireland Minister of Justice and the Northern Ireland Assembly as to what legislative solution was to be introduced in Northern Ireland in response to the S and Marper judgment of the Grand Chamber in Strasbourg. Issues In the agreed statement of facts and issues the parties identified two questions for determination in this appeal as follows. First, does the retention of the fingerprints, photograph, DNA sample and DNA profile disclose an interference with the appellant's right to respect for his private life within the meaning of article 8(1) of the European Convention on Human Rights (ECHR), the appellant having been convicted of a recordable offence? Second, if so, is that interference justified under article 8(2)? Those questions reflect, at least in part, the way in which the appellants case was put on an application to the Divisional Court in Northern Ireland (Higgins, Girvan and Coghlin LJJ) for judicial review of the right of the respondent to retain the material described above (which the Divisional Court described as the relevant data) for an indefinite period: [2012] NIQB 88. In two respects the certificate granted by the Divisional Court is in somewhat different terms from the agreed statement of facts and issues, as follows: THE COURT CERTIFIES that the following point of law of general public importance is involved in the decision of the court. Is the policy of the Police Service of Northern Ireland to retain indefinitely the DNA profile, fingerprints and photographs of a person convicted of a recordable offence in breach of article 8 of the ECHR? As can be seen, there is no reference to the DNA sample. The PSNI intends to retain the DNA sample but only until the commencement of section 9 and, with it, Schedule 2 of the Criminal Justice Act (Northern Ireland) 2013 (the 2013 Act). These provisions have yet to come into force but are expected to do so in the comparatively near future. When they do come into force, Schedule 2 of the 2013 Act provides for the insertion of a new article 63P into the 1989 Order. Article 63P(2) requires the destruction of all DNA samples as soon as a DNA profile has been taken or within six months of the taking of the DNA sample. It will not therefore be possible to retain the appellants DNA sample once section 9 and Schedule 2 of the 2013 Act come into force. In these circumstances the appeal was argued on the assumption that the appellants DNA sample will not be retained. The appeal is thus concerned with the PSNIs policy with regard (a) to the retention of a convicted persons DNA profile and fingerprints, which I will refer to as his or her biometric data, and (b) to the retention of any photograph taken of him or her by the PSNI as described below. The PSNI continues to retain and intends to retain indefinitely within its records the DNA profile, fingerprints and photograph relating to the appellant that were taken from him on 14 October 2008. The appellant says that it cannot lawfully do so. The statutory position in Northern Ireland Pending the coming into force of the 2013 Act, which will broadly bring the position in Northern Ireland into line with the current position in England and Wales, the statutory position in Northern Ireland is as it was at the time of the decision of the ECtHR in S and Marper. Article 64(lA) of the 1989 Order, as amended by the Police and Criminal Evidence (Amendment) (Northern Ireland) Order 2007 (the 2007 Order) provides a general permission to the PSNI to retain fingerprints and samples after they have fulfilled the purposes for which they were taken. The use to which such fingerprints and samples may be put is, however, curtailed by article 64(lA) of the 1989 Order. The fingerprints and samples must not be used by any person except for purposes related to the prevention or detection of crime, the investigation of an offence, the conduct of a prosecution or the identification of a deceased person or of the person from whom a body part came. Article 64A(4) of the 1989 Order permits photographs relating to a person photographed to be retained by the police but it can only be used for a purpose permitted by statute. Current statutory position in England and Wales These amendments to the Police and Criminal Evidence Act 1984 (PACE) were introduced by the Protection of Freedoms Act 2012 in the light of the decision of the ECtHR in S and Marper. Section 63I of PACE now provides that fingerprints and a DNA profile (derived from a DNA sample) taken from a person convicted of a recordable offence may be retained indefinitely. Section 63K provides that where (i) the person convicted is under the age of 18 years at the time of the offence, (ii) the offence is a minor recordable offence (meaning an offence which neither attracts a custodial sentence of more than five years nor is a qualifying offence as defined in section 65A), and (iii) the person has not previously been convicted of a recordable offence, the period of retention of such material may be shorter: the length of the sentence plus five years where the person concerned receives a custodial sentence of less than five years (section 63K(2)), or, if no custodial sentence was given, five years from the time when the fingerprints or DNA sample were taken, as the case may be (section 63K(4)). These provisions are subject to the person not re-offending during the relevant period: if the person is convicted of another recordable offence during the relevant period, the material may then be retained indefinitely (section 63K(5)). Where the custodial sentence is five years or more or where the offence is a qualifying offence the material may again be held indefinitely. Section 63R relates to the destruction of samples, including non- intimate samples. Section 63R(4) provides for the general principle that a sample must be destroyed as soon as a DNA profile has been taken from it and, in any event, within six months of the sample being taken. As to photographs, section 64A(4) of PACE is in the same terms as article 64A(4) of the 1989 Order. At the request of the court, a note was produced on behalf of the Secretary of State, which included an annex setting out a summary overview of the PACE retention rules. That annex is reproduced as Annex A to this judgment. Policy and Practice of the PSNI Before the decision of the ECtHR in S and Marper it was the policy and practice of the PSNI to retain the fingerprints, photographs and DNA samples of persons from whom such information or data had been lawfully taken and where there was no statutory obligation to destroy such information or data. The fact that a person was subsequently acquitted of the offence that led to the taking of a photograph, fingerprint or sample was of no relevance. After the decision in S and Marper the policy and practice of the PSNI changed in relation to those who were acquitted but remained unchanged in relation to those, like the appellant, who were subsequently convicted. So, once the 2013 Act is in force, the policy and practice in the case of the appellant will allow the PSNI to retain the DNA profile, fingerprints and photograph for any use to which they may be lawfully put. DNA Profiles The method of obtaining a DNA profile is briefly described in the case for the Secretary of State and, so far as I am aware, is not in dispute. When the PSNI takes a DNA sample from a person, it is sent to Forensic Science Northern Ireland ("FSNI"), which is an agency of the Northern Ireland Department of Justice. FSNI extract a DNA profile from the DNA sample. A DNA profile is digitised information in the form of a numerical sequence representing a very small part of the person's DNA. The DNA profile extracted by FSNI indicates a persons gender. Other than indicating the gender of the person, DNA profiles do not include any information from which conclusions could be drawn as to the person's wider characteristics, such as age, height, hair colour or propensity to develop a particular disease. FSNI upload the DNA profile onto the Northern Ireland DNA Database (the NIDNAD), together with sufficient information to identify the person to whom it relates. This information does not include information as to whether a person has been convicted of, or is under investigation for, an offence. As of June 2012, the NIDNAD included the DNA profiles of 123,044 known persons. DNA profiles uploaded on to the NIDNAD are also loaded on to the United Kingdom National DNA Database, although the retention of Northern Irish DNA profiles on the NIDNAD is governed by the law and policy applicable in Northern Ireland. The NIDNAD is managed by FSNI on behalf of the PSNI. It is held on a standalone computer that cannot be accessed from outside FSNI. Access within FSNI is restricted to a small number of FSNI staff and access is audited. In particular, police officers do not have access to the NIDNAD. Where a search is requested, it will be undertaken by the appropriate FSNI staff and the police will only be provided with details of the matching profile, if any. Requests for searches from police forces other than the PSNI are considered on a case by case basis and are in any event subject to the same controls as a request from the PSNI. FSNI will not delete a DNA profile from the NIDNAD or destroy a DNA sample (which they retain) without instructions from the PSNI. Decisions to delete profiles are subject to the oversight of the PSNI Biometric Retention/Disposal Ratification Committee. When a DNA profile is loaded to the NIDNAD (whether it relates to a known person or whether it is a crime scene profile, with which this appeal is not concerned) it is cross-checked with the profiles already on the database. It is this process, which is known as speculative searching, which gives rise to the matches that are of use in the detection of crime. The control, management and operation of the NIDNAD are overseen by the NI DNA Database Board. Fingerprints When a person is taken into custody, the PSNI takes his or her fingerprints using a system which digitally scans fingerprints and palm prints and automatically loads them on to the IDENT1 United Kingdom database, where they are automatically searched against other sets of fingerprints held on that database. If a match is found, an electronic message is sent to the terminal at the custody suite confirming the identity of the person from whom the fingerprints were taken. It is said with force that the facility to verify the identity of the person from whom fingerprints are taken is necessary to combat the risk of a person giving a false identity, which is of particular use in the United Kingdom, where, by contrast with other European countries, there is no requirement to carry an identity card. Photographs When a person is taken into custody, the PSNI takes his or her photograph using a digital camera. The photographs are then loaded on to a PSNI database known as Niche, along with the person's custody record. They form part of the custody record and are available to view when accessing the custody record. Access to the Niche database is limited to authorised PSNI personnel and is audited. The Niche database does not have the capability to match photographs, whether by way of facial recognition software or otherwise. Photographs can of course be used to verify the identity of a person in order to combat the risk of a person giving a false identity to the police. They can also be used, subject to appropriate controls, to enable witnesses to identify a person. Article 8 of the ECHR Article 8 provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others. It is now rightly accepted on behalf of both the PSNI and the Secretary of State that article 8(1) is, as it is said, engaged, on the basis that the indefinite retention of a persons DNA profile, fingerprints and photograph interferes with the right to respect for private life recognised by article 8(1). However, it is of course common ground that there is no violation of article 8 if the PSNI can satisfy the court that its policy is in accordance with the law and necessary in a democratic society for one of the reasons identified in article 8(2). On the facts of this case, the questions which arise under article 8(2) are whether the retention policy is justifiable and, in particular, whether it satisfies the principle of proportionality. In this regard it is helpful to recall the four elements identified by Lord Reed in Bank Mellat v HM Treasury (No 2) [2013] UKSC 39, [2014] AC 700, para 74. Although Lord Reeds judgment was a dissenting judgment, there is no difference in principle between his formulation of the relevant principles and those stated by Lord Sumption for the majority. They are (1) whether the objective of the relevant measure is sufficiently important to justify the limitation of a protected right, (2) whether the measure is rationally connected to the objective, (3) whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective, and (4) whether, balancing the severity of the measure's effects on the rights of the persons to whom it applies against the importance of the objective, to the extent that the measure will contribute to its achievement, the former outweighs the latter. Lord Reed added that, in essence, the question at step four is whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure. He also noted at para 71 that an assessment of proportionality inevitably involves a value judgment at the stage at which a balance is to be struck between the importance of the objective pursued and the value of the right intruded upon. These proceedings The appellant sought leave to apply for judicial review of the decision to retain the biometric data and the photograph. By an order of Morgan J on 3 April 2009 the applicant was granted leave to apply for judicial review on the grounds set out in paras 9(c) and (d) of the Order 53 statement as follows: (c) The retention of the [data] for an indefinite period of time in the unregulated manner observed by the European court between paras 105-125 of its Judgment in S and Marper v UK (4 December 2008) is not proportionate and does not strike a fair balance between competing public and private rights. (d) A conviction for an offence of relatively minor gravity is very much the type of circumstance in which the Committee of Ministers in R(92)(1) gave a provisional view that there was no need for the taking or retention of such samples. The European court has been heavily influenced by that document and there is every reason to believe that they would continue to be influenced by that document and those observations in circumstances where they were dealing with the conviction of an individual for a minor offence in circumstances where the samples were taken not for the true purposes of investigating the offence but simply for the purpose of retaining data in connection with the individual. The orders sought were: (a) a declaration that the indefinite retention of the data was unlawful and constituted an unjustifiable interference with his right to respect for private life under article 8; and (b) an order of prohibition preventing the respondent from making any use of the relevant data. The substantive application was heard by the Divisional Court, which refused the application on 13 November 2012. Girvan LJ gave the judgment of the court. The Divisional Court was persuaded that the infringement was justified, so that article 8(2) was satisfied. The appellant says that it was wrong. The answer depends upon a number of matters: namely the correct approach under article 8(2), a consideration of the relevant statutory provisions in Northern Ireland, together with the policy of the PSNI, and an analysis of the cases decided so far, especially by the ECtHR. I have considered both the correct approach to proportionality under article 8(2) and the relevant statutory provisions in Northern Ireland, together with the policy of the PSNI. The Divisional Court considered in some detail both S and Marper in the House of Lords, reported in [2004] 1 WLR 219, and S and Marper in the ECtHR. In that litigation the challenge was to the retention of fingerprints, cellular samples and DNA profiles after proceedings against the individuals had led to acquittal or discontinuance. It will be recalled that the majority of the House of Lords, Baroness Hale dissenting, held that there was no infringement of article 8(1) and the House concluded unanimously that the retention could in any event be justified under article 8(2). The ECtHR disagreed. It held that there was a breach of article 8(1) and that the retention could not be justified as proportionate under article 8(2). It was accepted by this court in R (GC) v Commissioner of Police of the Metropolis [2011] UKSC 21; [2011] 1 WLR 1230 that in the light of S and Marper the decision in the House of Lords could no longer be accepted as correct. The reasoning of the ECtHR is important because both parties to this appeal rely upon it. The Divisional Court distinguished it on the basis that the court was not concerned with a case of retention after conviction but only with retention after acquittal. At para 30 Girvan LJ quoted these two striking paragraphs from the judgment, paras 119 and 125: 119. the court is struck by the blanket and indiscriminate nature of the power of retention in England and Wales. The material may be retained irrespective of the nature or gravity of the offence for which the individual was originally suspected or of the age of the suspected offender; fingerprints and samples may be taken and retained from a person of any age arrested in connection with a recordable offence which includes minor or non-imprisonable offences. The retention is not time limited, the material is retained indefinitely whatever the nature or seriousness of the offence of which the person was suspected. Moreover there exist only limited possibilities for an acquitted individual to have the data removed from the Nationwide Database or the materials destroyed; in particular, there is no provision for independent review of the justification for the retention according to defined criteria including such factors as the seriousness of the offence, previous arrests, the strength of the suspicion against the person and any other special circumstances. 125. In conclusion the court finds that the blanket and indiscriminate nature of the powers of retention of the fingerprints, cellular samples and DNA profiles of persons suspected but not convicted of offences as applied in the case of the present applicants, fails to strike a fair balance between competing public and private interests and that the respondent state has overstepped an acceptable margin of appreciation in this regard. Accordingly, the retention at issue constitutes a disproportionate interference with the applicant's right to respect for private life and cannot be regarded as necessary in a democratic society. This conclusion obviates the need for the court to consider the applicant's criticism regarding the adequacy of certain particular safeguards, such as too broad an access to the personal data concerned and insufficient protection against the misuse or abuse of such data. In para 37 Girvan LJ noted that the Strasbourg analysis in S and Marper proceeded along the usual course of determining whether the interference with the individuals article 8 rights was (a) in accordance with law, (b) pursued a legitimate aim and (c) was necessary in a democratic society. He added that question (c) involved the issue whether the retention was proportionate and struck a fair balance between the competing public and private interests. Girvan LJ noted in para 38 that, having regard to the limited grounds upon which leave was granted, the focus of the appellants case was on the question of necessity and proportionality. In para 39 he correctly noted that there was clearly a statutory power to retain the data and that the focus must be upon the proportionality of indefinite retention. Under Legitimate aim, the ECtHR said at para 100 that it agreed with the Government that the retention of fingerprint and DNA information pursues the legitimate purpose of the detection and, therefore, prevention of crime. It added that, while the original taking of this information pursues the aim of linking a particular person to the particular crime of which he or she is suspected, its retention pursues the broader purpose of assisting in the identification of future offenders. Under the heading Necessary in a democratic society the ECtHR discussed the general principles between paras 101 and 104. In summary it held that an interference will be considered necessary in a democratic society for a legitimate aim if it answers a pressing social need and, in particular, if it is proportionate to the legitimate aim pursued and if the reasons given by the national authorities to justify it are relevant and sufficient. It is for the national authorities to make the initial assessment subject to review by the ECtHR. A margin of appreciation must be left to the competent national authorities, which varies and depends upon a number of factors. They include the nature of the right in issue, its importance for the individual, the nature of the interference and the object pursued by the interference. Where there is no consensus among member states, either as to the relative importance of the interest at stake or as to how best to protect it, the margin will be wider. In para 103 the ECtHR stressed the importance of the protection of data to a persons enjoyment of his rights under article 8 in some detail by reference, in particular, to Recommendation No R(92)1 of the Committee of Ministers. However it concluded this part of the judgment in para 104 as follows: The interests of the data subjects and the community as a whole in protecting the personal data, including fingerprint and DNA information, may be outweighed by the legitimate interest in the prevention of crime (see article 9 of the Data Protection Convention). However, the intrinsically private character of this information calls for the court to exercise careful scrutiny of any state measure authorising its retention and use by the authorities without the consent of the person concerned. I agree with the Divisional Court that the ECtHR was not considering the position of convicted people. At para 40 Girvan LJ said that the ECtHR was at pains to point out that the only issue to be considered was whether the retention of the data obtained from persons who had been suspected but not convicted of certain criminal actions. He referred to para 106 without quoting it. It must be set in its context, which begins with para 105 in the courts consideration of the application of the principles to the facts. Paras 105 and 106 read: 105. The court finds it to be beyond dispute that the fight against crime, and in particular against organised crime and terrorism, which is one of the challenges faced by todays European societies, depends to a great extent on the use of modern scientific techniques of investigation and identification. The techniques of DNA analysis were acknowledged by the Council of Europe more than 15 years ago as offering advantages to the criminal-justice system (see Recommendation No R(92)1 of the Committee of Ministers, paras 43-44 above). Nor is it disputed that the member states have since that time made rapid and marked progress in using DNA information in the determination of innocence or guilt. 106. However, while it recognises the importance of such information in the detection of crime, the court must delimit the scope of its examination. The question is not whether the retention of fingerprints, cellular samples and DNA profiles may in general be regarded as justified under the Convention. The only issue to be considered by the court is whether the retention of the fingerprint and DNA data of the applicants, as persons who had been suspected, but not convicted, of certain criminal offences, was justified under article 8 paragraph 2 of the Convention. In the following paragraphs the court nowhere suggests that the principles apply to convicted persons. In para 112 it stresses the importance of carefully balancing the potential benefits of the extensive use of modern scientific techniques, and in particular extensive DNA databases, against important private-life interests. It concludes para 112 by saying that any state claiming a pioneer role in the development of new techniques (in which it plainly included the United Kingdom) bears special responsibility for striking the right balance in this regard. Paragraphs 113 and 114 read as follows: 113. In the present case, the applicants fingerprints and cellular samples were taken and DNA profiles obtained in the context of criminal proceedings brought on suspicion of attempted robbery in the case of the first applicant and harassment of his partner in the case of the second applicant. The data were retained on the basis of legislation allowing for their indefinite retention, despite the acquittal of the former and the discontinuance of the criminal proceedings against the latter. 114. The court must consider whether the permanent retention of fingerprint and DNA data of all suspected but unconvicted people is based on relevant and sufficient reasons. Girvan LJ quoted an extract from para 114 (without referring to the number) and italicised the words all suspected but unconvicted people. In my opinion he was correct to do so. They fit with the statement in para 106 quoted above that the only issue to be considered by the court was whether the retention of the fingerprint and DNA data of the applicants, as persons who had been suspected, but not convicted, of certain criminal offences, was justified under article 8(2) the Convention. There is no indication that the Strasbourg court was considering the position of those who had been convicted at all. I agree with Girvan LJs conclusion at para 42 that Strasbourg was not saying that a blanket policy of retaining the data of convicted persons would be unlawful. It stressed in para 125 (quoted above) its conclusion that the blanket and indiscriminate nature of the powers of retention of the fingerprints, cellular samples and DNA profiles of persons suspected but not convicted of offences fails to strike a fair balance between competing public and private interests and that the respondent state has overstepped an acceptable margin of appreciation in this regard. As Girvan LJ put it at the end of para 42, [t]he courts focus was solely and entirely on the issue of unconvicted persons and para 119 of the judgment [also quoted above] must be read in that context. I recognise that it does not follow from the fact that the ECtHR was only considering unconvicted persons that the system in Northern Ireland (and the United Kingdom) is justified under article 8(2). I also recognise that, save for exceptional cases, the policy of retaining DNA profiles from those convicted persons to whom it applies may be described as a blanket policy. However, the ECtHR recognised the importance of the use of DNA material in the solving of crime. It also recognised that, although the rights of the appellant and a person in his position are interfered with by the system in operation in the Northern Ireland and England and Wales (and indeed Scotland), the interference is a low level of interference. I also recognise that a relevant factor to take into account in the balance is the nature of the offence of which the person concerned is convicted. The United Kingdom has chosen recordable offences as the touchstone. Recordable offences include any offences punishable by imprisonment, together with a limited number of non-imprisonable offences. As the expression suggests, the police are obliged to keep records of convictions and offenders in relation to such offences on the Police National Computer. I can see nothing unreasonable in the conclusion that such records ought to ought to include any available DNA profiles. It is of course true that the appellant was only fined 50 and disqualified from driving for a year but driving with excess alcohol is a serious offence and can cause significant injury and damage. It may lead to up to six months imprisonment. In S and Marper the ECtHR was concerned with a scheme that involved the retention of all biometric data, including DNA samples, whereas, for the reasons explained above, the present case does not concern the retention of the sample or samples, but only the profile, which contains much less data. S and Marper was also concerned with a scheme which did not discriminate between adults and children whereas the present case is concerned with a scheme which only applies to adults. These limitations seem to me to be of real importance. It is true that a conviction for driving with excess alcohol will become spent but there is no support in S and Marper for the conclusion that, just because a conviction may become spent, the biometric data of a person who is convicted cannot be kept indefinitely. Reliance was placed on behalf of the appellant upon the reference to spent convictions in Principle 7 of the Council of Europes Committee of Ministers Recommendation No R(87)15, which was adopted on 17 September 1987 and provides: Principle 7 - Length of storage and updating of data 7.1 Measures should be taken so that personal data kept for police purposes are deleted if they are no longer necessary for the purposes for which they were stored. For this purpose, consideration shall in particular be given to the following criteria: the need to retain data in the light of the conclusion of an inquiry into a particular case; a final judicial decision, in particular an acquittal; rehabilitation; spent convictions; amnesties; the age of the data subject, particular categories of data. 7.2 Rules aimed at fixing storage periods for the different categories of personal data as well as regular checks on their quality should be established in agreement with the supervisory authority or in accordance with domestic law. As I see it, Principle 7 gives some support for the proposition that the fact that a conviction may become spent is a potentially relevant but by no means decisive factor in considering where the balance lies. Indeed it was argued before us that account should be taken of the fact that Mr Gaughrans conviction had been spent in accordance with the Rehabilitation of Offenders (Northern Ireland) Order. The Secretary of State submitted in response that the Order had no relevance, because it was concerned only with the use of past criminal convictions in legal proceedings. In my opinion it is unnecessary to resolve this question. It is not material to the application of article 8, unless it can be said that the retention of the material after the conviction has been spent is not in accordance with domestic law. That has not been argued and would in any event be an unpromising argument. The Rehabilitation of Offenders Order is not concerned with the retention of information about convicted persons, but only with the disclosure of the convictions themselves. It is right to add, first, that we are hearing an appeal from the Divisional Court which decided this case before the conviction had been spent, and secondly that, when it comes into force, the 2013 Act will provide in terms that the right to retain information will not be affected by the fact that any conviction has become spent. Taking account of all relevant factors I would hold that the balance struck by the Northern Irish authorities, and indeed in England and Wales, is proportionate and justified. It is within the margin of appreciation which the ECtHR accepts is an important factor. There is in my opinion nothing in the Strasbourg jurisprudence which leads to a different conclusion. Before us, as before the Divisional Court, the appellant relied upon cases such as Van der Velden v The Netherlands 29514/04 and W v The Netherlands 20689/08, [2009] ECHR 277. In those cases, the complaints were held to be inadmissible. They show that there are many factors which are potentially relevant to the issue of proportionality. Under Dutch law DNA profiles may be retained for 30 years where the relevant offence carries a sentence of six years or more and 20 years where it carries a sentence of less than six years. As it seems to me, it does not follow from the fact that in those cases time limits were held to be proportionate that the system in a member state in which there are no time limits must be disproportionate. It is simply one of the factors to take into account. As I see it, the benefits to the public of retaining the DNA profiles of those who are convicted are potentially very considerable and outweigh the infringement of the right of the person concerned under article 8. I would accept the submission made on behalf of the Secretary of State that the retention of the biometric data contributes to law enforcement and the investigation of offences in relation to both future and historic offences. The Secretary of State puts it thus in para 22 of her case. (1) Where a convicted person subsequently commits another offence in relation to which a crime scene profile or fingerprints is or are obtained, the fact that there is a record of his or her DNA profile or fingerprints will assist in identifying him or her as a suspect. (2) Of particular relevance to DNA profiles, where a convicted person has in the past committed a crime that remains unsolved, but a subsequent cold case review later produces a crime scene profile, the fact that there is a record of his or her DNA profile will assist in identifying him or her. A number of examples were given by the Secretary of State which it is not necessary to set out in detail here. It is also of some note that a DNA profile may establish that the person concerned did not commit a particular offence. This is a factor which was taken into account in both Van der Velden and W. In Van der Velden the ECtHR said at p 9: Secondly, it is to be noted that while the interference at issue was relatively slight, the applicant may also reap a certain benefit from the inclusion of his DNA profile in the national database in that he may thereby be rapidly eliminated from the list of persons suspected of crimes in the investigation of which material containing DNA has been found. In W the ECtHR said that it had no cause to arrive at a different conclusion from the one it had reached in earlier cases including Van der Velden and S and Marper, Where it considered that the compilation and retention of a DNA profile served the legitimate aims of the prevention of crime and the protection of the rights and freedoms of others. The ECtHR added: In its Van der Velden decision the court already pointed to the substantial contribution which DNA records have made to law enforcement in recent years, and noted that while the interference at issue was relatively slight, the applicant might also reap a certain benefit from the inclusion of his DNA profile in the national database in that it allowed for a rapid elimination of the applicant as a possible suspect of a particular crime in the investigation of which material containing DNA had been found. The court finds that these considerations apply equally in the present case, where the person whose DNA profile is to be compiled and stored in the database is a minor. In S and Marper the ECtHR, when considering the margin of appreciation in the case of those who were acquitted, placed some reliance upon the fact that the United Kingdom was alone or almost alone in retaining biometric data in such cases. There is a much broader range of approaches in the case of those who have been convicted. The Secretary of State produced an annex setting out a summary of inclusions and removal criteria in other jurisdictions. It is attached to this judgment as Annex B. It shows that in such cases many countries retain biometric data for very long periods. In addition to England and Wales and Northern Ireland, Ireland and Scotland are I think the only jurisdictions which provide for indefinite retention. However, there are several states which provide for retention until death. They are Austria: five years after death or 80 years of age; Denmark: two years after death or at 80 years of age; Estonia: ten years after death; Finland: ten years after death; Lithuania: 100 years after inclusion or ten years after death; Luxembourg: ten years after death; The Netherlands: as stated above and 80 years after a conviction against minors; Romania five years after death or 60 years of age; and Slovakia: 100 years after date of birth. It seems to me that in the context of a persons rights under article 8 there is little, if any, difference between retention for an indefinite period and retention until death or effectively until death. Annex B shows that there are other formulae. They include Belgium: 30 years after inclusion; France: 40 years after the end of the sentence or after the age of 80; Hungary: 20 years after the sentence has been served; Latvia: 75 years of age; Poland: 35 years after conviction; Germany: DNA profiles are reviewed after ten years and removal depends on a court decision; Italy: 20 years after the incident but no profile can be kept for more than 40 years; and Sweden: ten years after sentence. It can thus be seen that member states have chosen many different approaches but there is, in my opinion, no principled basis upon which the system in operation in Northern Ireland can be held to be disproportionate, especially when compared with the significant number of countries which retain DNA profiles until death or effectively until death. Very few states have a process of review. The factors set out above seem to me to be strong factors in support of the conclusion that the PSNI was entitled to retain the biometric data as it did in the case of those convicted. As the ECtHR put in a different context in Animal Defenders International v United Kingdom (2013) 57 EHRR 21, para 23, the lack of consensus between states broadens the margin of appreciation to be accorded to individual states. See also eg Frett v France (2004) 38 EHRR 31, para 41 and Goodwin v United Kingdom (2002) 35 EHRR 28, para 85. While a blanket policy may be objectionable in some circumstances (see eg Hirst v United Kingdom (No 2) (2006) 42 EHRR 41, para 81), all depends upon the circumstances. It was put thus in the Animal Defenders case at paras 109 and 110: 109. It follows that the more convincing the general justifications for the general measure are, the less importance the court will attach to its impact in the particular case. 110. The central question as regards such measures is not, as the applicant suggested, whether less restrictive rules should have been adopted or, indeed, whether the State could prove that, without the prohibition, the legitimate aim would not be achieved. Rather the core issue is whether, in adopting the general measure and striking the balance it did, the legislature acted within the margin of appreciation afforded to it. See also eg Clift v United Kingdom (Application No 7205/07) at para 76. In these circumstances, it appears to me that there is no basis in the ECtHR jurisprudence for the conclusion that the PSNI policy of retaining biometric data indefinitely is not justified. The policy was within the margin of appreciation identified by the ECtHR. The question then arises how the Northern Irish court should proceed. In R (Nicklinson) v Ministry of Justice [2014] UKSC 38, [2014] 3 WLR 200, Lord Neuberger put the position thus at para 75: Where the legislature has enacted a statutory provision which is within the margin of appreciation accorded to member states, it would be wrong in principle and contrary to the approach adopted in In re G, for a national court to frank the provision as a matter of course simply because it is rational. However, where the provision enacted by Parliament is both rational and within the margin of appreciation accorded by the Strasbourg court, a court in the United Kingdom would normally be very cautious before deciding that it infringes a Convention right. As Lord Mance said in In re G, the extent to which a United Kingdom court should be prepared to entertain holding that such legislation is incompatible must depend on all the circumstances, including the nature of the subject-matter, and the extent to which the legislature or judiciary could claim particular expertise or competence. In re G (Adoption: Unmarried Couple) is reported at [2008] UKHL 38, [2009] AC 173. Having concluded that the retention policy is within the margin of appreciation accorded by the Strasbourg court, the Northern Irish court must decide for itself whether it infringes a Convention right. The question is whether the policy is proportionate, and therefore justified, under article 8(2). Viewed from a domestic standpoint, it appears to me that the authorities in Northern Ireland were entitled to pursue such a policy on the basis that it was justified and proportionate under article 8(2), essentially for the reasons discussed above and given by the Divisional Court as summarised below. Girvan LJ set out (at para 44) 11 factors which led him (and the Divisional Court) to the conclusion that the policy of indefinite retention is not disproportionate and that the application should be refused. His 11 factors were these: (i) The building up of a database of such data from those convicted of offences provides a very useful and proven resource in the battle against crime by reason of the assistance it provides in identifying individuals. It is clear that the larger the database the greater the assistance it will provide. While a universal database would be of immense help in combatting crime, weighing the private rights of individuals against the good which would be achieved by such a universal system requires the striking of a fair balance. Experience has shown that those who have committed offences may go on to commit other offences. A state decision to draw the line at those convicted of a substantial category of offences is entirely rational and furthers the legitimate aim of countering crime so as to protect the lives and rights of others. (ii) The rights and expectations of convicted persons differ significantly from those of unconvicted persons. The striking of a balance between the public interest and the rights of a convicted or an unconvicted individual will inevitably be appreciably different. Strasbourg recognises that even in the case of some unconvicted persons retention for a period may be justifiable in the public interest. (iii) A person can only be identified by fingerprints and DNA sample either by an expert or with the use of sophisticated equipment. The material stored says nothing about the physical make up, characteristics or life of the person concerned and it represents objective identifying material which can only be relevant or of use when compared with comparative material taken from a person lawfully subjected to a requirement to provide such material for comparison. (iv) The use to which the material can be lawfully put is severely restricted by the legislation. (v) As well as being potentially inculpatory the material may be exculpatory and thus in ease of a person such as the applicant. If it is inculpatory its use assists in the detection of someone likely to have been involved in crime which is a matter of deep interest to the public. (vi) There is in place an exceptional case procedure which permits of a possibility of an application to have data removed. (vii) Any differentiation within the system between categories of convicted persons calls for administrative action and has the potential for administrative complexity. Lord Steyn described how there was the potential for interminable and invidious disputes where differentiation is operated. While he was making that point in the context of differentiation between convicted and unconvicted persons (and thus was in error according to the Strasbourg court) the point retains its force in the context of differentiation between convicted persons. Carswell LCJ pointed out in In re McBride [1997] NI 269 at 274 that the legislature wished to have as wide a cover for the database as possible in order to give the police the best chance of detecting criminal offenders. Marper requires protections for unconvicted persons and the current legislation and policy have limited the retention of data to those convicted of recordable offences. To allow further exceptions would in the view of the authorities undermine the effectiveness of the process which is designed to build up a database of those who have been involved in criminality to assist in the war against crime. Such a conclusion by the state authorities is legitimate and rational. (viii) The current policy in fact does distinguish between (a) unconvicted persons and those convicted of offences which are not recordable and (b) those convicted of offences which are recordable. This represents a policy and legislative intent which is not blanket or indiscriminate as such but one which distinguishes between cases. The choice of that differentiation is one involving the exercise of judgment by the state authorities which seeks to balance, on the one hand, the very limited impact of retention and use of such material on a person's real private life and its minimal impact on the intimate side of his life and, on the other hand, the benefit to society flowing from the creation of as effective a database as legitimately possible to help in combatting crime. The choice to retain the data of those convicted of recordable offences represents the exercise of a balanced and rational judgment by the authorities. (ix) In this case the offence committed by the applicant cannot, as the applicant asserts, be described as minor or trivial. It was an offence of a potentially dangerous antisocial nature. The criminal law has as one of its aims the protection of the lives of others and the consumption of alcohol by a driver endangers human life. Indeed the state under its operative duties under article 2 must have in place laws which protect the lives of others. The offence was a recordable offence being one in respect of which a period of imprisonment could be ordered. (x) Time limitations on the retention of data for particular categories of offences can be imposed as has occurred in some legal systems such as in The Netherlands (See W and Van der Velden). Different countries operate different policies in this field and some other countries follow practices similar to those followed in the United Kingdom. Any time restriction is inevitably somewhat arbitrary and it is difficult to point to any particular reason why one particular period as opposed to another should be chosen. To introduce time limitations for some offences simply to avoid a possible charge of disproportionality smacks of defensive policy making in a field which requires a proper balancing of the interests of the public against the consequences of criminal activity. The introduction of different time periods for different offences or for different sentences would clearly add to the administrative burden and would require changes and deletion of recorded data. This complexity would be aggravated in the case of those found guilty periodically of repeat offending in respect of minor offences. The removal of such data would give the offender no benefit other than the knowledge that his data is no longer recorded. As already noted the retention of the data represents a very minor intrusion into his private life. (xi) The retention of the data serves the added purpose of discouraging a convicted offender from re offending for the offender has the knowledge that the police have available data which could lead to his detection. The permanent retention of that data thus serves a useful long term purpose in that regard. I agree with that analysis and would dismiss the appeal. I would answer the certified question (quoted at para 8 above) in the negative. I do not think that it was suggested that, if the retention of the biometric data was lawful, the retention of the photograph was not. Annex A SUMMARY OVERVIEW OF RETENTION RULES DNA SAMPLES Arrest/charge/conviction status All DNA samples regardless of whether person convicted or not Retention rule Must be destroyed once a DNA profile has been derived from it, or after six months, whichever is sooner (s 63R) Arrest/charge/conviction status Person arrested for, charged with or convicted of non-recordable offence Person arrested for recordable offence, investigation or court proceedings ongoing Person arrested for non-qualifying recordable offence (i.e. offence not on list of mainly sexual and violent offences), not charged or convicted Person arrested for qualifying recordable offence, not charged or convicted Person charged with non-qualifying recordable offence, not convicted Person charged with qualifying recordable offence, not convicted Person given penalty notice Person under 18 convicted of non-qualifying recordable offence (and not previously convicted of a recordable offence) DNA PROFILES AND FINGERPRINTS Retention rule No power to take DNA and fingerprints so no issue of retention (s 63D) Retention until investigation and/or proceedings complete, must then be destroyed unless another power to retain applies (s 63E) Must be destroyed (may first be searched against databases to check whether any match to unsolved crimes) (s 63D) Must be destroyed (may be searched against databases first), unless police apply to the Biometrics Commissioner for retention; if Biometrics Commissioner agrees, retention for 3 years (s 63F) Must be destroyed (may be searched against databases first) (s 63D) Retention for 3 years. On expiry of that period the police may apply for a court order for retention for a further 2 years (ss 63F and 63G) Retention for 2 years (s 63L) Where not sentenced to a custodial sentence, retention for 5 years; where sentenced to a custodial sentence of less than 5 years, retention for the length of the sentence plus 5 years; where sentenced to a custodial sentence of 5 years or more, indefinite retention (s 63K) Indefinite retention (s 63I) Indefinite retention (s 63I) Retention for 2 years, extendable for a further 2 years if a further NSD made; however if the Biometrics Commissioner determines that retention is unnecessary the material must be destroyed (s 63M and PoFA s 20) Indefinite retention where an individual is convicted of a recordable offence (s 63N(3)). Otherwise must be destroyed when it has fulfilled its purpose). Person over 18 convicted of non-qualifying recordable offence Person convicted of qualifying recordable offence Material subject to a national security determination (NSD) Material given with consent Material retained with consent DNA samples, DNA profiles and fingerprints subject to the Criminal Procedure and Investigations Act 1996 and its Code of Practice (i.e. needed for disclosure or evidence in court) Annex B Retention for as long as the person consents consent must be in writing and can be withdrawn at any time (s 63O) Retention as long as CPIA or its Code apply; must be used only for the case in question and cannot be searched against databases (s 63U(5)) Summary of inclusion and removal criteria in other EU jurisdictions Derived from Santos et al, Forensic DNA databases in European countries: is size linked to performance? (2013) Life Sciences, Society and Policy, 9:12 Country Criteria for inclusion of profiles Austria Individuals suspected and/ or convicted of a dangerous assault a Belgium Suspects and individuals convicted of serious crimes (list) Denmark Estonia Finland Suspects and individuals convicted of crimes punishable by sentences of > 1 year and 6 months Suspects and convicted offenders Individuals suspected of crimes punishable with a sentence of > 6 months and offenders receiving sentences of > 3 years profiles Criteria for removal of Convicted: 5 years after death or at SO years of age if the individual has not been forensically identified in the last 5 years. Minors: removed if s/he is not forensically identified in the previous three years. Acquitted suspects have to apply for removal and/ or the authorities will decide if the acquitted suspect's profile is no longer necessary Convicted offenders 30 years after inclusion. Profiles in the criminal investigation database deleted when no longer needed. Convicted offenders 2 years after death or at 80 years of age. Suspects 10 years after acquittal. At 70 years of age, 2 years after death. Suspects and convicted offenders 10 years after death. Suspects 1 year after acquittal (on the order of a legal officer) or 10 years after death. Convicted offenders 10 years after death. France Suspects and individuals convicted of serious crimes (list) Germany Hungary Ireland Italy Lativa Lithuania Luxembourg Official suspects charged with crimes and individuals convicted of serious crimes or re-offending with other crimes Convicted offenders and individual suspected of crimes punishable with a sentence of > 5 years (or listed crimes involving lower sentences, such as drug trafficking) Suspects, convicted offenders (crimes punishable with a sentence of > 5 years or specific crimes involving lower sentences) and ex- convicts Individuals arrested, remanded in custody and convicted of premeditated crimes Suspects and convicted offenders any crime Suspects and convicted offenders any crime and those temporarily detained Individuals suspected of any crime (only by order of the court dealing with the case); convicted offenders included only if sentenced for listed crimes or by order of the solicitor or court dealing with the case The Netherlands Suspects and individuals convicted of offenses or crimes for which preventative custody is allowed, or by a judicial order Poland Suspects and convicted offenders (listed crimes) Convicted offenders 40 years after end of sentence or after individuals reach the age of 80. Suspects removed when retention is no longer considered necessary by a law official (or at the request of the party concerned) Profiles reviewed 10 years (adults), 5 years (young people) or 2 years (children) after inclusion. Removal of profiles of convicted offenders depends on a court decision. Suspects deleted after acquittal. Convicted offenders 20 after sentence has been served Profiles of suspects acquitted or not charged removed after 10 years, or 5 years in the case of minors. Convicted offenders indefinite retention. Individuals arrested and remanded in custody deleted on acquittal. Convicted offenders 20 years after the incident that led to sampling. No profile may be held for more than 40 years. Convicted offenders 75 years. Suspects 10 years after verdict, if acquitted. 100 years after inclusion or 10 years after the death of the suspect or convicted offender. Suspects after acquittal, prescription of the crime or 10 years after death. Convicted offenders 10 years Convicted offenders 30 years after sentencing if the crime is punishable with > 6 years 20 after death; 20 years if < 6 years or 12 after death. Suspects and convicted sexual offenses against minors 80 years. Retention may be extended in the event of a new conviction; Suspects DNA profiles are removed if they are not prosecuted or convicted (unless a match is found in the DNA database). Suspects deleted after acquittal. Convicted offenders after 35 years Portugal Individuals convicted of premeditated crimes with an effective prison sentence of 3 years or more, by court order Convicted offenders until criminal record annulled. Romania Suspects and convicted offenders (listed crimes) Scotland Individuals detained of any crime Slovakia Suspects and convicted offenders any crime Spain Individuals detained and those convicted of serious crimes (list) Sweden Convicted offenders receiving non- financial sentences of over 2 years Suspects removed when retention no longer considered necessary by the courts or Public Prosecution. Convicted offenders retained until aged 60 (in the event of the death of the individual, retained for a further 5 years) Suspects deletion after acquittal or extension of retention period in cases of relevant sexual or violent offences. Convicted offenders indefinite retention. Convicted offenders 100 years after the date of birth of the individual concerned. Suspects removal after acquittal. Individuals detained data deleted on prescription of crime.b Individuals convicted on date of prescription of criminal record (unless a court order states otherwise). Suspects removed after acquittal. Convicted offenders 10 years after sentence served. aIn Austria serious crimes, as defined in section 16(2) of the Sicherheitspolizeigesetz (Security Police Act), are understood to be any threat against a legal asset by, committing a premeditated crime punishable by law. In addition to the type of crime, the profile of an individual may be included when the police cite the nature of the crime or the personality of the respective individual as grounds for expecting them to reoffend (Prainsack and Kitzberger 2009). bThe period of prescription for the crime applies to individuals who are detained and for whom the judicial proceedings do not result in acquittal or conviction. LORD KERR: (dissenting) On 14 October 2008 Fergus Gaughran was driving between Crossmaglen and Camlough, County Armagh when his vehicle was stopped at a police checkpoint. As a result of a breath test taken from Mr Gaughran at the scene, it was suspected that he had been driving after having consumed more than the permissible amount of alcohol. He was arrested and taken to a police station in Newry, County Down. There he provided more samples of breath which, when analysed, were found to contain 65 milligrams of alcohol per 100 millilitres of breath. This level of alcohol exceeded the permitted limit by 30 milligrams. Mr Gaughran was charged with the offence of driving with excess alcohol. He pleaded guilty to that offence at Newry Magistrates Court on 5 November 2008 and was fined 50 and ordered to be disqualified from driving for 12 months. As well as supplying samples of breath, Mr Gaughran provided a DNA sample. His photograph and fingerprints were taken. It has been established that, despite initial claims by the appellant to the contrary, all of this was done with his consent and there is no issue as to the legal entitlement of the police to take these steps. The photographs, fingerprints and DNA sample are held on the database maintained by the Police Service of Northern Ireland (PSNI). Section 9 of and Schedule 2 to the Criminal Justice Act (Northern Ireland) 2013 make provision about the retention of samples. When they come into force a new article 63P will be inserted into the Police and Criminal Evidence (Northern Ireland) Order 1989. This will have the effect that Mr Gaughrans DNA sample will be destroyed. But already a DNA profile compiled from his sample has been created by the Forensic Science Agency in Northern Ireland (FSNI). A DNA profile consists of digitised information in the form of a numerical sequence representing a small part of the person's DNA. The DNA profile extracted by FSNI comprises 17 pairs of numbers and a marker ("XX" or "XY") which indicates gender. DNA profiles do not include any information from which conclusions about personal characteristics of an individual, such as his or her age, height, hair colour or propensity to develop a particular disease might be drawn. The purpose of the profile is to provide a means of identification of the person in respect of whom it is held. The European Court of Human Rights (ECtHR) made these observations in para 75 of S and Marper (2009) 48 EHRR 50 about the use to which DNA profiles can be put: the profiles contain substantial amounts of unique personal data. While the information contained in the profiles may be considered objective, and irrefutable in the sense submitted by the Government, their processing through automated means allows the authorities to go well beyond neutral identification. The court notes in this regard that the Government accepted that DNA profiles could be, and indeed had in some cases been, used for familial searching with a view to identifying a possible genetic relationship between individuals. It also accepted the highly sensitive nature of such searching and the need for very strict controls in this respect. DNA profiles obtained by police in Northern Ireland, such as that of Mr Gaughran, are held (and, it is intended, will remain) on the Northern Ireland DNA database. Although a profile thus created does not include information as to whether that person has been convicted of or is under investigation for an offence, it contains sufficient material to allow the person concerned to be identified and, of course, it can be used to match a DNA sample subsequently obtained. The photograph and fingerprints of Mr Gaughran have also been retained and it is intended that these will also be kept indefinitely. As of June 2012, the Northern Ireland DNA database included the DNA profiles of 123,044 known persons. DNA profiles uploaded onto the Northern Ireland system are also loaded onto the United Kingdom wide National DNA Database. The retention of Northern Irish DNA profiles on the National DNA Database is governed by the law and policy applicable in Northern Ireland. Mr Gaughran claims that the policy of PSNI to retain for an indefinite period his DNA profile, his photograph and his fingerprints is an interference with his right to respect for a private life guaranteed by article 8 of the European Convention on Human Rights and Fundamental Freedoms (ECHR) and that that interference has not been justified on any of the grounds advanced by the respondent (the Chief Constable of PSNI) or the intervener (the Secretary of State for the Home Department). Article 8 of ECHR provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others. Justification of an interference with a Convention right It is accepted by the respondent and the intervener that the appellants article 8 right has been interfered with; the single and central issue in the appeal is whether that interference has been justified. Justification of interference with a qualified Convention right such as article 8 rests on three central pillars. The interference must be in accordance with law; it must pursue a legitimate aim; and it must be necessary in a democratic society. Proportionality is a sub-set of the last of these requirements. The appellant has not argued that the retention of samples, his photograph and his fingerprints is other than in accordance with law see articles 64(1A) and 64A(4) of the Northern Ireland PACE Order of 1989. Likewise, it is not disputed that the retention of these pursues a legitimate aim. That aim was identified by ECtHR in S and Marper v United Kingdom at para 100 as the detection, and therefore, the prevention, of crime. In particular the retention of samples etc. was said to be for the broader purpose of assisting in the identification of future offenders. One can focus, therefore, on the question of whether the measure is necessary in a democratic society. In the context of this case, that means asking whether the policy is proportionate. As Lord Wilson in R (Aguilar Quila) v Secretary of State for the Home Department [2012] 1 AC 621, para 45 and Lord Reed in Bank Mellat v HM Treasury (No 2) [2014] AC 700, 790, para 72ff explained, this normally requires that four questions be addressed: (a) is the legislative objective sufficiently important to justify limiting a fundamental right?; (b) are the measures which have been designed to meet it rationally connected to it?; (c) are they no more than are necessary to accomplish it?; and (d) do they strike a fair balance between the rights of the individual and the interests of the community? The circumstance that the measure pursues a legitimate aim does not necessarily equate to the objective of the policy being sufficiently important to justify the limitation of a fundamental right, although, in most cases, the pursuit of such an aim will provide an effective answer to the first of the mooted questions. It is, at least hypothetically, possible to conceive of a legitimate aim that a contemplated policy or a legislative provision might seek to achieve but, because the right that would thereby be infringed is so fundamental, no limitation on it, on the basis of the avowed legitimacy of the aim to be pursued, would be defensible. One need not dwell on this, perhaps somewhat esoteric, question, however, because it has not been contended by the appellant that no limitation on his article 8 right could be justified. It is accepted that the need to counteract crime is of sufficient importance to warrant some restriction of the right to respect for private life. But the actual interference, as ECtHR observed in S and Marper at para 101, must conform to the general principle of the Strasbourg jurisprudence that an interference will only be considered necessary in a democratic society if it answers a pressing social need and, in particular is proportionate to the aim pursued. Importantly, the court stated that the reasons which national authorities proffered to justify the interference must be relevant and sufficient. This is of especial significance in addressing the question whether it has been shown that there is in fact a rational connection between the breadth of the policy as it is currently framed and the objective which it is said to be designed to achieve. The two critical questions on the issue of the proportionality of the policy of indefinite retention of the appellants DNA profile, his photograph and his fingerprints are, in my opinion, whether there is a rational connection between the legislative objective and the policy and whether it goes no further than is necessary to fulfil the objective. What is the objective of the policy? It is, I believe, necessary to recognise the distinction between the legislative provisions which authorise the retention of samples etc. and the policy of using those provisions to retain them indefinitely. The justification of, on the one hand, the enactment of statutory provisions which permit retention and, on the other, the use of those provisions to devise a policy to retain without limit must be considered separately. But no distinction has been drawn between the legislation and the policy in terms of their objective. In the case of both, this has been assumed to be that which was articulated in S and Marper v United Kingdom, namely, the detection of crime and assisting in the identification of future offenders. It is of fundamental importance that it be recognised that the objective is not the creation of as large a database of the Northern Irish population as possible, in order that it should be available as a potential resource in the counteracting of crime. The objective is defined in terms of the actual detection of crime and identification of future offenders. This distinction is important because it is not difficult to hypothesise that if everyones DNA profile was held by police this might have a significant impact on the detection of future criminals. The theory is, perhaps, less obvious but still tenable in relation to photographs and fingerprints. But hypothesis should not be confused with evidence. And the question of whether the retention of DNA profiles, photographs and fingerprints of a limited class of person viz those convicted of recordable offences, as opposed to the population at large, would in fact make a substantial contribution to counteracting crime is, at best, imponderable. But before it can be said that a rational connection exists between the retention of biometric data of all convicted of recordable offences and the detection of crime and identification of future offenders one must go beyond assumption or supposition. To justify an interference, it is necessary that it be shown, at the very least, that the promoted objective will be advanced, in order to support the claim that there is a rational connection between the interference and the stated objective. Rational connection? A connection between the aim of a measure and its terms, in order to qualify as rational, must be evidence-based see para 101 of S and Marper. Mere assertion that there is such a connection will not suffice, much less will speculation or conjecture that the connection exists. The fact that the interference can be characterised as relatively slight (as ECtHR described the retention of DNA profiles and fingerprints of convicted persons in the two admissibility decisions of Van der Velden v The Netherlands 29514/05 EQ-IR and W v The Netherlands 20689-08 (2009) ECHR 277) does not diminish the need for the justification to be established positively. Slight interference may sound on the question of whether a measure can be regarded as no more intrusive than necessary. It does not supply the answer to the question whether it is rationally connected to its avowed aim. Moreover, the rational connection here must be between the objective of the detection of future criminals and the indefinite retention of the profile, fingerprints and photograph. It is not enough that retaining these items on a permanent basis might, in some vague or unspecified way, help in the detection of crime in the future. It is necessary to show that in a real, tangible sense, keeping DNA profiles, fingerprints and photographs indefinitely will assist in counteracting or detecting future crime. That is not to say, of course, that it needs to be shown that retention of the appellants particular details will assist in preventing or detecting crime in the future. But, as a minimum, it must be established that retaining forever such items from all who have been convicted of recordable crime is likely to make a positive and significant contribution to the detection of future criminal activity. I accept, of course, that it is not required of the state to show that the achievement of the aim of the measure will be the only and inexorable consequence of its implementation. As Lord Reed said in Bank Mellat (No 2), quoting Wilson J in the Canadian case of Lavigne v Ontario Public Service Employees Union [1991] 2 SCR 211, 291 the inquiry into rational connection between objectives and means to attain them requires nothing more than showing that the legitimate goals of the legislature are logically furthered by the means government has chosen to adopt. As Lord Reed then put it: The words furthered by point towards a causal test: a measure is rationally connected to its objective if its implementation can reasonably be expected to contribute towards the achievement of that objective. This is the critical question on this particular aspect of the proportionality analysis. Can the indefinite retention of biometric data of all who are convicted of recordable offences be reasonably expected to contribute to the detection of crime and the identification of future offenders? It is, of course, tempting to make the assumption that the more DNA profiles etc. that the police hold, the greater will be their chances of discovering the identity of those who commit crime in the future. But there is a striking lack of hard evidence to support the claim that a blanket policy of retaining such items indefinitely is indispensable to the need to counteract crime or even that it will make a significant contribution to the detection of future crime. The usefulness of the assembly of a pool of personal data to assist with the detection of crime was rejected in S and Marper as justification for interference with the article 8 right and should also be in this case. Without proof as to the likelihood of reoffending, there is no obvious, or rational, connection between the current policy and reducing crime. The current system operates on the assumption that all persons who, at any time, commit any offence are potential suspects in any future crime. No evidence to support this has been provided. Indeed, the only evidence proffered by the respondent on this issue was that which suggested that 90% of those who were given custodial sentences reoffended within two years, regardless of the nature of the original offence. But the true significance of this particular statistic must be recognised. It involves (a) the commission of more serious offences, which attract a custodial offence; (b) more serious offenders, where the custodial option has been chosen; and (c) time-limitation, rather than indefinite duration. In fact, the respondent accepted during the hearing that there was no robust evidence base for the current policy. It seems to me clear, therefore, that a rational connection between the policy and its professed aim has not been established. Much was made in the Divisional Court of the fact that S and Marper was concerned with the retention of the data of persons who had not been convicted. But the need for a rational connection between the broad policy of indefinite retention of the DNA profiles, photographs and fingerprints of all who have been convicted of recordable offences is just as necessary in their case. The connection cannot be considered to be supplied simply by the fact of conviction. Many who have been convicted, especially of less serious recordable offences never re-offend. The rational connection between the retention of their biometric data and photographs still needs to be established. It is not to be inferred or presumed simply because they have been found guilty. Nor can the connection be presumed to exist just because the importance of the use of DNA material in the solving of crime has been recognised by ECtHR. It requires a considerable leap of faith, or perhaps more realistically, a substantial measure of conjecture, to say that simply because DNA material is useful in combatting crime in a general way the retention forever of DNA profiles of everyone convicted of a recordable offence establishes the rational connection between that particular policy and the aim the detection of crime and the identification of future offenders. In this connection, it should be remembered that recordable offences occupy a wide spectrum of criminal activity. Under the Northern Ireland Criminal Records (Recordable Offences) Regulations 1989 they include not only all offences punishable by imprisonment but also examples of what may fairly be described as minor, not to say trivial, offences such as tampering with motor vehicles (article 173 of the Road Traffic (Northern Ireland) Order 1981: improper use of the public telecommunications system (section 43 of the Telecommunications Act 1984). To take some even more extreme examples they include blowing a horn or other noisy instrument or ringing any bell for the purpose of announcing any show or entertainment or hawking, selling, distributing or collecting any article whatsoever, or obtaining money or alms; wilfully and wantonly disturbing any inhabitant by ringing any doorbell or knocking at any door without lawful excuse, all under section 167 of the Belfast Improvement Act 1845 and being drunk in any street under section 72 of the Town Improvement (Ireland) Act 1854. These might be considered to be frivolous examples of recordable crimes which would never, in practical reality, generate the taking of biometric samples but they serve to illustrate the extremely wide potential reach of PSNIs current policy and the failure of PSNI to confront the implications of the breadth of its possible application. No more than necessary to achieve the aim? If one accepts the premise that the retention of DNA profiles, fingerprints and photographs of those convicted of crime can help in the detection and identification of future offenders, the question arises whether a more tailored approach than that of the current PSNI policy in relation to the retention of those materials, sufficient to satisfy the aim, is possible. ECtHR has consistently condemned, or, at least, has been extremely wary of, measures which interfere with a Convention right on an indefinite or comprehensive basis. Thus in Campbell v United Kingdom (1992) 15 EHRR 137 the court rejected the justification for opening and reading all correspondence between prisoners and solicitors, pointing out that letters could be opened to check for illicit enclosures without having to be read at para 48. And in Open Door Counselling and Dublin Well Woman v Ireland (1992) 15 EHRR 244, the permanent nature of an injunction granted by the Supreme Court of Ireland restraining the applicants from counselling pregnant women in Ireland on the options for travelling abroad to obtain an abortion was found to be disproportionate. The Irish Supreme court had granted an injunction, restraining the applicants from counselling or assisting pregnant women to obtain further advice on abortion. ECtHR found the injunction to be disproportionate and in breach of article 10, because of its perpetual nature and because of its sweeping application. It applied regardless of the age or health of the women who sought the applicants advice or of the reasons that the advice was sought at para 73. The question whether a measure interfering with a Convention right is no more than necessary to achieve the aim is sometimes expressed as an inquiry into whether the least intrusive means has been chosen. This has not always been the basis used by the Strasbourg court as a measure of the proportionality of a particular species of interference and it has been suggested that it is a factor to be weighed in the balance, but not insisted on in every case Arden LJ Human Rights and European Law (2015) OUP, p 60. In R (Wilson) v Wychavon District Council Richards LJ [2007] QB 801 suggested that the least restrictive means test was not an integral part of the proportionality assessment. Recent case-law from ECtHR suggests, however, that resort to the least intrusive means approach will be much more readily made in deciding whether interference with a Convention right is proportionate. In Mouvement Raelien Suisse v Switzerland (2012) 16354/06, para 75, the court observed at the conclusion of its proportionality reasoning: the authorities are required, when they decide to restrict fundamental rights, to choose the means that cause the least possible prejudice to the rights in question. And in Nada v Switzerland (2013) 10593/08 , para 183, ECtHR made similar comments: The court has previously found that, for a measure to be regarded as proportionate and as necessary in a democratic society, the possibility of recourse to an alternative measure that would cause less damage to the fundamental right at issue whilst fulfilling the same aim must be ruled out. In Bank Mellat Lord Reed, in outlining the four-fold test of proportionality followed the approach of Dickson CJ in the Canadian case of R v Oakes [1986] 1 SCR 103. It is worth recalling that Lord Reed, in articulating the third element of the test, specifically endorsed the approach that one should ask whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective. Of course it is true that this approach does not require the condemnation of an interference simply on the basis that it is possible to conceive of a less intrusive interference at a theoretical level. The mooted less intrusive measure must be capable of fulfilling, and must not unacceptably compromise, the objective. As Lord Reed pointed out, a strict application of a least restrictive means test would allow only one legislative response to an objective that involved limiting a protected right. But where it is clear that the legislative objective can be properly realised by a less intrusive means than that chosen, or where it is not possible to demonstrate that the database that is created by the PSNI policy is in fact needed to achieve the objective, this is, at least, a strong indicator of its disproportionality. I suggest, therefore, that the least restrictive measure test is now well established as part of domestic law. A recent example of its application is to be found in a case decided in October 2014, R (Gibraltar Betting and Gaming Association Ltd) v Secretary of State for Culture, Media and Sport [2014] EWHC 3236 (Admin) where the High Court went to considerable lengths in paras 182-190 to analyse this test as part of its proportionality analysis under the TFEU, ultimately explicitly accepting that the least restrictive measure test is a proper part of the proportionality assessment. See also R (Sinclair Collis Ltd) v Secretary of State for Health [2012] QB 394. European Union law on the least restrictive means test It is beyond question that proportionality is a fundamental principle of EU law. In the Skimmed Milk Powder case Bergman v Grows-Farm [1977] ECR 1211 it was held that, in order to be lawful, an obligation had to be necessary in order to attain the objective in question. Similarly, in Commission v United Kingdom (Re UHT Milk) [1983] ECR 203, at para 236, the ECJ commented: It must be ascertained whether the machinery employed in the present case by the UK constitutes a measure which is disproportionate in relation to the objective pursued, on the ground that the same result may be achieved by the means of less restrictive measures. EU law and that of ECHR have become increasingly assimilated, not least because of the possible future accession of the EU to the Convention and the enactment of the European Charter on Human Rights. In this context, see also cases such as Baumbast v Secretary of State for the Home Department [2002] (Case No C-413/99) [2003] ICR 1347. The Court of Justice of the European Union has traditionally given the Convention special significance as a guiding principle in its case law (Anthony Arnull, The European Union and its Court of Justice (2006) pp 339-340) and therefore, while the EU approach to proportionality is not necessarily to be imported wholesale into the Convention analysis, it is clear that the prominence given to this general principle in EU law is likely to be reflected in Strasbourg jurisprudence. Canadian case-law Lord Reed in Bank Mellat (No 2), referred to the circumstance that Canadian law has long embraced the least restrictive measures principle see, in particular, Ford v Quebec [1988] 2 SCR 712 and Black v Royal College of Dental Surgeons [1990] 2 SCR 232 and the classic exposition of the test in R v Oakes above. court stated: In Libman v AG of Quebec (1997) 151 DLR (4th ed) 385, paras 415-416 the The government must show that the measures at issue impair the right of free expression as little as reasonably possible in order to achieve the legislative objective. The impairment must be minimal, that is the law must be carefully tailored so that rights are impaired no more than necessary. The tailoring process seldom admits of perfection and the courts must accord some leeway to the legislator. If the law falls within a range of reasonable alternatives, the court will not find it over broad because they can conceive of an alternative which may better tailor the objective to infringement. This approach is largely mirrored in the current case-law of this country, particularly Bank Mellat (No 2). There must be a proper inquiry into whether the measure affects the right of the individual no more than is necessary. That does not require the state to show that every conceivable alternative is unfeasible a condition of unique practicability is not demanded. But if it is clear that the measure goes beyond what the stated objective requires, it will be deemed disproportionate. Application of the principles to the present case One must return, therefore, to the question whether a more tailored approach than that of the current PSNI policy in relation to the retention of biometric materials, sufficient to satisfy the aim of detecting crime and assisting in the identification of future offenders, is possible. To that question only one answer can be given, in my opinion. Clearly, a far more nuanced, more sensibly targeted policy can be devised. At a minimum, the removal of some of the less serious offences from its ambit is warranted. But also, a system of review, whereby those affected by the policy could apply, for instance on grounds of exemplary behaviour since conviction, for removal of their data from the database would be entirely feasible. Similarly, gradation of periods of retention to reflect the seriousness of the offence involved would contribute to the goal of ensuring that the interference was no more intrusive than it required to be. In this context, article 5(e) of the Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data should be noted. It provides that personal data undergoing automatic processing shall be preserved in a form which permits identification of the data subjects for no longer than is required for the purpose for which it is required. There is no evidence that consideration has been given to the question of whether it is necessary for the effective combatting of crime that the materials concerned in this case should be retained indefinitely. For the intervener, the Secretary of State for the Home Department, Mr Eadie QC accepted that the decision as to how long and for what offences biometric and other data should be retained called for a nuanced decision. He argued that this had been achieved by the exclusion of non-recordable offences and offences committed by children and by the fact that such material from those not convicted was no longer retained. He was unable to point to evidence, however, that the question of whether it was necessary that there be retention of all data from all convicted of recordable offences for all time had been considered. Absent such consideration and in light of the fact that it is eminently possible to conceive of measures which are less intrusive but which would conduce to the avowed aim of the policy, it is simply impossible to say that the policy in its present form is the least intrusive means of achieving its stated aim. A fair balance? The final element in the proportionality examination is whether a fair balance has been struck between the rights of the individual and the interests of the community. Although this may not be of quite the same importance as the rational connection and less intrusive means factors, it deserves consideration in its own right. The starting point must be a clear recognition of the importance of the rights of the individual. This was emphasised by ECtHR in S and Marper at para 103: The protection of personal data is of fundamental importance to a persons enjoyment of his or her right to respect for private and family life, as guaranteed by article 8 of the Convention. The domestic law must afford appropriate safeguards to prevent any such use of personal data as may be inconsistent with the guarantees of this article. The need for such safeguards is all the greater where the protection of personal data undergoing automatic processing is concerned, not least when such data are used for police purposes. The domestic law should notably ensure that such data are relevant and not excessive in relation to the purposes for which they are stored; and preserved in a form which permits identification of the data subjects for no longer than is required for the purpose for which those data are stored. The domestic law must also afford adequate guarantees that retained personal data was efficiently protected from misuse and abuse. The above considerations are especially valid as regards the protection of special categories of more sensitive data and more particularly of DNA information, which contains the person's genetic make-up of great importance to both the person concerned and his or her family. At para 104 the European court acknowledged that the interests of the data subjects and the community as a whole in protecting personal data could be outweighed by the legitimate interest in the prevention of crime but it emphasised that the intrinsically private character of the information called for careful scrutiny of any state measure authorising its retention and use by state authorities. Addressing the blanket and indiscriminate nature of the power of retention, the court said this at para 119: The material may be retained irrespective of the nature or gravity of the offence with which the individual was originally suspected or of the age of the suspected offender; fingerprints and samples may be taken - and retained - from a person of any age, arrested in connection with a recordable offence, which includes minor or non-imprisonable offences. The retention is not time limited; the material is retained indefinitely whatever the nature of seriousness of the offence of which the person was suspected. Moreover, there exist only limited possibilities for an acquitted individual to have the data removed from the nationwide database or the materials destroyed; in particular, there is no provision for independent review of the justification for the retention according to defined criteria, including such factors as the seriousness of the offence, previous arrests, the strength of the suspicion against the person and any other special circumstances. While this was said in relation to those who had not been convicted of crime, much of this passage is clearly relevant to the issue under discussion here. No differentiation is made based on the gravity of the offence of which an individual was convicted; the retention is not time-limited, whatever the offence; and there is no provision for independent review of the justification for the retention of the data. The court also addressed the question of stigmatisation of individuals by the retention of data. At para 122 it said: Of particular concern in the present context is the risk of stigmatisation, stemming from the fact that persons in the position of the applicants, who have not been convicted of any offence and are entitled to the presumption of innocence, are treated in the same way as convicted persons. In this respect, the court must bear in mind that the right of every person under the Convention to be presumed innocent includes the general rule that no suspicion regarding an accuseds innocence may be voiced after his acquittal. It Ii true that the retention of the applicants private data cannot be equated with the voicing of suspicions. Nonetheless, their perception that they are not being treated as innocent is heightened by the fact that their data are retained indefinitely in the same way as the data of convicted persons, while the data of those who have never been suspected of an offence are required to be destroyed. Of course, it is true that the sense of stigmatisation may be more acutely felt by those who have been acquitted of crime but that does not mean that someone such as the appellant would be free from such sentiment knowing as he does that his biometric data and photograph will forever remain on police databases. Although he has been convicted of a crime, and a serious crime at that, he is entitled to be presumed innocent of future crime notwithstanding that conviction. His sense of stigmatisation and the impact that the retention of his data on police databases must be taken into account, therefore, in an assessment of whether a fair balance has been struck between his rights and the interests of the community as a whole. As Lord Reed observed in para 71 of Bank Mellat this involves what is essentially a value judgment. Making due allowance for what has been claimed will be the contribution made to fighting crime by the indefinite retention of data from those such as the appellant, when weighed against his personal interests, my judgment is that a fair balance has not been struck between the two. I am reinforced in this view by consideration of the provisions and intended effect of the Rehabilitation of Offenders (Northern Ireland) Order 1978. By virtue of article 5 of that Order, a person who has become rehabilitated for the purposes of the Order is to be treated for all purposes in law as a person who has not committed or been charged with or prosecuted for or convicted of or sentenced for the offence. Retaining the biometric data of someone who has become rehabilitated is plainly inconsistent with the requirement that he or she be treated as if they had never been convicted of the offence. Conviction of the offence is the very basis on which the data are retained. If Mr Gaughran had not been convicted, his data could not be retained. But he is being treated markedly differently from someone who has not been convicted. The Secretary of State has submitted that the sole effect of the Order is to restrict the use that may be made of past convictions in legal proceedings, eg where the subject has suppressed a spent conviction. This cannot be right. The contexts in which a rehabilitated offender is entitled to demand that he or she be treated in precisely the same way as someone who has not been convicted are not prescribed by the Order. If a rehabilitated offender is entitled, for instance, to refuse to disclose that he has not been convicted when applying for employment, why should he not be entitled to demand that his biometric data be destroyed, after the original purpose in obtaining them is no longer relevant, just as someone who has been arrested but not convicted of an offence is entitled to do? It is suggested that the fact that a conviction may become spent is no more than one of a number of factors to be taken into account in deciding whether a proper balance has been struck between the appellants rights and the interests of the community. I consider that it ranks much higher than this. The single basis on which Mr Gaughrans biometric material is retained is that he has committed a crime. If the principle of rehabilitation is to have any meaning, ex-offenders such as he cannot be defined by the fact of their former offending. The philosophy underlying the rehabilitation provisions is the restoration of the ex-offender to his or her position as a citizen without the stigma of having been a criminal. He once more shares with his fellow citizens, entitlement to be treated as if he was of good character. If the fact that his conviction is spent is relegated to the status of a single factor of no especial significance, the purpose of rehabilitation is frustrated. Rehabilitation is our criminal justice systems way of acknowledging and encouraging the potential for personal growth and change. If we continue to define ex-offenders throughout their lives on the basis of their offending we deprive them of reintegration into society on equal terms with their fellow citizens. The only reason proffered to justify the denial of that hope is the assertion that those convicted of offences may reoffend. The premise which must underlie this claim is that those convicted of recordable offences are more likely to reoffend than those who have not been. But no evidence has been presented to support that claim. Unsurprisingly, therefore, no attempt to quantify such a risk has been made. It is difficult to avoid the conclusion that the fact of conviction merely provides the pretext for the assembly and preservation of a database which the police consider might be useful at some time in the future and that it has no direct causal connection to the actual detection of crime and the prevention of future offending. In any event, for the principle of rehabilitation to have proper effect, it is necessary that, once a conviction is spent, any supposed or presumed risk be regarded as having dissipated. Offenders whose convictions are spent must be treated as any other citizen would be treated. Allowing their biometric details to be retained indefinitely is in flat contradiction of that fundamental principle. It is, of course, true that Mr Gaughrans conviction was not spent when the case was decided in the Divisional Court but that is nothing to the point. In the first place, his conviction is now spent and, more importantly, the PSNI policy proceeds on the basis that the Rehabilitation Order provisions can effectively be ignored. I do not believe that they can be and they constitute an unanswerable reason that the policy does not strike a fair balance between the rights of individuals who are entitled to the benefit of the Orders rehabilitation provisions and the interests of the community. It might be said that, when the 2013 Act comes into force, there will be an express statutory power to retain indefinitely all biometric data of those convicted of a recordable offence. If that will indeed be its effect, serious questions will arise, in my opinion, about its compatibility with article 8 of ECHR. But that is not a matter for decision in this case. The possibility of future legislation underpinning the present policy of PSNI should not deflect this court from recognising the current illegitimacy of that policy. Margin of appreciation It is, of course, the case that a margin of appreciation is available to national authorities in deciding where to strike the balance between the rights of the individual under article 8 of ECHR and the interests of the community. The use and advantage of that margin is exemplified by the consideration in S and Marper of the different standards that have been adopted by various member states of the Council of Europe. It is also referred to in the judgment of Lord Clarke and in the annexes to his judgment. For a margin of appreciation to be accorded to the choice of the member state, however, some consideration must have been given by that state to the issues at stake and a considered judgment must have been made on the options available. One cannot excuse a slack or ill-considered policy as survivable just because it can be said to be open to the member state to make a choice which is different from that of other member states. There needs to be some form of evaluation or judgment of the issues at stake. If the choice is the product of consideration and is designed to meet the particular circumstances or conditions encountered in the particular member state, that is one thing. But an ill-thought out policy which does not address the essential issues of proportionality cannot escape condemnation simply because a broad measure of discretion is available to an individual state. A margin of appreciation is accorded to a contracting state because Strasbourg acknowledges that the issue in question can be answered in a variety of Convention-compatible ways, tailored to local circumstances. But the margin of appreciation that is available to the state does not extend to its being permitted to act in a way which is not Convention compliant. If the state acts in such a way, it cannot insulate itself from challenge by recourse to the margin of appreciation principle. In Wingrove v UK (1996) 24 EHRR 1, para 58, a broad margin case, ECtHR emphasised that authorities within the state in question were in a better position than international judges to give an opinion on the exact content of these requirements with regard to the rights of others as well as on the necessity of the restriction. Domestic courts therefore have the responsibility to examine closely the proportionality of the measure without being unduly influenced by the consideration that the Strasbourg court, if conducting the same exercise, might feel constrained to give the contracting states decision a margin of appreciation. For the reasons that I have given, I have concluded that the issues which must be considered under the proportionality exercise have not been properly addressed and that, if they had been, a more restricted policy would have been the inevitable product. The margin of appreciation cannot rescue the PSNI policy from its incompatibility with the appellants article 8 right. Conclusion I would therefore allow the appellants appeal and declare that the policy of retaining indefinitely DNA profiles, fingerprints and photographs of all those convicted of recordable offences in Northern Ireland is incompatible with article 8 of ECHR. I would therefore allow the appellants appeal and declare that the policy of retaining indefinitely DNA profiles, fingerprints and photographs of all those convicted of recordable offences in Northern Ireland is incompatible with article 8 of ECHR. |
This appeal concerns the proper interpretation and effect of section 4(1) of the Explosive Substances Act 1883 (section 4(1) and the 1883 Act, respectively). This provides in material part as follows: Any person who makes or knowingly has in his possession or under his control any explosive substance, under such circumstances as to give rise to a reasonable suspicion that he is not making it or does not have it in his possession or under his control for a lawful object, shall, unless he can show that he made it or had it in his possession or under his control for a lawful object, be guilty of an offence As originally enacted, section 4(1) provided that a person convicted of this offence was liable to penal servitude for a term not exceeding 14 years, or to imprisonment for a term not exceeding two years with or without hard labour. Currently, the maximum sentence is imprisonment for life. The Court of Appeal certified the following point of law of general public importance: for the purposes of section 4(1) can personal experimentation or own private education, absent some ulterior unlawful purpose, be regarded as a lawful object? Factual background and the proceedings below The appellant is aged 22 and has no convictions. He was diagnosed with Autism Spectrum Disorder as a child. In April 2018 he was living in a terraced house in Coventry with his mother. The appellant had been purchasing quantities of chemicals online. His explanation for this is that he had from a young age developed an obsessive interest in things military. He became interested in bomb disposal after watching the film The Hurt Locker about a US bomb disposal unit in Iraq and wanted to understand how explosives worked and to experiment with them. On 24 April 2018 a search warrant was executed at the house. The chemicals the appellant had purchased were found in a garden shed which he used as a laboratory. The appellant had managed to make a small quantity, of the order of about 10 grams or less, of Hexamethylene Triperoxide Diamine (HMTD) from Hydrogen Peroxide, Hexamine and Citric Acid. HMTD is a sensitive primary high explosive that can easily be detonated. According to the Statement of Facts and Issues for the appeal, such a small amount of HMTD potentially carries a risk of insubstantial injury or damage. It should also be noted that the appellant might only have used part of this quantity at any one time when experimenting with it. The HMTD was found in the form of a powdery substance in a petri dish in the shed and in another in the appellants bedroom. Material found in the appellants bedroom and on his computer included manuals for making explosives, notes on the making of HMTD and a video downloaded to his mobile telephone of a demonstration of the making of HMTD. Over the previous months the appellant had made explosive substances with other chemicals on about six or seven occasions. By means of homemade initiators made from fairy lights filled with firework powder or by means of a mobile telephone signal, he had detonated or attempted to detonate these substances in his back garden and had made a video record of this on his mobile telephone. According to his explanation, his plan was to conduct similar experiments with the HMTD he had made. The appellant was interviewed by the police over many days. He admitted his actions and gave the explanations referred to above. He was charged with a number of offences, including six counts of having possession of information likely to be useful for an act of terrorism contrary to section 58 of the Terrorism Act 2000. The two relevant charges on the indictment for present purposes are in identical terms, as counts 1 and 2, as follows: STATEMENT OF OFFENCE MAKING OR POSSESSION OF EXPLOSIVE UNDER SUSPICIOUS CIRCUMSTANCES, contrary to section 4(1) of the Explosive Substances Act 1883 PARTICULARS OF OFFENCE CHEZ COPELAND on 24 day of April 2018 knowingly had in his possession or under his control a certain explosive substance, namely [HMTD], in such circumstances as to give rise to a reasonable suspicion that he had not made it for a lawful object. As this court pointed out at the hearing, and as counsel on both sides agreed, this charge is in defective form. It elides the two limbs of section 4(1), ie (1) making any explosive substance under circumstances giving rise to a reasonable suspicion that the defendant is not making it for a lawful object and (2) knowingly having in his possession or control any explosive substance under circumstances giving rise to a reasonable suspicion that he does not have it in his possession or control for a lawful object. Mr Louis Mably QC, for the Crown, gave an undertaking to amend the charge so as to replace the words after reasonable suspicion with the phrase that he did not have it in his possession or under his control for a lawful object. Mr Paul Bogan QC, for the appellant, accepted that this amendment would not cause any prejudice to the appellant and said it would not be resisted. On the particular facts of this case, the alteration makes no material difference, since the appellants defence would be the same whether he was charged under limb (1) or limb (2), namely that he had both made the HMTD and had it in his possession with a view to experimentation and self education regarding its manufacture and properties, by conducting detonations with it in the garden of his home. The appeal therefore proceeded on the basis that the indictment could be taken to refer to limb (2) of the offence. The appellants defence statement in relation to counts 1 and 2 on the indictment was as follows: It is the defence case that: 1. The circumstances do not give rise to the reasonable suspicion that the defendant had not made [the HMTD] for a lawful object; and 2. The defendant made it for a lawful object. The defendant has a longstanding obsession with the armed forces and has collected military paraphernalia over many years. More recently, and inspired by the film The Hurt Locker, he has been interested in explosives. In pursuit of this interest he has researched manuals and recipes on the internet. He sought to understand how explosives could be made and acquired certain chemicals to do so. He experimented with the chemicals and caused small explosions to be made in the back garden of his home. His own ambition to join the armed forces has been thwarted by a diagnosis of Autism Spectrum Disorder when aged around 14 years. He had regularly engaged in role play, dressing and purporting to behave as a member of the armed forces. The condition of Autism Spectrum Disorder has manifested itself in interests and hobbies becoming obsessional and, in the context of explosives, an obsessional need to understand how explosives work. By way of an addendum, in the appellants written submissions at first instance it was asserted that, For the avoidance of doubt the defendants object or objects encompass interest, education and experimentation. On 23 October 2018 a preparatory hearing took place before His Honour Judge Wall QC in the Crown Court at Birmingham, at which it was agreed that he should determine, among other things, whether the potential defence to counts 1 and 2 on the indictment could amount to a defence in law. The judge ruled that the appellants proposed defence that he made the HMTD and had it in his possession for a lawful object, being experimentation and self education, was not good in law, holding that he was bound to reach that conclusion by the decision of the Court of Appeal in R v Riding [2009] EWCA Crim 892. This ruling meant that the judge proposed that he would direct the jury accordingly and would exclude evidence and prevent submissions directed to trying to support that part of the defence case. The appellant appealed to the Court of Appeal, Criminal Division (Sir Brian Leveson P, Elisabeth Laing and Whipple JJ). The appeal was dismissed: [2019] EWCA 36 (Crim). Like Judge Wall QC, the Court of Appeal considered that it was bound by R v Riding to reach the conclusion that the appellants proposed defence under section 4(1) was bad in law. The court certified the point of law set out above at para 3. The statutory context The Offences Against the Person Act 1861 (the 1861 Act) consolidated various enactments in England and Ireland relating to offences against the person, including the offences of destroying or damaging a building with gunpowder or other explosive substance, with intent to murder (section 12, now repealed), unlawfully and maliciously causing bodily injury by gunpowder or other explosive substance (section 28), unlawfully and maliciously causing gunpowder or other explosive substance to explode etc, with intent to do grievous bodily harm to some person (section 29), placing gunpowder or other explosive substance near a building etc, with intent to do bodily injury to any person (section 30) and making or having possession of gunpowder or any explosive substance etc, with intent by means thereof to commit any of the felonies set out in the Act (section 64). In parallel with these primary provisions of the criminal law, the Explosive Substances Act 1875 (the 1875 Act) amended the previous regulatory regime in relation to such substances. Although the Act uses the term gunpowder in its operative provisions, by virtue of section 3 this term also covers other explosive substances. Section 4 provided that gunpowder should not be manufactured except at a lawfully existing factory or one licensed under the Act, [p]rovided that nothing in this section shall apply to the making of a small quantity of gunpowder for the purpose of chemical experiment and not for practical use or sale. Section 5 provided that gunpowder should only be kept at certain approved places including places licensed under the Act, subject to a proviso that it should not apply to (among others) a person keeping for his private use and not for sale gunpowder to an amount not exceeding on the same premises 30 pounds. Thus, the 1875 Act recognised that possession of small quantities (or, in the case of section 5, a comparatively large quantity) of explosive substances for private use for experimentation or otherwise could be legitimate and would not require regulation. In fact, there is a long and well established tradition of individuals pursuing self education via private experimentation in a range of fields, including with chemicals and explosives. The 1875 Act acknowledged and made allowance for such practices. The penalties for breach of the regulatory provisions in the 1875 Act were at a much lower level than the penalties in respect of the primary criminal provisions in the 1861 Act and the 1883 Act, underlining the distinction between those primary criminal provisions and the regulatory offences. The 1883 Act was a measure passed by Parliament at great speed as a reaction to fears of Irish nationalist terrorism, and in light of a concern that the offences in the 1861 Act did not provide sufficient protection for the public. The 1883 Act created the new offences of unlawfully and maliciously causing an explosion likely to endanger life (section 2); acting unlawfully and maliciously with intent to cause an explosion likely to endanger life or cause serious injury to property (section 3(a)); unlawfully and maliciously making any explosive substance or having it in possession or under control with intent to endanger life or cause serious injury to property (section 3(b)); and the offence in section 4(1). The 1883 Act applies to Scotland: section 9. Section 9(1) provides a very wide definition of explosive substance: The expression explosive substance shall be deemed to include any materials for making any explosive substance; also any apparatus, machine, implement, or materials used, or intended to be used, or adapted for causing, or aiding in causing, any explosion in or with any explosive substance; also any part of any such apparatus, machine or implement. In relation to the offence in section 4(1), section 4(2) provided that the accused and their spouse should be competent to give evidence for the defence (this at a time when according to the ordinary law the accused and their spouse could not give evidence). Parliament considered that, for the accused to have a fair and effective opportunity of availing himself of the defence in section 4(1) of showing that he had made the explosive substance or had in in his possession or under his control for a lawful object, he and his spouse should have the opportunity of giving evidence about that at trial. The regulatory regime in relation to explosives is now contained primarily in the Explosives Regulations 2014 (the Regulations). The Explanatory Memorandum published with the Regulations and Guidance in relation to the Regulations issued by the Health and Safety Executive in 2014 make it clear that it continues to be expected that private individuals may manufacture explosives and have them in their possession for their own private use. The Explanatory Memorandum referred at para 7.1 to the explosives sector being fragmented and diverse, ranging from the storage and manufacture of large amounts of highly energetic and flammable material to individual hobbyists. See also the section of the Explosive Regulations 2014 Safety Provisions Guidance at para 9: Duty holders such as employers, private individuals and other people manufacturing explosives, storing larger quantities of explosives or storing explosives that present higher hazards or greater risks of initiation should use the relevant subsector guidance to supplement the guidance in this document. And para 13: Explosives for work, personal and recreational use [The Regulations apply] to explosives operations 13. whether they are for work or non work purposes. They therefore apply to anyone storing explosives for personal recreational use, or to voluntary clubs or societies storing explosives (examples include storage for firework displays, bonfire processions or re enactment events). Authorities In R v Fegan (1984) 78 Cr App R 189, a decision of 1971, the Court of Criminal Appeal in Northern Ireland considered the meaning and effect of section 4(1). Lord MacDermott CJ, delivering the judgment of the court, explained that section 4(1) illustrates a means of meeting a legislative problem, of how to curb a grave evil which postulates a guilty mind or mental element on the part of offenders, when proof of that guilty mind or mental element is likely to be a matter of inherent difficulty (p 191). In other words, section 4(1) was enacted because Parliament was not satisfied that the existing offences in the 1861 Act and the other offences created by the 1883 Act, involving as they did the need to prove a specific mental element, were sufficient fully to meet the risk posed by the making or possession of explosives. As Lord MacDermott CJ explained (p 191): Section 4(1) of the Act of 1883 may be said to proceed by way of compromise. It does not make it an offence to possess explosive substances for an unlawful purpose, nor does it create an absolute offence by prohibiting the mere possession of explosive substances. Instead, its two limbs provide for a dual enquiry (1) Was the person charged knowingly in possession under such circumstances as to give rise to a reasonable suspicion that his possession was not for a lawful object? and (2) if the answer to (1) is in the affirmative, has the person charged shown that his possession was for a lawful object? If the answer to (1) is in the affirmative and the answer to (2) in the negative a conviction follows; otherwise there must be an acquittal. The first limb allows for a conviction on reasonable suspicion. The second allows what may be very much a subjective defence, with the accused and his or her spouse permitted by section 4(2) (as an exception to the then existing law) to give evidence on oath as ordinary witnesses. (Emphasis in original) The appellant in Fegan was a young Roman Catholic man married to a Protestant woman, who by reason of his religion was subjected to threats of serious violence in the Protestant area in which he lived and told to move out of the district. The appellant acquired a pistol and live ammunition, maintaining that he did so to protect himself and his family. He was charged with a number of offences and was convicted at trial on three counts: possession of the pistol without holding a firearm certificate; possession of the ammunition without holding a firearm certificate; and possession of explosive substances (the pistol and the ammunition) under such circumstances as to give rise to a reasonable suspicion that he did not have them in his possession for a lawful object, contrary to section 4(1). He appealed against his conviction on the section 4(1) count. His appeal was allowed. The Court of Appeal found that the jury had clearly been entitled to find that limb (1) of the offence had been made out by the prosecution, but there had been a misdirection because the trial judge had not properly directed them regarding the possibility of a defence under limb (2), in relation to which there was evidence on which the jury could have found for the appellant. The court made it clear that a person may have a lawful object for the purposes of section 4(1) even though his possession of the explosive substances in question is in breach of regulatory offences (p 194): A, for example, borrows a shot gun to shoot birds despoiling his orchard. He has no certificate or other authority for possessing the gun and his possession is unlawful. To say that his object cannot be lawful is to confuse possession and purpose A firearm in lawful possession may undoubtedly be possessed for an unlawful object and there seems to be no good reason why the converse should not be true. The court also explained that the words possession for a lawful object in limb (2) should be construed as meaning possession for a lawful object and no other: The defence cannot have been meant to exonerate the possessor of a firearm for a lawful object if his possession was also for an unlawful object. Again, as a matter of construction, a defence under the second limb of section 4(1) cannot be made by the possessor proving that he had no unlawful object. The onus resting on him is specific and positive. He has to show possession for a lawful object. (p 194) Finally, the court gave guidance regarding the limits of the concept of lawful object in a case where self defence is relied upon as the relevant object: Possession of a firearm for the purpose of protecting the possessor or his wife or family from acts of violence may be possession for a lawful object. But the lawfulness of such a purpose cannot be founded on a mere fancy, or on some aggressive motive. The threatened danger must be reasonably and genuinely anticipated, must appear reasonably imminent, and must be of a nature which could not reasonably be met by more pacific means. A lawful object in this particular field therefore falls within a strictly limited category and cannot be such as to justify going beyond what the law may allow in meeting the situation of danger which the possessor of the firearm reasonably and genuinely apprehends. One does not, for example, possess a firearm for a lawful object if the true purpose is merely to stop threats or insults or the like. (p 194) Accordingly, possession with the general object of using the items for self defence should the need arise was capable of being possession for a lawful object for the purposes of limb (2) of section 4(1). This was so, even though the availability of a defence of self defence, should the pistol ever be used by the appellant, would depend upon the particular circumstances in which it was so used, including consideration whether use of it was a proportionate reaction to the specific threat experienced at the time and whether there were other means of avoiding that threat. No one could know in advance whether those conditions would be satisfied or not. There was no challenge to the correctness of any part of this reasoning. Fegan was followed by the Criminal Division of the Court of Appeal of England and Wales (Lord Lane CJ, McCowan and Leggatt JJ) in Attorney Generals Reference (No 2 of 1983) [1984] QB 456. The accused, whose property had been attacked and damaged by rioters, and fearing that it would be attacked again, made some petrol bombs, which he intended to use purely to repulse raiders from his property. A prosecution submission that self defence could not constitute a defence to an offence under section 4(1) was dismissed by the trial judge, and the jury acquitted the accused. The Attorney General referred for the courts opinion the question whether self defence could be a defence to an offence under that provision. The court endorsed the reasoning in Fegans case and held that self defence could constitute a lawful object for the purposes of section 4(1). It noted that, as was common ground, the accused had committed offences contrary to provisions of the 1875 Act by making and possessing explosive substances. However, the court held that a person in danger may arm himself for his own protection, if the exigency arises, although in so doing he may commit other offences (p 471). The court said, In our judgment, approaching a priori the words lawful object it might well seem open to a defendant to say, My lawful object is self defence. The fact that in manufacturing and storing the petrol bombs the respondent committed offences under the Act of 1875 did not necessarily involve that when he made them his object in doing so was not lawful The object or purpose or end for which the petrol bombs were made was not itself rendered unlawful by the fact that it could not be fulfilled except by unlawful means. The fact that the commission of other offences was unavoidable did not result in any of them becoming one of the respondents objects. (p 470) The court answered the point of law referred to it by saying that the defence under limb (2) of section 4(1) is available if the accused can satisfy the jury on the balance of probabilities that his object was to protect himself or his family or his property against imminent apprehended attack and to do so by means which he believed were no more than reasonably necessary to meet the force used by the attackers (p 471). The court so concluded, even though the question whether the defence of self defence would eventually be available if the accused happened to make use of the petrol bombs would depend upon the particular circumstances in which they were used. Thus, as in Fegans case, the courts ruling was based on the idea of self defence as a general object of the accused, even though a defence of self defence might not in fact be made out if the accused ever came to be charged with offences arising from actual use of the petrol bombs. In R v Riding [2009] EWCA Crim 892; 2009 WL 1096 171, the Criminal Division of the Court of Appeal of England and Wales (Hughes LJ, King J and Judge Radford) again considered section 4(1). The appellant made a pipe bomb and kept it at his home. He was convicted of the offence of making an explosive substance, contrary to section 4(1). He appealed against his conviction on grounds which included that the trial judge was wrong to hold that it could not be a lawful object to make the pipe bomb that he did out of no more than curiosity to see whether he could do it. The contention of the appellant was that for the purposes of section 4(1) a lawful object is the absence of any object which is criminal (para 8). The Court of Appeal rejected that submission. It rightly held that section 4(1) provides that if a person is found in possession of or has made an explosive substance in circumstances in which there is a reasonable suspicion that there is no lawful object, it is an offence unless there was in fact some affirmative object which was lawful (para 10); lawful object in limb (2) of section 4(1) does not mean the absence of criminal purpose, but rather requires the accused to identify a positive object which is lawful (para 12). The court followed what Lord MacDermott CJ said about this in Fegans case: the onus resting on the accused is specific but positive. He has to show possession for a lawful object (para 12, quoting from the passage set out above). Discussion In my view, the structure of section 4(1) is clear. If, under limb (1), the prosecution proves circumstances as to give rise to reasonable suspicion that the making or possession/control of an explosive substance which is in issue is not for a lawful object, that gives rise to a specific onus on the accused under limb (2) to identify the specific object or purpose for which he made the substance or had it in his possession/control. The burden of proof at the limb (2) stage is on the accused, and the standard of proof is the balance of probabilities. The object or purpose so identified by the accused under limb (2) has to be lawful in the place in which it is to be carried into effect: see R v Berry [1985] AC 246. In the present case, that was in England and lawful has the usual sense of that term in English law, namely that the object in question is not an object or purpose which is made unlawful by the common law or statute. As it was put by Sir Robert Megarry V C in Malone v Metropolitan Police Comr [1979] Ch 344, 357: England is not a country where everything is forbidden except what is expressly permitted: it is a country where everything is permitted except what is expressly forbidden. There is no other sensible criterion of lawfulness to be applied. Nothing said in any of the authorities referred to above suggests otherwise. Moreover, the general requirement that the criminal law should be clear and give fair notice to an individual of the boundaries of what he may do without attracting criminal liability supports this interpretation: a person should not be penalised except under clear law, sometimes called the principle against doubtful penalisation: see Bennion on Statutory Interpretation, 7th ed (2019) (D Bailey and L Norbury, eds), section 27.1. As explained in Fegans case and Attorney Generals Reference (No 2 of 1983), the fact that the making or possession of the substance may involve the commission of regulatory offences does not prevent an accused who seeks to make out a defence under limb (2) of section 4(1) from relying on an object at a more general level which is lawful. If an accused does identify a specific object for which he made the substance or had it in his possession/control, which is lawful in the requisite sense, issue will be joined on that at trial. The prosecution may seek to show that this was not in fact his object, or that it was not his sole object and that his object, as correctly understood, included an unlawful element. For example, as indicated in Fegans case, if the accused had not been put in fear of a reasonably imminent risk of serious physical harm such as might be capable of providing a justification for use of the pistol, there would not be a sufficient connection between his possession of the pistol and any use of it in his reasonable contemplation which could be lawful. In my view, it would also be open to the prosecution to meet the defence under limb (2) by seeking to show that pursuit of the object specified by the accused, although the object might be lawful in a general sense, would involve such obvious risk to other people or their property from use of the explosive substance that the inference should be drawn that the object of the accused was mixed, and not wholly lawful in the sense indicated in Fegans case. If the accused knew that his proposed use of the explosive substance in his possession would injure others or cause damage to their property or was reckless regarding the risk of this, the ostensibly lawful object identified by him would be tainted by the unlawfulness inherent in his pursuit of that object. Typically, these would be matters to be explored at trial. In Ridings case at para 12 the Court of Appeal, having approved and adopted what had been said by Lord MacDermott CJ, continued by saying Mere curiosity simply could not be a lawful object in the making of a lethal pipe bomb and observed that the appellant did not have a lawful object for making the bomb. The court therefore dismissed the appellants appeal against conviction in relation to the section 4(1) offence. This conclusion was correct on the facts of the case. The trial judge and the Court of Appeal explained that there was no need for the appellant to use an explosive substance to satisfy his curiosity whether he could successfully construct a pipe bomb: instead of filling it with gunpowder, he could have used an inert substance such as sand, which would equally have demonstrated whether or not he was capable of constructing it (para 3). He had constructed the pipe bomb in the spring of 2006, a considerable time before it was found in his possession, and had not attempted to detonate it (para 3). It was not part of his case that he had made the pipe bomb in order to see if he could make it explode. The courts statement that [m]ere curiosity simply could not be a lawful object in the making of a lethal pipe bomb has to be read in this context. Unfortunately, however, that statement was taken as having wider significance by Judge Wall QC and the Court of Appeal in the judgments below in the present case. The critical part of the reasoning of the Court of Appeal is at paras 42 and 43: 42. In summary, we conclude that Riding was not decided per incuriam the various cases relied on by the applicant. The outcome in Riding would have been the same, even if the court had been shown those cases. In any event, we agree with Riding. We accept that a person in possession of explosives must show, on balance of probabilities, that he or she has an affirmative or positive object for possessing those explosives. We reject the proposition that an absence of unlawful purpose is the same thing as a lawful purpose. We conclude that on a proper interpretation, section 4 requires that the defence is only made out when the person in possession of the explosives can show that the way in which those explosives will be used is itself lawful. That means, the person must be able to show both, first, the use to which the explosives will be put and second, that such a use is lawful. 43. We come then to the applicants case that he possessed these explosives out of curiosity, or because he wished to experiment with them. Consistent with Riding, we reject the proposition that curiosity or experimentation is a lawful object. The fact that a person is curious or wishes to experiment may be an explanation for why that person has accumulated the explosives; but it says nothing about his continued possession of them and the use to which they will be put. Indeed, it would be perfectly possible, if unattractive, to argue that explosives were detonated, with potential loss to life and limb, out of mere curiosity or in order to experiment. These are not objects in and of themselves; they are not uses to which explosives may be put; they are just explanations for past actions. With respect, I consider that the court fell into error in its reasoning in the latter part of para 42 and in para 43. Experimentation and self education, including to satisfy ones curiosity in relation to the subject of investigation, are lawful objects. As a matter of ordinary language, they are objects every bit as much as self defence is an object. That is true as a general proposition. It is particularly true in relation to section 4(1), enacted against the background of the 1875 Act, which in sections 4 and 5 recognised the lawfulness and legitimacy of individuals making or possessing quantities of explosives for the purposes of private experimentation and other private use. In the first part of para 42, the Court of Appeal rehearsed the analysis correctly set out in Ridings case. But in the latter part of para 42, the court set the bar to be cleared by an accused under limb (2) of section 4(1) rather too high, when it said that he must show that the way in which [the explosives in his possession] will be used is itself lawful. In my judgment, the accused does not have to identify precisely how the explosives will be used in future and that this will be lawful. To require that would be inconsistent with Fegans case and Attorney Generals Reference (No 2 of 1983), in which it was held that the accused only had to identify a relatively general object for which the explosive substances were to be used, which object was lawful (ie self defence), and that it was in the reasonable contemplation of the accused that the explosive substances might be required for that purpose and could lawfully be used for that purpose. As noted above, the defendants in those cases could not demonstrate precisely how the substances might come to be used; nor could it be guaranteed that if and when they were used, such use would necessarily be lawful. In my view, in para 43 the Court of Appeal erred by treating the statement in Ridings case that [m]ere curiosity simply could not be a lawful object in the making of a lethal pipe bomb as, in effect, a proposition of law rather than a statement regarding the position on the facts in that case; and in rejecting the idea that experimentation or self education can be objects for the purposes of section 4(1). In my judgment, they clearly can be objects for the purposes of that provision, as a matter of the ordinary use of language. The word object is synonymous with purpose, and similarly has a relatively general meaning. The object or purpose for which something is done is distinct from the precise conditions under which it might be done. Moreover, Parliament must have contemplated that that is how an accused or their spouse, speaking naturally when giving evidence pursuant to section 4(2) of the 1883 Act, would be likely to express themselves when giving an explanation in the witness box of the kind which it considered they should have the opportunity to present by way of defence under limb (2) of section 4(1). In line with the approach in Attorney Generals Reference (No 2 of 1983), the word object is to be given its natural meaning as a matter of ordinary language. In Berrys case, Lord Roskill, in giving the only substantive speech in the appellate committee, emphasised that the term object as used in section 4(1) is an ordinary English word, and accordingly was to be given its ordinary meaning so that unlawful object is synonymous with an unlawful purpose or an unlawful intent ([1985] AC 246, 254). There is nothing unlawful about experimentation and self education as objects, in themselves, so they are capable of being lawful objects within the meaning of section 4(1). Further examples can be given to illustrate the intended meaning of lawful object in section 4(1): see para 40 below. In the penultimate sentence of para 43 of its judgment the Court of Appeal called attention to a case of mixed objects. In my view, contrary to that of the Court of Appeal, the example given does not show that experimentation cannot be an object for the purposes of section 4(1). Rather it provides an illustration that, as contemplated in Fegans case, in a case of mixed objects where one of the objects is unlawful or in a case where unlawfulness taints the potentially lawful object on which the accused seeks to rely in his defence, the defence under limb (2) will fail. Whether that is so in a particular case will usually be a matter to be determined on the evidence at trial. Mr Mably sought to supplement the reasoning of the Court of Appeal. He submitted that Judge Wall QC was right at the preparatory hearing to disallow presentation by the appellant at trial of his proposed defence under limb (2) of section 4(1) by reference to the objects of experimentation and self education, because in his defence statement he had not given a detailed account of how he proposed to use the HMTD such as would demonstrate that his detonation of it in his back garden would not cause harm to other people or damage to their property. I do not accept that submission. Section 4(1) has general application. It can apply in the case of a teacher in the chemistry department of a school or university, or a person in a commercial research laboratory, who makes explosive substances or has them in his possession. If a charge were brought against such a person under section 4(1) and the prosecution was able to surmount the relatively low hurdle in limb (1) of the provision, the accused would be entitled to defend himself under limb (2) by proving that his object in making or keeping the substances was experimentation, education or research. It is apt to describe each of those as an object, as a matter of ordinary use of language. It might be the case that the accused had no developed and precise plan in mind as to how he proposed using the substance for those purposes, but that would not disable him from presenting a defence under limb (2). The absence of a precise plan as to how the substance was to be used in the course of pursuing those purposes might be a relevant matter to be taken into account at trial. But it would be for the jury to assess, on the evidence at trial, whether the defence was made out despite the absence of precise details as to proposed use. That view is supported by the approach taken to the lawful object of self defence in Fegans case and Attorney Generals Reference (No 2 of 1983), as explained above. For his defence under limb (2), the appellant only had to establish that he proposed using the HMTD in his possession for the lawful objects of experimentation and self education. The term lawful object in limb (2) does not require specification of the precise way in which the substance in question will be used by the accused. The appellants proposed defence was that he intended to use the HMTD in small amounts to produce insignificant detonations of the order to be expected from a simple domestic firework, ie at a level which was lawful. It was possible that he could have achieved this, or that he genuinely believed that he could, as he had done using other explosive substances on previous occasions. Therefore his defence under limb (2) should have been allowed to be presented at trial, rather than being ruled out at the preliminary hearing. In parts of his submissions, Mr Mably appeared to be taking what amounted to a pleading point. He said that the appellants defence statement did not give sufficient details of how he proposed using the HMTD in his experiments. As I understood the submission, this point was made by Mr Mably in support of his general argument regarding the meaning of lawful object in section 4(1), which I have addressed above. However, to the extent that he was seeking to make a different point, as a distinct complaint about a want of particularity in the defence statement, that is not within the scope of the issues which arise on this appeal. In any event, in my view the defence statement gave fair notice to the prosecution of the defence which the appellant proposed to present at trial, in accordance with the requirements of section 6A of the Criminal Procedure and Investigations Act 1996. Conclusion For the reasons given above, I would allow the appeal. I would answer the question certified by the Court of Appeal in the affirmative. LORD LLOYD JONES AND LORD HAMBLEN: (dissenting) We regret that we are unable to agree with the decision of the majority. Counts 1 and 2 of the indictment charge the appellant with the offence of making or possession of an explosive under suspicious circumstances contrary to section 4(1) of the Explosive Substances Act 1883. During the course of argument before this court, a defect in the drafting of the particulars of offence having been identified, the parties agreed that we should approach this appeal on the basis that the particulars of the offence on each count allege that the appellant knowingly had in his possession or under his control an explosive substance in such circumstances as to give rise to a reasonable suspicion that it was not in his possession for a lawful object. Mr Mably QC for the respondent told us that an application will be made to the Crown Court to amend the particulars of offence in each count accordingly. Mr Bogan QC for the appellant was also content that we should proceed on the basis of the defence statement as presently drafted because it would still reflect the substance of the defence. We will do so and we will limit our discussion to the offence committed in cases of possession. The scheme of the offence created by section 4(1) is that the prosecution is required to prove that the defendant was in possession of an explosive in circumstances giving rise to a reasonable suspicion that the defendant did not have the explosive in his possession for a lawful object. If that is established, it is for the defendant to prove that he had it in his possession for an object which was lawful. In the present case the Court of Appeal noted (at para 37) that a reasonable suspicion is enough for the offence to be made out and continued: This accords with common sense, because possessing or controlling explosives is dangerous (see Riding at para 10) and so it is understandable that the criminal law should be engaged in cases of reasonable suspicion, it not necessarily being possible for the prosecution to establish the precise object. The obvious purpose of the statute is to protect human life and property from harm by explosions. In the present case, each count alleges the possession by the appellant of HMTD, a sensitive primary high explosive that can easily be detonated from a spark, friction or impact and which has no commercial applications. The respondent contends that the circumstances give rise to a reasonable suspicion that he did not possess it for a lawful object. The appellant contends that he can rely on the statutory defence under section 4(1) as he can show that he had it in his possession for a lawful object. In particular, he maintains that, he was in possession as a result of an obsessional interest in the armed forces and a need to understand how explosives work and that his object or objects encompassed interest, education and experimentation. This is summarised in the certified question which asks: For the purposes of section 4(1) of the Explosive Substances Act 1883 can personal experimentation or own private education, absent some ulterior unlawful purpose, be regarded as a lawful object? Whether the appellants possession of HMTD may have been, quite independently of section 4(1), unlawful, for example under the Explosives Regulations 2014, is irrelevant for present purposes. A person in possession of an explosive in suspicious circumstances does not commit an offence contrary to section 4(1) if he can show on the balance of probabilities that he was in possession for a lawful object. The defence may be available even if the possession is otherwise unlawful. In R v Fegan (1971) 78 Cr App R 189, Court of Appeal of Northern Ireland, Lord MacDermott CJ accepted as correct a concession that a firearm held without certificate, permit or other authority might be possessed for a lawful object for the purposes of section 4(1). The Lord Chief Justice observed (at p 194): A firearm in lawful possession may undoubtedly be possessed for an unlawful object and there seems no good reason why the converse should not be equally true. The defence turns on the defendants object in having the explosive in his possession. It would be insufficient, in order to make out a defence under section 4(1), for a defendant to establish that he was not in possession of an explosive for a purpose which was unlawful. He must show that he was in possession for a lawful purpose. That is the natural meaning of the words in the statute and it was the interpretation adopted by the Court of Appeal of Northern Ireland in Fegan where Lord MacDermott observed, at p 194: as a matter of construction, a defence under the second limb of section 4(1) cannot be made by the possessor proving that he had no unlawful object. The onus resting on him is specific but positive. He has to show possession for a lawful object. Similarly, in R v Riding [2009] EWCA Crim 892 the Court of Appeal Criminal Division held that lawful object does not mean the absence of a criminal purpose. It is necessary to identify a positive object which is lawful. Hughes LJ referred in this regard to Attorney Generals Reference (No 2 of 1983) [1984] QB 456, where the defendant had made petrol bombs. The Court of Appeal in that case had been prepared to accept that self defence against rioters was capable of amounting to a lawful object, at least if the defendant could demonstrate that that was his sole object and that the means adopted were no more than he believed to be reasonably necessary. However, as Hughes LJ observed in Riding (at para 12), It is plain that the court took the view that the defendant could only be within the defence if the necessary immediacy of danger and reasonableness of the response was present. There was no question of the possession of the petrol bombs being lawful unless some criminal purpose for them existed. In the present case it has been made clear on behalf of the appellant, both in the defence statement and in the appellants written case, that it was never his case that the mere absence of an unlawful object could suffice to establish the statutory defence. Indeed, Mr Bogan on behalf of the appellant has accepted that a generic and unspecified plea or a passive plea of having no unlawful object could not succeed as it would rob the tribunal of the ability to make findings as to what was the true object and whether it was lawful or unlawful. Against this background, the central issue in this appeal is whether the explanation provided in the defence statement ie that the appellant had explosives in his possession for the purpose of personal experimentation or private education, is capable of being a sufficient lawful object within section 4(1). The trial judge and the Court of Appeal held that it was not. We agree with them. The statutory defence requires proof, on the balance of probabilities, of both (1) the object of the possession of the explosive substance and (2) that that object is lawful. The natural meaning of the word object is a reason for doing something, or the result you wish to achieve by doing it (Cambridge English Dictionary). It involves identification of what you wish to do and why. We agree with the Court of Appeal (at para 42) that in the present context that means showing the use to which the explosives will be put. It also necessarily involves identifying that use with sufficient particularity to show that the use may be lawful. In our view, to say that something is done for ones own private education is not a sufficient object for the purposes of the section 4(1) defence, as it does not identify the use to which the explosives will be put in order to provide such education. Similarly, personal experimentation is not a sufficient object for this purpose as, although it identifies in very general terms what is to be done with the explosives, it does not identify any purpose for so doing. This accords with the decision of the Court of Appeal in Riding. There, the defendant had made a pipe bomb which he kept in his home. He was convicted of making an explosive substance contrary to section 4(1). He appealed on the ground that the trial judge had been wrong to hold that it could not be a lawful object that, as he claimed, he made the pipe bomb out of no more than curiosity to see whether he could do it. Dismissing the appeal, Hughes LJ observed (at para 12): Mere curiosity simply could not be a lawful object in the making of a lethal pipe bomb. It would indeed be very remarkable indeed if it could. [Counsel for the appellant] was frank enough to accept that if the statute had used the words good reason instead of lawful object the defendant could not have established that he had good reason for making the bomb. We are entirely satisfied that he did not have a lawful object for it either. Furthermore, as the Court of Appeal pointed out in the present case (at para 42), the defence is only made out when the person in possession of the explosives can show that the way in which those explosives was intended to be used is itself lawful. It is not enough to show that it may be lawful. Even if it were accepted that personal experimentation for the purpose of ones own private education may be an object, this does not describe with any particularity how the experimentation is to be carried out in a manner which is lawful. At the defence statement stage, it is necessary to identify a use which could be found to be lawful. This requires, at the very least, some details to be provided of the nature of the proposed experimentation or use. In this case, for example, it was apparently envisaged that experimentation would take the form of detonations of the explosives in the appellants back garden. (It is the prosecution case that over the months prior to his arrest the appellant had made explosive substances with other chemicals on approximately six or seven occasions, had detonated or had attempted to detonate those explosive substances in his back garden by means either of homemade initiators made from fairy lights filled with firework powder or by means of a mobile telephone, and had made video recordings of these detonations or attempted detonations on his mobile telephone.) Such detonations involve an obvious risk of causing injury and damage to property and causing a public nuisance. For such experimentation to be capable of being lawful it would be necessary to particularise how it was to be carried out so as to avoid any such risk or how it would otherwise be lawful. Defence statements are meant to set out particulars of the matters of fact intended to be relied upon for the purposes of a defence (section 6A of the Criminal Procedure and Investigations Act 1996). We consider that the vague and generalised statements referring to personal experimentation and private education, whether considered individually or taken together, fail to provide sufficient particularity of how these claimed objects were to be carried out lawfully. The self defence cases, Fegan and Attorney Generals Reference (No 2 of 1983), referred to above are distinguishable. In those cases what was accepted as capable of constituting a lawful object was use for purposes of self defence in circumstances where the necessary immediacy of danger and reasonableness of the response were present (see Riding per Hughes LJ at para 12, cited above). In Fegan and in Attorney Generals Reference (No 2 of 1983) the claimed object was intended use to meet a future contingency which use could be sufficiently defined by reference to the limits of lawful self defence. That necessarily involved the assertion that the explosive substances would only be used in circumstances where the defendant believed that it was necessary to use force and that the amount of force used was reasonable. In the present case, by contrast, no lawful use of the explosives within the statutory provision is identified. Reliance on personal experimentation and own private education gives no sufficient indication of the use to which it was intended the explosives should be put, nor does it permit any assessment of its lawfulness. For these reasons we consider that the judge was correct in his conclusion that the explanation set out in the defence statement was not capable of amounting to a lawful object within section 4(1). We would answer the certified point of law as follows: For the purposes of section 4(1) of the Explosive Substances Act 1883, personal experimentation or own private education, absent some ulterior unlawful purpose, cannot be regarded as a lawful object. We would accordingly dismiss the appeal. |
The Rehabilitation of Offenders Act 1974 (the 1974 Act) provides that, after a period of time, the criminal convictions of a person, say of a man, are in many cases spent. This means, among other things, that he is not obliged to disclose them in response to a question by, for example, a prospective employer and that the prospective employer is not entitled to make a decision prejudicial to him by reference to them or to any failure on his part to disclose them. The same goes for cautions (which include warnings given to a child: section 65(9) Crime and Disorder Act 1998). Subject to an immaterial exception, cautions are spent as soon as they have been given: para 1(1)(b) of Schedule 2 to the 1974 Act, added by paragraph 6 of Schedule 10 to the Criminal Justice and Immigration Act 2008. But the law identifies exceptions to a persons protection from reference to spent convictions and to cautions. In these proceedings the two respondents, T and JB, claim that the reference in certificates issued by the state to cautions given to them violated their right to respect for their private life under article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention). T further claims that the obligation cast upon him to disclose the warnings given to him violated the same right. To the extent that the claims of T and JB are valid, another important question arises in relation to the width of the appropriate remedy. The Secretary of State for the Home Department has responsibility for the Disclosure and Barring Service (the DBS), an executive agency charged with the issue of certificates relating to a persons criminal record pursuant to the Police Act 1997 (the 1997 Act). The Secretary of State for Justice has responsibility for the working of the 1974 Act. The two Secretaries of State appeal against orders made by the Court of Appeal (Lord Dyson MR, Richards and Davis LJJ) on 29 January 2013: [2013] 1 WLR 2515. It upheld Ts appeal against the dismissal of his claim for judicial review and, in his case, declared first, pursuant to section 4 of the Human Rights Act 1998 (the 1998 Act), that the provisions of Part V of the 1997 Act were incompatible with article 8 insofar as they require the disclosure of all convictions and cautions that are recorded on central records on certificates; and second that the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (SI 1975 /1023) (the 1975 Order) was incompatible with article 8 and ultra vires the 1974 Act. A judge had refused to grant JB permission to apply for judicial review and, in her case, the Court of Appeal allowed her appeal, granted permission, upheld her claim and declared, pursuant to section 4 of the 1998 Act, that the provisions of Part V of the 1997 Act were incompatible with article 8 for the reasons set out in [its] judgment. In both cases the Court of Appeal provided that its declarations should not take effect pending application by the Secretaries of State to this court for permission to appeal. On granting permission, this court extended the stay until its determination of the appeals. In particular, therefore, the result is that there is no presently effective declaration that the 1975 Order is ultra vires. In these circumstances one would expect the Secretaries of State to have awaited the determination of the current appeals before exercising powers under the 1974 Act to amend the 1975 Order and powers under the 1997 Act to amend that Act itself, with a view to eliminating the incompatibilities and indeed invalidities identified by the Court of Appeal. On 22 May 2013, however, no doubt for reasons which they considered to be good, the Secretaries of State made the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (Amendment) (England and Wales) Order 2013 (SI 2013/1198) and the Police Act 1997 (Criminal Record Certificates: Relevant Matters) (Amendment) (England and Wales) Order 2013 (SI 2013/1200) with a view to eliminating the identified incompatibilities and invalidities. In paras 13 to 15 below I will, in effect in parenthesis, summarise the effect of the recent orders, which took effect on 29 May 2013. These appeals, however, concern the provisions of the 1975 Order and of the 1997 Act as they stood prior to the amendments wrought by the recent orders and, unless the context otherwise requires, references to the 1975 Order and to the 1997 Act should be understood accordingly. The appeals therefore lose some, but only some, of their practical significance. There would be a piquancy about any conclusion by this court that the 1975 Order and the 1997 Act were not, after all, incompatible with the respondents rights. But the court must beware of allowing its knowledge of the recent orders to lead it to avoid such a conclusion otherwise than on a principled basis. In 2002 the police issued two warnings to T, who was then aged 11, in respect of the theft of two bicycles. Like a caution issued to an adult, a warning to a child can be given only following his admission of guilt. T has no other criminal record. In 2008 a football club, to whom he had applied for part time employment, required him to obtain an enhanced criminal record certificate (an ECRC) under section 113B of the 1997 Act (as inserted by section 163 of the Serious Organised Crime and Police Act 2005 and amended by section 97(2) of the Policing and Crime Act 2009 and section 82(1) of the Protection of Freedoms Act 2012). The certificate disclosed the warnings but, following the intervention of Ts M.P., the police agreed to apply to the warnings their policy of stepping down in some cases. The effect was that, while the warnings remained on police files, they were not automatically to be disclosed on certificates. This seems to have resolved any problem between T and the football club. In 2010, however, T applied for enrolment on a sports studies course, which was to entail his contact with children. The college required him to obtain an ECRC. No doubt T was unaware that in the interim the police had acknowledged that their policy of stepping down contravened the 1997 Act: Chief Constable of Humberside Police v Information Comr (Secretary of State for the Home Department intervening) [2009] EWCA Civ 1079, [2010] 1 WLR 1136, at para 3. In the event, therefore, the ECRC issued in relation to T again disclosed the warnings. The college responded that Ts place on the course was at risk. It was only as a result of representations by his solicitor that it accepted T for enrolment on the course notwithstanding the warnings. In 2001 the police issued a caution to JB, then aged 41, in respect of the theft from a shop of a packet of false fingernails. She has no other criminal record. In 2009 she completed a training course arranged by the Job Centre for employment in the care sector. The provider of the course asked her to obtain an ECRC, which disclosed the caution. It thereupon told her that it felt unable to put her forward for employment in the care sector. THE 1974 ACT AND THE 1975 ORDER Section 4(2) and (3)(b) of the 1974 Act applies to such convictions as are treated as spent under the Act; and para 3(3) and (5) of Schedule 2 to it applies analogously to cautions. Broadly summarised, section 4(2) and para 3(3) provide that, where a question is asked of a person about his criminal record, it shall be treated as not extending to them and he is entitled not to disclose them and cannot be liable for failure to do so. Also thus summarised, section 4(3)(b) and para 3(5) provide that a persons spent conviction or his caution, or a failure to disclose it, cannot justify his exclusion or dismissal from a profession or employment or any action prejudicial to him in the course of his employment. But the 1975 Order makes exceptions to these provisions: article 3 of it specifies the exception to section 4(2) and to para 3(3) of the Schedule and article 4 specifies the exception to section 4(3)(b) and to para 3(5). In the light of the Court of Appeals declaration that the whole order was ultra vires, it is important to note the width of the two articles. Article 3 of the 1975 Order (as amended by article 3 of the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) Order 2001 (SI 2001/1192) and article 4 of the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2008 (SI 2008/3259) (the 2008 Order)) provides that a persons entitlement not to disclose either spent convictions or cautions in answer to questions does not extend to situations in which the questions are asked in order to assess his suitability in any one of 13 specified respects. Six examples are his suitability, at (a) of the article, for admission to certain professions and for entry into certain types of employment, all specified in Schedule I to the Order; at (aa), for his assignment to work with children in specified circumstances; at (b), for his assignment to work which impacts on national security; at (e), for his proposed adoption of a child; at (f), for his assignment to the provision of day care; and, at (g), for the grant to him by the Financial Conduct Authority of specified permissions and approvals. Analogously article 4 of the 1975 Order (as amended by article 5 of the 2008 Order) provides that the inability to exclude or dismiss a person from a profession or employment or to take action prejudicial to him in the course of his employment, by reference to a spent conviction or to a caution or to a failure to disclose it, does not apply: at (a) and (b) of the article, to the professions and types of employment specified in Schedule 1 to the Order; at (c), to any action taken for the purpose of safeguarding national security; at (d), to any one of 16 specified decisions of the Financial Conduct Authority; and at (e) to (n), to ten specified decisions of other authorities. The shape of the 1975 Order is therefore clear. It is the circumstances in which the question is asked which dictate whether an exception from protection under the 1974 Act arises; and when it arises, the duty to disclose in response to the question and the entitlement of the questioner to act in reliance upon the disclosure or upon a failure to do so are both absolute, being unrelated to the circumstances in which the spent conviction or the caution arose. THE 1997 ACT Sections 113A and 113B of the 1997 Act identify the circumstances in which the DBS must issue a criminal record certificate (a CRC) and an ECRC respectively. The only substantive difference between the two certificates is that an ECRC must include not only, as must a CRC, relevant matters recorded on the Police National Computer but also, by way of enhancement, information about the person on local police records which they reasonably believe to be relevant and ought to be included (conveniently described as soft intelligence): contrast section 113A(3)(a) with section 113B(3)(a) and (4). It is only where the certificate is required for the purposes of an exempted question asked for a prescribed purpose that an ECRC, rather than a CRC, is available. The present appeals concern ECRCs and, since in any event the greater includes the lesser, it will be convenient to address the circumstances in which the DBS must issue an ECRC. following circumstances: (a) The application for it is made by the person who is to be the subject of it (subsection (1)(a)). In summary, section 113B provides that an ECRC must be issued in the (b) The application is countersigned by a person listed in a register, maintained by the DBS, of persons likely to ask exempted questions (subsection (2)(a), read with section 120). (c) The application is accompanied by a statement by the registered person that the certificate is required for the purposes of an exempted question asked for a prescribed purpose (subsection (2)(b)). (d) An exempted question is a question to which exemption from protection arises under the 1975 Order (subsection (9) and section 113A(6)). (e) A prescribed purpose is a purpose prescribed in regulation 5A of the Police Act 1997 (Criminal Records) Regulations 2002 (SI 2002/233) which sets out a list overlapping with, but not co extensive with, the list in article 3 of the 1975 Order, of situations in which the registered person proposes to consider the applicants suitability for a specified position of trust or sensitivity. In what follows it will be convenient to regard both the exceptional obligation of a person to disclose a spent conviction or a caution under the 1975 Order and the obligation of the DBS to make disclosure of it by an ECRC under the 1997 Act as running in parallel. But the parallel is not exact. For the obligation of the DBS to make disclosure under an ECRC is, at the same time, both wider than the obligation of the person in terms of its inclusion of soft intelligence and yet narrower in that it arises only in circumstances in which the application is countersigned by a registered person who states that the certificate is required for a prescribed purpose. There will therefore be cases in which, although the questioned person is not exempt from a duty of disclosure, the questioner is not entitled to call for an ECRC. Nevertheless the shape of the 1975 Order is certainly reflected in the 1997 Act: for, if the prescribed circumstances surrounding the application for the ECRC are present, the duty of the DBS is to disclose even spent convictions and cautions irrespective of the circumstances in which they arose. THE 2013 AMENDMENTS In that the 1975 Order removes the protection from disclosure and reliance afforded by the 1974 Act when questions are asked in the circumstances which I have described, the first order dated 22 May 2013, made by way of amendment of the 1975 Order, (SI 2013/1198), in effect reinstates protection in the case of what it calls a protected caution and a protected conviction. A caution is protected if it was given otherwise than for any of 14 listed categories of offence and if at least six years have passed since the date of the caution (or two years if the person was then a minor): article 4. A conviction is protected if it was imposed otherwise than for any of the listed categories; if it did not result in a custodial sentence; if the person has not been convicted of any other offence; and if at least 11 years have passed since the date of the conviction (or five and a half years if he was then a minor): article 4. But this new, more nuanced, regime does not apply when questions are asked in order to assess a persons suitability for a few specified types of employment: article 6. The entitlement of the questioner to act in reliance upon the disclosure of a spent conviction or a caution, or upon a failure to disclose it, is re cast along the same lines: articles 8 and 9. The second order dated 22 May 2013, made by way of amendment of the 1997 Act, (SI 2013/1200), narrows the content of a CRC and of an ECRC analogously. The obligation of the DBS is to include in the certificate details of every relevant matter (sections 113B(3)(a) and 113A(3)(a)); and, whereas the definition of relevant matter in section 113A(6) originally included all convictions including all spent convictions, the new order amends the definition so as to render the obligation of the DBS to make disclosure of spent convictions and of cautions under the 1997 Act broadly co extensive with the new, narrower, obligation of the person to make disclosure under the amended 1975 Order: articles 3 and 4. It may be that information about the circumstances behind a spent conviction or a caution which is now no longer required to be disclosed on a certificate will nevertheless, in the case of an ECRC, be disclosed as soft intelligence; but that will occur only if the police reasonably believe it to be relevant (section 113B(4)(a)). The recent orders, each approved by resolution of Parliament, therefore represent a departure from the former regime under which disclosure of all spent (as well, of course, as unspent) convictions and of all cautions was required if the question was put, or the application for a certificate made, in the specified circumstances. Even in those circumstances certain spent convictions and cautions, identified by their subject matter and in the case of a conviction also by the sentence, and also by the number and age of them, are no longer required to be disclosed. WITHIN SCOPE OF ARTICLE 8 Did the cautions issued to T and to JB represent an aspect of their private life, respect for which, subject to qualification, is guaranteed to them under article 8 of the Convention? An authoritative affirmative answer is provided within the judgments of this court in R(L) v Commissioner of Police of the Metropolis (Secretary of State for the Home Department intervening) [2009] UKSC 3, [2010] 1 AC 410. The decision itself related to soft intelligence included in an ECRC under the precursor of section 113B of the 1997 Act. Mrs L was employed by an agency which provided staff for schools and the ECRC which it required her to obtain disclosed police intelligence to the effect that, two years previously, her teenage son had been placed on the child protection register under the category of neglect, on the basis that Mrs L, with whom the son had not then been living, had little control over his behaviour and was not prepared to cooperate with social services. The agency then terminated her employment. Her claim against the police for infringement of her rights under article 8 failed but only on the basis that the interference with her rights had been justified. By reference to various decisions of the European Court of Human Rights (the ECtHR), Lord Hope of Craighead said: 24it has been recognised that respect for private life comprises, to a certain degree, the right to establish and develop relationships with other human beingsExcluding a person from employment in her chosen field is liable to affect her ability to develop relationships with others, and the problems that this creates as regards the possibility of earning a living can have serious repercussions on the enjoyment of her private life: see Sidabras v Lithuania (2004) 42 EHRR 104, para 48. She is entitled also to have her good name and reputation protected As Baroness Hale said in R (Wright) v Secretary of State for Health [2009] AC 739, para 36, the fact that a person has been excluded from employment is likely to get about and, if it does, the stigma will be considerable. 27. This line of authority from Strasbourg shows that information about an applicants convictions which is collected and stored in central records can fall within the scope of private life within the meaning of article 8(1), with the result that it will interfere with the applicants private life when it is released. It is, in one sense, public information because the convictions took place in public. But the systematic storing of this information in central records means that it is available for disclosure under Part V of the 1997 Act long after the event when everyone other than the person concerned is likely to have forgotten about it. As it recedes into the past, it becomes a part of the persons private life which must be respected. Moreover, much of the other information that may find its way into an ECRC relates to things that happen behind closed doors. A caution takes place in private, and the police gather and record information from a variety of sources which would not otherwise be made public. See also the judgment of Lord Neuberger of Abbotsbury at paras 68 to 72. Building on the comments in those two main judgments in the L case, the Court of Appeal in the present cases held that, in that a caution takes place in private, the receipt of a caution was part of a persons private life from the outset. The proposition calls for careful thought but in the end I find myself in agreement with it. My receipt of a caution, whenever received, is a sensitive, certainly embarrassing and probably shameful, part of my history, which may have profound detrimental effects on my aspirations for a career; and the unchallengeable fact that I did commit the offence for which I was cautioned makes it no less sensitive but, on the contrary, more sensitive. These appeals do not relate to the disclosure of a spent conviction which will have been imposed in public. But it might be helpful to refer to Lord Hopes comment in the L case at para 27, quoted at para 16 above, that as it recedes into the past it becomes a part of the persons private life. Liberty, an intervener in these appeals, suggests that the point at which a conviction recedes into the past and becomes part of a persons private life will usually be the point at which it becomes spent under the 1974 Act. It is a neat and logical suggestion which this court should adopt. INTERFERENCE: THE 1997 ACT In the Sidabras case, cited by Lord Hope in para 24 of his judgment in the L case quoted at para 16 above, the ECtHR addressed a law, passed following Lithuanias declaration of independence, that former KGB officers could not pursue certain types of employment in the private sector for ten years. It held that the law violated the rights of the two applicants under Article 8, taken in conjunction with article 14. The court said: 48. Admittedly, the ban has not affected the possibility for the applicants to pursue certain types of professional activities. The ban has, however, affected the applicants ability to develop relationships with the outside world to a very significant degree, and has created serious difficulties for them as regards the possibility to earn their living, with obvious repercussions on their enjoyment of their private life. It was the Sidabras case, together with other authorities, which led Lord Hope to conclude in the L case at para 27, also quoted at para 16 above, that it was the disclosure of the information about L in the ECRC which represented the interference with her rights. Referring to the precursor of section 113B(3)(a), Lord Neuberger added, at para 75 of the L case, that it is likely that an adverse ECRC, ie one falling within section 115(6)(a), will represent something close to a killer blow to the hopes of a person who aspires to any post which falls within the scope of the section. In the present appeals it is true that, in the end, T was allowed to enrol on the sports studies course and it is possible, albeit unlikely, that, notwithstanding the refusal of the provider of the training course to put her forward for work in the care sector, JB could have secured it by direct application. But the point is that, in both cases, the disclosure in the ECRCs of the cautions issued to them significantly jeopardised entry into their chosen field of endeavour. This court need therefore proceed no further before concluding not just that (as the Secretaries of State concede) the ECRCs, once issued, were capable of interfering with the rights under Article 8 of the two applicants but that they did interfere with them. It is, however, at least arguable that the states retention of data about cautions (and spent convictions), even prior to their disclosure in a CRC or an ECRC, amounts to interference with Article 8 rights which thus requires justification. In S v United Kingdom (2009) 48 EHRR 1169 the Grand Chamber of the ECtHR held that the retention by the police, save in exceptional circumstances, of DNA samples and fingerprints taken from persons suspected, but never convicted, of a criminal offence represented an interference with their rights under Article 8: paras 77 and 86. It rejected the UKs argument that there was no interference until use was made of the retained material (para 70) and it held persuasively that the applicants reasonable concern about its possible future use was relevant to whether an interference had already arisen (para 71). It is true that the Grand Chamber stressed the highly personal and sensitive nature of the material (para 72) and one could argue that a record of cautions and of spent convictions is not in that league. On the other hand, in Bouchacourt v France, Application No.5335/06, (unreported) 17 December 2009, which concerned material on a sex offenders register, the ECtHR seemed to declare categorically that retention of data relating to private life by itself represented interference irrespective of its sensitivity (para 57). This court can leave open whether it should go as far as that. POSITIVE OBLIGATIONS: THE 1975 ORDER The Secretaries of State put forward a distinct and undeniably seductive argument in response to the challenge of T to the lawfulness of the 1975 Order. It relates to the difference between the imposition by the Convention upon a public authority of an obligation not to act in such a way as to violate a persons human rights (ie a negative obligation) and its imposition upon it of an obligation to act in such a way as not to do so (ie a positive obligation). In the case of the 1997 Act (they argue) the state has done something: for it has issued a certificate. If the court concludes that it has thereby interfered with the Article 8 rights of T and JB and proceeds also to conclude that the state has thereby violated them, it will hold that the state must not continue to do it. In other words the positive character of the states violation attracts the imposition of a negative obligation. The argument is that, in the case of the 1975 Order, the nature of the alleged violation of the Article 8 rights of T is opposite: it is that the state has not done something, specifically that it has not legislated so as to permit him to deny (let us not forget, falsely to deny) that, when aged 11, he received two warnings for stealing two bicycles and, equally, that it has not legislated so as to disable specified third parties from making decisions by reference to his receipt of them. Unlike, for example, Article 6(3), Article 8 of the Convention does not routinely oblige a member state to take positive action, whether it be to legislate or otherwise; and on any view (see para 24 below) it will pay special respect to the judgment made by the state before obliging it to do so. An initial question is how the imposition of a positive obligation can arise at all under Article 8. Paragraph 2 prohibits interference with the exercise of the right except in the circumstances there specified. When it has omitted to do something, how can the state be said to have interfered? Happily the ECtHR does not seek to pretend that non interference can amount to interference. In Rees v United Kingdom (1986) 9 EHRR 56, at paras 35 and 37, the court accepted that, by failing to confer on a transsexual a right to an amended birth certificate, the state was not guilty of interference with his rights under article 8. It noted that the article could nevertheless give rise to positive obligations but proceeded, in a decision later superseded, not to discern one in that situation. How, then, can the article yield a positive obligation? The answer is to be found in para 1 of the article, which is not cast in prohibitory terms. It provides that everyone has the right to respect for certain things and in some circumstances a state can respect them only by taking positive action: Marckx v Belgium (1979) 2 EHRR 330 at paras 31 and 43. It is necessary therefore to address the argument of the Secretaries of State on its merits. They rely on the decision of the ECtHR in Mosley v UK (2011) 53 EHRR 1011. A domestic court had held that, in publishing an article about his participation in sexual activities, a newspaper had breached the applicants privacy. Before the ECHtR he contended that, by failing to legislate so as to require a newspaper to give prior notice to a person of publication of material about his personal life, the UK had infringed his rights under article 8. The claim failed. The court said: 106. the words the right to respect forprivatelife which appear in article 8 require not only that the state refrain from interfering with private life but also entail certain positive obligations on the state to ensure effective enjoyment of this right by those within its jurisdiction. Such an obligation may require the adoption of positive measures designed to secure effective respect for private life even in the sphere of the relations of individuals between themselves. 107. The court emphasises the importance of a prudent approach to the states positive obligations to protect private life in general and of the need to recognise the diversity of possible methods to secure its respect. The choice of measures designed to secure compliance with that obligation in the sphere of the relations of individuals between themselves in principle falls within the contracting states margin of appreciation. However, this discretion goes hand in hand with European supervision. 108 First, the court reiterates that the notion of respect in article 8 is not clear cut, especially as far as the positive obligations inherent in that concept are concerned: bearing in mind the diversity of the practices followed and the situations obtaining in the contracting states, the notions requirements will vary considerably from case to case. Thus contracting parties enjoy a wide margin of appreciation in determining the steps to be taken to ensure compliance with the Convention. In this regard, the court recalls that by reason of their direct and continuous contact with the vital forces of their countries, the state authorities are, in principle, in a better position than the international judge to give an opinion on how best to secure the right to respect for private life within the domestic legal order. 109. Secondly, the nature of the activities involved affects the scope of the margin of appreciation. [A] serious interference with private life can arise where the state of domestic law conflicts with an important aspect of personal identity. Thus, in cases concerning article 8, where a particularly important facet of an individuals existence or identity is at stake, the margin allowed to the state is correspondingly narrowed. The same is true where the activities at stake involve a most intimate aspect of private life. 110. Thirdly, the existence or absence of a consensus across the member states of the Council of Europe, either as to the relative importance of the interest at stake or as to the best means of protecting it, is also relevant to the extent of the margin of appreciation: where no consensus exists, the margin of appreciation afforded to states is generally a wide one. From the foot of these observations the Secretaries of State argue that even a domestic court should afford considerable latitude to the state before interpreting article 8 as imposing upon it a positive obligation to legislate in the manner proposed; that T cannot claim that the issue surrounds the most intimate aspect of his private life; and that there is no consensus among member states about the extent to which minor or ancient entries in a persons criminal record should be deleted. The trouble is, however, that the classification of an obligation as positive rather than negative is not always as easy as in relation to the obligation proposed in the Mosley case. The boundaries between them are not susceptible of precise definition: Garnaga v Ukraine, ECtHR, (Application No.20390/07) (unreported) 16 May 2013, para 37. T argues, with only a limited degree of contrivance, that the state has already taken a positive step namely to attach legal sanctions, civil and sometimes even criminal, to untruthful representations made in specified circumstances and that the only question is whether its delineation of those circumstances has been so broad as to have violated his rights and whether it should therefore be the subject of a negative obligation, namely not to maintain rules of that breadth. He argues, analogously, that the state has already taken another positive step namely by the 1974 Act to relieve a person from an obligation to refer to certain entries in his criminal record save where excepted by the 1975 Order and that the only question is whether its delineation of the exceptions has been so broad as to have violated his rights and whether it should therefore be the subject of a negative obligation, namely not to maintain exceptions of that breadth. In this respect there is an analogy with the decisions of the ECtHR that, although the Convention does not require a state to establish, by article 6, a system for appeals (Delcourt v Belgium (1970) 1 EHRR 355) nor, by article 1 of Protocol 1, a welfare system (Carson v United Kingdom (2010) 51 EHRR 369), the system, if established, must not violate Convention rights. If, which is therefore debateable, Ts challenge to the 1975 Order is properly classified as a demand for the imposition of a positive obligation, I conclude that, of itself, the classification should not inhibit the court from further proceeding to determine the challenge and, if valid, from granting such remedy in respect of it as would otherwise be appropriate. In Dickson v United Kingdom (2008) 46 EHRR 927, the ECtHR said, at para 71, that, irrespective of whether the suggested obligation was positive or negative, the core issue was whether a fair balance had been struck between the competing interests. In so concluding I have an eye also to the paradox which would arise if treatment of the 1997 Act differed from treatment of the 1975 Order: it would make no sense to conclude that the state had violated Ts rights by issue of the ECRC for the attention of the college but that it had not violated them by requiring him truthfully to answer its questions about his criminal record nor by permitting the college to act in reliance upon his answers in deciding whether to enrol him on the course. For an ECRC is in effect no more than the method of verification of a persons answers. LEGALITY In that, by the issue of the ECRCs under the 1997 Act and, in Ts case, by the imposition upon him of the obligations of the 1975 Order, they interfered with the right of T and JB to respect for their private life, para 2 of article 8 casts upon the Secretaries of State the onus of establishing that the interference was in accordance with law (the requirement of legality) and necessary in a democratic society (the requirement of necessity). But for the decision of the ECtHR on 13 November 2012 in MM v UK, No 24029/07 The Times 16 January 2013, to which I will turn at para 35 below, there is in my view little reason to doubt that the issue of the certificates and the imposition of the obligations upon T were, at any rate, in accordance with law. R (Gillan and another) v Comr of Police of the Metropolis [2006] UKHL 12, [2006] 2 AC 307, concerned a power given by statute to senior police officers, in the event that they considered it expedient for the prevention of acts of terrorism, to confer authority, limited by time and place, upon constables to stop and search pedestrians at random. In the domestic courts two innocent pedestrians, who had been stopped and searched, unsuccessfully argued that the stop and search regime had violated their Convention rights, including under article 8. They argued unsuccessfully that it was not in accordance with law. Lord Bingham of Cornhill said: 34. The lawfulness requirement in the Convention addresses supremely important features of the rule of law. The exercise of power by public officials, as it affects members of the public, must be governed by clear and publicly accessible rules of law. The public must not be vulnerable to interference by public officials acting on any personal whim, caprice, malice, predilection or purpose other than that for which the power was conferred. This is what, in this context, is meant by arbitrariness, which is the antithesis of legality. This is the test which any interference with or derogation from a Convention right must meet if a violation is to be avoided. Lord Hopes analysis, at para 52, was only subtly different. He too stressed the need for the domestic law to be not only accessible but clear (sufficiently precise to enable the individual to foresee the consequences) but he suggested that the need for the regime not to be arbitrary was a further factor as opposed to being the opposite side of the coin of clarity and precision. At all events, when the pedestrians took their case to the ECtHR, they secured a contrary determination, namely that the stop and search regime had not been in accordance with law and that their rights under article 8 had been violated: Gillan v United Kingdom (2010) 50 EHRR 1105. The courts analysis was in conflict not with the enunciation of legal principle by Lord Bingham but only with the committees application of it. 76 the words, in accordance with the law require the impugned measure both to have some basis in domestic law and to be compatible with the rule of law, which is expressly mentioned in the preamble to the Convention and inherent in the object and purpose of article 8. The law must thus be adequately accessible and foreseeable, that is, formulated with sufficient precision to enable the individual if need be with appropriate advice to regulate his conduct. 77. For domestic law to meet these requirements it must afford a measure of legal protection against arbitrary interferences by public authorities with the rights safeguarded by the Convention. In matters affecting fundamental rights it would be contrary to the rule of law for a legal discretion granted to the executive to be expressed in terms of an unfettered power. Consequently, the law must indicate with sufficient clarity the scope of any such discretion conferred on the competent authorities and the manner of its exercise. It could not seriously be argued that the way in which the regimes for the issue of certificates under the 1997 Act and for the obligation to answer questions (and for the questioner to act in reliance on them) under the 1975 Order worked were insufficiently accessible or foreseeable for them not to be in accordance with law as interpreted in the Gillan case both in the House of Lords and in the ECtHR. There is no doubt that, in the light of the way in which the requirements of legality and necessity in article 8(2) have been developed, there is some overlap between them. To take the obvious example, rules which are insufficiently precise for the purposes of the former are likely to go wider than is necessary to accomplish their legitimate objective for the purposes of the latter. It is however important that we domestic judges, and particularly (if I may say so) our respected colleagues in the ECtHR, should not erode the distinction between the two requirements more than logic compels. It is particularly important that our colleagues should not do so because a cardinal feature of their courts jurisprudence in relation to necessity is to afford a margin of appreciation, of greater or lesser width, to the contours within which the member state has seen fit to draw the impugned rules. The ECtHR does not extend the margin of appreciation and it is right that it should not do so to its consideration of legality. In S v United Kingdom (2009) 48 EHRR 1169, cited in para 21 above, concerning the retention of fingerprints and DNA samples taken from those suspected of a crime, the ECtHR observed, at para 99, that the statutory authority for the use of such material for purposes related to the prevention or detection of crime was in rather general terms. It went on to conclude that complaints about the absence of detailed safeguards in respect of the use (and storage) of the material were more conveniently considered in terms of the necessity for the interference. In that it was to proceed to conclude that the nature of the statutory powers overstepped the margin of appreciation and failed to satisfy the requirements of necessity, it saw no need to decide whether it also failed to satisfy the requirement of legality. When the issues had been before the House of Lords, the committee had given short shrift to the argument that retention of the material had not been in accordance with law: R (S) v Chief Constable of the South Yorkshire Police [2004] UKHL 39, [2004] 1 WLR 2196, para 36. It would have been surprising if, whatever its other shortcomings, the statutory power had been held in the ECtHR to fail even the requirement of legality. In Kennedy v United Kingdom (2010) 52 EHRR 207 the applicant failed to persuade the ECtHR that the states possible past, and at any rate its potential future, interception of his telephone and email communications had violated his rights under article 8. The court held that there were sufficient safeguards in the interception regime, including in particular a right of complaint to a tribunal (which had rejected a complaint by the applicant), to justify interference with his rights. But the court took a significant step towards blurring the difference between legality and necessity: for it decided, at para 155, to address them jointly. So we arrive at the MM case, cited above. The applicant, who lived in Northern Ireland, was a babys paternal grandmother and was distressed at the prospect of the mothers removal of him to her native Australia. In order, apparently, to induce the mother and her son to reconcile their differences, the grandmother disappeared with the baby for more than a day. She accepted a caution for the offence of child abduction on the basis that, as the Northern Ireland police assured her in accordance with what was then their practice, the caution would be deleted from her record after five years, namely in 2005. At around that time, however, the Northern Ireland police changed their practice so as to retain adult cautions on file indefinitely and, in that year, they disclosed it to a potential employer of MM, who, in consequence, did not offer her employment. The disclosure was pursuant to the powers of the Northern Ireland police at common law for sections 113A and 113B of the 1997 Act did not come into force in Northern Ireland until 2008. The ECtHR nevertheless also considered the new, statutory regime for the issue of certificates on the basis that the grandmother was at risk of its future application to her. police had violated the grandmothers rights under article 8 as follows: 206. In the present case, the court highlights the absence of a clear legislative framework for the collection and storage of data, and the lack of clarity as to the scope, extent and restrictions of the common law powers of the police to retain and disclose caution data. It further In the MM case the ECtHR explained its conclusion that the Northern Ireland refers to the absence of any mechanism for independent review of a decision to retain or disclose data, either under common law police powers or pursuant to Part V of the 1997 Act. Finally, the Court notes the limited filtering arrangements in respect of disclosures made under the provisions of the 1997 Act: as regards mandatory disclosure under section 113A, no distinction is made on the basis of the nature of the offence, the disposal in the case, the time which has elapsed since the offence took place or the relevance of the data to the employment sought. 207. The cumulative effect of these shortcomings is that the court is not satisfied that there were, and are, sufficient safeguards in the system for retention and disclosure of criminal record data to ensure that data relating to the applicants private life have not been, and will not be, disclosed in violation of her right to respect for her private life. The retention and disclosure of the applicants caution data accordingly cannot be regarded as being in accordance with the law. There has therefore been a violation of article 8 of the Convention in the present case. This conclusion obviates the need for the court to determine whether the interference was necessary in a democratic society for one of the aims enumerated therein. In the present appeals the Secretaries of State argue that it is surprising that the ECtHR should have determined the grandmothers application by reference to the requirement of legality. The first of that courts three points in para 206 is criticism of lack of clarity about the extent of the common law powers of the Northern Ireland police, albeit circumscribed by the Data Protection Act 1998, to retain and disclose information about cautions. That criticism, well founded or otherwise, is indeed one of inadequate precision. The court made its second point, namely the absence of mechanism for independent review, after, in particular, having noted at para 197 the stress laid by this court on that factor in its analysis of the regime for notifications by sex offenders in R (F) (A Child) v Secretary of State for the Home Department (Lord Advocate intervening) [2010] UKSC 17, [2011] 1 AC 331. But this courts analysis was specifically conducted in terms of necessity rather than legality (see para 41, Lord Phillips of Worth Matravers). It is hard to see how absence of review can affect either the accessibility or the precision of the legislation although, if safeguards against arbitrariness are a free standing aspect of the principle, it might arguably qualify in that regard. But in my view the courts third and final point, namely its powerful criticism of the failure of the regime under the 1997 Act to regulate disclosure by reference to the circumstances of the caution, clearly addresses its proportionality and thus the necessity, as opposed to the legality, of the interference. Then in para 207 the court concluded that the consequence of these three points was an absence of safeguards which precipitated a violation of the grandmothers rights and that accordingly the retention and disclosure of the information about her caution were not in accordance with law. So, although significantly the grandmother had not even disputed that the interference was in accordance with law (para 192), the court reached its determination on that basis and therefore without any reference to the margin of appreciation. In my view the Secretaries of State raise a legitimate concern that issues which, when properly analysed, fall to be resolved in the ECtHR by reference to the principle of necessity, and therefore to attract extension to the member state of the margin of appreciation, should not instead be resolved by reference to the principle of legality. Although the first and perhaps also the second of the three points addressed above probably justified the resolution of the MM case by reference to it, I take the view, in respectful disagreement with the other members of this court, that the 1997 Act does not fall foul of the principle of legality. The Court of Appeal was in my view right to decline to conclude, even in the light of the MM case, that either the 1997 Act or the 1975 Order did so; and counsel for T and JB have been wise not to seek to uphold any part of its decision by reference to the principle of legality. The complaint in the MM case of an absence of a clear legislative framework in Northern Ireland and of lack of clarity in the contours of the common law powers of its police has no analogue in the present cases; and the instant proceedings demonstrate independent review of a most exacting character. Lord Reed suggests in para 114 that the question whether there are safeguards which enable the proportionality of the interference adequately to be examined affects legality, whereas the question whether the interference was proportionate affects necessity. But in my view the ECtHRs third point logically falls within the latter; and I deprecate its seepage into the former. There is also, if I may say so, a paradox about Lord Reeds conclusion on the one hand, at para 119, that the 1997 Act falls foul of the principle of legality but yet his disinclination to conclude on the other hand, at para 140, that the 1975 Order does so: for both the arrangement of the two provisions and the charge against them run in broad parallel and the different degree of their intrusiveness, to which Lord Reed refers at para 140, is pre eminently a factor which relates to necessity. NECESSITY In this respect one asks first whether the objective behind the interference was sufficiently important to justify limiting the rights of T and JB under article 8; second whether the measures were rationally connected to the objective; third whether they went no further than was necessary to accomplish it; and fourth, standing back, whether they struck a fair balance between the rights of T and JB and the interests of the community (R (Aguilar Quila) v Secretary of State for the Home Department [2011] UKSC 45, [2012] 1 AC 621, para 45). The objective behind the regime created by the 1975 Order and by Part V of the 1997 Act was supremely important. It was to protect various members of society, particularly vulnerable groups such as the elderly and children but also, for example, consumers of financial advice, from exposure to persons able and likely to mistreat, neglect or defraud them. On any view the contents of the Order and of the Act were rationally connected to the objective. The issue surrounds the third and fourth questions, in relation to both of which the Secretaries of State make a valid preliminary point. It is that whether the measures were necessary to accomplish the objective and whether the balance was fairly struck are issues of fine judgement which, by affirmatively approving the 1975 Order and by enacting the 1997 Act, Parliament itself determined and that the courts should therefore hesitate long before concluding that its judgement in these respects was wrong. Nevertheless the nature of Ts and JBs attack on the regime is obvious. It is that it operated indiscriminately. The exception (so the argument goes) from the eradication for practical purposes of certain entries from a persons record in accordance with the 1974 Act should be bounded by two sets of rules: rules which specify the type of request which should justify some disclosure and rules which identify the entries which should then be disclosed. The regime certainly contained rules of the former character. But there were none of the latter character. If the type of request was as specified, there had to be disclosure of everything in the kitchen sink. There was no attempt to separate the spent convictions and the cautions which should, and should not, then be disclosed by reference to any or all of the following: (a) the species of the offence; (b) the circumstances in which the person committed it; (c) his age when he committed it; (d) in the case of a conviction, the sentence imposed upon him; (e) his perpetration or otherwise of further offences; (f) the time that elapsed since he committed the offence; and (g) its relevance to the judgement to be made by the person making the request. The case of T is held up as an egregious example of the flaws in the regime. His theft of two bicycles before he even became a teenager was disclosed in connection with his proposed participation in sporting activities with children, to which (it is said) it had no conceivable relevance; indeed entries reflective of childish error should be a particular candidate for total elimination in the interests (in the words of article 40 of the UN Convention on the Rights of the Child 1989) of promoting the childs reintegration and the childs assuming a constructive role in society. T and JB fortify their attack by demonstrating that, long before they introduced the 2013 amendments, the Secretaries of State were actively contemplating the making of changes to the regime which would make its operation less indiscriminate. In 2010 the Secretary of State for the Home Department established the Criminal Records Review and set its terms of reference in arresting language as follows: To review whether the criminal records regime strikes the right balance between respecting civil liberties and protecting the public and make proposals to scale back the use of systems involving criminal records to common sense levels. Mrs Mason, the governments Independent Advisor for Criminality Information Management, was appointed to conduct the review in two phases, of which the first was to encompass disclosure under Part V of the 1997 Act. Mrs Mason published her Report on Phase One in February 2011 and aptly headed it A Common Sense Approach. Her fifth recommendation was that the government should introduce a filter to remove old and minor conviction information from criminal record checks and that an advisory panel, which the government had already set up, should make recommendations about the optimum mechanism for filtering them. In December 2011 the government responded that it was considering the proposal and was in particular attempting to identify an appropriate and workable filtering mechanism: Independent Review of the Criminal Records Regime Government Response, p 3. At about the same time the panel made its report; but, although all members of it were agreed on eight basic principles, they were not unanimous about how they should be applied. Evidence filed in these proceedings on behalf of the Secretary of State for the Home Office convincingly demonstrates the complexities of developing a satisfactory filter, with which the government was apparently continuing to wrestle until (so it seems to have considered) its hand was forced into making the 2013 amendments. Against the attack on the regime the Secretaries of State raise three points by way of defence. They say, first, that a filter mechanism was always in place in that it was only convictions and cautions for recordable offences that were entered on the Police National Computer and were therefore available for disclosure. About one half of all offences are not recordable and so are, in that sense, filtered out. An offence is recordable if it is punishable with imprisonment or is one of a number of disparate offences identified in the Schedule to the National Police Records (Recordable Offences) Regulations 2000 (SI 2000/1139). The trouble is however that the identification of an offence as recordable under the Regulations is not effected with a view to limiting disclosure under the 1997 Act to what might be relevant. An offence which is imprisonable but which in the event is visited with a minor penalty is recorded; but an offence which is not imprisonable but which is visited with a substantial fine is not recorded. A few offences relevant to suitability for certain occupations, such as causing unnecessary suffering to animals contrary to section 4(1) of the Animal Welfare Act 2006, are not imprisonable and are not identified as recordable. By contrast, a multitude of offences irrelevant to suitability are imprisonable and so are recordable. The Secretaries of State say, second, that the regime reflected a conclusion by Parliament that it was preferable to make the prospective employer or other registered person the judge of the relevance of the disclosure to his decision. Rely on him (they say) to sift the wheat from the chaff. But will he do so? In these days of keen competition and defensive decision making will the candidate with the clean record not be placed ahead of the other, however apparently irrelevant his offence and even if otherwise evenly matched? More fundamentally, the regime reflects an exception to the eradication of the offence under the 1974 Act and it is the fact, or even the potentiality, of disclosure, whatever its ultimate consequences, which causes the interference and for the person creates, as a minimum, embarrassment, uncertainty and anxiety. The Secretaries of State say, third, that the Convention can discern justification for an interference in a regime set within bright lines, which is simple and inexpensive to operate. In this regard they rely, in particular, on three authorities. The first is Evans v United Kingdom (2008) 46 EHRR 728, where the ECtHR held that a womans rights under article 8 had not been violated by application of a bright line rule that a frozen embryo which a woman and a man had created could no longer be implanted in the woman once the man had withdrawn his consent. The applicant had complained in particular of the lack of any mechanism for the rule to be disapplied but the court held at para 89 that the absolute nature of the rule promoted legal certainty and avoided the problems of individual assessment of the incommensurable interests of the man and the woman. The second is R (RJM) v Secretary of State for Work and Pensions (Equality and Human Rights Commission intervening) [2008] UKHL 63, [2009] AC 311, in which the House of Lords held that the application of a rule which disentitled a person from receiving a state disability premium when he became homeless had not violated his rights under Article 1 of the First Protocol to the Convention even though it was a blunt instrument and hard cases would fall on the wrong side of its line (Lord Neuberger, para 54). The third is Animal Defenders International v United Kingdom (2013) 57 EHRR 607, in which the Grand Chamber held that the rights under article 10 of an animal rights group had not been violated by the prohibition of their proposed television advertisement pursuant to a statutory prohibition on political advertising, defined in wide terms. The difficulty of framing the legislation and the depth of prior consideration given to it had afforded the state a wide margin of appreciation, which the prohibition did not exceed. Three other authorities, by contrast, reject bright line rules. In Hirst v United Kingdom (No 2) (2006) 42 EHRR 849 the disenfranchisement of convicted prisoners, irrespective of the length of their sentence or of the gravity of their offence, was held to violate their rights under Article 3 of the First Protocol. Such a general, automatic and indiscriminate restriction on a vitally important Convention right, said the ECtHR at para 82, must be seen as falling outside any acceptable margin of appreciation. In the S case (2009) 48 EHRR 1169, cited at para 21 above, it was the blanket and indiscriminate nature of the powers of retention of the fingerprints and DNA samples which rendered the interference disproportionate and precipitated the violation (para 125). And in the F case [2011] 1 AC 331, cited at para 37 above, the obligation upon sex offenders sentenced to imprisonment for at least 30 months to notify the police of their changing circumstances for the rest of their lives following release violated their rights under article 8 because it failed to provide for review of whether they continued to pose a risk of re offending (para 58). It is easy to conclude that, of the above authorities referable to bright line rules, the F case is closest to the present. The three situations in which interference was justified by bright line rules related to complex areas of judgement in which it was far from obvious that a more calibrated system could operate more satisfactorily. The F case, like the present cases, addressed a regime which condemned people to suffer, like an albatross which they could never shake off, permanent adverse consequences of ancient wrong doing notwithstanding completion of the ostensible punishment (if any) and irrespective of its continuing significance. Nor, to take the present cases, can the Secretaries of State contend that it is impossible to devise a more calibrated system for identifying material which should be the subject of disclosure under the 1997 Act and the 1975 Order. For, in introducing the 2013 amendments, they duly devised it! Indeed back in 2010 the Secretary of State for the Home Department commissioned Mrs Masons review. The Secretaries of State convincingly protest that Mrs Masons commission was not born of any acceptance that the regime which then existed violated rights under article 8. They point out, more broadly, that the fact that another, more specific, regime might be able to be devised does not, of itself, render the contested regime disproportionate: Wilson v First County Trust Ltd (No.2) [2003] UKHL 40, [2004] 1 AC 816, para 70. But it was the Secretary of State for the Home Department who chose to describe Mrs Masons remit as being to scale back the criminal records system (obviously including disclosure under the 1997 Act) to common sense levels. In the L case [2010] 1 AC 410, cited at para 16 above, the subject matter was, as there explained, soft intelligence included in an ECRC. Lord Hope, at para 41, endorsed remarks made in R (X) v Chief Constable of the West Midlands Police [2004] EWCA Civ 1068, [2005] 1 WLR 65, para 20, in which, although that case also related to soft intelligence, Lord Woolf CJ seems to have accepted that the regime for disclosure under the 1997 Act, taken as a whole, did not violate rights under article 8. Lord Hope added that the question was whether the particular exercise of judgement required by the Act of the police in its disclosure of soft intelligence had been proportionate. Lord Neuberger, at para 76, was more specific. As a preface to his treatment of soft intelligence, he said that he was prepared to proceed on the basis that there was nothing objectionable about the inclusion in an ECRC of spent convictions and cautions, which reflected the actual commission of crimes. There was no focus in the L case on the indiscriminate disclosure of spent convictions and cautions and, notwithstanding the eminence of their authors, the above remarks cannot represent a significant contribution to the decision for which the current appeals call. In its application to the cases of T and JB the regime set up by the 1997 Act and by the 1975 Order failed the requirement of necessity. The disclosure of their cautions, obviously that of T but also in my view, in the light of the triviality of her one and only offence, that of JB, went further than was necessary to accomplish the statutory objective and failed to strike a fair balance between their rights and the interests of the community; and so it violated their rights under article 8. THE 1997 ACT: DECLARATION OF INCOMPATIBILITY Under article 34 of the ECHR the jurisdiction of the ECtHR is to determine an application from a person claiming to be the victim of a violation by a member state of his Convention rights. So its inquiry is into violation in the individual case before the court. When it concludes that the legislation of a state is incompatible with the Convention, the ECtHR is understood to mean not that the legislation will always operate incompatibly but that it operated incompatibly in its application to the individual case. In the Hirst case (2006) 42 EHRR 849, cited in para 47 above, the ECtHR appeared to depart from this understanding: it appeared to consider whether the disenfranchisement of prisoners was compatible with the Convention irrespective of the fact that the applicant was a life prisoner to whom denial of the vote could in any event scarcely amount to a violation. The courts approach was criticised first in a minority judgment of the court in that case and then by this court in R (Chester) v Secretary of State for Justice [2013] UKSC 63, [2014] AC 271. Lady Hale observed, at para 100, that it would have been in accordance with the consistent practice of the court for the majority to indicate in precisely what way Mr Hirsts rights had been violated by the law in question. Then, relevantly to the present appeals, she added it seems to me that the courts of this country should adopt that sensible practice when considering the application of the various remedies provided by the Human Rights Act 1998. Finally, in addressing the apparent width of the power to make a declaration of incompatibility under section 4 of the 1998 Act, she stated at para 102 that the court should be extremely slow to make a declaration of incompatibility at the instance of an individual litigant with whose own rights the provision in question is not incompatible. As Lady Hales last statement makes clear, a declaration of incompatibility is not a declaration that the legislation always operates incompatibly with convention rights. It is a declaration only that it is capable of operating incompatibly and, almost always, that it has operated incompatibly in the case before the court. Thus, in Bellinger v Bellinger [2003] 2 AC 467, a statutory provision that a marriage was void if the parties to it were not respectively male and female was declared incompatible even though it infringed the rights under Article 8 only of those who had undergone gender reassignment and wished to marry persons of their own genetic sex. In making a declaration of incompatibility of the 1997 Act with article 8, the Court of Appeal was therefore not suggesting that disclosure of spent convictions and cautions in certificates would always violate rights under article 8. Its order in Ts case was appropriately qualified, namely that the provisions of the Act were incompatible only insofar as they require the disclosure of all convictions and cautions . recorded on central records (emphasis supplied). In relation to the 1997 Act the Court of Appeal was fully entitled, in the exercise of its discretion under section 4 of the 1998 Act, to make a declaration of incompatibility. It was impossible for it to read and give effect to its provisions in a way which was compatible with the rights of T and JB pursuant to section 3 of the 1998 Act. The beauty of its declaration was that, while it alerted Parliament to the fact that, for the reasons given in the courts judgment, the 1997 Act was capable of operating incompatibly with Convention rights and so required amendment (which the Secretary of State could then achieve by a remedial order under section 10 of the 1998 Act), it did not affect the validity, continuing operation or enforcement of the Act (section 4(6)(a) of the 1998 Act). Although the Secretary of State for the Home Department contends that, by her amendment of the Act in 2013, she has remedied the incompatibility identified by the Court of Appeal, its declaration, when made, was rightly made and it seems logical, in the context of an appeal, not now to set it aside. This court is informed that in future proceedings it may be argued that operation even of the amended regime under the Act will have precipitated a violation of rights under article 8. Today this court can say nothing about that. THE 1975 ORDER: ULTRA VIRES? No doubt the Court of Appeal considered that, had it been open to it to do so, the convenient course would have been to make an analogous declaration of incompatibility in relation to the 1975 Order. But it was not open to it to do so: for the order is subordinate legislation and it cannot be said, for the purposes of section 4(4)(b) of the 1998 Act, that the 1974 Act prevents removal of the incompatibility with article 8 rights to which its operation is capable of giving rise. The Secretaries of State contended before the Court of Appeal, as, albeit faintly, they contend before this court, that in the case of the 1975 Order, it is possible to read it and give effect to it in a way which is compatible with Convention rights. The contention is that article 4 of the 1975 Order, which releases certain prospective employers and other specified decision makers from the prohibition against acting in reliance on spent convictions and cautions, should be qualified by words such as save where this would violate the article 8 rights of any person. No doubt it is true that many of the specified employers (such as public hospitals and schools) and other decision makers are public authorities for whom it is unlawful to act incompatibly with Convention rights and who therefore have in any event to make the judgements thereby required. Nevertheless, as the Court of Appeal held, it would be unsatisfactory for each individual decision maker to be made the arbiter albeit perhaps only the initial arbiter of whether his proposed action would violate the rights of the person whom he has questioned. The 1975 Order is the responsibility of the Secretary of State for Justice. It is for him to devise a regime which is not capable of operating so as to violate rights under article 8 and the court should not lend itself to a construction which enables him to pass this buck to individual decision makers. So it was that the Court of Appeal exercised its discretion to grant a declaration that the 1975 Order was ultra vires. When is subordinate legislation ultra vires? A leading, relatively recent, example is Director of Public Prosecutions v Hutchinson [1990] 2 AC 783. The Secretary of State for Defence made a byelaw prohibiting all entry into designated land at Greenham Common without authority. His statutory authority for doing so was expressed not to extend to interference with any right of common. It turned out that there were 62 commoners who had rights to take gravel and wood from, and to graze animals on, part of the land which he had designated. So he had no power to prohibit entry in such unqualified terms. Then the question arose whether the byelaw could be severed so that its validity could be retained in respect of people who, like the appellants, were not commoners yet had entered the land. To this the House of Lords gave a negative answer. It held, at p 811, that the fact that the invalid feature of the byelaw could not be excised with a blue pen did not preclude severance. What precluded it was that, if the byelaw was so construed as to allow the 62 commoners to enter the land, the legislative purpose behind it would be undermined: p 813. By way of contrast the House cited with approval Dunkley v Evans [1981] 1 WLR 1522, in which the Minister of Agriculture had made an order prohibiting fishing for herring in designated waters. One per cent of the area which he designated was a stretch of water off Northern Ireland which he had no power to include in his designation. The respondents had been fishing for herring in the remaining 99% of the area. The Divisional Court held that the order was severable and that the respondents should have been convicted. These then, are examples of the classic situation in which the width of the subordinate legislation exceeds the contours expressed in the authority for it to be made. Sometimes the court decides that the operation of a piece of subordinate legislation has violated fundamental rights in circumstances in which the logic of the decision means that its operation will always violate fundamental rights. A good example is A v HM Treasury [2010] UKSC 2, [2010] 2 AC 534. By a subparagraph of an article of an order purportedly made pursuant to the United Nations Act 1946, the Treasury provided that any person listed by the Sanctions Committee of the United Nations, on the basis that he was associated with an organisation threatening international peace, was a designated person for the purposes of another order, which dramatically deprived him of access to financial resources. Two of the parties before the court had been so listed. The Supreme Court held that the absence in the order of a facility for them to mount a domestic challenge to the basis of their listing by the Sanctions Committee ran counter to their fundamental rights. The court therefore held that the subparagraph was ultra vires but that a judge had been wrong to declare the whole order to be ultra vires: paras 81 and 83 (Lord Hope) and para 241 (Lord Mance). It is easy to see that the vice of the order was not related to the particular circumstances of the two parties who had been listed: the rights of every person listed by the Sanctions Committee would be violated by the absence in the order of a facility for challenge. The conclusion about T in the present case is, however, of an entirely different character. It is that, in the light of the circumstances surrounding his receipt of the warnings, the requirement in the 1975 Order that he should disclose them to the college and its entitlement to act in reliance on them violated his rights under article 8. It cannot possibly be said that the operation of the order will always be such as to violate the rights of those required to make disclosure of spent convictions and cautions under it: for in some, perhaps many, cases the circumstances of the conviction or caution will not render its disclosure disproportionate to the objective behind the order. It is in the light of the above considerations that the Court of Appeals declaration that the entire 1975 Order was ultra vires falls to be assessed. Its effect was that the operation of the entire order always violated article 8 rights and therefore that all actions taken by questioners in reliance on disclosures made pursuant to it since 2 October 2000, when section 1 of the 1998 Act came into force, had been unlawful in that, not having been permitted by the 1974 Act, they had not been the subject of any valid exception under the order. The Financial Conduct Authority, for example, which intervenes in the appeals to this court, complains unanswerably that it was given no notice of the Court of Appeals intention to declare the order to be ultra vires and thus no opportunity to address it; and that only subsequently did it discover that the jurisdiction which it and its predecessor had long purported to exercise so as to withhold specified permissions and approvals in the discharge of its regulatory functions by reference to spent convictions and cautions had been declared non existent. The Financial Conduct Authority points out that, as a public authority, it must not act incompatibly with a Convention right; that its decisions are reviewable, including for alleged violation of Convention rights, by the Upper Tribunal (Tax and Chancery Chamber) pursuant to section 133 of the Financial Services and Markets Act 2000; and that the Court of Appeal did not find, and could not have found, that in its case the operation of the 1975 Order violated rights under article 8. But the effect of the declaration of ultra vires was still more astonishing: for, by a sidewind, its effect was to declare that the regime for the issue of certificates under the 1997 Act was also invalid. Application for a CRC and an ECRC can be made only if accompanied by a statement that it is required for the purposes of an exempted question: see para 11(c) above. An exempted question is a question to which exemption from protection arises under the 1975 Order: see para 11(d) above. If the order is ultra vires, there is no valid definition of an exempted question and it follows that no valid application for a CRC or for an ECRC can be made. In that about four million certificates are issued each year, the declaration raises the spectre of the unlawful issue of many millions of certificates. It follows that the Court of Appeals declaration of ultra vires in relation to the 1975 Order was, apart from anything else, entirely inconsistent with its declaration of incompatibility in relation to the 1997 Act. As noted in para 53 above, it was a fundamental feature of the declaration of incompatibility that it would not affect the validity or continuing operation of the 1997 Act. Yet the declaration of ultra vires had precisely that consequence. What was the source of the Court of Appeals jurisdiction to make the declaration that the 1975 Order was ultra vires? Section 8(1) of the 1998 Act provides that: In relation to any act of a public authority which the court finds is unlawful, it may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate. So the subsection does not confer powers. It refers to existing powers and confirms their applicability to unlawful acts of public authorities. The existing power to make a declaration in proceedings for judicial review is to be found in section 31(2) of the Senior Courts Act 1981, which provides that: A declaration may be made under this subsection in any case where an application for judicial review, seeking that relief, has been made and the High Court considers that, having regard to (a) (b) (c) it would be just and convenient for the declaration to be made all the circumstances of the case, In Attorney Generals Reference (No 2 of 2001) [2003] UKHL 68, [2004] 2 AC 72, Lord Bingham suggested in para 24 that, in Convention terms, the words just and appropriate in section 8(1) above mean effective, just and proportionate. Although the notion of convenience has been applicable to the grant of discretionary remedies ever since 1925, it may no longer be helpful and in particular it may sound insufficiently demanding; and Lord Binghams Convention terms seem just as apt in extracting the meaning of the words just and convenient in section 31(2) above as they are in relation to the words in section 8(1). In my view the declaration of ultra vires was not just to all those who had been parties to the lawful operation of the order; was not appropriate; and on any view was not proportionate. It is therefore wrong for courts to assume that, where a persons human rights have been violated by the application of subordinate legislation in circumstances in which the application was not mandated by primary legislation, the appropriate remedy is always to declare the subordinate legislation to be ultra vires. It was nevertheless appropriate for the Court of Appeal to indicate in its judgment, as the Secretaries of State have recognised in introducing the 2013 amendments, that the interlocking character of the 1997 Act with the 1975 Order demanded that the requisite amendments to the former should broadly be reflected in the latter. So the question arises: should some other form of declaration in relation to the 1975 Order be substituted for that made by the Court of Appeal? Without affecting the validity of the order, might the court, for example, declare that the Secretary of State for Justice acted unlawfully between 2 October 2000 and 29 May 2013 in failing to cause it to be amended so as to render it compatible with article 8 of the Convention? I am grateful to Lord Reed for demonstrating at paras 148 and 149 that the answer is no. The obstruction lies in section 6(6)(a) of the 1998 Act which provides that a failure to lay before Parliament a proposal for legislation cannot amount to an unlawful act within the meaning of section 6(1). As Lord Reed points out, any order made by the Secretary of State by way of amendment of the 1975 Order is, by section 10(2) of the 1974 Act, made subject to approval by resolution of each House of Parliament so, speaking for myself, I am clear that the subject of the suggested declaration of unlawfulness would indeed be the Secretary of States failure to lay before Parliament a proposal for legislation and would thus be impermissible. The rationale behind section 6(6) of the 1998 Act is the thread, central to the whole Act, of respect for Parliamentary supremacy (see the speech of the Lord Chancellor, Lord Irvine of Lairg, in the House of Lords, 24 November 1997, vol.583, cols 814 5) but whether respect for Parliamentary supremacy truly requires protection to be given to the Secretary of State in circumstances such as the present is an interesting question. Lord Reed proceeds to conclude at para 157 that no judicial remedy in relation to the 1975 Order is necessary. I respectfully agree with the reasons which he gives for that conclusion. LORD REED If a person applies for a job, the employer is entitled under the common law to ask whatever questions of the applicant he considers relevant, and the applicant is obliged, if he chooses to answer them, to do so truthfully. If therefore he is asked about his criminal record, he can decline to answer the question, in which event he may of course not be considered further for the position. If he chooses to answer the question, however, he is under an obligation to do so truthfully. If he lies about his past, a resultant contract of employment will be regarded as having been induced by a fraudulent misrepresentation. If the deceit is discovered, the employer is in principle entitled to have the contract set aside. A person who obtained employment by means of deceit is also in principle liable to prosecution. The position of a person applying for appointment to certain offices, such as judicial office, or for admission to certain professions, such as accountancy or the legal profession, or for permission to carry on certain other regulated activities, such as providing financial services or operating a casino, is broadly analogous. At common law, the applicant may again be asked about his criminal record. If he chooses to answer the question, he is again under a duty to do so truthfully, and his failure to do so will expose him to the risk of adverse consequences under both the civil and the criminal law. The Rehabilitation of Offenders Act 1974 The common law position was altered significantly by the Rehabilitation of Offenders Act 1974 (the 1974 Act). This landmark measure, enacted following the report of a committee chaired by Lord Gardiner, Living it Down the Problem of Old Convictions (1972), was designed to facilitate the rehabilitation of offenders who have not been reconvicted of any serious offence for a period of years, and to penalise the unauthorised disclosure of their previous convictions. The provisions of the Act are complex, and have undergone repeated amendment. The central provision is section 4. Subsection (1) provides: Subject to sections 7 and 8 below, a person who has become a rehabilitated person for the purposes of this Act in respect of a conviction shall be treated for all purposes in law as a person who has not committed or been charged with or prosecuted for or convicted of or sentenced for the offence or offences which were the subject of that conviction; and, notwithstanding the provisions of any other enactment or rule of law to the contrary, but subject as aforesaid (a) no evidence shall be admissible in any proceedings before a judicial authority exercising its jurisdiction or functions in Great Britain to prove that any such person has committed or been charged with or prosecuted for or convicted of or sentenced for any offence which was the subject of a spent conviction; and (b) a person shall not, in any such proceedings, be asked, and, if asked, shall not be required to answer, any question relating to his past which cannot be answered without acknowledging or referring to a spent conviction or spent convictions or any circumstances ancillary thereto. Section 7 imposes limitations upon the effect of section 4(1) in a number of circumstances, so as to ensure for example that evidence of a persons criminal convictions continues to be admissible in criminal proceedings, and in subsection (4) provides the Secretary of State with the power to add to those circumstances: The Secretary of State may by order exclude the application of section 4(1) above in relation to any proceedings specified in the order (other than proceedings to which section 8 below applies) to such extent and for such purposes as may be so specified. Section 4(2) provides: Subject to the provisions of any order made under subsection (4) below, where a question seeking information with respect to a person's previous convictions, offences, conduct or circumstances is put to him or to any other person otherwise than in proceedings before a judicial authority (a) the question shall be treated as not relating to spent convictions or to any circumstances ancillary to spent convictions, and the answer thereto may be framed accordingly; and (b) the person questioned shall not be subjected to any liability or otherwise prejudiced in law by reason of any failure to acknowledge or disclose a spent conviction or any circumstances ancillary to a spent conviction in his answer to the question. Section 4(2) does not affect the rights of employers or others to ask questions about criminal convictions, but it alters the obligations and liabilities of persons to whom the questions are addressed, by requiring such questions to be treated as not relating to spent convictions, and by exempting such persons from any liability by reason of their failure to disclose such convictions. A person with a spent conviction is therefore entitled to treat a question about his criminal record as not relating to spent convictions; and he cannot incur any civil or criminal liability if he answers the question on that basis. Section 4(3) provides: Subject to the provisions of any order made under subsection (4) below, (a) any obligation imposed on any person by any rule of law or by the provisions of any agreement or arrangement to disclose any matters to any other person shall not extend to requiring him to disclose a spent conviction or any circumstances ancillary to a spent conviction (whether the conviction is his own or another's); and (b) a conviction which has become spent or any circumstances ancillary thereto, or any failure to disclose a spent conviction or any such circumstances, shall not be a proper ground for dismissing or excluding a person from any office, profession, occupation or employment, or for prejudicing him in any way in any occupation or employment. Section 4(3) deals with the situation where no question is asked, but where an obligation to disclose criminal convictions arises for some other reason. In that situation too, such an obligation is not to extend to spent convictions, and neither the spent conviction nor the failure to disclose it is to be a proper ground for dismissing or excluding the person from (read short) any occupation or employment. Section 4(4) enables exceptions to be made to the general principles set out in section 4(2) and (3): The Secretary of State may by order (a) make such provision as seems to him appropriate for excluding or modifying the application of either or both of paragraphs (a) and (b) of subsection (2) above in relation to questions put in such circumstances as may be specified in the order; (b) provide for such exceptions from the provisions of subsection (3) above as seem to him appropriate, in such cases or classes of case, and in relation to convictions of such a description, as may be specified in the order. The operation of section 4(2) and (3) is therefore subject to any order made under section 4(4), and it also depends of course upon the provisions defining the circumstances in which convictions become spent. As originally enacted, the 1974 Act was silent on the subject of cautions, and the equivalent warnings and reprimands given to offenders under the age of 18. The Act was however amended with effect from 19 December 2008 by the Criminal Justice and Immigration Act 2008, so as to enable cautions, warnings, and reprimands to become spent. In what follows, I shall refer generally to cautions as including each of these disposals, unless I wish to refer specifically to warnings. The relevant provisions are set out in Schedule 2 to the Act, as added by paragraph 6 of Schedule 10 to the 2008 Act, and in subordinate legislation. They are broadly analogous in structure to those applicable to convictions, subject to the qualification that a caution (other than a conditional caution) becomes spent at the time it is given. In particular, paragraphs 3(1), 3(3), 3(4) and 3(5) of Schedule 2 correspond to sections 4(1), 4(2), 4(3)(a) and 4(3)(b) respectively; paragraph 4 of Schedule 2 corresponds to section 4(4); and paragraph 6(4) of Schedule 2 corresponds to section 7(4). The Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 As I have explained, sections 4(4) and 7(4) of the 1974 Act confer a power upon the Secretary of State to make exceptions to the general principles laid down in section 4(1), (2) and (3). That power was exercised when the Secretary of State made the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (SI 1975/1023) (the 1975 Order), which came into force on the same day as the Act. The Order has undergone repeated amendment, but the general scheme has remained the same. For present purposes, the relevant version of the Order is as it stood prior to amendment by the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (Amendment) (England and Wales) Order 2013 (SI 2013/1198) (the 2013 Order). The substantive provisions of the Order begin with article 3, which excludes the application of section 4(2) of the Act, and paragraph 3(3) of Schedule 2 to the Act, to questions asked in a number of specified circumstances. These include admission to a number of specified professions, appointment to certain offices and employments, and working with children or in circumstances raising issues of national security. Article 3A of the 1975 Order, added by article 3 of the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2010 (SI 2010/1153), excludes the application of section 4(2) of the Act, and paragraph 3(3) of Schedule 2 to the Act, in two particular situations. Put shortly, the first is where it is necessary to assess the suitability of a person for work with children, and that person is barred from regulated activity relating to children, or is included in the list kept under the Protection of Children Act 1999, or is subject to a direction made under section 142 of the Education Act 2002. The second situation is the analogous situation relating to work with vulnerable adults, where the person is barred from regulated activity relating to vulnerable adults or is included in the list kept under the Care Standards Act 2000. Article 4 of the 1975 Order excludes the application of section 4(3)(b) of the 1974 Act, and paragraph 3(5) of Schedule 2 to the Act, to professions, offices and employments falling within the scope of article 3. Article 4A of the Order, added by article 3 of the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2012 (SI 2012/1957), excludes the application of sections 4(2) and (3) specifically in relation to the election of police and crime commissioners. Article 5 of the Order excludes the application of section 4(1) of the Act, and paragraph 3(1) of Schedule 2 to the Act, in relation to particular proceedings, such as disciplinary proceedings in respect of members of the professions falling within the scope of article 3. Finally, article 6 of the Order deals specifically with offices and employments in the Channel Islands and the Isle of Man. The Police Act 1997 Part V of the Police Act 1997 (the 1997 Act) created a statutory scheme for the disclosure of criminal records and, in limited circumstances, other information held by the police relating to individuals, where required in order to assess the suitability of a person for employment in particular types of position of trust or sensitivity, such as those involving contact with children, or suitability for the grant of particular types of licence or permit, such as gaming, betting and lottery licences. In particular, sections 113A and 113B (inserted by section 163(2) of the Serious Organised Crime and Police Act 2005) have the practical effect of enabling employers and regulatory bodies to obtain access to such records and information when considering applications falling within the scope of the 1975 Order. The application for a criminal record certificate (or, under section 113B, for an enhanced criminal record certificate) must be made to the Disclosure and Barring Service (DBS) by the individual to whom the certificate relates. It must be accompanied by a statement by the prospective employer or regulatory body that the certificate is required for the purposes of an exempted question: that is to say, a question in relation to which section 4(2) of the 1974 Act, or paragraph 3(3) or (4) of Schedule 2 to the Act, has been excluded by an order made under section 4(4) of the Act. In consequence, the circumstances must fall within the scope of articles 3, 3A or 4A of the 1975 Order. In such a situation, disclosure is made under section 113A of every relevant matter recorded on the Police National Computer. Under section 113A as it stood at the relevant time, prior to its amendment by the Police Act 1997 (Criminal Record Certificates: Relevant Matters) (Amendment) (England and Wales) Order 2013 (SI 2013/1200), a relevant matter was any conviction or caution, whether spent or not, other than a disregarded caution within the meaning of Chapter 4 of Part 5 of the Protection of Freedoms Act 2012 (which is concerned with sexual offences committed upon a consenting adult). Section 113B provides for the disclosure of additional information where it is required for the purpose of an exempted question which is asked for a prescribed purpose. Such purposes include considering the suitability of a person to engage in a regulated activity relating to children or vulnerable adults, as defined in legislation. In that situation, in addition to the information which would be disclosed under section 113A, disclosure is also made under section 113B(4) of any information held on local police records which the chief officer of the relevant police force reasonably believes to be relevant, and which in his opinion ought to be included in the certificate. In exercising these functions, the chief officer is required to have regard to guidance published by the Secretary of State. The process of obtaining a criminal record certificate is thus initiated by the person to whom it relates. He applies for the certificate because he wishes to obtain an employment, or some form of permit or licence to carry on an activity, which involves such a degree of trust, or is of such sensitivity, as to have been excluded from the general regime for the rehabilitation of offenders laid down in the 1974 Act. In practice, without the certificate he will not be able to obtain the employment or licence in question, since the employer or regulatory authority is likely to insist upon it. The certificate will only be seen by the applicant and by the employer or authority to which he produces it: it is an offence for the latter to make further disclosure of the certificate, under section 124. Provision is made in section 117 for the applicant to be able to challenge the inclusion of information in an enhanced criminal record certificate. Provision is made in section 119B, inserted by section 28 of the Safeguarding Vulnerable Groups Act 2006, for the independent monitoring of the operation of section 113B(4), so as to ensure compliance with article 8 of the Convention. It follows that the relevant provisions of the 1997 Act are different in nature from the 1974 Act and the 1975 Order. The 1974 Act innovates upon the common law in relation to the rights and obligations of employers and persons seeking employment (and, in an analogous manner, in relation to those of persons seeking to be admitted to some office or to be permitted to carry on some activity, and the persons responsible for controlling admission to such offices or the right to carry on such activities). The 1975 Order limits the effect of the 1974 Act, and in consequence preserves the common law position in relation to the employments, offices and activities falling within its scope. Part V of the 1997 Act as amended, and in particular sections 113A and 113B, are on the other hand concerned with the disclosure by the DBS of the criminal records of individuals which are held on the Police National Computer and, where section 113B applies, of additional information held in local police records. There are however both legal and practical connections between the provisions of the 1997 Act and the 1975 Order. Sections 113A and 113B of the 1997 Act are legally dependent upon the 1975 Order, in that the information disclosed under those sections must be required for the purposes of a question falling within the ambit of the 1975 Order. But the converse is not true: the amendment or repeal of sections 113A and 113B would have no effect upon the legal status of the 1975 Order, which was in force for more than 20 years before the 1997 Act was enacted. The amendment or repeal of those sections would nevertheless affect the practical working of the 1975 Order, to the extent that, in circumstances falling within their scope, disclosure under those sections provides a means of obtaining information which might otherwise be obtained from the individual by virtue of the 1975 Order. Since it provides a means of obtaining information which is independent of the individual and potentially more reliable, the effect of the 1997 Act is to improve the effectiveness of the vetting of potential employees by employers and others who come within its scope. Personal data and the Convention The United Kingdom has never had a secret police or internal intelligence agency comparable to those that have existed in some other European countries, the East German Stasi being a well known example. There has however been growing concern in recent times about surveillance and the collection and use of personal data by the state. Some might argue that the grounds for such concern are illustrated in the present case by the information that about four million criminal record certificates are provided annually under Part V of the 1997 Act. But such concern on this side of the Channel might be said to have arisen later, and to be less acutely felt, than in many other European countries, where for reasons of history there has been a more vigilant attitude towards state surveillance. That concern and vigilance are reflected in the jurisprudence of the European Court of Human Rights in relation to the collection, storage and use by the state of personal data. The protection offered by the common law in this area has, by comparison, been of a limited nature. The contrast is exemplified by the judgments in Malone v Metropolitan Police Commissioner [1979] Ch 344 and Malone v United Kingdom (1984) 7 EHRR 14. The higher level of concern elsewhere in Europe is reflected in the repeated condemnation by the European court of the law of this country in this area, often on the basis that the law contains no adequate safeguards, in such cases as Malone v United Kingdom (1984) 7 EHRR 14, Halford v United Kingdom (1997) 24 EHRR 523, Khan v United Kingdom (2000) 31 EHRR 1016, Peck v United Kingdom (2003) 36 EHRR 719, Copland v United Kingdom (2007) 45 EHRR 858, S v United Kingdom (2008) 48 EHRR 1169 and Kennedy v United Kingdom (2010) 52 EHRR 207. Although there is a relationship between the disclosure of criminal records and the rehabilitation of offenders, the retention and use by the state of data relating to individuals, including data relating to their criminal records, therefore raise different issues under the European Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention) from the question whether employers and regulatory authorities are entitled to ask applicants for employment or a licence about their past histories. Part V of the 1997 Act is accordingly best considered separately from the 1975 Order. I shall consider the aspect of the present appeals relating to the 1997 Act before turning to the aspect concerning the 1975 Order. Domestic case law and the judgments of the European Court of Human Rights Under article 1 of the Convention, the member states undertake to secure to everyone within their jurisdiction the rights and freedoms defined in Section I. Those include the right set out in article 8, which provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. There is a substantial body of judgments of the European court concerned with the effect of article 8 in relation to the retention and use by the state of personal data. As I have indicated, many of the judgments concern the United Kingdom. The issue has also been considered by the courts of this country, but none of the domestic judgments cited to us fully reflects the Strasbourg courts approach to the application of article 8 in this context, or appears to me to provide an answer to the present appeals. In particular, although the judgments of Lord Hope and Lord Neuberger in R (L) v Comr of Police for the Metropolis (Secretary of State for the Home Department intervening) [2009] UKSC 3; [2010] 1 AC 410 contain much that is valuable in relation to the applicability of article 8 in the present context and, as I shall explain, passages from the judgments were subsequently incorporated by the Strasbourg court into its own reasoning on that point they are of less assistance in relation to the application of article 8(2) in the circumstances of the present appeals. In the first place, the court was concerned in that case only with the disclosure of information under the then equivalent of section 113B(4) of the 1997 Act: that is to say, the additional information contained in an enhanced criminal record certificate. That issue does not arise on the facts of the present appeals. Secondly, and more importantly, the court did not approach the question of justification under article 8(2) in the way in which it would be addressed by the European court. As Lord Hope explained at para 41, there was no suggestion in that case that the relevant legislation contravened article 8: the argument focused upon whether it had been interpreted and applied in a way that was proportionate. Following the common law conception of the judicial function, the court dealt with the appeal on the basis of the arguments presented to it. As I shall explain, the European courts consideration of article 8(2) in this context begins by addressing the question whether the interference with the right protected by article 8 is in accordance with the law; and it often ends there. It ended there, in particular, in a carefully considered judgment of the Strasbourg court, which I shall discuss shortly, that addressed the very point in issue in these appeals in relation to the 1997 Act. Rotaru v Romania Although the Strasbourg jurisprudence in this area goes back more than 30 years, a suitable starting point is the judgment of the Grand Chamber in Rotaru v Romania (2000) 8 BHRC 449, in which the court considered the storage and disclosure of a criminal record. The applicant in the case complained about the disclosure by the security services of the contents of a file containing information about him, and his inability to have inaccuracies in the information corrected. It was argued by the government that article 8 was not applicable, since the information in question, which included information about the applicants political activities and his criminal record, related not to his private life but to his public life. That contention was rejected. As in its earlier case law, the court began by emphasising the correspondence between its broad interpretation of private life and that adopted in the Council of Europes Convention of 28 January 1981 for the Protection of Individuals with regard to Automatic Processing of Personal Data, which came into force on 1 October 1985, and of which the UK is a signatory (the 1981 Convention). The purpose of the 1981 Convention is to secure for every individual respect for his rights and fundamental freedoms, and in particular his right to privacy, with regard to automatic processing of personal data relating to him (article 1), such personal data being defined in article 2 as any information relating to an identified or identifiable individual. Article 5 requires that personal data undergoing automatic processing shall be, inter alia, stored for specified and legitimate purposes and not used in a way incompatible with those purposes, adequate, relevant and not excessive in relation to the purposes for which they are stored, and preserved in a form which permits identification of the data subjects for no longer than is required for the purpose for which those data are stored. Article 6 provides that special categories of data, including personal data relating to criminal convictions, may not be processed automatically unless domestic law provides appropriate safeguards. In relation to this aspect of the case, the court stated at paras 43 44: 43. public information can fall within the scope of private life where it is systematically collected and stored in files held by the authorities. That is all the truer where such information concerns a person's distant past. 44. In the instant case the court notes that the [letter containing the disclosure] contained various pieces of information about the applicant's life, in particular his studies, his political activities and his criminal record, some of which had been gathered more than 50 years earlier. In the court's opinion, such information, when systematically collected and stored in a file held by agents of the state, falls within the scope of private life for the purposes of article 8(1) of the Convention. As to whether there had been an interference with the right protected by article 8, the court stated at para 46 that both the storing by a public authority of information relating to an individuals private life and the use of it and the refusal to allow for an opportunity for it to be refuted amount to interference with the right to respect for private life secured in article 8(1) of the Convention. In considering whether the interference was justifiable under article 8(2), the court stated at para 47 that that paragraph, since it provides for an exception to a right guaranteed by the Convention, is to be interpreted narrowly. As in many of its earlier judgments in this area, including the Grand Chamber judgment given earlier that year in the case of Amman v Switzerland (2000) 30 EHRR 843, the court held that the holding and use of the information in question had not been in accordance with the law, as required by article 8(2), because of the absence from the relevant national legislation of adequate protection against arbitrary interference. In that regard, the court based its decision upon a number of aspects of the legislation, including the absence of a definition of the kind of information that might be recorded, and the absence of limits as to the age of the information held or the length of time for which it might be kept. MM v United Kingdom This approach was followed in the case of MM v United Kingdom (Application No 24029/07) (unreported) given 13 November 2012, which concerned the disclosure of a caution which the applicant had received for child abduction. Disclosures had been made by the police to organisations to which the applicant had applied for employment as a family support worker. The disclosures occurred in Northern Ireland, prior to the entry into force there of the relevant provisions of the 1997 Act, and were made under common law powers. The European court however treated the complaint as encompassing the continuing threat of future disclosure under sections 113A and 113B of the 1997 Act as amended, the terms of which were for all material purposes indistinguishable from the version with which the present appeals are concerned. As the court observed, the data in question would be retained for life, and would be disclosed under the 1997 Act whenever the applicant applied for employment falling within its scope. It was therefore clear that for as long as her data are retained and capable of being disclosed, she remains a victim of any potential violation of article 8 arising from retention or disclosure (para 159). The judgment is therefore directly relevant to the present appeals. As in Rotaru, the court referred to the 1981 Convention, citing articles 5 and 6. It also referred to a number of other relevant Council of Europe and EU instruments. In particular, it considered in detail Recommendation No R (87) 15 regulating the use of personal data in the police sector, adopted by the Committee of Ministers on 17 September 1987 in the context of an approach to data protection intended to adapt the principles of the 1981 Convention to the requirements of particular sectors. The Recommendation does not have the same status as the 1981 Convention, but sets out principles to serve as guidance to the governments of the member states in their domestic law and practice. Principle 2 concerns the collection of data and states: 2.1 The collection of personal data for police purposes should be limited to such as is necessary for the prevention of a real danger or the suppression of a specific criminal offence. Any exception to this provision should be the subject of specific national legislation. the background The Explanatory Memorandum setting out the to Recommendations adoption states that Principle 2.1 excludes an "open ended, indiscriminate" collection of data by the police (paragraph 43). Principle 5 of the Recommendation deals with communication of police data. Principle 5.2 states: 5.2.i Communication of data to other public bodies should only be permissible if, in a particular case: a. there exists a clear legal obligation or authorisation, or with the authorisation of the supervisory authority, or if b. these data are indispensable to the recipient to enable him to fulfil his own lawful task and provided that the aim of the collection or processing to be carried out by the recipient is not incompatible with the original processing, and the legal obligations of communicating body are not contrary to this. the 5.2.ii Furthermore, communication to other public bodies is exceptionally permissible if, in a particular case: b. the communication is necessary so as to prevent a serious and imminent danger. Principle 5.3 makes analogous provision in relation to communication to private parties. The Explanatory Memorandum stresses that Principles 5.2 and 5.3 allow communication only in circumstances of an exceptional nature (paragraph 58). Principle 7 deals with length of storage and updating of data. Principle 7.1 requires measures to be taken to delete personal data kept for police purposes if they are no longer necessary for the purposes for which they are stored. In that regard, it requires consideration to be given to a number of criteria, including rehabilitation, spent convictions and the age of the data subject. The Explanatory Memorandum states that it is essential that periodic reviews of police files are undertaken to ensure that they are purged of superfluous data (paragraph 96). In its assessment of the merits of the application, the court reiterated that both the storing of information relating to an individuals private life and the release of such information come within the scope of article 8(1), that even public information can fall within the scope of private life where it is systematically collected and stored in files held by the authorities, and that this is all the more true where the information concerns a persons distant past (para 187). In particular, data relating to the applicants caution related to her private life, and their disclosure constituted an interference with her private life. In reaching that conclusion, the court noted that the data constituted both personal data and sensitive personal data within the meaning of the Data Protection Act 1998, and also fell within a special category of data under the 1981 Convention. Further, the data formed part of the applicants criminal record: In this regard the court, like Lord Hope in R (L) v Comr of Police for the Metropolis (Secretary of State for the Home Department intervening) [2009] UKSC 3; [2010] 1 AC 410 [at para 27], emphasises that although data contained in the criminal record are, in one sense, public information, their systematic storing in central records means that they are available for disclosure long after the event when everyone other than the person concerned is likely to have forgotten about it, and all the more so where, as in the present case, the caution has occurred in private. Thus as the conviction or caution itself recedes into the past, it becomes a part of the persons private life which must be respected. (para 188) The court rejected the Governments contention that it was material that disclosure was made to the applicant herself, on her own application: The court notes and agrees with the comments of Lords Hope and Neuberger in R (L) [at paras 43 and 73], to the effect that the fact that disclosure follows upon a request by the data subject or with her consent is no answer to concerns regarding the compatibility of disclosure with article 8 of the Convention. Individuals have no real choice if an employer in their chosen profession insists, and is entitled to do so, on disclosure. (para 189) In considering whether the interference was justified under article 8(2), the court focused initially upon the question whether the interference was in accordance with the law. In order to satisfy that test, the domestic law had to be compatible with the rule of law, and therefore must afford adequate legal protection against arbitrariness (para 193). In particular, following the approach adopted by the Grand Chamber in such cases as Amman v Switzerland, Rotaru v Romania and Bykov v Russia (Application No 4378/02) (unreported) given 10 March 2009, the court considered it essential in the context of the recording and communication of criminal record data, as in relation to telephone tapping, secret surveillance and covert intelligence gathering, to have clear, detailed rules governing the scope and application of measures, as well as minimum safeguards concerning, inter alia, duration, storage, usage, access of third parties, procedures for preserving the integrity and confidentiality of data and procedures for their destruction, thus providing sufficient guarantees against the risk of abuse and arbitrariness (para 195). In that regard, the court drew attention to Principles 2.1, 5 and 7 of Recommendation No R (87) 15. The court acknowledged that there might be a need for a comprehensive record of all cautions, convictions and other information of the nature disclosed under section 113B of the 1997 Act. But it observed that the indiscriminate and open ended collection of criminal record data was unlikely to comply with the requirements of article 8 in the absence of clear and detailed statutory regulations clarifying the safeguards applicable and setting out the rules governing, inter alia, the circumstances in which data could be collected, the duration of their storage, the use to which they could be put and the circumstances in which they might be destroyed (para 199). The court referred in that connection to passages in the judgments of Lord Hope and Lord Neuberger in R (L) as demonstrating the wide reach of the legislation requiring disclosure and the impact of an adverse certificate upon the hopes of a person who aspires to any post which falls within the scope of disclosure requirements. In relation to the possibility of future disclosure of the applicants caution, the court stated: Pursuant to the legislation now in place, caution data contained in central records, including where applicable information on spent cautions, must be disclosed in the context of a standard or enhanced criminal record check. No distinction is made based on the seriousness or the circumstances of the offence, the time which has elapsed since the offence was committed and whether the caution is spent. In short, there appears to be no scope for the exercise of any discretion in the disclosure exercise. Nor, as a consequence of the mandatory nature of the disclosure, is there any provision for the making of prior representations by the data subject to prevent the data being disclosed either generally or in a specific case. The applicable legislation does not allow for any assessment at any stage in the disclosure process of the relevance of conviction or caution data held in central records to the employment sought, or of the extent to which the data subject may be perceived as continuing to pose a risk such that the disclosure of the data to the employer is justified. (para 204) The court concluded: 206. In the present case, the court highlights the absence of a clear legislative framework for the collection and storage of data, and the lack of clarity as to the scope, extent and restrictions of the common law powers of the police to retain and disclose caution data. It further refers to the absence of any mechanism for independent review of a decision to retain or disclose data, either under common law police powers or pursuant to Part V of the 1997 Act. Finally, the court notes the limited filtering arrangements in respect of disclosures made under the provisions of the 1997 Act: as regards mandatory disclosure under section 113A, no distinction is made on the basis of the nature of the offence, the disposal in the case, the time which has elapsed since the offence took place or the relevance of the data to the employment sought. 207. The cumulative effect of these shortcomings is that the court is not satisfied that there were, and are, sufficient safeguards in the system for retention and disclosure of criminal record data to ensure that data relating to the applicants private life have not been, and will not be, disclosed in violation of her right to respect for her private life. The retention and disclosure of the applicants caution data accordingly cannot be regarded as being in accordance with the law. There has therefore been a violation of article 8 of the Convention in the present case. This conclusion obviates the need for the court to determine whether the interference was necessary in a democratic society for one of the aims enumerated therein. In the present case, counsel for the Secretaries of State were critical of the reasoning of this judgment. Lord Wilson adopts some of their criticisms. I take a different view. The approach adopted by the court in MM appears to me to have been based on its settled case law. As long ago as 1984, the court said in Malone v United Kingdom (1984) 7 EHRR 14, in the context of surveillance measures, that the phrase in accordance with the law implies that the law must give the individual adequate protection against arbitrary interference (para 68). In Kopp v Switzerland (1998) 27 EHRR 91, para 72, it stated that since the surveillance constituted a serious interference with private life and correspondence, it must be based on a law that was particularly precise: It is essential to have clear, detailed rules on the subject, especially as the technology available for use is continually becoming more sophisticated. These statements were reiterated in Amman v Switzerland 30 EHRR 843. As I have explained, that approach to the question whether the measure provides sufficient protection against arbitrary interference was applied, in the context of criminal records and other intelligence, in Rotaru v Romania, where the finding that the interference was not in accordance with the law was based upon the absence from the national law of adequate safeguards. The condemnation of Part V of the 1997 Act in MM v United Kingdom is based on an application of the same approach. Put shortly, legislation which requires the indiscriminate disclosure by the state of personal data which it has collected and stored does not contain adequate safeguards against arbitrary interferences with article 8 rights. This issue may appear to overlap with the question whether the interference is necessary in a democratic society: a question which requires an assessment of the proportionality of the interference. These two issues are indeed inter linked, as I shall explain, but their focus is different. Determination of whether the collection and use by the state of personal data was necessary in a particular case involves an assessment of the relevancy and sufficiency of the reasons given by the national authorities. In making that assessment, in a context where the aim pursued is likely to be the protection of national security or public safety, or the prevention of disorder or crime, the court allows a margin of appreciation to the national authorities, recognising that they are often in the best position to determine the necessity for the interference. As I have explained, the courts focus tends to be upon whether there were adequate safeguards against abuse, since the existence of such safeguards should ensure that the national authorities have addressed the issue of the necessity for the interference in a manner which is capable of satisfying the requirements of the Convention. In other words, in order for the interference to be in accordance with the law, there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined. Whether the interference in a given case was in fact proportionate is a separate question. The criticism that the court in MM did not allow for any margin of appreciation is therefore misplaced. Whether a system provides adequate safeguards against arbitrary treatment, and is therefore in accordance with the law within the meaning of the Convention, is not a question of proportionality, and is therefore not a matter in relation to which the court allows national authorities a margin of appreciation. The criticism that the court reached its conclusion in MM on a basis that had not been argued by the applicant reflects assumptions about the judicial role that do not hold good across the English Channel. In Strasbourg, the civilian principle jura novit curia applies: the court indeed referred to the principle in its judgment. This was by no means the first occasion on which the court had found a violation on a basis which the applicant had not raised: the court gave some other examples at para 150 of the judgment. The present case the 1997 Act The respondent T received two warnings from the police in 2002, when he was 11 years old, in respect of the theft of two bicycles. He has no other criminal record. The warnings were disclosed under Part V of the 1997 Act in 2008, when he applied for a part time job with a football club which might involve contact with children. They were disclosed again in 2010, when he applied for a place on a sports studies course, which again might involve contact with children. Under the legislation as it then stood, they were bound to be disclosed throughout the rest of his life, whenever he made an application falling within the ambit of Part V of the 1997 Act. The respondent JB received a caution from the police in 2001, when she was 41years old, in respect of the theft from a shop of a packet of false fingernails. She has no other criminal record. The caution was disclosed under Part V of the 1997 Act in 2009, when she completed a training course for employment in the care sector and was required by the training organsiation to obtain a criminal record certificate. The organisation told her that it felt unable to put her forward for employment in the care sector. In the light of the judgment in MM v United Kingdom, it is plain that the disclosure of the data relating to the respondents cautions is an interference with the right protected by article 8(1). The legislation governing the disclosure of the data, in the version with which these appeals are concerned, is indistinguishable from the version of Part V of the 1997 Act which was considered in MM. That judgment establishes, in my opinion persuasively, that the legislation fails to meet the requirements for disclosure to constitute an interference in accordance with the law. That is so, as the court explained in MM, because of the cumulative effect of the failure to draw any distinction on the basis of the nature of the offence, the disposal in the case, the time which has elapsed since the offence took place or the relevance of the data to the employment sought, and the absence of any mechanism for independent review of a decision to disclose data under section 113A. I would therefore dismiss the appeals of the Secretaries of State against the grant of declarations of incompatibility in respect of sections 113A and 113B of the 1997 Act. Although I have reached that conclusion on the basis that Part V of the 1997 Act (as it stood at the material time) fails to meet Convention requirements as to the quality of the law, I agree with Lord Wilson that the disclosure of the respondents cautions could not in any event be regarded as necessary in a democratic society. In the case of the respondent T, the disclosure of the warnings for dishonesty which had been given to him when he was a young child bore no rational relationship to the aim of protecting the safety of children with whom, as an adult, he might come into contact. In the case of the respondent JB, the impact upon her private life of the disclosure of her caution for minor dishonesty, many years earlier, was disproportionate to its likely benefit in achieving the objective of protecting people receiving care. The 1975 Order and the Convention: introduction The challenge made to the 1975 Order in these proceedings raises different issues from the challenge to the 1997 Act. Part V of the 1997 Act is concerned with the use by the state of data which it collects and stores, relating to the criminal records of individuals. The 1975 Order is on the other hand concerned largely with relationships between employers and potential employees, and has the effect, broadly speaking, that those relationships, in circumstances falling within the scope of the Order, remain governed by the common law of contract and tort. It is less immediately obvious why this should be regarded as an interference by the state with the right to respect for private life. Positive and negative obligations The primary argument advanced on behalf of the respondent T is that the effect of the 1975 Order, taken together with the common law, is to require applicants for employment of a kind falling within its scope, or for a licence to carry on a regulated activity falling within its scope, to make a full disclosure of their criminal records when asked about them by prospective employers or regulatory bodies, however old, trivial or irrelevant a conviction or caution may be. The 1975 Order is therefore, it is argued, an unjustifiable interference by the state with the applicants right to respect for his private life under article 8. Counsel for the Secretaries of State submit that the respondents argument amounts to an assertion that article 8 imposes a positive obligation upon contracting states to enact legislation establishing a scheme which excuses applicants for employment from any obligation to provide information to employers about their criminal records, except to the extent that an obligation to provide specific information may be proportionate in the particular circumstances. This question of classification should not inhibit the court from considering the challenge to the 1975 Order and, if it is valid, granting an appropriate remedy. Even if the respondents argument is correctly characterised as involving the assertion of a positive obligation on the part of the state, that does not mean that it is necessarily ill founded. The European court has said repeatedly that, although the purpose of article 8 is essentially to protect the individual against arbitrary interference by public authorities, it does not merely compel the state to abstain from such interference: in addition to this primarily negative undertaking, there may be positive obligations inherent in an effective respect for private life. These obligations may involve the adoption of measures designed to secure respect for private life even in the sphere of relations between individuals: see, amongst many other authorities, the courts recent judgment in Wgrzynowski and Smolczewski v Poland (Application No 33846/07) (unreported) given 16 July 2013, para 54. The court developed the concept of the positive obligation precisely to express the principle that the state cannot fulfil its duty under article 1 of the Convention to secure the rights guaranteed by simply remaining passive: it must, for example, ensure through its legal system the protection of those whose lives are at risk, the recognition of novel forms of family relationship, and the prevention of undue media intrusion into the private lives of individuals. Furthermore, as the European court has often said, the boundary between the state's positive and negative obligations under article 8 does not lend itself to precise definition. There are many situations which could be analysed on either basis, particularly where the complaint concerns a defect in a states existing law. In such a situation (as, for example, in the series of cases concerning the failure of the United Kingdom to amend its law so as to recognise the change of gender of transsexual people), a negative/positive dichotomy is unhelpful, since the situation can be analysed either on the basis that the existing law results in a breach of a negative obligation not to interfere with the relevant Convention right, or on the basis that the state is in breach of a positive obligation to adapt its law so as to comply with the Convention right. The mode of analysis selected can hardly determine the outcome of the complaint. I doubt therefore whether there is much value in debating whether the argument advanced on behalf of T is more aptly regarded as involving a positive or a negative obligation. The complaint about the 1975 Order can be analysed either as concerning a violation resulting from the existing law (ie the common law, to the extent that it is excluded from the ambit of the 1974 Act by the 1975 Order), and therefore as involving the breach of a negative obligation, or as concerning a violation resulting from the states failure to extend more widely the scope of the 1974 Act, and therefore as involving the breach of a positive obligation. The real issue, however it is presented, is whether the obligation imposed upon T by the law of the United Kingdom to disclose to any potential employer in his chosen career, for the remainder of his life, the fact that he had received two warnings for stealing a bicycle when he was a child of 11, or otherwise lose the opportunity of being employed, involves an interference with his right to private life which is unjustifiable under article 8(2). Relevant international instruments The search for common standards, whether evidenced by international instruments or by national laws and practices, is a constant thread running through the case law of the European court. By anchoring developments in its jurisprudence to developments at the national or international level, the court seeks to ensure that it keeps pace with societal developments. I shall therefore begin by considering relevant developments at the international level. There is no doubt that the importance attached to the rehabilitation of offenders in a variety of international instruments can be a relevant consideration in the application of the Convention. For example, in its judgment in MM v United Kingdom the court referred at para 142 to Recommendation No R (84) 10 on the criminal record and rehabilitation of convicted persons, adopted by the Committee of Ministers on 21 June 1984. The document sets out measures which the governments of the member states are recommended to introduce where necessary. In particular, recommendation 1 is to provide that the information mentioned on the criminal record will be communicated only in the form of extracts whose content will be strictly limited to the legitimate interest of the recipients. That recommendation reflects the view, expressed in the preamble to the document, that the disclosure of criminal records outside the context of criminal proceedings may jeopardise the convicted person's chances of social reintegration, and should therefore be restricted to the utmost. Other recommendations include to provide for an automatic rehabilitation after a reasonably short period of time (recommendation 10) and to provide that rehabilitation implies prohibition of any reference to the convictions of a rehabilitated person except on compelling grounds provided for in national law (recommendation 13). In its judgment in V v United Kingdom (1999) 30 EHRR 121 the court also referred to Recommendation R (87) 20 on social reactions to juvenile delinquency, adopted by the Committee of Ministers on 17 September 1987. The document recommends the governments of member states to review, if necessary, their legislation and practice with a view: 10. to ensuring that the entries of decisions relating to minors in the police records are treated as confidential and only communicated to the judicial authorities or equivalent authorities and that these entries are not used after the persons concerned come of age, except on compelling grounds provided for in national law. There are a number of other international instruments which are also relevant to the rehabilitation of juvenile offenders, and which the court has referred to in its case law. First, the United Nations Standard Minimum Rules for the Administration of Juvenile Justice (the Beijing Rules), adopted by the United Nations General Assembly on 29 November 1985, contain a number of relevant provisions. Rule 21, concerned with records, provides: 21.1 Records of juvenile offenders shall be kept strictly confidential and closed to third parties. Access to such records shall be limited to persons directly concerned with the disposition of the case at hand or other duly authorized persons. 21.2 Records of juvenile offenders shall not be used in adult proceedings in subsequent cases involving the same offender. These Rules are not binding in international law: in the Preamble, states are invited, but not required, to adopt them. The United Nations Convention on the Rights of the Child, adopted by the General Assembly of the United Nations on 20 November 1989, has binding force under international law on the contracting states, including all of the member states of the Council of Europe. Article 40 provides: 1. States Parties recognize the right of every child alleged as, accused of, or recognized as having infringed the penal law to be treated in a manner consistent with the promotion of the child's sense of dignity and worth, which reinforces the child's respect for the human rights and fundamental freedoms of others and which takes into account the child's age and the desirability of promoting the child's reintegration and the child's assuming a constructive role in society. Finally, in this connection, the International Covenant on Civil and Political Rights 1966 provides in article 14(4), which broadly corresponds to article 6 of the European Convention, that: In the case of juvenile persons, the procedure shall be such as will take account of their age, and the desirability of promoting their rehabilitation. Some of these instruments are of greater significance than others in the present context, but they are consistent in their emphasis upon the importance attached to the rehabilitation of minor and juvenile offenders, and to the confidentiality of their criminal records as an aid to promoting their rehabilitation. In particular, recommendations 10 and 13 of Recommendation No R (84) 10, recommendation 10 of Recommendation R (87) 20, and rule 21 of the Beijing Rules, are directly relevant to the present context. That a person should in practice be required throughout his adult life to disclose the fact that he committed a minor offence as a juvenile, if he wishes to pursue a wide range of careers, is difficult to reconcile with these provisions, in the absence of what recommendation 10 of Recommendation R (87) 20 describes as compelling grounds. The laws of the member states When considering what the position might be under the Convention, it is also relevant to consider whether there is or is not a consensus across the member states: as the European court has often said, where no consensus exists, the margin of appreciation afforded to states is generally a wide one. No comparative analysis was however presented by any of the parties to the appeals. Although a certain amount of information is readily available, notably in the Home Office report, Breaking the Circle a Report of the Review of the Rehabilitation of Offenders Act (2002), the Report of the Irish Law Reform Commission on Spent Convictions, LRC 84 2007 (2007), and the report published by KPMG, Disclosure of Records in Overseas Jurisdictions (2009), it would not be appropriate to draw firm conclusions from it in the absence of submissions. The reports that I have mentioned indicate that a survey would probably be of limited assistance in any event, since almost all the other member states do not have legislation equivalent to the 1974 Act, but address the issue of rehabilitation in other ways, such as provisions in their constitution or civil code which prohibit unjustified discrimination against ex offenders. The reports focus upon the vetting of potential employees on the basis of criminal record certificates. In that context, there appears to be a widely held view that the disclosure of information about a minor conviction of a juvenile offender, after he has become an adult, is not appropriate. That is consistent with the international instruments to which I have referred. It is relevant to note that a child of 11 would not be regarded as criminally responsible in most of the member states. The present case the 1975 Order No judgment or decision of the European Court of Human Rights, or of the European Commission on Human Rights, has been cited to this court relating to legislation (or the absence of legislation) analogous to the 1974 Act, or the exceptions made to it by the 1975 Order: that is to say, legislation relating to the right of employers to require information from applicants for employment about their criminal records, or the obligation of such applicants to provide the information requested. That does not however prevent this court from reaching its own view on the compatibility of the 1975 Order with the Convention rights protected by the Human Rights Act 1998, if the relevant principles are sufficiently clear. It seems to me to be reasonably clear that laws requiring a person to disclose his previous convictions or cautions to a potential employer constitute an interference with the right to respect for private life, protected by article 8. Whereas the European court laid particular emphasis, when considering Part V of the 1997 Act in MM v United Kingdom, upon the interference constituted by the states disclosure of personal data which it had collected and stored, that issue does not arise directly in relation to the disclosure by a person of information retained in his own memory. On the other hand, the same issue arises out of the private aspect of a persons personal history, especially as it fades into the past and becomes forgotten by the world at large. It is also important to remember that article 8 protects the right to personal development, and the right to establish and develop relationships with other human beings, including relationships at work. As the court has said, it is, after all, in the course of their working lives that the majority of people have a significant, if not the greatest, opportunity of developing relationships with the outside world (Niemitz v Germany (1992) 16 EHRR 97, para 29). Viewed in that way, laws which have the effect of jeopardising a persons ability to pursue his chosen career, or which in practice close off to him a wide range of potential employments, must be regarded as interfering with his private life: see, for example, Sidabras v Lithuania (2004) 42 EHRR 104. The fact that the relevant laws do not, strictly speaking, require an ex offender to disclose his criminal record, since he can avoid doing so by refraining from applying for jobs in the relevant sectors or by abandoning such an application when the inevitable question is asked, is no answer to these points. The question then arises whether the interference with the right to respect for private life resulting from the 1975 Order is justifiable under article 8(2). This question can in my view be addressed most conveniently by considering in the first place whether the interference resulting from the Order, in a case such as that of the respondent T, has a legitimate aim and is necessary in a democratic society. As I shall explain, that question admits of a clear answer. The question whether the interference is in accordance with the law appears to me to be less straightforward, and it is unnecessary to answer it. The conclusion reached in relation to the 1997 Act cannot automatically be extended to the 1975 Order, since the question whether the domestic law affords adequate safeguards against abuse must be judged by reference to the degree of intrusiveness of the interference being considered. As I have explained, particularly strict standards apply in relation to the collection, storage and use by the state of personal data, as under Part V of the 1997 Act. It may be arguable that the requirements in the context of the 1975 Order are somewhat less stringent, as the particularly sensitive element of the use by the state of personal data is absent. Focusing then on the questions of legitimate aim and necessity in a democratic society, there is undoubtedly a public interest in ensuring the suitability of applicants for certain positions, including those involving the supervision or care of children or vulnerable adults, and those which are of particular sensitivity, such as positions connected with the administration of justice. In principle, measures designed to facilitate the vetting of applicants for such positions fall within the scope of one or more of the legitimate aims listed in article 8(2), namely in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. I cannot however see any rational connection between minor dishonesty as a child and the question whether, as an adult, the person might pose a threat to the safety of children with whom he came into contact. There is therefore no rational connection between the interference with article 8 rights which results from the requirement that a person disclose warnings received for minor dishonesty as a child, and the aim of ensuring the suitability of such a person, as an adult, for positions involving contact with children, let alone his suitability, for the remainder of his life, for the entire range of activities covered by the 1975 Order. It can only be concluded that the interference in issue in this case was not necessary in a democratic society to attain the aim of protecting the safety of children. Remedy I have already explained that the Court of Appeal was correct to make the declaration of incompatibility which it made in relation to the 1997 Act. The position in relation to the 1975 Order appears to me to be less straightforward. The Human Rights Act 1998 makes express provision for two distinct types of remedy to be given. Under section 4, the court can grant a declaration of incompatibility in circumstances falling within the scope of that section. Under section 8, the court can grant a remedy in relation to an act of a public authority which it finds is unlawful under section 6(1). Considering first the possibility of a remedy under section 8, the application of the 1975 Order to a particular person is not an act of the Secretary of State. The Order forms part of the law of the land governing the obligations inter se of (amongst others) employers and applicants for employment. Its operation, and in particular the resultant obligation of an applicant for employment to answer questions about his past history, does not depend upon any action on the part of the Secretary of State. The question then arises whether the making of the 1975 Order was an unlawful act of the Secretary of State within the meaning of section 6(1). The answer would appear to be that it was not. Subject to an exception created by section 22(4), which has no application in these proceedings, none of the operative provisions of the Act is retroactive: Wilson v First County Trust (No 2) [2003] UKHL 40; [2004] 1 AC 816, para 212. Could it however be said that the Secretary of State acted unlawfully by failing to amend the 1975 Order, following the entry into force of the Human Rights Act, so as to establish a proportionate scheme in relation to the disclosure of convictions and cautions (at least until 29 May 2013, when the 2013 Order came into force: whether that Order succeeded in rendering the scheme compatible with Convention rights is not a question raised in these appeals)? By virtue of section 6(6), an act includes a failure to act but does not include a failure to (a) introduce in, or lay before, Parliament a proposal for legislation, or (b) make any primary legislation or remedial order. The term legislation, as used in section 6(6)(a), must include subordinate legislation, given the express reference in section 6(6)(b) to primary legislation. Was the Secretary of States failure in relation to the amendment of the 1975 Order a failure to lay before Parliament a proposal for legislation? I am inclined to think that it was. The power to make orders under the 1974 Act is exercisable in accordance with section 10(2), which requires that a draft of the proposed order must be laid before Parliament and approved by an affirmative resolution. The draft order would appear to me to be properly described as a proposal for legislation. That approach leads to the somewhat unattractive conclusion that whether a failure to make subordinate legislation falls within the scope of section 6 of the Human Rights Act depends upon the particular way in which the legislation must be made: an order made by the Secretary of State subject to annulment by a resolution of either House, for example, would not on any view involve the laying before Parliament of a proposal for legislation. On the other hand, it is consistent with the respect for Parliamentary sovereignty found throughout the Human Rights Act that the decision of a member of either House whether to lay a legislative proposal before Parliament, whether in the form of a Bill or a draft order, should not be the subject of judicial remedies. As I shall explain, however, I find it unnecessary to reach a concluded view upon the point, which was not the subject of submissions. If no remedy can be granted under section 8 of the Human Rights Act, can a declaration of incompatibility be made under section 4? Where primary legislation cannot be interpreted compatibly with Convention rights, the court can make a declaration of incompatibility under section 4(2). The position in relation to subordinate legislation is governed by section 4(3) and (4): (3) Subsection (4) applies in any proceedings in which a court determines whether a provision of subordinate legislation, made in the exercise of a power conferred by primary legislation, is compatible with a Convention right. (4) If the court is satisfied (a) that the provision is incompatible with a Convention right, and (b) that (disregarding any possibility of revocation) the primary legislation concerned prevents removal of the incompatibility, it may make a declaration of that incompatibility. By virtue of subsection (3), subsection (4) applies in the present proceedings. Subsection (4)(a) is satisfied: even applying the rule of interpretation set out in section 3(1) of the Act, the 1975 Order cannot be interpreted compatibly with Convention rights. In relation to subsection (4)(b), however, there is no suggestion that the 1974 Act prevents removal of the incompatibility of the 1975 Order with article 8 of the Convention. The condition laid down by section 4(4)(b) of the Human Rights Act is therefore not satisfied. It follows that the court cannot make a declaration of incompatibility under section 4. If, then, there is no remedy that can be granted under either section 4 or section 8 of the Human Rights Act, is there any other basis upon which a remedy might be granted? This question was not addressed in the parties submissions, and I do not consider it necessary to reach a concluded view. A number of potential answers present themselves. An approach that has been adopted in some cases, such as Francis v Secretary of State for Work and Pensions [2005] EWCA Civ 1303; [2006] 1 WLR 3202 and In re G (Adoption: Unmarried Couple) [2008] UKHL 38; [2009] AC 173 has been to make a declaration that it was unlawful for a public authority to act in the manner required by subordinate legislation which could not be interpreted or given effect in a way which was compatible with Convention rights. That solution does not however appear to be apt in the present case, for the reason I have explained at para 146. A more attractive possibility in the present circumstances is that a declaration might be granted to the effect that the 1975 Order cannot be read or given effect in a way which is compatible with Convention rights, or at least with the Convention rights of the respondent T. Although it appears that a declaration of incompatibility could not be granted under section 4 of the Human Rights Act, for the reasons I have explained at para 151, and the powers conferred by section 10 would therefore not be available, it is arguable that a declaration along the lines I have suggested, reflecting the result of applying section 3(1) of the Act to the 1975 Order, might nevertheless be granted. A further possibility is that the Order might be declared to be ultra vires, on the basis that the entry into force of section 3(1) of the Human Rights Act had the effect that the order making powers conferred by sections 4(4) and 7(4) of the 1974 Act must, as from 2 October 2000, be read and given effect in a way which is compatible with Convention rights, and therefore could not be read as authorising the making of an order which was incompatible with Convention rights. It might perhaps be argued that it follows that the making of the 1975 Order could not after 2 October 2000 be regarded as being authorised by the 1974 Act. On the other hand, the idea that subordinate legislation which was intra vires when made could subsequently become ultra vires would give rise to numerous counter arguments and questions. One such question concerns the effect which a declaration that the Order was to be treated as ultra vires with effect from 2 October 2000 might have upon actions taken since that date by persons affected by the Order. Lord Wilson comments, in relation to the Court of Appeals declaration that the 1975 Order was ultra vires, that its effect was that all actions taken by questioners in reliance on disclosures made pursuant to it had been unlawful. Its effect in his view was indeed still more astonishing, since if the Order was ultra vires, it would follow that no valid application for a criminal records certificate could have been made. These are serious concerns, but I would wish to reserve my opinion as to whether they are well founded. In a suitable case, consideration would have to be given to the protection of legal certainty in our administrative law, under reference to such authorities as R v Wicks [1998] AC 92, Boddington v British Transport Police [1999] 2 AC 143 and Mossell (Jamaica) Ltd v Office of Utilities Regulations [2010] UKPC 1, to the Convention principle of legal certainty (discussed, for example, in Cadder v HM Advocate (HM Advocate General for Scotland intervening) [2010] UKSC 43; [2010] 1 WLR 2601, para 58), and to the possibility, if necessary to protect legal certainty, of either exercising the courts discretion to refuse to provide a remedy, or alternatively granting a remedy with only prospective effect. In the circumstances of the present case, however, it does not appear to me to be necessary for the court to insist upon further discussion of these questions, or of the other possible remedies that I have discussed. The respondent T does not complain of any adverse consequences which he has suffered as a result of the 1975 Order: on the contrary, he failed to disclose his cautions when asked questions about his record, as he mistakenly believed that they no longer formed part of his record, and no adverse consequences are said to have resulted from that failure. The harm of which he complains resulted rather from the operation of the 1997 Act. As a result of these proceedings, the 1975 Order has been amended with the intention of rectifying the problem identified. There is therefore no possibility of T being affected in future by the 1975 Order in the form in which it has been considered in these proceedings. He can be regarded for the purposes of the Convention as having obtained just satisfaction by reason of the courts acceptance that his complaint was well founded, and the resultant amendment of the Order. In these circumstances, it appears to me that the court can properly conclude that, even if a remedy might in principle be granted, this is not a case in which, in relation to the 1975 Order, any judicial remedy is necessary. LORD NEUBERGER, LADY HALE AND LORD CLARKE We agree with Lord Reed and Lord Wilson that the appeal of the Secretaries of State against the grant of a declaration of incompatibility in respect of sections 113A and 113B of the Police Act 1997 should be dismissed; but that their appeal against the declaration that the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 is ultra vires should be allowed; and that there is no need for a judicial remedy in respect of that Order. They disagree on only one matter: whether those sections of the 1997 Act are incompatible because they fail to meet the requirement that the interference with the Convention right be in accordance with the law. As to that, we agree with Lord Reed that those sections of the 1997 Act are incompatible for that reason, although we also agree with both Lord Reed and Lord Wilson that the interferences in these cases failed to meet the requirement that they be necessary in a democratic society. In all other respects, we agree with both judgments. |
When is it lawful for a local housing authority to accommodate a homeless person a long way away from the authoritys own area where the homeless person was previously living? There is no doubt that, for a variety of reasons, such out of borough placements have become increasingly common in recent years. The latest national statistics show that in September 2014 a quarter of all temporary accommodation for homeless people was provided in a different council area, an increase from 21% in September 2013. The great majority of these were from London Boroughs (Department for Communities and Local Government, Statutory Homelessness: July to September Quarter, England, National Statistics, Housing, Statistical Release, 11 December 2014). However, local authorities have a statutory duty to provide accommodation in their own area so far as reasonably practicable: Housing Act 1996 (the 1996 Act), section 208(1). And if that is not practicable, statutory guidance requires them where possible, to try to secure accommodation as close as possible to where the applicant was previously living. This case is about the import of those duties for individual households who are offered an out of borough placement. The facts The appellant is a 51 year old single mother of five children, aged between eight and 14. She has many long standing health problems: she is HIV positive, and suffers from Type II diabetes, hypertension, diabetic retinopathy and perhaps depression. She has lived in London since at least January 2000. From December 2008 to November 2012, the family lived in a privately rented four bedroomed house in Westminster. Her rent of 1,150 per week was covered by housing benefit. In 2012, however, a cap (known as the local housing allowance) was placed on the amount of housing benefit payable for privately rented properties according to their size and locality (known as the local housing allowance). Her maximum housing benefit was dramatically reduced. This meant that she was no longer able to afford the rent. The landlord was not prepared to reduce it and so she was evicted from her home in November 2012. She applied to Westminster City Council under the homelessness provisions in Part 7 of the 1996 Act and the family were temporarily housed in two rooms in a hotel in the Royal Borough of Kensington and Chelsea on a bed and breakfast basis. This was near enough for the children to continue in their schools. On 17 January 2013, she was notified that Westminster had decided that she was homeless, eligible for assistance, in priority need, not intentionally homeless, and that they should not refer her case to another local authority where she was more closely connected. Hence they accepted that they owed her what is usually termed the main homelessness duty under section 193(2) of the 1996 Act, as they put it a duty to ensure that you have somewhere suitable in which to live. Their temporary lettings team would be contacting her shortly with an offer of self contained temporary accommodation in discharge of that duty. On Thursday 24 January, the authority wrote offering her temporary accommodation in a five bedroomed house in Bletchley, near Milton Keynes. They had arranged for her to view the property at 12 pm on Monday 28 January. The letter explained: There is a severe shortage of accommodation in Westminster and it is not reasonably practicable for us to offer a Westminster home for everyone who applies for one. That is why we have had to offer you accommodation in Milton Keynes. Although it is outside Westminster, having considered your circumstances, we believe this accommodation is suitable for you. The appellant rejected this offer because it was too far away. It was too far from people helping her with her children. There would be nobody there she knew. She had high blood pressure and wanted to stay with her GP. It would mean changing the childrens schools. She had lived in Westminster for a long time. The authoritys immediate response, by letter of Friday 25 January, was that none of the children was of GSCE age, so it was suitable for them to move schools. The average journey time from the Bletchley property to Westminster was around one hour and 15 minutes. The property was of a suitable size for the family and based on your circumstances theres no reason for us to place you within the borough of Westminster. Because she had refused the offer, their duty under section 193 had ended and they were no longer required to provide her with accommodation. The letter was headed Notice that our housing duty has come to an end. This was no doubt because the duty under section 193(2) does not come to an end automatically when the applicant refuses to accept an offer of accommodation which the authority are satisfied is suitable; under section 193(5), the authority must serve notice that the duty has come to an end. The appellant sought a review of the authoritys decision under section 202 of the 1996 Act. She was interviewed for the purpose of the review, where she repeated her concerns and gave some more details of the help she received from her friends. Three of her friends were also interviewed. Two medical certificates were obtained which confirmed that her chronic conditions [were] incurable and likely to worsen with further complications and that she needed safe accommodation to be able to take medication and stay well; but a medical assessment could not find anything medical to preclude residing in Milton Keynes. The review was completed on 27 May 2013 and the reviewing officer confirmed the decision that the property in Bletchley was suitable and the duty towards her discharged. The decision letter dealt in detail with the familys personal circumstances. As to these, the officers conclusions were: I am not satisfied that the accommodation was unsuitable on the grounds that your medical and support needs are such that you have to live in Westminster; the length of time she had lived in Westminster was not a particularly long time and does not mean that you cannot live anywhere else; none of her children were currently sitting national exams and could move schools without their education suffering; and the accommodation offered was suitable and affordable. The letter then refers to the duty in section 208 of the 1996 Act and states: As you are aware Westminster is currently suffering from a severe shortage of both temporary and permanent accommodation. It is therefore not reasonably practicable to offer temporary accommodation in the borough for everyone who applies for it and therefore we have to offer some people temporary accommodation located outside Westminster. The Councils Temporary Lettings team carefully assesses each application based on the individual circumstances of each household member and decides what type of accommodation would be suitable for the household. Given the shortage of housing in Westminster and all of your circumstances, including those above, I believe that it was reasonable for the Council to offer your household this accommodation outside the Westminster area. This appears to be a standard paragraph which has appeared in a number of other decision letters emanating from the City of Westminster. The authority have produced no evidence of their policy in relation to the procurement of accommodation in order to fulfil their obligations under the 1996 Act, nor of the location of that accommodation, nor of the instructions given to the temporary lettings team as to how they are to decide which properties are offered to which applicants. The appellant then appealed to the county court under section 204 of the 1996 Act. The appeal was heard in October 2013. The authority adduced evidence that at that date 52% of Westminsters temporary accommodation units were in borough and 48% out of borough. Also produced was a report dated May 2012, from the Strategic Director of Housing, Regeneration and Property, produced for the relevant Cabinet Members approval. This reviewed the demand for and supply of social rented housing and low cost home ownership for the previous year and made supply and demand projections for the coming year. It revealed that in the nine months to the end of 2011 there had been 1072 homelessness applications and 394 acceptances; there was a total of 1783 households in temporary accommodation, of which 478 were stage 2 (that is, after the main homelessness duty had been accepted); the housing benefit cap was leading to an increase in homelessness resulting from the loss of a private sector tenancy; at the same time it was becoming increasingly difficult to source self contained temporary accommodation from the private sector, particularly in high rent areas; but at that time around 70% of their temporary accommodation was in borough, with the majority of the non Westminster stock in East London; it would continue to be secured in borough so far as reasonably practicable but would also be sourced out of borough in areas where it was available. The appeal was unsuccessful. HHJ Hornby commented that: I appreciate that there appears to be no reference in particular to the fact that consideration was given to the particular area within Westminster or those areas nearer than Milton Keynes, but it seems to me almost inevitable that the team must have had regard to all the stock that there was and allocated what was the most suitable property available to them for that particular person. The authority had been continuing to provide interim accommodation for the appellant and her children during the review and appeal process. But they refused to do so pending her application for permission to appeal to the Court of Appeal. After she was refused permission for a judicial review of that decision, the authority ceased to provide that accommodation. The childrens services department refused to accommodate the whole family and so on 24 February 2014, the appellant asked the childrens services department to provide accommodation for her children under the Children Act 1989. The children were separated between three different foster families and care proceedings were begun. The appellant was granted permission to appeal to the Court of Appeal, but that appeal was also unsuccessful, for reasons which were essentially the same as those of Judge Hornby: [2014] EWCA Civ 1383, [2015] PTSR 211 (see paras 33 and 34 below). The 1996 Act and Guidance Sections 206 and 208 of the 1996 Act impose distinct but related requirements upon the local authority. Section 206(1) provides that the authority may discharge their housing functions only by securing suitable accommodation, albeit by a variety of routes. Section 208(1) provides that: So far as reasonably practicable a local housing authority shall in discharging their housing functions under this Part secure that accommodation is available for the occupation of the applicant in their district. By virtue of section 205(1) of the 1996 Act, their housing functions refers to their functions under Part 7 to secure that accommodation is available for a persons occupation. It is clear, therefore, that these are duties owed to the individual person to whom the main homelessness duty is owed. The accommodation offered has to be suitable to the needs of the particular homeless person and each member of her household and the location of that accommodation can be relevant to its suitability: see R (Sacupima) v Newham London Borough Council [2001] 1 WLR 563, CA. This has since been fleshed out in statutory guidance. Under section 182(1) of the 1996 Act, local housing authorities are required to have regard to such guidance as may from time to time be given by the Secretary of State. The current general guidance is contained in the Homelessness Code of Guidance for Local Authorities (Department for Communities and Local Government, 2006). As to the duty in section 208(1), this provides: 16.7. Section 208(1) requires housing authorities to secure accommodation within their district, in so far as is reasonably practicable. Housing authorities should, therefore, aim to secure accommodation within their own district wherever possible, except where there are clear benefits for the applicant of being accommodated outside of the district. This could occur, for example, where the applicant, and/or a member of his or her household, would be at risk of domestic or other violence in the district and need to be accommodated elsewhere to reduce the risk of further contact with the perpetrator(s) or where ex offenders or drug/alcohol users would benefit from being accommodated outside the district to help break links with previous contracts which could exert a negative influence. As to suitability, the Code says this about the location of the accommodation: 17.41. The location of the accommodation will be relevant to suitability and the suitability of the location for all the members of the household will have to be considered. Where, for example, applicants are in paid employment account will need to be taken of their need to reach their normal workplace from the accommodation secured. The Secretary of State recommends that local authorities take into account the need to minimise disruption to the education of young people, particularly at critical points in time such as close to taking GCSE examinations. Housing authorities should avoid placing applicants in isolated accommodation away from public transport, shops and other facilities, and, wherever possible, secure accommodation that is as close as possible to where they were previously living, so they can retain established links with schools, doctors, social workers and other key services and support essential to the well being of the household. This has since been expanded upon. Under section 210(2), the Secretary of State may by order specify (a) the circumstances in which accommodation is or is not to be regarded as suitable, and (b) the matters to be taken into account or disregarded in determining whether accommodation is suitable for a person. During the passage of the Localism Act 2011, the Government undertook to remain vigilant to any issues that arose around suitability of location. It had come to light that some local authorities were seeking accommodation for households owed the main homelessness duty far outside their own district. The Government was therefore willing to explore whether protections around location of accommodation need to be strengthened and how this might be done (Department for Communities and Local Government, Homelessness (Suitability of Accommodation) (England) Order 2012 Consultation, May 2012, para 38). A full consultation exercise showed widespread support for strengthening that protection (Department for Communities and Local Government, Homelessness (Suitability of Accommodation)(England) Order 2012 Governments Response to Consultation, November 2012): Government has made it clear that it is neither acceptable nor fair for local authorities to place households many miles away from their previous home where it is avoidable. Given the vulnerability of this group it is essential that local authorities take into account the potential disruption such a move could have on the household. The method chosen was to make it a matter of statutory obligation to take the location of the accommodation into account when determining whether accommodation is suitable. Hence, in October 2012, shortly before the decisions were taken in this case, the Secretary of State made the Homelessness (Suitability of Accommodation) (England) Order 2012 (SI 2012/2601). Article 2 provides: In determining whether accommodation is suitable for a person, the local housing authority must take into account the location of the accommodation, including (a) where the accommodation is situated outside the district of the local housing authority, the distance of the accommodation from the district of the authority; (b) the significance of any disruption which would be caused by the location of the accommodation to the employment, caring responsibilities or education of the person or members of the persons household; (c) the proximity and accessibility of the accommodation to medical facilities and other support which (i) are currently used by or provided to the person or members of the persons household; and (ii) are essential to the well being of the person or members of the persons household; and (d) the proximity and accessibility of the accommodation to local services, amenities and transport. The Governments response to consultation had emphasised that the Order does not prevent or prohibit out of borough placements where they are unavoidable nor where they are the choice of the applicant. However, the Department also issued Supplementary Guidance on the homelessness changes in the Localism Act 2011 and on the Homelessness (Suitability of Accommodation) (England) Order 2012 (November 2012), which strengthened the obligation to secure accommodation as close as possible to where the household had previously been living: 48. Where it is not possible to secure accommodation within district and an authority has secured accommodation outside their district, the authority is required to take into account the distance of that accommodation from the district of the authority. Where accommodation which is otherwise suitable and affordable is available nearer to the authoritys district than the accommodation which it has secured, the accommodation which it has secured is not likely to be suitable unless the authority has a justifiable reason or the applicant has specified a preference. 49. Generally, where possible, authorities should try to secure accommodation that is as close as possible to where an applicant was previously living. Securing accommodation for an applicant in a different location can cause difficulties for some applicants. Local authorities are required to take into account the significance of any disruption with specific regard to employment, caring responsibilities or education of the applicant or members of their household. Where possible the authority should seek to retain established links with schools, doctors, social workers and other key services and support. (Emphasis supplied) The guidance goes on to deal with employment, caring responsibilities, education, medical facilities and other support, and also with cases where there may be advantages in the household being accommodated somewhere outside the local authoritys district, including employment opportunities there. The effect, therefore, is that local authorities have a statutory duty to accommodate within their area so far as this is reasonably practicable. Reasonable practicability imports a stronger duty than simply being reasonable. But if it is not reasonably practicable to accommodate in borough, they must generally, and where possible, try to place the household as close as possible to where they were previously living. There will be some cases where this does not apply, for example where there are clear benefits in placing the applicant outside the district, because of domestic violence or to break links with negative influences within the district, and others where the applicant does not mind where she goes or actively wants to move out of the area. The combined effect of the 2012 Order and the Supplementary Guidance changes, and was meant to change, the legal landscape as it was when previous cases dealing with an out of borough placement policy, such as R (Yumsak) v Enfield London Borough Council [2002] EWHC 280 (Admin), [2003] HLR 1, and R (Calgin) v Enfield London Borough Council [2005] EWHC 1716 (Admin), [2006] HLR 58, were decided. An applicant who is dissatisfied with any of the local authoritys decisions listed in section 202(1) of the Act can request a review of that decision. The decisions listed do not in terms include a decision to place out of borough despite section 208(1). But they do include, at (f), any decision of a local housing authority as to the suitability of accommodation offered in discharge of their duty under, inter alia, section 193(2). They also include, at (b), any decision as to what duty (if any) is owed, inter alia, under section 193(2). It is common ground that (b) includes a decision that the duty is no longer owed because it has been discharged. Under section 204, an applicant who has requested a review under section 202 and is dissatisfied with the decision may appeal to a county court on any point of law arising from the decision (alternatively, if the review decision has not been notified within the prescribed time, arising from the original decision). The childrens welfare Shelter Childrens Legal Service have helpfully intervened to remind the court that the exercise of the local authoritys functions under the 1996 Act is covered by section 11(2) of the Children Act 2004. This requires each person or body to whom the section applies (which includes a local housing authority) to make arrangements for ensuring that: (a) their functions are discharged having regard to the need to safeguard and promote the welfare of children; and (b) any services provided by another person pursuant to arrangements made by the person or body in the discharge of their functions are provided having regard to that need. Section 11 does not define welfare, but section 10 provides a statutory framework for co operation between the local authority and relevant agencies with a view to improving the well being of children in the area. Well being for this purpose is defined as (a) physical, mental and emotional well being; (b) protection from harm and neglect; (c) education, training and recreation; (d) the contribution made by children to society; and (e) social and economic well being (section 10(2)). The welfare of the child has long been given a broad meaning in family proceedings, encompassing physical, psychological, social, educational and economic welfare. It has been held that section 11 applies, not only to the formulation of general policies and practices, but also to their application in an individual case. As Pitchford LJ put it, in R (Castle) v Metropolitan Police Commissioner [2011] EWHC 2317 (Admin), [2014] 1 All ER 953, para 51: The chief officers statutory obligation is not confined to training and dissemination of information. It is to ensure that decisions affecting children have regard to the need to safeguard them and to promote their welfare. However, he went to point out that: This does not mean that the duties and functions of the police have been re defined by section 11 the guidance accurately states the obligation of chief officers of police to carry out their existing functions in a way which takes into account the need to safeguard and promote the welfare of children. In the homelessness context, there is a distinction between the factual decisions which the authority have to make and an exercise of discretion or evaluation. Thus it has been held that section 11 has no part to play in the decision as to whether a persons actions are deliberate for the purpose of deciding whether she is intentionally homeless. As Moses LJ pointed out in Huzrat v Hounslow London Borough Council [2013] EWCA Civ 1865, para 26: The statutory questions are clear; was the action or omission in question deliberate? The answer to that question cannot differ [according to] whether the local authority takes into account the duty under section 11 of the Childrens [sic] Act or not. Some statutory questions do leave room for the consideration of the childs welfare. Where the question relates to the eligibility of a third country national for homelessness assistance under the Regulations implementing the decision of the Court of Justice of the European Union in Ruiz Zambrano v Office national de lemploi (Case C 34/09) [2012] QB 265, the test is whether the EU citizen child of that third country national would be unable to reside in the UK or another EEA state if the third country national were obliged to leave. It was held in Hines v Lambeth London Borough Council [2014] EWCA Civ 660, [2014] 1 WLR 4112, that the childs welfare had obviously to be taken into account, but it could not be the paramount consideration as this would be inconsistent with the statutory language. The question of whether the accommodation offered is suitable for the applicant and each member of her household clearly requires the local authority to have regard to the need to safeguard and promote the welfare of any children in her household. Its suitability to meet their needs is a key component in its suitability generally. In my view, it is not enough for the decision maker simply to ask whether any of the children are approaching GCSE or other externally assessed examinations. Disruption to their education and other support networks may be actively harmful to their social and educational development, but the authority also have to have regard to the need to promote, as well as to safeguard, their welfare. The decision maker should identify the principal needs of the children, both individually and collectively, and have regard to the need to safeguard and promote them when making the decision. However, section 11 does not in terms require that the childrens welfare should be the paramount or even a primary consideration. As the Joint Committee on Human Rights pointed out (19th Report of Session 2003 2004, Children Bill, HL Paper 161, paras 69 to 77), it does not in terms reproduce the wording of article 3(1) of the United Nations Convention on the Rights of the Child (UNCRC): In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. Where Convention Rights under the Human Rights Act 1998 are engaged, it is well established that they have to be interpreted and applied consistently with international human right standards, including the UNCRC: see ZH (Tanzania) v Secretary of State for the Home Department [2011] UKSC 4, [2011] 2 AC 166, H(H) v Deputy Prosecutor of the Italian Republic Genoa (Official Solicitor intervening), [2012] UKSC 25, [2013] 1 AC 338, Stevens v Secretary of State for Communities and Local Government [2013] EWHC 792 (Admin), [2013] JPL 1383, approved in Collins v Secretary of State for Communities and Local Government [2013] EWCA Civ 1193, [2013] PTSR 1594. It is not suggested in this case that any of the Convention rights are engaged: compare Yumsak (para 19 above), where it was conceded that placing the mother and her children in Birmingham interfered with their rights under article 8 of the Convention. We have not heard argument on the interesting question of whether, even where no Convention right is involved, section 11 should nevertheless be construed consistently with the international obligations of the United Kingdom under article 3 of the UNCRC. That must be a question for another day. It is also the case that there will almost always be children affected by decisions about where to accommodate households to which the main homelessness duty is owed. Such households must, by definition, be in priority need, and most households are in priority need because they include minor children. The local authority may have the invidious task of choosing which household with children is to be offered a particular unit of accommodation. This does not absolve the authority from having regard to the need to safeguard and promote the welfare of each individual child in each individual household, but it does point towards the need to explain the choices made, preferably by reference to published policies setting out how this will be done (as to which see further below). Evidencing and explaining the authoritys decisions The Secretary of State for Communities and Local Government has also intervened in this case, in order to emphasise that when making decisions about where to accommodate homeless persons, local authorities have a number of duties to evidence and explain their decisions. They are required to take the Code and Supplementary Guidance into account. If they decide to depart from them they must have clear reasons for doing so: see R (Khatun) v Newham London Borough Council [2004] EWCA Civ, [2005] QB 37, para 47. Very good reasons are required to depart from a policy formulated after public consultation: Royal Mail Group plc v Postal Services Commission [2007] EWHC 1205 (Admin), para 33. This is especially so where the Code is designed to protect vulnerable people: R (Munjaz) v Mersey Care NHS Trust [2005] UKHL 58, [2006] 2 AC 148. By definition, any homeless household in priority need will be vulnerable in this sense. The authority must also have a proper evidential basis for their decision: R (Calgin) v Enfield London Borough Council [2005] EWHC 1716 (Admin), [2006] HLR 58, para 32. It must be clear from the decision that proper consideration has been given to the relevant matters required by the Act and the Code. While the court should not adopt an overly technical or nit picking approach to the reasons given in the decision, these do have to be adequate to fulfil their basic function. It has long been established that an obligation to give reasons for a decision is imposed so that the persons affected by the decision may know why they have won or lost and, in particular, may be able to judge whether the decision is valid and therefore unchallengeable or invalid and therefore open to challenge: see R v City of Westminster, Ex p Ermakov (1996) 28 HLR 819, at 826 827. Nor, without a proper explanation, can the court know whether the authority have properly fulfilled their statutory obligations. The Secretary of State is concerned that the Court of Appeal was too ready to assume that the authority had properly complied with their statutory obligations. Thus, at para 21, it was said that the reviewing officer must be taken to have been aware of the resources available to the council and the pressures on them. It is not necessary in a decision letter of this kind for the reviewing officer to describe in detail what those resources and pressures are. If, as I think, Westminster was entitled to take a broad range of factors into account in deciding whether it was reasonably practicable to provide accommodation to [the applicant] within its own district, it was sufficient for the reviewing officer to describe the circumstances which led her to that conclusion in general terms. I am therefore not persuaded that her decision was irrational in the sense that it lacked an evidential base. Then, at para 25, when it came to providing accommodation as close as possible to the home district: The guidance produced by the Secretary of State is lengthy and detailed in my view there is no basis for inferring that [the reviewing officer] did not have it in mind or that she was unaware of the desirability of accommodating [the applicant] as close to Westminster as was reasonably practicable. It was not necessary for her to explain in detail what other accommodation was available to Westminster outside its own district and why it had not been offered to [her]. The Secretary of State complains that the effect of this approach would be to encourage courts to infer, on no other basis than the assumed experience and knowledge of a local authority, that the authority knew of the Code and Guidance and had taken it into account; that the authority had considered and rejected the possibility of providing closer accommodation than that offered; and that the authority had good reasons for their decision in this particular case. If the courts are prepared to assume all this in the authoritys favour, this would immunise from judicial scrutiny the automatic decisions to house people far from their home district, which was just what the 2012 Order and Supplementary Guidance were designed to prevent. This case The Secretary of State has, of course, made no submissions as to the effect of these criticisms in this particular case. Mr Peacock, on behalf of the Local Authority, does not dispute the applicable principles but has valiantly tried to defend the decision letter. But it is apparent that this decision suffers from all of those defects and more. There is little to suggest that serious consideration was given to the authoritys obligations before the decision was taken to offer the property in Bletchley. At that stage, the temporary lettings team knew little more than what was on the homelessness application form. This did not ask any questions aimed at assessing how practicable it would be for the family to move out of the area. Nor were any inquiries made to see whether school places would be available in Bletchley and what the appellants particular medical conditions required. Those inquiries were only made after the decision had been taken. The review decision is based on the premise that, because of the general shortage of available housing in the borough, the authority could offer accommodation anywhere else, unless the applicant could show that it was necessary for her and her family to remain in Westminster. There was no indication of the accommodation available in Westminster and why that had not been offered to her. There was no indication of the accommodation available near to Westminster, or even in the whole of Greater London, and why that had not been offered to her. There was, indeed, no indication that the reviewing officer had recognised that, if it was not reasonably practicable to offer accommodation in Westminster, there was an obligation to offer it as close by as possible. It follows that the authority cannot show that their offer of the property in Bletchley was sufficient to discharge their legal obligations towards the appellant under the 1996 Act. Moreover, their notification to the appellant that their duty towards her had come to an end was purportedly given in circumstances where she did not know, and had no means of knowing, what, if any, consideration had been given to providing accommodation in or nearer to the borough, apart from the general standard paragraph in the letter offering her the Bletchley accommodation the previous day. I would add that they also cannot show that they have properly discharged their obligation under section 11 of the Children Act 2004. The appeal must be allowed and the decision that their duty to secure that accommodation was made available to her had come to an end must be quashed. Guidance But how, it may be asked, are local authorities to go about explaining their decisions as to the location of properties offered? It is common ground that they are entitled to take account of the resources available to them, the difficulties of procuring sufficient units of temporary accommodation at affordable prices in their area, and the practicalities of procuring accommodation in nearby authorities. It may also be acceptable to retain a few units, if it can be predicted that applicants with a particularly pressing need to remain in the borough will come forward in the relatively near future. On the other hand, if they procure accommodation outside their own area, that will place pressures on the accommodation, education and other public services available in those other local authority areas, pressures over which the receiving local authority will have no control. The placing authority are bound to have made predictions as to the likely demand for temporary accommodation under the 1996 Act and to have made arrangements to procure it. The decision in any individual case will depend upon the policies which the authority has adopted both for the procurement of temporary accommodation, together with any policies for its allocation. Ideally, each local authority should have, and keep up to date, a policy for procuring sufficient units of temporary accommodation to meet the anticipated demand during the coming year. That policy should, of course, reflect the authoritys statutory obligations under both the 1996 Act and the Children Act 2004. It should be approved by the democratically accountable members of the council and, ideally, it should be made publicly available. Secondly, each local authority should have, and keep up to date, a policy for allocating those units to individual homeless households. Where there was an anticipated shortfall of in borough units, that policy would explain the factors which would be taken into account in offering households those units, the factors which would be taken into account in offering units close to home, and if there was a shortage of such units, the factors which would make it suitable to accommodate a household further away. That policy too should be made publicly available. This approach would have many advantages. It would enable homeless people, and the local agencies which advise them, to understand what to expect and what factors will be relevant to the decision. It would enable temporary letting teams to know how they should go about their business. It would enable reviewing officers to review the decisions made in individual cases by reference to those published policies and how they were applied in the particular case. It would enable reviewing officers to explain whether or not the individual decision met the authorities obligations. It would enable applicants to challenge, not only the lawfulness of the individual decision, but also the lawfulness of the policies themselves. Indeed, it would also enable a general challenge to those policies to be brought by way of judicial review. In some ways this might be preferable to a challenge by way of an individual appeal to a county court. But it may not always be practicable to mount a judicial review of an authoritys policy, and an individual must be able to rely upon any point of law arising from the decision under appeal, including the legality of the policy which has been applied in her case. No doubt there are other ways in which an authority could ensure that their decisions are properly evidenced and properly explained. But a standard paragraph of the sort that was used in this case is not one of them. |
This case concerns the true ambit of the new offence created by section 3ZB of the Road Traffic Act 1988 (the 1988 Act). This new section was added by section 21(1) of the Road Safety Act 2006 (the 2006 Act). It provides: 3ZB Causing death by driving: unlicensed, disqualified or uninsured drivers. A person is guilty of an offence under this section if he causes the death of another person by driving a motor vehicle on a road and, at the time when he is driving, the circumstances are such that he is committing an offence under (a) Section 87(1) of this Act (driving otherwise than in accordance with a licence); (b) Section 103(1)(b) of this Act (driving while disqualified), or (c) Section 143 of this Act (using a motor vehicle while uninsured or unsecured against third party risks). On conviction on indictment, this offence carries imprisonment for up to two years. On a late Sunday afternoon in October 2009 the defendant Mr Hughes was driving his family in his camper van. They were on their way home from a motor sports event. The road was the A69 single carriageway trunk road which runs more or less due west from Newcastle upon Tyne towards Carlisle. Mr Hughes and his family were travelling east towards Newcastle. The speed limit was the national limit of 60 mph. His driving was faultless, and his speed a steady 45 55 mph. As he rounded a right hand bend on his correct side of the road he was confronted by a motor car driven by a Mr Dickinson in the opposite direction. Mr Dickinsons car was veering all over the road; it twice crossed to its wrong side and it smashed into Mr Hughess camper van, tipping it over and trapping some of the occupants inside. The oncoming driver, Mr Dickinson, suffered injuries in the impact which proved fatal. Without saying any more it would be apparent that the collision was entirely the fault of Mr Dickinson. As it transpired, he was under the influence of heroin, as well as overtired. He worked at a power station at Largs on the west coast of Scotland. He had worked a series of 12 hour night shifts. That Sunday he had driven from Largs to Newcastle and was on his way back, a round trip of something like 400 miles, of which he had completed about 230. He was a drug user. He was maintained on a prescription dose of methadone, no doubt as a substitute for heroin, but on this day blood analysis proved that he had taken a significant quantity of heroin. He additionally had other controlled drugs in his blood, although they would not, given the heroin level, have had a significant bearing on the accident. No doubt because of the combination of heroin and over tiredness, Mr Dickinson had been driving erratically for some time before the collision. He had wandered both off the road to the nearside and across to the wrong side of the centre white line. There had nearly been an earlier collision when he was partly on the wrong side of the road, and an oncoming car had had to swerve to avoid being hit by him. Mr Dickinson had appeared to following drivers to be unaware of this incident, and rather than taking any avoiding action he had merely drifted back to his correct side of the road in the course of the swerving pattern he was exhibiting. That earlier oncoming driver was fortunate. Mr Hughes was not. He too tried his best to avoid collision by steering to his left, but Mr Dickinson took no avoiding action at all and the impact was the result. It is accepted on all sides that there was nothing Mr Hughes could do to avoid the collision. Although his manner of driving could not be criticised, Mr Hughes was without insurance. That was not, in this instance, through inadvertence. He had, culpably, chosen to disregard what everyone knows is the duty of a driver to carry insurance against liability to a third party. He had, and advanced, no excuse for being uninsured. He was also without a full driving licence. He was not disqualified from driving, but his licence had, several years earlier, been revoked on medical grounds. Subsequently he had passed a medical test and had received a letter offering congratulations on being able to get his licence back. A licence had been issued to him, which he said he thought was a full licence but which was in fact a provisional one. Whatever the truth about his belief on this score, he was undoubtedly guilty of the two offences of driving uninsured and driving without a full licence, for both of these offences are ones of strict liability which can be committed without any fault on the part of the driver. Those offences, contrary respectively to sections 143 and 87 of the 1988 Act, rendered him liable to prosecution, to fine, to penalty points and to disqualification. Neither of those offences carries a sentence of imprisonment. Rather, however, than being prosecuted for, and suffering the consequences of, these two offences, Mr Hughes was prosecuted for two offences under the new section 3ZB, namely for causing the death of Mr Dickinson at time when he was uninsured and without full driving licence. On his behalf it was submitted that he had not committed either additional offence because he had not caused the death of Mr Dickinson. The Recorder of Newcastle ruled in his favour on that point, but the Crown appealed that ruling to the Court of Appeal, Criminal Division. By the time of the hearing, the Court of Appeal considered itself bound to allow the Crowns appeal by an intervening decision in another case involving section 3ZB. Consistently with that earlier decision R v Williams [2010] EWCA Crim 2552; [2011] 1 WLR 588, it ruled that Mr Hughes had in law caused the death. Williams had held that it was not an element of the offence that the defendants driving had to exhibit any fault contributing to the accident. It had held, moreover, that it was enough that the defendant was uninsured, or without full licence, and that his car had been involved in the fatal collision. The Court of Appeal in the present case followed that ruling. Mr Hughes appeals against its decision. It follows that the question for this court is whether or not these two decisions of the Court of Appeal Criminal Division are correct. If they are, the consequence is, as Hooper LJ observed in the course of his judgment in the present case, that Mr Hughes is held criminally responsible for the death of Mr Dickinson although on a common sense view Mr Dickinson was entirely responsible for the collision which resulted in his immediate death. It also follows that if the injuries which Mr Hughess wife and son sustained had proved fatal, as easily might have happened, he would have had no defence to the charge of also causing the deaths of his own close family. This would have been notwithstanding the fact that Mr Dickinson, if he had survived to be prosecuted, would on any view have been guilty of causing their deaths by dangerous driving (section 1 of the 1988 Act) or, at the very least, by careless driving coupled with being unfit to drive through drugs (section 3A of the same Act), both of which are very serious offences carrying a maximum sentence of 14 years. The circumstances of Williams demonstrate that the problem raised by this case is neither unusual nor exceptional. There too the defendant was uninsured, again in that case deliberately so. He was driving in a perfectly proper manner along an urban dual carriageway, within the prevailing 30 mph speed limit, when a pedestrian jumped over the central reservation, stepped out right in front of his car, and was killed in the impact. It was agreed on all sides that there was nothing the defendant could have done to avoid hitting the pedestrian, and that unhappily the pedestrian was entirely responsible for his own death. The jury made it clear by two questions that it was uncomfortable with the prospect of convicting the defendant in these circumstances, but loyally abided by the judges direction that fault in the manner of driving was not an element in the offence and that it made no difference if the pedestrian was the principal cause of his own death, so long only as the presence of the defendants car was a cause of the death, and not de minimis. Williams was convicted and the Court of Appeal upheld his conviction. The duty of every driver to maintain insurance against liability to third parties who might be injured in any road accident is of great public importance. The public expects that a person injured in a road accident through the fault of someone else will have recourse to proper compensation for his injuries and loss. Since the driver at fault may well not have the money to meet the necessary compensation himself, this can only be achieved by insisting on compulsory insurance against the risk. So firm is this public expectation that for over 60 years the motor insurance industry as a whole has accepted the obligation to provide compensation even where the driver at fault had no insurance, so that the innocent injured person shall not be left without compensation. The cost of this safety net inevitably falls on the great majority of law abiding drivers who do have insurance; their premiums have to be increased to an extent to pay for those who flout their obligations. So Mr Hughes, in the present case, was committing a serious offence in seeking to profit by not paying the insurance premium which he ought to have paid and by leaving it, in effect, to the rest of the driving public to pay it for him. Public and parliamentary frustration with such people is entirely understandable. It may also be the case (although not here) that the irresponsible driver who fails to take out insurance is also irresponsible in the manner of his driving. In that event public offence is understandably the greater. To a lesser extent similar frustration may be felt with the driver who has no full driving licence, especially if he has failed to pass a driving test. The difficulty, however, exposed by the present case and others like it is that instead of Mr Hughes being punished for what he did wrong, namely for failing to pay his share of the cost of compensation for injuries to innocent persons, he is indicted and liable to be punished for an offence of homicide, when the deceased, Mr Dickinson, was not an innocent victim and could never have recovered any compensation if he had survived injured. A further difficulty is that since using a car uninsured is an offence of strict liability, it is an offence which may well be committed not only by the likes of Mr Hughes, who deliberately fail to take out insurance, but also by those who overlook a renewal notice, or who find themselves uninsured because of an office mistake by brokers, or because they have driven someone elses car when both they and the owner believed there was valid insurance but in fact there was not, for example because a condition in the policy had been overlooked. If the ruling in the present case is correct, all such persons will be guilty of a very serious offence of causing death by driving if a fatal collision ensues, even if they could have done nothing to avoid it. Has Parliament used language which unambiguously has such far reaching effects? Before the 2006 Act, the principal offences relating to bad driving, and to causing injury by it were, except for manslaughter, contained in the 1988 Act and were as set out below. All remain in existence. (i) Manslaughter, a common law offence where death is caused by gross negligence; the sentence is at large. (ii) Under section 1 of the 1988 Act, causing death by dangerous driving; this has carried imprisonment up to a maximum of 14 years since the Criminal Justice Act 2003. (iii) Under section 3A, causing death by dangerous driving when the driver was unfit through drink or drugs or over the legal alcohol limit; this too carries imprisonment up to a maximum of 14 years. (iv) Under section 2, dangerous driving, irrespective of whether accident or injury ensued; the maximum sentence has remained at two years for decades. (v) Under section 3, careless or inconsiderate driving; this is a summary only offence and does not carry custody. (vi) Under sections 4 and 5, four offences involving drink or drugs, namely driving or being in charge when either unfit or over the prescribed alcohol limit; these are also summary offences and carry maxima of six months imprisonment for the driving offences and three months for the in charge offences. (vii) There were in addition a great many summary only offences relating to the condition of vehicles and to the qualifications required of drivers; amongst them were the offences of using a motor vehicle whilst uninsured and driving without a full driving licence; these, as mentioned earlier, did not and do not carry imprisonment at all. (viii) Lastly for present purposes should be listed driving when disqualified by court order, contrary to section 103; this is a summary offence and carries a maximum of six months imprisonment. The new offence created by section 3ZB, with which we are now concerned, was introduced into the 1988 Act by section 21 of the 2006 Act. At the same time, the next door provision of the 2006 Act, section 20, created another new offence of causing death by careless or inconsiderate driving, also inserted into the 1988 Act as section 2B, and carrying a maximum of five years imprisonment. It is plain that before these additions, there was a substantial gap between, on the one hand, dangerous driving, carrying a maximum of two years imprisonment, and, on the other, manslaughter and the offences under sections 1 and 3A relating to causing death, with a maximum sentence up to 14 years. The sentencing powers available for some of the non fatal offences had for years attracted judicial criticism as too low. A prime example is dangerous driving, for which the maximum has remained two years for decades, no matter how outrageous the driving, no matter how many people were endangered and no matter how bad the defendants record for bad driving. Moreover, this offence, with its two year maximum, was the only available offence even when the dangerous driving had caused grievous injury and perhaps permanent disability; a greater sentence was available only in the event of death being caused. The penalty for uninsured driving could readily be seen likewise to fail to cope adequately with bad cases, especially for serial offenders, of whom there are many. That is the context in which Parliament created the two new offences of causing death by careless driving (section 2B) and causing death when uninsured etc (section 3ZB), no doubt in an attempt to fill part of the perceived gap. That does not, however, answer the question what is the ambit of the offence under s 3ZB. The duty of a court faced with legislation is faithfully to construe its meaning. It is not to impose upon it a judicial view of what it ought to have said. It is for that reason irrelevant that the gaps in the 1988 Act offences and penalties could easily have been cured by different means, for example by increasing the available penalties for dangerous driving, driving whilst uninsured and driving whilst disqualified, and by adding the offence of causing grievous bodily harm by dangerous driving. The last of these changes has subsequently had to be made by the addition of what is now section 1A of the 1988 Act, inserted by the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which creates the offence of causing serious injury by dangerous driving and defines serious injury (for England and Wales) as physical harm amounting to grievous bodily harm. What has to be decided in this case is what is meant by the expression in section 3ZB causes the death of another person by driving Although that question is asked in this context of a driver who is committing one of the three specified offences, it is formulated in a way which could equally be asked of any driver. Has a driver caused the death of another person by his driving: (a) whenever he is on the road at the wheel and a fatal incident involving his vehicle occurs? or (b) when he has done or omitted to do something in his control of the vehicle which is open to proper criticism and contributes in some more than minimal way to the death? The Crown argument, presented by Mr John Price QC, is that the words of section 3ZB are sufficiently clear to establish that the parliamentary intention was to make a driver guilty in situation (a). The purpose, it is said, was to create not only an aggravated form of the offences of using a motor vehicle uninsured, or driving unlicensed or disqualified, but to impose criminal liability for a death if it involved the presence of the defendant at the wheel of a car on the road where he had no business to be. The fault is sufficient, it is said, in driving at all when he had no right to be on the road. On paper that argument appeared to have the virtue of certainty, however counter intuitive its results might be in some situations which it is by no means far fetched to imagine. However, as the hearing progressed Mr Price recognised that this argument could not be pressed to its logical limit. He accepted that the section would not apply if the victim was attempting to commit suicide by running front of a vehicle, or if another motorist crashed into the defendants car in an attempt to kill or seriously to injure someone inside it. Once that is accepted, it is difficult to see where else a line is to be drawn than by following the normal approach to causation taken by the common law. The elusiveness of a third way (ie neither the application of the ordinary approach to questions of causation nor the strict construction that the unlicensed or uninsured motorist is guilty of the offence whenever he is involved in a collision which results in death) became apparent during Mr Prices attempts in his oral argument to ring fence possible exceptions to the strict construction, He concentrated on the mental state of the third party, ie whether he was suicidal or homicidal or attempting to cause serious injury or merely drunk or extremely reckless. Now it would be correct to say that applying the ordinary approach of the common law to a question of causation, the more deliberate the act of the third party, the more likely it is to be regarded as the effective cause of the accident; but that presupposes that the question of causation is to be determined on the ordinary common law approach. If, as a matter of construction, the offence is purely situational, ie it is committed by virtue of the fact that when involved in a fatal accident the defendant was uninsured [etc], it can make no logical difference what was the state of mind of the third party. It may readily be accepted that the intention was to create an aggravated form of the offence of having no insurance [etc], but that only begs the question whether the intention was to attach criminal responsibility for a death to those whose driving had nothing to do with that death beyond being available on the road to be struck. It is certainly true that an uninsured person ought not to be driving at all, although there is no general prohibition on his driving and if he paid for insurance he could drive perfectly lawfully, but this too begs the question whether the intention was to make him criminally responsible as a killer for an offence of homicide in the absence of any act or omission on his part which contributed to the death other than his presence as a motorist capable of being hit. To say that he is responsible because he ought not to have been on the road is to confuse criminal responsibility for the serious offence of being uninsured with criminal responsibility for the infinitely more serious offence of killing another person. The criminal law is well used to offences of which there are aggravated forms carrying additional punishment where greater harm has been done. The escalating offences of common assault, assault occasioning actual bodily harm, and causing grievous bodily harm are but simple examples; there are many more. But ordinarily, the greater punishment is linked to additional harm which is caused by a culpable act on the part of the defendant. In the case of section 3ZB, it is not. On the contrary, the present offence, if construed in the manner for which the Crown contends, represents a rare example of double strict liability, where both the underlying or qualifying condition is an offence (in the cases of unlicensed or uninsured driving) which can be committed unwittingly as well as deliberately, and also the aggravating element can be constituted by an event for which the defendant is not culpable. A trenchant expression of the approach which the Crowns submission reflects was advanced in a consultation document in 2005, at least in relation to a disqualified driver. There the possible view was set out that the mere fact of taking a vehicle on the road when disqualified is, in the Governments view, as negligent of the safety of others as is any example of driving below the standard of a competent driver, even if the disqualified driver at a particular time is driving at an acceptable standard. (Home Office Consultation Paper Review of Road Traffic Offences Involving Bad Driving February 3 2005 para 4.2) A similar argument can no doubt be advanced in relation to drivers without insurance, although there is greater scope for them to be committing the offence inadvertently. But the difficulty about this view is that however culpable it may be to drive when uninsured, unlicensed, or disqualified, if the driving is of an acceptable standard it is simply not accurate to call it negligent. The description of such a proposition by Professors Sullivan and Simester ([2012] Criminal Law Review 754) as a colourable attempt to pass off strict liability as something else is pejorative as expressed, but correct in substance. If what was meant was that there was some moral equivalence between careless or dangerous driving on the one hand and driving whilst disqualified (or uninsured or unlicensed) on the other, that may well be a tenable view so far as it goes, but a careless or dangerous driver is only fixed with criminal responsibility for a death when the manner of his driving contributes more than minimally to that death; equivalence would suggest that the same should be true of the uninsured, disqualified or unlicensed driver. The question remains whether the approach reflected in the Crowns argument is, or is not, the one ultimately adopted by Parliament. It would plainly have been possible for Parliament to legislate in terms which left it beyond doubt that a driver was made guilty of causing death whenever a car which he was driving was involved in a fatal accident, if he were at the time uninsured, disqualified or unlicensed. One formulation might have been that on which it is clear from the material before us that the Government originally consulted, at least in relation to disqualified or unlicensed (but not uninsured) drivers. That formulation was that anyone driving whilst disqualified [etc] whose vehicle was involved in a collision which resulted in death shall be guilty of an offence. Another equally clear course might have been to mirror the existing statutory language in the neighbouring section 170 of the 1988 Act (failing to stop after an accident), and to stipulate that If an accident causing the death of another person occurs owing to the presence on a road of a motor vehicle, the driver of that vehicle shall be guilty of an offence if the circumstances were that he was committing [any of the three specified offences]. If such formulations (or similar ones) had been adopted, there could have been no doubt that Mr Hughes and Mr Williams were guilty of the offence. However, that would have gone beyond the effect of the present offence on the Crowns own argument. It would have included cases of death resulting from would be suicide or from the deliberate ramming of the vehicle with intent to kill or cause serious harm. It would likewise have included the uninsured driver who was sitting stationary at the traffic lights, or at the kerbside about to pull away, when struck by an oncoming vehicle driven dangerously by someone else for, although stationary, there is no doubt that in law such persons would be driving: see for example Planton v Director of Public Prosecutions [2001] EWHC Admin 450; [2002] RTR 107. So also would have been included the driver whose car struck a pedestrian who fell into the road in front of him as a result of drunken horseplay with others on the pavement, or for that matter who engaged in a game of chicken running in front of oncoming cars. And in the same way the driver would, under such language, be guilty if driving impeccably but involved in a collision caused entirely by someone else, the result of which was to push his vehicle onto a pavement where an innocent child is killed. Such factual scenarios are by no means hypothetical. Nor is the case where the accident is caused entirely independently of the driver by interference from within the car, as is illustrated by the recent case of R v Meeking [2012] EWCA Crim 641; [2012] 1 WLR 3349 where a passenger pulled on the handbrake at speed and caused a crash which the driver could not prevent. If he had been uninsured and had survived, but a child in the rear seat had been killed, he too would then have been made guilty, by such a formulation, of killing the child. Thus if unequivocal language of this kind had been used, it would have been beyond doubt that the new offence was committed simply as a result of the defendant being in a situation, viz a fatal accident, whether caused by his driving or not, when committing one of the three specified offences. If such had been the intention of Parliament, it was very easy of achievement. Parliament did not, however, adopt language of this kind. Instead it used the expression causesdeathby driving. That imports the concept of causation. It is trite law, and was common ground before us, that the meaning of causation is heavily context specific and that Parliament (or in some cases the courts) may apply different legal rules of causation in different situations. Accordingly it is not always safe to suppose that there is a settled or stable concept of causation which can be applied in every case. That said, there are well recognised considerations which repeatedly arise in cases turning on causation. For the appellant Hughes, Mr Robert Smith QC relied upon two such recurrent propositions. The first is that a chain of causation between the act of A and a result may be broken by the voluntary, deliberate and informed act of B to bring about that result. The second is the distinction between cause in the sense of a sine qua non without which the consequence would not have occurred, and cause in the sense of something which was a legally effective cause of that consequence. Voluntary intervening act Mr Smith submitted that a person is not to be held liable for the free, deliberate and informed act of a second person, not acting in concert with him. He relied on the decision of the House of Lords in R v Kennedy (No 2) [2007] UKHL 38; [2008] 1 AC 269, in which that proposition was reiterated in those terms by Lord Bingham at para 14, citing Hart and Honores Causation in the law 2nd ed (1985). He submitted that the independent acts and omissions of Mr Dickinson in driving as he did fell into this category and thus broke the chain of any causation connecting any driving of the defendant to the fatality. It is certainly true that the deliberate act of B may break the chain of causation between something done by A and that deliberate act. That was so in Kennedy (No 2). There the charge was unlawful act manslaughter. Kennedy had prepared a syringe of heroin for a man called Bosque, had handed it to him at his request, and had been present when Bosque injected himself. Bosque died of the heroin. The only unlawful act alleged against Kennedy was that he caused heroin to be administered to Bosque (an offence contrary to section 23 of the Offences Against the Person Act 1861). The occurrence whose cause was under investigation was thus not the death of Bosque, but the administration of the drug. Kennedy had doubtless encouraged and assisted Bosque to administer the drug. But Bosque had administered it to himself deliberately and as a matter of free choice. Kennedy had not caused him to administer it. That principle does not assist Mr Hughes in the present case. The occurrence whose cause is under investigation here is the death of Mr Dickinson. He did not voluntarily and deliberately kill himself; he drove dangerously and without thought and as a result caused the collision in which he died. Here, if the driving of Mr Hughes was a cause of the death at all, this is the familiar case of concurrent causes. There are many examples of two or more concurrent causes of an event, all effective causes in law. A road traffic accident is one of the commoner cases, for such events are only too often the result of a combination of acts or omissions on the part of two or more persons. Where there are multiple legally effective causes, whether of a road traffic accident or of any other event, it suffices if the act or omission under consideration is a significant (or substantial) cause, in the sense that it is not de minimis or minimal. It need not be the only or the principal cause. It must, however, be a cause which is more than de minimis, more than minimal: see R v Hennigan (1971) 1 All ER 133. It follows that this appeal depends not on the narrow concept of independent intervening deliberate action (sometimes called novus actus interveniens) but on the broader question whether the driving of Mr Hughes was in law a cause of the death of Mr Dickinson. But for cause and legal cause The law has frequently to confront the distinction between cause in the sense of a sine qua non without which the consequence would not have occurred, and cause in the sense of something which was a legally effective cause of that consequence. The former, which is often conveniently referred to as a but for event, is not necessarily enough to be a legally effective cause. If it were, the woman who asked her neighbour to go to the station in his car to collect her husband would be held to have caused her husbands death if he perished in a fatal road accident on the way home. In the case law there is a well recognised distinction between conduct which sets the stage for an occurrence and conduct which on a common sense view is regarded as instrumental in bringing about the occurrence. There is a helpful review of this topic in the judgment of Glidewell LJ in Galoo Ltd v Bright Grahame Murray (a firm) [1994] 1 WLR 1360. Amongst a number of English and Commonwealth cases of high authority, he cited at pp 1373 1374 the judgment of the High Court of Australia in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506, 515, in which Mason CJ emphasised that it is wrong to place too much weight on the but for test to the exclusion of the common sense approach which the common law has always favoured, and that ultimately the common law approach is not susceptible to a formula. In the earlier section 3ZB case of Williams the principal focus of the argument was the defendants submission that the new offence under section 3ZB depended on proof of some fault in the driving of the defendant. That submission failed in large part because of the simultaneous creation by the 2006 Act of the second new offence of causing death by careless driving by inserting section 2B into the 1988 Act. The view was taken that this necessarily meant that section 3ZB must catch cases which would not in any event fall within section 2B. The argument in Williams did not focus centrally on the meaning of causes. deathby driving. In the present case, Mr Smith for the appellant has disclaimed any argument that fault is a necessary element of the offence under section 3ZB. He has concentrated on the meaning of the expression causesdeathby driving. Logically that is a separate question from whether section 3ZB has to be read as requiring an element of careless or inconsiderate driving. As a matter of fact, recent legislative history is replete with examples of new offences which very largely overlap with each other, or with existing offences, so that it is not altogether safe to draw a conclusion from the juxtaposition of the two new offences that they do not also overlap. If it be assumed that Mr Smiths concession is correct, it does not follow from the fact that section 3ZB contains no requirement that the defendant driver should have committed the offence of careless or inconsiderate driving that he is not required to have done or omitted to do something in the driving of the car which has contributed to the death, before he can be held to have caused it by his driving. In the present case, as in that of Williams, there is no suggestion that there was anything which the defendant either did or omitted to do in the driving of the car which contributed to the least extent to the fatality. The driving of the two defendants was, no doubt, a but for cause of the death. It set the scene or provided the background to, or occasion for, the fatal collision. But that does not resolve the question whether it was a legally effective cause. By the test of common sense, whilst the driving by Mr Hughes created the opportunity for his car to be run into by Mr Dickinson, what brought about the latters death was his own dangerous driving under the influence of drugs. It was a matter of the merest chance that what he hit when he veered onto the wrong side of the road for the last of several times was the oncoming vehicle which Mr Hughes was driving. He might just as easily have gone off the road and hit a tree, in which case nobody would suggest that his death was caused by the planting of the tree, although that too would have been a sine qua non. This is a statute creating a penal provision, and one of very considerable severity. The offence created is a form of homicide. To label a person a criminal killer of another is of the greatest gravity. The defendant is at risk of imprisonment for a substantial term. Even if, at least in a case of inadvertent lack of insurance or venial lack of licence, a sentence of imprisonment were not to follow, the defendant would be left with a lifelong conviction for homicide which would require disclosure in the multiple situations in which ones history must be volunteered, such as the obtaining of employment, or of insurance of any kind. Nor should the personal burden or the public obloquy be underestimated; to carry the stigma of criminal conviction for killing someone else, perhaps a close relative, perhaps as in the kind of situation referred to in para 19 an innocent child, is no small thing. A penal statute falls to be construed with a degree of strictness in favour of the accused. It is undoubtedly open to Parliament to legislate to create a harsh offence or penalty, just as it is open to it to take away fundamental rights, but it is not to be assumed to have done so unless that interpretation of its statute is compelled, and compelled by the language of the statute itself. The rule of construction which applies to penal legislation, and a fortiori to legislation which carries the penalty of imprisonment, is not identical to, but is somewhat analogous to, the principle of statutory interpretation known as the principle of legality. Lord Hoffmann described that principle in this way in R v Secretary of State for the Home Department Ex p Simms and OBrien [2000] 2 AC 115, 131E: Parliamentary sovereignty means that Parliament can, if it chooses, legislate contrary to fundamental principles of human rights. But the principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual. This is not a case of fundamental human rights However, the gravity of a conviction for homicide, for which the sentence may be a term of imprisonment, is such that if Parliament wishes to displace the normal approach to causation recognised by the common law, and substitute a different rule, it must do so unambiguously. Where, as here, Parliament has plainly chosen not to adopt unequivocal language which was readily available, it follows that an intention to create the meaning contended for by the Crown cannot be attributed to it. It follows that in order to give effect to the expression causesdeathby driving a defendant charged with the offence under section 3ZB must be shown to have done something other than simply putting his vehicle on the road so that it is there to be struck. It must be proved that there was something which he did or omitted to do by way of driving it which contributed in a more than minimal way to the death. The question therefore remains what can or cannot amount to such act or omission in the manner of driving. The decisions of the Court of Appeal in Williams and in the present case have received academic commentary including a case note on Williams by Professor Ormerod at [2011] Crim LR 473 and the article by Professors Sullivan and Simester referred to above. All consider that on a correct construction of the section more is required than the mere fact of involvement of Ds vehicle in a fatal accident whilst D is driving without a licence, etc, so as to give proper meaning to the words causes the deathby driving As is apparent from what we have said, we agree. Sullivan and Simester have gone on to canvass what the additional ingredient might involve, if short of some form of fault or driving which is properly open to criticism. They suggest that the additional ingredient required is something giving rise to responsibility for the death but that responsibility is not to be confused with culpability. They postulate examples of the driver who, in the agony of the moment, swerves the wrong way, or who encounters an unexpected natural hazard such as black ice. Mr Smiths concession led him similarly to accept that if an unlicensed driver in the agony of the moment swerves to avoid a car being driven across the road in the way that Mr Dickinson drove, but in so doing he makes the wrong movement and is involved in a collision which might have been avoided if he had acted differently, he would be guilty under the section. But even if one were to remove the inherent ambiguities of might by requiring simply that the manoeuvre be a cause of the death, this still begs the vital question: by what standard is the jury to judge what was the wrong movement? There might be several variations to the scenario in which an oncoming motorist acts as Mr Dickinson did. D1 is unable to swerve and is hit by the oncoming vehicle with the resulting death of the oncoming motorist and/or a passenger in one or both of the vehicles. D2 swerves but is struck by the oncoming car and the impact causes D2s vehicle to collide with another vehicle or a pedestrian. D3 swerves and avoids colliding with the oncoming vehicle but collides with another vehicle or pedestrian. Yet there is no principled difference in the criminal responsibility of these defendants in respect of the death or deaths of the victim or victims. The same difficulty is encountered if one considers unexpected natural hazards. Sullivan and Simester suggest that D would be guilty if he lost control of his vehicle on a treacherous road surface but without any culpability, but that is to attach guilt to mere presence on the road (which of itself they do not consider to be enough for purposes of causation). If the suggestion were nevertheless correct, it begs the question whether there is any difference in Ds causation between cases where the hazard is naturally occurring and cases where it occurs through human agency? Would it apply if a falling rock (or other heavy object) lands naturally on the road in front of him but also where it falls from the back of an insecure tailgate of a lorry in front of D or is thrown or dropped in front of his vehicle? Similary, is there a difference in terms of Ds causation between him skidding on invisible black ice which has formed naturally and skidding unavoidably on a pool of oil deposited by another motorist which made the surface dangerous? To draw fine distinctions between these cases would be to make the law confusing and incoherent, as well as being unmanageable for trial courts, both for judges and juries. We are driven to the view that there is no logical or satisfactory intermediate position between holding (a) that the law imposes guilt of homicide whenever the unlicensed motorist is involved in a fatal accident and (b) that he is guilty of causing death only when there is some additional feature of his driving which is causative on a common sense view and the latter entails there being something in the manner of his driving which is open to proper criticism. To give effect to the words causesdeathby driving there must be something more than but for causation. If causing death by driving cannot be constituted simply by being involved in a fatal collision, it would be contrary to the common laws common sense approach to agony of the moment situations for it to be constituted by (for example) a desperate last millisecond attempt to swerve out of the way of the oncoming vehicle of such as Mr Dickinson. Once this is accepted, there is no stopping point short of some act or omission in the driving which is open to criticism, ie which involves some element of fault. Mr Smiths concession in the present case proves, on close inspection, to go further than it should. The statutory expression cannot, we conclude, be given effect unless there is something properly to be criticised in the driving of the defendant, which contributed in some more than minimal way to the death. It is unwise to attempt to foresee every possible scenario in which this may be true. It may well be that in many cases the driving will amount to careless or inconsiderate driving, but it may not do so in every case. Cases which might not could, for example, include driving slightly in excess of a speed limit or breach of a construction and use regulation. If on facts similar to the present case, D who was driving safely and well at 34 mph in a 30 mph limit, or at 68 mph in a 60 mph limit was unable to stop before striking the oncoming drunken drivers car, but would have been able to stop if travelling within the speed limit, his driving would be at fault, and one cause of the death, but would be unlikely to amount, by itself, to careless driving. The same might be true if he could not stop in time because a tyre had become underinflated or had fallen below the prescribed tread limit, something which he did not know but could, by checking, have discovered. Juries should thus be directed that it is not necessary for the Crown to prove careless or inconsiderate driving, but that there must be something open to proper criticism in the driving of the defendant, beyond the mere presence of the vehicle on the road, and which contributed in some more than minimal way to the death. How much this offence will in practice add to the other offences of causing death by driving will have to be worked out as factual scenarios present themselves; it may be that it will add relatively little, but this is the inevitable consequence of the language used and the principles of construction explained above. We were referred to the decision of the Court of Appeal in R v Marsh [1997] 1 Cr App R 67, which was relied upon in Williams. That case concerned the offence of aggravated vehicle taking, contrary to section 12A (1) of the Theft Act 1968. Under that section if the defendant has committed the basic offence of wrongful taking of, or driving, or allowing himself to be carried in, such a vehicle, he is made criminally liable for the aggravated offence if certain specified additional events happen to the vehicle. Two of those additional events are accidents causing injury to a person, or damage to some property other than the vehicle, if they occur owing to the driving of the vehicle. Marsh held that no element of drivers fault was imported into that offence. The language and construction of the section are different from the section here under consideration. The different language of section 12A makes it clear that a defendant may be guilty even if the vehicle is being driven by someone else at the time of the specified additional events, although a defence is then provided in the case of injury if the defendant was not present at the time. Whilst there might be some force in the contention that the expression owing to the driving of the vehicle imports an element of causation similar to that involved in causingdeathby driving, the point was not argued before us and should be left open. It does not assist the construction of the present statute to compare it with different words of a different statute creating a different type of offence. The certified question in this case asks: Is an offence contrary to section 3ZB of the Road Traffic Act 1988, as amended by section 21(1) of the Road Safety Act 2006, committed by an unlicensed, disqualified or uninsured driver when the circumstances are that the manner of his or her driving is faultless and the deceased was (in terms of civil law) 100% responsible for causing the fatal accident or collision? under section 3ZB will then add to the other offences of causing death by driving must remain to be worked out as factual scenarios are presented to the courts. In the present case the agreed facts are that there was nothing which Mr Hughes did in the manner of his driving which contributed in any way to the death. It follows that the Recorder of Newcastle was correct to rule that he had not in law caused the death by his driving. The appeal should be allowed and that ruling restored. For the reasons set out, enquiry into apportionment of liability in civil terms is not appropriate to a criminal trial. But it must follow from the use of the expression causesdeathby driving that section 3ZB requires at least some act or omission in the control of the car, which involves some element of fault, whether amounting to careless/inconsiderate driving or not, and which contributes in some more than minimal way to the death. It is not necessary that such act or omission be the principal cause of the death. In which circumstances the offence |
The issue on this appeal is how a covenant should be construed and understood as applying in a novel legal and accounting context, which was not foreseen or foreseeable or was, according to uncontradicted expert evidence, unthinkable when the covenant was entered into. The covenant was contained in a Deed agreed and executed in 1997 between the appellant, then known as Lloyds TSB Group plc and now known as Lloyds Banking Group plc (and which I shall for simplicity call Lloyds Bank), and the respondent, Lloyds TSB Foundation for Scotland (the Foundation). The 1997 Deed replaced an earlier Deed executed in 1986 and varied by agreement between the parties in 1993. The 1986 Deed was one of four entered into upon the floatation of the TSB Group plc (TSB) and intended to provide four charitable foundations with payments totalling 1% of the pre tax profits of the TSB. Under Clause 2 of the 1997 Deed, Lloyds Bank covenanted to pay the Foundation the greater of (a) an amount equal to one third of 0.1946 per cent of the Pre Tax Profits (after deducting Pre Tax Losses) for the relevant Accounting Reference Periods and (b) the sum of 38,920. Clause 1 defined Pre Tax Profit and Pre Tax Loss as meaning in relation to any Accounting Reference Period . respectively the group profit before taxation and the group loss before taxation (as the case may be) shown in the Audited Accounts for such period adjusted to exclude therefrom any amounts attributable to minority interests and any profits or losses arising on the sale or termination of an operation, such adjustment to be determined by the Auditors on such basis as they shall consider reasonable, which determination shall be conclusive and binding on the parties hereto. The words and any profits or losses arising on the sale or termination of an operation were added to the 1986 Deed by the amendments mutually agreed in 1993, and were maintained in the replacement Deed mutually agreed and executed in February 1997. Clause 1 further defined Audited Accounts as meaning, in relation to any Accounting Reference Period, the audited accounts of the Company and its subsidiaries for that period. The appeal concerns the level of payment to be made to the Foundation on the basis of the Lloyds Bank groups audited accounts for 2009. Those accounts included in the consolidated income statement (the modern equivalent of a profit and loss account) a figure for gain on acquisition of over 11 billion, converting a loss of over 10 billion into a figure for profit before taxation of over 1 billion. This unrealised gain on acquisition related to the rescue of HBOS mounted by Lloyds Bank in 2008. It was described on p 160 of the accounts as reflecting the difference between, on the one hand, the book value of HBOSs assets written down by (in percentage terms) small fair value adjustments and, on the other hand, consideration given by Lloyds Bank of about half that written down fair value. Further insight into the envisaged and likely outcome may be provided by the Group Chief Executive officers statement under the heading Results Overview on p 11 that we acquired the business at half book value in anticipation of the likely losses resulting from their troubled asset portfolios. However that may be, unrealised profits are not the same as realised profits. There is many a slip twixt cup and lip, and, not surprisingly, a gain on acquisition is not capable at any level of a groups or its members accounts of being income distributable by way of dividends. Nor is it taxable as income. Indeed, it did not even appear in the income statement of Lloyds Bank itself, where the acquisition was accounted for at cost. At the dates of the various Deeds, it would have been contrary to both the law and accounting practice to include in a profit and loss account an unrealised item like gain on acquisition. This remained the case until 1 January 2005, on and after which date a change in the law and accounting practice instituted at European Union level required listed companies to make such an entry in their consolidated (but not their individual) accounts, albeit with the different implications already mentioned by comparison with other items in the consolidated income statement. In the present case, therefore, Lloyds Bank maintains that the gain on acquisition should be left out of account for the purposes of the 1997 Deed when ascertaining the groups profit or loss before taxation by reference to the audited accounts, while the Foundation maintains that it is no more than one of many items making up a bottom line figure for pre tax profit or loss, with the result that the group made for those purposes a profit of over 1 billion, rather than a loss of over 10 billion, before taking into account minority interests. The legal and accounting context To understand the Deeds, it is necessary to place them in the legal and accounting context at the dates when they were executed. In this respect, when the original Deed was made in 1986, amended in 1993 and replaced in 1997, there were two fundamental legal and accounting principles: (a) that a profit and loss account was concerned with ordinary activities before taxation and (b) that only profits realised at the balance sheet date could lawfully be included in the profit and loss account. These principles followed from the Companies Act 1985, itself implementing the Fourth Council Directive 78/660/EEC: see Schedule 4, paras 3(6) and 12a. Schedule 4, para 3(6) of the 1985 Act read: Every profit and loss account of a company shall show the amount of the companys profit or loss on ordinary activities before taxation. Schedule 4, para 12 read: 12 The amount of any item shall be determined on prudent basis, and in particular (a) only profits realised at the balance sheet date shall be included in the profit and loss account; and (b) all liabilities and losses which have arisen or are likely to arise in respect of the financial year to which the accounts relate or previous financial year shall be taken into account . Paragraph 91 of Schedule 4 of the Companies Act 1985 provided: Realised profits 91 Without prejudice to (a) the construction of any other expression (where appropriate) by reference to accepted accounting principles or practice, or (b) any specific provision for the treatment of profits of any description as realised, it is hereby declared for the avoidance of doubt that references in this Schedule to realised profits, in relation to a company's accounts, are to such profits of the company as fall to be treated as realised profits for the purposes of those accounts in accordance with principles generally accepted with respect to the determination for accounting purposes of realised profits at the time when those accounts are prepared. The like principles applied to group accounts: section 230(1) of the 1985 Act. Their function was to combine the information contained in the separate balance sheets and profit and loss accounts of the holding company and of the subsidiaries dealt with by the consolidated accounts but with such adjustments (if any) as the directors of the holding company think necessary: Schedule 4, paragraph 61. The position regarding group accounts was shortly to change pursuant to the requirements of the Seventh Council Directive 83/349/EEC due for implementation by 1 January 1988. By amending section 255 of, and introducing section 255A into, the Companies Act 1985, the Companies Act 1985 (Bank Accounts) Regulations SI 1991/2705 required banking companies and banking groups to prepare their accounts in accordance with an amended Schedule 9, rather than Schedule 4, of the 1985 Act. Paragraph 19 of the amended Schedule 9 was however in identical terms to paragraph 12 of Schedule 4. An aspect of these statutory provisions worth brief mention concerns the four prescribed Formats for a profit and loss account prescribed by Schedule 4. Consistently with the requirements of the Fourth Directive (articles 23 to 26), they list a number of items of income and expenditure; after such items, no specific line appears for profit or loss on ordinary activities before taxation. However, the Formats then proceed (with or without a line identifying the tax) to identify profit or loss on ordinary activities after taxation, thereafter any extraordinary income and, finally, profit or loss for the financial year. Under the prescribed Formats group consolidated accounts could thus have had no single line correlating with a concept of group profit before taxation. In fact, the groups 1986 accounts did contain such a line, entitled Group operating profit before taxation. If they had not done, the group profit [or loss] before taxation would have had to be identified by an exercise in subtraction. The figure would however still be shown in the Audited Accounts. In contrast, the two permissible Formats introduced by Schedule 9 amended by the 1991 Regulations had specific lines for [profit] [loss] on ordinary activities before tax and for [profit] [loss] on ordinary activities after tax, followed by lines for extraordinary income or charges, for tax on extraordinary profit or loss, for extraordinary profit or loss after tax and, finally, for profit or loss for the financial year. It is common ground that, before its 1993 amendment, the effect of the original Deed was that any profits or losses arising on the sale or termination of an operation were not part of the group profits on which the Foundations rights were to be based. The problem which arose in October 1992 from the introduction of Financial Reporting Standard 3 was that exceptional income of this nature was from now on no longer to appear below, but as part of, profit or loss on ordinary activities, although its tax treatment remained distinct that is, because under para 24 of Financial Reporting Standard 3 (FRS 3) issued October 1992 tax was to be computed on ordinary items as if the extraordinary profit or loss did not exist, and the result then compared with the notional tax charge on the profit or loss after the extraordinary items, with any additional tax charge or credit arising being attributed to the extraordinary items). In the light of FRS 3, the parties to the Deed appreciated that there could be a problem when Lloyds Bank came to sell Hill Samuel Bank and TSB Property Services. As the agreed statement of facts and issues records (para 14): The effect of the amendment was to restore the position in relation to profits or losses arising on the sale or termination of an operation to that which existed prior to the adoption of FRS 3. The Deed was therefore understood by the parties in 1993 to focus on the line showing profit [or loss] on ordinary activities. When the parties realised that exceptional items consisting of profits or losses arising on the sale or termination of an operation were required to be included in ordinary activities they agreed the 1993 amendment to make clear that they were not to count towards the group profit before taxation to which the Deed referred. The Foundation submits that this confirms that any legal and accounting change whatever affecting the profit or loss shown in the accounts must be accepted, unless the parties met the change by agreeing a specific exclusion. I do not agree. I have some doubt whether the exclusion in respect of any profits or losses arising on the sale or termination of an operation was actually necessary, bearing in mind their extraordinary nature and entirely different tax treatment. But at least such profits or losses were realised and could in 1993 as a matter of law permissibly be included in the profit and loss account. Assuming on that basis that the exclusion was necessary, and it was certainly a sensible precaution, that says nothing about whether the Deed covers an unrealised gain on acquisition arising outside the groups ordinary trading activities, which at the time when it was made could not in law or foreseeably ever have been included in a profit and loss account. The fundamental principles of the Companies Act 1985 were (necessarily) reflected in the Generally Accepted Accountancy Principles (GAAP) and in Statement of Standard Accounting Practice 22 (SSAP 22) by reference to which the TSB prepared its accounts. Negative goodwill arising on the purchase of an asset for less than its fair value had to be credited to reserves, increasing shareholder funds, and had no effect on the profit and loss account. When SSAP 22 was replaced by Financial Reporting Standard 10 (FRS 10) in 1997, the balance sheet treatment of any gain on acquisition was changed, and provision was made for the release (or amortisation) of the gain on acquisition through the profit and loss account in proportion to the value of the non monetary assets of the acquired company realised by sale or depreciation during the same period. This was consistent with the Companies Act principle that only profits recognised during an accounting period could be included in any profit and loss account. Assets could, in contrast, be included at the lower of cost and current value, with any write downs appearing in the profit and loss account as depreciation, impairment or provision for bad debts. On 19 July 2002 the European Union adopted Regulation 1606/2002. Under article 4, this Regulation led to the fundamental change that listed companies must prepare their consolidated accounts in conformity with International Financial Reporting Standards (IFRS), rather than the Companies Act 1985. (Under article 5 the United Kingdom was entitled to permit, and has it appears permitted, such companies to continue to prepare their individual accounts in conformity with the 1985 Act, as well as to permit unlisted companies to continue to prepare their consolidated and individual accounts in conformity with the 1985 Act.) With regards to the consolidated accounts of listed companies, the innovation introduced by para 34 of the relevant Standard, IFRS 3, was to require that in any accounting period starting on or after 1 January 2005 any negative goodwill arising from a bargain purchase should for the first time be recognised in the profit and loss account as of the acquisition date and measured as the excess of the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed (this being measured in turn under para 18 at the fair values of such assets and liabilities) over the consideration paid therefor (and of any non controlling interest in the operation acquired). As Mr Simmonds of Deloittes put it before the Lord Ordinary, in an unchallenged passage in his first report (para 5.30), para 34 means that such a gain on acquisition: is recognised immediately in the consolidated income statement, notwithstanding that it reflects an unrealised gain. It is unrealised at the date of acquisition since the related net assets of the acquired entity, which give rise to the negative goodwill, have not been realised through use or sale (hence they are unrealised). It is as a result of this development in the legal and accounting position, unforeseen and unforeseeable in 1986, 1993 and 1997, that the present issue arises. The parties did not discuss or agree any further exclusion following the 2002 Regulation, and the change only became relevant as a result of the well publicised rescue of HBOS undertaken at short notice by Lloyds TSB Group as the financial crisis threatened mortgage lenders in September 2008. If the 1997 Deed does not require an unrecognised gain on acquisition of this nature to be taken into account in identifying the group profit before taxation, it is circular to try to draw any inference from the fact that the parties did not renegotiate or amend the Deed. It would also be illegitimate to try to do so, since parties subsequent conduct cannot, in Scots or English law, construe an earlier contract. In any event, it is clear that neither party actually foresaw the present issue until it arose after the acquisition of HBOS. The factual background The background to the Deed, which was set out by the Lord Ordinary and about which the Foundation must have been aware, was that the payments made to the Foundation and to the three sister Foundations were made by way of covenants for (in total) about 1% of the groups annual pre tax profits, because such covenants would represent a charge on income and be a more tax efficient method of providing income than dividends. The covenant was thus seen as an alternative to the issue of shares and to any payment of dividends or their equivalent. If the profits of all group companies were remitted to the parent, and the parent distributed equivalent sums by way of dividends, there would have been a general equation with the covenanted payments. But, as the table produced by the Dean of Faculty demonstrated, there had over the years been considerable discrepancies in particular years between the group profit before tax and the actual dividend payments made by individual group companies. That is understandable. Individual companies in the group may have resolved to retain profits, rather than distribute them as dividends. Or they may have distributed dividends at a rate greater than the 1% total contemplated when the covenants in the Deeds were entered into. Dividends must be and are, however, paid out of realised profits, and the Lord Ordinary concluded, after hearing oral evidence, that the change which is said to lead to the result that covenanted payments should be by reference to figures which did not constitute realised profits, and could not at any level in the group constitute distributable or taxable profits, was not and could not have been anticipated without magical powers of foresight, and, if it had been foreseen, would certainly have led the parties to come up with a different formula to express their basic intention (paras 37 and 78 79). In short, realised profits equate broadly with sums which the group would have available and which Lloyds Bank could correspondingly make available to pay away. Analysis of the opposing cases The Foundations case rests in essence upon the use in clause 1 of the phrase group profit before taxation in inverted commas, coupled with the phrase shown in the Audited Accounts. These words are said, in effect, to tie Lloyds Bank to any similarly phrased line which may from time to time be found in a future years Audited Accounts, however fundamentally different the basis on which it is arrived at from any which existed or was in mind when any of the Deeds were executed. The present dispute relates, as stated, to the groups consolidated income statement in its audited accounts for 2009. This contains a line reading profit before tax: 1,042[,000,000]. This, the Foundation says, should be taken without further examination or enquiry. The novel previous line, gain on acquisition: 11,173[,000,000], entered pursuant to the demands of Regulation 1606/2002 and IFRS 3, is to be ignored: this, although it represents an entry which could never have appeared in company accounts when the various Deeds were executed or any date until 2005 and which converts a realised loss of over 10 billion into an unrealised profit of over 1 billion. It is, for good measure, also a line which finds no place in the individual company accounts of Lloyds Bank, the groups parent company which actually acquired HBOS. In its accounts, the acquisition of HBOS is entered at cost, making it doubly clear the difference between the group gain on acquisition and any realised income by reference to which tax might be paid or dividends declared by Lloyds Bank. The Dean of Faculty forcefully advocated the Foundations case as reflecting an appropriately mechanical application of the combination of clauses 1 and 3. The description mechanical is appropriate, but the value of machinery depends upon its being correctly directed towards the right end. In this respect, the proper approach is contextual and purposive. That this is so needs today relatively little citation of authority. As Lord Wilberforce said in Prenn v Simmonds [1971] 1 WLR 1381, pp 1383H 1384B The time has long passed when agreements, even those under seal, isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations There is no need to appeal here to any modern, anti literal, tendencies for Lord Blackburns well known judgment in River Wear Commissioners v Adamson (1877) App Cas 743, 763 provides ample warrant for liberal approach. We must, as he said, inquire beyond the language and see what the circumstances were with reference to which the words were used, and the object, appearing from those circumstances, which the person using them had in view. Construing the words actually paid in Charter Reinsurance Co Ltd v Fagan [1997] AC 313, Lord Mustill stated that, in cases not involving a specialist vocabulary, the inquiry will start, and usually finish, by asking what is the ordinary meaning of the words used (p 384C D) and that he had: initially thought that the meaning of the words [actually paid] was quite clear, and that the complexities and mysteries of this specialist market had hidden the obvious solution, and had led the courts below to abjure the simple and right answer and to force on the words meaning which they could not possibly bear (p 384F G). But he went on (p 384G H): This is, however, an occasion when a first impression and a simple answer no longer seem the best, for I recognise now that the focus of the argument is too narrow. The words must be set in the landscape of the instrument as whole. Here, the landscape, matrix and aim of the 1997 Deed as well as its predecessors could not be clearer. They were, when made, and could only have been, concerned with and aimed at realised profits or losses before the taxation which would fall on group companies. The change occurring in 2005 was to introduce negative goodwill into the profit and loss account as a gain on acquisition, which would not appear in Lloyds Banks individual company accounts (since the HBOS transaction was there accounted for on a cost basis) and which could never attract taxation. In the light of the legal position of the 1980s and 1990s and the Lord Ordinarys findings on the accountancy evidence (para 19 above), the change was wholly outside the parties original contemplation, and something which they would not have accepted, had they foreseen it. No one suggests or could suggest that the change meant that the 1997 Deed was frustrated, so the question is how its language best operates in the fundamentally changed and entirely unforeseen circumstances in the light of the parties original intentions and purposes: Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 AC 251, Bromarin AB v IMD Investments Ltd [1999] STC 301, and Debenhams Retail plc v Sun Alliance and London Assurance v Co Ltd [2005] EWCA Civ 868, [2006] 1 P & C R 123. The answer is evident. It operates best, and quite naturally, by ignoring in the 2009 accounts the unrealised gain on acquisition and treating the loss which exists apart from that as the relevant figure for the purposes of clause 2. No principle of construction insists that the words group profit [or loss] before taxation shown in the Audited Accounts can only be satisfied by reference to a single line entry in accounts, however great and unforeseen the changes in law and accounting practice which have in the meantime occurred and whatever the consequences. On the contrary, it is not at all difficult to imagine that, if (as might have occurred between 1986 and 1991: see para 10 above) no single line could plausibly be identified as the group profit before taxation and it was necessary to refer to two or more lines to achieve a result marrying with the parties originally contemplated scheme, the Foundation itself would then be urging that approach. The proper approach as a matter of construction is to identify and use the figures in the consolidated income statement which show the group profit or loss before taxation in the sense intended by the Deed. That means realised profit or loss before taxation, and it excludes a wholly novel element which was included in the income statement by a change which was neither foreseen nor foreseeable and which, had it been foreseen when the Deeds were executed, would not have been accepted as part of the computation of profit or loss. The unrealised gain on acquisition thus falls out of account and the balance is the relevant group profit or (on the facts of this case) loss before taxation. In respect of the Accounting Reference Period to which the 2009 accounts relates, it follows that the Foundation receives only the minimum sum of 38,920, rather than the 3,543,333 which on their case results from the unrealised gain (after taking into account 135 million attributable to minority interests in the group). Consequences of the opposing cases The Dean of Faculty submits that this conclusion would create problems in later accounting periods. No such problems were suggested or investigated when the accountants gave expert evidence before the Lord Ordinary. I would discount the Deans submission for that reason alone. But I am also in no way persuaded that the submission, now made in the abstract, has any weight. The item gain on acquisition is explained in detail in note 14 to the 2009 consolidated group accounts, and represents in the main receivables of HBOS, written down by relatively small (in percentage terms) amounts to what is said to have been a fair value, together with some other financial, tangible and intangible assets. In any future accounts, there would have necessarily to be entries covering any further gain realised, or any further write down or adjustment for impairment recognised, in respect of such items. This is so, whether the starting point taken is the fair value taken as at the balance sheet date of 31 December 2009 or the cost to Lloyds Bank of acquiring HBOS with such assets, which was about half the fair value figure. Either way, further profits could be made or further write downs/impairment could fall to be recognised. So it will necessarily be possible to identify by reference to future accounts the amounts which will on Lloyds Banks case logically have to be taken into account by way of profit or loss in future years, if the gain on acquisition in 2009 is ignored for the purposes of the Deed. In contrast, the Foundations case involves striking irrationality. On the Foundations case, the Foundation is entitled to have the unrealised gains on acquisition of HBOS taken into account in looking for an appropriate figure for group profit before taxation in the 2009 accounts. The Dean of Faculty suggested that this was not unfair because, if the unrealised gains did not in fact materialise, that would inure to the Foundations detriment in the calculation of group profit or loss before taxation in future accounts. But that is very far from the invariable case. First, the Foundation is guaranteed a minimum of 38,920 in every year. In any year when the Lloyds Bank group makes a loss or insufficient profit, and therefore cannot absorb some element of the original gain on acquisition realised in that year at less than its original fair value to an extent which still yields the Foundation at least 38,920, the Foundation will have benefitted from the original gain on acquisition, and suffered no equivalent detriment. Second, the unrealised gain was made on the acquisition of all of HBOS. It is logical therefore to examine the position which would arise if all or part of HBOS were sold a year or more later a classic case of actual realisation of an asset. It is inconceivable that the parties could have intended the Foundation to derive from an unrealised gain a benefit it could not derive from a realised profit. Yet this is precisely what the Foundations case achieves. If HBOS was sold at a profit over and above the fair price which led to the gain on acquisition in the 2009 accounts, the Foundation would not be able to take advantage of that actual realised gain, but the exclusion in clause 3 of any profits or losses arising on the sale or termination of an operation would mean that it could keep the advantage of the covenanted payment due, on its case, at the earlier stage of the unrealised gain on acquisition of HBOS. Similarly, if the (probably much more likely) scenario arose of a disposal of all or part of HBOS at a price less than the fair price which led to the gain on acquisition, the exclusion would mean that the Foundation would not have to bring into account any part of the realised loss which had now replaced all or part of the unrealised gain on acquisition of HBOS. These incongruous consequences make to my mind completely untenable the Foundations case that the phrase group profit before taxation must or can refer to a figure derived from an unrealised gain on acquisition. Conclusion The Lord Ordinary thought that the words shown in the Audited Accounts in clause 1 could simply be disregarded. The Inner House was correct to reject that approach. In some contractual contexts, words may have to be disregarded. But so radical an approach is both inappropriate and unnecessary to give effect to the intention of the 1997 Deed, when understood in its context and properly construed. As demonstrated above, the words shown in the Audited Accounts are well capable of catering for the present situation, and must on any view be understood as flexible enough to cover situations in which there is no single identifiable line in audited accounts describing group profit [or loss] before taxation or anything like it. The Inner House itself failed properly to identify what the parties had in mind by group profit [or loss] before taxation, at the times when the 1997 Deed and its predecessors were executed. It did not appreciate the significance of the legal and accounting context in which the Deeds were made, and it in effect assumed, contrary to all the indications and regardless of the consequences, that the contract must operate on an entirely literal basis by reference to a single line in whatever accounts might in future be produced in circumstances and under legal and accounting conventions entirely different from those in and for which it was conceived. As a result the Inner House thought that Lloyds Banks construction would involve re writing the Deed, when in fact it reflects the proper approach, of giving effect to the parties original intentions in the radically different legal and accounting context which existed by 2009. The Inner House further failed to recognise the incongruity of the result for which the Foundation contends. The issue has been extremely well argued on both sides. For the reasons I have given, I would allow the appeal, and restore the decision of the Lord Ordinary to grant decree of absolvitor, albeit for reasons different to those he gave. LORD HOPE (with whom Lord Reed and Lord Carnwath agree) Like Lord Clarke, I was inclined at the end of the argument to accept the Dean of Facultys submission that the phrase group profit before taxation shown in the Audited Accounts in Clause 1 of the 1997 Deed should be given its ordinary meaning. It was, as he said, a simple and straightforward point of reference, which left no doubt as to what was to be taken to be the pre tax profits for the relevant accounting reference period. But I have been persuaded by Lord Mances judgment that these words must be read in the light of what a reasonable person would have taken them to mean, having regard to what was known in 1997 when the idea of introducing negative goodwill into the profit and loss account was unthinkable. Read in that context, the words do not have the weight that the Deans argument would give to them. That would be to give them a meaning which no reasonable person would have dreamed of at that time. The words used are capable of meaning realised profit or loss before taxation, and of excluding elements which would not have been contemplated as having anything to do with the computation of profit or loss when the Deed was executed. On that reading I am left in no doubt that the argument for Lloyds Bank, which accords with the landscape at the time when the words were written, must prevail over that for the Foundation. For the reasons that Lord Mance gives, therefore, I too would allow the appeal. I would recall the Inner Houses interlocutor and restore the interlocutor of the Lord Ordinary. Mr Barne for the Bank submitted that, should it fail on the issue of construction, the court should adjust the 1997 Deed by applying to it a doctrine referred to as equitable adjustment. The effect of applying that doctrine, he submitted, would be to exclude the sum brought in for negative goodwill from the calculation of the groups profit or loss before taxation. This would create a loss in the 2009 Audited Accounts, so the amount due to the Foundation for 2009 under clause 3 of the Deed would be restricted to 38,920. The Lord Ordinary recognised, when this argument was before him in the Outer House, that the Banks success on the issue of construction made it unnecessary for him to deal with it. He had held that the Foundation must fail in its claim against the Bank in any event. But he dealt with the argument nevertheless and, having examined the authorities, he concluded that there was no such doctrine in Scots law: [2011] CSOH 105, 2012 SLT 13, para 89. The point was raised in the Inner House by way of a cross appeal. As the First Division decided to reverse the Lord Ordinary on the issue of construction, it had to deal with it: [2011] CSIH 87, 2012 SC 259, para 22. In its view however there was no foundation for the equitable adjustment of contracts, as a generality, in Scots law. Lord President Hamilton recognised the existence of the doctrine, but he said it would be beyond the judicial power to develop it in a way that would assist the Bank in this case: para 29. We are in the same position as the Lord Ordinary. The Banks success on the main issue makes it unnecessary for us to decide whether a remedy by way of equitable adjustment is available. But the point was dealt with fully in the parties written cases as well as in oral argument, and it is of some general interest. So I should like to say a word or two about it. Despite Mr Barnes able submissions to the contrary, I have reached the same conclusion as the judges in the Court of Session. I add these few words to explain why. The proposition for which Mr Barne contended was that the doctrine was available where, as a result of supervening events, performance of a contract no longer bears any realistic resemblance to that which was originally contemplated. He made it clear in his written case that it was not his position that it would be impossible to implement the Deed if it were to be construed in the manner argued for by the Foundation. The contract had not been frustrated. Nor was it his case that the court had any general power to adjust or alter contracts to achieve what one or other of the parties might regard as an equitable result. His proposition was a narrow one, confined to a case where the alteration in the circumstances in which the contract came to be performed was affected in a material way by supervening events for which neither party was responsible. There had to be a supervening event which was not foreseen and was not foreseeable when the contract was made, and that event must affect the substance of the contract. The Foundation, for its part, made it clear in its written case that it did not suggest that there was no concept of equitable adjustment in Scots law. It is to be found, for example, where the future performance of a contract is frustrated. The rule in Scots law is that the loss does not lie where it falls on the frustration of a contract. There must be, as McBryde, The Law of Contract in Scotland, (3rd ed, 2001), para 21 47 puts it, an equitable adjustment. That was what was done in Cantiere San Rocco SA v Clyde Shipbuilding and Engineering Co 1923 SC (HL) 105, [1924] AC 226, where it was held that the buyer was entitled to repetition of the instalment of the price that was paid on signature of the contract as, owing to the war, further performance of the contract had become impossible. As Lord Dunedin explained, at pp 126, 248 249, the remedy for frustration of the contract was given not under the contract or because of breach of the contract inferring damages, but in respect of the equitable (of course I am not using the words in the technical English sense) doctrine of condictio causa data causa non secuta. It should be noted that the term causa data causa non secuta is used today not to describe a remedy as such, but rather to describe one particular group of situations in which the law may provide a remedy because one party is unjustifiably enriched at the expense of the other: Shilliday v Smith 1998 SC 725, 728, per Lord President Rodger. The situation that was discussed in Cantiere San Rocco is not the situation in this case, as it was not part of the Banks argument that if the Foundation were to succeed on the interpretation argument its obligations under the Deed could not be implemented. But Lord President Cooper, Frustration of Contract in Scots Law (1946) 28 Journal of Comparative Legislation, at p 1, saw frustration of the contract as a by product of a wider question how the relations of two parties should be equitably readjusted by the Court when the one has been unintentionally enriched at the expense of the other. He made it clear at pp 4 5 that in his opinion the principle of frustration was capable of being expanded in the future into other areas. In James B Fraser & Co Ltd v Denny, Mott & Dickson Ltd 1944 SC (HL) 35, 41, [1944] AC 265, 272, Lord Macmillan (who was counsel for the unsuccessful shipbuilding company in Cantiere San Rocco) said that the doctrine of frustration was so inherently just as inevitably to find a place in any civilised system of law: The manner in which it has developed in order to meet the problems arising from the disturbances of business due to world wars is a tribute to the progressive adaptability of the common law. In Muir v McIntyre (1887) 14 R 470 it was held that a tenant was not bound to pay the full rent where, due to no fault of his own, almost the whole of the accommodation on the farm was destroyed by a fire. Lord Shand at p 473 said that the principle on which the tenant was entitled to an abatement of his rent was founded on the highest equity. These observations provide the background to Mr Barnes submission that, while the concept of equitable adjustment overlapped with unjustified enrichment, it was broader in its application. It was a matter of degree, he said, whether the contract was discharged or was equitably adjusted. It all depended on the extent or nature of the change. Cases such as Muir v McIntyre and Sharp v Thomson 1930 SC 1092, where the tenant was held to be entitled to an abatement of his rent upon the partial destruction of the subjects, showed how equitable principles could operate where the contract was not frustrated. It could continue on terms which were adjusted to reflect the changed circumstances. Rankine, A Treatise on the Law of Leases in Scotland (3rd ed, 1916), p 227 said that the court will not be confined in adjusting the rights of the parties by any artificial rule that the loss must either be total or at least plus quam tolerabile. In Wilkie v Bethune (1848) 11 D 132, due to the failure of the potato crop, the farm servants employer was unable to deliver the potatoes to which the servant was entitled in addition to his money wages. The court fixed a sum which was regarded equitably as the money equivalent of the employers obligation. The contract had not been frustrated, but the court applied an equitable construction and held the servant entitled, not to his potatoes, but to a sum which would purchase the equivalent of other food: McBryde, The Law of Contract in Scotland, para 21 21. This is not the occasion to cast doubt on the ability of Scots law to find equitable solutions to unforeseen problems. Adaptability has a part to play in any civilised system of law, as Lord Macmillan recognised in James B Fraser & Co Ltd v Denny, Mott & Dickson Ltd 1944 SC (HL) 35, 41, [1944] AC 265, 272. The way that use has been made of civilian principles to develop the law of frustration of contract in Scots law is a powerful demonstration of that fact. So too is Reinhard Zimmermanns observation that the doctrine of Wegfall der Geschftsgrundlage (collapse of the underlying basis of the transaction), which was formulated in response to the problems posed by the consequences of the First World War, has become part and parcel of the modern German law of contract: The Law of Obligations, p 582. It can also be seen in the way strict rules for the interpretation of contracts have been discarded in favour of giving effect to what a reasonable person would have understood the parties to have meant by the language used: see Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, para 14 per Lord Clarke. That development as to how contracts are to be interpreted is very much in point in this case. It would have created a very real problem for the Bank, had it been necessary for it to rely on an equitable adjustment. The assumption must be that it had to resort to this argument because it had lost on the issue of construction. In other words, the 1997 Deed had been held, by applying that principle of construction, to mean what the Foundation contends it means. The obligation that, so construed, it sets out is not impossible of performance. Can it really be said that it would be appropriate to resort to an equitable doctrine in order that the Deed should mean something else? None of the examples of equitable adjustment that are to be found in the reported cases go that far. And it is hard to see how this the enrichment can be regarded as unjustified, if including the sum for negative goodwill results from the meaning that must be given to the covenant. In Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 AC 251, paras 55 56, Lord Hoffmann drew attention to the way that 18th and 19th century English judges, when faced with rigid rules of construction which were productive of injustice, resorted to solutions based on what was referred to as an equitable doctrine. But, as he went on to say in para 60, judicial creativity of that kind was to be invoked only if it was necessary to remedy a widespread injustice. Otherwise there was much to be said for giving effect to what on ordinary principles of construction the parties agreed. Those are the principles that have been applied in this case. There surely is no need, if that approach is adopted, to strive to find a basis in equity for arriving at a different result. On the contrary, to do that would be to look for a result which was different from that which the parties must be taken, by placing the words used in their legal and accounting context at the date when the Deed was executed, to have agreed to. There is a place for such a result where the contract has become impossible of performance or something essential to its performance has been totally or partially destroyed, as in the case of leases. But not, as the Lord Ordinary put it in para 92 of his opinion, where a contract is nearly frustrated but not quite. Moreover it could hardly be said that there is anything in this case that could reasonably be described as inequitable if the result were to come down in favour of the Foundation. As the Dean of Faculty pointed out, the unrealised gain on acquisition was due to Lloyds TSB Groups decision to acquire HBOS in January 2009 by which date IFRS 3 had already been issued. The situation which has resulted from this was described by the Banks expert Mr Simmonds as unthinkable when the covenant was entered into. But the acquisition was a voluntary act. It was not something that was beyond the control of either party. For all these reasons I would hold that the proposition that the court can equitably adjust a contract on the basis that its performance, while not frustrated, is no longer that which was originally contemplated is not part of Scots law. To hold otherwise would be to undermine the principle enshrined in the maxim pacta sunt servanda which lies at the root of the whole of the law of contract. I see no need for this and, as there is no need for it, I would reject the suggestion that the court should assume that function. LORD CLARKE I have found this to be a very difficult case. My mind fluctuated a good deal in the course of the argument. At the end of the argument I was inclined to accept the submissions made by the Dean of Faculty on behalf of the Foundation. It then seemed to me that the Deed set out a clear formula which was intended to apply to the relevant circumstances over very many years, that the parties must be taken to have recognised that there would be likely to be changes in accounting standards over the years and that the purpose of the formula was to leave it to the auditors in each year to set out the group profit before taxation and the group loss before taxation in the Audited Accounts. It appeared to me that, in these circumstances, since it was clear that the group profit before taxation was the item described as Profit before tax in the Audited Accounts for 2009, it followed that the figure of just over 1 billion shown against that item was the group profit before taxation shown in the Audited Accounts for the relevant period and that, following the formula set out in clause 2(1) of the Deed, the amount payable by Lloyds Bank to the Foundation was 3,543,333. That seemed to me to be the result on the natural meaning of the deed. However, having read Lord Mances judgment, I have now reached the conclusion that that is not the correct result on the true construction of the Deed. I have done so essentially for the reasons he gives. The result is that the relevant amount payable by Lloyds Bank to the Foundation is based on the minimum figure of 38,920 set out in clause 2(1)(b) of the Deed. As Lord Mance explains, the difference between the parties depends upon whether the figure of just over 11.1 billion shown in the accounts as Gain on acquisition should be taken into account in arriving at the group profit before taxation. If it is not taken into account the profit of just over 1 billion is turned into a significant loss of over 10 billion so that only the minimum amount is payable under the Deed. In my opinion a critical aspect of the findings of fact made by the Lord Ordinary in this case, which was based on uncontradicted expert accountancy evidence, is that, when the Deed was entered into, it was unthinkable that the relevant accounting rules would require unrealised profits to be treated as part of group profit before taxation. The difference between the issue of construction in this case and that in many other cases which have come before the courts is that here the problem is how to construe the contract in the context of changed circumstances which were unforeseeable when the contract was entered into. A similar problem arose in Debenhams Retail Plc v Sun Alliance and London Assurance Co Ltd [2006] 1 P & C R 123, where the question was what was meant by additional rent on the true construction of a lease. It was common ground that that rent was a proportion of turnover. The question was whether, for the purposes of the lease, turnover included VAT. The problem was that the lease was negotiated in 1965 and VAT was not introduced until 1973 and the regime in force in 1965 was the different purchase tax regime. Mance LJ said this at p 130: no one suggests that that the lease cannot or should not apply in the changed circumstances. We have to promote the purposes and values which are expressed or implicit in the wording, and to reach an interpretation which applies the wording to the changed circumstances in the manner most consistent with them. I agree that that is a sensible approach both to that problem and to the problem we have here. I note that in Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 Lord Clyde said, at para 79: Generally people will say what they mean. Generally if they intend their agreement to cover the unknown or the unforeseeable, they will make it clear that their intention is to extend the agreement to cover such cases. Here the parties did not make it clear what the position would be if new accounting rules were made which required unrealised profits to be taken into account. They did not think of such a possibility because it was unthinkable. In my opinion, if, as Mance LJ suggested, we promote the purposes and values which are expressed or implicit in the wording of the Deed in order to reach an interpretation which applies the wording to the changed circumstances in the manner most consistent with them, the better construction of the Deed is that advanced by Lloyds Bank. I will not repeat the detailed reasons given by Lord Mance for that conclusion. For the reasons he gives, I would allow the appeal. I add by way of postscript that I entirely agree with Lord Hopes judgment on the issue of equitable adjustment. |
This appeal concerns the assessment of damages arising out of the repudiation of a charterparty by charterers of a cruise ship called New Flamenco (the vessel). I can take the facts from the judgment of Longmore LJ (with whom Christopher Clarke and Sales LJJ agreed) in the Court of Appeal. He had in turn taken the facts from the judgment of Popplewell J (the judge) on appeal from the First Final Arbitration Award, dated 3 June 2013, (the award) made by Mark Hamsher as sole arbitrator. The arbitrator gave detailed reasons which formed part of the award. By a time charterparty on the NYPE 93 form dated 13 February 2004 (the charterparty) the vessel was chartered by her then owners, Cruise Elysia Inc to the defendants (the charterers) for a period of one year. At that time the vessel was managed by the claimants (the owners), who bought the vessel on 4 March 2005 and entered into a novation agreement dated 23 March 2005 under which they assumed the rights and liabilities of the owners under the charterparty effective as from 7 March 2005. In August 2005 the owners and the charterers concluded an agreement extending the charter for two years expiring on 28 October 2007, with an option for a third year. The option was never exercised. The extension was recorded in addendum A. At a meeting on 8 June 2007, the owners and charterers reached an oral agreement in terms subsequently recorded in addendum B. The agreed terms extended the charterparty for a further two years expiring on 2 November 2009. The charterers disputed having made the agreement recorded by addendum B and refused to sign it. They maintained an entitlement to redeliver the vessel on 28 October 2007 in accordance with addendum A. The owners treated the charterers as in anticipatory repudiatory breach and on 17 August 2007 accepted the breach as terminating the charterparty. The vessel was redelivered on 28 October 2007. Shortly before redelivery the owners entered into a memorandum of agreement for sale of the vessel for US$23,765,000. The charterparty was governed by English law and provided for London arbitration. The owners commenced arbitration on 11 September 2007 and Mr Hamsher was appointed sole arbitrator on 4 March 2008. The charterers denied liability, claim submissions were served only on 23 November 2011 and the hearing took place in May 2013. By the time of the hearing it was apparent that there was a significant difference between the value of the vessel in October 2007, when the owners sold her, and in November 2009, when the vessel would have been redelivered to the owners had the charterers not been in breach of the charterparty. The collapse of Lehman Brothers in September 2008 and the financial crisis had occurred in the meantime. The value of the vessel when she would have been redelivered in accordance with addendum B in November 2009 was, as the arbitrator subsequently found, US$7,000,000. That finding was based on expert evidence of valuers as between a willing seller and a willing buyer. The owners advanced their claim for damages calculated by reference to the net loss of profits which they alleged that they would have earned during the additional two year extension. Such profits were set out in a detailed schedule identifying the revenue which would have been earned under the charterparty, and giving credit for the costs and expenses which would have been incurred in operating the vessel in providing the charterparty service for the two years, but which had been saved as a result of the sale of the vessel. The amount claimed was 7,558,375. As Longmore LJ put it, ironically the owners were, at this stage, prepared to give credit for what they called the reduction in the re sale value of the vessel (said to be for depreciation) between October 2007 and November 2009 of US$5,145,000. The charterers argued that the owners were bound to bring into account and give credit for the whole difference between the amount for which the vessel had been sold in October 2007 (US$23,765,000) and her value in November 2009 (subsequently found by the arbitrator to be US$7,000,000). The owners wished, however, to argue that the difference in value was legally irrelevant and did not fall to be taken into account. Because there was no agreement between the parties on the accounting figures in relation to the net profits which would have been earned for the two year period under the charter, the arbitrator made no findings on the quantum of the owners claim and left the figures to be agreed by the parties or referred back to him in the absence of agreement. But he declared that the charterers were entitled to a credit of 11,251,677 (being the equivalent of US$16,765,000) in respect of the benefit that accrued to the owners by selling the vessel when worth more in October 2007 than it was at the end of the charter period in November 2009. This was more than the owners loss of profit claim and would result in the owners recovering no damages for the charterers repudiation. As Longmore LJ observed in para 10, towards the end of the arbitration hearing the owners had made an application to amend their submissions by deleting the conceded credit. That application was refused by the arbitrator but he allowed the point of principle (that no credit needed to be given) to be argued holding that, if the owners were successful on the point, the amount of the conceded credit would have, nevertheless, to be brought into account. That remained the position before the judge. The award and the judgment There were two issues before the arbitrator: (1) whether the owners had been entitled to terminate the charterparty; and (2) if so, whether they had to give credit for any benefit that they had received by selling the vessel. On the first issue, the arbitrator found that the parties had concluded an oral agreement on the terms of addendum B and that the charterparty had been terminated by the owners in response to the charterers repudiatory breach. There has been no challenge to that finding. The second issue was the only issue of quantum which was argued before the arbitrator (apart from the valuation issue referred to in para 4 above). As I understand it, the parties agreed that, depending upon the circumstances, subject to the way in which the specific issue was decided, any other quantum issues would be the subject of directions and a further hearing. The issue for determination by the arbitrator was recorded in para 3 of his reasons in this way: there was a fundamental difference between [the parties] as to whether any difference between the October 2007 sale and the putative November 2009 sale price had to be taken into account as a benefit that had accrued to the Owners. The Owners argued that it was totally irrelevant in considering their claim for loss of profit. The Charterers argued that it was a benefit that could and should be taken into account to establish the true net damages suffered by the Owners. This was far from being an arid, legal dispute of little practical importance. If the Charterers were correct both as to the extent of the alleged benefit that had accrued to the Owners and the fact that it had to be taken into account, then even if the Owners succeeded on liability, they could recover nothing because the benefit could exceed by a considerable margin the claim for loss of profits. On this second issue, the arbitrator made a declaration in his award that, when damages fell to be assessed, the charterers were entitled to a credit of 11,251,677 in respect of the benefit that accrued to the owners when they sold the vessel in October 2007 as opposed to November 2009, which was the earliest time when they could have sold the vessel if addendum B had been performed. The arbitrator added, consistently with the above, that since the parties had not agreed the other accounting figures between them, it was appropriate for him merely to declare the credit to which the charterers were entitled, leaving it to the parties either to refer the balance of their disputes to him or to resolve matters amicably. Finally he reserved the right to make such further award or awards as might be appropriate including on costs. The owners sought permission to appeal to the High Court pursuant to section 69 of the Arbitration Act 1996 on a question of law which was formulated in this way: When assessing shipowners damages for loss of profits on earnings of hire under a time charterparty which has been repudiated by the charterers and the repudiation accepted by the owners as terminating the contract, are the charterers entitled to have taken into account as diminishing the loss of earnings/hire sustained by the owner as a result of the accepted repudiation a benefit said to consist of avoidance of a drop in the capital value of the vessel because the vessel has been sold shortly after acceptance of the repudiation whereas, if the vessel had been retained until after performance of the charterparty, it would have had a lower capital value by reason of decline in the capital value of the vessel through market decline in ship sale values in that period? Permission to appeal was granted by Teare J on 17 September 2013. He considered the question to be one of general public importance and that the arbitrators decision was at least open to serious doubt. The appeal was argued before Popplewell J on 30 April and 1 May 2014 and judgment was given by the judge, allowing the appeal, on 21 May 2014. In a judgment reported in [2014] 2 Lloyds Rep 230 he held in para 65 that, on the facts found by the arbitrator, the application of the principles of law which he had identified did not require the owners to give credit for any benefit in realising the capital value of the vessel in October 2007, by reference to its capital value in November 2009, because it was not a benefit which was legally caused by the breach. The charterers appealed to the Court of Appeal, which allowed the appeal. Before considering the reasoning of the Court of Appeal, it is appropriate to consider the reasoning of the judge. Having set out the submissions of counsel in some detail between paras 13 and 62, he summarised his conclusions on legal principle in paras 63 and 64 as follows1: 63. The search for a single general rule which determines when a wrongdoer obtains credit for a benefit received following his breach of contract or duty is elusive. In Parry v Cleaver Lord Wilberforce said at [1970] AC 1, at pp 41H to 42B: As the learned justices in the High Court are careful to state, it is impossible to devise a principle so general as to be capable of covering the great variety of benefits from one source or another which may come to an injured man after, or because, he has met with an accident. Nor, as was said by Dixon CJ in Espagnes case (1961) 105 CLR 569, is much assistance to be drawn from intuitive feelings as to what it is just that the wrongdoer should pay. Moreover, I regret that I cannot agree that it is easy to reason from one type of benefit to another. 64. Nevertheless a number of principles emerge from the authorities considered above which I would endeavour to summarise as follows: (1) In order for a benefit to be taken into account in reducing the loss recoverable by the innocent party for a breach of contract, it is generally speaking a necessary condition that the benefit is caused by the breach: Bradburn, British Westinghouse, The Elena DAmico, and other authorities considered above. 1 Case references as previously inserted in the judgment: Parry v Cleaver [1970] AC 1, Bradburn v Great Western Railway (1874) LR 10 Exch 1, British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railway Co of London Ltd [1912] AC 673, The Elena DAmico [1980] 1 Lloyds Rep 75, Coles v Hetherton [2015] 1 WLR 160, The Fanis [1994] 1 Lloyds Rep 633, Lavarack v Woods of Colchester Ltd [1967] 1 QB 278, Needler Financial Services Ltd v Taber [2002] 3 All ER 501, Hussey v Eels [1990] 2 QB 227, Palatine Graphic Arts Co Ltd v Liverpool City Council [1986] QB 335, Bellingham v Dhillon [1973] QB 304, Nadreph Ltd v Willmett & Co [1978] 1 WLR 1537, The Elbrus [2010] 2 Lloyds Rep 315, The Yasin [1979] 2 Lloyds Rep 45, Shearman v Folland [1950] 2 KB 43 and Smoker v London Fire and Civil Defence Authority [1991] AC 502. (2) The causation test involves taking into account all the circumstances, including the nature and effects of the breach and the nature of the benefit and loss, the manner in which they occurred and any pre existing, intervening or collateral factors which played a part in their occurrence: The Fanis. (3) The test is whether the breach has caused the benefit; it is not sufficient if the breach has merely provided the occasion or context for the innocent party to obtain the benefit, or merely triggered his doing so: The Elena DAmico. Nor is it sufficient merely that the benefit would not have been obtained but for the breach: Bradburn, Lavarack v Woods, Needler v Taber. (4) In this respect it should make no difference whether the question is approached as one of mitigation of loss, or measure of damage; although they are logically distinct approaches, the factual and legal inquiry and conclusion should be the same: Hussey v Eels. (5) The fact that a mitigating step, by way of action or inaction, may be a reasonable and sensible business decision with a view to reducing the impact of the breach, does not of itself render it one which is sufficiently caused by the breach. A step taken by the innocent party which is a reasonable response to the breach and designed to reduce losses caused thereby may be triggered by a breach but not legally caused by the breach: The Elena DAmico. (6) Whilst a mitigation analysis requires a sufficient causal connection between the breach and the mitigating step, it is not sufficient merely to show in two stages that there is: (a) a causative nexus between breach and mitigating step; and (b) a causative nexus between mitigating step and benefit. The inquiry is also for a direct causative connection between breach and benefit (Palatine), in cases approached by a mitigation analysis no less than in cases adopting a measure of loss approach: Hussey v Eels, The Fanis. Accordingly, benefits flowing from a step taken in reasonable mitigation of loss are to be taken into account only if and to the extent that they are caused by the breach. (7) Where, and to the extent that, the benefit arises from a transaction of a kind which the innocent party would have been able to undertake for his own account irrespective of the breach, that is suggestive that the breach is not sufficiently causative of the benefit: Lavarack v Woods, The Elena DAmico. (8) There is no requirement that the benefit must be of the same kind as the loss being claimed or mitigated: Bellingham v Dhillon, Nadreph v Willmett, Hussey v Eels, The Elbrus, cf The Yasin; but such a difference in kind may be indicative that the benefit is not legally caused by the breach: Palatine. (9) Subject to these principles, whether a benefit is caused by a breach is a question of fact and degree which must be answered by considering all the relevant circumstances in order to form a commonsense overall judgment on the sufficiency of the causal nexus between breach and benefit: Hussey v Eels, Needler v Taber, The Fanis. (10) Although causation between breach and benefit is generally a necessary requirement, it is not always sufficient. Considerations of justice, fairness and public policy have a role to play and may preclude a defendant from reducing his liability by reference to some types of benefits or in some circumstances even where the causation test is satisfied: Palatine, Parry v Cleaver. (11) In particular, benefits do not fall to be taken into account, even where caused by the breach, where it would be contrary to fairness and justice for the defendant wrongdoer to be allowed to appropriate them for his benefit because they are the fruits of something the innocent party has done or acquired for his own benefit: Shearman v Folland, Parry v Cleaver and Smoker. As stated above, the judge held in para 65 that, on the facts found by the arbitrator, the application of those principles did not require the owners to give credit for any benefit in realising the capital value of the vessel in October 2007, by reference to its capital value in November 2009, because it was not a benefit which was legally caused by the breach. The judge gave his reasons for reaching those conclusions in his paras 66 to 72. Whether his reasoning is correct is critical to the resolution in this appeal. It may be summarised as follows. He noted in para 66 that the vessel was an asset purchased by the owners in 2005 which the owners could have sold at any time thereafter at the prevailing market rate. When they sold it in October 2007 it was worth US$23,765,000. The judge held that the fact that it would have been worth only US$7m two years later was a result of the fall in the market flowing from the financial crisis. The difference in the value of the vessel was not, he said, caused by the charterers breach of the charter; it was caused by the fall in the market which occurred irrespective of such breach. He added that the effect of the fall in the market was also not caused by the charterers breach. It was caused by the owners decision to sell the vessel. He added in para 66 that it was caused thus. At the moment of the breach, the owners had a choice whether or not to sell the vessel, as they had at any stage over the unexpired period of the charterparty. If and when they chose to sell, market fluctuations in the vessels value thereafter would no longer affect them, for good or ill. If the market subsequently rose, the decision to sell might with hindsight seem a poor one; if the market fell it would prove to be a wise one. That was a matter for the owners commercial judgment and involved a commercial risk taken for their own account. That is none the less so because it was reasonable for them to sell when faced with the charterers breach. The decision to sell was legally independent of the breach, so far as concerns movements in the capital value of the vessel, just as was the decision of charterers not to charter in substitute tonnage in The Elena DAmico. The breach merely provided the context or occasion for the owners to realise the capital value of the vessel. It was the trigger not the cause. The judge made a similar point in para 67. The owners, he said, were not obliged to sell the vessel, as a matter of fact or law. The arbitrator did not find that a failure to do so would have been a failure reasonably to mitigate loss. There can be no question of the owners being obliged to realise the capital value of the vessel by selling it on breach, however reasonable such a course was from a business point of view. Then in para 68 the judge concluded that the issue of causation was not concluded by the arbitrators finding that the sale was in reasonable mitigation of loss. The true question was whether the owners suffered a net loss in income from the charterparty. The judge added: The sale of the vessel mitigated this loss because it reduced the continuing costs of operating or laying up the vessel. To the extent that the benefits flowing from the sale comprised such cost savings, there is no difficulty in treating the causal nexus between breach and benefit as established through the mitigating step of selling the vessel. But insofar as the sale gave rise to a capital benefit, it was not caused by the breach, but by the independent decision of the owners to realise the capital value of their asset. Although that was a benefit which flowed from the mitigating step of selling the vessel, it does not satisfy the principle that benefits are only to be taken into account to the extent that they are caused by the breach. In short, the judge concluded in para 69 that a capital loss of this kind is different from the only relevant loss, which was a loss of income, not a loss of capital. The judge further observed in para 70 that a further indication that the capital benefit to the owners derived from selling the vessel in 2007 rather than 2009 was not legally caused by the breach is to be found in the fact that a sale of the vessel was the kind of transaction which it was open to the owners to enter into irrespective of the charterers breach of charterparty. Whilst the charter was on foot, the owners might have sold the vessel subject to charter, provided that they did so on terms which required the new owner to perform the charterparty so that they were not putting it out of their power to perform. The judge considered this aspect of the case further in the remainder of para 70 and in para 71. In para 72 the judge explained that the same result is reached if the issue is approached as one of the measure of damage rather than mitigation; the application of the causation test leads to the same conclusion. In summary, he concluded that the change in capital value of the vessel consequent upon the drop in the market over the two years between the vessel being sold in November 2009 for immediate delivery and the vessel being sold in October 2007 had nothing to do with the contractual rights which the owners lost as a result of the charterers repudiation. In his para 73 the judge added that the same result was dictated by the policy grounds which inform Bradburn and its extension in Parry v Cleaver and Smoker. His reasoning was similar to that under the heading of causation. He said this in para 73 after referring to those cases: The capital value of the vessel was a benefit which the owners had obtained for their own account prior to the breach when they bought the vessel in 2005. They invested their money (or that which they borrowed) in an asset, taking upon themselves the risk of fluctuations in its capital value which would inevitably be affected by the sale and purchase market. They took the risk of having invested in the vessel, and of the financial consequences of a decision of whether and when to sell her. To allow the charterers to take the benefit of their decision to sell at what turned out to be an opportune moment in market conditions would be to allow the charterers to appropriate the fruits of the owners investment in a way that would be unfair and unjust. In this respect the position is properly analogous to the position of a person who receives the proceeds of insurance or a pension following breach, and the policy rationale for ignoring such benefits articulated in Shearman v Folland, Parry v Cleaver and Smoker applies. In paras 74 and 75 the judge considered a submission made to him on behalf of the charterers that questions of causation raised issues of fact which were matters for the arbitrator and not matters for the court on an appeal limited to issues of law. The judge correctly accepted that his jurisdiction was limited to issues of law. However, while recognising the deference and respect due to the very experienced arbitrator, there is considerable force in the points made at the end of para 74 as follows: I have nevertheless reached the conclusion that had the arbitrator applied the correct principles he could not have reached the conclusion to which he came, which is indicative of an error of law either in failing to identify the correct principles of law or in failing to apply them. The arbitrator appears to have treated the issue as determined by: (a) the compensatory principle (award, paras 63 and 67); (b) his rejection of owners argument that the benefit had to be of the same kind as the loss mitigated (paras 67 and 68); and (c) his finding that the sale of the vessel was caused by the charterers breach and in reasonable mitigation of loss (para 73). The finding that the sale of the vessel was caused by the charterers breach and in reasonable mitigation of loss was not legally sufficient to establish the necessary causative link between breach and benefit. The Court of Appeal The Court of Appeal took a different view from the judge. Giving the leading judgment, Longmore LJ set out the conclusions of the judge as I have sought to do. Having referred to the authorities in some detail, he said this in para 23: The important principle which emerges from these citations is that, if a claimant adopts by way of mitigation a measure which arises out of the consequences of the breach and is in the ordinary course of business and such measure benefits the claimant, that benefit is normally to be brought into account in assessing the claimants loss unless the measure is wholly independent of the relationship of the claimant and the defendant. That should be a principle sufficient to guide the decision of the fact finder in any particular case. In para 24 Longmore LJ said that an important question is whether there is an available market. He referred in detail to the judgment of Robert Goff J in The Elena dAmico, where he asked himself why the normal rules of mitigation did not apply in available market cases. The reason was that, by analogy with sale of goods cases, even if a reasonable buyer would wait before buying in other goods on the available market, the resulting loss or gain was not caused by the defendants breach of contract but by the independent decision of the innocent party not to take advantage of the available market. If the innocent party chooses to speculate as to the way in which the market is going to go, the result of such speculation is for his account not the account of the guilty party. Longmore LJ added that in this connection Robert Goff J cited the statement of Viscount Haldane LC in British Westinghouse Electric & Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd (No 2) [1912] AC 673 at 689, where Robert Goff J noted that he emphasised that, for the benefit of mitigation to be taken into account, the action taken to acquire that benefit must be one arising out of the transaction. Longmore LJ concluded thus at the end of para 24, in reliance upon the statement of Robert Goff J at p 89: A decision to speculate on the market rather than buying in (or selling) at the date of the breach did not arise from the contract but from the innocent partys decision not to avail himself of the available market. He added in para 25 that that reasoning all depends on there being an available market which the innocent party decides for reasons of his own to ignore. That thinking cannot be automatically transposed to cases where there is no available market. In such cases the prima facie measure of loss in hire contracts is the difference between the contractual hire and the cost of earning that hire (crew wages, cost of fuel, etc). But it will not usually be reasonable for the owners to claim that prima facie measure if they are able to mitigate that loss by trading their vessel if opportunities to trade that vessel arise. If they do so trade the vessel they may make additional losses or additional profits but, in either event, they should be taken into account. Longmore LJ further noted that in such a case the owners are not speculating on the market as they would be if there was an available market of which they choose not to avail themselves; they are just bringing into account the consequences of their decision to mitigate their loss and those consequences will arise, generally speaking, from the consequences of the breach of contract. Then, between paras 26 and 29, Longmore LJ referred to a number of cases which made that proposition good. As I see it, the critical para of Longmore LJs judgment is para 30, which is in these terms: The unusual facts of this case show, however, that as well as spot chartering the vessel an owner may equally decide to mitigate its loss by selling the vessel. If so, it is not easy to see why the benefit (if any) which an owner secures by selling the vessel should not be brought into account just as much as benefits secured by spot chartering the vessel during the unexpired term of the time charterparty are, according to the decisions in The Kildare and The Wren, to be brought into account. Nor is there any reason why the value of that benefit should not be calculated by reference to the difference between the value of the vessel at the time of sale and its value at the time when (in a falling market) the charterparty was due to expire. Mr Croall [counsel for the charterers] accepted that, if the sale market had risen substantially during that time, the charterers would be liable for the owners inability to take advantage of that rise in the market, if the sale had arisen from the consequences of the breach of contract and been undertaken by way of mitigating the loss caused by that breach. Christopher Clarke LJ said much the same in his judgment agreeing with Longmore LJ. Sales LJ agreed with both judgments. I have reached a different conclusion and prefer the reasoning of the judge. Conclusions Viewed as a question of principle, most damages issues arise from the default rules which the law devises to give effect to the principle of compensation, while recognising that there may be special facts which show that the default rules will not have that effect in particular cases. On the facts here the fall in value of the vessel was in my opinion irrelevant because the owners interest in the capital value of the vessel had nothing to do with the interest injured by the charterers repudiation of the charterparty. This was not because the benefit must be of the same kind as the loss caused by the wrongdoer. In this regard I agree in particular with the eighth proposition identified by the judge in his para 63 and quoted in para 16 above. As I see it, difference in kind is too vague and potentially too arbitrary a test. The essential question is whether there is a sufficiently close link between the two and not whether they are similar in nature. The relevant link is causation. The benefit to be brought into account must have been caused either by the breach of the charterparty or by a successful act of mitigation. On the facts found by the arbitrator, the benefit that the charterers are seeking to have brought into account is the benefit of having avoided a loss of just under about US$17m by selling the vessel in October 2007 for US$23,765,000 by comparison with the value of the vessel in November 2009, namely (as the arbitrator found) US$7m. That difference or loss was, in my opinion, not on the face of it caused by the repudiation of the charterparty. The repudiation resulted in a prospective loss of income for a period of about two years. Yet, there was nothing about the premature termination of the charterparty which made it necessary to sell the vessel, either at all or at any particular time. Indeed, it could have been sold during the term of the charterparty. If the owners decide to sell the vessel, whether before or after termination of the charterparty, they are making a commercial decision at their own risk about the disposal of an interest in the vessel which was no part of the subject matter of the charterparty and had nothing to do with the charterers. As I see it, the absence of a relevant causal link is the reason why they could not have claimed the difference in the market value of the vessel if the market value would have risen between the time of the sale in 2007 and the time when the charterparty would have terminated in November 2009. For the same reason, the owners cannot be required to bring into account the benefit gained by the fall in value. The analysis is the same even if the owners commercial reason for selling is that there is no work for the vessel. At the most, that means that the premature termination is the occasion for selling the vessel. It is not the legal cause of it. There is equally no reason to assume that the relevant comparator is a sale in November 2009. A sale would not have followed from the lawful redelivery at the end of the charterparty term, any more than it followed from the premature termination in 2007. The causal link fails at both ends of the transaction. For the same reasons the sale of the ship was not on the face of it an act of successful mitigation. If there had been an available charter market, the loss would have been the difference between the actual charterparty rate and the assumed substitute contract rate. The sale of the vessel would have been irrelevant. In the absence of an available market, the measure of the loss is the difference between the contract rate and what was or ought reasonably to have been earned from employment of the vessel under shorter charterparties, as for example on the spot market. The relevant mitigation in that context is the acquisition of an income stream alternative to the income stream under the original charterparty. The sale of the vessel was not itself an act of mitigation because it was incapable of mitigating the loss of the income stream. If the vessel were sold, say, a year into the two year period when it would have been employed under the repudiated charterparty, the sale of the vessel would or might be relevant for some purposes as follows. It would shorten the period during which the owners could claim to have lost the income stream under the old charterparty and therefore the period during which there was a lost income stream to mitigate. If it could be shown that the owners received less for the vessel than they could have done by selling it with the benefit of what remained of the old charterparty, the difference might also be recoverable on the basis that the effect of the sale would be to capitalise the value of a years hire payments. But none of those considerations would make the sale of the vessel itself an act of mitigation. It would simply be the exercise of the owners proprietary right which they enjoy independent of the charterparty and independent of its termination. Disposal For these reasons I would hold that the judge was correct to hold that the arbitrator erred in principle. I would therefore answer the question formulated for the purposes of section 69 of the Arbitration Act 1996 (and set out in para 14 above) in the negative. I would accordingly allow the appeal and restore the order of the judge, dated 21 May 2014, in which, inter alia, he allowed the appeal and set aside paragraph 7A of the award, in which the arbitrator declared that the charterers were entitled to a credit of 11,251,677 in respect of the benefit that accrued to the owners when they sold the vessel in October 2007 as opposed to November 2009, the earliest time they could have sold the vessel if Addendum B had been performed. The arbitrator reserved such other issues to himself as may be necessary. There remain a number of issues between the parties which fall for decision by the arbitrator, arising at least in part by reasons of concessions made before the arbitrator. It appears to me that the most sensible course is for the remaining issues to be identified and formulated in the order of this Court and then remitted for determination by the arbitrator in the light of the answers set out above. The parties should try to agree the remaining issues to be remitted and submit them to the Court. In the absence of agreement, the parties should exchange submissions on the form of the order and costs and submit them to the Court within 28 days of the judgment being handed down. |
This appeal is concerned with a challenge to the legality of legislation of the Scottish Parliament which deprives a person, A, who is accused of sexual activity with an under aged person, B, of the defence that he or she reasonably believed that B was over the age of 16, if the police had previously charged A with a relevant sexual offence. The appellant raises a compatibility issue, which is a question, arising in criminal proceedings, as to whether an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament is incompatible with any of the Convention rights: section 288ZA(2)(b) of the Criminal Procedure (Scotland) Act 1995 (the CPSA 1995). Convention rights are the rights set out in the articles of the European Convention on Human Rights (ECHR) which are listed in section 1(1) of the Human Rights Act 1998, and include the rights in articles 6, 8 and 14 of the ECHR which are the subject of this appeal. The compatibility issue raises a question of legality because section 29 of the Scotland Act 1998 provides: (1) An Act of the Scottish Parliament is not law so far as any provision of the Act is outside the legislative competence of the Parliament. (2) A provision is outside that competence so far as any of the following paragraphs apply it is incompatible with any of the Convention (d) rights The legislative provisions Sections 28 to 37 of the Sexual Offences (Scotland) Act 2009 (the 2009 Act) create various sexual offences against older children, who are children who have attained the age of 13 years but who have not attained the age of 16 years. Section 39 provides the qualified defence (the reasonable belief defence), as follows: (1) It is a defence to a charge in proceedings (a) against A under any of sections 28 to 37(1) that A reasonably believed that B had attained the age of 16 years, The defence is qualified because subsection (2) provides: (2) But (a) the defence under subsection 1(a) is not available to A if A has previously been charged by the (i) police with a relevant sexual offence, (ia) if A has a previous conviction for a relevant foreign offence committed against a person under the age of 16, or (ii) sexual harm order. if there is in force in respect of A a risk of The relevant sexual offences to which section 39(2)(a) refers are set out in 34 paragraphs in Schedule 1 to the 2009 Act and cover a wide range of sexual offences against children under the age of 16 in Scotland, England and Wales or under the age of 17 in Northern Ireland. In relation to offences under the 2009 Act, paragraph 1 of Schedule 1 includes in the phrase relevant sexual offences: Any of the following offences under this Act an offence under Part 1 against a person under (a) the age of 16, (b) an offence under Part 4 (but not an offence of engaging while an older child in sexual conduct with or towards another older child (section 37(1)) or engaging while an older child in consensual sexual conduct with another older child (section 37(4)), (c) under the age of 16, (d) sexual abuse of trust of a mentally disordered person (section 46) of a person under the age of 16. sexual abuse of trust (section 42) of a person Offences in Part 1 of the 2009 Act, to which paragraph 1 of Schedule 1 refers, cover both consensual and non consensual sexual activity. They range from rape to indecent communications, exposure of ones genitals and voyeurism. Those offences can be committed against a person of any age but paragraph 1(a) of Schedule 1 makes them a relevant sexual offence only if the victim is under the age of 16. Paragraph 15 of Schedule 1 lists common law offences against a person under the age of 16, which have been replaced by offences under the 2009 Act, including lewd, indecent or libidinous practice or behaviour. The history of the reasonable belief defence Since 1885 our law has recognised the possibility of an honest mistake as to a young persons age and has allowed a reasonable belief defence in some form. Section 5 of the Criminal Law Amendment Act 1885 (the 1885 Act) created the offence of unlawful carnal knowledge of a girl between the ages of 13 and 16 but that offence was subject to a defence that the accused had reasonable cause to believe that the girl was aged 16 or over. The defence was restricted by section 2 of the Criminal Law Amendment Act 1922 (the 1922 Act) to a man aged 23 or under and was available only on the first occasion that he was charged with the offence under section 5 of the 1885 Act. The law was restated in Scotland in section 4 of the Sexual Offences (Scotland) Act 1976 so that the reasonable belief defence was available only when the accused man was under the age of 24 and had not previously been charged with a like offence. The offences which were like offences were defined as (i) having or attempting to have unlawful sexual intercourse with a girl aged between 13 and 16, and (ii) permitting a girl under the age of 16 to use premises for sexual intercourse. The law was restated without any substantive change in section 5 of the Criminal Law (Consolidation) (Scotland) Act 1995 (the 1995 Act). Although there was no Scottish judicial authority on the point, it was widely understood that the prior charge in the relevant provisions of the legislation, including the 1995 Act, referred to a charge at a trial in Scottish proceedings. In English law there was judicial authority that it referred to a charge at committal proceedings: R v Rider [1954] 1 WLR 463. In the highly respected textbook, Sir Gerald Gordon, The Criminal Law of Scotland, 3rd ed (2000), para 36.06, it was stated: These words [ie previously charged] have not generally been judicially defined in Scotland. They could refer to a charge by the police, an appearance on petition or complaint at the instance of the procurator fiscal, or an appearance on indictment. In England it has been held that where a man appears before a magistrate in committal proceedings that is a previous charge, being an appearance before a competent court, except where he is committed for trial, in which case the trial itself is his first charge. [fn: R v Rider [1954] 1 WLR 463] The nearest Scots equivalent to committal proceedings is an appearance on petition, but it is unlikely that such an appearance would be regarded as a previous charge for the purposes of the subsection, particularly as it does not nowadays involve any adjudication on the case by the court. In practice, therefore, a man may not be regarded as having been previously charged with an offence unless he has previously stood trial for it. In recent years Scots law and English law have diverged. In England and Wales section 6 of the Sexual Offences Act 1956 made the offence of unlawful sexual intercourse with a girl between the ages of 13 and 16 subject to exceptions which included the exception that the defendant was under the age of 24, had not previously been charged with a like offence, and believed on reasonable grounds that the girl was aged 16 or over. In this Act a like offence was the offence of unlawful sexual intercourse with a girl aged between 13 and 16 or an attempt to commit that offence. Under the Sexual Offences Act 2003 the absence of reasonable belief as to age is made part of the definition of many sexual offences by persons aged 18 or over against children aged between 13 and 16. Under that Act the prosecution must establish that absence of belief against all such defendants, regardless of their age. The existence of a previous charge is no longer relevant in English law. In 2006 the Scottish Law Commission published a Discussion Paper on Rape and Other Sexual Offences (Scot Law Com DP No 131) in which it described the reasonable belief defence, which was confined to accused persons under the age of 24, as unprincipled and suggested that it was a political compromise which led to the enactment of the 1922 Act. It proposed (a) that the age of the accused person should not be a formal restriction on the raising of the defence, and (b) that the fact that the accused may have raised the reasonable belief defence before should go to the accused persons credibility and not be a restriction on the raising of the defence (paras 5.63 5.67). The Scottish Law Commission in its Report on Rape and Other Sexual Offences (2007) (Scot Law Com No 209) recommended that there should be a defence to an offence relating to sexual activity with a child aged between 13 and 16 that the accused believed on reasonable grounds that the child was 16 or older (para 4.64). The Commission saw merit in the view that the Crown should in appropriate cases be allowed to lead evidence that the accused had previously been charged with a like offence whenever the accused raised the defence for a second time, in order to test the accused persons credibility rather than to disallow the defence (paras 4.61 4.62). It recommended that the accused should bear an evidential, but not a legal, burden of establishing that defence (para 4.74). The rationale of the current legislation The Scottish Parliament in enacting the 2009 Act took up the Scottish Law Commissions recommendation that the reasonable belief defence should be available regardless of the age of the accused person. But it chose to reformulate the previous charge proviso in two material respects. First, as section 39(2)(a)(i) expressly states, a prior police charge is sufficient to disentitle the accused to the reasonable belief defence; a charge at trial is not necessary. Secondly, the prior charge is not confined to the like offences to which I referred in para 5 above, but extends to all of the relevant sexual offences in Schedule 1 to the 2009 Act (para 4 above). In the Policy Memorandum to the Bill the Scottish Government explained the policy and their rejection of the Scottish Law Commissions recommendation. They stated (a) that the proposed restriction on the reasonable belief defence reflected the then current law in preventing someone who had been charged with a like offence from using the defence (paras 131 132) and (b) that the restriction was being re enacted because they were concerned that its removal could enable serial predators to evade conviction (para 135). Both statements are problematic. First, the assertion (in paras 131 132) that the Bills restriction of the defence reflected the current law was incorrect because the range of relevant sexual offences extended far beyond the like offences of the prior law. Secondly, as I will show, the Lord Advocate has not attempted to defend the impugned provision on the basis that its purpose was to prevent serial sexual predators repeatedly exploiting the defence. In evidence to the Scottish Parliament, the Scottish Governments Bill Team Leader adopted the line of the Policy Memorandum by asserting that the purpose of the restriction of the defence was to prevent a serial sexual predator who relied on that defence on a previous occasion but was acquitted of all charges from using the same defence to evade conviction on a subsequent offence or offences (Subordinate Legislation Committee, 28 October 2008, col 392). But, immediately afterwards, a representative from the Scottish Government Legal Directorate expressed a different view as to the purpose of the restriction. He described the prior charge as a shot across the bows and as effectively [putting the accused person] on notice to be careful not to engage in sexual activity with another person who was under the age of 16 and thereby discouraging them from engaging in such activity (Subordinate Legislation Committee, 28 October 2008, cols 392 393). The Lord Advocate in his written case in this appeal did not attempt to defend the reasoning in the Policy Memorandum and relied instead on the latter rationale which the Scottish Government had presented to the Parliament, stating (para 19): The defence is excluded where the accused has been charged by the police with a relevant sexual offence and has therefore received an official warning about sexual offences with children. In his careful oral submissions, the Lord Advocate again founded on the rationale of an official warning that one must make sure that ones sexual partner was aged 16 or over. The factual background to the appeal In 2009, when the appellant was aged 14, the police charged him with two charges of lewd and libidinous practices at common law and one contravention of section 6 of the Criminal Law (Consolidation) (Scotland) Act 1995, which concerned indecent behaviour towards a girl aged between 12 and 16. One of the common law charges involved the allegation of showing online pornographic images to a young boy. The other common law charge and the statutory charge involved the allegations of exposing his penis to, and chasing after, three other children, who were girls aged 4, 12 and 13. The police reported the case to the Procurator Fiscal and a decision was made not to prosecute the appellant. Instead, the case was referred to the Childrens Reporter. The outcome of this referral is unknown as there are no extant records, but it is legitimate to infer that the case did not proceed to a Childrens Hearing. In July 2015, when the appellant was aged 19, he appeared on petition on charges of having shortly before engaged in sexual intercourse with a girl who was then aged 14 years and 11 months, contrary to sections 28 and 30 of the 2009 Act. He does not deny that sexual intercourse took place. His only defence to the charges is that at the time he reasonably believed that the girl had attained the age of 16 years. In other words, he wishes to plead the reasonable belief defence in section 39(1)(a) of the 2009 Act. But section 39(2)(a)(i) of the 2009 Act, if lawful, has the effect that the reasonable belief defence is not available to him. He has therefore challenged the legality of that statutory provision by raising a compatibility issue. The prior proceedings Sheriff Joan Kerr, Sheriff of Glasgow and Strathkelvin at Glasgow, referred the compatibility issue to the High Court under section 288ZB of the CPSA 1995. In the reference Sheriff Kerr asked whether article 8 of the ECHR was engaged by the prohibition against utilising the reasonable belief defence and, if so, whether the interference was compatible with the appellants article 8 right; whether the lack of a mechanism to challenge the validity of the police charge would result in his trial being unfair under article 6 of the ECHR; and whether the prohibition applied when the police charged a child and the Lord Advocate did not instruct a prosecution on the charge. On 26 February 2016 the Appeal Court of the High Court of Justiciary (the Lord Justice General (Lord Carloway), Lady Dorrian and Lord Bracadale) issued their opinion on the reference. In that opinion the court rejected the appellants submission that the prohibition on raising the reasonable belief defence created a presumption of guilt and held that, absent any relevant complaint of procedural unfairness, the appellant was not within the ambit of article 6 of the ECHR. The court held that the appellants decision as an adult to engage in sexual activity with a child under the age of 16 did not engage the protection of article 8 of the ECHR. It held that, even if article 8 were engaged, the interference was both in accordance with the law and proportionate. The court stated (para 25): The purpose of section 39(2)(a)(i) is to give legal significance to a charge by the police as a shot across the bow. An individual is entitled to plead ignorance of a childs true age on one occasion only. If the provision were not framed to cover charges, as distinct from convictions, the aim of protecting children from adults who may prey on their vulnerability may not be realised. The defence could be utilised over and over again. This would undermine the purpose of the provision. There is nothing disproportionate about the measure. Had article 8 been engaged, the interference would have been justified under article 8(2). The court answered the questions accordingly. The appellant applied for leave to appeal to this court. On 24 March 2016 the High Court of Justiciary issued a statement of reasons on the application to appeal to this court. It held that the ground of appeal concerning article 6 of the ECHR was not arguable but that the ground relating to article 8 was, and that the latter raised a matter of general public importance. The High Court therefore granted leave to appeal to this court. The challenge and the response Mr Aidan ONeill QC for the appellant advances four arguments. First, he argues that section 39(2)(a)(i) of the 2009 Act (the impugned provision) is incompatible with article 6(2) of the ECHR because it breaches the presumption of innocence. Secondly, he submits that the impugned provision is incompatible with article 8 of the ECHR because it is not rationally connected to a legitimate aim, because it is not in accordance with the law, because there were less intrusive means of achieving the desired result and because it is disproportionate in its effect on the protected right. Thirdly, he argues that it unjustifiably discriminated (a) between those persons who had been previously charged with a relevant sexual offence and those who had not and (b) between UK nationals and others: article 14 read with article 8 of the ECHR. His fourth submission is that the impugned provision failed to distinguish between accused persons who had previously been charged as children and those who had previously been charged as adults, contrary to article 14 read with article 8 of the ECHR. The court also has the benefit of submissions by Ms Morag Ross, advocate (now QC), on behalf of the charity, Community Law Advice Network, which aims to improve life chances for children and young people in Scotland by obtaining for them access to legal advice and securing the recognition and enforcement of their rights. Her submissions focus on the challenge under article 8 of the ECHR, and describe how offending by a child is treated differently from adult offending under the childrens hearing system, which has existed in Scotland for over 50 years and which treats the welfare of the child as a paramount consideration. She submits that the rationale of an official warning has no place in such a scheme. There are less intrusive means of achieving the legitimate aims of protecting older children from sexual activity and predation. The impugned provision does not strike a fair balance between the public interest and the accused persons article 8 rights. In essence, her submission is that the impugned provisions interference with a persons article 8 rights when he or she has committed the relevant sexual offence as a child is not justified. The Lord Advocate, in response, argues that the appellants circumstances do not come within the ambit of article 6. Contrary to the opinion of the High Court of Justiciary, he accepts that the appeal comes within the ambit of article 8 of the ECHR because the prosecutor relied on the earlier police charges in the course of the criminal proceedings against the appellant and disclosed the charges to the court. In essence, he submits that the impugned provision strikes a fair balance between the accused persons rights and the public interest in the prevention of crime, the protection of health and morals, and the protection of the rights and freedoms of others. He also submits that any difference in treatment or absence of difference, on which the appellant founds, is objectively justified and so meets the requirements of article 14. The appellant whilst a child has been afforded the special treatment which the criminal justice system gave to children. Reliance on the 2009 charges once he had become an adult does not upset the fair balance which the Parliament had struck. Discussion (i) Article 6 of the ECHR Like the High Court, I am satisfied that the impugned provision is not within the ambit of article 6, which guarantees that a trial will be procedurally fair. The impugned provision did not, as the appellants counsel asserts, create an irrebuttable presumption that the appellant did not have a reasonable belief as to the age of the girl with whom he had sexual intercourse, thereby overriding the presumption of innocence in breach of article 6(2) of the ECHR which provides: Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. Instead, the impugned provision, when applicable, makes the offences under sections 28 and 30 strict liability offences by treating as irrelevant the accused persons state of knowledge of the victims age. The creation of what amounts to a strict liability offence in relation to the victims age in such circumstances does not violate article 6(2) of the ECHR, which is concerned with procedural guarantees and not with the substantive elements of a criminal offence: R v G [2009] AC 92, paras 27 31 per Lord Hope, para 46 per Lady Hale; Salabiaku v France (1988) 13 EHRR 379, para 27; and G v United Kingdom (2011) 53 EHRR SE 25, paras 26 27 (which was a case concerning the strict liability offence of sexual intercourse with a child under the age of 13). The European Court of Human Rights (ECtHR) concluded in para 29 of G v United Kingdom that the court does not consider that Parliaments decision not to make available a defence based on reasonable belief that the complainant was aged 13 or over can give rise to any issue under article 6(1) or (2) of the Convention. In my view, that reasoning applies, mutatis mutandis, to the decision of the Scottish Parliament in its enactment of the impugned provision. (ii) Article 8 of the ECHR Article 8 of the ECHR provides: (1) Everyone has the right to respect for his private and family life, his home and his correspondence. (2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. As I have said, the Lord Advocate concedes that in this case the impugned provision fell within the ambit of article 8 because the prosecutor relied on the earlier police charge in the course of the criminal proceedings and disclosed its existence to the court. In my view that concession is rightly made. I would go further: the recording for possible later use of the charges involved interference with the appellants article 8 rights which may have to be justified. In S v United Kingdom (2008) 48 EHRR 1169 the Grand Chamber of the ECtHR held that, save in exceptional circumstances, the retention by the police of DNA samples and fingerprints taken from persons who were suspected but never convicted of a criminal offence represented an interference with their article 8 rights. In Bouchacourt v France (Application No 5335/06) [2009] ECHR 2276 (unreported), a case which concerned material on a sex offenders register, the ECtHR in a judgment given on 17 December 2009 declared (para 57) that the retention by a public authority of data relating to a persons private life by itself represented interference with that persons article 8 rights. In R (T) v Chief Constable of Greater Manchester Police [2014] UKSC 35; [2015] AC 49, Lord Wilson at para 21 referred to those cases but left open the question whether retention by a public authority of data relating to private life which were not sensitive amounted to an interference with article 8 rights. It is not necessary to resolve that issue in this appeal as a criminal charge relating to a sexual offence is sensitive personal data under domestic law: Data Protection Act 1998, section 2. Further support for this view of the ambit of article 8 can be found in the judgments of the ECtHR in Rotaru v Romania (2000) 8 BHRC 449, para 46 and MM v United Kingdom [2012] ECHR 24029/07, para 159, which Lord Reed discussed in R (T) (above) between paras 95 and 112. See also Leander v Sweden (1987) 9 EHRR 433, para 48 and Amann v Switzerland (2000) 30 EHRR 843, para 69. In this case, however, it is sufficient to focus only on the disclosure of the charge in court. It is necessary to consider, first, whether the impugned provision is in accordance with the law and, secondly, whether it was necessary in the interests of one or more of the desirable outcomes set out in article 8(2). The second issue involves a consideration (i) whether the objective of the impugned provision is sufficiently important to justify the limitation of the appellants right under article 8(1), (ii) whether there is a rational connection between the impugned provision and that legitimate aim or objective, (iii) whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective, and (iv) whether the impact of the rights infringement is proportionate, having regard to the likely benefit of the impugned provision. In accordance with the law: It is well established that in order to be in accordance with the law under article 8(2) of the ECHR the measure must not only have some basis in domestic law but also be accessible to the person concerned and foreseeable as to its effects. There is a clear basis in domestic law in the 2009 Act, which is an enactment of a democratic legislature. The additional qualitative requirements of accessibility and foreseeability have two elements: (i) a rule must be formulated with sufficient precision to enable any individual, with appropriate advice when needed, to regulate his or her conduct and (ii) the rule must be sufficiently precise to give legal protection against arbitrariness. In relation to the latter element, there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined: R (T) (above), para 114 per Lord Reed. The impugned provision innovates on the prior law by making a criminal charge by a police officer the basis for excluding the reasonable belief defence. The Lord Advocate explains that police officers are trained to charge an individual with an offence if they are satisfied that there is sufficient evidence that a crime has been committed. There is no formal guidance on charging people with criminal offences and no distinction is made between adults and children. He informs the court that this appeal has alerted him to the lack of any guidelines on charging children and that he has instructed a review of whether such guidelines are required. If the only rationale of the impugned provision was to prevent a person asserting a reasonable belief defence more than once, the provision could have arbitrary results because it could deprive a person of that defence when he or she had never used it in the past. But the rationale, which the Lord Advocate advances and which is supported by what the representative of the Scottish Governments Legal Directorate told the Parliament, is that the charge by the police officer gives the person charged an official warning that consensual sexual activity with children between the ages of 13 and 16 is an offence. On the hypothesis that there was a warning or notice, the rule that a person once warned would not in future be able to advance the reasonable belief defence would in my view be sufficiently accessible to enable the person charged to regulate his or her conduct and thus be in accordance with the law. Finally on the topic of the requirement to be in accordance with the law, I do not accept the submission of the appellants counsel that the impugned provision gives rise to arbitrary results because a prior charge could relate to an alleged offence which occurred after the occurrence which is the subject of the criminal proceedings in which the accused person wishes to advance the reasonable belief defence. It is straightforward to interpret the impugned provision in a way which avoids that absurd result by reading A has previously been charged with a relevant sexual offence to refer to an offence which is alleged to have occurred before the events which are the subject matter of the proceedings in which the accused person seeks to advance the defence. Thus, as a prior charge can act as a relevant warning, I consider the provision to be in accordance with the law. The problem in this case, which is relevant to the issue of proportionality, is that the prior charges, which were not charges of consensual sexual activity with a child aged between 13 and 16, did not by themselves provide such a warning. Necessary for the prevention of crime, the protection of health or morals, and the protection of the rights of others: (i) The importance of the aims: Of the public purposes listed in article 8(2) as possible justifications for an interference with an article 8(1) right, the prevention of crime, the protection of health or morals, and the protection of the rights of others, in this case potential victims of sexual offending, appear the most relevant. The aims of the legislation, as the Lord Advocate submits, include the protection of children from premature sexual activity, young teenage pregnancy, sexually transmitted diseases, and also exploitation and abuse. It also seeks to deter adults from sexual activity with children under the age of 16. Those aims are undoubtedly legitimate and are consistent with the states positive obligation to protect children from exploitation and abuse. The aims are, in my view, sufficiently important to justify some limitation of the appellants right to privacy. (ii) Rational connection: As a matter of policy both the United Kingdom Parliament and the Scottish Parliament have not sought to criminalise all sexual activity between an adult and children between the ages of 13 and 16, recognising the possibility of reasonable mistake as to age. In the 2003 Act in England and Wales and in the 2009 Act in Scotland the democratic legislatures have created strict liability offences where sexual activity is with children under the age of 13, but have allowed a role for honest belief as to age to exclude criminal liability where that activity is with older children. In English law the prosecution must exclude such honest belief (para 7 above); in Scots law a reasonable belief defence is available so long as the accused person has not been charged with an earlier relevant sexual offence (paras 10 and 11 above). The rational connection between the restriction of the reasonable belief defence in the impugned provision and the legitimate aims of protecting children and deterring adults from sexual activity with older children principally, but not exclusively, depends on the extent to which the prior police charge can operate as a warning to the person so charged. There are no operating procedures which require police officers to give any particular warning. Instead, the official warning or notice on which the Lord Advocate relies is (if it exists at all) an implied notice as it is left to the charged person to infer from the particular charge that consensual sexual activity with older children is a criminal activity. Until the 2009 Act was enacted, the prior charge which excluded the reasonable belief defence in a charge of sexual intercourse with an older child was a charge of a like offence, ie principally, having or attempting to have (consensual) sexual intercourse with an older child (para 5 above). As I have said, it was generally accepted that the relevant charge had to proceed to trial before the reasonable belief defence was excluded. In the 2009 Act, by contrast, the charge can relate to a wide range of relevant sexual offences in Schedule 1, involving both consensual and non consensual sexual activity and including offences, such as coercing a person into looking at a sexual image, sexual exposure or voyeurism (sections 6, 8 and 9), in which the age of the victim is not an essential component. The sexual offence in, for example, Part 1 of the Act becomes a relevant sexual offence under Schedule 1 if the victim is in fact under the age of 16. Thus, while the police officer in formulating the charge of a sexual offence may follow the practice in a formal charge in an indictment by narrating the date of birth of the victim, if a child, in cases where that persons age is not an essential component of the crime, the charge itself would contain no further warning about the criminality of consensual sexual activity with an older child. In addition, it is striking that Schedule 1, Part 1, paragraph 1(b) excludes from the list of relevant sexual offences those which prima facie would have been most relevant as a warning to a person who, like the appellant, committed the prior offence while still aged between 13 and 16, namely the offences of older children engaging in sexual conduct with each other: section 37(1) and (4). In my view there will in many cases be no rational connection between the suggested warning and the deterrence of the person who is charged from consensual sexual activity with older children, because there will not be an adequate basis in the charge from which the charged person can infer the official warning about sexual behaviour with children under 16, for which the Lord Advocate contends. On the other hand, the limitation of the availability of the reasonable belief defence, which may often be difficult for the Crown to disprove, is rationally connected with the protection of children from sexual activity and predation, because it creates strict liability offences which are easier for the Crown to prove. It may therefore contribute towards the aim stated in the Policy Memorandum of preventing serial sexual predators evading conviction by repeated use of the reasonable belief defence. I conclude therefore that the impugned provision does not infringe the appellants article 8 right because of an absence of rational connection. (iii) Less intrusive means: Mr ONeill submits that the Parliament could sufficiently have achieved the legitimate aims of protecting older children from sexual activity and deterring adults from such activity with them by other means which would not interfere with the appellants article 8 right to the same extent. He puts forward four possibilities. He suggests that the reasonable belief defence could be disallowed either if the accused person has been convicted of a relevant sexual offence or if the accused has actually relied on the defence in court on a previous occasion. Alternatively, the Parliament could have adopted the recommendation of the Scottish Law Commission to allow the Crown to challenge the credibility of the accused if he or she has attempted to raise a reasonable belief defence in earlier criminal proceedings. Finally, he suggests that if the mere fact of a police charge were to be used as the basis for modifying the individuals defences, its effect could be confined, for example, to imposing a legal burden rather than merely an evidential burden on the accused to establish the existence of the reasonable belief. I am not persuaded. It is important to recall that the question of whether the Parliament could have used a less intrusive measure does not involve the court in identifying the alternative measure which is least intrusive. The court allows the legislature a margin of discretion and asks whether the limitation on the article 8 right is one which it was reasonable for the Parliament to propose: Bank Mellat v HM Treasury (No 2) [2013] UKSC 38, [2014] AC 700, para 75 per Lord Reed; Animal Defenders International v United Kingdom (2013) 57 EHRR 21, para 110. Had the 2009 Act provided that the reasonable belief defence would not be available if on an earlier occasion the accused had been charged with an offence which itself objectively entailed a warning of the illegality of consensual sexual activity with older children, the fact that there were other options, which were less intrusive, to restrict the availability of that defence would not cause an infringement of the individuals article 8 right. The problem for the Lord Advocate in this appeal is where to find such a warning. (iv) Proportionality: The Scottish Parliament has sought to strike a balance between protecting young people under the age of 16 from both premature sexual activity and predation on the one hand and the recognition that it might be harsh to criminalise an honest mistake when an older child appears older than his or her true age. It has expanded the reasonable belief defence by making it available to accused persons regardless of their age. But it has set a limit on the defence by excluding it when the accused person has previously been charged with a relevant sexual offence. As I have said, the principal rationale now advanced for the use of the prior charge to limit the availability of the defence is that the charge amounts to an official warning about sexual offences with children as the Lord Advocate states in his written case. The balance, which this court is enjoined to address, is different. It is the question of a fair balance between the public interest and the individuals right to respect for his or her private life under article 8. The question for the court is, in other words, whether the impact of the infringement of that right is proportionate, having regard to the likely benefit of the impugned provision. In addressing this question, I acknowledge that the Scottish Parliament might have chosen to make sexual activity with older children a strict liability offence by excluding altogether the reasonable belief defence. But it did not. Instead, it chose to use as a limit on the defence the prior police charge of a relevant sexual offence, thereby bringing the limitation in the impugned provision within the ambit of article 8. defence and its effect on the appellants article 8 right I bear in mind that it will almost always be possible for the courts to conclude that a more precisely tailored bright line rule might have been devised than the one selected by the body to which the choice has been democratically entrusted and which, unlike the courts, is politically accountable for that choice. the courts are not called on to substitute judicial opinions for legislative or executive ones as to the place at which to draw a precise line. In addressing the limit which the Parliament has chosen to place on the (R (Tigere) v Secretary of State for Business, Innovation and Skills [2015] UKSC 57, [2015] 1 WLR 3820, para 93 per Lord Sumption and Lord Reed (in a dissenting judgment)). I also have regard to the fact that once a police officer has charged a person with a relevant sexual offence, the record of that charge will remain available to exclude the reasonable belief defence for the rest of that persons life. I am satisfied that in principle a warning by a police officer that sexual activity with older children, including consensual activity, was a criminal offence, could form a basis for the exclusion of the reasonable belief defence without infringing an accused persons article 8 right. The problem in this case is that there does not appear to have been such a warning. The relevant sexual offences with which the appellant was charged when he was aged 14 (para 13 above) were common law offences which could be committed only against children under the age of puberty and a statutory offence which could be committed only against girls aged 12 or over and under 16. To that extent, he, when a child, was given notice that certain sexual activity involving children was criminal. But the charges, which involved showing online pornographic images to a young boy and the exposure of his genitals to girls, did not involve consensual sexual activity with an older child and could not amount to an implicit warning that such activity was an offence. There is no suggestion that the police officer gave any explicit warning that such consensual activity amounted to an offence or that in future any such sexual activity with an older child would be a strict liability offence because the reasonable belief defence would not be available. No charge was laid against the appellant at a trial. Instead, the case was referred to the Childrens Reporter, who appears to have decided to take no action. In my view the use of the prior charges in this case to exclude the reasonable belief defence amounts to a disproportionate interference with the appellants article 8 right because the prior charges did not give the official warning or official notice, which is the only rationale of the impugned provision which the Lord Advocate seeks to defend. If the appellant had in the past been charged with an offence of consensual sexual activity under section 37 of the 2009 Act and that offence had been listed as a relevant sexual offence, it would clearly be arguable that he had been given sufficient notice to meet the rationale of an official warning. Similarly, if an adult had been charged with the equivalent of a like offence under the prior law, there would clearly be scope for finding that there had been an implicit warning which would justify a restriction of the defence by the Parliament. But that is not what happened in this case. When discussing whether there was a rational connection between the impugned provision and the legitimate aim, I have observed that the list of relevant sexual offences includes charges in which the age of the victim is not an essential component, extends far beyond consensual sexual activity with an older child and excludes charges relating to sexual conduct (including consensual conduct) under section 37 of the 2009 Act, which might be most relevant to a person of the appellants age when he was first charged. This suggests that the impugned provision is likely in many other cases to give rise to infringements of article 8 because of the absence of a warning. Discrimination: article 8 and article 14 Having reached the conclusions which I have in relation to proportionality, it is not necessary to discuss this alternative challenge. Conclusion and remedy I am satisfied that section 39(2)(a)(i) of the 2009 Act is incompatible with Convention rights in its application to the appellant because it interferes disproportionately with his article 8 right (paras 43 44). It is likely to do so in all other cases where the prior charge does not objectively give the relevant warning. I do not consider that it is possible to invoke section 101 of the Scotland Act 1998 to interpret the impugned provision narrowly so as to bring it within the competence of the Parliament. The courts power under section 102 of the Scotland Act 1998 to suspend or vary the effect of its decision on a compatibility issue is to be exercised by the High Court of Justiciary: Scotland Act 1998, section 102(5A). Court of Justiciary. LORD REED: (with whom Lord Kerr, Lord Wilson and Lord Hughes agree) When the provision which became section 39(2)(a)(i) of the Sexual Offences (Scotland) Act 2009 was introduced into the Scottish Parliament, as part of the Sexual Offences (Scotland) Bill, the Parliament was told, in the Scottish Governments policy memorandum which accompanied the Bill: I would therefore allow the appeal and remit the proceedings to the High The Bill provides that it shall be a defence to a charge of sexual activity with an older child that the accused reasonably believed that the child was 16 years old or older. This is similar to what the SLC [Scottish Law Commission] proposed but differs by restricting the use of the defence to those not previously charged with a like offence. This reflects the current law, where the defence is allowed in respect of a charge of intercourse with a girl under 16, but it is a requirement that the accused had not previously been charged with a like offence. (paras 131 132) As Lord Hodge has explained, however, the new provision departed from the then current law in two important respects. First, it restricted the defence to those not previously charged by the police, whereas the then current law (contained in section 5 of the Criminal Law (Consolidation) (Scotland) Act 1995), as generally understood, restricted the defence to those who had not previously stood trial. That was a significant change, since people who are charged by the police are not necessarily brought to trial. The present case provides an example: the appellant was charged by the police when he was 14, but was not prosecuted. Instead, like most children in such circumstances, he was referred to the Childrens Reporter, who seemingly decided to take no action. Secondly, the defence was previously restricted to those not previously charged with a like offence, defined as meaning (i) having or attempting to have unlawful sexual intercourse with a girl aged between 13 and 16, and (ii) permitting a girl under the age of 16 to use premises for sexual intercourse. The new provision, on the other hand, restricted the defence to those not previously charged with a relevant sexual offence, defined in Schedule 1 to the 2009 Act so as to include a far wider range of offences. That was another important change. As to the policy justifying the provision, the policy memorandum explained that the Scottish Government disagreed with the Scottish Law Commissions recommendation that there should be no restriction on the availability of the defence, and stated: We were concerned that removing this restriction could enable serial sexual predators to evade conviction and have therefore re instated it. (para 135) In evidence to the Scottish Parliament, the Scottish Governments Bill Team Leader explained the thinking more fully: Now, as regards the relevant offence and its restriction, the defence is restricted to those not previously . charged by the police with a relevant offence to prevent a serial sexual predator who relied on that defence on a previous occasion but was acquitted of all charges from using the same defence to evade conviction on a subsequent offence or offences. In each individual instance, the accuseds claim of mistaken belief as to the childs age may appear to be reasonable. However, when considered together, the accused's behaviour would indicate that he or she was deliberately preying on children. (Subordinate Legislation Committee, 28 October 2008, col 392) So the policy justification was to prevent the defence from being exploited by serial sexual predators. No one could quarrel with that objective. The problem is that it cannot provide a legally tenable justification for the measure which was introduced and enacted. Indeed, the Lord Advocate has not attempted to defend the rationale put forward in the policy memorandum and in the Bill Team Leaders evidence. The difficulty with that rationale is that the restriction on the availability of the defence is not confined to persons who relied on the defence on a previous occasion, or even to persons who could conceivably have relied on the defence on a previous occasion. For example, a person who, like the appellant, was previously charged with offences against children under the age of puberty could not possibly have relied on a defence that he reasonably believed that the victims were 16 or older, since that would not be a defence to the charge. The justification for the interference with article 8 rights The need for a legally defensible justification for the provision arises from the fact, conceded on behalf of the Crown, that the application of section 39(2)(a)(i) involves an interference with rights guaranteed by article 8 of the European Convention on Human Rights, since it involves the disclosure of information about an earlier police charge. That concession departs from the Crowns position before the courts below. Given that concession, it is legally necessary for the interference to be justified under article 8(2). The justification which is now put forward was first advanced in evidence given to the Scottish Parliament by a representative of the Scottish Government Legal Directorate. It was not, however, the policy which underlay the drafting of the provision and was set out in the policy memorandum, namely to prevent the defence from being exploited by serial sexual predators. Unsurprisingly, the justification now put forward does not fit particularly well with a provision which was drafted with a different rationale in mind. The justification now put forward is that where the accused has been charged by the police with a relevant sexual offence [he] has therefore received an official warning about sexual offences with children. It is argued that such a warning alerts the person charged to the importance of a young persons age in relation to sexual behaviour, and therefore justifies depriving that person, if he is later charged with one of the sexual offences against older children set out in sections 28 to 37 of the 2009 Act, of the defence that he reasonably believed that the complainer was 16 or older. On that basis, it is argued that the disclosure of the previous charge is justified in the interests of protecting older children from sexual exploitation. In considering this justification, it is important to understand that sections 28 to 37 are concerned primarily with consensual sexual behaviour involving older children. Non consensual offences, such as rape or sexual assault, are dealt with elsewhere in the 2009 Act. For example, a boy and girl of 15 who willingly have sexual intercourse together are both guilty of an offence under section 37. Section 39(1), which provides the defence taken away by section 39(2)(a)(i), provides the boy and the girl with a defence if they reasonably believed that their partner was 16 or older. If, on the other hand, the girl did not consent to sexual intercourse, the offence would be rape, which is dealt with in section 1 of the 2009 Act. No question of a defence under section 39(1) would arise: it is, of course, no defence to a charge of rape that the rapist was mistaken as to his victims age. Similarly, a boy of 16 who touches sexually a girl of 15, with her consent, commits an offence under section 30 of the 2009 Act. If he reasonably believed that she was 16 or older, he has a defence under section 39(1), unless he is deprived of it under section 39(2)(a)(i). If, on the other hand, the girl did not consent to being touched, the offence would be sexual assault, which is dealt with in section 3 of the 2009 Act. No question of a defence under section 39(1) could arise: a mistake as to the age of the victim is irrelevant to the question whether she was assaulted or not. There are also some offences in sections 28 to 37 which can be committed either consensually or not (such as causing a child aged over 13 but under 16 to look at a sexual image), but in practice the offences charged under those sections are primarily concerned with sexual activities involving two or more willing parties. It is because even willing children need to be protected from premature sexual activities that these offences have been created; and it is because of the possibility that a person can make a reasonable mistake as to the age of an older child that the defence in section 39(1) has been provided. Considered against that background, the fundamental problem with the justification now put forward for depriving a person of the defence namely, that by being previously charged with a relevant sexual offence, he has been alerted to the importance of making sure that his partner in sexual activities is over the age of consent is readily apparent. The problem is that relevant sexual offences are defined in Schedule 1 to the 2009 Act as including almost all sexual offences, provided they were committed against a person under the age of 16. That made sense when the policy was to prevent the defence from being exploited by serial sexual predators. But it does not make sense if the justification is that the person charged has been warned about the importance of the age of consent. That is because the age of the victim is irrelevant to many sexual offences. As I have explained, rape and sexual assault, for example, are offences whatever the age of the victim; and the same is true of many other offences concerned with non consensual sexual activities. A person who is charged with an offence of that nature, even if the complainer is aged under 16, is not in consequence put on notice that consensual sexual activity with a person of that age is equally unlawful. An analogous problem arises also where the relevant sexual offence is one which can be committed only against younger children. For example, a person who is accused of having sexual intercourse with a girl under 13 will be charged with the rape of a young child, under section 18 of the 2009 Act. No question arises of a defence under section 39(1): sexual intercourse with a child under 13 is an offence of strict liability. It is difficult to regard such a charge as constituting a warning of the need to make sure that an older girl who is sexually mature and willing to engage in sexual intercourse is 16 or older. This point also arises in relation to the common law offences with which the appellant was charged when he was 14, since they could be committed only against children under the age of puberty. Even the statutory offence with which he was then charged, although one which could only be committed against someone aged between 12 and 16, was concerned with non consensual conduct. On what basis could it be said that his being charged with offences of those kinds alerted him to the importance of ensuring that an older person who was willing to engage in consensual sexual behaviour with him was over the age of consent? In short, the difficulty arises from the width of the definition of relevant sexual offences in Schedule 1 to the 2009 Act. Since such offences are not confined to sexual conduct which is illegal because it is with children in the relevant age group, prior charges of such offences cannot be taken to have alerted the accused to the importance of making sure that a person is over 16 before engaging in the sexual activities which are criminalised by sections 28 to 37. In addition, since the offences listed in Schedule 1 include non consensual offences, prior charges cannot be taken to have alerted the accused to the importance of age in the context of consensual sexual conduct. The difficulty is underlined by the fact that relevant sexual offences are defined in paragraph 1(b) of Schedule 1 so as to exclude consensual sexual activities between older children. For example, a 15 year old who has previously been charged with having sexual intercourse with another 15 year old is not deprived of the defence. Yet that is the clearest example of a situation where the charge alerts the person charged to the importance of the age of consent when engaging in consensual sexual behaviour. The explanation, presumably, is that it was considered inappropriate to apply the serial sexual predator policy to offenders who were themselves children at the time of a previous charge involving consensual behaviour with another child. It follows that the interference with the right guaranteed by article 8 which is implicitly authorised by section 39(2)(a)(i) cannot be regarded as proportionate in cases (such as the present case) where the necessary link between the prior charge and the supposed warning does not exist. This problem cannot be resolved by interpreting the legislation narrowly: it can only be resolved by further legislation. It follows that section 39(2)(a)(i) must be held to be incompatible with article 8 and therefore not law. Given that conclusion, and bearing in mind also that the Lord Advocate has instructed a review in relation to the charging of children, it is unnecessary to reach a concluded view on the challenge under article 14. Conclusion For these reasons, and those given by Lord Hodge, I agree that the appeal against the decision of the High Court of Justiciary should be allowed, and that the proceedings should be remitted to that court. |
On 26 October 2010 this Court issued its judgment in Cadder v HM Advocate [2010] UKSC 43, 2010 SLT 1125. It held that the Crowns reliance on admissions made by an accused without legal advice when detained under section 14 of the Criminal Procedure (Scotland) Act 1995 gave rise to a breach of his right to a fair trial, having regard to the decision of the European Court of Human Rights in Salduz v Turkey (2008) 49 EHRR 421. This was because the leading and relying on the evidence of the appellants interview by the police was a violation of his rights under article 6(3)(c) read in conjunction with article 6(1) of the European Convention on Human Rights: see Cadder v HM Advocate, para 63. The evidence that was in question in Cadder had been obtained when the appellant was being questioned while in detention at a police station. The applicant in Salduz too had been taken into custody before he was interrogated during his detention by police officers of the anti terrorism branch of the Izmir Security Directorate. But the facts of those cases by no means exhaust the situations in which the prosecution may seek to rely on answers to questions that have been put to the accused by the police. The Court now has before it four references by judges of the High Court of Justiciary which have been required by the Lord Advocate under paragraph 33 of Schedule 6 to the Scotland Act 1998. Common to them all is the fact that incriminating answers were given to questions put by the police when the accused did not have access to legal advice. In three of them the evidence that is objected to was obtained by the police otherwise than by questioning at a police station following detention under section 14 of the 1995 Act. They can be grouped together and are the subject of this judgment. The fourth is concerned with the question whether the ratio of the decision in Salduz extends to lines of enquiry to which the accuseds answers to questions while in detention have given rise. That reference is dealt with in a separate judgment: P v HM Advocate [2011] UKSC 44. The issues that the first three references raise are (1) whether the right of access to a lawyer prior to police questioning, which was established by Salduz, applies only to questioning which takes place when the person has been taken into police custody; and (2) if the rule applies at some earlier stage, from what moment does it apply. The first reference is of a case which is the subject of an appeal against conviction. The second is of a case which is before the Appeal Court in an appeal against a ruling by a sheriff on the admissibility of evidence. The third is of case which is the subject of a devolution minute which was referred by the trial judge to the Appeal Court under paragraph 9 of Schedule 6 to the Scotland Act 1998. The cases that are the subject of the second and third references that have not yet gone to trial, so the names of the parties involved have been anonymised. In each case the reference has been made by the Appeal Court at the request of the Lord Advocate. The first reference The appellant in the first case, John Paul Ambrose, was prosecuted on summary complaint at Oban Sheriff Court on a charge of contravening section 5(1)(b) of the Road Traffic Act 1988 as being in charge of a motor vehicle whilst having consumed a level of alcohol in excess of the prescribed limit. He had been found by two police officers sitting in the passenger seat of a car parked by the roadside. A female was sitting in the drivers seat. A member of the public had expressed concerns to the police about them because they were thought to be drunk. As there was vomit beside the drivers door and the female was seen to be upset, the police officers decided to speak to the appellant. Having formed the view that he had been drinking, one of the police officers cautioned the appellant but did not give him any specification about the offence which he was suspected of having committed. The appellant made no reply when cautioned. He was then asked three questions, to which he gave answers, by the police. They were as follows: Q Where are the keys for the vehicle? A In my pocket. Q Do you drive the car? A Yes. Q Are you going to drive the car? A Ah, well she wisnae well or Aye, well she wisnae well. The appellant then removed the car keys from his trouser pocket. He was asked whether he had anything to drink in the last 20 minutes and replied that he had not. He was then given a roadside breath test which he failed. He was taken to Oban police station where he gave a breath/alcohol reading that was well in excess of the prescribed limit. The appellant pled not guilty to the complaint. He went to trial before a Sheriff on 31 May 2010 and 2 July 2010. The evidence of the questions and answers was led without objection from his solicitor. After the Crown had closed its case the appellants solicitor challenged the admissibility of this evidence on the ground that the police had not informed the appellant of the offence of which he was suspected before he was questioned. The sheriff repelled this submission. After hearing evidence from the appellant and a defence witness, he found the appellant guilty. He was fined 375, was disqualified from driving for two years and had his licence endorsed. The appellant then lodged an appeal against his conviction. Among the grounds on which he applied for a stated case was the submission that the act of the Lord Advocate in seeking a conviction in reliance on the evidence of the police interview was incompatible with his right to a fair trial under article 6(1). Leave to appeal having been refused at the first sift, he appealed to the second sift and then lodged a devolution minute in which it was stated that for the Lord Advocate to support the conviction would be incompatible with his rights under article 6(1) and article 6(3)(c). In a note which he lodged on 12 October 2010 in support of the appeal he submitted, with reference to the decision in Salduz, that the use of the evidence of the interview was unfair as he did not have access to legal representation before or during the police interview. On 3 November 2010 leave to appeal was granted at the second sift. Following a procedural hearing on 26 January 2011 and at the request of the Lord Advocate, the Appeal Court referred the following question to this court: Whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the appellant conducted under common law caution at the roadside and without the appellant having had access to legal advice was incompatible with the appellants rights under article 6(1) and 6(3)(c) of the European Convention on Human Rights, having regard in particular to the decision of the Supreme Court of the United Kingdom in Cadder v HM Advocate 2010 SLT 1125. The second reference The accused in the second case, referred to as M, has been indicted in the sheriff court on a charge of assault to severe injury, permanent disfigurement and permanent impairment. Shortly after the assault took place on 30 August 2008, in the course of initial inquiries, the police took the accuseds details from him but allowed him to leave the locus. On 4 September 2008 however he was traced to his home address where, after administering a common law caution to the effect that he was not required to say anything but that anything he did say might be used in Page4 evidence, a police officer asked a total of seven questions, each of which was answered by the accused. They were as follows: Q I am investigating a serious assault which happened on Saturday night there, within a bar named [X]. There was a large disturbance in there too. Were you there? A Yes, aye. Q Were you involved in the fight? A Aye. Q Who were you with? A My dad and just boys fae [Y] where I used to work. Q Were they involved too? A I think so, the other boys started it. I got punched a couple of times on the eyebrow. Its still sair. Q OK, what were you wearing? A Pale blue t shirt, jeans, trainers. Q OK [M], I will stop there. I need to speak to you further except it will be recorded in a taped interview format. Can you be at [Z] Police Office tomorrow night at 8 pm? A Yes. Q I need to take your t shirt you had on, is that OK? A Aye. At this point the police officer concluded his questions because he felt that it had become obvious that the accused had some involvement on the incident and that it was not appropriate to carry out an interview there. The accused attended the police office the next day. He was then detained and interviewed under section 14 of the 1995 Act, in the course of which he made further admissions. The accused was indicted for trial, and after sundry procedure he lodged a minute raising the issue whether the Crown had power to lead evidence of the admissions which he had made. When the minute was argued before the sheriff on 9 November 2010 the Crown conceded that the evidence of the admissions made during the section 14 interview was inadmissible. But the sheriff ruled that evidence relating to the questions and answers at the accuseds home on 4 September 2008 was admissible. The accused appealed against that decision to the High Court of Justiciary, contending that by failing to allow him access to legal advice prior to interview and there being no compelling reasons to justify this, his admissions allegedly obtained under caution had been unfairly obtained and were therefore inadmissible. Following a procedural hearing on 26 January 2011 and at the request of the Lord Advocate, the Appeal Court referred the following question to this court: Whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the accused, conducted under common law caution at his home address and without the accused having had access to legal advice would be incompatible with the accuseds rights under article 6(1) and 6(3)(c) of the European Convention on Human Rights, having regard in particular to the decision of the Supreme Court of the United Kingdom in Cadder v HM Advocate 2010 SLT 1125. The third reference The accused in the third case, referred to as G, has been indicted in the High Court of Justiciary with offences including the possession of controlled drugs under the Misuse of Drugs Act 1971 and possession of prohibited firearms and ammunition under the Firearms Act 1968. The police had obtained a search warrant under the 1971 Act for the search of a flat where on 4 June 2008, having forced entry, they found the accused. Before commencing the search in terms of the warrant the accused, who had been handcuffed following a struggle, was cautioned in these terms: A systematic search will be carried out in your presence. I must caution that you are not obliged to say anything or make any comment regarding any article that may be found, but anything you do say will be noted and may be used in evidence. The accused was then detained and searched. Prior to being searched he admitted to having drugs in his jeans pocket, from which a bag of brown powder was recovered that was later found to be heroin. He was then arrested for contravention of section 23(4) of the 1971 Act. He was not arrested or charged with any other offence in the course of the search of the premises. During the search he was asked questions about the items which were found. He was not offered access to legal advice or to a solicitor before being asked these questions. After the search was concluded he was removed to a police station where he was detained under section 14 of the 1995 Act and again interviewed by the police in connection with alleged offences involving controlled drugs and firearms. He was not allowed access to legal advice before or during this interview. The Crown does not seek to rely on answers which the accused gave while he was being interviewed in the police station, but it seeks to rely on the statements and answers which he made at the premises in the course of the search. They are set out in a schedule which was completed as the search of the flat was carried out. Without that evidence there would not be sufficient evidence to convict the accused. The accused has lodged a devolution minute in which he contends that the leading of evidence of the statements and answers which he made at the premises would be incompatible with his Convention right to a fair trial. The trial judge decided to refer this issue to the Appeal Court under paragraph 9 of Schedule 6 to the Scotland Act 1998. On 18 January 2011 at the request of the Lord Advocate the Appeal Court referred the following question to this court: Is it incompatible with the Panels Convention rights for the Lord Advocate to lead evidence of his statements and answers made during the course of the search conducted under warrant granted in terms of section 23(3) of the Misuse of Drugs Act 1971 as recorded in the Search Production Schedule? In each of these three cases the circumstances differ from those that were before the court in Cadder and before the Grand Chamber in Salduz. The evidence that is objected to was obtained, in Ambroses case before he was taken to the police station for further procedures to be carried out under section 7 of the Road Traffic Act 1988 following his failure of a road side breath test, and in the cases of M and G before they were detained and questioned at a police station under section 14 of the 1995 Act. It is precisely because the issue that the references raise was not the subject of decision in either case that the courts guidance is now sought by the Lord Advocate. His position is that three features determine whether an individual has a right to legal advice under article 6 in accordance with the principle in Salduz. These features are all taken from words used by the Grand Chambers judgment in that case: see paras 55 and 56. First, he must be a suspect. Second, he must be in police custody. Third, he must be the subject of police interrogation. Unless all three features are present, he has no right of access to legal advice under article 6. These propositions all assume, of course, that the court finds that article 6(1) was engaged when the incriminating statements were made. This is because the protection of articles 6(1) and 6(3)(c) is afforded only to those who have been charged, as that word has been interpreted by the Strasbourg court. Each of these expressions will need to be analysed in the discussion that follows. Background Two very important points need, however, to be made at the outset. The first is that the jurisdiction of this court is limited to a consideration of the devolution issue which is raised by each of these references. That is plain from the wording of paragraph 33 of Schedule 6 to the Scotland Act 1998 under which the references have been made, but it needs to be emphasised yet again. The High Court of Justiciary is the court of last resort in all criminal matters in Scotland: see section 124(2) of the Criminal Procedure (Scotland) Act 1995; McInnes v HM Advocate [2010] UKSC 7, 2010 SLT 266, para 5, Fraser v HM Advocate [2011] UKSC 24, 2011 SLT 515, para 11. It is not our function to rule on how the circumstances referred to in each case would fall to be dealt with under domestic law, although this does form part of the background. The second point is that a decision by this court that there is a rule that a person who is suspected of an offence but is not yet in custody has a right of access to a lawyer before being questioned by the police unless there are compelling reasons to restrict that right would have far reaching consequences. There is no such rule in domestic law: see para 22, below. If that is what Strasbourg requires, then it would be difficult for us to avoid holding that to deny such a person access to a lawyer would be a breach of his rights under articles 6(1) and 6(3)(c) of the Convention. But the consequences of such a ruling would be profound, as the answers to police questioning in such circumstances would always have to be held in the absence of compelling reasons for restricting access to a lawyer to be inadmissible. The effect of section 57(2) of the Scotland Act 1998 would be that the Lord Advocate would have no power to lead that evidence. I agree with Lord Matthew Clarke that this would have serious implications for the investigation of crime by the authorities: see para 116, below. This suggests that a judgment pointing unequivocally to that conclusion would be required to justify taking that step. If Strasbourg has not yet spoken clearly enough on this issue, the wiser course must surely be to wait until it has done so. Section 126(1) of the Scotland Act 1998 provides that the Convention rights has the same meaning as in the Human Rights Act 1998. Section 2(1) of the Human Rights Act requires this court in determining any question which has arisen in connection with a Convention right to take into account any relevant Strasbourg case law. In R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] UKHL 23, [2003] 2 AC 295, para 26 Lord Slynn of Hadley said that, although the Human Rights Act did not provide that a national court is bound by these decisions, it is obliged to take account of them so far as they are relevant: In the absence of some special circumstances it seems to me that the court should follow any clear and constant jurisprudence of the European Court of Human Rights. If it does not do so there is at least a possibility that the case will go to that court, which is likely in the ordinary case to follow its own constant jurisprudence. In R (Ullah) v Special Adjudicator [2004] UKHL 26, [2004] 2 AC 323, para 20 Lord Bingham of Cornhill said that Lord Slynns observations in that case reflected the fact that the Convention is an international instrument, the correct interpretation of which can be expounded only by the Strasbourg court. From that it followed that a national court should not without strong reason dilute or weaken the effect of the Strasbourg case law. It was its duty to keep pace with it as it evolved over time. There is, on the other hand, no obligation on the national court to do more than that. As Lord Bingham observed, it is open to member states to provide for rights more generous than those guaranteed by the Convention. But such provision should not be the product of interpretation of the Convention by national courts. Lord Kerr says that it would be wrong to shelter behind the fact that Strasbourg has not so far spoken and use that as a pretext for refusing to give effect to a right if the right in question is otherwise undeniable: para 130, below. For reasons that I shall explain later, I do not think that it is undeniable that Strasbourg would hold that any questions put to a person by the police from the moment he becomes a suspect constitute interrogation which cannot lawfully be carried out unless he has access to a lawyer, which is the principle that Lord Kerr derives from his consideration of the mainstream jurisprudence: see para 146, below. But his suggestion that there is something wrong with what he calls an Ullah type reticence raises an important issue of principle. It is worth recalling that Lord Binghams observations in Ullah were not his first pronouncements on the approach which he believed should be taken to the Convention. In Brown v Stott 2001 SC (PC) 43, 59 he said: In interpreting the Convention, as any other treaty, it is generally to be assumed that the parties have included the terms which they wished to include and on which they were able to agree, omitting other terms which they did not wish to include or on which they were not able to agree. Thus particular regard must be had and reliance placed on the express terms of the Convention, which define the rights and freedoms which the contracting parties have undertaken to secure. This does not mean that nothing can be implied into the Convention. The language of the Convention is for the most part so general that some implication of terms is necessary, and the case law of the European Court shows that the court has been willing to imply terms into the Convention when it was judged necessary or plainly right to do so. But the process of implication is one to be carried out with caution, if the risk is to be averted that the contracting parties may, by judicial interpretation, become bound by obligations which they did not expressly accept and might not have been willing to accept. As an important constitutional instrument the Convention is to be seen as a living tree capable of growth and expansion within its natural limits (Edwards v Attorney General for Canada ([1930] AC 124) at p 136 per Lord Sankey LC), but those limits will often call for very careful consideration. The consistency between this passage and what he said in Ullah shows that Lord Bingham saw this as fundamental to a proper understanding of the extent of the jurisdiction given to the domestic courts by Parliament. Lord Kerr doubts whether Lord Bingham intended that his discussion of the issue should have the effect of acting as an inhibitor on courts of this country giving full effect to Convention rights unless they had been pronounced upon by Strasbourg: para 128, below. I, for my part, would hesitate to attribute to him an approach to the issue which he did not himself ever express and which, moreover, would be at variance with what he himself actually said. Lord Binghams point, with which I respectfully agree, was that Parliament never intended to give the courts of this country the power to give a more generous scope to those rights than that which was to be found in the jurisprudence of the Strasbourg court. To do so would have the effect of changing them from Convention rights, based on the treaty obligation, into free standing rights of the courts own creation. That is why, the courts task in this case, as I see it, is to identify as best it can where the jurisprudence of the Strasbourg court clearly shows that it stands on this issue. It is not for this court to expand the scope of the Convention right further than the jurisprudence of the Strasbourg court justifies. The background in domestic law The powers of the police to detain a person and to subject him to questioning depend on the category into which the person falls at the time these powers are being exercised. They differ according to whether the person is a witness, a suspect or an accused. Where a person is not under suspicion, the police have no power to take him into custody or to compel him to submit to police questioning. Such a person is classified, at most, as a witness. A person who is in that category can be asked to provide personal information, such as his name and address. Further questions may be put as part of a routine investigation into the events that have happened. So long as he is being questioned as a potential witness rather than as a suspect, the right to protection against self incrimination is not in play. There is no obligation to advise him of his rights, such as the right to silence or his right to seek legal advice. As Lord Justice Clerk Thomson said in Chalmers v HM Advocate 1954 JC 66, 81, a person ultimately accused may be interviewed as part of the ordinary routine investigation of the police into the circumstances of the crime. It would unduly hamper the investigation of crime if the threat of inadmissibility were to tie the hands of the police in asking questions at this stage. The position changes if the stage is reached when suspicion begins to fall on the person who is being questioned. Once suspicion has begun to fall on him the need to protect him against self incrimination comes into play. As Lord Justice General Cooper explained in Chalmers v HM Advocate 1954 JC 66, 78: The theory of our law is that at the stage of initial investigation the police may question anyone with a view to acquiring information which may lead to the detection of the criminal; but that, when the stage has been reached at which suspicion, or more than suspicion, has in their view centred upon some person as the likely perpetrator of the crime, further interrogation of that person becomes very dangerous, and, if carried too far, eg to the point of extracting a confession by what amounts to cross examination, the evidence of that confession will almost certainly be excluded. It was for a time thought that this passage was to be taken to establish that answers by suspects to police questioning were inadmissible by virtue of the persons position as a person under serious consideration as the perpetrator of the crime. But, as the law has developed, the position is less easy to define: see Renton and Brown, Criminal Procedure, 6th ed looseleaf (1996), para 24 38. In Miln v Cullen 1967 JC 21 it was held that the incriminating answers which the driver of a car gave when questioned by police officers who had formed the opinion that he was under the influence of drink were admissible in evidence. Lord Justice Clerk Grant said at p 25 that the constable, in asking the simple question whether he was the driver, was not merely acting reasonably, properly and fairly but was acting in accordance with the duties incumbent upon him. Lord Wheatley said at pp 30 31 that it was difficult to define with exactitude when a person becomes a suspect in the eyes of a police officer, as it may vary from a very slight suspicion to a clearly informed one, and that what happened after that had to be judged by the test of fairness. In Lord Advocates Reference (No 1 of 1983) 1984 JC 52, 58 Lord Justice General Emslie said that Lord Wheatleys statement in Miln v Cullen, at p 31 that in each case the issue is whether the question was in the circumstances a fair one was a sound statement of the law: A suspects self incriminating answers to police questioning will indeed be admissible in evidence unless it can be affirmed that they have been extracted from him by unfair means. The simple and intelligible test which has worked well in practice is whether what has taken place has been fair or not? (see the opinion of the Lord Justice General (Clyde) in Brown v HM Advocate 1966 SLT 105 at 107). In each case where the admissibility of answers by a suspect to police questioning becomes an issue it will be necessary to consider the whole relevant circumstances in order to discover whether or not there has been unfairness on the part of the police resulting in the extraction from the suspect of the answers in question. He went on to say that, where the words interrogation and cross examination were used in the decided cases in discussing unfair tactics on the part of the police, they were to be understood to refer only to improper forms of questioning tainted with an element of bullying or pressure designed to break the will of the suspect or to force from him a confession against his will. The current position as described in Renton and Brown, para 24 39 is therefore that the fact that the accused was at the time under suspicion or even under arrest is not in itself crucial. It is merely a circumstance like any other to be taken into account in assessing the fairness of the police questioning. The legal basis for detaining and questioning a suspect was clarified by section 2 of the Criminal Justice (Scotland) Act 1980 which was consolidated as section 14 of the Criminal Procedure (Scotland) Act 1995. The background to the legislation was described with characteristic skill and attention to detail by Lord Rodger in Cadder, para 74 86. As he explained in para 86, one aim was to put an end to the doubts about the legal basis for holding suspects for questioning when they had not been arrested. Another was to clarify the law as to the power of the police to question suspects and as to the admissibility of any answers that the suspects gave to such questions. A person may be detained for the purpose of carrying out investigations where a constable has reasonable grounds for suspecting that he has committed or is committing an offence punishable by imprisonment: section 14(1). Where a person has been detained under section 14(1) a constable may, without prejudice to any relevant rule of law as regards the admissibility in evidence of any answer given, put questions to him in relation to the suspected offence: section 14(7). The effect of the decision in Cadder is that the Lord Advocate has no power to lead and rely on answers by a detainee who was subjected to questioning by the police while he was without access to legal advice. In none of the situations described in each of the references was the person who was being questioned a detainee under section 14 of the 1995 Act. The domestic law test for the admissibility of the answers that were given to the questions put by the police is whether or not there was unfairness on the part of the police. The fact that the person did not have access to legal advice when being questioned is a circumstance to which the court may have regard in applying the test of fairness, but it is no more than that. There is no rule in domestic law that says that police questioning of a person without access to legal advice who is suspected of an offence but is not in custody must always be regarded as unfair. The question is whether a rule to that effect is to be found, with a sufficient degree of clarity, in the jurisprudence of the Strasbourg court. The reasoning in Salduz The starting point for an examination of this question must be the reasoning of the Grand Chamber in Salduz. Some of the propositions that are set out in its judgment are expressed in a way that might suggest that the right of access to a lawyer is not confined to persons who are subjected to police questioning while they are in custody. Para 55 of the judgment is in these terms: Against this background, the Court finds that in order for the right to a fair trial to remain sufficiently practical and effective article 6(1) requires that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police, unless it is demonstrated in the light of the particular circumstances of each case that there are compelling reasons to restrict this right. Even where compelling reasons may exceptionally justify denial of access to a lawyer, such restriction whatever its justification must not unduly prejudice the rights of the accused under article 6. The rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction. Read on its own, and without taking full account of the context in which these sentences were written, that paragraph suggests that the features which determine whether access to legal advice is to be provided are (a) that the person is a suspect, and (b) that he is subject to police interrogation. No mention is made in this paragraph of his being in police custody. The fact is, however, that the applicant was in police custody when he was interrogated by the police. The narrative of the facts in paras 12 14 shows that it was not until after he had been taken into custody by police officers from the Anti Terrorism Branch of the Izmir Security Directorate that he was interrogated. That being so, it is necessary to look elsewhere in the judgment to see whether the court was contemplating anything other than an interrogation in police custody when it came to set out what it did in para 55 of the judgment. In Part II A of the judgment, under the heading Domestic law, the court referred to legislation in force at the time of the application which provided that anyone suspected or accused of a criminal offence had a right of access to a lawyer from the moment they were taken into police custody. The reason why this had not been provided to the applicant was that the legislation did not apply to persons accused of offences falling within the jurisdiction of the state security courts, which his offence did. The challenge, therefore, was to a systematic departure from the right of access to a lawyer which the law gave to everyone else. In its examination of recent amendments in paras 29 31 of the judgment too its focus was on provisions that deal with juveniles taken into police custody. That continued to be its focus in its examination of the relevant international law materials in Part IIB. Chapter 1 of that Part refers to materials from the Council of Europe and the United Nations dealing with procedure in juvenile cases where the child had been deprived of his liberty by means of pre trial detention. The heading of Chapter 2 is Right of access to a lawyer during police custody. Reference is made in para 37 of the judgment to rule 93 of the Standard Minimum Rules for the Treatment of Prisoners adopted by the Council of Europe Ministers, which states that an untried prisoner shall be entitled as soon as he is imprisoned to choose his legal representatives and to receive visits from his legal adviser, and, in para 38, to a recommendation of the Committee of Ministers to Member States of the Council of Europe dealing with the right of prisoners to legal advice. There is no sign here or in its examination of the United Nations materials in paras 41 42 that the Grand Chamber was interested in the position of suspects who were questioned by the police when not in custody. Nor is there any sign of an international consensus that there is a right of access to a lawyer at that stage. The part of the judgment which deals with the alleged violation of article 6 of the Convention begins at para 45. The first section, which is headed Access to a lawyer during police custody, continues to para 63. It includes para 55, which I have already quoted: see para 26, above. In para 45 it is stated that the applicants allegation was that his defence rights had been violated as he had been denied access to a lawyer during his police custody. The parties submissions, as narrated in paras 47 49 were directed to this issue. There then follows a discussion of the general principles which were applicable to the case: paras 50 55. In this passage, to which I will return, the court does not, at least in so many words, limit its scrutiny of the principles to what they require in cases where the person concerned is in police custody. But in the next section, where it applies the principles to the case of applicant, the fact that he was in police custody lies at the heart of the discussion; paras 56 62. The holding in para 80 states that there had been a violation of the applicants rights under article 6(1) in conjunction with article 6(3)(c) on account of the lack of legal assistance while he was in police custody. But for the discussion of the relevant principles in paras 50 55, which is not so limited, there would be no doubt at all that the Grand Chambers declaration in the last sentence of para 55 that the rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction was directed to the situation where that interrogation took place while the person was in police custody. That is the conclusion that one would naturally draw from the context. The concurring opinions of Judge Bratza and Judge Zagrebelsky lend further support to this conclusion. Judge Bratza said in para O I2 that, like Judge Zagrebelsky, he thought that the court should have used the opportunity to state in clear terms that the fairness of criminal proceedings under article 6 required that, as a rule, a suspect should be granted legal advice from the moment he is taken into police custody or pre trial detention. No mention is made in either of these opinions of any rule to the effect that the suspect should be granted legal advice at any earlier stage. It may be, as Lord Rodger suggested in Cadder, para 70, that what these judges were contemplating was legal assistance for other purposes such as support for an accused who was distressed or to check on the conditions of detention. Whatever the reason, they were plainly not addressing their remarks to situations such as those described in the references where the questioning took place before the suspect was taken into police custody. The discussion of the general principles in paras 50 55 is not limited in this way. As para 50 makes clear, the fact that the applicants case was concerned with pre trial proceedings did not mean that article 6 had no application. The point is made that the fairness of a trial may be seriously prejudiced by an initial failure to comply with its provisions. In para 51 reference is made to the right of everyone charged with a criminal offence to be effectively defended by a lawyer, the choice of means of ensuring this being left to the contracting states. The paragraph ends with a warning that assigning counsel does not in itself ensure the effectiveness of the assistance he may afford an accused. So far there is nothing to suggest that the Grand Chamber was searching for a basis for a ruling that the right of access to a lawyer arose at a stage before the suspect was taken into police custody. In para 52 reference is made for the first time to the attitude of the accused at the initial stages of police interrogation and to the fact that article 6 will normally require that the accused be allowed to benefit from the assistance of a lawyer at this stage. No mention is made of where he was assumed to be when he is being questioned, but the cases referred to in the footnote to this paragraph are all cases where the applicant was in custody when he was subjected to interrogation by the police: Murray v United Kingdom (1996) 22 EHRR 29, Brennan v United Kingdom (2001) 34 EHRR 507 and Magee v United Kingdom (2000) 31 EHRR 822. In para 53 it is stated that the principles outlined in the previous paragraph are also in line with the generally accepted international human rights standards which, as the footnote to this paragraph indicates, are those set out in Part B of the judgment: see para 28, above. These are said to be at the core of the concept of a fair trial. Their rationale relates in particular to the protection of an accused against abusive coercion on the part of the authorities. The language used and the international materials referred to suggest that what the Grand Chamber had in mind here was the need for protection of the accused against abusive coercion while he was in custody. In para 54 it underlined the importance of the investigation stage for the preparation of criminal proceedings and referred to the fact that the accused often finds himself in a particularly vulnerable position at that stage of the proceedings and to the fact that early access to a lawyer was part of the procedural safeguards to which the court will have particular regard. The stage in the proceedings that the court had in mind is not specified other than by reference to the accuseds vulnerability. This is said to be amplified by the fact that legislation in criminal procedure tends to become increasingly complex. It seems that what the Grand Chamber had in mind here was a stage when the accused was being subjected to detailed questioning of the kind that, under the inquisitorial systems, will invariably take place after the accused has been taken into custody. This impression is reinforced by the reference in the third last sentence of the paragraph to the recommendations of the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment about the right of a detainee to have access to legal advice as a fundamental safeguard against ill treatment to which, I would infer, it was thought a detainee might be vulnerable. This analysis of the reasoning of the Grand Chamber in Salduz suggests that the judgment was concerned only with establishing a rule that there was a right of access to a lawyer where the person being interrogated was in police custody. The alternative view is that in para 55 it recognised a broader principle that the rule applies as soon as the person has been charged so that article 6 is engaged. This alternative has a certain logical appeal for the reasons that Lord Kerr has identified. The prejudice suffered by the accused is the same irrespective of the stage at which an incriminating statement is made in answer to questions put by the police. But the base on which this proposition rests is not that the Convention prohibits absolutely any reliance on incriminating statements. The privilege against self incrimination is not an absolute right: Murray v United Kingdom (1996) 22 EHRR 29, para 47. It is primarily concerned with respecting the will of the person to remain silent: Saunders v United Kingdom (1996) 23 EHRR 313, para 68. Everyone is entitled to respect for the right not to incriminate himself, irrespective of whether or not he is in police custody. Nevertheless a person can confess if he is willing to do so, and his confession will be admissible if it is truly voluntary. The underlying principle therefore is that there is a right against self incrimination which in some circumstances must be protected by special measures to protect the person against the risk that a confession may be obtained from him against his will by unfair tactics by the police. That is why the court recognised in its application of those principles to Salduzs case, as it had already done in para 54, that an interview which takes place in police custody has particular features which require the provision of an especially strong protection to protect the rights of the defence against a forced confession. It is that aspect of Salduzs case which seems to have informed the whole of the courts judgment. It seems to me that the Grand Chambers judgment, when taken as a whole, does not indicate with a sufficient degree of clarity or indeed, I would suggest, in any way at all that the ruling in para 55 about incriminating statements made without access to a lawyer applies to questions put by the police before the accused is taken into custody. The context would have required this to be stated expressly if it was what was intended, as the rule which the judgment laid down can be departed from only where there are compelling reasons to justify its restriction. It would have had to have been stated precisely to what situations outside police custody the rule was to apply, and it was not. The jurisprudence since Salduz The Grand Chambers judgment has, not surprisingly, been referred to many times by the Strasbourg court since the judgment in that case was delivered. The question is whether there is an indication in any of the cases that the right of access to a lawyer arises, as a rule, as soon as a person whose rights under article 6 are engaged is subject to questioning by the police. There are passages in some of the cases which indicate that Salduz is regarded as having been concerned only with the need for legal advice while the person was in custody. In Dayanan v Turkey (application no 7377/03) (unreported) given on 13 October 2009, which is a decision of the Second Section and is available only in French, the applicant was arrested and detained as part of an operation against the Hizbullah. He was informed of his right to silence and exercised it, as he refused to answer the questions put to him by the police. It was held nevertheless that there had been a breach of article 6(3)(c) in conjunction with article 6(1) because he did not have access to a lawyer while he was being interrogated. The court said: 31. Elle estime que lquit dune procdure pnale requiert dune manire gnrale, aux fins de larticle 6 de la Convention, que le suspect jouisse de la possibilit de se faire assister par un avocat ds le moment de son placement en garde vue ou en dtention provisoire. 32. Comme le souligne les normes internationales gnralement reconnues, que la Cour accepte et qui encadrent sa jurisprudence, un accus doit, ds quil est priv de libert, pouvoir bnficier de lassistance dun avocat et cela indpendamment des interrogatoires quil subit (pour les textes de droit international pertinents en la matire, voir Salduz, prcit, paras 37 44) The proposition in para 32 that an accused must have access to a lawyer from the moment he is deprived of his liberty (un accus doit, ds quil est priv de libert, pouvoir bnficier de lassistance dun avocat) seems to go further than what the Grand Chamber itself said in Salduz. It is more in keeping with the concurring opinions of Judge Bratza and Judge Zagrebelesky. However that may be, the passages which I have quoted indicate the importance that appears to have been attached by Strasbourg to the fact that the person was in police custody when he was being interrogated. It is especially significant that this is what the court saw the international consensus (les normes internationales gnralement reconnues) to be on this issue. Three other cases from Turkey are to the same effect. In Arzu v Turkey (application no 1915/03) (unreported) given on 15 September 2009 the applicant, who was arrested and placed in custody, complained that he had been denied access to a lawyer during the initial stages of the criminal proceedings against him. The court said that Salduz had considered the grievance of a lack of access to a lawyer whilst in police custody: para 46. In Duman v Turkey (application no 28439/03) (unreported) given on 23 March 2010 the court said in para 46 that the use of statements obtained at the stage of the police inquiry and the judicial investigation is not inconsistent with article 6(1), provided that the rights of the defence are respected. On that point the court said that it relied on the basic principles laid down in its judgments, including Salduz, para 55, concerning the notion of a fair procedure. In Takin v Turkey (application no 5289/06) (unreported) given on 1 February 2011 the applicant complained that he had had no legal assistance before he made his police statement or during his interrogation before the public prosecutor while in custody. The court observed that it had already examined the issue concerning the lack of legal assistance in police custody in Salduz, paras 56 62. In all these cases, as in Salduz itself, there was a systemic restriction on access to legal advice by anyone held in police custody in connection with proceedings that were to be taken in the state security courts. In Pishchalnikov v Russia (application no 7025/04) (unreported) given on 24 September 2009 the applicant, who had been arrested, was interrogated while he was in police custody. The pattern of the First Sections judgment followed that of the Grand Chamber in Salduz. It repeated many of the propositions in paras 50 55 of Salduz in its assessment of the case under the heading Restrictions on access to a lawyer in the police custody, and referred in para 71 to the fact that the right to silence and the right not to incriminate oneself are generally recognised international standards which lie at the heart of a fair procedure under article 6. But, as it was a custody case, it does not examine the question whether these propositions require access to a lawyer at any earlier stage. In Sharkunov and Mezentsev v Russia (application no 75330/01) (unreported) given on 10 June 2010 the question before the court was again directed to the lack of legal assistance while in police custody and the use at the trial of incriminating statements that had been made at that stage. In para 97 the court repeated the proposition that was first stated in Salduz, para 55 that the rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction. But once again the police interrogation in the course of which these statements were made took place while the applicant was in police custody. In Borotyuk v Ukraine (application no 33579/04) (unreported) given on 16 December 2010 the applicant was, once again, in police custody during the pre trial investigation. Here too the propositions on which the court based its judgment are closely modelled on what the Grand Chamber said in para 55 of Salduz. In para 79 it summarised the general principles that are to be found there. It stated that, as a rule, access to a lawyer must be provided as from the first questioning of a suspect by the police, unless it can be demonstrated in the light of the particular circumstances that there are compelling reasons to restrict that right. As in para 55 of Salduz, no indication is given that the principles are restricted to cases where the accused was in police custody. But, as in Salduz, that was the background against which the case was heard. Once again it is unclear whether the general propositions on which the judgment was based must equally be applied, as a rule, to cases where the accused was not in custody when the questioning took place. Zaichenko v Russia The First Section had the opportunity to clarify where the court stood on this issue in Zaichenko v Russia (application no 39660/02) (unreported) given on 18 February 2010. This appears to have been the only case to date in which the complaint was of lack of legal assistance during questioning by the police when the applicant was not in custody. He was stopped while he was driving home from work and his car was inspected by the police as there had been reports of workers stealing diesel from their service vehicles. Two cans of diesel were discovered in the car. The applicant made self incriminating statements in reply to questions put to him by the police at the roadside. He was charged with stealing the cans, and he was convicted. His complaint was that he had not been advised of the privilege against self incrimination when he made his admission to the police. His position at the trial was that he had purchased the diesel at a petrol station and that he did not give this explanation to the police because he felt intimidated and did not have a receipt to prove the purchase. In its assessment the court set out the general principles that are relevant to a consideration of whether there has been a violation of the right to a fair trial. It noted that article 6(3)(c) especially might be relevant before a case is sent to trial if and in so far as the fairness of the trial is likely to be seriously prejudiced by a initial failure to comply with its requirements. In para 36 it recalled, as the Grand Chamber did in Salduz, the proposition that the court set out in Imbrioscia v Switzerland (1993) 17 EHRR 441, para 38 that the manner in which articles 6(1) and 6(3)(c) were to be applied during the preliminary investigation depended on the special features of the proceedings and on the circumstances of the case. Account was taken in para 37 of the principles set out in Salduz, para 55 and in para 38 of the fact that the right to silence and the right not to incriminate oneself are generally recognised standards which lie at the heart of the notion of a fair procedure. Para 38 then contains these important propositions which did not receive the same attention in Salduz: The right not to incriminate oneself presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused (see, inter alia, J B v Switzerland, no 31827/96, para 64, ECHR 2001 III). In this sense the right is closely linked to the presumption of innocence contained in article 6(2) of the Convention. In examining whether a procedure has extinguished the very essence of the privilege against self incrimination, the Court must examine the nature and degree of the compulsion, the existence of any relevant safeguards in the procedures and the use to which any material so obtained is put (ibid). Applying these propositions to the applicants case, the court noted in para 42 that in criminal matters article 6 comes into play as soon as a person is charged and that this may occur on a date prior to the case coming before the trial court, such as the date of arrest, the date when the person concerned was officially notified that he would be prosecuted or the date when the preliminary investigations were opened. Eckle v Germany (1982) 5 EHRR 1, para 73 was referred to, which includes the proposition taken from cases such as Deweer v Belgium (1980) 2 EHRR 439, para 46 that the test as to whether a person has been charged for the purposes of article 6(1) is whether the situation of the person has been substantially affected. The court concluded that, given the context of the road check and the applicants inability to produce any proof of the diesel purchase at the moment of his questioning by the police, there was a suspicion of theft against him from that moment and that, although he was not yet accused of any criminal offence, his situation in the proceedings at the roadside was substantially affected. So article 6(1) was engaged at that point. But the fact that article 6(1) was engaged did not mean that a right of access to a lawyer arose at that point. The court observed in para 47 that the case was different from previous cases concerning the right to legal assistance in pre trial proceedings. This was because the applicant was not formally arrested or in police custody but was stopped for a roadside check which was carried out in the presence of two attesting witnesses. In para 48 it said: Although the applicant in the present case was not free to leave, the Court considers that the circumstances of the case as presented by the parties, and established by the Court, disclose no significant curtailment of the applicants freedom of action, which could be sufficient for activating a requirement for legal assistance already at this stage of the proceedings. In para 49 it noted that the role of the police in such a situation was to draw up an inspection record and receive the applicants explanation as to the origin of the cans in his car. Having done so, the police transferred the documents to the inquirer who submitted a report to his superior which prompted him to open a criminal case against the applicant. In para 51 it held that the absence of legal representation at the roadside check did not violate his right to legal assistance under article 6(3)(c). In a partly dissenting opinion Judge Spielmann said that the interview took place in circumstances that could in no way be compared to those normally observed during routine road checks and he could not agree that the circumstances of the case disclosed no significant curtailment of the applicants freedom of action such as to require legal assistance. He did not take issue with the principle formulated in para 48. His dissent was as to its application to the facts of the case. Mr Scott for Ambrose submitted that it was wrong to look at the courts reasoning in Salduz through what it decided in Zaichenko. Mr Shead for M submitted that Zaichenko was so out of line with the other cases, and so hard to reconcile with the basic principles that were stated in Salduz, that it should be regarded as having been wrongly decided. I would reject these arguments. The President of the Court, Judge Rozakis, was a member of the Grand Chamber in Salduz, as was Judge Spielmann. The importance of the question that the case raised, which was whether the ruling in Salduz applied to questioning where the applicant was not in police custody, would not have been overlooked. The reasoning shows that the reasoning in Salduz was fully taken into account. The finding in para 48 that the circumstances did not disclose a sufficient curtailment of the applicants freedom of action which could be sufficient for activating a requirement for legal assistance indicates that the court was well aware that it had to give reasons for reaching a different result. That it did so in the way that it did shows that this is a judgment which must be taken into account in the search for an answer to the question where the jurisprudence of the Strasbourg court stands on the question we have to decide. Abdurahman v United Kingdom The question whether the right of access to a lawyer applies at a stage before the person is taken into custody is now before the Strasbourg court in an application by Ismail Abdurahman, application no 40351/09. He was questioned by the police as a witness in connection with the attempt to detonate four bombs at separate points in the London public transport system two weeks after the bombings that took place on 7 July 2005. He had been approached by two police officers who took him to a police station. According to their evidence at the voir dire at the applicants trial, this was with a view to his assisting the police as a potential witness. They began interviewing him, but after about 45 minutes of questioning they considered that, as a result of the answers that he was giving, he was in danger of incriminating himself and should be cautioned. On instructions from a senior officer they continued nevertheless to interview him as if he were a witness. It was not until after he had completed and signed his witness statement, which contained statements that were incriminating and was made without access to legal assistance, that they were told to arrest him and he was then taken into custody. This case is still awaiting a hearing in Strasbourg. It has reached the stage of the court posing questions to the parties, which are whether there has been a violation of article 6(1) together with article 6(3)(c) arising from (a) the failure to caution the applicant before he gave his witness statement (Aleksandr Zaichenko v Russia, no 39660/02, 18 February 2010); and/or (b) the failure to provide him with legal assistance before he gave the witness statement? In particular, were the rights of the defence irretrievably prejudiced by the use of the witness statement at trial (Salduz v Turkey [GC], no 36391/02, para 55, 27 November 2008)? It is, of course, too early to say what view will be taken of this case when the facts have been assessed by the court in the light of the relevant principles. But it is at least likely that its judgment will provide some useful guidance as to the approach that is to be taken to a persons rights under article 6(1) together with article 6(3)(c) where the prosecution seeks to rely on answers given to questions by the police before he is formally taken into custody. The key issue, so far as the references that are before the court in this case are concerned, is whether, as a rule, access to a lawyer must always be provided when a person is questioned at any stage in the proceedings after he has become a suspect and must be taken to have been charged for the purposes of article 6 (see paras 62 63, below), or whether access to a lawyer is required, as a rule, only where the person has been taken into custody or his freedom of action has been significantly curtailed. The fact that this application is still pending suggests that, if there was any doubt as to where the jurisprudence of the Strasbourg court stands, it would have been wise to wait for its judgment in Abdurahman before holding that there is a rule that access must be provided in any situation that is not analogous on its facts to that which was before the court in Salduz. But that is for another day, as the delivery of the judgment in that case cannot be taken to be imminent. Miranda v Arizona The Lord Advocate placed considerable weight in support of his argument on the judgment of the Supreme Court of the United States in Miranda v Arizona 384 US 436 (1966). In that case the Supreme Court held that the prosecution may not use statements, whether incriminatory or exculpatory, stemming from custodial interrogation of a defendant unless it demonstrated the use of procedural safeguards which were sufficient to secure the privilege against self incrimination. These safeguards require that, unless other fully effective means are devised to inform the accused person of the right to silence and to assure continuous opportunity to exercise it, he must be warned that he has a right to remain silent, that any statement that he does make may be used as evidence against him, that he has the right to consult with an attorney and that, if he cannot afford one, a lawyer will be appointed to represent him. Custodial interrogation for the purposes of this rule means questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way: p 444. Miranda has been referred to in a number of individual opinions given by judges of the Strasbourg court. Judge De Meyer referred to it in his dissenting opinion in Imbrioscia v Switzerland (1993) 17 EHRR 441. The applicant in Imbrioscia had been questioned several times without access to a lawyer while he was in police custody but the court held, considering the proceedings as a whole, that there had been no breach of article 6(1) read with article 6(3)(c). Judge De Meyer said that the court had failed to recognise the rules governing the right to legal advice during custodial interrogation which the Supreme Court has summarised in its Miranda judgment and which he said belonged to the very essence of fair trial. In Murray v United Kingdom (1996) 22 EHRR 29 the applicant had been denied legal advice for 48 hours after he had been taken into custody. The court held that there had been a violation of article 6(1) read with article 6(3)(c). The partly dissenting judges, Judge Pettiti, joined by Judge Valticos, and Judge Walsh, joined by Judges Makarczyk and Lhmus, also referred to the Miranda judgment in this context. Judge Walsh pointed out that the Supreme Court had affirmed that the constitutional protection against self incrimination contained in the Fifth Amendment guarantees to the individual the right to remain silent unless he chooses to speak in the unfettered exercise of his own free will whether during custodial interrogation or in court. Much more recently, but prior to the Grand Chambers decision in Salduz, Judge Fura Sandstrm joined by Judge Zupani referred to Miranda in Galstyan v Armenia (2007) 50 EHRR 618 when, in para 0 I5, she described the right to be assisted by a lawyer as a bright line rule which nobody should cross and said that its purpose was to neutralise the distinct psychological disadvantage that suspects are under while dealing with the police. The Strasbourg court has not referred to Miranda in any of its judgments, and Imbrioscia, Murray and Galstyan are the only cases where it has been referred to in a dissenting opinion in the context of what is described in Miranda as custodial interrogation. But it can be assumed that the court will not have overlooked it in its search for generally accepted international human rights standards. The dissenting judgments in Imbrioscia and Murray which drew attention to it were given before the Grand Chamber considered the issue in Salduz, and those cases were cited to it in that case. As T A H M van der Laar and R L de Graaf, Salduz and Miranda: is the US Supreme Court pointing the way? [2011] 3 EHRLR 304, 315 have pointed out, the test that the Strasbourg court described in paras 47 and 48 of Zaichenko when it considered that the applicant was neither formally arrested nor interrogated in police custody and that there was no significant curtailment of his freedom of action echoes the statement in Miranda, p 477 that the rule of access to a lawyer that it describes applies when the suspect is subjected to police interrogation while in custody or otherwise deprived of his freedom of action in any significant way. It is not unreasonable to think that Miranda and subsequent cases that the ruling in that case have given rise to in the United States will influence the thinking of the Strasbourg court as it develops the principles described in Salduz. The significance of Miranda is that it follows the custodial approach to the question as to when access to a lawyer is required. The core of that decision, as der Laar and de Graaf have described it in [2011] EHRLR 304, 310, is that a suspects statement made as a result of interrogation initiated by the interrogating authorities while he is in custody cannot be used in evidence unless the prosecutor can prove that the procedural safeguards that were used were effective enough to secure the suspects right not to incriminate himself. The underlying reason is that the circumstances in which such an interrogation takes place are inherently intimidating. As Chief Justice Warren explained at p 445, an understanding of the nature and setting of the in custody interrogation was essential to the courts decision: incommunicado interrogation in a police dominated atmosphere. But it was noted that an interpretation of the requirement that the right to legal advice arose at an earlier stage would hamper the traditional function of the police in investigating crime. General on the scene questioning as to facts surrounding the crime or other general questioning of citizens was not affected. The right to legal advice was held not to extend that far because the compelling atmosphere inherent in the process of in custody interrogation was not necessarily present: Miranda, pp 477 478. The accused in that position is protected by the rule that only statements voluntarily made are admissible. I think that there is an indication here about the way the Strasbourg courts jurisprudence may develop, if there are doubts as to the significance of the courts decision in Zaichenko. Miranda shows that reasons can be given which, at the very least, the court has not yet said are irrelevant for thinking that it would be going too far to hold that there is a rule that there must be access to a lawyer irrespective of whether the person who is being questioned by the police is being held in custody. The basis for the ruling in Miranda is that police custody or its equivalent creates particular pressures which mean that the persons will is more likely to be overcome when he is being questioned under conditions of that kind. The observation in Salduz, para 53 that the rationale of the generally recognised international human rights standards relates in particular to the protection of the accused against abusive coercion on the part of the authorities fits in with this line of reasoning. This feature is likely to be absent when questions are being put at the locus or in the persons home simply with a view to deciding whether the person being questioned is to be treated as a suspect and, as such, to be subjected to further procedures. The case for police custody or its equivalent I should like, before stating my conclusions, to say a bit more about why I would hold that in principle the line as to when access to legal advice must be provided before the person is questioned should be drawn as from the moment that he has been taken into police custody, or his freedom of action has been significantly curtailed as it was put in Zaichenko, para 48. I return to the points I made in para 34, above. The privilege against self incrimination is not an absolute right: Murray v United Kingdom (1996) 22 EHRR 29, para 47; Brown v Stott 2001 SC (PC) 43, 64, per Lord Steyn. At p 60 Lord Bingham said that while it could not be doubted that such a right must be implied, there is no treaty provision which expressly governs the effect or extent of what is to be implied. At p 74 I said that implied rights are open, in principle, to modification or restriction so long as this is not incompatible with the right to a fair trial. We do know however that the right is primarily concerned with respecting the will of the person to remain silent: see Saunders v United Kingdom (1996) 23 EHRR 313, para 68. A person is therefore free to speak to the police and to answer questions if he is willing to do so, even after he has been cautioned. He can provide them with self incriminating answers if he is willing to do this, and his answers will be admissible if they are truly voluntary. This approach to the problem is familiar in domestic law: see para 22, above. So long as it is applied the fundamental right under article 6 to a fair trial will be guaranteed. The test is whether the will of the person to remain silent, if that is his will, has been respected. Answers cannot be extracted from him by unfair means, and he must be protected against the risk that they may be forced out of him. It is well understood that in some circumstances merely to caution the person that he has the right to remain silent will not be enough to protect him against the risk of a forced confession. The paradigm case is where he is in police custody. In such a situation the circumstances surrounding his questioning are likely to be oppressive and intimidating. The questioning is likely to be prolonged, and the atmosphere is likely to be coercive. In such circumstances it is reasonable to assume that he will be vulnerable to having a confession extracted from him against his will and to insist that special measures are needed to ensure that his rights are respected. As Lord Kerr points out, common experience tells us that a coercive atmosphere can exist independently of custody: para 147, below. That is why it was recognised in Miranda and in Zaichenko that a persons freedom of action to act as he wishes may be significantly impaired in other circumstances. But it does not follow that this will be so in every case when the police engage in conversation with a suspect. Circumstances will vary, and questioning which may become objectionable as the process continues may not be so during its initial stages. That is why I believe that a more flexible approach to the problem is called for than the rigid principle that Lord Kerr would adopt, which would involve laying down a rule that access to lawyer must always be provided before any police questioning can take place: see para 146, below. Lord Kerr says in para 148 that there is no reason to suppose that a person questioned by the police while not in detention would not experience the same need to acquiesce in the power of the police to require answers to potentially highly incriminating questions. The important question, he says, is whether the questions asked are liable to be productive of incriminating answers, not the circumstances in which they are being asked. That leads him to say that whenever questions of that kind are being put to a suspect they must be asked in the presence of a lawyer. I do not think that there is any support in the Strasbourg cases, or in such international authorities as we have been shown, for that proposition. The point that was being made in the Canadian case of R v Grant 2009 SCC 32; [2009] 2 SCR 353 to which he refers in para 147 was that there are situations in which psychological constraint amounting to detention have been recognised: the majority judgment of McLachlin CJ and LeBel, Fish, Abella and Charron JJ at para 30. These are where the subject is legally required to comply with a direction or command and where there is no such obligation but a reasonable person in the subjects position would feel so obligated. Not every conversation that takes place between the police and a suspect in which questions are asked is of that character. A demand or direction by a police officer is one thing. Questioning under caution is another. It is understandable that a person who is confronted by a direction or a demand by a police officer to provide information will feel that he has to comply with it. It is understandable too if the circumstances are such that he feels that he has no real choice in the matter. That is why the law requires that before questions are put to him by the police the suspect must be cautioned. In that way a fair balance is struck between the interests of the individual and the public interest in the detection and suppression of crime. The search for that balance is inherent in the whole of the Convention: Sporrong and Lnnroth v Sweden (1982) 5 EHRR 35, para 69. The whole point of the caution is to make it clear to the person that he is under no obligation to answer the questions that are being put to him. The requirement would be pointless if it is to be assumed that he will nevertheless feel, whatever the circumstances, that he has no alternative but to answer them. Whether the caution is enough to ensure that the person will have a fair trial will depend on the circumstances. Conclusion I return to the Lord Advocates submission that three features determine whether an individual has a right to legal advice under article 6 in accordance with the principle in Salduz. First, he must be a suspect. Second, he must be in police custody. Third, he must be the subject of police interrogation. The submission is that, unless all three features are present, he has no right of access to legal advice under article 6. The correct starting point, when one is considering whether the persons Convention rights have been breached, is to identify the moment as from which he was charged for the purposes of article 6(1). The guidance as to when this occurs is well known. The test is whether the situation of the individual was substantially affected: Deweer v Belgium (1980) 2 EHRR 439, para 46; Eckle v Germany (1982) 5 EHRR 1, para 73. His position will have been substantially affected as soon as the suspicion against him is being seriously investigated and the prosecution case compiled: Shabelnik v Ukraine (application no 16404/03) (unreported) given on 19 February 2009, para 57. In Corigliano v Italy (1982) 5 EHRR 334, para 34 the court said that, whilst charge for the purposes of article 6(1) might in general be defined as the official notification given to the individual by the competent authority of an allegation that he has committed an criminal offence, as it was put in Eckle, para 73, it may in some instances take the form of other measures which carry the implication of such an allegation. In ubinski v Slovenia (application no 19611/04) (unreported) given on 18 January 2007, paras 62 63 the court said that a substantive approach, rather than a formal approach, should be adopted. It should look behind the appearances and investigate the realities of the procedure in question. This suggests that the words official notification should not be taken literally, and that events that happened after the moment when the test is to be taken to have been satisfied may inform the answer to the question whether the position of the individual has been substantially affected. It is obvious that the test will have been satisfied when the individual has been detained and taken into custody. It must be taken to have been satisfied too where he is subjected to what Salduz, para 52 refers to as the initial stages of police interrogation. This is because an initial failure to comply with the provisions of article 6 at that stage may seriously prejudice his right to a fair trial. The moment at which article 6 is engaged when the individual is questioned by the police requires very sensitive handling if protection is to be given to the right not to incriminate oneself. The mere fact that the individual has been cautioned will not carry the necessary implication. But, when the surrounding circumstances or the actions that follow immediately afterwards are taken into account, it may well do so. The moment at which the individual is no longer a potential witness but has become a suspect provides as good a guide as any as to when he should be taken to have been charged for the purposes of article 6(1): Shabelnik v Ukraine, para 57. The Lord Advocate submitted that the protection of article 6(3)(c) was not engaged until the individual was actually taken into custody. But this cannot withstand the emphasis that the Strasbourg court puts on the consequences of an initial failure to comply with its provisions, as in Salduz, para 50; see also Zaichenko v Russia, para 42. As for the requirement that the individual must be in police custody, I would hold that the Strasbourg court has not said, or at least has not said with a sufficient degree of clarity, that a person who has become a suspect and is not in custody must, as a rule, have access to a lawyer while he is being questioned. I would attach particular importance to the judgment in Zaichenko v Russia, for the reasons given in para 46, above. That is not to say that the fact that the individual had no access to legal advice in that situation is of no consequence. If it was practicable for access to legal advice to be offered, this will be one of the circumstances that should be taken into account in the assessment as to whether the accused was deprived of a fair hearing, as he is entitled to respect for the right not to incriminate himself. But it is no more than that. The fact that the incriminating statements were made without access to a lawyer does not of itself mean that the rights of the defence are irretrievably prejudiced, as was held to be the case in Salduz on account of the lack of legal assistance while the applicant was in custody. The phrase police interrogation appears frequently in the cases where the applicant was detained in custody. It was suggested that, for the purposes of the rule about access to a lawyer, it means something more than just asking questions of an individual. These words are, however, extremely fact sensitive. Any questioning of an individual who has been detained in custody by persons who are referred to in the Strasbourg cases as representing the investigating authorities with the aim of extracting admissions on which proceedings could be founded will amount to interrogation for the purposes of the rule: for a statement to that effect in England, see R v Absolam (1989) 88 Cr App R 332, 336, per Bingham LJ. The same could be said of questioning that takes place at the roadside or in the persons home, depending on the circumstances. It is not necessary, if access to a lawyer is needed for the right to a fair trial to remain practical and effective (see Salduz, para 55), that the questioning should amount to an interrogation in the formal sense. It need not be a detailed and sustained course of questioning. Questions that the police need to put simply in order to decide what action to take with respect to the person whom they are interviewing are unlikely to fall into this category. But they are likely to do so when the police have reason to think that they may well elicit an incriminating response from him. With that introduction, I now turn to the questions that have been referred to this court. As I understand them, they invite us not only to deal with the situations that they describe as raising issues of principle but also to express our own view as to the answers that the Appeal Court should give on the facts as presented to us in each case. The answers to the questions referred The question in Ambroses case is whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the appellant conducted under common law caution at the roadside and without the appellant having had access to legal advice was incompatible with the appellants rights under article 6(1) and 6(3)(c). I would answer this question in the negative. Applying the test that I have described in para 62, above, I would hold that Ambrose was charged for the purposes of article 6 when he was cautioned and that the police officer had reason to think that the second and third questions were likely to elicit an incriminating response from him. This conclusion is supported by the way the question whether the applicant was charged was dealt with in Zaichenko v Russia, para 41, where the court said that, given the context of the road check and the applicants inability to produce proof that he had purchased the diesel, there should have been a suspicion of theft against the applicant at the moment of his questioning by the police. The context in Ambroses case was that, when he was approached by the police, he was drunk and sitting in the car. Suspicion that he was committing an offence fell on him as soon as he told the police that the keys were in his pocket. But I would hold it would be to go further than Strasbourg has gone to hold that the appellant is entitled to a finding that this evidence is inadmissible because, as a rule, access to a lawyer should have been provided to him when he was being subjected to this form of questioning at the roadside. This leaves open the question whether taking all the circumstances into account it was fair to admit the whole or any part of this evidence. There may, perhaps, still be room for argument on this point. So I would leave the decision as to how that question should be answered to the Appeal Court. The question in Ms case is whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the accused, conducted under common law caution at his home address and without the accused having had access to legal advice was incompatible with the accuseds rights under article 6(1) and 6(3)(c). I would hold that M was charged for the purposes of article 6 when he was cautioned by the police officer at his home address. Although he did yet not have enough information as that stage to detain him as a suspect under section 14 of the 1995 Act, his actions were sufficient to carry the implication that the purpose of his visit was to establish whether M was in that category. Even if that was not so at the moment when M was cautioned, the first question which the police officer put to him carried that implication. I also think that the police officer had reason to think that the second question that he asked (Were you involved in the fight?) was likely to elicit an incriminating response from him. But I would answer the question in this reference also in the negative, as it would be to go further than Strasbourg has gone to hold that the accused is entitled to a ruling that this evidence is inadmissible because, as a rule, access to a lawyer should have been provided to him when he was being asked these preliminary questions in his own home with a view to determining what further steps should be taken to deal with him in connection with the offence. As in Ambroses case, this leaves open the question whether, taking all the circumstances into account, it would be fair to admit the whole or any part of this evidence. I would leave it to the sheriff to answer that question. The question in Gs case is whether it is incompatible with the Panels Convention rights for the Lord Advocate to lead evidence of his statements and answers made during the course of the search conducted under warrant granted in terms of section 23(3) of the Misuse of Drugs Act 1971 as recorded in the Search Production Schedule. The Lord Advocate conceded that G was a suspect from the time of his first admission to possession of a quantity of heroin in his jeans. In must follow that he had been charged for the purposes of article 6 by the time the police began their search. The feature of this case which distinguishes it from the other two is that, although G had not yet been formally arrested and or taken into police custody, there was a significant curtailment of his freedom of action. He was detained and he had been handcuffed. He was, in effect, in police custody from that moment onwards. So I would answer the question in the affirmative. The circumstances were sufficiently coercive for the incriminating answers that he gave to the questions that were put to him without access to legal advice about the items to be found to be inadmissible. I would hold however that the same result need not follow in every case where questions are put during a police search to a person who is to be taken to have been charged for the purposes of article 6. It would be to go further than Strasbourg has gone to hold that a person has, as a rule, a Convention right of access to a lawyer before answering any questions put to him in the course of a police search. It is not because there is a rule to this effect that I would answer the question in the affirmative. Rather it is because it is plain from the particular circumstances of the case that G was, in effect, a detainee when he was being questioned by the police. In the absence of such indications of coercion the question, as in the other cases, will be whether, taking all the circumstances into account, it would be fair to admit the whole or any part of the evidence. I am in full agreement with Lord Hopes judgment in this case and there is LORD BROWN comparatively little that I want to say in addition. Cadder is authority for an absolute rule, derived from the European Court of Human Rightss decision in Salduz v Turkey (2008) 49 EHRR 421, that the Crown cannot lead and rely upon evidence of anything said by an accused without the benefit of legal advice during questioning under detention at a police station. For convenience I call this the Cadder rule and refer to it as absolute notwithstanding the Courts recognition in Salduz itself (at para 55) that compelling reasons may exceptionally justify denial of access to a lawyer (providing always that such a restriction does not unduly prejudice the defence) since for present purposes those possible exceptional cases can safely be ignored. The critical issue arising for our determination on these references is whether the Cadder rule applies equally to anything said by an accused in answer to police questioning even before he is detained at a police station, providing only that at the time of such questioning he is already a suspect and charged within the meaning of article 6(1) of the Convention (his situation substantially affected as explained by Lord Hope at para 39). Although these are, of course, Scottish references and, rather to my regret, we have not had the benefit of any intervention on behalf of English and Welsh prosecuting authorities to assist us as to the legal position south of the border, I cannot but notice that on their face the statutory provisions governing the position in England and Wales sit a little uneasily even with the absolute rule in Cadder, let alone with the substantial extension to that rule now proposed by the respective accused in these references. Section 76(2) of the Police and Criminal Evidence Act 1984 (PACE) provides: If, in any proceedings where the prosecution proposes to give in evidence a confession made by an accused person, it is represented to the court that the confession was or may have been obtained (a) by oppression of the person who made it; or (b) in consequence of anything said or done which was likely, in the circumstances existing at the time, to render unreliable any confession which might be made by him in consequence thereof, the court shall not allow the confession to be given in evidence against him except in so far as the prosecution proves to the court beyond reasonable doubt that the confession (notwithstanding that it may be true) was not obtained as aforesaid. By section 82(1) of PACE, confession is defined to include any statement wholly or partly adverse to the person who made it and by section 76(8) oppression is defined to include torture, inhuman or degrading treatment, and the use or threat of violence (whether or not amounting to torture). The only absolute statutory rule, therefore, is that confessions are inadmissible under PACE if obtained by oppression or in consequence of anything said or done likely to render them unreliable. Generally speaking the court would not regard a confession elicited during questioning under detention at a police station as unreliable merely because the suspect had not at the time had the benefit of legal advice (unless, of course, by reason of youth or mental frailty or for any other reason the suspect may be regarded as having been particularly vulnerable to such questioning see, for example, R v McGovern (1990) 92 Cr App R 228). Nevertheless the principle established in Salduz that underlies the Cadder rule is, I apprehend, properly given effect in England and Wales by the appropriate application of sections 58 and 78 of PACE which provide respectively: 58(1) A person arrested and held in custody in a police station or other premises shall be entitled, if he so requests, to consult a solicitor privately at any time. 78(1) In any proceedings the court may refuse to allow evidence on which the prosecution proposes to rely to be given if it appears to the court that, having regard to all the circumstances, including the circumstances in which the evidence was obtained, the admission of the evidence would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it. Consistently, therefore, with the operation of the Cadder rule in Scotland, the discretion to exclude evidence under section 78(1) is, I apprehend, routinely exercised in England and Wales in the case of significant and substantial breaches of the right to legal advice conferred by section 58 and the related rights arising under Code C of the Codes of Practice established under PACE. In England and Wales, however, suspects do not, as I understand it, have a right to free legal advice before their arrest and admission into custody. The polices only obligation at this earlier stage is to caution the suspect before questioning begins. Once, however, a decision to arrest is made and once grounds for arrest exist it cannot then be delayed so as to defer the suspects right to legal advice the police are required to stop the questioning and to resume it only at the police station. On arrival at the police station the detainee must be advised about his right to free legal advice, including a right to speak to a solicitor on the telephone, and he must be asked if he wishes to do so. Once the interview begins he must again be reminded of his right to free legal advice. So much for the position obtaining under English law. Somewhat to my surprise, my own brief judgment in Cadder is sought to be prayed in aid in support of the respondents contention on these references that the principle against self incrimination requires a suspect to be given access to legal advice before he is first questioned whatever may be the circumstances of that questioning providing only that article 6(1) is engaged (as indeed it was held to be engaged even in the situation that arose in Zaichenko v Russia (application no 39660/02) (unreported) (judgment given 18 February 2010) see paras 41 44 of Lord Hopes judgment). With the best will in the world, however, I cannot recognise my judgment in Cadder as offering the least support for any such contention. On the contrary, the whole context of that judgment was interrogation in a police station and in the last sentence I was endeavouring to explain the principal considerations which seem to me to underlie the principle against self incrimination, namely the importance of guarding against both inadequate police investigation and the exploitation of vulnerable suspects. Strasbourgs evident core concern in Salduz (see in particular para 53 of the Courts judgment) is that suspects should be protected against abusive coercion and that miscarriages of justice should be prevented. Quintessentially such risks arise in the very situation under consideration in Salduz: the interrogation of a terrorist suspect in police custody. Small wonder that the court (at para 53) saw its decision as in line with the generally recognised international human rights standards, standards which may be seen from the instruments referred to in the footnotes to relate specifically to rights of access to a lawyer during, rather than before, suspects are taken into police custody. Another decision relied upon by the respondents is that of the Supreme Court of Canada in R v Grant [2009] 2 SCR 353 and true it is that the court there, having given a wide meaning to the concept of detention, concluded on the particular facts of that case (which involved the kerbside questioning of a suspect leading to his being searched and found to be carrying a loaded firearm) that the police had breached section 10(b) of the Canadian Charter of Rights and Freedoms by failing before questioning the suspect to advise him of his right to speak to a lawyer. Section 10(b) provides: Everyone has the right on arrest or detention . (b) to retain and instruct counsel without delay and to be informed of that right . Importantly, however, the Supreme Court concluded that, the breach of section 10(b) notwithstanding, the trial judge had been entitled pursuant to section 24(2) of the Charter to admit the incriminating evidence and in the result upheld the conviction. Section 24(2) provides: Where . a court concludes that evidence was obtained in a manner that infringed or denied any rights or freedoms guaranteed by this Charter, the evidence shall be excluded if it is established that, having regard to all the circumstances, the admission of it in the proceedings would bring the administration of justice into disrepute. For present purposes, two paragraphs only from the head note to the courts immensely long judgments must suffice: When faced with an application for exclusion under section 24(2), a court must assess and balance the effect of admitting the evidence on societys confidence in the justice system having regard to: (1) the seriousness of the Charter infringing state conduct, (2) the impact of the breach on the Charter protected interests of the accused, and (3) societys interest in the adjudication of the case on its merits. At the first stage, the court considers the nature of the police conduct that infringed the Charter and led to the discovery of the evidence. The more severe or deliberate the state conduct that led to the Charter violation, the greater the need for the courts to dissociate themselves from that conduct, by excluding evidence linked to that conduct, in order to preserve public confidence in and ensure state adherence to the rule of law. The second stage of the inquiry calls for an evaluation of the extent to which the breach actually undermined the interests protected by the infringed right. The more serious the incursion on these interests, the greater the risk that admission of the evidence would bring the administration of justice into disrepute. At the third stage, a court asks whether the truth seeking function of the criminal trial process would be better served by admission of the evidence or by its exclusion. Factors such as the reliability of the evidence and its importance to the Crowns case should be considered at this stage. The weighing process and the balancing of these concerns is a matter for the trial judge in each case. Where the trial judge has considered the proper factors, appellate courts should accord considerable deference to his or her ultimate determination. Here, the gun was discovered as a result of the accuseds statements taken in breach of the Charter. When the three stage inquiry is applied to the facts of this case, a balancing of the factors favours the admission of the derivative evidence. The Charter infringing police conduct was neither deliberate nor egregious and there was no suggestion that the accused was the target of racial profiling or other discriminatory police practices. The officers went too far in detaining the accused and asking him questions, but the point at which an encounter becomes a detention is not always clear and the officers mistake in this case was an understandable one. Although the impact of the Charter breach on the accuseds protected interests was significant, it was not at the most serious end of the scale. Finally, the gun was highly reliable evidence and was essential to a determination on the merits. The balancing mandated by section 24(2) is qualitative in nature and therefore not capable of mathematical precision. However, when all these concerns are weighed, the courts below did not err in concluding that the admission of the gun into evidence would not, on balance, bring the administration of justice into disrepute. The significant impact of the breach on the accuseds Charter protected rights weighs strongly in favour of excluding the gun, while the public interest in the adjudication of the case on its merits weighs strongly in favour of its admission. However, the police officers were operating in circumstances of considerable legal uncertainty, and this tips the balance in favour of admission. In short, the position in Canada, just as in England and Wales, is that no absolute rule applies to exclude incriminating evidence obtained in breach of a constitutional right to legal advice although it may be supposed that in flagrant cases equivalent to those where the Cadder rule itself would apply directly (where a suspect in police custody is denied access to a lawyer during interrogation) the Canadian courts would invariably strike the section 24(2) balance in the accuseds favour. It follows from all this that I share Lord Hopes view that the court in Salduz ought not to be understood to be laying down an absolute rule of exclusion with regard to admissions made without the opportunity to take legal advice irrespective of whether or not the suspect was at the time actually in police custody. The contention that Salduz requires the Cadder rule to be extended in this way to my mind founders on a proper understanding both of what the Strasbourg Court was there saying in the particular factual context of that case, and of the recognised international human rights standards underlying that decision. It also seems to me inconsistent both with the terms of Judge Bratzas concurring opinion in that case (implicit in which was a recognition that under the majority judgment the very earliest time at which a suspect could be found entitled to legal advice is when he is taken into police custody or pre trial detention) and with Strasbourgs post Salduz jurisprudence (helpfully analysed by Lord Hope in great detail), most notably the judgment in Zaichenko v Russia itself. Also like Lord Hope (see paras 50 53 above) I find some assistance here in the decision of the Supreme Court of the United States in Miranda v Arizona 384 US 436 (1966). As Lord Hope observes (at para 53), the significance of Miranda is that it adopts a custodial approach to the question as to when access to a lawyer is required, the fundamental reason being that it is at that point that the circumstances in which [the suspects] interrogation takes place are inherently intimidating, because [of] the compelling atmosphere inherent in the process of in custody interrogation. As, however, Lord Hope also observes: It was noted that an interpretation of the requirement that the right to legal advice arose at an earlier stage would hamper the traditional function of the police in investigating crime. I have already indicated (at para 80 above) my own understanding of the central considerations underlying the principle against self incrimination: the importance of guarding against the exploitation of vulnerable suspects and also against inadequate police investigation. In the intimidating circumstances of custodial interrogation there are undoubtedly some suspects who confess to crimes of which in truth they are innocent. And undoubtedly too, once a suspect has confessed, the police are likely to become less inclined to pursue other useful avenues of investigation that may identify the actual offender. Thus it is that miscarriages of justice can occur. As Miranda suggests, however, the introduction of a right to legal advice (and what, of course, is being contended for here is an absolute right to free legal advice) at some pre custodial stage, so far from encouraging proper police investigation into crime, would in fact tend to inhibit it. It is, in short, one thing to require of the police that they caution a suspect before questioning him, quite another to require that he be provided with legal assistance as a precondition of any self incriminating answers later becoming admissible in evidence against him. This is the critical distinction which Zaichenko v Russia so clearly illustrates. The Court there considered quite separately the applicants article 6 complaints as to (i) legal assistance and (ii) the privilege against self incrimination and the right to remain silent and in the event it found no violation of article 6 (3)(c) in respect of the former but a violation of article 6(1) in respect of the latter (the applicants self incriminatory answers to the polices roadside questioning having been elicited without his first being cautioned). Like Lord Hope, I too would in the present context give full weight to what has come to be known as the Ullah principle see para 20 of Lord Binghams judgment in R (Ullah) v Special Adjudicator [2004] 2 AC 323. It would seem to me quite wrong for this court now to interpret article 6 of the Convention as laying down an absolute exclusory rule of evidence that goes any wider than Strasbourg has already clearly decided to be the case. And whatever else one may say about the Strasbourg jurisprudence, it can hardly be regarded as deciding the present issue clearly in the respondents favour. In the result I agree with the answers proposed by Lord Hope to the questions posed in the respective references. Essentially it comes to this. In the cases of Ambrose and M there is no absolute rule such as that laid down in Cadder which precludes reliance on the evidence in question. Rather it must be for the trial court to decide just as an English court must decide under section 78(1) of PACE whether the evidence ought fairly to be admitted or excluded. In Gs case, however, because he was, as Lord Hope puts it (para 71), in effect, in police custody from the time when, following his arrest, he was handcuffed and detained, the Cadder rule should be held to apply to his questioning during the subsequent search. That said, I also agree with Lord Hope (para 72) that the Cadder rule would by no means routinely apply to exclude answers to questions put to a suspect without his having been given the opportunity to seek legal advice during a search. That too would be to go further than Strasbourg has yet gone. LORD DYSON I agree with the answers proposed by Lord Hope for the reasons that he gives as well as those given by Lord Brown. In Salduz v Turkey (2008) 49 EHRR 421 (applied by this court in Cadder v HM Advocate [2010] UKSC 43, [2010] SLT 1125), the ECtHR decided that article 6 of the European Convention on Human Rights (the Convention) requires that, as a rule, access to a lawyer should be provided to a suspect when he is interrogated by the police while he is in detention; and that there will usually be a violation of article 6 if incriminating statements made by a suspect during a police interrogation in such circumstances are relied on to secure a conviction. I shall refer to this as the Salduz principle. The central question that arises in the present proceedings is whether the Salduz principle also applies to interrogations of a suspect that are conducted before he is placed in detention. Lord Hope says that there is no sufficiently clear indication in the Strasbourg jurisprudence of how the ECtHR would resolve this question and that we should not apply the Salduz principle to situations to which the ECtHR has not clearly stated that it applies. Lord Kerr says that (i) even if the ECtHR has not clearly decided whether article 6 requires the Salduz principle to be applied to statements obtained from a suspect when he is not in detention, that is not a sufficient reason for this court to refuse to do so (paras 126 to 130); (ii) to draw a distinction between evidence obtained before and after a suspect is detained is not only arbitrary, it is illogical (para 136); and (iii) in any event, an analysis of the Strasbourg jurisprudence clearly shows that it draws no distinction between the two cases (paras 146 and 148). It is convenient to start with explaining why I cannot accept Lord Kerrs third proposition, since, if it is clear from the Strasbourg jurisprudence that the Salduz principle applies whether or not the evidence is obtained from the suspect while he is in detention, then the premise on which the judgments of Lord Hope and Lord Brown are based falls away. As Lord Hope explains at paras 26 to 33, the judgment in Salduz was concerned with whether there was or should be a rule that there was a right of access to a lawyer where the person being interrogated was in police custody. On its facts, it was a case about a suspect who had been interrogated by the police while he was in custody. The references in para 53 to generally recognised international human rights standards (which are concerned with the position of suspects who are in custody) and to abusive coercion strongly suggest that the court was only considering the position of suspects who are in custody. Paras 37 to 44 contains a discussion of the international law materials relating to a suspects right of access to a lawyer during police custody. Unsurprisingly, the judgment says nothing explicitly about the position of a suspect who is not in custody. I agree with Lord Hope that the concurring opinions of Judge Bratza and Judge Zagrebelski lend further support to the conclusion that the court was only considering the position of suspects who are in custody. Lord Kerr says that Salduz is authority for the broad proposition that a suspect is entitled to have access to a lawyer at the investigation stage (because he is in a particularly vulnerable position at that stage of the proceedings) and that there is nothing in the reasoning of the decision to indicate that the investigation stage only begins after the suspect has been detained. But the judgment should be read as a whole. In my view, the better interpretation is that, for the reasons I have already given, the court was only addressing the issue of police interrogation of a suspect in custody. It was making the point that for such a suspect the investigation stage takes place while he is in custody, where there is the risk of abusive coercion and he is in a particularly vulnerable position of making self incriminating statements. Further, the decision of the First Section in Zaichenko provides clear support for the view that the Strasbourg jurisprudence draws a distinction between the fruits of police questioning of a suspect who is in detention and one who is not. I agree with the reasons given by Lord Hope at para 46 for rejecting the arguments that Zaichenko was wrongly decided. I note that Lord Kerr does not suggest that it was wrongly decided. He analyses the reasoning of Zaichenko closely at paras 24 to 40. He says that the basis for the courts decision that there had not been a violation of article 6(3)(c) is the cumulative effect of a number of factors (which he identifies at para 33) and that none of them, if taken in isolation, would have been sufficient to support the courts conclusion. I cannot accept this interpretation of the courts reasoning in Zaichenko. It is true that at para 46, the court notes at the outset that the applicant waived his right to a lawyer. But the court went on to give other reasons for its decision at para 47. It said that the present case is different from previous cases concerning the right to legal assistance in pre trial proceedings (see Salduz. .) because the applicant was not formally arrested or interrogated in police custody. He was stopped for a roadcheck. (emphasis added). The court was, therefore, fully alive to the difference between police questioning of a suspect at the roadside and police questioning of a suspect who has been taken into custody. It was in the context of this difference that the court made express reference to Salduz. Plainly and explicitly it did not apply the Salduz principle and it gave its reasons for not doing so. The principal reason was given at para 48 which Lord Kerr has set out at para 160 below. I agree with Lord Kerr that this paragraph is not easy to follow. But what is clear is that the court considered that, whatever restrictions faced the suspect when he was being questioned at the roadside, they did not amount to a significant curtailment of [his] freedom of action sufficient to entitle him to legal assistance at this early stage of the proceedings. This is an essential part of the courts reasoning. It is clear that the court considered that the fact that the questioning took place before the suspect had been formally arrested or detained was critical. I conclude, therefore, that the Strasbourg jurisprudence does not clearly show that the Salduz principle applies to statements made by a suspect who is not in detention when he is questioned by the police. The only case to which our attention has been drawn in which the Salduz principle has been considered in relation to statements made by a suspect who is not in detention is Zaichenko. For the reasons that I have given, Zaichenko strongly suggests that the Salduz principle does not apply in that situation. I turn to Lord Kerrs second proposition. He says that the animation of the right under article 6(1) cannot be determined in terms of geography (para 133) and that it is arbitrary and illogical to hold that a suspect has no right to access to a lawyer if he is questioned by the police until he is taken into custody: the suspect is as likely to make incriminating statements outside as inside a police station and is therefore in equal need of the protection of article 6(3)(c) in both situations. The essential question is at what stage of the proceedings access to a lawyer should be provided in order to ensure that the right to a fair trial is sufficiently practical and effective for the purposes of article 6(1). What fairness requires is, to some extent, a matter of judgment. I accept that opinions may reasonably differ on whether the line for providing a suspect with access to a lawyer should be drawn at the point when the person being questioned becomes a suspect or at the point when he is taken into custody. I do not doubt that being interrogated by the police anywhere can be an intimidating experience and that a person may make incriminating statements to the police wherever the interrogation takes place. This can occur in a situation of what the majority of the Canadian Supreme Court described as psychological detention in R v Grant 2009 SCC 32 ; [2009] 2 SCR 353, at para 30. On the other hand, the arresting of a suspect and placing him in custody is a highly significant step in a criminal investigation. The suspect cannot now simply walk away from the interrogator. For most suspects, being questioned after arrest and detention is more intimidating than being questioned in their home or at the roadside. The weight of the power of the police is more keenly felt inside than outside the police station. As was said in Miranda v Arizona 384 US 436 (1966) at p 478, there is a compelling atmosphere inherent in the process of in custody interrogation. No doubt, it is also present to the mind of the suspect that the possibility of abusive coercion is greater inside than outside the police station. Whether the difference between interrogation inside and outside the police station is sufficient to justify according the suspect access to a lawyer in one situation but not the other is a matter on which opinions may differ. But I do not see how it can be said to be arbitrary or illogical to recognise that there is a material difference between the two situations. I can agree with Lord Kerr (para 167) that one should be careful about making assumptions about the Miranda experience or believing that it can be readily transplanted into European jurisprudence. But this counsel of caution is hardly consistent with the assertion that the adoption of the distinction made in Miranda is arbitrary and illogical. So what should this court do in these circumstances? This brings me to Lord Kerrs first proposition. As I have said, to the extent that the ECtHR has spoken on the question at all, Zaichenko contains a clear statement that the Salduz principle does not apply to statements made by a suspect during police questioning while the suspect (i) is not in custody or (ii) is not deprived of his freedom of action in any significant way. I derive (ii) from para 48. That paragraph echoes the language of p 477 of Miranda: The principles announced today deal with the protection which must be given to the privilege against self incrimination when the individual is first subjected to police interrogation while in custody at the station or otherwise deprived of his freedom of action in any significant way (emphasis added). I accept, however, that there is no clear and constant Strasbourg jurisprudence on the point. So the obligation in section 2 of the Human Rights Act 1998 to take account of judgments of the ECtHR does not compel a decision one way or the other: see R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] UKHL 23; [2003] 2 AC 295 para 26. Nor is this a case where, although Strasbourg has not expressly decided the point, it can nevertheless clearly be deduced or inferred from decisions of the ECtHR how the court will decide the point if and when it falls to be determined. Lord Kerr has referred to para 20 of Lord Binghams speech in R (Ullah) v Special Adjudicator [2004] 2 AC 323 and the dictum that the duty of national courts is to keep pace with the Strasbourg jurisprudence as it evolves over time: no more, but certainly no less. Lord Brown extended this in R (Al Skeini and others) v Secretary of State for Defence [2008] 1 AC 153 at para 106 by saying that Lord Binghams dictum could as well have ended: no less, but certainly no more. At para 107 Lord Brown said that the Convention should not be construed as reaching any further than the existing Strasbourg jurisprudence clearly shows it to reach. Lady Hale said much the same at para 90. This approach was explicitly endorsed in R (Smith) v Oxfordshire Assistant Deputy Coroner [2010] UKSC 29; [2011] 1 AC 1 by Lord Phillips at para 60, Lord Hope at para 93 and Lord Brown at para 147. But these statements are not entirely apposite where Strasbourg has spoken on an issue, but there is no clear and constant line of authority. That is the case here because there is only one case in which the ECtHR has expressly decided that the Salduz principle does not apply in relation to the interrogation of a suspect who is not in detention (Zaichenko). Moreover, despite the view I have expressed earlier in this judgment, I accept that it is arguable that the language of para 55 of the judgment in Salduz can and should be interpreted as holding that the Salduz principle does apply in such circumstances. So what should a domestic court do in this situation? Recognising that it is our duty to give effect to the domestically enacted Convention rights, I think that the correct approach was suggested at para 199 of the judgment of Lord Mance in Smith: However, it is our duty to give effect to the domestically enacted Convention rights, while taking account of Strasbourg jurisprudence, although caution is particularly apposite where Strasbourg has decided a case directly in point or, perhaps, where there are mixed messages in the existing Strasbourg case law and, as a result, a real judicial choice to be made there about the scope or application of the Convention. The position here is that Strasbourg has decided a case which is directly in point (Zaichenko). The most that can be said on behalf of the accused in these three cases is that by reason of (i) the broad terms in which para 55 of the judgment in Salduz is expressed and (ii) the decision in Zaichenko, it is arguable that there are mixed messages in the Strasbourg case law as to whether the Salduz principle applies to evidence obtained from a suspect who has been interrogated without access to a lawyer outside the police station. To use the words of Lord Mance, it follows that there is a real judicial choice to be made. Whether fairness requires the Salduz principle to apply in both situations raises questions of policy and judgment on which opinions may reasonably differ and as to which there is no inevitable answer. To demonstrate this, it is sufficient to contrast the approach of the US Supreme Court in Miranda with that of the Canadian Supreme Court in Grant. In these circumstances, I consider that caution is particularly apposite and that the domestic court should remind itself that there exists a supranational court whose purpose is to give authoritative and Europe wide rulings on the Convention. If it were clear, whether from a consideration of the Strasbourg jurisprudence or otherwise, that the Salduz principle applies to statements made by suspects who are not detained or otherwise deprived of their freedom of action in any significant way, then it would be our duty so to hold. But for the reasons that I have given, it is not clear that this is the case. In these circumstances, we should hold that the Salduz principle is confined to statements made by suspects who are detained or otherwise deprived of their freedom in any significant way. LORD MATTHEW CLARKE I refer to Lord Hopes judgment for his detailed description of the references and the background to them which I gratefully adopt. In R v Samuel [1988] QB 615 at p 630 Hodgson J, delivering the judgment of the Court of Appeal, described the right of a suspect to consult and instruct a lawyer as one of the most important and fundamental rights of a citizen. His Lordship did so in the context of section 58(1) of the Police and Criminal Evidence Act 1984 (PACE). The present references have raised the question as to when, and in what circumstances, such a right emerges as part of Scots law by virtue of the application of Article 6 ECHR. The Grand Chamber of the European Court of Human Rights in Salduz v Turkey (2008) 49 EHRR 421 held that the rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction (para 55). In Cadder v HM Advocate 2010 SLT 1125 this court applied that decision to the existing law of Scotland and, in particular, to the operation of the powers of detention of persons then contained in sections 14 and 15 of the Criminal Procedure (Scotland) Act 1995. As a result of the courts decision in Cadder the Scottish Parliament enacted certain provisions in the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010. In particular a new section 15A to the 1995 Act was enacted which is in the following terms: 15A Right of suspects to have access to a solicitor (c) (a) (a) (b) (1) This section applies to a person (the suspect) who is detained under section 14 of this Act, attends voluntarily at a police station or other premises or place for the purpose of being questioned by a constable on suspicion of having committed an offence, or is (i) arrested (but not charged) in connection with an offence, and (ii) being detained at a police station or other premises or place for the purpose of being questioned by a constable in connection with the offence. (2) The suspect has the right to have intimation sent to a solicitor of any or all of the following the fact of the suspects (i) detention (ii) attendance at the police station or other premises or place, or (iii) arrest (as the case may be), (b) the police station or other premises or place where the suspect is being detained or is attending, and (c) that the solicitors professional assistance is required by the suspect. (3) The suspect also has the right to have a private consultation with a solicitor (a) before any questioning of the suspect by a constable begins, and (b) at any other time during such questioning. (4) Subsection (3) is subject to subsections (8) and (9). (5) In subsection (3), consultation means consultation by such means as may be appropriate in the circumstances, and includes, for example, consultation by means of telephone. (6) The suspect must be informed of the rights under subsections (2) and (3) (a) without delay, or (b) (a) on arrival at the police station or other premises or place, and (b) in the case where the suspect is detained as mentioned in subsection (1)(a), or arrested as mentioned in subsection (1)(c), after such arrival on detention or arrest, (whether or not, in either case, the suspect has previously been informed of the rights by virtue of this subsection). (7) Where the suspect wishes to exercise a right to have intimation sent under subsection (2), the intimation must be sent by a constable if some delay is necessary in the interest of the investigation or the prevention of crime or the apprehension of offenders, with no more delay than is necessary. (8) In exceptional circumstances, a constable may delay the suspects exercise of the right under subsection (3) so far as it is necessary in the interest of the investigation or the prevention of crime or the apprehension of offenders that the questioning of the suspect by a constable begins or continues without the suspect having had a private consultation with a solicitor. (9) Subsection (3) does not apply in relation to the questioning of the suspect by a constable for the purpose of obtaining the information mentioned in section 14(10) of this Act. Prior to that enactment, and the decision in Cadder, the position was that the courts in Scotland had never recognised a suspects right to have access to a solicitor before or during questioning of him by the police. The position was, as stated in pre Cadder versions of Renton and Browns Criminal Procedure, 6th edition at para 24 39 as follows: any statement by a suspect in answer to police questions will be inadmissible in evidence at the subsequent trial of that suspect unless it has been obtained fairly, and that all the circumstances of the questioning (apart from whether or not a caution was given to a person accused of a crime) are relevant in so far, and only in so far, as they indicate the presence or absence of unfairness. That passage continued later: The current situation is that the fact that the accused was at the same time under suspicion or even under arrest is not in itself crucial, but is merely a circumstance like any other to be taken into account in assessing the fairness of the police, in the same way as the fact that he.did not have the services of a solicitor Reference was made to, inter alia, Law v McNicol 1965 JC 32, HM Advocate v Whitelaw 1980 SLT (Notes) 25 and HM Advocate v Anderson 1980 SLT (Notes) 104. As was also noted in Renton and Brown at para 24 39 There are no legal rules in Scotland governing the questioning of a suspect such as the Judges Rules and Administrative Directions issued by the Home Office. Nor were there, until the 2010 Act, any provisions similar to those provided in England and Wales under PACE. In HM Advocate v Cunningham 1939 JC 61 Lord Moncrieff at page 65 noted that after the accused had been charged and had replied, he subsequently received an incidental intimation that he might, if he so desired, require and obtain the assistance of a law agent. His Lordship continued: I think it would have been desirable that that intimation should have been made formally and should have been made at the very outset before the making of any charge, but I am satisfied that, in not making it, the police officers followed their usual practice and acted with an intention of complete fairness. Nonetheless, any such practice, in my opinion, ought to be reformed The later full bench decision in Chalmers v HM Advocate 1954 JC 66 gave some support for the view that all answers given by a suspect to a police officer were inadmissible and nothing was said about a suspects right to have a solicitor present when he was being questioned. Although that decision was never over ruled its influence was considered to have been virtually removed by subsequent case law, concerned, it seems, with rising crime rates, which made the criterion of admissibility, fairness see Lord Advocates Reference (no. 1 of 1983), 1984 JC 52. The decision in the case of Cadder, in applying the law as set out in Salduz, can be seen as truly innovative as regards what had been understood to be the domestic law of Scotland up until that time. The present references raise, in the first place, the question as to how far the innovation goes having regard to the relevant Strasbourg jurisprudence. The focus of the hearing before this court was concerned, to a significant extent, with how the suspects right to access to a lawyer has been defined to date by the Strasbourg court, either expressly, or by necessary implication, whatever other arguments there may be in principle, or policy, for defining it otherwise. The defence in the cases before us sought to take from the language of the ECtHR, in discussing the right in the decided cases on the topic, a broad approach to its nature and its extent. They had some basis for doing so having regard to how the court expressed itself in Salduz at para 55 where the Grand Chamber was to the effect Article 6(1) requires that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police. At para 52 of the judgment one finds the following Article 6 will normally require that the accused be allowed to benefit from the assistance of a lawyer already at the initial stages of police interrogation. That language, it was submitted, focused on the status of the person as a suspect when determining his rights rather than his position being that of a person in custody. Similar language can be seen in previous judgments of the Court. For example in Panovits v Cyprus (Application No 4268/04) (unreported) given 11 December 2008 the Court, at para 66, observed that the concept of fairness enshrined in Article 6 requires that the accused be given the benefit of the assistance of a lawyer already at the initial stages of police interrogation see also Borotyuk v Ukraine (Application No 33579/04) (unreported) given 16 December 2010 at para 79. It should, however, be noted that Panovits was a case which concerned the questioning of a child when the child had gone to the police station with his father, as requested by the police, and was thereafter arrested. Borotyuk was also a custody case. In Panovits, at para 65, the court, having said that it was reiterating that the right to silence and the right not to incriminate oneself were generally recognised international standards, which lay at the heart of the notion of a fair procedure under Article 6, went on to say: Their rationale lies, inter alia, in the protection of the accused against improper compulsion by the authorities, thereby contributing to the avoidance of miscarriages of justice and to the fulfilment of the aims of Article 6. In Salduz similar remarks were made by the court at paragraph 53: These principles, outlined at para 52 above, are also in line with the generally recognised international human rights standards which are at the core of the concept of a fair trial and whose rationale relates in particular to the protection of the accused against abusive coercion on the part of the authorities. They also contribute to the prevention of miscarriages of justice and the fulfilment of the aims of Article 6, notably equality of arms between the investigating or prosecuting authorities and the accused. Those remarks would tend, in my judgement, to support the contention that the focus of the courts concern in Salduz, and other cases, has been in relation to those situations where methods of coercion or oppression might be more readily, and effectively, employed upon a suspect person, namely when his liberty has been curtailed by the authority detaining him. Significant support for that being the focus of such a rule is to be found in the jurisprudence of the United States, and particularly the seminal decision of the US Supreme Court in Miranda v State of Arizona 384 US 436 (1966), where at p 467, para 23 the court said: Today, then, there can be no doubt that the Fifth Amendment privilege is available outside of criminal court proceedings and serves to protect persons in all settings in which their freedom of action is curtailed in any significant way from being compelled to incriminate themselves. We have concluded that without proper safeguards the process of in custody interrogation of persons suspected or accused of crime contains inherently compelling pressures which work to undermine the individuals will to resist and to compel him to speak where he would not otherwise do so freely. In order to combat these pressures and to permit a full opportunity to exercise the privilege against self incrimination, the accused must be adequately and effectively apprised of his rights and the exercise of those rights must be fully honoured. The court then at pp 478 479, paras 66, 67 defined the right and its extent, together with its rationale in the following way: To summarise, we hold that when an individual is taken into custody or otherwise deprived of his freedom by the authorities in any significant way and is subjected to questioning the privilege against self incrimination is jeopardised. Procedural safeguards must be employed to protect the privilege and unless other fully effective means are adopted to notify the person of his right of silence and to assure that the exercise of the right will be scrupulously honoured, the following measures are required. He must be warned prior to any questioning that he has the right to remain silent, that anything he says can be used against him in a court of law, that he has the right to the presence of an attorney, and that if he cannot afford an attorney one will be appointed for him prior to any questioning if he so desires. Opportunity to exercise these rights must be afforded to him throughout the interrogation. After such warnings have been given, and such opportunity afforded him, the individual may knowingly and intelligently waive these rights and agree to answer questions or make a statement. But unless and until such warnings and waiver are demonstrated by the prosecution at trial, no evidence obtained as a result of interrogation can be used against him. The Miranda decision has informed international legal discussion of the right of the suspect to have access to a lawyer, since the decision was given. Another factor pointing towards the more restrictive extent of the right in question is that the Strasbourg court, in defining it, has done so by referring to the context of what are described as pre trial proceedings, see para 50 of the Salduz judgment. The person taken into detention who, in due course, may face being tried for a crime, might well be said to be involved, at the stage of any questioning, while detained, to be in pre trial proceedings for the purposes of Article 6. That that is the context in which the Strasbourg court has been considering the right in question under Article 6 is, I think, supported by what the court had to say recently in Affaire Brusco c France (Requete No 1466/07) (unreported) given 14 October 2010, at para 45: La Cour rappelle galement que la personne place en garde vue a le droit dtre assiste dun avocat ds le dbut de cette mesure ainsi que pendant les interrogatoires, et ce a fortiori lorsquelle na pas t nforme par les autorits de son droit de se taire. That passage also, to my mind, points to the phrases in Salduz early access to a lawyer and from the first interrogation of a suspect by the police as being references to the earliest point in time after the person is taken into custody with his liberty having been restricted by the investigating authorities. The reference by the Strasbourg court to equality of arms, at para 53 of its judgment in Salduz, also, in my opinion, supports that approach. Once a persons liberty is curtailed by the authorities, the balance of power between him and the representatives of the state shifts significantly and, it might be said, requires to be redressed by his having access to a lawyer. All of these considerations, taken together, with what Lord Hope has to say in his analysis of the Salduz decision, and other Strasbourg jurisprudence, ultimately persuades me that the proper understanding of those decisions is that the right to have access to a lawyer emerges at the point when the suspect is deprived of his liberty of movement, to any material extent, by the investigating authorities and is to be questioned by them. It follows that I am in agreement with Lord Hope that the Strasbourg jurisprudence, to date, does not support the defence contention in these references that the ECtHR has gone as far as to say that the right emerges as soon as a suspect is to be questioned by the police in whatever circumstances. As to whether this court should go further than the ECtHR seems to have gone so far, certain important considerations lead me to the conclusion that it should not. The first is the difficulty that can arise in relation to defining precisely at what point in time someone becomes a suspect, as opposed to being a witness or a detained person. The second is that the broader version of the right, contended for by the defence in these cases, could have serious implications for the proper investigation of crime by the authorities. If the police are to be required to ensure that a person who they wish to question about the commission of a crime (in a situation where the circumstances point to the person being a possible suspect) should have access to a lawyer, if he so wishes, then such a requirement could hamper proper and effective investigations in situations which are often dynamic, fast moving and confused. The unfortunately regular street brawls in city and town centres, or disturbances in crowded places like night clubs, which, on occasions, result in homicide, are simply examples of situations which highlight the problems that might be involved. In relation to the first of these considerations I note that the limits of the Miranda rights have been, very recently, (16 June 2011) re visited by the US Supreme Court in JDB v North Carolina 564 US 2011. That case involved the questioning of a 13 year old. The majority of the court held that the childs age was a relevant factor to be taken into account in addressing the question as to whether he had been in custody at the time of questioning. The majority did not depart from the test being whether or not the person was in custody at the relevant time and at page 18 of the opinion of the court they directed the state court to address that question, taking account of all of the relevant circumstances of the interrogation, including the childs age at the time. The disagreement between the majority and minority was with regard to the relevance of the childs age in judging of the question as to whether or not he was in custody at the relevant time. In giving the dissenting judgment, with which the rest of the minority concurred, Alito J at pp 1 2 said Mirandas custody requirement is based on the proposition that the risk of unconstitutional coercion is heightened when a suspect is placed under formal arrest or is subjected to some functionally equivalent limitation on freedom of movement. Alito J, then, at page 8 of his judgment, under reference to previous authorities remarked that a core virtue of the Miranda rule has been the clarity and precision of its guidance to police and courts. Again at page 13 he remarked that a core virtue of Miranda was the ease and clarity of its application. I am persuaded that the value of clarity and certainty in this area are relevant factors in deciding the extent of the right. As to the second consideration, I recall what was said by Lord Wheatley in Miln v Cullen 1967 JC 21 at pp 29 30: While the law of Scotland has always very properly regarded fairness to an accused person as being an integral part of the administration of justice, fairness is not a unilateral consideration. Fairness to the public is also a legitimate consideration, and in so far as police officers in the exercise of their duties are prosecuting and protecting the public interest, it is the function of the Court to seek to provide a proper balance to secure that the rights of individuals are properly preserved, while not hamstringing the police in their investigation of crime with a series of academic vetoes which ignore the realities and practicalities of the situation and discount completely the public interest. That dictum is, of course, of its time and pre dates the experience of examples of convictions obtained on false confessions which have caused justifiable public concern. Nevertheless it is difficult, even now, to contradict the substance of what his Lordship said. As was said by Binnie J in the Canadian case of R v Grant 2009 SCC 32 [2009] 2 SSC 353 at para 180 It is not controversial that in the early stages of a criminal investigation the police must be afforded some flexibility before the lawyers get involved. The police do have the right to ask questions and they need to seek the co operation of members of the public, including those who turn out to be miscreants. It seems to me that the balancing of legitimate interests referred to by Lord Wheatley is a further justification for restricting the right to have access to a lawyer to situations in which the suspect is in custody. The law in formulating a right designed to protect and support a legitimate interest, such as the right to silence, should seek to avoid defining that right in such a way, as to damage, or unduly inhibit another legitimate interest such as the efficient investigation of crime. The task, which may be a delicate and difficult one, is to produce a result which strikes a rational balance between the two interests. I consider the balance struck in the US Miranda jurisprudence achieves that end. For the foregoing reasons I agree entirely with Lord Hope as to the way in which references in the cases of Ambrose and M should be answered. In relation to these two cases the admissibility or otherwise of the replies to questioning will fall to be determined by the Appeal Court and the trial judge respectively in accordance with the rules as to fairness. In the passage in his judgment in Miln v Cullen, cited above, Lord Wheatley continued: Even at the stage of routine investigations, where much greater latitude is allowed, fairness is still the test, and that is always a question of circumstances. As regards Gs case I consider that the right to access to a lawyer, before questioning, arises not only when the suspect is taken into the physical surroundings of a police station. The focus should be on whether, at the commencement of the proposed questioning, the individuals liberty is significantly restricted by the police. The location where that occurs is not in itself conclusive. In relation to rights of this kind matters should be judged in accordance with what the substance of the position is rather than its form. It follows that I, therefore, also agree with Lord Hope in the way in which the reference in Gs case should be answered. I also agree with Lord Hope, for the reasons given by him, that the Cadder rule would not necessarily routinely apply to exclude answers to questions, put to a suspect, without his having been given the opportunity to seek legal advice, during a search. There is no justification in the Strasbourg jurisprudence, as I read it, for the right to be so interpreted. By way of a footnote I would add this. Our attention was drawn by the defence, in support of their position, to a Proposal for a Directive of the European Parliament and of the Council on the right of access to a lawyer in criminal proceedings and on the right to communicate upon arrest recently published by the European Commission Brussels, XXX COM (2011) 326/3. Article 3(1) of the draft of the proposed Directive, attached to that document is in the following terms: 1. Member States shall ensure that suspects and accused persons are granted access to a lawyer as soon as possible and in any event: (a) before the start of any questioning by the police or other law enforcement authorities; (b) upon carrying out any procedural or evidence gathering act at which the persons presence is required or permitted as a right in accordance with national law, unless this would prejudice the acquisition of evidence; (c) from the outset of deprivation of liberty. The proposed Article 3 appears to envisage three discrete situations where the right of access to a lawyer should arise. The authors of the proposal appear to believe that those draft provisions reflect the settled jurisprudence of the Strasbourg court see para 13. It follows from what I have said above that their apparent understanding of the Strasbourg jurisprudence does not coincide with my own. LORD KERR Introduction The well known aphorism of Lord Bingham in para 20 of R (Ullah) v Special Adjudicator [2004] UKHL 26, [2004] 2 AC 323 that the duty of national courts is to keep pace with the Strasbourg jurisprudence as it evolves over time: no more, but certainly no less has been given a characteristically stylish twist by Lord Brown in R (Al Skeini and others) v Secretary of State for Defence [2007] UKHL 26; [2008] 1 AC 153 at para 106 where he said that the sentence could as well have ended: no less, but certainly no more. In keeping with this theme, some judges in this country have evinced what might be described as an Ullah type reticence. On the basis of this, it is not only considered wrong to attempt to anticipate developments at the supra national level of the Strasbourg court, but there is also the view that we should not go where Strasbourg has not yet gone. Thus, in the present case Lord Hope says that this courts task is to identify where the jurisprudence of the Strasbourg court clearly shows that it currently stands and that we should not expand the scope of the Convention right further than the current jurisprudence of that court justifies. Lord Binghams formulation of the principle expressed in para 20 of Ullah was prompted by his consideration of the effect of section 2 of the Human Rights Act 1998 by which the courts of this country are enjoined to take into account Strasbourg case law. Therefore, said Lord Bingham, although such case law was not strictly binding, where a clear and constant theme of jurisprudence could be detected, it should be followed because the Convention, being an international instrument, had as the authoritative source of its correct interpretation the Strasbourg court. A refusal to follow this would dilute or weaken the effect of the Strasbourg case law. I greatly doubt that Lord Bingham contemplated much less intended that his discussion of this issue should have the effect of acting as an inhibitor on courts of this country giving full effect to Convention rights unless they have been pronounced upon by Strasbourg. I believe that, in the absence of a declaration by the European Court of Human Rights as to the validity of a claim to a Convention right, it is not open to courts of this country to adopt an attitude of agnosticism and refrain from recognising such a right simply because Strasbourg has not spoken. There are three reasons for this, the first practical, the second a matter of principle and the third the requirement of statute. It is to be expected, indeed it is to be hoped, that not all debates about the extent of Convention rights will be resolved by Strasbourg. As a matter of practical reality, it is inevitable that many claims to Convention rights will have to be determined by courts at every level in the United Kingdom without the benefit of unequivocal jurisprudence from ECtHR. Moreover, as a matter of elementary principle, it is the courts duty to address those issues when they arise, whether or not authoritative guidance from Strasbourg is available. The great advantage of the Human Rights Act is that it gives citizens of this country direct access to the rights which the Convention enshrines through their enforcement by the courts of this country. It is therefore the duty of this and every court not only to ascertain where the jurisprudence of the Strasbourg court clearly shows that it currently stands but to resolve the question of whether a claim to a Convention right is viable or not, even where the jurisprudence of the Strasbourg court does not disclose a clear current view. Finally, section 6 of the Human Rights Act leaves no alternative to courts when called upon to adjudicate on claims made by litigants to a Convention right. This section makes it unlawful for a public authority, including a court, to act in a way which is incompatible with a Convention right. That statutory obligation, to be effective, must carry with it the requirement that the court determine if the Convention right has the effect claimed for, whether or not Strasbourg has pronounced upon it. In this context, it would be particularly unsatisfactory, I believe, if, because of an Ullah type reticence, we should feel constrained not to reach a decision on the arguments advanced by the respondents to these references just because those very arguments are likely to be ventilated on behalf of the applicant in ECtHR in Abdurahman v United Kingdom application no 40351/09 and we cannot say how Strasbourg will react to them. If the much vaunted dialogue between national courts and Strasbourg is to mean anything, we should surely not feel inhibited from saying what we believe Strasbourg ought to find in relation to those arguments. Better that than shelter behind the fact that Strasbourg has so far not spoken and use it as a pretext for refusing to give effect to a right that is otherwise undeniable. I consider that not only is it open to this court to address and deal with those arguments on their merits, it is our duty to do so. The nature of the right under article 6(1) taken in conjunction with article 6(3)(c) The true nature of the right under article 6(1), taken in conjunction with article 6(3) (c), can only be ascertained by reference to its underlying purpose. What is its purpose? The respondents argue that its purpose is that when a person becomes a suspect, because of the significant change in his status that this entails; because of the potential that then arises for him to incriminate himself or to deal with questions in a way that would create disadvantage for him on a subsequent trial; and because of the importance of these considerations in terms of his liability to conviction, the essential protection that professional advice can provide must be available to him. The right, it is argued, should not be viewed solely as a measure for the protection of the individuals interests. It is in the interests of society as a whole that those whose guilt or innocence may be determined by reference to admissions that they have made in moments of vulnerability are sufficiently protected so as to allow confidence to be reposed in the reliability of those confessions. For reasons that I will develop, I consider that these arguments should prevail. If it has taught us nothing else, recent experience of miscarriage of justice cases has surely alerted us to the potentially decisive importance of evidence about suspects reactions to police questioning, whether it is in what they have said or in what they have failed to say, and to the real risk that convictions based on admissions made without the benefit of legal advice may prove, in the final result, to be wholly unsafe. The role that a lawyer plays when the suspect is participating in what may be a pivotal moment in the process that ultimately determines his or her guilt is critical. Thus understood, the animation of the right under article 6(1) cannot be determined in terms of geography. It does not matter, surely, whether someone is over the threshold of a police station door or just outside it when the critical questions are asked and answered. And it likewise does not matter whether, at the precise moment that a question is posed, the suspect can be said to be technically in the custody of the police or not. If that were so, the answer to a question which proved to be the sole basis for his conviction would be efficacious to secure that result if posed an instant after he was taken into custody but not so an instant before. That seems to me to be a situation too ludicrous to contemplate, much less countenance. Two supremely relevant, so far as these appeals are concerned, themes run through the jurisprudence of Strasbourg in this area. The first is that, in assessing whether a trial is fair, regard must be had to the entirety of the proceedings including the questioning of the suspect before trial see, for instance, Imbrioscia v Switzerland (1993) 17 E.H.R.R. 441, Murray v United Kingdom (1996) 22 E.H.R.R. 29; Averill v United Kingdom (2000) 31 E.H.R.R. 839; Magee v United Kingdom (2000) 31 E.H.R.R. 822; and Brennan v United Kingdom (2001) 34 E.H.R.R. 507. The second theme is that, although not absolute, the right of everyone charged with a criminal offence to be effectively defended by a lawyer, assigned officially if need be, is one of the fundamental features of a fair trial Poitrimol v France (1993) 18 E.H.R.R. 130 and Demebukov v Bulgaria (Application No 68020/01) (unreported) given 28 February 2008 at para 50. Taken, as they must be, in combination, these features of a fair trial lead inexorably to the conclusion that where an aspect of the proceedings which may be crucial to their outcome is taking place, effective defence by a lawyer is indispensable. When one recognises, as Strasbourg jurisprudence has recognised for quite some time, that the entirety of the trial includes that which has gone before the actual proceedings in court, if what has gone before is going to have a determinative influence on the result of the proceedings, it becomes easy to understand why a lawyer is required at the earlier stage. There is no warrant for the belief that vulnerability descends at the moment that one is taken into custody and that it is absent until that vital moment. The selection of that moment as the first occasion on which legal representation becomes necessary is not only arbitrary, it is illogical. The need to have a lawyer is not to be determined on a geographical or temporal basis but according to the significance of what is taking place when the later to be relied on admissions are made. This much, I believe, is clear from paras 54 and 55 of the judgment in Salduz v Turkey (2008) 49 EHRR 421. It is worth setting out para 54 to examine its constituent parts and in order to draw together the various strands of guidance that it contains. This is what the court said in that para: the Court underlines the importance of the investigation stage for the preparation of the criminal proceedings, as the evidence obtained during this stage determines the framework in which the offence charged will be considered at the tria1. At the same time, an accused often finds himself in a particularly vulnerable position at that stage of the proceedings, the effect of which is amplified by the fact that legislation on criminal procedure tends to become increasingly complex, notably with respect to the rules governing the gathering and use of evidence. In most cases, this particular vulnerability can only be properly compensated for by the assistance of a lawyer whose task it is, among other things, to help to ensure respect of the right of an accused not to incriminate himself. This right indeed presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. Early access to a lawyer is part of the procedural safeguards to which the Court will have particular regard when examining whether a procedure has extinguished the very essence of the privilege against self incrimination. In this connection, the Court also notes the recommendations of the CPT [European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment], in which the committee repeatedly stated that the right of a detainee to have access to legal advice is a fundamental safeguard against ill treatment. Any exception to the enjoyment of this right should be clearly circumscribed and its application strictly limited in time. These principles are particularly called for in the case of serious charges, for it is in the face of the heaviest penalties that respect for the right to a fair trial is to be ensured to the highest possible degree by democratic societies. The first question that arises from this passage concerns the meaning of the investigation stage. That stage is stated to be particularly important for two related reasons. The first is that evidence obtained at that stage determines the framework in which the offence with which the defendant is charged will be considered at trial. In other words, evidence obtained during the investigation stage can significantly influence the outcome of the proceedings and on that account it requires close attention as to its reliability. The second reason is that at that very time (viz when evidence capable of influencing the trials outcome is being obtained) the accused finds himself in a vulnerable position. It may seem trite to ask why he should be vulnerable at that time but the answer, it seems to me, is both plain and significant. He is vulnerable because at this investigation stage, evidence which may be instrumental in securing a finding of guilt against him is being obtained and collated. The way that he reacts during the collection of that evidence may prove to be of critical importance in his subsequent trial. His vulnerability may be enhanced, moreover, because increasingly complex legislation permits the evidence to be obtained and used in ways that were not previously possible. I return then to the anterior question. What is meant by the investigation stage? It must surely include any point or juncture at which evidence which is potentially inculpatory of an accused is being obtained. This is of especial importance when the investigation stage provides the setting for a statement by the accused person that might incriminate him. ECtHR recognised in para 54 of Salduz that an incriminating statement might occur at an early stage of the investigation and it was for this reason that early access to a lawyer was considered to be necessary. That early access is expressly required so that the very essence of the right not to incriminate oneself is not destroyed. But extinction of the essence of the right, it seems to me, is precisely what may happen if statements tending to incriminate, made without the benefit of legal advice, are admitted in evidence against their maker on his or her trial. And that conclusion reinforces my view that it is not the place at which admissions are made nor whether the individual making the statements has been detained that is important. What is important is the use to which such statements may subsequently be put. The same message is provided by the opening words of para 55 of Salduz: Against this background, the Court finds that in order for the right to a fair trial to remain sufficiently practical and effective" article 6(1) requires that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police, unless it is demonstrated in the light of the particular circumstances of each case that there are compelling reasons to restrict this right. Once more, it is noteworthy that the court here does not refer to the place at which the first interrogation takes place nor whether the person who is answering questions has been detained. It is from the moment of the first interrogation that the need for the presence of a lawyer is deemed to be required and that point is chosen because that is precisely when self incriminating statements may begin to be made. In this connection I should say that I do not construe the judgments of Judge Bratza and Judge Zagrebelsky in Salduz as seeking to link the need for a lawyers presence inextricably with the moment that a suspect is taken into custody. At O I2 Judge Bratza said: At para 55 of the judgment, the Court states as a general principle that in order for the right to a fair trial to remain sufficiently, practical and effective, article 6 requires that, as a rule, access to a lawyer should be provided, as from the first interrogation of a suspect by the police. This principle is consistent with the Court's earlier case law and is clearly sufficient to enable the Court to reach a finding of a violation of article 6 on the facts of the present case. However, I share the doubts of Judge Zagrebelsky as to whether in appearing to hold that the right of access to a lawyer only arises at the moment of first interrogation, the statement of principle goes far enough. Like Judge Zagrebelsky, I consider that the Court should have used the opportunity to state in clear terms that the fairness of criminal proceedings under article 6 requires that, as a rule, a suspect should be granted access to legal advice from the moment he is taken into police custody or pre trial detention. It would be regrettable if the impression were to be left by the judgment that no issue could arise under article 6 as long as a suspect was given access to a lawyer at the point when his interrogation began or that article 6 was engaged only where the denial of access affected the fairness of the interrogation of the suspect. The denial of access to a lawyer from the outset of the detention of a suspect which, in a particular case, results in prejudice to the rights of the defence may violate article 6 of the Convention whether or not such prejudice stems from the interrogation of the suspect. It is immediately obvious from this passage that Judge Bratzas concern was that the judgment of the court did not go far enough. It is clear that his assumption was that the first interrogation of a suspect would normally take place after he had been taken into custody. He felt that to prescribe that the presence of a lawyer was only then required might not be sufficient. Statements could be made or events could occur which might prove incriminating after the suspect was taken into custody but before the first formal interrogation began. That was why Judge Bratza suggested that a lawyer was required when the accused was taken into custody. But his statement to that effect does not betoken a view that the moment that custody begins should be invested with some special significance. On the contrary, it reflects concern that the suspects vulnerability and his need for a lawyer should not be seen as inevitably coincident with the opening of the formal interview. Statements made or events occurring before that time are just as likely to require the presence of a lawyer if the fairness of the trial is to be assured. The cases decided in Strasbourg post Salduz and discussed by Lord Hope in paras 36 40 of his judgment do not appear to me, with respect, to contribute much to the debate except for the case of Borotyuk v Ukraine (Application no. 33579/04). All of the cases concerned suspects who were already in custody when the questioning began. Lord Hope has suggested that importance was attached by Strasbourg in some of these cases to the fact that the person was in custody when he was being interrogated. I do not so read them. It seems to me that the cases are at least as consistent with the view that the important factor in play was that the interrogation was the occasion when inculpatory statements might be made and on that account a lawyers presence was considered an indispensable concomitant of a fair trial. In Borotyuk an interesting passage appears at para 79. There the court said: The Court emphasises that although not absolute, the right of everyone charged with a criminal offence to be effectively defended by a lawyer, assigned officially if need be, is one of the fundamental features of fair trial (see Poitrimol, cited above, para 34). As a rule, access to a lawyer should be provided as from the first questioning of a suspect by the police, unless it can be demonstrated in the light of the particular circumstances of each case that there are compelling reasons to restrict this right. The rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police questioning without access to a lawyer are used to secure a conviction (see Salduz vs Turkey [(2008) 49 EHRR 421], para 55. Quite apart from the observation that access to a lawyer was deemed necessary as from the first questioning of a suspect, the emphasis in this passage seems to be on the inevitable prejudice that will occur if questioning takes place at a time and in circumstances where incriminating statements might be made. This, as it seems to me, is entirely consonant with the underlying philosophy of article 6(1) taken in conjunction with article 6(3)(c). The essential question is: when the questioning is taking place, is the suspect in a position where the advice of a lawyer is essential if a fair trial is to occur. If he is liable to incriminate himself at that time, a lawyers presence is required so that he may be fully advised as to how he may or should respond to the interrogation. Likewise, if he requires advice as to how he should react to questioning, for example by giving information that may subsequently emerge at the trial, he needs to have proper guidance. Remaining silent when a perfectly innocent explanation is available may fatally undermine a subsequently proffered defence. I would therefore express the principle, to be derived from a consideration of the mainstream Strasbourg jurisprudence, in this way: where a person becomes a suspect, questions thereafter put to him or her that are capable of producing inculpatory evidence constitute interrogation. Before such interrogation may be lawfully undertaken, the suspect must be informed of his or her right to legal representation and if he or she wishes to have a lawyer present, questions must be asked of the suspect, whether or not he or she is in custody, in the presence of a lawyer. The Lord Advocate in the present appeal submitted that the touchstone should be the taking into custody of the individual because this marked the start of the coercive atmosphere in which the vulnerability of the suspect was aroused. I cannot accept that argument. Common experience tells us that a coercive atmosphere can exist independently of custody. The subject was also helpfully considered, albeit in a different context, in the Canadian case of R v Grant 2009 SCC 32; [2009] 2 S.C.R. 353. In that case the Supreme Court of Canada held that what it described as psychological detention such as to give rise to rights under section 9 of the Canadian Charter of Rights and Freedoms was established where an individual has a legal obligation to comply with a restrictive request or demand, or where a reasonable person would conclude by reason of the state conduct that he or she had no choice but to comply. Although the right under section 9 of the Charter is one that entitles an individual not to be arbitrarily detained or imprisoned, as opposed to the right not to incriminate oneself, the relevance of the decision to the present appeal lies in the courts analysis of when the interaction between a police officer and the person he has stopped and questioned assumes a coercive quality. At para 30 of the majority judgment of McLachlin CJ and LeBel, Fish, Abella and Charron JJ it was stated: we find that psychological constraint amounting to detention has been recognized in two situations. The first is where the subject is legally required to comply with a direction or demand, as in the case of a roadside breath sample. The second is where there is no legal obligation to comply with a restrictive or coercive demand, but a reasonable person in the subject's position would feel so obligated. The rationale for this second form of psychological detention was explained by Le Dain J. in [R v Therens [1985] 1 SCR 613, 644] as follows: In my opinion, it is not realistic, as a general rule, to regard compliance with a demand or direction by a police officer as truly voluntary, in the sense that the citizen feels that he or she has the choice to obey or not, even where there is in fact a lack of statutory or common law authority for the demand or direction and therefore an absence of criminal liability for failure to comply with it. Most citizens are not aware of the precise legal limits of police authority. Rather than risk the application of physical force or prosecution for wilful obstruction, the reasonable person is likely to err on the side of caution, assume lawful authority and comply with the demand. The element of psychological compulsion, in the form of a reasonable perception of suspension of freedom of choice, is enough to make the restraint of liberty involuntary. Detention may be effected without the application or threat of application of physical restraint if the person concerned submits or acquiesces in the deprivation of liberty and reasonably believes that the choice to do otherwise does not exist. There is no reason to suppose that a person questioned by police while not in detention would not experience the same need to acquiesce in the power of the police to require answers to potentially highly incriminating questions. In as much, therefore, as a coercive atmosphere is required in order to stimulate the need for the protection that a lawyers presence brings, I consider that it is just as likely that this will occur outside a police station as within. As I have said, the important question is whether the circumstances in which questions are asked are liable to be productive of incriminating answers, not whether those questions are being asked in a police station or whether the suspected person can be said to be in custody. Zaichenko v Russia This decision needs to be examined because of the possibly discordant note that it strikes in what I consider to be the clear message of what I have described as the mainstream European jurisprudence on the subject. The applicant had been stopped by police when driving away from his place of work on 21 February 2001. He was asked to account for two cans of diesel that were discovered in his car. He replied that he had poured the fuel from the tank of a service vehicle that he drove as an employee into the containers that the police had found in his car. He said that he intended to use it for his own personal purposes in other words, he admitted to having stolen it. A vehicle inspection record was prepared by a police officer at the scene in which it was stated that the applicant had explained that he had poured out the fuel from the company premises. The applicant signed that document. He also signed another document entitled explanations in which his statement to the following effect was recorded: Since 1997 I have been employed as a driver by a private company. On 21 February 2001 I arrived to my workplace at 9 am. During the day I was repairing my service vehicle. In the evening I poured out thirty litres of fuel from the tank of my service vehicle. I have previously brought the cans, ten and twenty litres each, from home. After work, at around 8 pm, I was driving home in my car and was stopped by the police. The car was inspected in the presence of the attesting witnesses. I poured out the fuel for personal use. On 2 March 2001 an official known as an inquirer compiled a report on the events of 21 February 2001. It was recorded that the applicant had intentionally stolen thirty litres of diesel from his service vehicle. The report was stated to have been based on, among other things, the inspection record compiled by the police at the scene and the applicant's written statement. The accusation section of this statement read, At 8 pm on 21 February 2001 [the applicant] . being at work intentionally stole from his service vehicle the diesel in the amount of thirty litres. Thereby, he caused to the company pecuniary damage in the amount of 279 roubles. The applicant appended his signature to the following certificates that appeared at the foot of the statement: I have been informed of the nature of the accusation, the right to have access to the case file, the right to legal representation, the right to make requests and challenge the inquiring authorities' actions. and I have studied the case file and have read this document. I have no requests or motions. I do not require legal assistance; this decision is based on reasons unrelated to lack of means. I will defend myself at the trial. At his trial the applicant retracted the confession and instead advanced a defence that he had purchased the fuel. He maintained that evidence of his admissions to police officers when his car was stopped should not have been admitted because he had not been informed of his right against self incrimination. At para 19 of ECtHRs judgment it is recorded that the appeal court in Russia had decided that the applicant's allegation of self incrimination had been rightly rejected by the trial court as unfounded. At paras 42 and 43 of its judgment, ECtHR dealt with the question of whether the applicant had been charged during the events of 21 February 2001. As to that the court said this: 42. The Court reiterates that in criminal matters, Article 6 of the Convention comes into play as soon as a person is charged; this may occur on a date prior to the case coming before the trial court, such as the date of arrest, the date when the person concerned was officially notified that he would be prosecuted or the date when preliminary investigations were opened (see Eckle vs Germany, 15 July 1982, 73, Series A no. 51, and more recently, O'Halloran and Francis vs the United Kingdom [GC], nos. 15809/02 and 25624/02, 35, ECHR 2007. ). Charge, for the purposes of Article 6 1, may be defined as the official notification given to an individual by the competent authority of an allegation that he has committed a criminal offence, a definition that also corresponds to the test whether the situation of the [person] has been substantially affected (see Shabelnik vs Ukraine, no. 16404/03, 57, 19 February 2009; Deweer vs Belgium, 27 February 1980, 46, Series A no. 35; and Saunders vs the United Kingdom, 17 December 1996, 67 and 74, Reports of Judgments and Decisions 1996 VI). Given the context of the road check and the applicant's inability to produce any proof of the diesel purchase at the moment of his questioning by the police, the Court considers that there should have been a suspicion of theft against the applicant at that moment. 43. Applying these principles to the facts of the case, the Court notes that the trial court's use made of the admissions made on 21 February 2001, which led to the institution of criminal proceedings against the applicant and then served for convicting him of theft, is at the heart of the applicant's complaints under Article 6 of the Convention (compare Saunders, cited above, 67 and 74; and Allen vs the United Kingdom (dec.), no. 76574/01, 10 September 2002). It is also noted that the inspection record itself indicated Article 178 of the RSFSR Code of Criminal Procedure as the legal basis for the inspection (see paragraph 26 above). Thus, although the applicant was not accused of any criminal offence on 21 February 2001, the proceedings on that date "substantially affected" his situation. The Court accepts that Article 6 of the Convention was engaged in the present case. Nor was there any disagreement on this point between the parties. The substantial effect which prompted the finding that article 6 was engaged appears to comprise the suspicion which the court felt the police must have had that the applicant had been guilty of theft and the fact that the events that occurred at the roadside check led to his subsequent prosecution and conviction. On that basis the same conclusion (that article 6 is engaged) is irresistible in the three cases involved in these references. In each of the cases it is clear that, at the time that the relevant admissions were made, the police either did have or should have had a suspicion that the persons to whom they were posing questions were guilty of the offences that were under investigation and that the statements made in answer to those questions were or were likely to be highly incriminating of all three. But why in Zaichenko, if article 6 was engaged, was the applicant not entitled to the protection of article 6(3)(c), taken in conjunction with article 6(1)? For an answer to this, one must conduct a probe of the later passages of the judgment which, I should confess in advance, has not led me to an entirely clear understanding of the rationale underlying the courts conclusion on the issue. At para 46 the court said this: 46. The Court notes at the outset that the applicant only complained that he had not been afforded enough time to contact a lawyer in a nearby town. The Court cannot but note that, as confirmed by the applicant's representative in his letter to the European Court dated 26 July 2002, both on 21 February and 2 March 2001 the applicant chose not to exercise his right to legal representation with the hope that the court would give him a fair trial even without counsel. It is difficult to be sure that, in using the phrase, the court cannot but note, the judgment at this point was indicating that, because the applicant had elected not to have legal representation, this was a basis on which it could be concluded that there had not been a violation of article 6(3)(c). Observations that appear later in the judgment would tend to support that view, however. In the first instance, the para following (para 47) opens with the word moreover which suggests that the decision of the applicant not to seek legal representation was, at least, one of a number of reasons for the finding that article 6(3)(c) had not been breached. Secondly, at para 50 of the judgment, the court refers to the applicants election not to seek legal assistance either on 21 February or on 2 March 2001 as a waiver of his right to legal assistance. Some of the other reasons for finding that there had not been a violation of article 6(3)(c) appear in para 47: 47. Moreover, the Court observes that the present case is different from previous cases concerning the right to legal assistance in pre trial proceedings because the applicant was not formally arrested or interrogated in police custody. He was stopped for a road check. This check and the applicant's self incriminating statements were both carried out and made in public in the presence of two attesting witnesses. It is true that the trial record contains a statement by the applicant suggesting that the writing down of the inspection record and/or his subsequent statement were started on the spot but were completed in the village of Birofeld. Nevertheless, the Court concludes on the basis of the materials in the case file that the relevant events, namely the drawing of the inspection record and the taking of the applicant's explanation, were carried out in a direct sequence of events. The distinction between Zaichenkos case and earlier decisions that is highlighted here viz that the applicant had not been arrested or interrogated while in police custody is not expressly stated to be a reason that alone would warrant a finding that there had not been a violation of article 6(3)(c) taken in conjunction with article 6(1). It seems to me impossible to say, on the basis of the statements in this paragraph, that ECtHR has concluded that formal arrest and interrogation in custody are essential prerequisites to the invocation of the right. Rather, it appears that the court treated the cumulative effect of factors that were peculiar to this particular case as the basis for the finding that there had not been a violation of article 6(3)(c). These factors can be enumerated as follows: (1) the applicant had waived his right to a lawyer and had explicitly stated that he did not want a lawyer to represent him despite having been told on 2 March 2001 that he was entitled to legal representation; (2) he had not been formally arrested or interrogated in police custody; (3) the initial questioning of the applicant took place at a road check and not in any formal setting; (4) the applicant was questioned in a public place with other witnesses present who could attest to a lack of coercion on the part of the police; and (5) the checking of the applicants car and his questioning as to the source of the diesel all occurred as part of a seamless process. I do not believe that any one of these factors can be elevated to a position of pre eminence nor does it appear to me that it can be said with confidence that any single factor, taken in isolation, would be sufficient to support the finding that there had not been a breach of article 6(3)(c). The succeeding paragraphs in the judgment repeat the matters dealt with in paras 46 and 47 or expand on them to some extent. It is not necessary to consider these in any detail but I should mention para 48, if only to say that I have had a little difficulty in following the reasoning that it contains. It reads: Although the applicant in the present case was not free to leave, the Court considers that the circumstances of the case as presented by the parties, and established by the Court, disclose no significant curtailment of the applicant's freedom of action, which could be sufficient for activating a requirement for legal assistance already at this stage of the proceedings. It is not immediately clear why someone who was not free to leave the scene could be said not to have had any significant curtailment of his freedom of action. Be that as it may, it appears to be the case that if the court had found that there had been a significant curtailment of the applicants freedom of action, it would have regarded this as a sufficient basis for a finding of a violation of article 6(3)(c). What would constitute such a curtailment of freedom of action has not been made clear, however. Altogether, it is not easy to distil any obvious principle from this paragraph and I would be reluctant to ascribe to it any significance beyond that relevant to the circumstances of the case of Zaichenko itself. Although ECtHR concluded that Mr Zaichenko had waived his right to legal assistance, it decided that there had not been a waiver of his right not to incriminate himself. At para 52 the court held that it was incumbent on the police to inform the applicant of the privilege against self incrimination and the right to remain silent. Their failure to do so at the roadside check before putting questions to him constituted a violation of article 6(1), therefore. In a partly dissenting opinion, Judge Spielmann (who, as Lord Hope pointed out in para 46 of his judgment, was a member of the Grand Chamber in Salduz) addressed forthrightly the question of when the right to legal representation arose and, relating it directly to the decision in Salduz, came down firmly in favour of what I believe to be the logical position, namely, that it began when police questioning started. In para 3 of his opinion, Judge Spielmann said: 3. In Salduz vs Turkey the Court held that as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police (see Salduz vs Turkey [GC], no. 36391/02, 55, ECHR 2008 . ). The Court also held that the lack of legal assistance during a suspect's interrogation would constitute a restriction of his defence rights and that these rights would in principle be irretrievably prejudiced when incriminating statements, made during police interrogation without access to a lawyer, were used for a conviction. The Court took a similar approach in the equally important judgment in Panovits (Panovits vs Cyprus, no. 4268/04, 66 and 70 73, 11 December 2008). (original emphasis) Judge Spielmann also questioned the reasoning of the majority that is contained in para 48 of the courts judgment. At para 6 he said: 6. Contrary to what is said in para 48 of the judgment, I cannot agree that the circumstances of the case disclose no significant curtailment of the applicant's freedom of action. I am of the opinion that those circumstances were sufficient to activate a requirement for legal assistance. I do not understand Judge Spielmanns dissent necessarily to indicate that there was a divergence of views between him and the majority about the nature of the principle at stake. The principle which I believe can be said to be common to both is that when a suspect is interrogated by police he is entitled to legal assistance. Where Judge Spielmann parted company with the majority was in its conclusion as to whether the principle applied. Because of the accumulation of factors that the court had identified (see para 158 above) and because it concluded that there had not been a curtailment of Mr Zaichenkos freedom of action, it held that the principle did not apply. Judge Spielmann, by contrast, did not attach the weight to the factors that the majority had considered militated against a finding of violation of article 6(3)(c) and he disagreed (in my view, quite properly) with the suggestion that someone who was not free to leave the scene nevertheless had not suffered any curtailment of his freedom of action. Miranda v Arizona As Lord Hope has said in para 52, curtailment of freedom of action carries echoes from Miranda v Arizona 384 US 436 (1966). And as Lord Hope suggests, it may well be that Miranda will influence the thinking of Strasbourg, it having featured in a number of prominent dissenting judgments in that court already. But I question whether this will lead to the adoption of the custodial approach to the question as to when access to a lawyer is required. Curtailment of an individuals freedom of action can arise even when he has not been taken into custody. The important question must surely be whether the suspect feels constrained to answer the questions posed to him by the police officer. As the Grant case illustrates, this can arise either because of the manner in which the police officer manages the exchange with the suspect or because of the latters belief that he has no option but to answer the questions put to him. Quite apart from these considerations, however, I believe that one must be careful about making assumptions about the Miranda experience or believing that it can be readily transplanted into European jurisprudence in any wholesale way. The implications of that decision must be considered in the context of police practice in the United States of America. Nothing that has been put before this court establishes that it is common practice in America to ask incriminating questions of persons suspected of a crime other than in custody. Indeed, it is my understanding that as soon as a person is identified as a suspect, police are trained that they should not ask that person any questions until he or she has been given the Miranda warnings. Custody was identified in Miranda as one of the features necessary to activate the need for legal representation but custody has been held to mean either that the suspect was under arrest or that his freedom of movement was restrained to an extent associated with a formal arrest Stansbury vs California, 511 US 318 (1994); New York vs Quarles, 467 U.S. 649, 655 (1984). So it is clear that the rule that custody is required before entitlement to legal representation arises is not inflexible or static and that its underlying rationale is closely associated with the question whether the person questioned feels under constraint to respond. Hampering police investigation One of the principal practical arguments advanced against the requirement that a suspect be informed that he is entitled to legal representation before incriminating questions are put to him is that this will hamper police investigations. The argument is a venerable one. It has been deployed in reaction to various proposals for safeguards intended to protect suspects rights including the right to have a solicitor present during interviews and the audio recording or the videotaping of interviews. There is no evidence that the introduction of those measures brought about any widespread impediment to police investigations nor is there, in my view, any convincing evidence that this would be the result of recognising the right of a suspect to be informed that he or she is entitled to legal representation before being required to provide potentially incriminating answers to police questioning. As the respondents have pointed out, in the final analysis, these cases are about the admissibility of evidence. There is no legal prohibition on police asking questions of a suspect that may produce incriminating answers. The legal consequence of doing so without first informing the suspect of his or her right to be legally represented will be, in my opinion, that the answers produced will be inadmissible in evidence unless compelling reasons such as were discussed in para 55 of Salduz exceptionally justify denial of access to a lawyer. One can anticipate, therefore, that police may decide in appropriate circumstances to proceed with questions in order to further the investigation but have to accept that if they are capable of producing incriminating answers from someone who is a suspect, the replies will be inadmissible. A balance will always have to be struck between unfettered police investigatory powers and the complete safeguarding of suspects rights. The history of criminal jurisprudence shows how that balance has been struck in different ways and at different times, reflecting, no doubt, changing attitudes as to what properly reflects contemporary standards. It is my belief that the proper balance to strike for our times is the one that I have suggested in para 146 above. Conclusions For the reasons given in para 153 above, I consider that article 6 of ECHR was engaged in each of the respondents cases at the time that the relevant questions were asked. I have no doubt that when they were asked those questions each of them was suspected of having committed an offence. I agree with Lord Hope that the administration of a caution is not necessarily determinative of this issue but, in the particular circumstances of these cases, I do not believe that any other conclusion is possible. The second and third questions that were put to the respondent, Ambrose, were clearly capable of producing incriminating responses. In fact they did so and it is evident that the answers have been relied on in order to establish his guilt, (although that might well have been possible simply by proving that he was in the car and in possession of the keys). In these circumstances, I am of the view that he had a right under article 6(3)(c) taken in conjunction with article 6(1) of ECHR to be informed, after his reply to the first question, that he was entitled to legal representation before answering further questions, and that, absent such a warning, the incriminating answers given by him to the second and third questions were not admissible. The questions put to the respondent who has been referred to as M, apart from the first question, were also clearly capable of producing incriminatory replies although whether they would in fact be probative of guilt would be a matter for trial, if indeed the answers were held to be admissible. Since they clearly had the capacity of producing inculpatory responses, however, I consider that the questions put to M at his home, apart from the first question, are inadmissible. In the case of the respondent referred to as G, for the reasons given by Lord Hope (with which I agree), it is indisputable that, at the time the impugned questions were put to him, he was in custody and, whatever view one takes of the effect of the European jurisprudence, the incriminating answers that he gave are inadmissible. But, for the same reasons that I have given in the cases of Ambrose and M, I would have held that they were inadmissible, regardless of whether G was in custody at the time that the answers were given. |
This appeal concerns the Hague Convention on the Civil Aspects of International Child Abduction (25 October 1980) (the Abduction Convention). It raises general questions relating to: the place which the habitual residence of the child occupies in the (1) scheme of that Convention, and (2) whether and when a wrongful retention of a child may occur if the travelling parent originally left the home State temporarily with the consent of the left behind parent or under court permission, and the agreed or stipulated time for return has not yet arrived. In addition, the facts of the present case raise particular questions whether the trial judges conclusions were properly open to him upon: (a) the habitual residence of the children in the case; and (b) whether a wrongful retention in fact occurred, and if so when. The 1980 Hague Abduction Convention The Abduction Convention is in force for some 97 States. Its preamble records the desire of those States: to protect children internationally from the harmful effects of their wrongful removal or retention and to establish procedures to ensure their prompt return to the State of their habitual residence Article 1 states the objects of the Convention as follows: to secure the prompt return of children wrongfully (a) removed to or retained in any Contracting State; and (b) to ensure that rights of custody and of access under the law of one Contracting State are effectively respected in the other Contracting States. The general scheme of the Convention is to enable a left behind parent to make this application in the State to which a child has been taken, seeking return of the child. States are required to set up Central Authorities to transmit and receive such applications. Where the removal from the home State, or the retention in the destination State is wrongful, the courts of the recipient State are required by article 12 to order the return of the child forthwith. Apart from a saving provision in article 20 which permits refusal to return where such would amount to a breach of the requested States fundamental principles of human rights, that obligation to return is subject to very limited exceptions which, if present, enable (but do not require) return not to be ordered. Those exceptions are found in article 13 (rights of custody not being exercised; consent or acquiescence of the left behind parent; grave risk that return would expose the child to physical or psychological harm or would place him/her in an intolerable situation; childs objections), and in article 12 (child has been in the recipient State for one year from the wrongful removal or retention and is now settled there). Where prompt notice of wrongful removal or retention is received, the recipient State is required by article 16 to abstain from any decision on the merits of rights of custody, unless it is determined that return is not to be ordered. Moreover, States are required to act fast on any request. By article 11 an initial period of six weeks is stipulated, and the applicant or his Central Authority are entitled to an explanation from the recipient State if that period is exceeded. Thus the return is summary and its object is to enable merits decisions as to the childs future to be made in the correct State, rather than in the State to which the child has been wrongfully taken, or in which he/she has been wrongfully retained. The general purposes and scheme of the Convention are expanded upon in an explanatory report by Professor Elisa Prez Vera on the work of the drafting conference, which report accompanied the original framing of the Convention; it is accordingly an aid to construction recognised in international law and in particular under article 32 of the Vienna Convention on the Law of Treaties (1969). In England and Wales the Convention is given domestic effect by the Child Abduction and Custody Act 1985, section 1(2). Four key concepts underlie the Convention: wrongful removal, wrongful retention, rights of custody and return. The principal provisions which require attention in the present case, apart from the preamble and article 1, set out above, are articles 3, 4, 5, 12 and 16. So far as relevant, they say: Article 3 The removal or the retention of a child is to be considered wrongful where (a) it is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the State in which the child was habitually resident immediately before the removal or retention; and (b) at the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention. Article 4 The Convention shall apply to any child who was habitually resident in a Contracting State immediately before any breach of custody or access rights. The Convention shall cease to apply when the child attains the age of 16 years. Article 5 For the purposes of this Convention [rights of access] (a) rights of custody shall include rights relating to the care of the person of the child and, in particular, the right to determine the child's place of residence; (b) Article 12 Where a child has been wrongfully removed or retained in terms of article 3 and, at the date of the commencement of the proceedings before the judicial or administrative authority of the Contracting State where the child is, a period of less than one year has elapsed from the date of the wrongful removal or retention, the authority concerned shall order the return of the child forthwith. The judicial or administrative authority, even where the proceedings have been commenced after the expiration of the period of one year referred to in the preceding paragraph, shall also order the return of the child, unless it is demonstrated that the child is now settled in its new environment. Article 16 After receiving notice of a wrongful removal or retention of a child in the sense of article 3, the judicial or administrative authorities of the Contracting State to which the child has been removed or in which it has been retained shall not decide on the merits of rights of custody until it has been determined that the child is not to be returned under this Convention or unless an application under this Convention is not lodged within a reasonable time following receipt of the notice. The facts The mother, although born in Canada, was brought up in England and is originally of British nationality. The father is Australian. Mother went to live in Australia in 2008. There she met, and later married, the father. She took Australian citizenship in 2014 and so now has dual British/Australian nationality. Two children were born to them in 2012 and 2014. By the end of 2014 the marriage was in difficulties. Mother was on maternity leave from her job at the time. She told Father that she wanted to make a trip to England with the children before going back to work. Although initially reluctant, he agreed to an eight week visit. Mother and the children came to England on 4 May 2015 with return tickets then scheduled for 24 June. They went to stay with the maternal grandmother, where they have since remained. Discussions between Mother and Father then resulted in Father agreeing to an extension of the eight week visit. Initially, Father agreed to a four week extension. But then, on 28 June 2015 he sent Mother an email which said: For the happiness of yourself & the children & for moving on with our lives I am in agreement that u n the children stay in the UK for a year. That email left open whether the year ran from its date or from Mothers first arrival six or seven weeks earlier. The difference does not affect the outcome of the present dispute, but it is relevant that Father raised the question in emails to Mother whether she intended to return in May or June 2016. She did not answer the question. On the basis of the extension she gave notice to her Australian employer and looked for work in England. In September 2015 she enrolled the older child at a local pre school. The children had entered England on six month visitor visas, so steps needed to be taken to regularise the longer stay now contemplated. What Mother then did loomed large at the hearing before the judge. Without telling Father she applied on 2 November 2015 for British citizenship for the children. She engaged solicitors to make the application. Those solicitors wrote on her behalf to the United Kingdom immigration authorities on 4 November 2015. In the course of a long letter they asserted that the marriage had irretrievably broken down, that Mother had been the object of repeated domestic abuse which had, moreover affected the elder child adversely, that she had been effectively forced not to return to Australia in order to safeguard herself and the children and that the children could not return to Australia because there was nowhere safe for them to go. The letter added: It cannot be in doubt that the childrens centre of life is, and will be, in the UK where the children are registered as requested. Meanwhile in continuing correspondence between the parents, Father pressed Mother on her expected date of return. On 11 February 2016 she wrote saying that she did not know what her plans were but Short term I will not be returning in May. She added I will not base my return to Australia at your demand. Later, Father referred her to the Abduction Convention and instructed solicitors who wrote formally to ask Mother when she planned to return. She replied in June 2016: Thank you for allowing me the time to seek professional advice I can confirm that I intend to remain in the UK for the short term. In due course both parents gave oral evidence at the hearing before the judge of Fathers application under the Abduction Convention. By then it was accepted that Mother did not propose to return. The issue of when she had so decided was much in contention. The judges conclusions on the topic are considered below: [2016] EWHC 3535 (Fam). But Mothers own case was that by April 2016 she had felt that we wouldnt be going back. That meant that on any view there had been a decision not to return before the expiry of the agreed year of stay in England. That gives rise to the second general question in this case, namely: whether and when such a decision can make the retention in the destination country wrongful for the purposes of the Abduction Convention before the expiry of any agreed or sanctioned term of residence there. The judge also had to make findings as to the place of the childrens habitual residence. The details of his conclusions are set out below, but he found that they were habitually resident in England and Wales by at the latest the end of June 2016, which was the last possible date for the expiry of the agreed year of stay. He added that in his view it was eminently arguable that they had acquired habitual residence significantly before that date. Those findings give rise to the first general question in this case, namely: what is the effect on an application under the Abduction Convention if the child has become habitually resident in the destination (requested) State before the act relied on as a wrongful removal or retention occurs. The significance of the two general questions In the simple paradigm case of wrongful removal, one parent will have taken the child from the State where s/he is habitually resident to a destination State. Similarly, in the simple paradigm case of wrongful retention, one parent will have travelled with the child from the State of habitual residence to the destination State, for example for an agreed fortnights holiday (and thus without the removal being wrongful), but will then wrongfully have refused to return. In each of those paradigm cases, the child will have remained habitually resident in the home State. An application under the Abduction Convention will be made in the destination (or requested) State for the return of the child to the State of habitual residence. The return will be a summary one, without investigation of the merits of any dispute between the parents as to custody, access or any other issue relating to the upbringing of the child (article 16). Such merits decisions are for the courts of the State of the childs habitual residence. In some cases, however, it is possible that by the time of the act relied upon as a wrongful removal or retention, the child may have acquired habitual residence in the destination State. It is perhaps improbable in the case of removal, but it is not in the case of retention. It may particularly happen if the stay in the destination State is more than just a holiday and lasts long enough for the child to become integrated into the destination State. It is the more likely to happen if the travelling parent determines, however improperly, to stay, and takes steps to integrate the child in the destination State. Even in the case of wrongful removal it may be possible to imagine such a situation if, for example, there had been successive periods of residence in the destination State, followed by a removal from the State of origin which infringed the rights of custody of the left behind parent. In England and Wales at least, this possibility did not in practice arise in the past, since it was regarded as axiomatic that one parent could not by unilateral action alter the habitual residence of the child. This proposition dated from a dictum of Lord Donaldson MR in In re J (A Minor) (Abduction: Custody Rights) [1990] 2 AC 562, 572, and the decision of Wall J in In re S (Minors) (Child Abduction: Wrongful Retention) [1994] Fam 70, which was approved by the Court of Appeal in In re M (Abduction: Habitual Residence) [1996] 1 FLR 887, 892, and, as Baroness Hale explained in A v A (Children: Habitual Residence) [2014] AC 1 at para 39, it was thereafter taken for granted. Such a proposition is, however, not generally adopted in other countries, including the United States, sits uneasily with the equally axiomatic principle that habitual residence is a question of fact, not law, and is difficult to accommodate within the European approach which requires an examination of integration, as exemplified in Proceedings brought by A (Case C 523/07) [2010] Fam 42 and Mercredi v Chaffe (Case C 497/10PPU) [2012] Fam 22, and which is binding on this country via Council Regulation (EC) No 2201/2003 (Brussels II Revised): see the analysis of Baroness Hale in A v A. It was recognised in In re H (Children) [2015] 1 WLR 863 that such a rule could not survive. If the habitual residence of the child may have changed to the destination State by the time of the wrongful act of removal or retention relied upon, then it becomes necessary to know whether the summary procedure of the Abduction Convention remains available in such a case or does not. Hence the first general question. If the answer is that it is not available, because the Abduction Convention pre supposes an application made in a destination State which is not the State of habitual residence, then the second general question becomes of importance. It becomes important because deliberate acts aimed at integrating the child in the destination State may well be undertaken by the travelling parent once he has decided not to honour his obligation to return to the State of origin. It will then matter whether such acts, or other manifestations of his decision, can themselves amount to wrongful retention. If they can, then wrongful retention may occur before any change of habitual residence has been achieved and whilst the child is still habitually resident in the State of origin. If they cannot, and wrongful retention cannot occur until the day of agreed return arrives, it may be too late for any application under the Abduction Convention, because the same acts which derive from and accompany the decision not to return may themselves have resulted in the child becoming habitually resident in the destination State. The first general question: habitual residence The first question is accordingly this: if by the time of the act relied on as wrongful removal or retention the child is habitually resident in the State where the application for return is made, is summary return under the Abduction Convention still available or not? This question did not arise in either of the courts below, where everyone proceeded on the assumption that the answer was no. It arose in the course of argument in this court, and we have had the benefit not only of some immediate oral submissions, but of considered post hearing written submissions from both parties and from the International Centre for Family Law, Policy and Practice as intervener. The argument that summary return under the Abduction Convention remains available runs as follows: (a) there is no express statement in the Convention that the remedy of summary return is available only where at the time of the act relied on as wrongful the child either remains habitually resident in the State of origin or is not habitually resident in the requested State; (b) on the contrary, article 3 refers to habitual residence only in order to identify the proper law that is to say to identify the law which determines whether a given act is wrongful (because it is in breach of rights of custody) or not; (c) therefore, if the child starts by being habitually resident in State A, but has by the time of the act relied on as wrongful become habitually resident in State B, all that article 3 requires is that you look to the law of State B to decide whether the act was wrongful or not; that is so whether State B is the requested State, or some intermediate State where the child has become habitually resident before arriving in the requested State; (d) once it has been decided that the act constituted either wrongful removal or wrongful retention, the Convention takes the court to article 12, which requires an order for return, subject to the limited exceptions contained in that article and article 13; (e) moreover, it is noticeable that article 12, in providing for an order for return, does not specify that return must be to the state of the childs habitual residence; it could be to any State; this reinforces the conclusion that habitual residence does not govern the place where application for return may be made, but is only referred to in the Convention in order to provide which law is to determine wrongfulness. Accordingly, it is said, on facts such as those of the present case, if the childs habitual residence is in England by the time of the act relied on as wrongful retention, that simply means that it becomes English law which decides whether the retention was wrongful. If it is decided that it is wrongful, there can still be a return to Australia. This may be a possible construction if one has regard simply to the wording of articles 3 and 12. It is, however, not a persuasive construction if one takes into account the general scheme of the Convention. Nor is it the way that the Convention has been operated over the nearly 40 years of its life. Nor is this construction consistent with the way in which the Convention has been treated by subsequent multi lateral instruments in the general field of the conflict of laws in relation to disputes about the upbringing of children. By the time of the Abduction Convention, habitual residence was already established as the principal internationally recognised basis for according jurisdiction relating to the upbringing of children. At any rate by the time of the 1961 Hague Convention on the Protection of Infants, habitual residence was, together with in some respects the law of the childs nationality, the principal basis for jurisdiction (see article 1). By the time of the Abduction Convention, Professor Prez Veras report was saying (in para 19) that the Convention: rests implicitly on the principle that any debate on the merits of the question, ie on custody rights, should take place before the competent authorities in the State where the child had its habitual residence prior to its removal (See also para 66 which repeats the point.) Since then the principle has become even more firmly entrenched. The 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Cooperation in respect of Parental Responsibility and Measures for the Protection of Children (the 1996 Convention) accords jurisdiction, by article 5, to the State for the time being of habitual residence, subject only to few qualifications. So, for states members of the European Union (EU), does Regulation 2201/2003 (Brussels II Revised) by article 8. The entire scheme of the Abduction Convention is to provide a summary remedy which negates the pre emptive force of wrongful removal or retention. The aim was also to defeat forum shopping. This is made clear by Professor Prez Veras report, especially at paras 14 15. 14. Now, even if the [left behind parent] acts quickly, that is to say manages to avoid the consolidation through lapse of time of the situation brought about by the removal of the child, the abductor will hold the advantage, since it is he who has chosen the forum in which the case is to be decided, a forum which, in principle, he regards as more favourable to his own claims. 15. To conclude, it can firmly be stated that the problem with which the Convention deals together with all the drama implicit in the fact that it is concerned with the protection of children in international relations derives all of its legal importance from the possibility of individuals establishing legal and jurisdictional links which are more or less artificial. In fact, resorting to this expedient, an individual can change the applicable law and obtain a judicial decision favourable to him. Admittedly, such a decision, especially one coexisting with others to the opposite effect issued by the other forum, will enjoy only a limited geographical validity, but in any event it bears a legal title sufficient to legalize a factual situation which none of the legal systems involved wished to see brought about. With that aim in mind, the framers of the Convention deliberately abjured a treaty which provided for recognition or enforcement of the decisions of the State of habitual residence. Paragraph 36 of the report makes this clear: 36. Secondly, the Convention is certainly not a treaty on the recognition or enforcement of decisions on custody. This option, which gave rise to lengthy debates during the first meeting of the Special Commission, was deliberately rejected. Due to the substantive consequences which flow from the recognition of a foreign judgment, such a treaty is ordinarily hedged around by guarantees and exceptions which can prolong the proceedings. Now, where the removal of a child is concerned, the time factor is of decisive importance . Hence the alternative scheme adopted, for mandatory summary return. Hence also the critical rule in article 16 that the courts of the requested State are to abstain from exercising any jurisdiction which they may have (for example based upon the presence of the child) to make a merits decision. This underlying rationale of the scheme of the Abduction Convention was recognised by this court in In re E (Children) (Abduction: Custody Appeal) [2011] UKSC 27; [2012] 1 AC 144. Baroness Hale and Lord Wilson observed at para 8: The first object of the Convention is to deter either parent (or indeed anyone else) from taking the law into their own hands and pre empting the result of any dispute between them about the future upbringing of their children. If an abduction does take place, the next object is to restore the children as soon as possible to their home country, so that any dispute can be determined there. The left behind parent should not be put to the trouble and expense of coming to the requested state in order for factual disputes to be resolved there. The abducting parent should not gain an unfair advantage by having that dispute determined in the place to which she has come. The whole point of the scheme adopted was to leave the merits to be decided by the courts of the place of the childs habitual residence. The preamble makes this clear in almost the first words of the Convention. If, however, the child has by the time of the act relied on as wrongful become habitually resident in the requested State, then that State will be the appropriate place for the merits of any custody dispute to be resolved. If the requested State is the habitual residence of the child, there can be no place for a summary return to somewhere else, without a merits based decision, still less for such to be mandatory. That would be so whether or not the removal or retention was, judged by the law of the requested State, as the State of habitual residence, wrongful, for even if it were, it would remain open to either party to ask the courts of that State to review the future plans for the upbringing of the child. This understanding of the scheme of the Abduction Convention is reflected in the provisions of both the 1996 Convention and Brussels II Revised. A large number of nations are party to these two multinational instruments, but not nearly so many as are party to the Abduction Convention. These two instruments are concerned, unlike the Abduction Convention, with recognition and enforcement. But they are scrupulous to ensure that wherever possible they are consistent with the Abduction Convention, whose scheme they very plainly seek to preserve. The 1996 Convention adopts, by article 7(2) a definition of wrongful removal and retention in the same words as article 3 of the Abduction Convention. Substantively, article 7(1) provides for cases of wrongful removal and retention a limited exception to the ordinary rule in article 5 that jurisdiction moves with the habitual residence of the child. In effect, the State of habitual residence immediately before the wrongful removal or retention keeps jurisdiction until not only habitual residence has shifted but also there has been an opportunity for the summary return provided for by the Abduction Convention. The effect, plainly intended, is to preserve the regime of the Abduction Convention, and in particular the mandatory summary return. But if, at the time of the wrongful act, the requested State had become the State of habitual residence, the extension by article 7(1) to the jurisdiction of the previous State of habitual residence would have no application and the requested State would have sole jurisdiction; in such an event, there could be no question of a mandatory summary return without consideration of the merits. Brussels II Revised adopts a similar structure to the 1996 Convention. article 2(11) provides a definition of wrongful removal and retention which, although not in identical words to article 3 of the Abduction Convention, achieves the same result, and in particular makes the test for wrongfulness the law of the State of habitual residence immediately before the act relied upon. Article 10 prolongs the jurisdiction of that State in the event of a wrongful removal or retention in much the same terms as does article 7 of the 1996 Convention. As with the 1996 Convention, the intention is plainly to preserve the regime of the Abduction Convention, and article 11 goes on to make supplemental provision for the handling of applications under it. It is revealing that it does so after introduction in the following terms: (1) Where a person [etc] having rights of custody applies to the competent authorities in a member state to deliver a judgment on the basis of [the Abduction Convention] in order to obtain the return of a child that has been wrongfully removed or retained in a member state other than the member state where the child was habitually resident immediately before the removal or retention, paragraphs 2 to 8 shall apply. (Emphasis supplied) Of course, this provision applies only as between States members which are of the EU. But there is no reason why such States alone should adopt a rule that the requested State must be a different one from the State of habitual residence immediately before the wrongful act. On the contrary, the aim is clearly to preserve the scheme of the Abduction Convention. The words other than the member state where the child was habitually resident immediately before the removal or retention plainly assume that this is the scheme implicit in the Abduction Convention. Recital 17 to the Regulation, which expresses the intention that the Abduction Convention should continue to operate, also assumes a difference between the State of habitual residence and the State requested to make a return order. There are other examples of legislative provisions making explicit the principle that return under the Abduction Convention presupposes return from a state other than that of habitual residence at the time of the wrongful act. In New Zealand, the Convention is given effect by the Care of Children Act 2004. In that Act, removal includes retention, in each case as defined in article 3 of the Convention. Section 103 provides: (1) The Authority must take action under the Convention to secure the prompt return of the child to a Contracting State other than New Zealand if the Authority receives, in respect of a child, an application claiming (a) that the child is present in New Zealand; and (b) that the child was removed from that other Contracting State in breach of the applicants rights of custody in respect of the child; and that at the time of the removal those rights of (c) custody were actually being exercised by the applicant, or would have been so exercised but for the removal; and (d) that the child was habitually resident in that other Contracting State immediately before the removal. (Emphasis supplied) In Australia the equivalent Family Law (Child Abduction Convention) Regulations 1986 provide by regulation 16(1A)(b) that one of the conditions for an order for return is that the child habitually resided in a convention country immediately before the childs removal to, or retention in, Australia. In re H (Minors) (Abduction: Custody Rights), In re S (Minors) (Abduction: Custody Rights) [1991] 2 AC 476 the House of Lords addressed the question whether wrongful removal and wrongful retention were mutually exclusive concepts; the issue arose in the context of the commencement date for the 1985 Act as between the two States involved. The House held that for the purposes of the Abduction Convention the two concepts were mutually exclusive, and that because article 12 required it to be possible to calculate the 12 month period from a wrongful retention, as well as from a wrongful removal, the former could not be regarded as simply continuing, but had to have an identified date, in effect its beginning. Giving the sole speech, Lord Brandon explained, at 498G: The preamble of the Convention shows that it is aimed at the protection of children internationally (my emphasis) from wrongful removal or retention. article 1(a) shows that the first object of the Convention is to secure the prompt return to the state of their habitual residence of children in two categories: (1) children who have been wrongfully removed from the state of their habitual residence to another contracting state; and (2) children who have been wrongfully retained in a contracting state other than the state of their habitual residence instead of being returned to the latter state. The Convention is not concerned with children who have been wrongfully removed or retained within the borders of the state of their habitual residence. (Emphasis of other supplied) That echoed an observation of Lord Donaldson MR in the same case in the Court of Appeal. He had said, [1991] 2 AC 476, 486F: plainly the Act and Convention can only apply if the child is found in a different State from that in which it was habitually resident The question raised in the present case did not arise for decision in In re H; In re S and so the observations noted were not the result of argument on the point now at issue. They were, however, a considered analysis of the scheme of the Abduction Convention, and they have been consistently followed in England and Wales ever since. In consequence in a number of cases, which it is not necessary to list, applications under the Convention have failed where the child was habitually resident in England and Wales by the time of the wrongful act relied upon. The researches of counsel, for which we are very grateful, have disclosed that a similar approach has been adopted in Scotland, France, Israel, Switzerland, Canada, Australia, New Zealand and various United States courts whether federal or state. Whilst those surveys cannot by their nature be exhaustive of every decision in every jurisdiction, what is significant is that none of them, including those conducted on behalf of those arguing against the currently assumed analysis (Father and the Intervener), has unearthed any decision to the contrary. In C v M (2014) (Case C 376/14PPU); [2015] Fam 116 the Court of Justice of the European Union (CJEU) adopted the same analysis. The French Father had made application to the Irish Court for the return of children who had been taken to Ireland by Mother. The background was an initial decision of the French court permitting relocation to Ireland, which had been appealed promptly. Mother had moved notwithstanding the pending appeal, a stay having been refused to Father, and subsequently the French decision had been reversed by the appeal court. The Irish court was minded to find that the child had become at some stage habitually resident in Ireland. It referred a number of questions to the CJEU. The CJEU decided (1) that the initial removal to Ireland had not been wrongful, because of the then extant first instance decision permitting the move (para 44), (2) that the subsequent retention there after the French appellate decision might justify an order for return but (3) this would depend on whether by then the child was habitually resident in Ireland (paras 45 49 and 63). If habitual residence had by then been established in Ireland, there could be no order for return. At para 48 the court said: Article 11(1) of the Regulation [vis Brussels II Revised] provides that paragraphs 2 8 of that article are to apply where the holder of rights of custody applies to the competent authorities of a member state to deliver a judgment on the basis of the 1980 Hague Convention in order to obtain the return of a child that has been wrongfully removed or retained in a member state other than the member state where the child was habitually resident immediately before the wrongful removal or retention. It follows that this is not the case if the child was not habitually resident in the member state of origin immediately before the removal or retention. It is certainly true that this paragraph proceeds from the words of article 11(1) of Brussels II Revised. But the application which the father had made was under the Abduction Convention. He had referred also to Brussels II Revised, but this Regulation does not contain the duty to return a child; what it does is to recognise that the Abduction Convention does contain such a duty, and by article 11 it provides supplementary rules for how this duty is to be performed. En route to its conclusion, the CJEU emphasised, first, that the Regulation and the Abduction Convention were to be uniform, that is to say consistent (para 58), and secondly that a decision to return under the Abduction Convention is not a decision on the merits and thus there can be no occasion for a conflict of jurisdiction between the requesting and requested State (paras 37 and 40 42). It left to the Irish court the decision of fact whether and when habitual residence had been established in Ireland. It may be that its proposition that for a return order under the Abduction Convention to be made it was essential that the child was habitually resident at the time of the wrongful act in the State of origin, as distinct from some State other than the requested State, might be wider than necessary, for it may not have considered the possibility of habitual residence in an intermediate State, which did not arise for debate. But what is abundantly clear is that it is only under the Abduction Convention that a summary order for return is provided for, and that such an order could not be made if the child was, by the time of the wrongful act relied upon, habitually resident in the requested State. There is no hint in the courts decision that Brussels II Revised has in any sense modified the fundamentals of the scheme of the Abduction Convention for EU members; quite the contrary. In the later case of OL v PQ (2017) (Case C 111/17PPU), a different chamber of the CJEU reached a similar conclusion. The court held that a child born in Greece was habitually resident there, despite the originally Italian home of her parents, and that in consequence an order under the Abduction Convention for return from Greece to Italy could not be made by the Greek court. At para 38 the court said: It is clear from those provisions that the concept of habitual residence constitutes a key element in assessing whether an application for return is well founded. Such an application can succeed only if a child was, immediately before the alleged removal or retention, habitually resident in the member state to which return is sought. The nearest case proffered as any indication to the contrary is In re G (A Minor) (Enforcement of Access Abroad) [1993] Fam 216. There, the Court of Appeal held that a Canadian resident father could use the Abduction Convention (article 21) to enforce his Canadian given rights of access in relation to a child who was habitually resident in England by the time the mother declined to comply with them. But that was not a case involving any question of return. The provisions of the Convention in relation to access are notably more fluid and flexible. They simply require the central authorities to facilitate co operation with a view to preserving access rights. They make no demands of the courts of the requested State and to the extent that they contemplate that an application may be made there, they appear to assume that those courts will conduct a merits hearing. They provide no guide to the scheme of the Convention in relation to applications for orders for summary return. These various examples of the practice as to the application of the Abduction Convention thus all point in the same direction. The Convention cannot be invoked if by the time of the alleged wrongful act, whether removal or retention, the child is habitually resident in the State where the request for return is lodged. In such a case, that State has primary jurisdiction to make a decision on the merits, based on the habitual residence of the child and there is no room for a mandatory summary return elsewhere without such a decision. It may of course be that in making a merits decision, the court of the requested State might determine that it is in the best interests of the child to be returned to his previous home State, and indeed might do so without detailed examination of all possible evidence, as the English courts may do (see In re J (A Child) (Custody Rights: Jurisdiction) [2005] UKHL 40; [2006] 1 AC 80). But so to do is very different from making a summary order for return without consideration of the merits under the Abduction Convention. The submissions made to this court addressed also the separate question of whether a return under the Abduction Convention, if made, must always and only be made to the State of habitual residence immediately before the wrongful act. It is to be noted that article 12 does not contain any such restriction, and that Professor Prez Veras report at para 110 makes clear that the decision not to do so was deliberate. The reason given is that whilst ordinarily that State will be the obvious State to which return should be made, there may be circumstances in which it would be against the interests of the child for that to be the destination of return. The example given is of the applicant custodial parent who has, in the meantime, moved to a different State. The propriety, in such circumstances, of an order returning the child to the new home state of the custodial parent is not in issue in this case. For the reasons given above, the silence of article 12 on the destination of a return order is of no help on the issue which does arise, namely whether an order for return can be made if at the time of the wrongful act the child was habitually resident in the requested State. It is however to be observed in passing that the unusual circumstances envisaged in para 110 of the Prez Vera report were held at first instance to have arisen in O v O (Child Abduction: Return to Third Country) [2013] EWHC 2970 (Fam); [2014] Fam 87 and there did result in an order for return to the new home State. The second general question: when does wrongful retention occur? This was the question of principle on which leave to appeal to this court was given. If the child has been removed from the home State by agreement with the left behind parent for a limited period (and thus the removal is not wrongful), can there be a wrongful retention before the agreed period of absence expires? The classic example of the possibility is where the travelling parent announces, half way through the agreed period (say of a sabbatical year of study for the parent) that he will not under any circumstances return the child in accordance with the agreement he made. He might do more. He might effectively make it impracticable to return, by, for example, selling his house in the home State, abandoning his job there, and obtaining residency in the new State for himself and the child on the basis of an undertaking that they will both remain there indefinitely. No doubt other examples could be postulated. The question is whether, if such a thing occurs, there is then and there a wrongful retention, or whether his retention of the child cannot in law be wrongful until the date agreed for return arrives and, as it was graphically put in the American case of Falk v Sinclair (2009) 692 F Supp 2d 147, the aeroplane lands and the child is not among those who disembark. There is some difficulty in devising a suitable shorthand for the possibility of wrongful retention in advance of the due date for return. One which has been used is anticipatory retention. This is certainly convenient but it may lead to misconceptions. If early wrongful retention is a legal possibility, it is not because there is an anticipation of retention. On the contrary, the child is retained in the destination State from the moment of arrival, just as he is removed from the home State at the moment of departure. If the departure and arrival are permitted by agreement with the left behind parent, or sanctioned by the court of the home State, they are still respectively removal and retention, but they are not wrongful. So what is under consideration is a retention which becomes wrongful before the due date for return. The key to the concept of early wrongful retention, if it exists in law, must be that the travelling parent is thereafter denying, or repudiating, the rights of custody of the left behind parent and, instead of honouring them, is insisting on unilaterally deciding where the child will live. In the absence of a better expression, the term which will be used here will, for that reason, be repudiatory retention. That is not to import contractual principles lock stock and barrel into the concept, for the analogy with a contract is only partial. It is simply to attempt a shorthand description. The expert and thorough analysis of the known cases in several different jurisdictions which was undertaken in this case by Black LJ, as she then was, cannot be improved upon. It is to be found at paras 28 97 of her judgment [2017] EWCA Civ 980; [2017] 3 FCR 719. On this part of her judgment the Court of Appeal was unanimous. It shows that a concept of repudiatory retention has been recognised in some jurisdictions, and for many years now: early examples included Wall Js decision in In re S (Minors) (Abduction: Wrongful Retention) [1994] Fam 70 and the Canadian case of Snetzko v Snetzko (1996) CanLII 11326. Other cases have rejected the concept, for example in Australia. There are cases going either way in the United States. It follows that there is no generally accepted international practice on the point, nor is there clear authority either way in this jurisdiction. In those circumstances it is necessary for this court to address the principle of the suggested concept. The Court of Appeal concluded unanimously that there was a concept of repudiatory retention known to the law. It divided, however, as to whether it could exist only when the repudiation was communicated to the left behind parent (or at least manifested by action), as Black LJ held, or whether such communication was not necessary in law, as Sharp and Thirlwall LJJ concluded. In considering the existence of the concept, it is necessary also to address how repudiatory retention, if it exists at all, may occur. The helpful submissions made to this court identified six suggested reasons why such a concept is inconsistent with the Abduction Convention and not known to the law. In principle there can only be a single act of wrongful retention and (i) this cannot occur until the due date for return arrives, and is not honoured, because until then there is no breach of the rights of custody of the left behind parent. (ii) In ordinary language retention means continuing to hold or to keep possession; however, until the due date for return arrives, the travelling parents retention is sanctioned and not wrongful. (iii) A repudiatory retention is too uncertain a concept, for the travelling parent may change his mind and return after all on the due date, whatever he may have said or done earlier. (iv) If repudiatory retention were acknowledged, the effect might be to start the clock running before the left behind parent knew about it, with the consequence that the 12 month period stipulated in article 12 might wholly or partly pass and the left behind parent be deprived of or hindered in the right to a certain order for return. (v) Any such concept would be likely to lead to prolonged hearings in applications under the Abduction Convention when it is axiomatic that they should be such as can be dealt with swiftly and summarily. (vi) No such concept is needed because the left behind parent will, if he cannot obtain a summary return order under the Abduction Convention, have other effective remedies. The crux of the issue lies in the first two contentions, which are different ways of expressing the same point. If there is no breach of the rights of custody of the left behind parent, then it is clear that the Convention cannot bite; such a breach is essential to activating it, via articles 3 and 12. It is clearly true that if the two parents agree that the child is to travel abroad for a period, or for that matter if the court of the home State permits such travel by order, the travelling parent first removes, and then retains the child abroad. It is equally true that both removal and retention are, at that stage, sanctioned and not wrongful. But to say that there is sanctioned retention is to ask, rather than to answer, the question when such retention may become unsanctioned and wrongful. When the left behind parent agrees to the child travelling abroad, he is exercising, not abandoning, his rights of custody. Those rights of custody include the right to be party to any arrangement as to which country the child is to live in. It is not accurate to say that he gives up a right to veto the childs movements abroad; he exercises that right by permitting such movement on terms. He has agreed to the travel only on terms that the stay is to be temporary and the child will be returned as agreed. So long as the travelling parent honours the temporary nature of the stay abroad, he is not infringing the left behind parents rights of custody. But once he repudiates the agreement, and keeps the child without the intention to return, and denying the temporary nature of the stay, his retention is no longer on the terms agreed. It amounts to a claim to unilateral decision where the child shall live. It repudiates the rights of custody of the left behind parent, and becomes wrongful. The plain purpose of the Abduction Convention is to prevent the travelling parent from pre empting the left behind parent. The travelling parent who repudiates the temporary nature of the stay and sets about making it indefinite, often putting down the childs roots in the destination State with a view to making it impossible to move him home, is engaging in precisely such an act of pre emption. It is possible that there might also be other cases of pre emptive denial of the rights of custody of the left behind parent, outside simple refusal to recognise the duty to return on the due date. It is not, however, necessary in the present case to attempt to foresee such eventualities, or to consider whether fundamental failures to observe conditions as to the care or upbringing of the child might amount to such pre emptive denial. It is enough to say that if there is a pre emptive denial it would be inconsistent with the aim of the Abduction Convention to provide a swift, prompt and summary remedy designed to restore the status quo ante to insist that the left behind parent wait until the aeroplane lands on the due date, without the child disembarking, before any complaint can be made about such infringement. It is no doubt true that a travelling parent might change his mind after an act of repudiation. But so he might after a failure to return on the due date, and commonly does when faced by notice of the provisions of the Abduction Convention, or by an application under it. So also he might, after making an unsanctioned move to an unagreed country, or after embarking on an unsanctioned programme of religious conversion. The possibility of a change of heart is no reason not to recognise that the heart needs changing if rights of custody in the left behind parent are to be respected. On the contrary, the desirability of inducing a prompt change of mind is an argument for recognising a repudiatory retention when and if it occurs. Proof that it has occurred is a matter of evidence, and what manifestation of it must be demonstrated is considered below. If a concept of repudiatory retention exists, it would indeed follow that once such an act occurs, the article 12 12 month clock would begin to run at that point. If the left behind parent knows of the repudiation, there is every reason why it should run. If he does not, the possibility exists that the 12 month period partly, or sometimes wholly, may pass before he finds out and can make an application under the Abduction Convention. But it is a mistake to think of the 12 month period as a limitation period, of the kind designed in Limitation Acts to protect a wrongdoer from claims which are too old to be pursued. It is not a protection for the wrongdoer. Rather, it is a provision designed in the interests of the child. It operates to limit the mandatory summary procedure of the Convention to cases where the child has not been too long in the destination State since the wrongful act relied on. Where it applies, it does not prevent a summary return; it merely makes it discretionary. In the event that an act of wrongful repudiatory retention had been concealed, that concealment might well be one factor in the decision whether to order return or not. In other cases, the settlement of the child might be so well established that notwithstanding the wrong done by the travelling parent, it is too late to disturb it. Such decisions are fact sensitive ones which are properly left to the court of the requested State. The risk of the 12 month period running without the knowledge of the left behind parent is in any event distinctly less fatal to his interests than the risk of the childs habitual residence being changed without his knowledge, or indeed with his knowledge but without him being able to invoke the Convention because the due date for return has not yet arrived. The latter risk creates a complete bar to return under the Convention; the former a discretionary one. The concern that Abduction Convention applications may become longer and more complicated is a point well made. It was convincingly voiced in the Court of Appeal by Black LJ. It is of the essence of such cases that the remedy is a swift and summary one. Oral evidence should be the exception, not the rule. But some limited disputes of fact are bound to arise. In the kind of case where retention is in question, it will often be critical to establish what the terms were of any arrangement under which the child travelled. That may be as necessary to establish the date of due return (and thus conventional wrongful retention) as to establish an earlier repudiatory retention. The Family Division judges who hear these cases are well used to managing them actively and to controlling any tendency to spill outside the issues necessary to determine them. If the correct rule is that repudiatory retention must be demonstrated by overt act or statement (see below) the danger of speculative applications being made, or of hearings degenerating into speculative cross examination as to the internal and undisclosed thinking of the travelling parent ought not to arise. It may be that in many cases which would be covered by the concept of repudiatory retention the left behind parent may have remedies alternative to an application under the Abduction Convention. We were pressed with the contention that ordinarily he will be able to seek an order for return in the home State, and then enforce it in the destination State. This may indeed sometimes be possible. It will be possible if both States are party to the 1996 Convention and if at the time of the application to the court of the home State the child is still habitually resident there. In that event, the home State has jurisdiction (article 5) and the destination State must enforce its decision (article 23). Article 7 of the 1996 Convention prolongs the jurisdiction of the home State if there has been a wrongful retention, but if the habitual residence of the child has been changed to the destination State by the time of the act relied upon, there will be no wrongful retention and article 7 will not apply. Nevertheless, the necessity for habitual residence in the home State presents no greater hurdle to the left behind parent under the 1996 Convention than under the Abduction Convention, because if the habitual residence of the child has shifted to the destination State by the time of the act relied on, neither form of machinery will work. Likewise, if both States are members of the EU and governed by Brussels II Revised. All that said, the critical fact is that by no means all States which are party to the Abduction Convention are party to the 1996 Convention; at the time of the hearing in this court there were some 49 States which are not. Even fewer are members of the EU. The Abduction Convention has its own self contained scheme and should function as such. The recognition and enforcement provisions in the 1996 Convention are, as explained above, meant to preserve that scheme and not to substitute for it. Moreover, such an application to the home State would have to trigger a merits hearing, in which the home State has to adjudicate upon where the best interests of the child now lie, and upon whether habitual residence has shifted, all depending on facts occurring perhaps some thousands of miles away. That is not at all the same as the mandatory summary remedy provided by the Abduction Convention. Even in jurisdictions, such as England and Wales, which retain the practice of sometimes returning children without a full investigation of the facts (In re J, para 34 above), the remedy is not, for the left behind parent, the equivalent of the Abduction Conventions mandatory summary return. For all these reasons, the principled answer to the question whether repudiatory retention is possible in law is that it is. The objections to it are insubstantial whereas the arguments against requiring the left behind parent to do nothing when it is clear that the child will not be returned are convincing and conform to the scheme of the Abduction Convention. The remaining question is what is needed to constitute such repudiatory retention. As with any matter of proof or evidence, it would be unwise to attempt any exhaustive definition. The question is whether the travelling parent has manifested a denial, or repudiation, of the rights of the left behind parent. Some markers can, however, be put in place. (i) It is difficult if not impossible to imagine a repudiatory retention which does not involve a subjective intention on the part of the travelling parent not to return the child (or not to honour some other fundamental part of the arrangement). The spectre advanced of a parent being found to have committed a repudiatory retention innocently, for example by making an application for temporary permission to reside in the destination State, is illusory. (ii) A purely internal unmanifested thought on the part of the travelling parent ought properly to be regarded as at most a plan to commit a repudiatory retention and not itself to constitute such. If it is purely internal, it will probably not come to light in any event, but even supposing that subsequently it were to do so, there must be an objectively identifiable act or acts of repudiation before the retention can be said to be wrongful. That is so in the case of ordinary retention, and must be so also in the case of repudiatory retention. (iii) That does not mean that the repudiation must be communicated to the left behind parent. To require that would be to put too great a premium on concealment and deception. Plainly, some acts may amount to a repudiatory retention, even if concealed from the left behind parent. A simple example might be arranging for permanent official permission to reside in the destination State and giving an undertaking that the intention was to remain permanently. (iv) There must accordingly be some objectively identifiable act or statement, or combination of such, which manifests the denial, or repudiation, of the rights of custody of the left behind parent. A declaration of intent to a third party might suffice, but a privately formed decision would not, without more, do so. (v) There is no occasion to re visit the decision of the House of Lords in In re H; In re S (para 28 above) that wrongful retention must be an identifiable event and cannot be regarded as a continuing process because of the need to count forward the 12 month period stipulated in article 12. That does not mean that the exact date has to be identifiable. It may be possible to say no more than that wrongful retention had clearly occurred not later than (say) the end of a particular month. If there is such an identifiable point, it is not possible to adopt the submission made to the Court of Appeal, that the left behind parent may elect to treat as the date of wrongful retention either the date of manifestation of repudiation or the due date for return. It may of course be permissible for the left behind parent to plead his case in the alternative, but that is a different thing. When once the actual date of wrongful retention is ascertained, the article 12 period begins to run. This case: the judges decision The judge ([2016] EWHC 3535 (Fam)) held that there was no concept of repudiatory retention known to the law. But he helpfully addressed the facts on the hypothesis that he was wrong about that. He held that the application to the immigration authorities made on 4 November 2015 did not amount to such a repudiatory retention, because although it was concealed from Father, something had to be done to regularise the stay of the children once it was to last more than their six month visas permitted. Father, he held, could not properly have objected to such regularisation, even if Mother feared that he might have tried. There can be no doubt that the judge significantly misdirected himself here. It was not the application for permission to stay which was potentially significant. It was what was said, in support of it, about Mothers intentions. Of course it was said by her solicitors, but if it showed that by that date she had determined that the childrens centre of life is, and will be, in the UK indefinitely, then it would be capable of being an objectively identifiable manifestation, made to an official third party, of her repudiation of Fathers rights of custody, and of the fact that thereafter her retention of the children in the United Kingdom was not in accordance with the arrangement she had made with him, but in defiance of it. However, the question which matters is not whether the judge made this error, but whether it affected his conclusion that Mother had not, before the expiry of the agreed year (which he determined was at the end of June 2016) made any act of repudiatory retention. The judge went on to examine Mothers state of mind. He found that she vacillated in what she meant to do. He had seen her examined and cross examined, and it is clear that he believed her when she said that as at both November 2015 and February 2016, she had not yet made up her mind. In February she had told Father only that she would not be returning in May (when the year would not, on the judges findings, have expired). He attributed her uncertainty in part to anticipation of harassment from Father. He then directed himself that even though she gave evidence that by the end of April 2016 she had resolved not to return, that could not be a date for repudiatory retention because it was too imprecise and thus inconsistent with the In re H; In re S rule that retention must be a definite occurrence rather than a continuing process. To the extent that he relied on imprecision he was, again, clearly wrong. There is, as explained above, nothing in In re H; In re S which prevents a court from saying that retention had occurred not later than the end of April. But what does prevent there from being a repudiatory retention in April is that Mothers internal thinking could not by itself amount to such. If she had had such an intention in November, the application to the immigration authorities would have been capable of amounting to an objective manifestation of her repudiation, but the judge believed her when she said that she did not. It was open to him to believe her or not to believe her about this. He saw her and this court has only a transcript. It does not provide nearly sufficient basis for overturning his decision. His error about the potential significance of what was said to the immigration authorities in November is not inconsistent with his yet believing the witness whom he saw when she said that she had not then (or until April) made up her mind to stay. These findings need to be considered alongside the judges decision as to the habitual residence of the children. He reviewed a body of evidence from Mother, relatives, neighbours and the playschool manager, to the effect that the children were, by the Summer of 2016, firmly integrated into the social and family environment of the part of England in which they had lived for a year, and, in the case of the younger child, for somewhat longer than he had lived in Australia. By reference to the decision of Hayden J in In re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174 (Fam); [2016] 4 WLR 156, he directed himself correctly as to the test of habitual residence and the factors relevant to the integration necessary to establish it. He found that the children were, by the time of their otherwise wrongful retention at the end of June 2016, already habitually resident in the United Kingdom, so that the Abduction Convention could not apply to call for a mandatory summary return. He expressed the view that they had probably become habitually resident in England much earlier than June 2016. There is no basis in law for criticising the judges decision as to habitual residence. His remark that it was arguable that the children had established habitual residence by the time of the November application to the immigration authorities may well be going too far, for at that stage they had been in the United Kingdom only since May, a period of about six months, but that remark does not alter the propriety of his decision as to June 2016, by which time more than a years residence had passed, during which the children had clearly become integrated parts of English life. For my part, I recognise the force of the contention that the judges error about the potential significance of what was said at the time of the November application to the immigration authorities infected his decision that there was no combination of intention not to return and outward manifestation of that decision until the following summer. But for the reasons given above I conclude that that infection did not in fact take place. It follows that by the time the children were retained in the United Kingdom inconsistently with Fathers rights of custody they had become habitually resident here. That being so, the application under the Abduction Convention cannot succeed. The consequence is that Mothers appeal against the order of the Court of Appeal must succeed, whilst Fathers cross appeal in relation to the finding as to habitual residence must be dismissed. LORD KERR: (dissenting) There is much in Lord Hughes judgment with which I agree. Like Lord Wilson (with whose proposed disposal I fully agree) I would have dismissed the appeal. There is perhaps a slight difference in emphasis between us, however, on the reasons that the appeal should be dismissed and, on that account, I add this short judgment. When dealing with the effect of wrongful retention of a child by what has been described as a travelling parent, one can recognise that various factors are in play. One starts with the proposition that, in general, it should not be possible for a child to acquire or for a parent to bestow habitual residence after the time that wrongful retention begins. A strong imperative exists for discouraging travelling parents from the view that they can avoid the consequences of the Abduction Convention by concealing an intention to retain the child in the country to which they have travelled, on the pretext, for instance, of a holiday of fixed or limited duration. To insist that wrongful retention can only occur at the end of an agreed period of absence could lead to absurd results; would encourage dissimulation on the part of the travelling parent; and would permit habitual residence to be acquired by the perpetration of deception on the left behind parent. As against that, it is often difficult retrospectively to decide when wrongful retention began. It may be the outcome of a gradual change of attitude on the part of the travelling parent. Retention in the country travelled to may be acquiesced in by the left behind parent, even if she or he suspects that the travelling parent may be in the process of forming an intention not to return the child to the country where she or he was habitually resident. If the child has formed relationships in the travelled to country and is well settled there (albeit as a result of the travelling parents covertly formed intention not to return him or her) do the best interests of the child obtrude on the question of where her or his habitual residence should be found to be? No final answers to these potentially difficult questions need be given in the present appeal. I raise them solely to illustrate the extremely trying problems that can arise in this fraught area. How is the fact (and the time of onset) of wrongful retention to be established? Clearly the intention of the travelling parent wrongfully to retain is needed. Must this be accompanied by some overt act or event by which the intention becomes manifest? Not without misgivings, I am prepared to accept that this is required. The reason for my misgivings can be explained by taking a simple but not, I suggest, fanciful, example. Suppose a husband persuades his wife to allow him to take their children to his parents native country on the promise that he will return within a stipulated period. Days after leaving, he conceives a firm determination that the children and he will never return. He does not communicate this to anyone. Some months later, he takes action which clearly demonstrates that he has no intention of returning the children. Evidence emerges that this was his plan from the outset. Is the period between his first determining not to return the children and the later event reckonable in the assessment as to whether they have acquired habitual residence in the country of their paternal grandparents? If we say that the retention only becomes wrongful when the intention of the retaining parent becomes manifest, how is the claim by the father in my example that the children have become habitually resident in his parents country to be resisted? Again, however, this conundrum does not require to be solved in the present appeal and, having expressed my misgivings about the notion that some manifestation of the wrongful retention is required, I say no more about it. For the reasons given by Lord Hughes and Lord Wilson, the judge ([2016] EWHC 3535 (Fam)) was wrong to hold that the law did not recognise repudiatory retention. His examination of when such a wrongful retention might have occurred (if, contrary to his view, the concept exists in law) appears to have been coloured by that primary finding, for he concluded that it had not arisen in this case at all. That finding simply cannot be reconciled with his statement in para 80 that as the months went by, the mother gradually came to the conclusion that she and the children should remain in England. She had reached that conclusion by around April though it was not communicated to the father. And this, notwithstanding that he had earlier said, at para 62, that a finding that there was a wrongful retention on some unspecified date in April 2016 is too imprecise. The opportunity for a firm finding as to the precise timing that an intention was formed is, in the nature of things, unlikely to be always possible. Intentions are formed over days, weeks or even years. Because it is not possible to make a positive finding of the date on which it had been formed is not a reason for not making a finding as to the time by which it had been formed. And indeed Judge Bellamy appears to have done precisely that when he said in para 80 that the mother had decided by around April that the children should remain in England. The judge, having made that finding, was obliged to consider whether the childrens habitual residence had been established in England by April 2016. He did not do that. On that account alone, his decision cannot be allowed to stand, in my opinion. It is impossible to say that, if he had recognised the true implication of his statement that the mother had, by April 2016, formed the intention not to return the children, he would nevertheless have decided that habitual residence in England had by then already been established. In the absence of a finding to that effect, or alternatively the inevitability of such a conclusion, it is quite impossible to conclude that the habitual residence of the children had changed at a time which would displace the fathers rights under the Abduction Convention. There is a more fundamental problem with the judges judgment. This concerns the communications to the Home Office in November 2015. In the letter from the mothers solicitor, it was asserted that she had been advised not to return to Australia; that it was necessary that she remain in England to safeguard herself and her children; and that there was no doubt that the childrens centre of life is and will be in the UK. At paras 53 and 59 of his judgment, the judge dealt with the application for British citizenship in the following terse passages: And The solicitors letter to the Home Office dated 4th November sets out information clearly designed to persuade and assumes that the person making the decision will be exercising a discretion. As the Home Office was not required to exercise a discretion it follows that any misleading or inaccurate information set out in that letter cannot have had any bearing on the decision of the Home Office to approve the childrens applications. As the father well knew, the children had entered the UK on six month visitors visas. To enable them to stay for the year to which the father had agreed, some step had to be taken to enable them lawfully to remain in the UK beyond 5th November. I do not accept that it can properly be said that the mother wrongfully retained the children from 5 November 2015. From these passages, two reasons for the judges conclusions can be discerned. First, the circumstance that the Home Office did not have to exercise a discretion meant that any misleading or inaccurate information in the letter should be discounted or ignored. Secondly, the fact that the father knew that something would have to be done to allow the children to remain in the United Kingdom after 5 November 2015 eliminated any possibility of the mother having wrongfully retained the children from that date. Neither reason is sustainable. More importantly, the conclusions that he reached on those matters deflected the judge from recognising and considering the significance of the evidence provided by the November 2015 correspondence as to the mothers intention at that time. The failure to give proper consideration to that evidence fatally undermines the conclusion reached by the judge as to the time at which the mother had conceived the intention to retain the children in England. In turn, this extinguishes the basis for his decision that the wrongful retention did not begin until June 2016 and that, by that time, the habitual residence of the children was England. Why was the judge wrong to decide that, because the Home Office did not have to exercise a discretion, any misleading or inaccurate information in the letter should be discounted or ignored? Because this was nothing to the point. The significance of the letter in the context of these proceedings was its potential to provide an insight into what the mothers intention was at the time that it was written. The purpose of the letter, the result that it sought to achieve, was entirely incidental to that critical consideration. The importance of the letter bore on the question of what the mothers sentiments about the retention of her children in England were at the time of its dispatch. What it sought to persuade the Home Office of was entirely irrelevant to that question. But the judge dismissed the letter as a potential source of evidence on that central question. Until that question is addressed, the conclusion that the mother had not formed any intention wrongfully to retain the children in England in November 2015 is simply insupportable. Likewise, the fact that the father knew that something would have to be done in November 2015 to ensure that the legal entitlement of the children to remain living in England was preserved, has no direct bearing on the question whether the letter from the mothers solicitor showed that, as early as that date, the mother had decided that she would not return the children to Australia. The contents of the letter certainly suggested that that was the case. As already observed (in para 11 above), it had said that she had been advised not to return to Australia; that it was necessary that she remain in England to safeguard herself and her children; and that there was no doubt that the childrens centre of life is and will be in the UK. What the judge should have asked himself was, is it conceivable that such a letter would be sent if the mother had not already decided that she and the children would not return to Australia?. Instead, he elided that question by concentrating on the circumstance that the husband must have known that the mother would have to do something to regularise the childrens continued stay in England. The important question was why the letter was couched in the terms that it was, if it did not reflect the mothers settled intention to remain here. That question was never asked by the judge and it has not been possible to address it since. It needs to be asked and satisfactorily answered before any conclusion as to the mothers intention in November 2015 about returning her children to Australia can be I consider that this court should have dismissed the mothers appeal. reached. That is why, in my opinion, remittal of the case for a proper hearing is unavoidable. LORD WILSON: (dissenting) I respectfully agree with the exposition of law in the judgment of Lord Hughes. I disagree with him only when, from para 52 onwards under the heading This case: the judges decision, he reaches the conclusion that the mothers appeal should be allowed. The trial judge (the judge) held that the law did not recognise a repudiatory retention and that the mothers retention of the children in the UK became wrongful only on 28 June 2016, which he found to have been the agreed date for their return to Australia. The judge added, however, that, even if the law did recognise a repudiatory retention, he did not consider that it had arisen in the present case, whether in November 2015 or in April 2016 or at all. As Lord Hughes has explained, the Court of Appeal was right to hold that the law does indeed recognise a repudiatory retention. The majority (Sharp and Thirlwall LJJ) proceeded to hold that the judges conclusion that in any event it had not arisen in the present case had been flawed; and they ordered that the case be remitted for further inquiry in that regard, particularly in relation to circumstances in November 2015. In my view the majority were right to order that the possibility of a repudiatory retention, particularly in November 2015, required further to be explored. It required further to be explored by reference in particular to the mothers intention; to the need for some objectively identifiable act of repudiation; and to whether, immediately before any repudiatory retention, the children had already acquired their habitual residence in the UK. Although, like the majority in the Court of Appeal, I will focus principally on circumstances in November 2015, I wish briefly to address the possibility of a repudiatory retention of the children on the part of the mother in April 2016. The judge found: I am satisfied that as the months went by the mother gradually came to the conclusion that she and the children should remain in England. She had reached that conclusion by around April though it was not communicated to the father. So why was there no repudiatory retention in April 2016? In para 55 above Lord Hughes explains that Mothers internal thinking could not by itself amount to such. If she had had such an intention in November, the application to the immigration authorities would have been capable of amounting to an objective manifestation of her repudiation, but the judge believed her when she said that she did not. Today this court decides, with hesitant concurrence on the part of Lord Kerr, that the concept of a repudiatory retention requires not only an intention on the part of the travelling parent to retain a child beyond the agreed date of return but also some objectively identifiable act of repudiation on her part. If, however curiously (see below), the objectively identifiable act occurred in November 2015 but the requisite intention arose only by around April 2016, how obvious is it that the requirements of the concept were not at any rate by then satisfied? More importantly, however, the majority in the Court of Appeal were in my view right to set aside the judges finding that the mothers intention to retain the children beyond 28 June 2016 arose only by around April 2016. For he did not grapple with evidence which seemed clearly to point to her having developed that intention by November 2015. This evidence was the letter dated 4 November 2015 from the mothers solicitor to the Home Office, which accompanied her applications on behalf of the children to be registered as UK citizens. The context was that the children had entered the UK on 5 May 2015 pursuant to visitors visas due to expire on 5 November 2015. In the light of the fathers agreement that they could remain with the mother in the UK until 28 June 2016, it was necessary for their visas to be extended for almost eight months. But the regularisation of their stay in the UK for that extended period could have been achieved without their becoming UK citizens. So the mothers applications for them to be registered as UK citizens called for an explanation. Her failure to notify the father in advance that she was making the applications also called for an explanation and, in cross examination, it received one: she explained that she believed that he would have obstructed them. To her statement in answer to the fathers application, the mother exhibited her solicitors letter dated 4 November 2015. In the letter the solicitor said: that the mother was effectively forced not to return to Australia in that she was advised not to return to Australia; that the interests of these two children are best served by their being (a) order to safeguard herself and her children; (b) (c) in the UK; and (d) be, in the UK where the children are registered as requested. that it cannot be in doubt that the childrens centre of life is, and will The terms of the letter therefore appear to be entirely inconsistent with an intention on the part of the mother to return with the children to Australia in June 2016 or at all. In the body of her statement the mother said that her decision not to return the children to Australia in June 2016 had developed over time and had not arisen long before that date. But she made no comment upon the content of her solicitors letter to the Home Office. She did not say that any part of it had been written without her approval or was untrue. On the contrary she said that her solicitor had been utterly clear that there was nothing wrong or deceptive in the applications for citizenship, being an assertion with which she seems there to have associated herself. In cross examination the mother was taxed, albeit perhaps in terms too general, about the content of the solicitors letter. She agreed that it did not indicate that she and the children would return to Australia in June 2016. She denied that, as at the date of the letter, she had formed an intention to stay with them indefinitely in the UK but, whether in re examination or otherwise, she offered no explanation for what her solicitors had said. In my view the content of the solicitors letter dated 4 November 2015, in support of applications for the children to acquire UK citizenship, represented a major obstacle to any finding that the mother had not by then intended to keep the children indefinitely in the UK. Before making any such finding, the judge was obliged to weigh that evidence and, on some basis or another, to explain it away. But, apart from an early reference to any misleading or inaccurate information set out in that letter, he did not address its content in any way. He said simply: If there is a binding legal principle in relation to anticipatory breach, I do not accept that the circumstances surrounding the childrens applications for British citizenship amount to such a breach. As the father well knew, the children had entered the UK on six month visitors visas. To enable them to stay for the year to which the father had agreed, some step had to be taken to enable them lawfully to remain in the UK beyond 5 November. With respect to the judge, he was there missing the main point and was indeed making an unconvincing subsidiary point. His crucial finding about the mothers intention in November 2015, not even expressly made but to be inferred from his reference to around April 2016, was flawed; and the majority in the Court of Appeal were correct to order that inquiry into it should be conducted again. |
This appeal concerns the legality under the Human Rights Act 1998 and the European Convention on Human Rights and Fundamental Freedoms (Human Rights Convention or the Convention) of an Enhanced Criminal Record Certificate (ECRC) issued in respect of the appellant (AR) under section 113B of the Police Act 1997. The certificate gave details of a criminal charge for which he had been tried and acquitted. The Court of Appeal held that the information contained in the certificate involved no breach of his rights under either article 6.2 (presumption of innocence) or article 8 (right to respect for private and family life). Permission to appeal was given solely in respect of article 8. The main issue in short is whether the admitted interference with his private life involved in the disclosure was justified, having regard in particular to what is said to be the limited utility to its recipients of the information so disclosed. The appeal also raises questions as to the proper role of the appellate courts in reviewing the judges finding of proportionality under the Convention. The legislation Part V of the Police Act 1997 provides a legislative framework for the disclosure of criminal records, for example where required in connection with applications for employment or licences. It has been subject to a number of amendments since then. The following references are to the Act as it was in the period material to the certificates issued in this case, that is, between March 2011 and August 2012. Significant amendments made to the scheme under the Protection of Freedoms Act 2012 (the 2012 Act) came into effect in September 2012. These followed a report by Sunita Mason, the Independent Advisor for Criminality Information Management: A Common Sense Approach A review of the criminal records regime in England and Wales (the Mason review). In her Preface she spoke of a degree of dissatisfaction with a system that has evolved with the laudable aim of protecting vulnerable people but is now viewed by some as intrusive and an unnecessary bar to employment. There is also concern that some people may be treated as guilty until proven innocent. She recommended a number of common sense actions to rebalance the system. Although not directly applicable to the case before us, the changes throw some light on the perceived weaknesses of the system at the time, and will need to be taken into account in considering references to our judgment in the future. Also in September 2012 (again in line with the Mason recommendations) there came into force provisions enabling a person dissatisfied with the content of an ECRC to apply for its review by the Independent Monitor established under the Police Act 1997 (sections 117A, 119B). A further important change occurred on 1 December 2012 when the functions of the Secretary of State, formerly carried out by the Criminal Records Bureau, were transferred to the Disclosure and Barring Service (DBS) by an order made under section 88 of the 2012 Act. The 1997 Act as amended provides for three forms of certificate, only the third of which is in issue in the appeal. Section 112 provides for the issue of criminal conviction certificates (CCCs), giving prescribed details of every conviction held in central records, not including spent convictions (section 112(3)); or stating that there is no such conviction (section 112(2)). CCCs are available to any applicant over 16 on payment of a fee. Section 113A provides for the issue on a more restricted basis of criminal record certificates (CRCs) which differ from CRCs in particular in that they include details of spent convictions and cautions (section 113A(6)). Under section 113A(2) an application for a CRC must be countersigned by a registered person with a statement by the registered person that the CRC is required for the purposes of an exempted question. By section 113A(6) exempted questions are ones in respect of which certain provisions of the Rehabilitation of Offenders Act 1974 are disapplied. Typically, they include questions to assess the suitability for admission to certain professions, or for certain offices or employments; or to hold certain licences or permits, or to work with children or vulnerable adults. A registered person is a person listed in the register maintained by the Secretary of State under section 120(1) as likely to ask such questions, such as employers or prospective employers, or bodies responsible for appointment to certain voluntary roles, or for granting certain types of licences. Section 113B, which is in issue in this case, deals with a third category enhanced criminal record certificates (ECRCs). Like CRCs they are issued again on an application countersigned by a registered person for the purposes of an exempted question, but can contain additional information. The relevant definition is in section 113B(3) and (4): (3) An enhanced criminal record certificate is a certificate which (a) gives the prescribed details of every relevant matter relating to the applicant which is recorded in central records and any information provided in accordance with subsection (4), or (b) states that there is no such matter or information. (4) Before issuing an enhanced criminal record certificate the Secretary of State must request the chief officer of every relevant police force to provide any information which, in the chief officers opinion (a) might be relevant for the purpose described in the statement under subsection (2), and (b) ought to be included in the certificate. (In September 2012, following a recommendation of the Mason review, section 4(a) was amended to refer to information which the chief officer reasonably believes to be relevant: 2012 Act section 82(1)(c).) Thus, there is an important difference between the contents of CRCs and ECRCs. The information included in a CRC is limited to the facts of convictions or cautions or their absence. By contrast, an ECRC includes information on the basis simply of the chief officers opinion as to its relevance, and whether it ought to be included in the certificate. In the case of an ECRC, it must further be shown that the exempted question is being asked for a particular prescribed purpose. The Police Act 1997 (Criminal Records) Regulations 2002 (SI 2002/233) prescribed the purposes for which an ECRC might be required (regulation 5A). They included a range of matters, starting with various categories of work with children (defined in regulation 5C) and with adults (regulation 5B), and extending to such matters as obtaining licences under the Gambling Act 2005 or the National Lottery etc Act 1993, and assessing suitability for employment related to national security, and suitability to obtain a taxi driver licence (regulation 5A(c) (zf)). The present case the facts On 21 January 2011 the appellant (AR), then aged nearly 33, was acquitted of rape by the Crown Court sitting at Bolton. He was a married man with children, of previous good character, and a qualified teacher, but was working at the time as a taxi driver. It had been alleged that, shortly after 1.00 am on 4 November 2009, he had raped a 17 year old woman, who was a passenger in a taxi driven by him. His defence was that there had never been sexual contact with the alleged victim. Both he and the complainant gave evidence and were cross examined at the trial. There was no scientific evidence to support or undermine the allegation. Following his acquittal, he applied for an ECRC in connection with an application for a job as a lecturer. On 22 March 2011 an ECRC (the first ECRC) was issued which, under the heading other relevant information disclosed at the Chief Police Officers discretion, contained the following statement about the charge and acquittal: On 4/11/09 police were informed of an allegation of rape. A 17 year old female alleged that whilst she had been intoxicated and travelling in a taxi, the driver had conveyed her to a secluded location where he forcibly had sex with her without her consent. AR was identified as the driver and was arrested. Upon interview he stated that the female had been a passenger in his taxi, but denied having sex with her, claiming that she had made sexual advances towards him which he had rejected. Following consideration by the Crown Prosecution Service, he was charged with rape of female aged 16 years or over, and appeared before Bolton Crown Court on 21/01/11 where he was found not guilty and the case was discharged. On 20 April 2011 AR submitted an objection to the contents of the certificate, stating: There is no conviction. The jury rejected the complainants evidence and the disclosure of the allegation is so prejudicial as to prevent me from being fairly considered for employment. Even if the disclosure of the allegation was possibly appropriate the disclosure fails to provide a full account of the evidence given and how the jury came to its conclusion. It is wrong, unfair and grossly prejudicial [that] I should have to defend myself every time I apply for employment after the jury have ruled I am an innocent man. The disclosure was upheld on 16 May 2011 by Inspector Kynaston (the officer responsible for the initial decision). AR then appealed to the Information Governance Unit (IGU) of the Greater Manchester Police in a letter dated 2 June 2011. His letter pointed out that he was a qualified teacher and wanted to pursue that career, but that now, when I apply for jobs, this rape allegation is disclosed on my CRB and therefore employers will not consider me. The appeal was rejected. The panel took account of a Memorandum dated 20 March 2012, on a standard form, prepared by a Ms Wilson, and signed also by Inspector Kynaston. (I understand that the form was part of the so called QAF documents, to which I will refer below: para 34.) She noted ARs application for the post of lecturer, and stated her view that the information was relevant to the post applied for and ought to be disclosed. In answer to a question as to the relevance of the information, she noted that the position of lecturer would give the opportunity for the applicant to befriend vulnerable females of a similar age to the victim, with the risk that he might use his role to abuse his trust and authority and commit similar offences. quality to pass the test, she said: In answer to the question Do you believe the information to be of sufficient I believe the information is of sufficient quality to pass the required test because: There was sufficient evidence for the CPS to authorise the applicant being charged with Rape, indicating that they believed there to be a realistic prospect of conviction. If the CPS had not believed the allegation, they would not have authorised the charge. This indicates that on the balance of probabilities the allegation was more likely to be true than false. Although the applicant was found not guilty by the jury, the test for criminal conviction is beyond all reasonable doubt, which is higher than that required for CRB disclosure purposes. Therefore the applicants acquittal does not prove that he was innocent, or even that the jury thought he was innocent, just that he could not be proved guilty beyond all reasonable doubt She then reviewed the details of the case at trial, referring for example to the trial judges comment on the inconsistencies in the complainants account, which she thought could plausibly be attributed to her admitted intoxication. Ms Wilson concluded this section: Although the IGU review has raised that the acquittal indicates that the allegation might not be true, the legislation and guidance is clear that allegations that might not be true can be disclosed, as the test required for CRB disclosure purposes is lower than this. Due to the above, I believe that the information is more likely to be true than false and is not lacking in substance, and it is reasonable to believe that the information might be true, and therefore it passes the required test. In answer to the question do you consider the information is both reasonable and proportionate to disclose, she said that it was. It was relatively recent, and although isolated was very serious as it relates to an alleged rape using force, by a stranger. She added: If the applicant repeats this alleged behaviour in the [position applied for], vulnerable people could be caused serious emotional and physical harm. She recognised that disclosure would have an impact on ARs human rights as he may fail to gain employment in his chosen profession, but this would not prevent him gaining employment in another profession which does not require an enhanced CRB check. She thought it important that the potential employer was made aware of this allegation in order that they can make an informed recruitment decision and act to safeguard vulnerable people; and that the potential risk to vulnerable people outweighed the effect of disclosure on his human rights. The Memorandum ended with a comment that the disclosure text was accurate, balanced, and not excessive There is no intimation of the applicants guilt or otherwise in the text. On 28 March 2012 a second ECRC was issued, this time in connection with an application by AR for a licence to work as a private hire driver. The ECRC contained the same information as before. AR wrote to the Criminal Records Bureau (CRB), in similar terms to his earlier letter, with further information about his academic qualifications, and his family, and commenting: This will affect the rest of my life and future as nobody will employ me to teach with this disclosed on my CRB. The disclosure was confirmed by the CRB on 7 August 2012. An internal note indicated that the letter was treated as offering no new information, and as covered by the previous consideration. The proceedings The present proceedings for judicial review were issued on 21 December 2012. They came before HH Judge Raynor QC (sitting as a Deputy High Court judge), who dismissed the claim in a judgment given on 5 September 2013 ([2013] EWHC 2721 (Admin)). He identified three issues (para 1): (a) whether the disclosure was a breach of the presumption of innocence under article 6.2 of the European Convention on Human Rights; (b) whether the disclosure was procedurally unfair because it was inconsistent with the claimants acquittal and/or occurred without consultation, and (c) whether the retention and disclosure of data regarding the acquittal is and was a breach of article 8 of ECHR. As to article 6.2, he held, having regard in particular to the guidance of the European Court of Human Rights in Allen v United Kingdom (2013) 36 BHRC 1; (2016) 63 EHRR 10, that the disclosure involved no breach of that article. The disclosure did not suggest that AR should have been convicted, or that he in fact committed the acts complained of (para 55). Nor was there any procedural unfairness in respect of the decision under challenge in March 2012: When making that decision, account was taken of his previous complaints regarding the March 2011 disclosure, there had been no legal challenge to that disclosure and the Chief Constable in my view was entitled to proceed upon the basis that the claimants complaints were as previously stated. In the event it is plain that the police in the March 2012 review anticipated and considered the matters that the claimant later raised in his letter of 22 June 2012 and, as submitted by the defendants, no suggestion has been made in these proceedings of any further substantive matters that the claimant would have wished to raise. (para 40(e)) The judge also rejected the suggestion that the police, as part of the decision making process, should have obtained a full trial transcript; a transcript of the summing up was sufficient (para 40(b)). In relation to article 8, he referred in some detail (para 30) to the leading authority of R (L) v Comr of Police of the Metropolis [2009] UKSC 3; [2010] 1 AC 410; (Ls case). He concluded (paras 39 40) that the disclosure was reasonable, proportionate and no more than necessary to secure the objective of protecting young and vulnerable persons. He accepted that the review had proceeded on the false premise that the CPS decision to charge itself indicated that the allegation was more likely to be true than false, but considered that the review was carefully considered and fair. On the substance of the allegation he said: The fact of acquittal was recognised, and in my view it was right to comment that nothing could be assumed from the fact of acquittal other than that the jury was not satisfied beyond reasonable doubt of guilt. Whilst I do not consider that a firm or reliable conclusion as to whether the complainants account is more likely to be true than false can be gathered from the transcript alone, I am quite satisfied that the Chief Constable was fully entitled to conclude that it was not lacking in substance, and that it [was] reasonable to believe that the information might be true. In my judgment that is a sufficient basis for disclosure (subject to the issue of proportionality), given the other factors reasonably relied upon by the Chief Constable as justifying disclosure as stated in the review, such as the seriousness of the alleged offence, its relevance to the position applied for and its comparatively recent occurrence. (paras 40(c) (d)) On the question of proportionality, having noted that the claimants employment difficulties had been taken into account, he said: In my judgment, the Chief Constable was justified in concluding that the potential risk to the vulnerable if the claimant obtained a private hire drivers licence and had acted as alleged by the complainant outweighed the detriments that would be caused to him by the disclosure and the interference with his article 8 rights and that disclosure were both justified and proportionate. I am satisfied that the disclosure in the March 2012 ECRC Certificate was no more than was necessary to meet the pressing social need for children and vulnerable adults to be protected and that the balance between that need and respect for the claimants article 8 rights was struck in the right place. (para 40(f)) In the Court of Appeal, McCombe LJ (with whom Lord Dyson MR, and David Richards LJ agreed) dealt at some length with the article 6.2 issue. He reviewed the authorities, domestic and European, including in particular the decisions of the Supreme Court in R (Adams) v Secretary of State for Justice [2011] UKSC 18; [2012] 1 AC 48, and of the Grand Chamber in Allen v United Kingdom (above). He summarised the effect of those authorities (by reference to the words of Lord Hope at para 111 of Adams): that it is not open to the state to undermine the effect of an acquittal (para 54). He accepted that there was some unfortunate language in the reviewing officers reasoning: He concluded: I have in mind here in particular the suggestion that the decision to prosecute indicated that on a balance of probabilities the allegations were more likely to be true than false and the statement of the officers own conclusion at the end that the information might be true. Nonetheless, a statement that the allegations were more likely to be true on the balance of probabilities does not cast doubt on an acquittal in view of the different, and more exacting, standard of proof in criminal proceeding (para 58) Taken as a whole, it seems to me that the issue of the certificate did not undermine the appellants acquittal. Nowhere is it said that he was in truth guilty of the offence. The purport of the certificate is to state the fact of the allegation and of the acquittal. It is no doubt implicit that this is an alert to the potential employer of those facts as to a possible risk to the vulnerable. However, that does not, to my mind, undermine the effect of the acquittal. The effect of the acquittal is that the jury was not satisfied, so that they were sure, that the appellant was guilty. The effect of indicating facts from which others may perceive a risk from a particular individual does not contradict the effect of that verdict. (para 60) He dealt more shortly with article 8, relying on the guidance of the Supreme Court in Ls case. He dismissed the complaint of procedural unfairness, for substantially the same reasons as the judge (para 66). On the roles respectively of the judicial review judge, and the Court of Appeal, he followed the judgment of Beatson LJ in R (A) v Chief Constable of Kent [2013] EWCA Civ 1706; 135 BMLR 22 (R (A)), to which I will need to return. Applying this approach McCombe LJ concluded that the appellate court should only consider the issue of proportionality for itself if it finds that the judge has made a significant error of principle. He found no such error in Judge Raynors judgment (paras 75 76). R (L) v Comr of Police of the Metropolis As already noted, the leading authority on the operation of the ECRC regime (as it appeared in its original form in section 115(6) (7) of the 1997 Act), and on its relationship to article 8, is the decision of the Supreme Court in Ls case. In the first judgment, Lord Hope described the background to the legislation, which had given effect, following consultation, to proposals in a Government White Paper, On the Record: The Governments Proposals for Access to Criminal Records for Employment and Related Purposes in England and Wales (1996) (Cm 3308). He referred (paras 4 5) to paras 29 and 30 of the White Paper, where it was explained that local records held by police forces contained a range of information about individuals, including convictions and cautions for minor offences as well as information going beyond the formal particulars of convictions, which might be of legitimate interest to those considering employing individuals for particularly sensitive posts; and that it was thought right for such information to be disclosed where there are particularly strong grounds for it, such as to combat the risk of paedophile infiltration of child care organisations; but that stricter guidelines on what may be disclosed would provide reassurance to those subject to checking . Before Ls case the leading authority had been the decision of the Court of Appeal in R (X) v Chief Constable of the West Midlands Police [2004] EWCA Civ 1068; [2005] 1 WLR 65 (Xs case). That case, like the present, involved a failed criminal charge; but not an actual acquittal following trial. The applicant had applied for a job as a social worker. Although he had no previous convictions, he had once been charged with indecent exposure, but the proceedings had been discontinued when the alleged victim failed to identify him. The ECRC issued by the Chief Constable contained details of the allegations of indecent exposure under the heading of other relevant information. The applicants challenge was rejected by the Court of Appeal. Lord Woolf CJ (paras 36 37) thought that the Act imposed on the Chief Constable a duty to disclose if the information might be relevant, unless there was some good reason for not making such a disclosure. He inferred that, in the view of Parliament, it was important for the protection of children and vulnerable adults that information be disclosed even if it only might be true. Given the statutory underpinning of the certificate, he saw little prospect of a successful challenge under article 8(2) of the Human Rights Convention, absent any untoward circumstance , adding: I accept that it is possible that there could be cases where the information should not be included in the certificate because it is disproportionate to do so; the information might be as to some trifling matter; it may be that the evidence made it so unlikely that the information was correct, that it again would be disproportionate to disclose it (para 41) In Ls case Lord Hope saw this passage as a significant departure from the way the White Paper envisaged the scheme would be operated (para 38). Its effect had been to tilt the balance against the applicant too far: It has encouraged the idea that priority must be given to the social need to protect the vulnerable as against the right to respect for private life of the applicant. The words ought to be included in section 115(7)(b) require to be given much greater attention. They must be read and given effect in a way that is compatible with the applicants Convention right and that of any third party who may be affected by the disclosure: Human Rights Act 1998, section 3(1). But in my opinion there is no need for those words to be read down or for words to be added in that are not there. All that is needed is to give those words their full weight, so that proper consideration is given to the applicants right to respect for her private life. (para 44) Ls case itself did not involve a criminal charge. The claimant had been employed by an agency providing staff for schools, which required her to apply for an ECRC. The certificate disclosed that she herself had no criminal convictions, but gave details about her child, who had been included on the child protection register on the ground inter alia of alleged inadequate parental supervision by her. It also referred to allegations that she had refused to co operate with social services. The agency ended her employment. She brought judicial review proceedings, claiming that the disclosure was in breach of her right to respect for private life under article 8 of the Convention. Her claim failed. It was held in summary that, although article 8 was engaged, the essential issue was whether the disclosure was a proportionate interference with her private life; that in cases of doubt, the applicant should be consulted before making the disclosure; but that, in the particular circumstances of the case, the significance of the information in respect of risk to children outweighed the prejudicial effect which disclosure had on her employment prospects. As Lord Hope said (para 48): there is no doubt that the facts that were narrated were true. It was also information that bore directly on the question whether she was a person who could safely be entrusted with the job of supervising children in a school canteen or in the playground. It was for the employer to decide what to make of this information, but it is not at all surprising that the decision was that her employment should be terminated. In a concurring judgment, Lord Neuberger thought it realistic to assume that in the majority of cases an adverse ECRC was likely to represent a killer blow to the hopes of a person aspiring to a post within the scope of the section (para 75). He observed that disclosable information under section 115 may frequently extend to allegations of matters which are disputed by the applicant, or even to mere suspicions or hints of matters which are disputed by the applicant; and that, taken on its own, the statutory test of relevance set too low a hurdle to satisfy article 8. The qualifying requirement to consider whether it ought to be included provided the requisite balancing exercise necessary to avoid breach of article 8 (paras 77 80). He gave examples of the factors likely to be relevant: the legislation, through the medium of section 115(7)(b), rightly acknowledges that the relevant public authority, namely the chief officer, must balance the need to protect those vulnerable people whom an ECRC is designed to assist with the article 8 rights of those in respect of whom an ECRC is issued. Having decided that information might be relevant under section 115(7)(a), the chief officer then has to decide under section 115(7)(b) whether it ought to be included, and, in making that decision, there will often be a number of different, sometimes competing, factors to weigh up. Examples of factors which could often be relevant are the gravity of the material involved, the reliability of the information on which it is based, whether the applicant has had a chance to rebut the information, the relevance of the material to the particular job application, the period that has elapsed since the relevant events occurred, and the impact on the applicant of including the material in the ECRC, both in terms of her prospects of obtaining the post in question and more generally. In many cases, other factors may also come into play, and in other cases, it may be unnecessary or inappropriate to consider one or more of the factors I have mentioned. Thus, the material may be so obviously reliable, relevant and grave as to be disclosable however detrimental the consequential effect on the applicant. (paras 80 81) Guidance statutory and non statutory Following the initial hearing the court sought more detailed information about the guidance available both to chief officers and to potential employers as to the operation of the ECRC system, and also any evidence about its impact in practice on those affected. We were interested in particular to see what advice was or is given as to the test for the reliability of information, and what if anything is said about disclosures following a trial and acquittal. The resulting picture is not entirely clear or consistent. As has been seen (para 6 above), the Mason review recommended a stricter test of relevance, but it contained no discussion of the test of reliability. It contained some discussion of the ECRC system, with examples, but no reference was made to the issue of disclosure following trial and acquittal. At the time of the decisions with which this appeal is concerned there was no statutory guidance regarding the application of the ECRC regime. Section 113B(4A), which came into force on 10 September 2012, requires the chief officer to have regard to guidance published by the Secretary of State. The current guidance is the Statutory Disclosure Guidance (2nd ed, August 2015). Under the heading Information should be sufficiently credible, it states: This will always be a matter of judgement, but the starting point will be to consider whether the information is from a credible source. In particular, allegations should not be included without taking reasonable steps to ascertain whether they are more likely than not to be true. (para 18, emphasis added) The same wording appeared in a version available in some form in July 2012: see R (A) at para 12. It seems likely, as Mr Southey QC suggests, that Ms Wilsons use of the expression more likely to be true than not reflected some equivalent guidance available at the time, but the actual source has not been identified. The 2015 guidance (like the 2012 version) also addresses the issue whether the information ought to be included in the certificate, and that of proportionality: whether disclosure pursues a legitimate aim, and if so whether it is proportionate, weighing factors underpinning relevancy, such as seriousness, currency and credibility against any potential interference with privacy (para 22). Nowhere does the statutory guidance address the question of disclosure of criminal allegations following a trial and acquittal. There was at the material time non statutory guidance in the form of a so called Quality Assurance Framework (QAF). This was described by Mr Moffett QC, for the Secretary of State, as a non statutory suite of documents and processes, including specific documents concerning all aspects of the process. Ms Richards QC for the Chief Constable told the court that it had been originally developed between ACPO (the Association of Chief Police Officers) and the CRB (Criminal Records Bureau) to provide a standardised framework under which to process, consider and disclose police information for Enhanced Criminal Records and ISA registration checks. She told us that the standard forms used in the present case were part of the then current QAF (Version 7). She referred us, for example, to one of the QAF documents, GD2 Disclosure Text Good Practice Guidance, in which the purposes of disclosure were said to be to convey non conviction information that may identify a potential risk to the vulnerable. Among the listed criteria were: 3. information; only relay the relevant facts. 4. The disclosure text should be balanced and neutral in tone, offering no opinion, assumption or supposition It should not include any unnecessary detail or Again we were not referred to any specific reference to the treatment of acquittals. Mr Moffett referred us to a more recent document issued by the DBS: Quality Assurance Framework an applicants introduction to the decision making process for Enhanced Disclosure and Barring Service checks (March 2014). It discusses the three primary tests, described as tests of Relevance, Truth/Substantiation and Proportionality. Under the heading Substantiation (p 9): The weight of evidence required is set at a reasonably low level. Some have argued that a higher test, one of a balance of probabilities should be used. Case law, however, asks for consideration of whether there are untoward circumstances that lead the decision maker to believe that it is unlikely that the information is true or that the information is so without substance as to make it unlikely to be true. A reasonable decision maker would not disclose the existence of allegations without first taking reasonable steps to ascertain whether they might be true (Emphasis added) This, it will be seen, is a rather different emphasis from the statutory guidance: reasonable steps to ascertain whether the allegations might be true, rather than whether they are more likely to be true than not. The document goes on to make clear that the disclosure may include information of matters that did not result in a conviction, a prosecution or even a charge as long as they pass the tests within QAF. One reason is said to be the need to protect from harm children and vulnerable adults, both of whom, sadly, are the least likely to make good witnesses, and less likely to present themselves as credible or believable when set against their abusers. Accordingly, it is said: So, there may not be sufficient evidence to secure a prosecution or even get a case to court (remember, the tests in court are far higher than those required for disclosure) but there may be enough for police to believe that someone may pose a real risk. (Emphasis added) This document is also of interest since it contains what appears to be the only specific reference to disclosures following a not guilty verdict in a criminal trial. Under the heading What kind of information can be considered for disclosure?, it includes incidents for which individuals were found Not Guilty in a court of law (in certain circumstances). That is supported by a quotation from the judgment of Wyn Williams J in R (S) v Chief Constable of West Mercia Constabulary [2008] EWHC 2811 (Admin): I do not suggest for one minute that allegations should not be disclosed in an ECRC simply because the alleged offender has been acquitted. The circumstances surrounding the acquittal are all important. There will be instances where an alleged offender is acquitted but only because the Magistrates (or Jury) entertain a reasonable doubt about the alleged offenders guilt. The tribunal of fact may harbour substantial doubts. In such circumstances, however, it might well be perfectly reasonable and rational for a Chief Constable to conclude that the alleged offender might have committed the alleged offence. (para 70) The commentary notes that, in that particular case, the decision making was found wanting and the challenge against disclosure was upheld, but no further explanation is given. Reference to the judgment of Wyn Williams J shows that the certificate was quashed because the chief officer had failed to take account of the Magistrates express indication that they regarded it as a case of mistaken identity. It is clear also that the judge (understandably at the time) was guided by the approach of the Court of Appeal in Xs case, before the reservations expressed in Ls case. As regards guidance to employers on the use of information disclosed in ECRCs, Mr Moffett drew attention to the Secretary of States statutory duty to publish a Code of Practice in connection with the use of information provided to registered persons (Police Act 1997 section 122(2)). The Code of Practice in force at the relevant time was prepared in 2009. The current version is dated November 2015. The Code (in both versions) requires the registered body to have a written policy on the suitability of ex offenders for employment and to make it available to applicants; and to notify potential applicants of the potential effect of a criminal record history on the recruitment and selection process. There is no specific reference to the handling of information in ECRCs, or of information about acquittals, other than a general requirement to discuss the content of the Disclosure with the applicant before withdrawing the offer of employment. There appears to be no formal evidence as to how ECRCs are used in practice by employers. A recent investigation into DBS by the National Audit Office (February 2018) records: There is no check on what employers have done with the information provided by DBS. Government does not know how many people this information prevented from working with children or vulnerable adults. (para 4.15) There is some evidence that employers are encouraged to treat police disclosures with care. Mr Moffett referred to a document published by Nacro (with the support of DBS) entitled Recruiting Safely and Fairly: A Practical Guide to Employing Ex Offenders (2015). This is directed principally at the employment of those with criminal convictions, said to constitute over 20% of the working age population, and accordingly a significant talent pool that organisations cannot afford to ignore. Although there is no specific advice on the handling of information in ECRCs relating to acquittals, emphasis is given to the need to adapt procedures to avoid inadvertent discrimination against those with criminal records, and for the need for a careful and sensitive risk assessment interview where concerns arise from a criminal record check. Mr Moffett also asked the court to note evidence from a report by a company called Working Links (Tagged for Life: A research report into employer attitudes towards ex offenders) that only 5% of employers surveyed would automatically reject a candidate with a criminal record. The same report indicates that only 18% had actually employed someone they knew to have convictions. For more specific advice on the use of non conviction information, he referred us to a Local Government Association publication (Taxi and PHV Licensing: Councillors Handbook; pp 13 16). Responding to anecdotal evidence that some authorities have been reluctant to attach weight to such information, it is noted that such information can and should be taken into account and may sometimes be the sole basis for a refusal. The following advice is given: When dealing with allegations rather than convictions and cautions, a decision maker must not start with any assumptions about them. Allegations will have been disclosed because they reasonably might be true, not because they definitely are true. It is good practice for the decision makers, with the help of their legal adviser, to go through the contents of an enhanced disclosure certificate with an applicant/driver and see what they say about it. If, as sometimes happens in practice, admissions are made about the facts, that provides a firm basis for a decision. (p 15) Finally, at its request, the court was given some information about the numbers of ECRCs relating to acquittals as a proportion of the whole. Ms Richards gave us the following information for the period 1 April 2017 to 31 March 2018: During that period there were 128,154 applications for Enhanced Criminal Record Certificates (ECRCs) processed by Greater Manchester Police (GMP). In relation to 80 of the 128,154 ECRC applications, GMP provided information pursuant to section 113B(4) of the Police Act 1997. 11 of the 80 cases in which information was provided pursuant to section 113B(4) included acquittal information (some may have contained other, non acquittal information as well, eg allegations which did not result in a trial). In eight of those 80 cases, the individual disputed the inclusion of such information. Only one of the eight disputes involved the inclusion of acquittal information. The submissions Mr Southey submits first that the Court of Appeal erred in failing to carry out their own assessment of proportionality. I will deal with that issue in the next section of this judgment. He submits in any event that the treatment of the issue of proportionality by the courts below in the present case was defective. The disclosure in the ECRC should have been found to be in breach of both the substantive and procedural obligations under article 8. As to the latter, it is said, AR was not given an opportunity to make representations before the first ECRC was issued, and accordingly no weight was given to his views, for example on the possibility of alternative employment. The principal dispute has related to the substantive obligation under article 8. There is no dispute that the disclosure involved an interference with ARs rights under the article. The issue is whether, in terms of article 8.2, it was necessary . for the protection of the rights and freedoms of others in other words, whether it was proportionate. That issue had to be addressed, in short, (in Lord Neubergers words: para 29 above) by balancing the need to protect those vulnerable people whom an ECRC is designed to assist with the article 8 rights of those in respect of whom an ECRC is issued. Mr Southey did not suggest that an ECRC might not sometimes be appropriate following an acquittal. But in his submission, the starting point must be the reliability of the allegations. That could only be assessed by a detailed analysis of the evidence, by reference so far as necessary to the transcript of oral evidence (as indicated by Coulson J in R (RK) v Chief Constable of South Yorkshire Police [2013] EWHC 1555 (Admin), para 57). Further, given the potential harm of disclosure to ARs prospects, and the gravity of the allegations, they should not have been disclosed unless they could be established on the balance of probabilities. The judge had been correct to hold that it was not possible to extract from the available material a firm or reliable conclusion that the complainants account is more likely to be true than false. However, neither he nor the Court of Appeal had understood its significance. In his submission, it inevitably undermined the weight which the police had given to the value of the disclosed information in the proportionality balance. That had expressly proceeded on the basis that the complainants account was likely to be true. Reducing the weight to be given to that side of the balance implied that greater, indeed decisive, weight should have been given to the highly damaging effect of the disclosure on AR and his family. Ms Richards for the Chief Constable did not accept that it was either necessary or practicable to conduct a mini trial of the allegations, or of their probability. As shown by the case law, the decision was one of balance taking into account a range of factors, including the gravity of the alleged conduct and its circumstances, the reliability and relevance of the information, the period that has elapsed since the events in question, and the impact on the applicant. In the present case, the majority of these factors weighed in favour of disclosure: the alleged offence was of the most serious nature, the circumstances were directly related to the employment sought, and the alleged offence was recent. The acquittal indicated only that the jury was not satisfied beyond reasonable doubt that AR was guilty of rape. His acquittal and continuing denial of the offence, and the potential impact of disclosure, were important factors in the balance, but not determinative. Her general approach to the legislation was supported by Mr Moffett for the Secretary of State, although he abstained from comments on the facts of this case. Following the conclusion of the oral hearing, the court asked for further submissions on the relationship of articles 6.2 and article 8 in the present context: in short, if disclosable information was limited by the former to the bare facts of the charge and acquittal, how should that be taken into account in assessing its practical utility to employers under the article 8 balance? Mr Southey submitted that merely informing an employer of the fact of charge and acquittal could not be proportionate, because it would lead them to speculate, rather than make an informed decision, and it risked giving them the impression that the information is more reliable than it really is. Ms Richards did not accept that article 6.2 would preclude a statement that the allegations were more likely to be true than not. However, in her submission, such a statement was not necessary to make disclosure proportionate. The purpose of disclosure is to draw to the attention of the registered body matters which may indicate a potential risk; it is then for the registered body to decide what (if any) further inquiries to make and to undertake its own assessment of any potential risk that the applicant might pose. The disclosure of information in an ECRC forms only part of a recruitment process. Mr Moffett supported that position, adopting the words of the Court of Appeal in this case (para 60): The purport of the certificate is to state the fact of the allegation and of the acquittal. It is no doubt implicit that this is an alert to the potential employer of those facts as to the possible risk to the vulnerable . (His emphasis) He also gives examples of cases where further information had been accepted by the courts as properly included: i) R (A) v Chief Constable of Kent Constabulary (2013) 135 BMLR 22 in which the ECRC recorded that the applicant was found not guilty of four charges of ill treatment or neglect of a person without capacity, no evidence being offered (para 16). ii) R (LG) v Independent Monitor [2017] EWHC 3327 (Admin) in which the ECRC recorded the acquittal of a nurse on charges of theft from a patient, noting that her earlier admission of theft had been ruled inadmissible at trial, and the jury directed to acquit (para 14). iii) R (BW) v Independent Monitor [2015] EWHC 4095 (Admin) in which the ECRC had included the reasons given by a District Judge in the Youth Court for acquitting the applicant of a charge of common assault, including his view that the burden of proof was not to the required standard and that the benefit of the doubt had to be given to the [applicant]. He reminds us that, for prosecutions in the Magistrates Court, the rules envisage that reasons may be given for an acquittal: Criminal Procedure Rules rule 24.3(6). Proportionality in the appellate court Before turning to the issues arising under article 8 itself, it is necessary to address the dispute as to the correct role of the appellate court in such cases. There was no disagreement as to the correctness of the approach adopted by the HH Judge Raynor: that is, to make his own assessment of proportionality, but giving weight to the views of the primary decision maker, as the person with relevant statutory or other authority, and institutional competence (Huang v Secretary of State for the Home Department [2007] 2 AC 167; R (SB) v Governors of Denbigh High School [2007] 1 AC 100, paras 30, 34; Pham v Secretary of State for the Home Department [2015] UKSC 19; [2015] 1 WLR 1591, para 108). There is however an issue about the approach of the Court of Appeal, taking account of the guidance given by the Supreme Court in In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 WLR 1911 (In re B). The relevant rule at the time, CPR rule 52.11(3), provided simply [The rule is now in CPR rule 52.21.] that the court will allow the appeal where the decision of the lower court was wrong. judgments of the Supreme Court in In re B: In R (A) Beatson LJ had sought to summarise the effect of the majority The majority judgments stated that the correct approach for an appellate court is to treat the exercise as an appellate exercise and not as a fresh determination of necessity or proportionality. Their reasoning was based on the requirement for a fair hearing before an independent tribunal under ECHR article 6. They considered that, because there is no obligation under article 6 to provide a right of appeal at all, it is open to domestic law to fashion the scope of any right given. In England and Wales CPR Part 52 limits this to a review of the decision of the lower court: see Lord Wilson at para 36, Lord Neuberger at paras 83 and 85, and Lord Clarke at para 136. It was recognised (see Lord Neuberger at para 88) that if, after such a review, the appellate court considered that the judge had made a significant error of principle the appellate court is able to reconsider the issue for itself if it can properly do so because remitting the issue results in expense and delay, and is often pointless. (para 87, emphasis added) Mr Southey submits that a test which depends on the court finding a significant error of principle is too narrow, and not supported by the reasoning of the Supreme Court. In re B was, he says, a different type of case. The appeal was from the judges decision on a care order. The judge had had to decide for himself whether the proposed order satisfied the statutory test, on the basis of the oral and other evidence before him. By contrast, in the present case, the judge was not the initial decision maker, but was reviewing the decision of the Chief of Police, and he heard no oral evidence. The Court of Appeal was in as good a position as the trial judge to make its own assessment of proportionality, whether or not it found an error of principle in the judges reasoning. In In re B Lord Neuberger identified two main issues for the judge (para 49), the first being whether the threshold in section 31(2) of the Children Act 1989 was satisfied; the second whether, if so, it was appropriate to make a care order. The first issue does not arise in this case. It was in the context of the second main issue (para 72ff) that Lord Neuberger considered the approach to be adopted by an appellate court on an appeal against a decision on issue of proportionality under the Convention. He thought that there should be no departure from the ordinary approach of an appellate court: that of reviewing the trial judges decision, rather than reconsidering the issue afresh (para 86). He described the approach as follows (para 88, emphasis added): If, after reviewing the judges judgment and any relevant evidence, the appellate court considers that the judge approached the question of proportionality correctly as a matter of law and reached a decision which he was entitled to reach, then the appellate court will not interfere. If, on the other hand, after such a review, the appellate court considers that the judge made a significant error of principle in reaching his conclusion or reached a conclusion he should not have reached, then, and only then, will the appellate court reconsider the issue for itself if it can properly do so (as remitting the issue results in expense and delay, and is often pointless). The contrary view of the minority was that the appellate court, while taking account of the decision of the court below, must make its own assessment of proportionality (paras 116 119 per Lord Kerr; paras 204 205 per Lady Hale). Their view was clearly rejected by the majority. I would observe that this rejection was not simply directed to cases where the first court enjoys the advantage of hearing oral evidence. It also reflected the general policy consideration that the purpose of the appeal is to enable the reasoning of the lower court to be reviewed and errors corrected, not to provide an opportunity for the parties to reargue the same case (see also McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477, para 3 per Lord Reed). Lord Neuberger dealt separately with the standard to be applied in deciding whether the judge was entitled to reach his conclusion on proportionality, once satisfied that it was based on justifiable primary facts. He rejected the view suggested in some authorities that the conclusion must be plainly wrong, before the appellate court could interfere: at least where Convention questions such as proportionality are being considered on an appeal, I consider that, if after reviewing the trial judges decision, an appeal court considers that he was wrong, then the appeal should be allowed. Thus, a finding that he was wrong is a sufficient condition for allowing an appeal against the trial judges conclusion on proportionality, and, indeed, it is a necessary condition (save, conceivably, in very rare cases). (paras 91 92) Lord Wilson agreed with the main substance of Lord Neubergers reasoning on this aspect (para 37, approving paras 83 90; and para 46, citing paras 90 91). Lord Clarke, while agreeing generally with Lord Neubergers reasoning (para 134), added his own comments on this aspect (para 137). Of CPR rule 52.11, he said: The rule does not require that the decision be plainly wrong. However, the courts have traditionally required that the appeal court must hold that the judge was plainly wrong before it can interfere with his or her decision in a number of different classes of case. I referred to some of them in Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577, to which Lord Neuberger refers at para 57, at my paras 9 to 23. It seemed to me then and it seems to me now that the correct approach of an appellate court in a particular case may depend upon all the circumstances of that case. So, for example, it has traditionally been held that, absent an error of principle, the Court of Appeal will not interfere with the exercise of a discretion unless the judge was plainly wrong. On the other hand, where the process involves a consideration of a number of different factors, all will depend on the circumstances. As Hoffmann LJ put it in In re Grayan Building Services Ltd [1995] Ch 241 at 254, generally speaking, the vaguer the standard and the greater the number of factors which the court has to weigh up in deciding whether or not the standards have been met, the more reluctant an appellate court will be to interfere with the trial judges decision. In the present context, it seems to me, in agreement with Lord Neuberger at para 58, that the court should have particular regard to the principles stated by Lord Hoffmann in Piglowska v Piglowski [1999] 1 WLR 1360, 1372, which are quoted by Lord Wilson at para 41. In Abela v Baadarani [2013] UKSC 44; [2013] 1 WLR 2043 (a decision given a few days after In re B), Lord Clarke, with the agreement of the rest of the court (including Lord Neuberger), expressed the position more succinctly. The issue in that case was whether there was good reason (under CPR rule 6.15(1)) to treat as valid service the steps taken by the claimant to bring the claim form to the attention of the defendant. He said: The judge held that there was. In doing so, he was not exercising a discretion but was reaching a value judgment based on the evaluation of a number of different factors. In such a case, the readiness of an appellate court to interfere with the evaluation of the judge will depend upon all the circumstances of the case. The greater the number of factors to be taken into account, the more reluctant an appellate court should be to interfere with the decision of the judge. As I see it, in such circumstances an appellate court should only interfere with that decision if satisfied that the judge erred in principle or was wrong in reaching the conclusion which he did. (para 23) In the light of that review, I agree with Mr Southey that the Court of Appeal applied too narrow a test, by asking simply whether the judges reasoning disclosed a significant error of principle. That expression was indeed used by Lord Neuberger, but he linked it to the question of whether the judge had reached a conclusion he should not have reached (In re B, para 88). That passage preceded and was separate from his consideration of the standard of review (para 91). As Lord Clarke said in Abela the question in relation to the standard of review is whether the judge erred in principle or was wrong in reaching the conclusion which he did (para 23, emphasis added). So far I have omitted any reference to one passage in Lord Neubergers judgment. After his discussion of the standard of review, while acknowledging the danger in over analysis, he added the following by way of further explanation: An appellate judge may conclude that the trial judges conclusion on proportionality was (i) the only possible view, (ii) a view which she considers was right, (iii) a view on which she has doubts, but on balance considers was right, (iv) a view which she cannot say was right or wrong, (v) a view on which she has doubts, but on balance considers was wrong, (vi) a view which she considers was wrong, or (vii) a view which is unsupportable. The appeal must be dismissed if the appellate judges view is in category (i) to (iv) and allowed if it is in category (vi) or (vii). (para 93) He added further comments on categories (iv) and (v) of this analysis (para 94). With hindsight, and with great respect, I think Lord Neubergers warning about the danger of over analysis was well made. The passage risks adding an unnecessary layer of complication. Further, it seems to focus too much attention on the subjective view of the appellate judges and their degrees of certainty or doubt, rather than on an objective view of the nature and materiality of any perceived error in the reasoning of the trial judge. The passage has not been without its critics. Professor Zuckerman (Civil Procedure: Principles and Practice 3rd ed, paras 24.209 210) has described it as puzzling, and saw the difference between categories (iv) and (v) as so fine as hardly to matter. In any event, I do not understand this passage to have been essential to Lord Neubergers reasoning or that of the majority. (As already noted, Lord Wilson limited his agreement to paras 83 91). In conclusion, the references cited above show clearly in my view that to limit intervention to a significant error of principle is too narrow an approach, at least if it is taken as implying that the appellate court has to point to a specific principle whether of law, policy or practice which has been infringed by the judgment of the court below. The decision may be wrong, not because of some specific error of principle in that narrow sense, but because of an identifiable flaw in the judges reasoning, such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion. However, it is equally clear that, for the decision to be wrong under CPR 52.11(3), it is not enough that the appellate court might have arrived at a different evaluation. As Elias LJ said (R (C) v Secretary of State for Work and Pensions [2016] EWCA Civ 47; [2016] PTSR 1344, para 34): the appeal court does not second guess the first instance judge. It does not carry out the balancing task afresh as though it were rehearing the case but must adopt a traditional function of review, asking whether the decision of the judge below was wrong. It follows that in the present case it was sufficient for the Court of Appeal to consider whether there was any such error or flaw in the judges treatment of proportionality. If there was not, there was no obligation (contrary to Mr Southeys submission) for the Court of Appeal to make its own assessment. Article 8 Discussion I turn to the disputes relating to article 8. Was the Court of Appeal correct to find no material error or flaw in the judges reasoning? I need not dwell long on the procedural aspects. It makes no difference whether this is looked at by reference to article 8, or to common law principles of fairness. The complaint in essence is of lack of consultation, and was rightly rejected for the reasons given by the judge (para 16 above) as endorsed by the Court of Appeal. The officers were fully aware from the evidence at trial of the nature of ARs defence, and his personal circumstances, and they were aware and took account of the potential impact on his employment prospects. As the judge said, there was no indication of any further information he would have wished to advance. Turning to the substantive effect of article 8, Mr Southeys principal submission is that the interference involved in the disclosure could not be justified unless the officers (or the judge) were in a position to form a positive view of likely guilt. This could not be done without a full appraisal of the evidence in the trial. He relies on R (RK) v Chief Constable of South Yorkshire Police (above). There Coulson J accepted that the mere fact of acquittal did not render disclosure of the alleged offence disproportionate, but he thought it a matter of significance in assessing proportionality. In the case before him the police had failed to give it proper weight; on one reading of the documents, they seemed to have grudgingly noted the acquittal and then gone on to address the allegations as if they had been proved (para 37). Mr Southey relies particularly on a later passage in which the judge criticised the failure of the police to make any detailed analysis of the critical evidence at the trial, which had been provided in transcript form: If the ECRC is going to disclose information in relation to allegations that have been rejected by the jury, on the grounds that the allegations could still be substantiated, then at the very least that requires a detailed analysis of those allegations by reference to the evidence. (para 57) While I do not question the actual decision in that case, I cannot accept that, as a matter of domestic law or under article 8, it is necessary or appropriate for those responsible for an ECRC to conduct a detailed analysis of the evidence at the trial, such as envisaged by Coulson J. That is the task of the judge and jury, who have the advantage of seeing and hearing the witnesses. Whether or not it would be compatible with article 6.2 for the chief officer to express a view on the merits of the case following an acquittal, it is not the proper function of an officer to attempt to replicate the role of the court, or (in Ms Richards words) to conduct a mini trial. Nor can that be read into the language of the statute. His task under section 113B is to identify and disclose relevant information, not to make a separate assessment of the evidence at trial. As Mr Moffetts examples show (para 52 above), additional information may in some cases be available about the circumstances of the acquittal, including possibly the courts own statements about it, which may give reasons for treating the courts disposal as less than decisive. By contrast in the case considered by Wyn Williams J (para 36 above) the available information should have been taken as a positive indication of innocence. However, in the absence of information of that kind, it is not the officers job to fill the gap. To the extent that Ms Wilson in the present case saw it as part of her task to assess whether, in the light of the evidence at trial, the allegation was more likely to be true than false, she was in error. The judge did not make the same error. He went no further than to accept, as he was entitled to do, the Chief Constables view that the information was not lacking substance and that the allegations might be true. However, that in itself did not mean that disclosure was disproportionate. It was a matter for him to assess whether the information, albeit in the limited form contained in the ECRC, was of sufficient weight in the article 8 balance. It is to be borne in mind that the information about the charge and acquittal was in no way secret. It was a matter of public record, and might have come to a potential employers knowledge from other sources. If so, a reasonable employer would have been expected to want to ask further questions and make further inquiries before proceeding with an offer of employment. Its potential significance was as the judge found underlined by the seriousness of the alleged offence, its relevance to the position applied for, and its comparatively recent occurrence (para 40(d)). These were matters envisaged by Lord Neuberger in Ls case as potentially justifying disclosure (para 29 above). On the other side, the judge took full account of the possible employment difficulties for AR, but regarded those as no more than necessary to meet the pressing social need for which the ECRC process was enacted (para 40(f)). In my view Mr Southey has failed to identify any error in the judges reasoning. Accordingly, in agreement with the Court of Appeal I would dismiss the appeal. Postscript Although I have reached a clear conclusion on the limited issues raised by the appeal before us, it gives rise to more general concerns about the ECRC procedure in similar circumstances. I bear in mind that the case preceded the improvements made in 2012 following the Mason report. However, so far as can be judged from the material before us, little attention has been given to the conceptual and practical issues arising from the relationship of the procedure to criminal proceedings. The issue did not arise in Ls case itself, which did not involve a criminal charge, and where in any event there was no significant dispute as to the correctness of the allegations. Nor was it a subject considered in the Mason review. It seems to have been assumed, at least since the Court of Appeal decision in Xs case, that a failed prosecution is no bar to the inclusion of the same allegations in an ECRC. This understanding is reflected in the 2014 QAF document, to which Mr Moffett referred, supported by reference to a 2008 judgment of Wyn Williams J (para 36 above). But that passage gives no clear guidance as what weight should be given to an acquittal in different circumstances. As already noted, it makes no reference to the Supreme Courts criticisms of the balance struck in Xs case. Given that Parliament has clearly authorised the inclusion in ECRCs of soft information, including disputed allegations, there may be no logical reason to exclude information about serious allegations of criminal conduct, merely because a prosecution has not been pursued or has failed. In principle, even acquittal by a criminal court following a full trial can be said to imply no more than that the charge has not been proved beyond reasonable doubt. In principle, it leaves open the possibility that the allegation was true, and the risks associated with that. However, I am concerned at the lack of information about how an ECRC is likely to be treated by a potential employer in such a case. Ms Richards was at pains to emphasise that the ECRC is only part of the information available, and will be not necessarily lead to failure. On the other hand, Lord Neuberger assumed that an adverse ECRC would be a killer blow for an application for a sensitive post (para 29 above). That view was adopted without question by the Strasbourg court in MM v United Kingdom (2013) (Application No 24029/07), but it is not at all clear with respect that it was on based on any objective information or empirical evidence of what happens in practice. We have been shown reports which emphasise the importance of not excluding the convicted from consideration for employment, but they say nothing about the acquitted, who surely deserve greater protection from unfair stigmatisation. Nor does there appear to be any guidance to employers as to how to handle such issues. Even if the ECRC is expressed in entirely neutral terms, there must be a danger that the employer will infer that the disclosure would not have been made unless the chief officer had formed a view of likely guilt. These issues require further consideration outside the scope of this appeal. Careful thought needs to be given to the value in practice of disclosing allegations which have been tested in court and have led to acquittal. The figures noted above show that the number of ECRCs relating to acquittals represent a very small proportion of the whole. This may suggest that in many cases chief officers find no cause for disclosure of risk in cases following acquittals. |
This appeal is concerned with the validity of a patent which claims the nucleotide sequence of the gene which encodes for a novel protein (and which has further associated claims). Although there is an insufficiency issue, which I will consider at the end of this judgment, the primary issue on this appeal raises a difficult question, namely the way in which the requirement of industrial applicability in Articles 52 and 57 of the European Patent Convention (the EPC) extends to a patent for biological material. While this issue can be said to raise an important question of principle, its resolution is inevitably fact sensitive, and therefore any answer may be of limited value in other cases. Further, the issue arises in the context of a fast developing field, which requires a court to approach it with caution. The need for caution is reinforced by the fact that the answer may give rise to potentially far reaching consequences for scientific research, the biotech industry, and human health. On the other hand, for those very reasons, it is particularly important that the law in this area is as clear, consistent and certain as possible. The patent in suit The patent in suit (the Patent) is European Patent (UK) 0,939,804. It describes the encoding nucleotide, the amino acid sequence, and certain antibodies, of a novel human protein, which it calls Neutrokine , and includes contentions as to its biological properties and therapeutic activities, as well as those of its antibodies. These contentions are predictions, which are substantially based on the proposition that Neutrokine is a member of the TNF ligand superfamily. The application for the Patent was filed by Human Genome Sciences Ltd (HGS) on 25 October 1996, and it was granted by the Examining Division of the European Patent Office (the EPO) to HGS on 17 August 2005. Accordingly, the Patents validity is to be judged as at October 1996. For present purposes, it is unnecessary to go into the claims or the description of the Patent in much detail. The claims, although not in their final form as allowed by the Technical Board of Appeal of the European Patent Office, are set out in an appendix to the judgment of Kitchin J at first instance, [2008] EWHC 1903 (Pat), [2008] RPC 29. The centrally important claim for present purposes is Claim 1, which essentially extends to the encoding nucleotides of the gene of Neutrokine . The specification, or description, of the Patent is well summarised by Kitchin J at [2008] RPC 29, paras 100 133. It is confusingly long, diffuse, and widely expressed, running to over 25 closely typed pages, and nearly 200 paragraphs of descriptive text, and a further twelve pages of sequences of polypeptide amino acids and DNA nucleotides. Also, as Kitchin J said, the specification contains extravagant and sometimes contradictory claims [2008] RPC 29, para 134. Perhaps rather more tolerantly, the Technical Board of Appeal of the European Patent Office (the Board) referred to the Patent as having been drafted on a boiler plate basis, which it described as a practice used by patentees T 0018/09 Neutrokine/Human Genome Sciences, para 27. The specification begins by explaining that Neutrokine is a new protein, and a member of the TNF ligand superfamily of cytokines, which are proteins which act as inter cellular mediators in inflammation and other immune responses. It states that all the known members of that superfamily are involved in regulation of cell proliferation, activation and differentiation, including control of cell survival or death by apoptosis or cytotoxicity. The specification also explains that the first identified member of the superfamily is known as TNF , which was isolated in 1975 and whose encoding gene was sequenced in 1985. By 1996, it was clear that TNF had a variety of effects on different cell types, which the specification describes as including immunoregulatory actions including activation of T cells, B cells, monocytes, [and] thymocytes . Accordingly, it is claimed, there is a need to provide cytokines similar to [TNF ] that are involved in pathological conditions. The specification goes on to reveal the existence and structure of Neutrokine , to claim it as a member of the superfamily, and to explain that it is expressed in neutrophils in kidney, lung, peripheral leukocyte, bone marrow, T cell lymphoma, B cell lymphoma, activated T cells, stomach cancer, smooth muscle, macrophages and cord blood tissue. The specification then describes the claimed invention as potentially useful for the diagnosis, prevention, or treatment of an extraordinarily large and disparate number of, sometimes widely expressed, categories of disorders of the immune system, and other conditions and actions, either through Neutrokine itself or through its antagonists. However, nowhere in the Patent is there any data or any suggestion of in vitro or in vivo studies, so there is no experimental evidence to support any of those suggestions. Among its many contentions, the specification states that, [l]ike other members of TNF family, Neutrokine exhibits activity on leukocytes including for example monocytes, lymphocytes and neutrophils, and so is active in directing the proliferation, differentiation and migration of these cell types. These activities are said to be useful for immune enhancement or suppression, myeloprotection, stem cell mobilization and treatment of leukemia. The specification also discusses the tissues in which Neutrokine is expressed, and goes on to state that, because Neutrokine belongs to the TNF superfamily, it will have a wide range of anti inflammatory activities and may be suitable to be employed as an anti neovascularizing agent to treat solid tumors by stimulating the invasion and activation of host defense cells, e.g., cytotoxic T cells . It is also said that Neutrokine may be suitable to be employed to enhance host defenses against resistant chronic and acute infections and also to inhibit T cell proliferation or for the treatment of T cell mediated auto immune diseases and lymphocytic leukemias. In very summary terms, the disclosure of the Patent thus includes the following features: (i) the existence and amino acid sequence of Neutrokine , (ii) the nucleotide sequence of the gene encoding for Neutrokine , (iii) the tissue distribution of Neutrokine , (iv) the expression of Neutrokine by its mRNA (the encoding gene) in T cell and B cell lymphomas, and (v) the information that Neutrokine is a member of the TNF ligand superfamily. Technical background to the Patent The teaching in the specification must, of course, be read through the eyes of the notional addressee (or the person skilled in the art), an appropriately skilled person or group of persons, as at October 1996. In that connection, the Judge said this at [2008] RPC 29, paras 30 and 32: 30. The Patent is directed to a team of people with about two years of post doctoral experience. It would include a molecular biologist familiar with routine techniques of cloning, expression and sequencing of genes and proteins; a biochemist to make and purify recombinant proteins; and a biologist or immunologist with experience of the TNF superfamily and with the skills necessary to generate and test antibodies. I am also satisfied that any team interested in identifying a new member of the TNF superfamily would carry out a literature search to gather as much knowledge as possible about the existing members. 32. [T]he skilled team looking for a new member of the TNF superfamily would have been aware that the science of bioinformatics could provide assistance in the search and, if a bioinformaticist was not already a member of the team, would have considered it worthwhile to consult such a person. Accordingly, particularly in the light of the last sentence of the first of those two paragraphs, recourse must be had not only to the common general knowledge as at October 1996, but also to the results of any research into the literature which such notional addressees could be expected to carry out as at that time. While a fuller explanation of the background and technique of bioinformatics, referred to in the passage quoted in para 11 above, was provided by the Judge at [2008] RPC 29, paras 78 99, I shall attempt a very brief explanation in the ensuing five paragraphs. DNA molecules are found in virtually every human and mammalian cell. They consist of a long chain of units called nucleotides, many of which encode, via a related molecule called RNA, for proteins through specific regions known as genes. A gene is a stretch of DNA, which normally includes non coding regions as well as protein encoding regions. RNA is made from DNA, and the non coding regions are removed as the RNA is processed into mature messenger RNA (mRNA). mRNA thus contains the protein encoding regions of a gene. mRNA is unstable outside the cell so it is copied in the laboratory to produce the more stable cDNA. Proteins consist of a chain (or sometimes linked chains) of amino acids, and, in mammals, they perform many essential functions in the body; they include, for instance, insulin and erythropoietin. There are four different nucleotides, and contiguous groups of three specific nucleotides in DNA encode either for a specific amino acid or to indicate the end of a particular encoding exercise (known as protein translation). The result of the translation process is often a linear strand of amino acids, which is called a polypeptide, and which folds up to form a functional protein. The sequence of nucleotides in DNA which encodes the amino acid sequence of a particular protein is the encoding gene of that protein. Part of the relevant art is to identify the gene of a particular protein, and to discover in which body tissues that gene is switched on so as to express the protein. Traditional wet lab experiments as at 1996 included the use of Expressed Sequence Tags (ESTs), which are usually relatively small pieces of cDNA, in attempts to identify novel protein encoding genes. However, EST cDNAs normally do not encompass the entire sequence of the original mRNA, and consequently do not give complete DNA sequence information. Therefore, it was often very difficult to derive the correct or complete protein amino acid sequence (and hence to the identity of the protein) from such experimental strategies. In the early 1990s, a new technique, known as bioinformatics, was developed. It relies upon what Kitchin J described as the considerable increase in the amount of DNA and amino acid sequence data created and stored in publicly accessible databases and a parallel increase in the power of computers [2008] RPC 29, para 6. Bioinformatics enables researchers to identify genes (and the proteins for which they encode) by comparing their sequences with previously identified and characterised genes. However, it is not possible to determine, at least conclusively, the actual activity of any gene or protein identified by this technique until after the gene has been cloned and the resultant protein has been subjected to in vitro and in vivo assays. As the Judge explained at [2008] RPC 29, para 75, Assays are essential to determine the activities and functions of a cytokine. They are also necessary to determine whether any putative therapeutic is effective. The immune system is the bodys defence mechanism against infection, which, in technical terms, involves the body being attacked by foreign bodies known as pathogens (bacteria, viruses, fungi, parasites). The system is based on white blood cells (or leukocytes), of which there are various types, including lymphocytes. Lymphocytes recognise and interact with structures on, or derived from, pathogens known as antigens. Two types of lymphocyte based mechanism are relevant for present purposes; they are: (i) The development (in the bone marrow, in the case of adults) of type B lymphocytes (B cells), which produce antibodies, which are molecules which bind to specific antigen sites (or epitopes) on the surface of specific pathogens, in order to clear those pathogens from the body, and (ii) The development (in the thymus) of type T lymphocytes (T cells), which directly react with epitopes derived from specific pathogens, again in order to clear those pathogens from the body. Once a new protein is found and identified, it is relatively easy for those skilled in the art to generate antibodies (or antagonists, which for present purposes can be treated as being the same thing), but it can be much more difficult to produce useful pharmaceuticals as a result. The production of a useful pharmaceutical from an antibody can be seen as initially involving three steps, namely (i) finding a murine antibody which is derived from a single B cell and which neutralises a particular antigen, (ii) ensuring that that antibody does not bind to other antigens, (iii) conversion of the murine antibody so that it can be effective in humans. This often involves engineering it so that it is not recognised and eliminated by the human immune system. Further to this, extensive clinical trials are required to confirm its efficacy in human disease. A more detailed explanation of the immunology may be found in Kitchin Js judgment, [2008] RPC 29, paras 34 50. A family or superfamily of proteins is a group of proteins, all of which enjoy a significant degree of homology, i.e. they all have certain specified structural characteristics. Although the distinction is not always observed, members of a particular family will normally have close structural similarity and similar functions, whereas members of a particular superfamily, while retaining related structural characteristics, will often be more distantly related and will include members which have similar functions but also may include members with different functions. However, even that is an over simplification, as, in some cases, proteins will have pleiotropic functions, that is to say a multitude of different effects on different cell types, driving multiple biological processes per Kitchin J at [2008] RPC 29, para 71. Accordingly, there will be cases where members of a family or superfamily have some functions which are common to all (or a majority) of the members, and other characteristics which are unique to one member (or a few members). The TNF superfamily is sufficiently described for present purposes as consisting of certain cytokines with common structural molecular characteristics. The nature of those characteristics need not be particularised for present purposes (they are described by Kitchin J at [2008] RPC 29, paras 53 56). As the Patent records, the founding member of the superfamily was TNF , which, by 1996, had long been known as a cytokine with a significant role in regulating immune cells; at least eight other members of the family had been found, including one called TNF . At [2008] RPC 29, para 71, Kitchin J stated that the following features would have been appreciated by the notional addressee of the Patent about members of the TNF ligand superfamily as at October 1996: i) They were all expressed by activated T cells and some by other [types of cell]. ii) Their activities were mediated by binding to receptors, of which a number had been identified. iii) They were known to have pleiotropic actions . Some of those activities were understood to be unique to particular TNF ligands and others were understood to be shared by some or all the other TNF ligands. iv) They all played a role in the regulation of T cell proliferation and T cell mediated immune responses [and they all co stimulated T cell proliferation [2008] RPC 29, para 65]. v) Some of the ligands played a role in the regulation of B cell proliferation and antibody secretion and some took part in T cell dependent regulation of B cells. vi) Some of the ligands had an ability to induce cell death by necrosis or apoptosis. vii) TNF and TNF were functionally linked as primary mediators of immune regulation and inflammatory response. viii) It had been suggested that various ligands were associated with a very wide range of particular disease states . But no disease had been identified in which all the ligands were involved. ix) TNF was the only ligand shown to have a therapeutic application; that being for the treatment of rheumatoid arthritis through the use of a specific monoclonal antibody. Earlier in his judgment, at [2008] RPC 29, paras 62 68, the Judge had described what a person skilled in the art would have been expected of a new member of the TNF ligand superfamily as at October 1996. Such a person would have anticipated that one of the activities of any new member [of the TNF ligand family] would relate to T cells. Such a new member would also have been expected to have the same roles, to some degree, as existing members, roles which included involve[ment] during lymphoid or thymic development, T cell mediated immune responses, T cell dependent help for B cells or humoral B cell activity, and being a co stimul[ant] of T cell proliferation. It was also clear that an effect on B cell proliferation and involve[ment] with distinct human diseases would also have been anticipated as a possible property of a new member of the TNF ligand superfamily. The Judge also said this: 72. [I]t was appreciated that further studies were both needed and desirable to identify further ligands in the TNF superfamily and, in relation to each ligand, to seek to identify its unique and redundant biological functions. There was undoubtedly an incentive to do so, because of their apparent roles in the regulation of the immune system and inflammatory response, their possible involvement in various different diseases and so also, in due course, their potential as therapeutic agents. The rewards were potentially very great. 74 [T]he reality [was] that pharmaceutical companies and academic institutions were indeed looking for further members of the TNF ligand and receptor superfamilies and seeking to elucidate their various biological functions and roles in disease states, ultimately with a view to developing a therapeutic or diagnostic product, if possible. The proceedings in the EPO and in the English courts The central issue both in the High Court proceedings before Kitchin J and in the opposition proceedings before the EPO was whether, in the light of the common general knowledge at October 1996, by disclosing the facts summarised in para 10 above (namely the existence and structure of Neutrokine , the sequence of its encoding DNA, its tissue distribution, its expression, and its membership of the TNF ligand superfamily), the Patent satisfied Articles 52 and 57 of the EPC so as to enable HGS to claim the encoding gene for Neutrokine . Article 52 of the EPC provides that an invention cannot be patented unless it is susceptible of industrial application. Article 57 of the EPC (Article 57) goes on to state that an invention is susceptible of industrial application if it can be made or used in any kind of industry, including agriculture. In its various decisions discussed below, the Board always refers to Article 57 alone, and I will adopt the same approach. After the grant of the Patent to HGS, it was the subject of opposition proceedings brought in the EPO by Eli Lilly and Company (Eli Lilly). Following an oral hearing before the Opposition Division of the EPO (the OD) in June 2008, the Patent was revoked on the basis that the claimed invention constituted, as the Judge put it, a claim to an arbitrary member of the TNF ligand superfamily without a known function. HGS appealed against the ODs decision to the Board, which, after a hearing lasting around a day and a half, in a decision given on 21 October 2009, allowed the appeal. The Boards decision was, in very summary terms, based on the ground that the notional addressee of the Patent would have appreciated that, in the light of the common general knowledge of the TNF ligand superfamily and its properties, Neutrokine would, as the Patent states, be active in directing the proliferation, differentiation, and migration of [T cells], and that was a sufficient function to vindicate the Patent under Article 57 see T 0018/09, paras 23 24. Accordingly, the Board referred the case back to the OD with a direction that the Patent be maintained. Meanwhile, Eli Lilly brought parallel proceedings in the High Court for revocation of the Patent in this jurisdiction. The proceedings came before Kitchin J, who, after a hearing held over some thirteen days, decided to revoke the Patent. His decision was, again in very summary terms, based on the conclusion that, in the light of the common general knowledge, the notional addressee of the Patent would have concluded that the functions of Neutrokine were, at best, a matter of expectation and then at far too high a level of generality to constitute a sound or concrete basis for anything except a research project see [2008] RPC 29, para 234. Kitchin Js decision was given on 31 July 2008, after the decision of the OD, but before HGS had appealed to the Board. HGS appealed against Kitchin Js decision to the Court of Appeal, who, on 9 February 2010, dismissed the appeal [2010] EWCA Civ 33, [2010] RPC 14. The Court of Appeals reasoning effectively followed and approved that of Kitchin J, although it was given after the ruling of the Board. In his judgment, with which Hallett LJ and Lewison J agreed, Jacob LJ discussed the reasoning of the Board in T0018/09. It is, of course, against the decision of the Court of Appeal which HGS now appeal. HGSs case on this appeal is that, notwithstanding Kitchin Js impressively full and careful analysis of the law, the relevant technology, the Patent and the expert evidence, and its affirmation by the Court of Appeal, his decision that the Patent failed to satisfy Article 57 was wrong. That case effectively mirrors the reasoning of the Board in T0018/09. In summary, HGS contends that the reasoning of the Board was correct, and that it shows that Kitchin J and the Court of Appeal set too high a standard for industrial applicability in the context of a patent for biological material. HGS and Eli Lilly each rely on the jurisprudence of the Board prior to the decision in T 0018/09 as to the way in which the requirement of industrial applicability extends to biological material patents, as did both Kitchin J, and the Board itself in T 0018/09. Kitchin J also referred to some domestic jurisprudence and to decisions of courts in the United States. It was also suggested below that the Biotech Directive (99/44EC) (the Directive) was of some assistance. The Directive, and domestic and US jurisprudence Article 5 of the Directive confirms that a naturally occurring gene is patentable, but states that [its] industrial application must be disclosed in the patent application. As Jacob LJ put it, However clever and inventive you may have been in discovering a gene sequence, you cannot have a patent for it or for the protein for which it encodes if you do not disclose how it can be used [2010] RPC 14, para 57. It was common ground that the Directive cannot alter the meaning of Article 57 (both because it came into force after 1996, and because the EPC extends to countries outside the EU). While that may not prevent the Directive being of some assistance in a case where Article 57 is in play in relation to a patent for biological material, it seems to me that it is not helpful in the present case, as it begs the central question, namely how far an applicant for a patent for biological material has to go in disclosing industrial application. Jacob LJs pithy formulation at [2010] RPC 14, para 57, cited in para 35 above, applies equally to Article 57 before the Directive came into force as it does afterwards. So far as the cases in this jurisdiction are concerned, as Kitchin J said at [2008] RPC 29, para 186 [t]here is very little authority on the topic of industrial applicability: only a brief and very general comment from the Court of Appeal in Chiron Corp v Murex Diagnostics Ltd [1996] RPC 535, 607 608, and a decision in 2005 of a Divisional Director acting for the Comptroller of UK Patents, Aeomicas Application BL O/286/05, which analysed the issue more fully. In my view, neither case provides any assistance to the problem raised on this appeal. The conclusions in both Chiron [1996] RPC 535 and Aeomica BL O/286/05 appear equally consistent with HGSs and Eli Lillys contentions, the observations in the former case are at a high level of generality, and the reasoning in the latter case rests on the US jurisprudence. As for the US courts, their approach to the question of what constitutes any new and useful composition of matter under section 101 of 35 USC was considered by the US Supreme Court in Brenner v Manson 383 US 519 (1966) 534 536, and by the US Court of Appeals for the Federal Circuit in Fisher v Lalgudi 421 F 3d 1365 (2005) (and both decisions are discussed and quoted from by the Judge at [2008] RPC 29, paras 218 224). The analyses in the US cases deserve great respect, and it is interesting to note that, in Fisher 421 F 3d 1365, the US Court of Appeals referred to a requirement that an invention is useful to the public as disclosed in its current form as opposed to prov[ing] useful at some future date after further research, and that the invention can be used to provide a well defined and particular benefit to the public. However, there are obvious risks in relying on US jurisprudence when considering the precise nature of the requirements of Article 57 in relation to a claim for a patent for biological material under the EPC. There have been moves over the past fifty years (and more) to harmonise patent law across jurisdictions (the EPC and TRIPS the Trade Related Aspects of Intellectual Property Protection being two important examples), and it is a laudable aim to seek to ensure that all aspects of the law of patents are identical throughout the world. However, the achievement of such an aim is plainly not currently practicable, and, although they have a great deal in common, there are significant and fairly fundamental differences (over and above the different words used in Articles 52 and 57 of the EPC and section 101 of 35 USC) between US patent law and the EPC (two notorious examples being the first to file rule in Europe, and file wrapper estoppel in the US). Accordingly, particularly when it comes to a nice question such as the precise delineation of boundaries between patentability and unpatentability on the ground of industrial application, it would be unsurprising if the law was not identical under the two jurisdictions. In the event, as both parties to this appeal acknowledge, it is in the jurisprudence of the EPO, and in particular that of the Board, that the applicable principles are really to be found. So I now turn to that jurisprudence. The Boards jurisprudence on Article 57 and biological material There are a number of decisions of the Board prior to its decision in relation to the Patent, which are of importance to the present appeal. In their oral arguments, the parties concentrated on two of them, T 0870/04 BDP1 Phosphatase/ Max Planck, on which Eli Lilly placed reliance, and T 0898/05 Hematopoietic receptor/ZymoGenetics, from which HGS sought to derive assistance. However, because it is important to establish the nature and ambit of the approach which the Board has adopted to the application of Article 57 to patents for proteins and their encoding genes, it is, in my view, necessary to consider all the decisions to which we were referred. I also consider that it is necessary to quote a number of passages from the decisions. As both parties accept, the reasoning of the Board in those decisions contains the principles applicable to this appeal, but they disagree as to the precise nature of those principles. In T 0870/04, decided on 11 May 2005, the Board upheld the rejection by the Examining Division of the EPO (the ED) of an application which disclosed BDP 1, a new polypeptide, said to be a member of the so called PTP PEST family. The application suggested that PTP PESTs played an important role in certain specified cellular functions, and were possible candidate anti cancer proteins. It also disclosed that BDP 1 was expressed in most tissues and cell lines, particularly in epithelium origin cell lines and in cancer cell lines. The Board began its reasoning by giving some general guidance. At T0870/04, para 3, it said that the concept of industry in Article 57 was very broad, extending to all activities carried out for for financial (commercial) gains. In the following paragraph, it explained that a practical application of the invention has to be disclosed so that there is some profitable use for which the [claimed] substance can be employed. Turning to the disclosure in the particular application, the Board pointed out at T 0870/04, paras 11 12 (and in the light of the subsequent jurisprudence, I draw particular attention to para 12): 11. [T]he application does not explicitly disclose the specific nature and the possible significance of [the] suggested roles for BDP1. [T]he application stops short of suggesting, let alone identifying, an anti cancer activity for BDP1 or a therapeutic use of BDP1 as a tumour suppressor agent. There is no evidence as to whether BDP1 plays a passive role or an active role in cancer. 12. Nor can the identification of BDP1 as a PTP PEST be taken as any clear indication of its function or use, as the prior art does not attribute clear functions to PTP PESTS as a class. At T 0870/04, paras 21 22, the Board concluded: 21. [A]lthough the present application describes a product (a polypeptide), means and methods for making it, and its prospective use thereof for basic science activities, it identifies no practical way of exploiting it in at least one field of industrial activity. In this respect, it is considered that a vague and speculative indication of possible objectives that might or might not be achievable by carrying out further research with the tool as described is not sufficient for fulfilment of the requirement of industrial applicability. The purpose of granting a patent is not to reserve an unexplored field of research for an applicant. 22. The present case is already on the [wrong] side of the borderline. [T]he only practicable use suggested is to use what is claimed to find out more about the natural functions of what is claimed itself. This is not in itself an industrial application, but rather research undertaken either for its own sake or with the mere hope that some useful application will be identified. Shortly after this, on 28 June 2005, the Board decided T 1329/04 Factor 9/John Hopkins, in which it again upheld the EDs refusal of a patent application. At T 1329/04, para 4, the Board embarked on its familiar problem/solution approach, and described the problem to be solved as isolating a further member of the TGF superfamily, whose established members it described as [having] influence on a wide variety of differentiation processes such as adipogenesis, myogenesis etc. The Board went on to say that the patents claimed solution was the nucleotide sequence encoding for the claimed polypeptide, and described the issue as being [w]hether or not the problem has been plausibly solved. The Board concluded on this issue at T 1329/04, para 11, in a passage which illuminatingly indicates what was lacking in the application: [A]s a significant structural feature fails to be identical in TGF 9 and the members of the TGF superfamily, and no functional characterisation of TGF 9 is forthcoming in the application, it is concluded that the application does not sufficiently identify this factor as a member of this family i.e. that there is not enough evidence in the application to make at least plausible that a solution was found to the problem which was purportedly solved. The Board added at T 1329/04, para 12, that even if supplementary post published evidence may in the proper circumstances also be taken into consideration, it may not serve as the sole basis to establish that the application solves indeed the problem it purports to solve. In T 0604/04 PF4A receptors/Genentech, decided on 16 March 2006, the Board allowed an appeal from the OD where the claim was to certain polypeptides on the ground that they were members of the PF4AR family of chemokine receptors. At T 0604/04, para 6, dealing with the issue of inventive step, and having accepted that there is no absolute certainty that the [claimed] polypeptides are receptors for members of the PF4A family of cytokines to which IL 8 belongs, the Board said that [certain] structural features make it plausible that this is indeed the case. In the following paragraph, the Board expressly distinguished T 1329/04, where it was not accepted that the polypeptide then claimed was a member of the TGF superfamily. Dealing with Article 57, the Board said this at T 0604/04, para 13: In summary, the patent in suit identifies applications for the claimed polypeptides which may ultimately lead to some profitable use. It provides a structural characterisation which enables their assignment to the category of receptors which bind members of the PF4A family of chemokines and, insofar, indicates what their function might be. Yet, in the absence of any characterisation of their ligands, this function remains at best incompletely understood. After referring to T 0870/04, the Board said at T 0604/04, para 15: [T]he technical data provided in respect of the [claimed] polypeptides . fall somewhat short of fulfilling them insofar as, as already above mentioned, there is no evidence available as to which ligands these polypeptides bind to. Yet, of course, each case has to be considered on its own merit and it is important here to take into account the common general knowledge at the priority date as well as the then prevalent attitude of the person skilled in the art as it may be inferred from the documents illustrating this common general knowledge. At T 0604/04, para 16, the Board said that, as at the priority date: chemokines were already known as mediators of the inflammatory response, a role which most of them were thought to play, in particular, through a biological interaction of the chemokines with the cells which they attract which involves binding to the receptors present on the cell surface. Thus, the skilled person would understand that any role of a given chemokine was reflected in its receptor. At T 0604/04, para 18, the Board concluded that: It is clear that chemokines as a family were considered not only to be interesting in fundamental research but also as important for the pharmaceutical industry irrespective of whether or not their role had been clearly defined. It follows that their receptors must have been considered equally important since the mode of action of chemokines is through their receptors. It is, thus, reasonable to conclude that the [claimed polypeptides] which exhibit the characteristics of receptors of members of the PF4A family of cytokines would have been regarded as important to the pharmaceutical industry, i.e. that industrial applicability may be acknowledged. The Board also said at T 0604/04, para 22 that in its judgment, and in the absence of any evidence to the contrary, the patent specification provides adequate experimental instructions for the skilled person to be able to reproduce without undue burden the [claimed] polypeptides . I turn now to the Boards decision on 7 July 2006 in T 0898/05. This was an appeal against the EDs refusal of a patent application, which disclosed the nucleotide sequence and the encoded amino acid sequence of a polypeptide and receptor, Zcytor1, and claimed inter alia the encoding nucleotide and the polypeptide. As in T 0870/04, the Board made some general observations at the outset. Thus, at T 0898/05, para 4, after referring to the reasoning in T 0870/04, the Board said that a patent application [must describe] its subject invention in sufficiently meaningful technical terms that it can be expected that the exclusive rights resulting from the grant of a patent will lead to some financial or other commercial benefit. And in the next paragraph, the Board said that the invention claimed must have such a sound and concrete technical basis that the skilled person can recognise that its contribution to the art could lead to practical exploitation in industry. The Board then elaborated its approach in these terms: 6. [T]he expression profitable use should be understood more in the sense of immediate concrete benefit. This conveys, in the words concrete benefit, the need to disclose in definite technical terms the purpose of the invention and how it can be used in industrial practice to solve a given technical problem, this being the actual benefit or advantage of exploiting the invention. The essence of the requirement is that there must be at least a prospect of a real as opposed to a purely theoretical possibility of exploitation. Further, the use of the word immediate conveys the need for this to be derivable directly from the description, if it is not already obvious from the nature of the invention or from the background article It should not be left to the skilled reader to find out how to exploit the invention by carrying out a research programme. 7. Accordingly, a product whose structure is given (e.g. a nucleic acid sequence) but whose function is undetermined or obscure or only vaguely indicated might not fulfil the above criteria, in spite of the fact that the structure of the product per se can be reproduced. If a patent is granted therefor, it might prevent further research in that area, and/or give the patentee unjustified control over others who are actively investigating in that area and who might eventually find actual ways to exploit it. 8. On the other hand, a product which is definitely described and plausibly shown to be usable, e.g. to cure a rare or orphan disease, might be considered to have a profitable use or concrete benefit, irrespective of whether it is actually intended for the pursuit of any trade at all. Thus, although no particular economic profit might be expected in the development of such products, nevertheless there is no doubt that it might be considered to display immediate concrete benefits. The claimed disclosure is described at T 0898/05, paras 13 16. In summary terms, it disclosed the nucleotide sequence and the encoded amino acid sequence of the cytokine, Zcytor1, its tissue distribution, including in both B and T cells, and claims that Zcytor1 accordingly had various roles such as in proliferation, differentiation, and/or activation of immune cells and that it could therefore be useful in different therapeutic conditions, of which a fair number of different possibilities were given. No experimental evidence was provided to support these claimed roles or uses. At T 0898/05, para 19, the Board identified the two reasons the ED had refused the patent application. They were (i) the use of a computer assisted alignment did not allow any concrete conclusions to be made as to the actual specific function of the protein, because such studies provided only speculation of a vague nature and no specific therapeutic or diagnostic use could be ascertained therefrom; and (ii) Zcytor1 was only a research tool whose disclosure was only the first step in the quest for industrially applicable matter. The Board then started its consideration of the EDs two reasons for refusing ZymoGenetics application in these terms: 21. In the present case, based on computer assisted sequence homology studies and on tissue distribution studies, the Zcytor1 receptor was identified in the application as a putative member of the hematopoietin receptor family and it was assigned a role in proliferation, differentiation and/or activation of immune cells and thus a possible role for its ligands in therapeutic conditions associated with the functioning of the immune system. Admittedly, no experimental evidence for the suggested role of the receptor and/or its ligands is made available in the application. Later evidence, however, confirmed this sort of educated guess, which the examining division considered to be in its own words reasonably credible. 22. The fact that the putative function of the Zcytor1 receptor was assigned in the examples based on computer assisted methods, rather than on the basis of traditional wet lab techniques, does not mean that it has to be automatically disregarded or excluded from a careful and critical examination. [The] probative value [of such examples] has to be examined on a case by case basis regarding the nature of the invention and the prior art relating thereto. Such methods of analysis are increasingly becoming an integral part of scientific investigations and can often allow plausible conclusions to be made regarding the function of a product before it is actually tested. The Board then explained at T 0898/05, para 24, that the identification of the Zcytor1 receptor as a putative member of [the] hematopoietin receptor family of cytokines was based on [its] general structure, and was not called into question by anything in the Patent or by any other evidence. The Board also said that post published evidence, which confirms the preliminary finding and actually supports the conclusion, cannot be ignored. After quoting the EDs view that the suggested role of the Zcytor1 receptor was too vaguely defined, not least because the members of the family all obviously have different functions, the Board said this at T 0898/05, para 27: It might well be possible that members of a structurally related family have, notwithstanding their related structure, a different activity and function. However, there is no reference to the prior art in the decision under appeal which supports such a case in the hematopoietin receptor family. In fact, from the prior art cited in the application and concerned with this family of receptors , it may be derived that, although none of these members are precisely interchangeable in terms of their biological action, there is considerable redundancy of action as well as an ability to elicit, under certain conditions, similar biological responses. Even more important is the fact that this prior art does not cast significant or serious doubts on the suggested role of the Zcytor1 receptor. Thus, the assumption (or educated guess) made in the patent application is plausible. At T 0898/05, paras 29 31, the Board concluded as follows: 29. The function of a protein (and thus of the nucleic acid encoding it) can be seen at different levels. These include: (i) the biochemical activity of the protein , i.e. its molecular function; (ii) the function of the protein in cellular processes , i.e. its cellular function; and (iii) the influence of those cellular processes within a multicellular organism, . this being its biological function in a broad sense. 30. The elucidation of one of these particular levels of function might result, under certain conditions, in a straightforward industrial application, even though the other levels of activity remain completely unknown or only partially characterized. For the purpose of Article 57 , none of these levels is more fundamental than the other ones . 31. In the present case, the suggested role of [Zcytor1] corresponds to the level of the biological function and the practical applications or the concrete technical benefits derived therefrom are clearly disclosed in the present application, namely the stimulation of cell mediated immunity and of lymphocyte proliferation by agonist ligands of Zcytor1 and the suppression of the immune system by antagonists of the Zcytor1 receptor . Although the details of the biochemical activity and the cellular function of the Zcytor1 receptor have not been elucidated in the application, the (therapeutic) treatments directly derivable from the biological function identified by the computer assisted method cannot be considered to be so vaguely defined that they do not suggest any therapeutic or diagnostic use. On the contrary, the treatments referred to in the application are specifically in relation to the function plausibly attributed to the molecule, and are in the areas of rheumatoid arthritis, multiple sclerosis, diabetes mellitus, etc. In T 1452/06 Serine protease/Bayer (10 May 2007) the Board considered and applied its reasoning in T 0870/04 and T 0898/05, when upholding a decision of the ED refusing an application claiming a patent for a polypeptide and its encoding gene. Having said that there was no experimental evidence whatsoever in support of [the claimed] serine protease activity of the claimed polypeptide, the Board then said at T 1452/06, para 4, that such support might be provided by a (computer assisted) comparison of [the disclosed] sequence with sequences of known serine proteases and, more particularly, with the allegedly closely related sequence of [the already known] epithin. The Board accepted, at para 6, that such support might be obtained by a straight (computer assisted) comparison of the [disclosed] sequence with the sequence of [epithin]. However, the Board pointed out that epithin is defined as a putative serine protease (original emphasis) and there was no experimental evidence in support of [its] serine protease activity nor of any other activity at all. (para 7) In T 1165/06 IL 17 related polypeptide/Schering, decided 19 July 2007, the main issue was obviousness, but the Board also addressed the question whether the requirements of Article 57 had been satisfied, and concluded that they had. At T 1165/06, para 14, the Board, adopting its problem/solution approach, said the technical problem to be solved can be defined as the isolation of a further polypeptide of the IL 17 cytokine family, and a nucleotide sequence encoding the polypeptide. The appellants case was that the claimed polypeptide exhibited significant sequence similarity to the [IL 17 cytokine family which had four established members, all of] which functioned in controlling physiology, development and differentiation of mammalian cells At T 1165/06, para 25, the Board concluded: The sequence information provided in the application with respect to the presence in IL 174 of the characteristic cysteine spacing of the IL 17 cytokine family makes it plausible that [the claimed] polypeptide may belong to this family and have biological activities similar to those of the other family members known at the filing date, in particular CTLA 8. This is confirmed by post published evidence filed by the appellant. The reasoning and conclusions of Kitchin J and of the Board As I have mentioned, in their respective decisions, both Kitchin J and the Board referred to and relied on the Boards jurisprudence, but they came to different conclusions. It is therefore appropriate to turn to the reasoning in the two decisions in a little more detail, and in particular the identification of what the notional addressee would get from the Patent, and why the Patent did or did not satisfy Article 57. As to the overall effect of the teaching of the Patent, it is convenient to refer to what Kitchin J said at [2008] RPC 29, paras 231 233, as the view which he expressed was very similar to that of the Board, and was not challenged in this court by HGS. In those paragraphs, he summarised his view as to what the Patent disclosed thus: 231. In this case I am quite satisfied that the skilled person would consider the Patent does not of itself identify any industrial application other than by way of speculation. [I]t contains an astonishing range of diseases and conditions which Neutrokine and antibodies to Neutrokine may be used to diagnose and treat and there is no data of any kind to support the claims made. The skilled person would consider it totally far fetched that Neutrokine could be used in relation to them all and would be driven to the conclusion that the authors had no clear idea what the activities of the protein were and so included every possibility. To have included such a range of applications was no better than to have included none at all. 232. But that is not the end of the matter because the disclosure must be considered in the light of the common general knowledge . The skilled person would have known that TNF was involved as a primary mediator in immune regulation and the inflammatory response and had an involvement in a wide range of diseases as septic shock, rheumatoid arthritis, inflammatory bowel disease, tissue rejection, HIV infection, and some adverse drug reactions. He would have known that all the members of the TNF ligand superfamily identified hitherto were expressed by T cells and played a role in the regulation of T cell proliferation and T cell mediated responses. Further, the skilled person would anticipate that the activities of Neutrokine might relate to T cells and, in particular, be expressed on T cells and be a co stimulant of B cell production; that it might play a role in the immune response and in the control of tumours and malignant disease; that it might have an effect on B cell proliferation . 233. On the other hand, the skilled person would have also known that the members of the family had pleiotropic actions; that some of those activities were unique to particular TNF ligands and others were shared by some or all the other TNF ligands and that no disease had been identified in which they were all involved. Moreover, the therapeutic application of TNF monoclonal antibody for the treatment of rheumatoid arthritis was believed to operate by interrupting the cytokine cascade and by controlling the recruitment and trafficking of blood cells to the joint a rather specific activity. Eli Lillys case to the effect that the teaching of the Patent fell short of the requirements of Article 57 was accepted by Kitchin J at [2008] RPC 29, paras 230 and 234 5 (which were effectively approved by the Court of Appeal). But before quoting them, it is appropriate to refer to three earlier passages in his judgment. At [2008] RPC 29, para 118, the Judge accepted that the claims of the Patent in relation to Neutrokine were significant because: [T]hey reveal the importance of the identification of the tissues where [it] is expressed, the tissues where it acts, the nature of its biological activity and how that profile varies in any particular disease state. However, no data is provided to support these claims. Further, the variety of conditions for which the described method is said to be useful [is] puzzlingly wide and the method itself impossible to operate in the absence of any information as to the standard level of Neutrokine expressed in each of these tissues in normal conditions. Having considered the description of the Patent, the Judge concluded at [2008] RPC 29, para 134, that there was nothing by way of experimental evidence to support the claims made and the idea that Neutrokine and [its antagonists] could be used to treat the extraordinary range of diseases identified was fanciful. He then said that, in his view, the skilled person would come to the conclusion that the inventors had no idea as to the activity of Neutrokine when drafting the Patent and that it taught the skilled person nothing useful about its activity other than that Neutrokine is another member of the TNF ligand superfamily. The Judge also considered in some detail the work carried out since October 1996, and concluded at [2008] RPC 29, para 176, that this work established Neutrokine s functions more clearly, and in particular that it plays a significant and particular role in the proliferation and differentiation of B cells [and] in the regulation of T cell proliferation and activation. He went on: Neutrokine has now been shown to have an important role in the development of autoimmune disease and B cell cancers; but, at the same time, much of its biology remains unclear and is the subject of continuing study by many different research centres. In my judgment the nature and extent of all this research work, the limited conclusions ultimately drawn and the amount of work that remains to be done point strongly to the conclusion that the therapeutic and diagnostic applications suggested in the Patent were indeed speculative. Turning then to the passage in which he expressed his conclusions, [2008] RPC 29, paras 230 and 234 5, Kitchin J said this: 230. I accept that the contribution made by HGS was to find Neutrokine and to identify it as a member of the TNF ligand superfamily. However it is clear from the cases to which I have referred that simply identifying a protein is not necessarily sufficient to confer industrial utility upon it. It may be sufficient if the identification of the protein will immediately suggest a practical application, such as was the case with insulin, human growth hormone and erythropoietin. But if the function of the protein is not known or is incompletely understood and if no disease has been attributed to a deficiency or excess of it, then the position may well be different. In these cases the industrial utility must be identified in some other way. 234. Does [the] common general knowledge, taken as a whole, disclose a practical way of exploiting Neutrokine ? Or does it provide a sound and concrete basis for recognising that Neutrokine could lead to practical application in industry? In my judgment it does not. The fact that Neutrokine might be expected to play a role in regulating the activities of B cells and T cells and play an unspecified role in regulating the immune and inflammatory response did not reveal how it could be used to solve any particular problem. Neither the Patent nor the common general knowledge identified any disease or condition which Neutrokine could be used to diagnose or treat. Its functions were, at best, a matter of expectation and then at far too high a level of generality to constitute a sound or concrete basis for anything except a research project. 235. I believe this conclusion is confirmed by the activities of those in the pharmaceutical industry in the years following the filing of the application. HGS, Lilly and Biogen (and possibly others too) carried out research programmes to try and find out where Neutrokine was expressed, where its receptors were expressed and what its activities appeared to be. They carried out in vitro assays and animal studies and determined that it appeared to have an activity in relation to B lymphocytes with a particular biological profile. On the basis of this work they recognised that it was an important therapeutic target some two to three years after the application for the Patent had been filed. It is significant that in so doing they considered that its utility might lie in the treatment of B cell disorders of particular kinds. The passage I have just quoted from Kitchin Js judgment encapsulates Eli Lillys case, and HGSs case is well summarised in the Boards reasoning at T0018/09, paras 22 26. The first of those paragraphs sets the scene in terms of the general approach: 22. As pointed out in T 870/04, [paras 5 and 6], in many cases the allocation of a newly found protein to a known protein family with known activities suffices to assign a specific function to the protein because normally the members of the family share a specific function. This may be a well characterized and perfectly understood function which provides in a straightforward manner enough support for industrial applicability. In such cases, the immediate concrete benefit is manifest. In other cases, where the members of a protein family have different, pleiotropic effects which may even be opposite and neither completely characterized nor understood, no effect can be assigned to a new member without relying on some experimental data. Between these two extreme situations, a variety of other situations may arise for which a detailed examination of all the facts may be required. Indeed, this is the case for the TNF ligand superfamily. In the next two paragraphs, the Board sought to follow that approach in relation to the instant Patent: 23. As known in the art and acknowledged in the [Patent], all members of the TNF ligand superfamily are known to participate in the regulation of (immune) cell proliferation, activation, and differentiation, and are involved in various medical conditions. They are pleiotropic cytokines which display a wide range of activities and have distinctive, but also overlapping biological functions. As acknowledged in the art, a feature common to all members (without exception) of the TNF ligand superfamily is the expression on activated T cells and the ability to co stimulate T cell proliferation In view of the assignment of Neutrokine to the family, the skilled person expects it to display this common feature, the relevant question here being whether anything in the Patent specification contradicts this expectation. 24. The Patent specification, besides providing the undisputed structural identification of Neutrokine as a member of the TNF ligand superfamily, also provides some further relevant technical data which are fully in line with the expected properties of a member of that superfamily. In particular, it discloses the tissue distribution of Neutrokine mRNA expression using the nucleic acid sequence encoding the Neutrokine protein, as a cDNA probe and, as expected, reports although without concrete experimental data the expression of Neutrokine in activated T cells . It further states that (l)ike other members of TNF family, Neutrokine exhibits activity on leukocytes including for example monocytes, lymphocytes and neutrophils. For this reason Neutrokine is active in directing the proliferation, differentiation and migration of these cell types . This broad statement, far from contradicting the ability of Neutrokine to co stimulate T cell proliferation, actually supports it. In the light of the common general knowledge of the TNF ligand superfamily and its properties, no serious doubts can be cast on this explicit additional information. Nor can this information be taken as a mere theoretical or purely hypothetical assumption. First of all, it is plausible and, secondly, there is ample post published evidence on file confirming both the presence of Neutrokine on activated T cells and its ability to co stimulate T cell proliferation. The Board then turned to Eli Lillys contention that in view of the numerous contradictory statements and of the broad range of conditions and diseases referred to in the patent in suit, the skilled person would have disregarded such information as constituting only hypothetical assumptions or speculations, and said this at T 0018/09, para 26: When reading the patent specification, a skilled person would distinguish the positive technical information such as that mentioned above from other allegedly contradictory and broad statements found in the patent in suit, such as the wide range of activities and conditions for which Neutrokine could be useful. This is because the skilled person realises that the description of the structure of Neutrokine , its structural assignment to the family of TNF ligands, and the reports about its tissue distribution and activity on leucocytes, are the first essential steps at the onset of research work on the newly found TNF ligand superfamily member. In view of the known broad range of possible activities of such a molecule, the skilled person is aware of the fact that the full elucidation of all properties requires further investigations which will gradually reveal them. In this context, the skilled person regards the long listing of possible actions of Neutrokine and of medical conditions in which it might take part as the enumeration or generalisation of the properties of the TNF ligand superfamily. This is seen as the frame in which the newly found molecule has to be placed as one could prima facie have a reasonable expectation that most of them could in fact be present. The Board accordingly concluded at T 0018/09, para 27 that the description of the patent delivers sufficient technical information, namely the effect of Neutrokine on T cells and the tissue distribution of Neutrokine mRNA, to satisfy the requirement of disclosing the nature and purpose of the invention and how it can be used in industrial practice. At T 0018/09, paras 28 30, the Board then considered the arguments that in view of the technical difficulties involved in measuring the co stimulation of T cells by Neutrokine , the implementation of the teaching of the Patent would involve an undue burden, and that, in any event, no industrial application can be directly derived from a mere co stimulation of T cells. Those arguments were also rejected. Although the Board acknowledged that such assays had produced a few contradictory results, there was post published evidence which showed that Neutrokine activity could be reasonably easily measured in relation to both T cells and B cells. Further, the Board said that the activities of Neutrokine , as taught by the Patent (in particular, the inhibition of co stimulation and/or proliferation of lymphocytes) may represent a valid basis for a possible industrial application. The Board went on to say at T 0018/09, para 30, that the Patents teaching as to the expression of Neutrokine mRNA in B cell and T cell lymphomas provides in itself in the context of the disclosure a valid basis for an industrial application, adding that the presence of Neutrokine in these lymphomas, which is also confirmed by post published evidence may be used to develop appropriate means and methods for their diagnosis and treatment based on the disclosure of the [Patent]. In the next four paragraphs, the Board also rejected the contention that alleged technical problems meant that no industrial application could be derived from [the] information [in the Patent]; this was because Eli Lilly was unable to establish serious doubts, substantiated by verifiable facts, so that it was relying on mere unsupported assumptions. Following the Boards jurisprudence Where the EPO decides that a patent, or a claim in a patent, is invalid, then that is the end of the issue (subject, of course, to the patentee or applicant appealing to the Board) in relation to all countries which are signatories to the EPC. Where, however, the EPO decides that a patent, or a particular claim, is valid, then, as this case shows, it is still open to a national court to decide that the patent, or claim, is invalid within its territorial jurisdiction. In all cases, however, the EPO and each national court are, of course, applying the principles contained in the EPC. It is plainly appropriate in principle, and highly desirable in practice, that all these tribunals interpret the provisions of the EPC in the same way. In a number of recent decisions of the House of Lords, attention has been drawn to the importance of UK patent law aligning itself, so far as possible, with the jurisprudence of the EPO (and especially decisions of its Enlarged Boards of Appeal), to quote Lord Walker in Generics (UK) Ltd v H Lundbeck A/S [2009] UKHL 12; [2009] RPC 13, para 35. It is encouraging that the same approach is being adopted in Germany by the Bundesgerictshof see Case Xa ZR 130/07 (10 September 2009), para 33. However, as Lord Walker went on to explain in Generics [2009] RPC 13, para 35, National courts may reach different conclusions as to the evaluation of the evidence in the light of the relevant principles even though the principles themselves should be the same, stemming as they do from the EPC. Thus, the EPO (or another national court) and a national court may come to different conclusions because they have different evidence or arguments, or because they assess the same competing arguments and factual or expert evidence differently, or, particularly in a borderline case, because they form different judgments on the same view of the expert and factual evidence. As Lord Hoffmann said in Conor Medsystems Inc v Angiotech Pharmaceuticals Inc [2008] UKHL 49, [2008] RPC 28, para 3: A European patent takes effect as a bundle of national patents over which the national courts have jurisdiction. It is therefore inevitable that they will occasionally give inconsistent decisions about the same patent. Sometimes this is because the evidence is different. In most continental jurisdictions, including the [EPO], cross examination is limited or unknown. Sometimes one is dealing with questions of degree over which judges may legitimately differ. Obviousness is often in this category. But when the question is one of principle, it is desirable that so far as possible there should be uniformity in the way the national courts and the EPO interpret the [EPC]. Further, while national courts should normally follow the established jurisprudence of the EPO, that does not mean that we should regard the reasoning in each decision of the Board as effectively binding on us. There will no doubt sometimes be a Board decision which a national court considers may take the law in an inappropriate direction, misapplies previous EPO jurisprudence, or fails to take a relevant argument into account. In such cases, the national court may well think it right not to apply the reasoning in the particular decision. While consistency of approach is important, there has to be room for dialogue between a national court and the EPO (as well as between national courts themselves). Nonetheless, where the Board has adopted a consistent approach to an issue in a number of decisions, it would require very unusual facts to justify a national court not following that approach. In the present instance, as discussed above, there has been little helpful domestic guidance as to the application of Article 57 to patents for biological material, but there have been a number of decisions of the Board which have addressed the topic and which at least purport to adopt a consistent approach to the issue. It is true that there is no decision of the Enlarged Board on the instant point, but there was no such decision on the point at issue in Generics [2009] RPC 13. But, again as in that case, there is what may be described, at its lowest, as an intended consistent approach to the issue in a number of carefully considered decisions of the Board. Further, it is not irrelevant to mention that there is unlikely to be a decision of the Enlarged Board on the instant point in the near future, as the Board refused to make a reference in T 0898/05, para 33. Further, while there has been some attack on the reasoning of the Board in its decision on the instant Patent, T 0018/09, both in the judgment of Jacob LJ in the Court of Appeal ([2010] RPC 14, paras 146, 155 and 156) and in the submissions on behalf of Eli Lilly in this court, there has been no attempt either here or below to suggest that the reasoning in the earlier decisions of the Board was wrong, save that Mr Waugh QC, on behalf of Eli Lilly, did make the point that decisions on appeal from the ED, perhaps particularly T 0898/05, should carry less weight as they were unopposed, or ex parte. In relation to the Boards assessment of the factual and expert evidence in a particular ex parte appeal, I can see the force of the point. But I am unimpressed with the point in so far as it is invoked in relation to the applicable principles. In particular, I would reject the implicit suggestion that the Board has been too favourable to patentees in some of the decisions discussed above, as a result of the hearing being ex parte. First, all the decisions discussed above appear to me to demonstrate a consistent approach to the issue raised on this appeal. Secondly, those decisions include an appeal from the OD, namely T 0604/04. Thirdly, the decision of the Board in relation to the instant Patent was from the OD, after strong opposition from Eli Lilly, and, far from resulting in the Board modifying its position, it is Eli Lillys case in this court that the Board went further in this case in favour of the patentee than in any appeal from the ED. In these circumstances, it seems to me to be right to take the law as being that laid down in the Boards jurisprudence I have discussed. But, of course, as explained by Lord Hoffmann and Lord Walker in the passages quoted above, this does not necessarily mandate the same outcome as the Board arrived at in T 0018/09. It is unlikely that the Board and Kitchin J received very different arguments in the present case, in the light of the reasoning in the two decisions, and the fact that the parties in the two sets of proceedings were the same. It is less clear how similar the evidence before each tribunal was: the witnesses were different, and there was at least one further expert witness statement (on behalf of HGS) before the Board which post dated Kitchin Js judgment. Further, unlike before Kitchin J, there was no cross examination of witnesses before the Board. As Jacob LJ said at [2010] RPC 14, paras 25 26, citing the well known observations of Lord Hoffmann in Biogen Inc v Medeva plc [1997] RPC 1, 45, appeals are conducted on the evidence and materials before the court of first instance and the Court of Appeal gives very considerable deference to the findings of fact of the first instance court. So also to its value judgments. That is all the more true of appeals to this court from the Court of Appeal, especially where, as here, there are concomitant findings (i.e. where the Court of Appeal has upheld the trial judges findings of fact and value judgments). In these circumstances, the question which needs to be decided is whether, as the Court of Appeal held, Kitchin J followed the principles laid down by the Boards jurisprudence. If he did, then it seems to me that it would be inappropriate to interfere with his conclusion that the Patent did not satisfy the requirements of Article 57, unless the conclusion was one which he could not reasonably have reached. If he did not, then things would stand on a very different footing. Before turning to that question, however, it is appropriate to mention another, and rather wider, reason for consistency of approach to patents in the biological field. Consistency and policy: the wider picture The BioIndustry Association (the BIA), which has intervened in these proceedings, describes itself as a trade association for innovative enterprises in the UKs bioscience sector and its membership extends to hundreds of companies with an aggregate turnover in 2010 of about 5.5bn, and around 36,000 employees. The requirements of clarity and certainty in this area of law are emphasised by the BIA. As its submissions also explain, after the discovery of a naturally occurring molecule, particularly a protein and its encoding gene, a large amount of research and development is required before there can be any therapeutic benefit. It is therefore important for bioscience companies to be able to decide at what stage to file for patent protection. Thus, If the application is filed early, [t]he company will be left with no patent protection, but would have disclosed its invention in the published patent application to competitors. If the application is filed late, there is a risk in such a competitive environment where several companies may be working on the same type of research projects, that a third party will already have filed a patent application covering the same or a similar invention, in which case the company may not be able to gain any patent protection for its work and by continuing their programme they may risk infringing that third partys patents. In both cases, the company will have lost much of the benefit of its costly research and development. Similarly, funding for research and development on the potential therapeutic value of a newly discovered and characterised protein or its antibodies is dependent on the funders being reasonably confident that the patent (or patent application) concerned will be reasonably safe from attack (or likely to be granted). It is also relevant that bioscience companies attract investment by reference to their patent portfolios, which gives rise to the same need for certainty. As the BIA suggests, it is worth remembering the purpose of the patent system, namely to provide a temporary monopoly as an incentive to innovation, while at the same time facilitating the early dissemination of any such innovation through an early application for a patent, and its subsequent publication. Although this is true in any sector, it has particular force in the pharmaceutical field, where even many of those who are sceptical about the value of intellectual property rights accept that there is a public interest in, and a commercial need for, patent protection. For obvious reasons, the BIA has not set out to support either of the two parties to this appeal in its trenchant written submissions in these proceedings. However, it does suggest that if we agree with the reasoning of the Court of Appeal there is at least a risk that it will make it appreciably harder for patentees to satisfy the requirement of industrial applicability in future cases. If that were so, it is suggested that this would cause UK bioscience companies great difficulty in attracting investment at an early stage in the research and development process. This consequence is said to arise from the reasoning of the Court of Appeal (and hence of Kitchin J), on the basis that there will normally be a need to conduct tests to provide experimental data to establish to the standard they require that a protein (or its antagonists) have therapeutic use. This in turn is said to lead to two problems. First, such tests will or may involve clinical work, which, as I understand it, would be hard to keep confidential, especially in the age of the internet. Secondly, such tests would often be expensive to run, and, as already mentioned, funding would be hard to obtain for a project of this sort which had no protection in the form of a patent application. Having said this, the BIA accepts that it would be wrong in principle to enable applications for patents to be made when the applicant can reveal no more than a vague indication of possible objectives that might or might not be achievable by carrying out further research. After all, as the BIA also states, the purpose of the patents system is not to reserve an unexplored field of research for the applicant nor to give the patentee unjustified control over others who are actively investigating in that area and who might eventually find ways actually to exploit it. Did the courts below follow the Boards jurisprudence? As already mentioned, despite its very wide ranging and generalised suggestions as to the uses to which Neutrokine and its antibodies might be put, over and above revealing the existence and structure of the new protein and its encoding gene, the only relevant teaching of the Patent ultimately arises from its teaching as to the tissue distribution of Neutrokine , its expression in T cell and B cell lymphomas, and the fact that it is a member of the TNF ligand superfamily. Accordingly, the question is whether the Judge was right, or at least entitled, to conclude that the inferences which would have been drawn from this in 1996 would not have been enough to satisfy Article 57. The determination of that issue, as I see it, ultimately involves focussing on the Judges conclusion at [2008] RPC 29, para 234, quoted at para 75 above. In that passage, he concluded that the fact that the description in the Patent, even taken together with knowledge which should be attributed to its addressee, neither reveal[ed] how [Neutrokine ] could be used to solve any particular problem nor identified any disease or condition which [it] could be used to diagnose or treat was fatal to the patents validity. He considered that the functions of Neutrokine were, at best, a matter of expectation and then at far too high a level of generality to constitute a sound or concrete basis for anything except a research project. My initial reaction, like that of the Court of Appeal, was that this was a conclusion to which Kitchin J, as the trial judge, who had heard a great deal of evidence, which he had impressively and cogently analysed, was entitled to come, and with which it would be inappropriate to interfere. Standing back, it also seemed to be a conclusion which could be said to accord with good sense. As he held in the next paragraph of his judgment (also quoted in para 75 above), it required what may fairly be characterised as a research project to enable the therapeutic qualities of Neutrokine to be identified, or, as HGS would put it, to be confirmed. However, on further reflection, like Lord Hope, I have come to the conclusion that the basis upon which the Judge decided the issue was not consistent with the approach adopted by the Board in the decisions which are discussed above. The essence of the Boards approach in relation to the requirements of Article 57 in relation to biological material may, I think, be summarised in the following points: The general principles are: (i) The patent must disclose a practical application and some profitable use for the claimed substance, so that the ensuing monopoly can be expected [to lead to] some commercial benefit (T 0870/04, para 4, T 0898/05, paras 2 and 4); (ii) A concrete benefit, namely the inventions use in industrial practice must be derivable directly from the description, coupled with common general knowledge (T 0898/05, para 6, T 0604/04, para 15); (iii) A merely speculative use will not suffice, so a vague and speculative indication of possible objectives that might or might not be achievable will not do (T 0870/04, para 21 and T 0898/05, paras 6 and 21); (iv) The patent and common general knowledge must enable the skilled person to reproduce or exploit the claimed invention without undue burden, or having to carry out a research programme (T 0604/04, para 22, T 0898/05, para 6); Where a patent discloses a new protein and its encoding gene: (v) The patent, when taken with common general knowledge, must demonstrate a real as opposed to a purely theoretical possibility of exploitation (T 0604/04, para 15, T 0898/05, paras 6, 22 and 31) ; (vi) Merely identifying the structure of a protein, without attributing to it a clear role, or suggest[ing] any practical use for it, or suggesting a vague and speculative indication of possible objectives that might be achieved, is not enough (T 0870/04, paras 6 7, 11, and 21; T 0898/05, paras 7, 10 and 31); (vii) The absence of any experimental or wet lab evidence of activity of the claimed protein is not fatal (T 0898/05, paras 21 and 31, T 1452/06, para 5); (viii) A plausible or reasonably credible claimed use, or an educated guess, can suffice (T 1329/04, paras 6 and 11, T 0640/04, para 6, T 0898/05, paras 8, 21, 27 and 31, T 1452/06, para 6, T 1165/06 para 25); (ix) Such plausibility can be assisted by being confirmed by later evidence, although later evidence on its own will not do (T 1329/04, para 12, T 0898/05, para 24, T 1452/06, para 6, T 1165/06, para 25); (x) The requirements of a plausible and specific possibility of exploitation can be at the biochemical, the cellular or the biological level (T 0898/05, paras 29 30); Where the protein is said to be a family or superfamily member: (xi) If all known members have a role in the proliferation, differentiation and/or activation of immune cells or function in controlling physiology, development and differentiation of mammalian cells, assigning a similar role to the protein may suffice (T 1329/04, para 13, T 0898/05, para 21, T 1165/06, paras 14 and 16, and T 0870/04, para 12); (xii) So the problem to be solved in such a case can be isolating a further member of the [family] (T 1329/04, para 4, T 0604/04, para 22, T 1165/06, paras 14 and 16); (xiii) If the disclosure is important to the pharmaceutical industry, the disclosure of the sequences of the protein and its gene may suffice, even though its role has not been clearly defined (T 0604/04, para 18); (xiv) The position may be different if there is evidence, either in the patent or elsewhere, which calls the claimed role or membership of the family into question (T 0898/05 para 24, T 1452/06, para 5); (xv) The position may also be different if the known members have different activities, although they need not always be precisely interchangeable in terms of their biological action, and it may be acceptable if most of them have a common role (T 0870/04, para 12, T 0604/04, para 16, T 0898/05, para 27). As already explained, Kitchin J concluded that (a) the Patent discloses Neutrokine as a new member of the TNF ligand superfamily; (b) all known members of the superfamily had pleiotropic effects, (c) there were some features which all those known members shared, such as expression by T cells and a role in the regulation of T cell proliferation and T cell mediated responses; (d) however, there were other features which some family members had, but others did not; (e) it would be anticipated that the activities of Neutrokine might relate to T cells and, in particular, be expressed on T cells and be a co stimulant of B cell production; that it might play a role in the immune response and in the control of tumours and malignant disease; that it might have an effect on B cell proliferation; (f) subsequent research has confirmed that was indeed the case; (g) there was a search for new members of the family as they were of interest to the pharmaceutical industry. In those circumstances, it seems to me that, subject to dealing with a number of specific arguments to the contrary, the disclosure of the existence and structure of Neutrokine and its gene sequence, and its membership of the TNF ligand superfamily should have been sufficient, taking into account the common general knowledge, to satisfy the requirements of Article 57, in the light of the principles which I have attempted to summarise in para 107 above. Points (viii), (ix) and (x) appear to apply so far as the plausibility of at least some of the claims are concerned, and points (xi), (xii) and (xiii) all appear to be satisfied, given the evidence in relation to the TNF ligand superfamily (and point (xiv) cannot be invoked by Eli Lilly). Like Lord Hope, I derive considerable assistance from the approach set out at T 0018/09, para 22, which appears to me to be entirely consistent with the Boards earlier jurisprudence (as summarised in para 107 above), and the application in the ensuing four paragraphs, of that approach to the Boards view of what constituted the centrally relevant facts, which (subject to the arguments considered in the next section of this judgment) do not appear to me to be inconsistent with the findings made by Kitchin J. As Lord Hope says at para 152 below, the Boards conclusion was effectively this, that the disclosure of what was accepted to be a new member of the TNF ligand superfamily (coupled with details of its tissue distribution) satisfied Article 57, because all known members were expressed on T cells and were able to co stimulate T cell proliferation, and therefore Neutrokine would be expected to have a similar function. This conclusion was supported, or reinforced, by the statement that Neutrokine was expressed in B cell and T cell lymphomas (referred to in T 0018/09, para 30), and indeed by the interest and effort in the pharmaceutical industry in finding a new member of the superfamily (as explained by Kitchin J at [2008] RPC 29, paras 72 74). The arguments in support of the conclusion reached below The first argument to the contrary is based on the fact that the members of the TNF ligand superfamily were known to have pleiotropic effects. On behalf of Eli Lilly, Mr Waugh QC therefore relies on point (xv) i.e. that the claim to a new member of a superfamily is not good enough because the known members of the family have different activities. In my opinion, that point does not apply in a case where all known members of the superfamily also manifest to a significant degree common activities which are, of themselves, enough to bring the patent within the ambit of points (xi), (xii) and (xiii). Given that the fact that all known family members have sufficient common features to satisfy those points can justify a patent for a new member, it would seem somewhat bizarre if the fact that they had additional, but differing, qualities, should preclude the grant of such a patent. The disclosure of a new member would not only be of greater potential value than if the additional qualities did not exist, but the reason for the grant of the patent is the perceived value of a new member because of the common features of all known members, a feature which is unaffected by the additional qualities. I believe that this conclusion is supported not only by the Boards decision in this case, but also by the Boards conclusion in T 0898/05 that the disclosure of Zcytor1 satisfied Article 57, in circumstances where its predicted activity was based on its membership of a family. As already explained, the Board stated that although none of these members are precisely interchangeable in terms of their biological action, there is considerable redundancy of action as well as an ability to elicit, under certain conditions, similar biological responses T 0898/05, para 27. I also derive support from the fact that the Board in T 0604/04 was prepared to uphold a patent granted in respect of a novel molecule on the basis that it was a member of a family, only most of whose known members were thought to play [a role as] mediators of the inflammatory response; nonetheless, it was held that the evidence established that it was reasonable to conclude that the [claimed] polypeptides which exhibit the characteristics of receptors of members of the PF4A family of cytokines would have been regarded as important to the pharmaceutical industry, ie that industrial applicability may be acknowledged (see T 0604/04, paras 16 18). A second argument raised against validity is the unsatisfactory drafting of the Patent (mentioned by the Court of Appeal at [2010] RPC 14, para 148). If the Judge had found that the drafting of the specification of the Patent was so confusing and potentially misleading that the skilled reader would have been put off the scent in relation to what would otherwise have been appreciated from common general knowledge and reading the literature as to the potential and plausible uses to which the disclosure could be put, that may well have been a problem for HGSs case. However, although the Judge was (in my view, rightly) critical about the drafting of the specification, he did not anywhere in his full and careful judgment say, or even suggest, that its wide ranging prolix contents would have actually diverted the notional addressees, the appropriately skilled persons, from what they would otherwise have understood the Patent to be revealing, in the light of what was appreciated about the properties of the known members of the TNF ligand superfamily. Indeed, Mr Thorley QC, for HGS, identified passages in the evidence of Professor Saklatvala, which would have made such a finding difficult to justify. Mr Waughs submission that the extravagant and wordy claims of the specification should count against HGS as a matter of policy has some attraction. However, I refer again to the Boards comments at T 0018/09, para 27, cited in para 6 above. The drafting of a patent is a ticklish business, no doubt particularly in some types of case, of which biological patents may well be an example, not least because it is a fast developing field, with substantial commercial and scientific pressures. In the end, the question is whether the drafting of the Patent would actually have diverted the notional addressees from what their search of the literature, coupled with common general knowledge, would otherwise have led them to understand represented the teaching of the Patent. The Board held that it would not have done so see at T 0018/09, para 26. Given (a) the fact that the Judge made no express finding that there would have been such a diversion, (b) the evidence of Professor Saklatvala suggested that there would have been no such diversion, and (c) the way in which the Judge expressed himself at [2008] RPC 29, paras 232 and 234 (quoted respectively at paras 70 and 75 above), I would infer that Kitchin J did not think differently. That is unsurprising, given the fact that there was fairly intense interest in the TNF ligand superfamily as the Judge held at [2008] RPC 29, paras 72 and 74 (quoted at para 26 above), and the fact that there is nothing in the description which positively points away from what was known about the family. A third argument is based on the Judges remarks at [2008] RPC 29, paras 176 and 234, that the disclosure in the Patent as to the uses of Neutrokine , even when taken together with common general knowledge, was no more than speculative and did not give rise to an immediate concrete benefit i.e. invoking on points (ii) and (iii). This argument (which was also relied on by the Court of Appeal see at [2010] RPC 14, para 132) proceeds on the implicit assumption that the disclosure of the Patent as summarised in para 108 above is not sufficient in itself to satisfy the requirements of Article 57. However, if, as I consider, the effect of the Boards jurisprudence is that the sort of disclosure summarised in para 108 above does justify patentability, then the fact that the plausible predictions for the use of the invention could also be said to involve speculation takes matters no further. If the known activities of the TNF ligand superfamily were enough to justify patentability for the disclosure of a novel molecule (and its encoding gene) which was plausibly identified as a member of that family, the fact that further work was required to see whether the disclosure actually had therapeutic benefits does not, at least without more, undermine the validity of a patent. In other words, in agreement with Lord Hope, I think that the approach of the Board in this case, in particular at T 0018/09, paras 22 30, appears more in line with the previous EPO jurisprudence than the approach of Kitchin J and the Court of Appeal. The Court of Appeal made much of the Boards statement that a patent should yield an immediate concrete benefit (see at [2010] RPC 14, paras 146, 149, 155 and 156). I certainly accept that, in some cases, different tribunals can and will legitimately come to different views as to whether a particular claimed invention can satisfy the requirement of providing an immediate concrete benefit. However, I am not persuaded that such an argument is open to Eli Lilly in this case. In my view, the Court of Appeals approach, like that of the Judge, was implicitly predicated on the mistaken basis that it was not enough for the Patent to satisfy the requirements of points (xi) to (xiii). Further, at least in the context of the present case, I do not consider that the Courts below gave proper weight to points (viii), (ix) and (x). In particular, in my judgment, the Court of Appeal did not approach the concept of plausibility consistently with the jurisprudence of the Board. That is well demonstrated by Jacob LJs observation at [2010] RPC 14, para 112, that [i]t is not good enough to say this protein or any antibody to it probably has a pharmaceutical use. Such a statement is indeed plausible, but is of no real practical use. You are left to find out what that use is. If the statement is indeed plausible, then, in the absence of any reason to the contrary, it at least prima facie satisfies the requirements of Article 57 according to the Board. I appreciate that the dividing line between plausibility and educated guess, as against speculation, just like the contrast between a real as opposed to a purely theoretical possibility of exploitation, can be difficult to discern in terms of language and application, and is a point on which tribunals could often differ. (I might add that the notion that the dividing line is not very satisfactory is illustrated by the fact that, at one point in his evidence, Professor Saklatvala effectively equiparated speculation with an educated guess.) However, as a result of the decisions discussed above, the Boards approach to patents such as that in this case is, I believe, tolerably clear. I also consider that the Judge did not give sufficient weight to point (x), in that he concentrated on the absence of firm evidence of specific therapeutic roles, as opposed to the other roles of Neutrokine . This is well demonstrated by his reliance in what is perhaps the crucial paragraph of his judgment, [2008] RPC 29, para 234, on the fact that [n]either the Patent nor the common general knowledge identified any disease or condition which Neutrokine could be used to diagnose or treat. He did not, in this context, take into account the roles at other levels which could be attributed to Neutrokine as a result of its membership of the TNF ligand superfamily and their known activities. (The same point may be made about Jacob LJs judgment at [2010] RPC 14, paras 112 and 119, quoted by Lord Hope at para 150 below). Eli Lilly also relied on the Judges finding at [2008] RPC 29, para 234 that the precise uses to which Neutrokine could be put would, on the basis of the disclosure in the Patent, involve a research project, effectively raising point (iv). Although the Court of Appeal also relied on this point (see at [2010] RPC 14, para 149), it does not appear to me to be maintainable, essentially for the reason given in the immediately preceding paragraphs of this judgment. I draw support for this conclusion from the Boards third reason for rejecting a similar argument raised by Eli Lilly in the EPO, namely that the skilled person would not have been able to reproduce [the activities of Neutrokine as described in the Patent] without the undue burden of undertaking a research programme. The Board said that the disclosure of the Patent may represent a valid basis for a possible industrial application. In particular, the inhibition of co stimulation and/or proliferation of lymphocytes might be prima facie of relevance for certain immune diseases in T 0018/09, para 29. If a patent advances an appropriately plausible function for the claimed protein, then the question of undue burden has to be considered in relation to the making of the protein, as the Boards observation at T 0604/04, para 22 that the patent specification provides adequate experimental instructions for the skilled person to be able to reproduce without undue burden the [claimed] polypeptides shows. A further argument, which is really another formulation of the same point, is that, as was emphasised by the Court of Appeal at [2010] RPC 14, para 152, one important reason why Kitchin J reached a different conclusion from the Board was because he concluded that the necessary assays to determine the precise role and potential of the patents disclosure would be a complex task, whereas the Board thought it would simply involve standard assays compare [2008] RPC 29, para 77, and T 0018/09, para 29 respectively. As the Court of Appeal rightly observed, such a conflict is entirely legitimate and understandable, in view of the different evidence, the benefit of cross examination, and/or the room for difference of opinion between two tribunals. In another case, such a difference in assessment of the evidence could well justify a difference in outcome. But not in this case. Once one concludes that the effect of the Boards jurisprudence is that, in the light of the common general knowledge, the disclosure of Neutrokine as a member of the TNF ligand superfamily (coupled with its amino acid and encoding gene sequences and the tissues in which it is expressed), the claims in relation to the inventions potential satisfy Article 57. As a result, the relevance of the degree of effort needed in relation to any subsequent work falls away. (The same point undermines Eli Lillys reliance on a number of other small differences between the findings of the Judge and the Board on the expert evidence). Conclusion on the main issue, Article 57 Accordingly, I would allow HGSs appeal on the issue as to whether the Patent satisfied the requirements of Article 57, and hold that it does. As explained, I have reached this conclusion by applying my understanding of the jurisprudence of the Board to the facts found by Kitchin J. However, particularly as I have stated in para 105 above that there is good sense in the contrary conclusion reached by the Judge and the Court of Appeal, it is right to emphasise that there is also good sense in the result which, at least in my view, is mandated by the Boards approach to the law in this field. Just as it would be undesirable to let someone have a monopoly over a particular biological molecule too early, because it risks closing down competition, so it would be wrong to set the hurdle for patentability too high, essentially for the reasons advanced by the BIA and discussed in paras 97 100 above. Quite where the line should be drawn in the light of commercial reality and the public interest can no doubt be a matter of different opinions and debate. However, in this case, apart from the fairly general submissions of the parties and of the BIA, we have not had any submissions on such wider policy considerations. That is not the end of this appeal, for two reasons. First, there is an argument based on insufficiency: Eli Lilly contends that, even if the Patent satisfies Article 57, it is invalid on the ground of insufficiency, an argument which largely turns on an issue of interpretation, on which the Judge found against Eli Lilly. Secondly, if Eli Lillys insufficiency argument fails, there remain some points decided by Kitchin J and not determined by the Court of Appeal, which it is agreed should be remitted to the Court of Appeal. The contention that claim 1 of the Patent is insufficient The Judge held that, in addition to failing to comply with Article 57, the Patent was invalid on the ground of insufficiency, namely that the specification does not disclose the invention clearly enough and completely enough for it to be performed by a person skilled in the art [2008] RPC 29, para 238. The basis for this conclusion was explained in these terms by the Judge at [2008] RPC 29, para 259: it would have required a research programme and been far from routine for the skilled person to produce a candidate pharmaceutical or diagnostic composition comprising an antibody to Neutrokine a, that is to say the pharmaceutical or diagnostic equivalent of a workable prototype. Although the Court of Appeal did not consider this point, Jacob LJ did say at the end of his judgment, that he rather suspect[ed] that the insufficiency argument would go hand in hand with Article 57 [2010] RPC 29, para 159. Subject to one point, which turns on the meaning of Claim 1 (as well as some of the other claims), it seems to me that that must be correct. If Claim 1 is simply to the encoding gene of Neutrokine , then, subject to any other points which have yet to be decided by the Court of Appeal, the reason why I consider the Judge and the Court of Appeal were wrong to hold that Article 57 is not satisfied is the same reason for holding the claim to be sufficient. In T 0898/05, para 6, the Board explained the close connection, indeed overlap, between Article 57 and sufficiency in a passage, of which the first sentence has already been quoted: It should not be left to the skilled reader to find out how to exploit the invention by carrying out a research programme. [This] corresponds to the requirements of Articles 57 (the need to indicate how to exploit the invention), and 83 EPC (the need to provide a sufficient disclosure of the claimed invention). All those provisions reflect the basic principle of the patent system that exclusive rights can only be granted in exchange for a full disclosure of the invention. However, Eli Lilly contend that the Judge was wrong to hold, as he did at [2008] RPC 29, para 137, that claim 1 is now limited to an isolated nucleic acid molecule comprising one of two sequences which are specifically disclosed and are not defined by reference to their activity. They contend that, on its true construction, the claim requires the claimed protein, or polypeptide to demonstrate what is referred to in the specification as Neutrokine activity, and that such activity is too imprecisely defined and too difficult to establish, following the teaching of the Patent and any prior art, to be sufficient. Claim 1, which I have not so far set out, is in the following terms: An isolated nucleic acid molecule comprising a polynucleotide sequence encoding a Neutrokine polypeptide wherein said polynucleotide sequence is selected from the group consisting of: (a) a polynucleotide sequence encoding the full length Neutrokine polypeptide having the amino acid sequence of residues [as defined]; and the (b) a polynucleotide sequence encoding extracellular domain of the Neutrokine polypeptide having the amino acid sequence of residues [as defined]. In my view, the Judge was right to conclude that the reference to a Neutrokine polypeptide was simply a reference to the polypeptide, and did not incorporate a provision that the polypeptide had certain activities. There is no express reference in the claim to the polypeptide having any specific activities, and I see no grounds for implying into claim 1 such a provision. There is no commercial or technical reason for implying such a provision, and, of course, it is well established that a term is only to be implied into a written document if there are strong reasons in support. It is true that the phrase Neutrokine before the word polypeptide is strictly redundant on this basis, but that is no reason for giving the phrase an unnatural meaning. The fact that the phrase is strictly redundant does not alter the fact that its natural meaning is to describe the polypeptide by the name which the specification has given to it. It is also true that the specification refers to the claimed invention involving Neutrokine activity in more than one place. However, the very fact that this expression is not included in claim 1, when it is (to some extent) defined and, in more than one place used, in the specification suggests that it is not intended to apply to the claim. Accordingly, I would dismiss Eli Lillys cross appeal on the insufficiency issue. Conclusion It follows from this that, at least in my opinion, HGSs appeal on the Article 57 issue should be allowed, Eli Lillys cross appeal on the insufficiency issue should be dismissed, and the case should be remitted to the Court of Appeal to deal with the outstanding issues. LORD HOPE This is a difficult and troublesome case. It is well known that modern techniques in the field of biomedical science offer immense benefits in the promotion of human health, particularly in the combating of a wide range of degenerative diseases previously thought to be incurable and in the provision of techniques for the effective treatment of cancers. As the BioIndustry Association has pointed out in its written intervention, patent portfolios are often the most valuable asset of companies in the bioscience industry. So assessments of the value of a bioscience companys patent portfolio are likely to be a key consideration in deciding whether to acquire or invest in such a company. This in turn affects the funding that is made available for research and development, without which effective progress in putting a patented invention to practical use is likely to be very limited. The evaluation of a patent specification for this purpose will depend on whether it discloses an invention that is reasonably capable of industrial application. There is thus much common ground between the aims of those whose funding is essential for the sustained programme of research and development that will almost always have to be carried out before a product can be placed on the market and the tests that the law lays down for patentability. Article 52(1) of the European Patent Convention provides: European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application. Article 57 provides: An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture. These articles were implemented in domestic law in sections 1(1)(c) and 4 of the Patents Act 1977. As the tests in both articles are the same, it is convenient to refer to the issue which they raise as the article 57 issue. It is plain that the standard to be applied for determining whether this test has been satisfied must in principle be the same for patents in the bioscience industry as for those in other fields. The bioscience industry is particularly dependent, however, on funding for long term research and development. It is commonplace for those who need money for these activities to have to look to other organisations to provide it. The tests that must be applied are necessarily very rigorous, and it may require many years of investment before a product can be declared safe for use in the promotion of health in humans. The gap between the point of initial research and the point where the discovery is ready to be developed by the pharmaceutical industry can be very wide. Various steps along this uncertain road can be identified in the present case. First, there is the inventive step itself. In this case it revealed the existence of Neutrokine , a previously unknown member of the TNF ligand superfamily. The characteristics of the newly discovered protein had then to be examined and analysed. In this case the task was to determine whether the Neutrokine molecule had characteristics that offered the prospect of influencing biological mechanisms in the same way as other members of the superfamily. If that could be achieved, there would then have to follow a large amount of research and development before the molecule could be deployed therapeutically. The question that this case raises is how far along that road the process must go before the invention can be held to be susceptible of industrial application and patented. The core of HGSs argument for the industrial application of Neutrokine was identified by their expert witness Professor Noelle in his first witness statement. In para 72 he said: In my opinion, the inventive concept of the Patent is the identification of a new member of the TNF ligand superfamily, which the inventors named Neutrokine , and elucidation of its nucleic acid and amino acid sequences. Once the nucleic acid sequence of a novel member of the TNF ligand superfamily became available, it opened up the field such that it was possible to use well known techniques to express the protein, analyze the protein, develop antibodies and make therapeutics and diagnostics for diseases associated with under or over expression of the protein. In para 75 he said that disclosure of this novel gene and its encoded protein, and the provision of information about its structure and activities enabled the making of products which could be used in studying its role in disease and for the development of potential diagnostic and therapeutic applications. In para 79 he said that, since the activities ascribed to Neutrokine in the Patent were consistent with those activities possessed by other TNF superfamily members, the skilled addressee would consider the activities of Neutrokine described in the Patent as specific and also credible. His point, in short, was the description of the protein, when taken with common knowledge as to the techniques that could be applied to it, was sufficient to show that it was possible to use it in the respects that he identified. For him the fact that it opened up the field indicated that it was susceptible of industrial application. The significance of his observations can be seen by comparing what Jacob LJ said in the Court of Appeal with the judgment of the Technical Board of Appeal (TBA) of the European Patent Office (the EPO) in the present case, which was published on 1 December 2009: Neutrokine /Human Gennome Sciences Inc T 0018/09. The Board reached a different conclusion from that which the trial judge, Kitchin J, had reached on 31 July 2008 when he held that the claimed invention was not susceptible of industrial application at the date of the Patent: [2008] RPC 29, para 237. In the Court of Appeal Jacob LJ attributed this to the fact that the Board was working on different evidence and was using a different procedure: [2010] RPC 14, para 157; see also para 154, where he noted that the judges findings were arrived at following an extensive examination of the evidence. I think that, while both of these things are true, the conclusion ought to have been that tests that the Board applied were materially different from those applied by the judge and by the Court of Appeal. In para 22 of the reasons for its decision that the Patent provided a concrete technical basis for the skilled person to recognise a practical exploitation of the claimed invention in industry, the TBA said: 22. As pointed out in T 870/04 of 11 May 2005 [Max Planck] (cf in particular points 5 and 6 of the Reasons), in many cases the allocation of a newly found protein to a known protein family with known activities suffices to assign a specific function to the protein because normally the members of the family share a specific function. This may be a well characterized and perfectly understood function which provides in a straightforward manner enough support for industrial applicability. In such cases, the immediate concrete benefit is manifest. In other cases, where the members of a protein family have different, pleiotropic effects which may even be opposite and neither completely characterized nor understood, no effect can be assigned to a new member without relying on some experimental data. Between these two extreme situations, a variety of other situations may arise for which a detailed examination of all the facts may be required. Indeed, this is the case for the TNF ligand superfamily. The expression superfamily does not appear to have a precise meaning, as Jacob LJ observed in the Court of Appeal: [2010] RPC, para 73. As he explained, the general idea is that it includes not only very closely homologous compounds but also those with rather less homology. The contrast is between a closely knit family with known activities, and a wider family with a variety of different, pleiotropic effects: cousins, second cousins, distant uncles and so on. The same contrast between two extremes is to be found in para 22 of the TBAs judgment. But the important point that emerges from its comment that it was dealing with a superfamily is to be found in the last two sentences. This case is not one where the different, pleiotropic effects are so poorly understood that it is plain that no effect can be assigned to a new member without relying on some experimental data. That is not true of the TNF ligand superfamily as it lies between the two extremes. So a detailed examination of all the facts is needed before it can be determined whether or not an effect can be assigned to this particular new member. As the TBA said in T 0898/05 (7 July 2006) Hematopoietic cytokine receptor/ZymoGenetics, para 22, the probative value of the claimed invention must be examined on a case by case basis regarding the nature of the invention and the prior art relating thereto: Such methods of analysis are increasingly becoming an integral part of scientific investigations and can often allow plausible conclusions to be made regarding the function of a product before it is actually tested. In other words, that examination may be enough in itself to show, without further experiments, that what the TBA refers to as a specific function can be assigned to the new member of the family. This is because that well characterized and perfectly understood function is shared by other members of the family which it has been shown to belong to. In paras 6 8 of its judgment in ZymoGenetics the TBA contrasted a product whose structure was given but whose function was undetermined or obscure or only vaguely indicated with one which was definitely described and plausibly shown to be usable. In the former case, the granting of a patent might give the patentee unjustified control over others who were actively investigating in that area and who might eventually find ways to exploit it. In the latter, because it was plausibly shown to be usable, it might be considered to display concrete benefits. As these benefits are assumed not yet to have been confirmed by research, the exercise that these passages indicate is necessarily one of prediction. That is why the Board used the word plausibly. I would not quarrel with Jacob LJs comment, after consulting the Shorter Oxford English Dictionary, that the sense that word conveys is that there must be some real reason for supposing that the statement is true: para 111. The important point, however, is that the standard is not any higher than that. Further experiments are not needed if sufficient information is provided in the description, when common general knowledge is taken into account, to show that a positive answer can be given to the question whether a profitable use can readily be identified: ZymoGenetics, para 20. In para 102 of his judgment in the Court of Appeal, however, having reviewed the EPO case law, Jacob LJ said: It is clear from these authorities that discovering a nucleotide sequence encoding for a human protein and being able to show that the protein concerned has some common homology with known proteins (ie is a member of a family) may satisfy article 57. But whether it does or not is case dependent and in particular depends upon how well established the functions of the other members of the family are. To say, my new protein is similar to a known family of proteins is not all that helpful in indicating a possible use if the function of that family is itself poorly understood at best. In para 112, having said that to be plausible a statement must be sufficiently precise, he added: It is not good enough to say this protein or any antibody to it probably has a pharmaceutical use. Such a statement is indeed plausible, but is of no real practical use. You are left to find out what that use is. In para 119, having summarised the findings and conclusions of Kitchin J, he said: So the Judge addressed the crucial question: is it enough to make the invention susceptible of industrial application to tell the skilled reader that Neutrokine is structurally similar to TNF and related cytokines and is believed to have similar biological effects and activities? That depends on what was known about the biological effects and activities of the known members of the superfamily. Each of the postulated uses of Neutrokine or its antagonists was possible in the sense that one could not rule that out as a matter of science based on what was known about other superfamily members. So in one sense each was plausible, even though all of them collectively were not and indeed some contradicted others so both could not be true. But that is miles away from being able to say that any particular use was plausible in the sense of being taken, by the reader, to be reasonably so. In reality one was faced with a research programme to see which, if any, of the possible uses of the Neutrokine or its antagonists was real. I think that there are indications in these passages that the standard which Jacob LJ was setting for susceptibility to industrial application was a more exacting one than that used by the TBA. He appears to have been looking for a description that showed that a particular use for the product had actually been demonstrated rather than that the product had plausibly been shown to be usable. In para 23 of the reasons for its decision in the present case the TBA noted that, as known in the art and acknowledged in the Patent, a feature common to all members of this particular superfamily without exception was the expression on activated T cells and the ability to co stimulate T cell proliferation. It followed, in view of the assignment of Neutrokine to the family, that the skilled person would expect it to display that common feature. Asking itself whether there was anything in the patent specification which contradicted that expectation, the Board found that the technical data in the patent specification, far from contradicting the ability of Neutrokine to co stimulate T cell proliferation, actually supported it. That information could not be taken as a mere theoretical or purely hypothetical assumption. In para 26 the TBA said that a skilled person, when reading the patent specification, would distinguish the positive technical information from the contradictory and broad statements to which Eli Lilly had drawn its attention: This is because the skilled person realises that the description of the structure of Neutrokine , its structural assignment of the family of TNF ligands, and the reports about its tissue distribution and activity on leucocytes, are the first essential steps at the onset of research work on the newly found TNF ligand superfamily member. In view of the known broad range of possible activities of such a molecule, the skilled person is aware of the fact that the full elucidation of all properties requires further investigations which will gradually reveal them. In this context, the skilled person regards the long listing of possible actions of Neutrokine and of medical conditions in which it might take part as the enumeration or generalisation of the properties of the members of the TNF ligand superfamily. This is seen as the frame in which the newly found molecule has to be placed as one could prima facie have a reasonable expectation that most of them could in fact be present. This is in sharp contrast to Jacob LJs comment in [2010] RPC 14, para 145 that the Patent, even in relation to T cell activity, was just too speculative to provide anything of practical value other than information upon which a research programme could be based. Referring to the first sentence of the passage which I have just quoted, he then said that a first step at the onset of research work was hardly enough to provide an immediate and concrete benefit: para 149. The phrase immediate concrete benefit the and which Jacob LJ inserted into this phrase is his own word comes from para 6 of the TBAs reasons for its decision in ZymoGenetics; see also para 21 of its reasons in the present case. Here again there is an indication that Jacob LJ was applying a different test from that applied by the TBA. The immediate concrete benefit that he was looking for was something more than that there was a reasonable expectation that the molecule would be usable for the purposes of research work. In para 27 the TBA said that, despite its long list of conditions and activities, the description of the Patent delivered sufficient technical information (namely the effect of Neutrokine on T cells and the tissue distribution of Neutrokine mRNA) to satisfy the requirement of disclosing the nature and purpose of the invention and how it could be used in industrial practice. In para 29 it rejected Eli Lillys arguments that, in view of the technical difficulties involved in measuring the co stimulation of T cells by Neutrokine and the absence of any detailed experimental information on the activities of Neutrokine listed in the Patent, the skilled person would not have been able to reproduce them without the undue burden of undertaking a research programme and that no industrial application could be directly derived from a mere co stimulation of T cells. It pointed out that there was a convincing body of post published evidence showing that, using standard assays, Neutrokine activity was indeed present on T cells, that the reference in the Patent to the presence of Neutrokine activity in lymphocytes would prompt the skilled person to look for that activity in all types of lymphocytes, including B lymphocytes as well as T lymphocytes. Contrary to Eli Lillys view, it held that these activities might represent a valid basis for a possible industrial application. The industrial application that it had in mind was the use of the molecule for research, which it must be taken to have regarded in itself as an industrial activity. Developing this point further, the TBA said in para 30: In the boards judgment, the tissue distribution of Neutrokine mRNA disclosed in the patent in suit, in particular the expression of Neutrokine mRNA in B cell and T cell lymphomas (cf paragraph [0032]), provides in itself in the context of the disclosure a valid basis for an industrial application. The presence of Neutrokine in these lymphomas, which is also confirmed by post published evidence on file (cf inter alia document D126), may be used to develop appropriate means and methods for their diagnosis and treatment based on the disclosure of the patent in suit. These passages are important not so much for the assessment of the evidence that was before the TBA, with which the national court may properly disagree if presented with evidence which it accepts to the contrary, as for the clear indication that they give as to the point in the development of an invention in the biosciences field where it may be said that the requirement that the invention shall be considered as susceptible of industrial application can be taken to have been satisfied. The concluding words of the last sentence of para 30 indicate that the test which the Board was applying, as in ZymoGenetics, para 8, was whether Neutrokine was plausibly shown to be usable. I read this as indicating that it was satisfied that the protein was a research tool which could be used to develop appropriate means and methods for the diagnosis and treatment of B cell and T cell lymphomas. In the Boards judgment that was enough for it to be susceptible of industrial application within the meaning of article 57 of the Convention. Kitchin J did not have the benefit of seeing the judgment of the TBA in this case, as it was published more than a year after he handed down his judgment on 31 July 2008. He identified the principles that had emerged from the decisions of the EPO in his judgment at [2008] RPC 29, para 226. Among them were the following (case references omitted): (vi)the purpose of granting a patent is not to reserve an unexplored field of research for the applicant nor to give the patentee unjustified control over others who are actively investigating in that area and who might eventually find ways actually to exploit it. (vii) If a substance is disclosed and its function is essential for human health then the identification of the substance having that function will immediately suggest a practical application. If, on the other hand, the function of that substance is not known or is incompletely understood, and no disease has been identified which is attributable to an excess or a deficiency of it, and no other practical use is suggested for it, then the requirement of industrial applicability is not satisfied. This will be so even though the disclosure may be a scientific achievement of considerable merit. (viii) Using the claimed invention to find out more about its activities is not in itself an industrial application. He derived these principles from the reasons that the TBA gave for its decisions in BDP1 Phosphatase/Max Planck T 0870/04 (11 May 2005) and, in the case of the second part of the principle in para (vi), from para 8 of ZymoGenetics. But he did not pick up the point made in para 8 of ZymoGenetics that a product which is definitely described and plausibly shown to be usable might be considered to have a profitable use or concrete benefit, or the point made in para 22 that computerised methods of analysis are increasingly becoming an integral part of scientific investigations and that they can often allow plausible conclusions to be made regarding the function of a product before it is actually tested. Careful though his analysis was, I think that it tended to divert attention away from points that were likely to produce an appropriately balanced decision in this case. In para 230 the judge said: I accept that the contribution made by HGS was to find Neutrokine and to identify it as a member of the TNF ligand superfamily. However it is clear from the cases to which I have referred that simply identifying a protein is not necessarily sufficient to confer industrial utility upon it. Multimeric Receptors/Salk Institute is just one example. It may be sufficient if the identification of the protein will immediately suggest a practical application, such as was the case with insulin, human growth hormone and erythropoietin. But if the function of the protein is not known or is incompletely understood and if no disease has been attributed to a deficiency or excess of it, then the position may well be different. In these cases the industrial utility must be identified in some other way. In paras 231 232 he said that he was quite satisfied that the skilled person would consider that the Patent did not by itself identify any industrial application other than by way of speculation. The range of diseases and conditions which Neutrokine and antibodies to Neutrokine might be used to diagnose and treat were astonishing and there was no data of any kind to support the claims made. But he recognised that the disclosure had to be considered in the light of the common general knowledge. Thus the skilled person would have known that TNF was involved as a primary mediator in immune regulation and the inflammatory response and had an involvement in a wide range of diseases, that all the members of the TNF ligand superfamily identified hitherto were expressed by T cells and played a role in the regulation of T cell proliferation and T cell mediated responses. Further, as Eli Lillys expert witness Professor Saklatvala accepted, the skilled person would anticipate that the activities of Neutrokine might relate to T cells, be expressed in T cells and be a co stimulant of B cell production and that it might play a role in the immune response and in the control of tumours and malignant disease and have an effect of B cell proliferation. Thus far, his analysis of the evidence matches that in paras 27 30 of the reasons which the TBA gave for its decision in this case: see paras 155 156, above. But he then went on to say in para 233 that the skilled person would also have known that the members of the family had pleiotropic actions, that some of those activities were unique to particular TNF ligands and others were shared by some or all the other TNF ligands, that no disease had been identified in which they were all involved and that the known therapeutic application of the TNF monoclonal antibody was a rather specific activity. In para 234, drawing these conclusions together, he said: Does that common general knowledge, taken as a whole, disclose a practical way of exploiting Neutrokine ? Or does it provide a sound and concrete basis for recognising that Neutrokine could lead to practical application in industry? In my judgment it does not. The fact that Neutrokine might be expected to play a role in regulating the activities of B cells and T cells and play an unspecified role in regulating the immune and inflammatory response did not reveal how it could be used to solve any particular problem. Neither the Patent nor the common general knowledge identified any disease or condition which Neutrokine could be used to diagnose or treat. Its functions were, at best, a matter of expectation and then at far too high a level of generality to constitute a sound or concrete basis for anything except a research project. In para 237 he said that he was satisfied that this was a case where the claimed inventions were not susceptible of industrial application at the date of the Patent. It was no answer to say that subsequent research had shown that they might be useful to treat diseases associated with particular B cell disorders. I think that there is here a significant drift away from the approach indicated by the TBAs reasons in ZymoGenetics as subsequently confirmed by the reasons for its decision in the present case. This is not just because the Board was working on different evidence and was using a different procedure, as Jacob LJ seems to have thought. There is a very obvious difference of view as to the test that the invention had to satisfy to be susceptible of industrial application. For the TBA, the question was whether, taking the common general knowledge into account, it had been plausibly shown that the molecule was usable. It was not necessary for a skilled person to undertake a research programme to conclude that the presence of Neutrokine in B cell and T cell lymphomas might be used to develop appropriate means and methods for their diagnosis and treatment: para 30. For the judge, this did not go far enough. For him the critical point was that neither the Patent nor the common general knowledge identified any disease or condition which Neutrokine could be used to diagnose or treat: [2008] RPC 29, para 234. In para 29 of its reasons in ZymoGenetics the TBA said that the function of a protein, and thus of the nucleic acid encoding it, could be seen at different levels: (i) its molecular function, revealed by the biochemical activity of the protein; (ii) its cellular function, in regard to cellular processes; and (iii) the influence of those cellular processes in a general and more complex network within a multicellular organism, this being its biological function in a broad sense. In para 30 it said that the elucidation of one of those particular levels of function might result in a straightforward industrial application, even though the other levels of activity remained completely unknown or only partially characterised. In ZymoGenetics the suggested role for the receptor corresponded to the biological function, and the therapeutical treatments directly derivable from it were not considered to be so vaguely defined that they did not suggest any therapeutic or diagnostic use: para 31. In the present case the role that the TBA saw for Neutrokine was in connection with activities at the level of the cellular function, and this in itself was seen to provide a valid basis for an industrial application: paras 29 30. Jacob LJ observed, I think correctly, that the Board thought that standard assays, of the kind revealed by common general knowledge, would do the job of providing an immediate concrete benefit: [2010] RPC 14, para 152. He then said that the judges finding on the facts was to the opposite effect. He quoted the following passage from para 77 of Kitchin Js judgment: In my judgment the skilled person would indeed have been able to identify or develop from his common general knowledge some assays with which to begin the study of the new ligand and start to asses at least some of its possible activities. But I am not satisfied that such studies would have produced informative results and I have no doubt that to carry out a comprehensive screening programme so as to identify the role of the ligand in the biology of any particular cell type would be an altogether more complex task, and one properly characterised as a research programme. In other words, it was necessary for the skilled person to be able to identify the role of the ligand in the biology of a particular cell type before the newly discovered molecule could be said to be susceptible of industrial application. The test which both he and the judge were applying was not that indicated by the TBA. The same approach is to be found in early parts of his judgment. In para 119 he said that the reader was faced with a research programme to see which, if any, of the possible uses of Neutrokine or its antagonists was real. In para 130, in his discussion of Gruss and Dowers assessment of the practical usefulness of the TNF ligand superfamily as a whole he said that their observations were far from saying that any member of the superfamily or its agonists had real or indeed any potential as a therapeutic or diagnostic agent. In para 142 he referred to the fact that the judge had preferred Professor Saklatvalas evidence that by 1996 only TNF had been shown to be biomedically useful to Professor Noelles comment that he would expect Neutrokine to be useful in the same way as other members of the TNF ligand superfamily. In para 145 he said that the Patent was just too speculative to provide anything of practical value other than information upon which a research programme can be based. It is clear from these passages that for him the fact that the skilled addressee would see that the molecule was usable for a programme of research work, which the TBA thought he would, was not sufficient. For these reasons I cannot agree with Jacob LJ that the differences between the conclusions reached by the judge and the TBA are attributable to the fact the Board was working on different evidence and was using a different procedure. It seems to me that they are attributable to differences of principle about the amount of information that was needed to show that the invention was susceptible of industrial application. The test to be applied to determine this issue is a question of law, not one of fact. As Jacob LJ observed, our practice is to follow any principle of law clearly laid down by the TBA: [2010] RPC 14, para 39. It is a strong thing to disagree with the concurrent findings of judges with such experience in this field. But our decision in this appeal does not depend on a re evaluation of the evidence. It turns on the principle of law which I find clearly set out by the TBA in the passages to which I have referred. In my opinion that principle leads inevitably to the conclusion that HGSs appeal on the article 57 issue must be allowed and the decision of Kitchin J that the claimed inventions were not susceptible of industrial application at the date of the Patent set aside. I would dismiss Eli Lillys cross appeal on the issue of insufficiency for the reasons given by Lord Neuberger. I too would remit the case to the Court of Appeal to deal with the outstanding issues. LORD WALKER As Lord Hope observes, this is a difficult and troublesome case. It is also an important case: not only for the parties, but also for the bioscience industry generally (as the intervention of the BioIndustry Association makes clear) and, in some measure, for the future course of patent law in the United Kingdom. I have to say that all my instincts, as an appellate judge, are for dismissing this appeal. The issue is one of multi factorial evaluation of evidence, a task which has already been carried out twice, with the same result, by a very experienced patent judge, and a division of the Court of Appeal presided over by a Lord Justice with even more experience in the field of patents. Their task was to evaluate the evidence against a statutory test expressed in simple terms, whose meaning is not necessarily made much clearer by elaborate judicial exposition (see the quotation in para 170 below). This Court has recently, in Lucasfilm Limited v Ainsworth [2001] UKSC 39, [2011] 3 WLR 487, para 45, reinforced Lord Hoffmanns much cited statement of the importance, in cases of this sort, of deference to the conclusions of the trial judge. What Lord Hoffmann said in Biogen Inc v Medeva Plc [1997] RPC 1, 45 is too well known to need repetition. It applies even more strongly in the case of concurrent findings. The same thought was expressed (in a dissenting judgment) by Justice Kirby in the High Court of Australia in Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] 212 CLR 411, para 95 (references omitted): The conclusions on obviousness in the proceedings below represented the outcome of a judicial evaluation of a mass of evidence. In the assessment of that evidence, and in the conclusion to be derived from it, the primary judge and the Full Court were better placed to perform the function of fact finding than this Court is. Unless some error is shown in the application of the relevant law, it would be a rare step for this Court to condescend to re evaluate such a factual conclusion, reached by concurrent decisions at two levels of the judicial hierarchy. Kirby J also quoted from Biogen, observing (para 97): Any exposition of judicial reasons explaining such factual findings is inherently an incomplete statement of the impression which was made upon [the judge] by the primary evidence. Judges having replaced juries in such matters in Australia, and having entangled themselves in a web of horrible verbal formulae, must do their best to explain their conclusions where, in the past, juries simply announced their verdicts. Nevertheless the powerful and sustained analysis and reasoning in the judgments of Lord Hope and Lord Neuberger has persuaded me, against my inclination, that this appeal must be allowed. There is nothing that I can usefully add to their reasoning, except to repeat that there are two strong policy arguments for allowing the appeal. The first is to reduce the risk of a chilling effect on investment in bioscience (though here the arguments are certainly not all one way). The other is to align this countrys interpretation of the European Patent Convention more closely with that of other contracting states. To my mind these considerations justify this Court in taking what would otherwise be a questionable course. LORD CLARKE Like Lord Neuberger, I was initially attracted by the submission that, as the Court of Appeal held, Kitchin J was entitled to reach the conclusion he did. Moreover, Lord Walker has expressed with clarity the correct approach of an appellate court in a case such as this. In short, where the judge, especially a judge of great experience in his field has carried out what Lord Walker calls a multi factorial evaluation of the evidence and the Court of Appeal has refused to interfere with that evaluation, it will be the rare case indeed in which this Court will be entitled to interfere. However, like Lord Walker, I have been persuaded by the detailed analysis by Lord Neuberger of the decisions in this and other cases of the Technical Board of Appeal of the European Patent Office that the appeal should be allowed. In all the circumstances I would allow the appeal for the reasons given by Lord Neuberger and Lord Hope. LORD COLLINS For the reasons given by Lord Neuberger and Lord Hope, I would allow the appeal. |
This appeal is concerned with oral discussions between a property developer and his bank about funding a development at Gleneagles, Perthshire. The central issue in the case, which went to proof before the Lord Ordinary, Lord Glennie, in 2009, was whether, on an objective assessment of what the parties said to each other, the bank intended to enter into a legally binding promise to advance sums in the future to fund not only the purchase of two development plots but also the construction of a house on each plot. In considering that issue, because the matter is raised on appeal, the court must have regard to the limited power of an appellate court to reverse the findings of fact of the judge who has heard the evidence. Those limits are well known. The House of Lords discussed them in Thomas v Thomas 1947 SC (HL) 45. More recently this court has reiterated those limits in McGraddie v McGraddie 2014 SC (UKSC) 12 and Henderson v Foxworth Investments Ltd 2014 SC (UKSC) 203; [2014] 1 WLR 2600 and the Judicial Committee of the Privy Council has made similar comments in Beacon Insurance Company Limited v Maharaj Bookstore Ltd [2014] UKPC 21, at paras 11 17. Those limits apply equally in this court as in other appellate courts. The banks action The Royal Bank of Scotland Plc (the bank) lent Mr Carlyle funds to purchase a development plot but later refused to fund its development. The bank raised an action against him for payment of 1,449,660 and interest on 14 August 2008. Mr Carlyle defended the action and counterclaimed for damages, including for alleged lost profit on the development, in a sum that exceeded what the bank claimed from him. Mr Carlyle depended on bank finance for the proposed development. He alleged that because, as the bank knew, the vendor of the plots of land would insist upon a right to buy back the plots if they were not promptly developed, he had sought and obtained an unequivocal commitment from the bank to fund not only the purchase of the plots but also their development. Having received that commitment, he entered into missives to purchase a plot but the bank, in breach of its promise, refused to fund its development. The Lord Ordinary by order dated 6 October 2009 allowed a preliminary proof before answer of the issues (a) whether or not a collateral warranty was given to Mr Carlyle as averred on Record and (b) whether the bank was personally barred from seeking payment of the sums which it claimed. The latter issue is no longer live. Mr Carlyle was ordered to lead at the proof. He gave evidence himself and called as witnesses his accountant, Colin Hamilton, and the banks principal representative in the transaction, Helen Hutchison, who was the assistant director of commercial banking at its Motherwell branch. The bank chose to lead no evidence although its employees, Rebecca Young and Mark McClymont, were also involved in the transaction. In an interlocutor dated 10 May 2010 the Lord Ordinary declared that the bank was in breach of a collateral warranty in terms of which [it] bound [itself] to make development funding of 700,000 sterling available to [Mr Carlyle] by way of loan for the purposes of the development of plot 5, Queens Crescent, Gleneagles Hotel, Perthshire. The bank appealed that decision but the hearing of the reclaiming motion was delayed by the difficulties which Mr Carlyle faced in obtaining legal representation after his estates were sequestrated on 2 November 2009 and he failed to obtain the recall of his sequestration. By interlocutor dated 12 September 2013 the Second Division of the Inner House allowed the banks reclaiming motion, recalled the Lord Ordinarys interlocutor and continued the cause to ascertain the terms of the decree for payment to be pronounced in favour of the bank. Mr Carlyle appeals to this court. The Lord Ordinarys findings of fact As the Lord Ordinarys findings of primary fact were not in dispute, I will summarise them in order to set out the circumstances. Mr Carlyle was a property developer and had enjoyed the support of the bank since 1991. In 2005 he set up a property development company, Carlyco Limited (Carlyco) to purchase and develop a site at Stewartfield Grove, East Kilbride. In February 2007, Mr Carlyle learned that Gleneagles Hotel proposed to sell two plots of ground at Gleneagles, Perthshire. He proposed to purchase and develop one plot (plot 5) and that Carlyco should purchase and develop the other (plot 2). He and Colin Hamilton prepared a presentation for the bank. On 26 March 2007 they met Ms Hutchison, who represented commercial banking, and Ms Young, who represented private banking. Their proposal was that plot 2 would be purchased for 975,000 and plot 5 for 1,250,000 and that the build cost of each plot would be 700,000. They discussed the requirement in the sales brochure that the dwelling house on each plot had to be wind and watertight and all external finishes and hard landscaping completed by 31 March 2011 so that there would not be half completed houses when the Ryder Cup was staged at Gleneagles golf course. The vendor proposed to secure this requirement by a buy back clause which, in the event of non completion on that date, entitled it to re purchase the site at the original purchase price. The purchaser was not allowed to sell the plots to others unless developed. The buy back clause was discussed and the note of the meeting made it clear that Mr Carlyle specifically and clearly stated that, if the bank was to provide funds for the deposits on the plots, then the balance [of the purchase price] for the plots and the Build/Development Costs must be provided as they needed to be built. Mr Carlyle asked for a full commitment on the proposal or nothing. The note recorded that Ms Hutchison and Ms Young understood this, were enthusiastic about the proposal and would push for its approval by the banks head office. Both Mr Carlyle and Mr Hamilton gave evidence confirming this account of the meeting. Mr Carlyle explained that the funding would be in three stages: deposit, land purchase, and build costs. He gave evidence that he asked the bank not to give him money for the land unless it also gave him money to build. He explained that Ms Hutchison said that the bank would have an appetite for the project, that it would involve both commercial and private banking with the former taking the lead, that she would refer it to head office and that she was aiming to get 100% funding for the project. On 28 March 2007, Mr Carlyle and Carlyco submitted qualified offers to purchase the plots. Mr Carlyle then worked on design options over several weeks during which he had telephone conversations with Ms Hutchison or Ms Young. On 24 April 2007 Mr Carlyle emailed Ms Hutchison to inform her that the vendor would accept his offers at 995,000 for plot 2 and 1,350,000 for plot 5. He required a commitment in principle as the vendor was pressing for completion of the missives and the payment of a 5% deposit. Towards the end of May Ms Hutchison and Ms Young advised that they could advance the deposit moneys in early June. Mr Carlyle informed Ms Young in a telephone call that the deposit money was of no use unless he also got the purchase money and the development funding and that he needed a commitment to the whole proposal. He gave evidence that Ms Young responded that the bank knew that he had made that clear from the outset. When he spoke on the telephone with Ms Hutchison on 5 June 2007 he again made clear his position that the bank should not give the deposit money unless everything was agreed and she replied that the bank would not give money only for the land as that would not make sense for it, especially with the buy back clause. He informed her that he would not pay even the deposit until the bank confirmed that it would provide the development funding. The crucial finding of fact relates to a telephone call on 14 June 2007. In para 15 of his opinion the Lord Ordinary stated: On 14 June 2007 Ms Hutchison telephoned [Mr Carlyle]. [He] described her manner as enthusiastic. she said: Youll be pleased to know its all approved, Edinburgh are going for it for both houses. On the strength of this conversation, he instructed Fiona Bryson, his and Carlycos solicitor, to pay the deposits on the plots. At that point he became committed to the project. Counsel, clarifying that finding, informed this court that the deposits were paid on 14 June 2007, which was before the conclusion of the contract to purchase plot 5. The Lord Ordinary also recorded Ms Hutchisons evidence to the effect that Mr Carlyle was told on various occasions that funding for the development would be advanced. She knew of the buy back clause and was aware that the bank would need to fund the development costs. She recalled Mr Carlyle saying to her that the bank should not give any funding unless it agreed to fund the development costs. She thought that she had spoken only of approval of funding the purchase of the plots in the telephone conversation of 14 June 2007. Her position was that the bank had an appetite to fund the development but that the level of funding had not been discussed. She stated that there was a general understanding that there would be development funding at some level, but that the details had to be worked out. In her credit submission to headquarters she had commented that the bank would be approached for future development funding but she had not submitted a request for development funding before the purchase of the plots. The Lord Ordinary accepted the evidence of Mr Carlyle and Mr Hamilton as credible and reliable. He preferred Mr Carlyles evidence to that of Ms Hutchison where they differed and in particular preferred Mr Carlyles account of the telephone conversation on 14 June 2007. In findings of secondary fact (which the bank contests) he stated at para 32 of his opinion that Mr Carlyle was fully justified in believing from the telephone conversation of 14 June 2007, set in the context of the previous discussions, that the bank was committing itself to advancing the purchase price and providing a facility for the build cost. He held (para 33) that Ms Hutchisons statement on 14 June 2007 would have made this clear to Mr Carlyle and that Ms Hutchison ought to have realised this even if she did not intend to convey that impression. He concluded (para 41) that the bank had committed itself to provide funding for the development of plot 5 in an amount up to 700,000. Lord Glennie also recorded the evidence on subsequent events. On 20 June 2007 Ms Hutchison telephoned Mr Carlyle and on the following day he met her to sign indicative terms for the provision of 2.35m to fund the purchase of the two plots. The indicative terms proposed that the facility be reduced to 700,000 by the sale of another development which Mr Carlyle had undertaken at Countess Gate, Bothwell and personal funding by private banking of the purchase of plot 5. It listed as securities the existing securities over the Bothwell development and proposed standard securities over the two plots at Gleneagles as well as a personal guarantee by Mr Carlyle for Carlycos indebtedness. In this action the court is not concerned with the lending to Carlyco but only with the sums advanced to Mr Carlyle personally. On 24 and 25 July 2007 in two loan agreements for 845,000 and 560,000 respectively, the bank gave Mr Carlyle secured personal loans to fund the purchase of plot 5. The repayment date was 12 months after draw down and the loans were interest only mortgages secured over the Bothwell development and plot 5. Interest was at 2% over the banks base rate. Shortly after Mr Carlyle concluded missives to purchase plot 5, Ms Hutchison left her employment at the bank. Mr Carlyle drew down the loan funds and acquired plot 5. He communicated with Mr McClymont, who in December 2007 asked him when he would need the development funding. He also communicated with Ms Hutchisons successor, Louise Burnet, and also Ms Young. In June 2008 he was told that banking management had been transferred to specialised lending services in Edinburgh. After further discussions the bank made it clear in August 2008 that it would not provide funding for the development. It promptly called in the loan and commenced this action. The Lord Ordinary, for completeness, also discussed the banks internal documents between paras 26 and 30 of his opinion. They showed how bank officials thought that sale of a property at Countess Gate, Bothwell would remove Mr Carlyles personal borrowing and with the sale of Carlycos Stewartfield development contribute to the funding of the Gleneagles project, thereby reducing what the bank would have to provide. The documents included a sanction summary sheet dated 2 May 2007 which showed that private banking were prepared to provide 2.01m for plot 5, which included the estimated 700,000 needed to develop the site, and that it would receive the sale proceeds of 11 Countess Gate, Bothwell. The decision of the Inner House The Second Division (the Lord Justice Clerk, Lady Dorrian and Lord Bracadale) disagreed with the Lord Ordinary. They held: (i) that on a proper objective analysis Ms Hutchisons telephone statement on 14 June 2007 was simply informing Mr Carlyle of an internal decision to approve the funding in principle (paras 57 and 61); that the prior transactions between the bank and Mr Carlyle and also the events after the telephone conversation of 14 June 2007 (in particular the signing of the indicative terms and the written loan agreements) showed that the bank was not under any legal obligation until there was a written loan agreement (paras 57 and 62 63); this was consistent with normal banking practice (para 60); and that the alleged promise or warranty was not legally effective as the parties had not agreed terms that were essential to the loan contract including maximum draw down, interest rates, time of draw down, method and time of repayment, and securities (para 58). (ii) (iii) The Second Division also commented on a pleading point, namely that Mr Carlyle had pleaded a collateral warranty rather than a promise to provide the full funding for plot 5 (para 59). But the court did not decide the appeal on the basis of that point. The banks case on appeal In his defence of the Inner Houses opinion in this appeal, Mr Richard Keen QC for the bank addressed the guidance in Thomas v Thomas and other cases on the role of an appellate court. He submitted that the Lord Ordinary was not entitled on the evidence to find in fact that the bank had made an oral commitment to provide the funding for plot 5. He submitted, first, that the Lord Ordinary had accepted Mr Carlyles evidence that characterised what Ms Hutchison said in the telephone call on 14 June 2007 as an agreement in principle to the funding. That was a primary finding of fact which, he submitted, could not support an inferential finding of an intention on the banks part to be legally bound by an oral promise in the telephone call. Secondly, he stressed that at the time of the alleged promise, the cost of developing plot 5 was unknown; thus there was no agreement as to the amount of the loan. There was no evidence from Mr Carlyle that the bank had agreed to advance up to 700,000 for the development; that sum was merely an early estimate of the development cost. Thirdly, he submitted that there was no basis for the Lord Ordinarys finding (in para 40 of his opinion) that Mr Carlyle was entitled on 14 June 2007 to take the view that the bank had already taken into account the extent of his overall indebtedness to it. That could not be so: the bank needed to ascertain the outcomes from Carlycos and Mr Carlyles developments at Stewartfield, East Kilbride and Bothwell respectively, before it could ascertain the extent of Mr Carlyles indebtedness. Discussion (i) The role of the appellate court Were I deciding the matter at first instance and if the findings of fact record all the material evidence, I think that I might have shared the view of the Second Division (a) that the statement by Ms Hutchison on 14 June 2007 did no more than communicate to Mr Carlyle that the bank had reached a decision in principle to provide funding for the development of the two plots and (b) that the parties were required to take further steps to create a legally binding obligation on the bank to advance that funding. But deciding the case as if at first instance is not the task assigned to this court or to the Inner House. It is not appropriate to restate at any length in this judgment the dicta from prior cases which this court recently set out in McGraddie v McGraddie (at paras 1 4) and discussed in Henderson v Foxworth Investments Limited (at paras 61 68). In Thomas v Thomas the House of Lords re asserted the need for an appellate court to defer to the findings of fact of the first instance judge unless satisfied that the judge was plainly wrong (Lord Thankerton at p 55, and Lord MacMillan at p 59). Lord Du Parcq expressed himself differently but to similar effect when he quoted (at pp 62 63) Lord Greene MR in Yuill v Yuill [1945] P 15 (at p 19): It can, of course, only be on the rarest occasions, and in circumstances where the appellate court is convinced by the plainest considerations, that it would be justified in finding that the trial judge had formed a wrong opinion. Lord Reed summarised the relevant law in para 67 of his judgment in Henderson in these terms: It follows that, in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified. When deciding that a judge at first instance who has heard the evidence has gone plainly wrong, the appeal court must be satisfied that the judge could not reasonably have reached the decision under appeal. The rationale of the legal requirement of appellate restraint on issues of fact is not just the advantages which the first instance judge has in assessing the credibility of witnesses. It is the first instance judge who is assigned the task of determining the facts, not the appeal court. The re opening of all questions of fact for redetermination on appeal would expose parties to great cost and divert judicial resources for what would often be negligible benefit in terms of factual accuracy. It is likely that the judge who has heard the evidence over an extended period will have a greater familiarity with the evidence and a deeper insight in reaching conclusions of fact than an appeal court whose perception may be narrowed or even distorted by the focused challenge to particular parts of the evidence. On these matters see In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] 1 WLR 1911, Lord Wilson at para 53; the US Supreme Court in Anderson v City of Bessemer 470 US 564 (1985), pp 574 575; and the Canadian Supreme Court in Housen v Nikolaisen 2002 SCC 33, para 14, to all of which Lord Reed referred in paras 3 and 4 of McGraddie. (ii) The opinion of the Second Division In my view Mr Roddy Dunlop QC was correct in his submission that the Second Division has disagreed with the Lord Ordinary on questions of fact without facing up to the restricted role of the appellate function on such questions. The Second Division referred to evidence which the Lord Ordinary had not recorded in his judgment, including certain provisions in the indicative terms which Mr Carlyle signed on 21 June 2007 which required the satisfaction of conditions precedent (para 16) and certain terms in the loan agreements which he signed on 24 and 25 July 2007 which stated among other things that the borrower was not bound by the loan until he had signed the agreements (para 19). The court stated, correctly, that those documents could not be dismissed as mere paperwork which was how a businessman such as Mr Carlyle might have viewed them. But they do not undermine the Lord Ordinarys findings of fact as (a) there is no basis for thinking that the Lord Ordinary had not considered their terms and (b) Lord Glennies finding that there was a binding undertaking on 14 June 2007 to provide both purchase finance and development funding is not inconsistent with the view that that undertaking was superseded but only so far as the purchase finance by the subsequent loan agreements of 24 and 25 July 2007. I turn to the three grounds of the Second Divisions decision which I summarised in para 18 above. The first ground was that on a proper analysis of the parties dealings and in particular the telephone call, at most Ms Hutchison was informing Mr Carlyle of a decision in principle and not creating a legal obligation to advance millions of pounds. This overlaps with the second ground as the Second Division prayed in aid the prior dealings of the parties in which the bank agreed in principle to provide funding and then negotiated separate funding packages for the purchase of land and for its development. The court held that the subsequent signing of the indicative terms and the loan agreements for the purchase price in the Gleneagles transaction followed the same pattern. In my view it was open to the Lord Ordinary to have interpreted the evidence in that way and conclude that there was no binding commitment; but he did not have to. It was not suggested that Mr Carlyle was exposed to buy back clauses in the earlier transactions. Further, the fact that parties envisage or agree that their agreement will be set out in a formal contract does not by itself prevent their agreement from having legal effect until then (Stobo Limited v Morrisons (Gowns) Limited 1949 SC 184, Lord President Cooper at p 192). Instead Lord Glennie in assessing the objective meaning of the telephone call on 14 June 2007 gave weight to the unusual circumstances of the buy back clause, to Mr Carlyles repeated requests for a commitment to fund both purchase and development and to the banks undisputed knowledge of those requests. It cannot be said that the evidence could not support the Lord Ordinarys view. Absent some legal error elsewhere in his reasoning, there was a reasonable basis for his finding that on an objective analysis the bank made a legally binding promise to fund the development of plot 5 in the telephone call of 14 June 2007. The second ground rested in part on the improbability, in the absence of special circumstances, that a bank would bind itself to advance up to 3.745m (to Mr Carlyle and Carlyco) without setting out the terms and conditions of the loans in writing. It also rested on Mr Carlyles awareness that he would have to sign a loan agreement before he received funding and his subsequent signing of the indicative terms and then the loan agreements to fund the purchase price. In relation to the first point it is notorious that the prudence which historically has been attributed to Scottish bankers was not always in 28. evidence in commercial and mortgage lending in the years leading up to financial crisis in 2008. As regards the second point, the parties knowledge throughout the transaction that the bank would prepare formal loan agreements before it advanced funds is an indicator which could point against the earlier creation of binding legal obligations. But, as I have said, that is not conclusive; in each case it is a question of fact (Stobo Limited at p 192). The Lord Ordinary was entitled to conclude that Mr Carlyle sought and obtained from the bank a legally binding commitment to provide funding for the purchase and the development in order to enable him to commit himself to pay the deposit and buy the plot. His and the banks shared knowledge that the commitment would eventually be superseded by more detailed loan agreements in relation to the purchase price and then in relation to the development of the site did not prevent the earlier commitment from having effect as a legally binding promise. included this statement: Without specification of the essential elements of [the provision of banking facilities] (including the maximum draw down, interest rates, time of draw down, method and time of repayment and securities), there could be no concluded agreement capable of enforcement. Mr Dunlop QC challenged this statement as a legal error. He referred to the decision of the House of Lords in Neilson v Stewart 1991 SC (HL) 22 in which it was held that in Scots law the contract of loan implied an obligation to repay and did not require express terms as to the rate of interest or the date of repayment. In this case the parties to the loan were clearly identified and the parties had proceeded on the basis that Mr Carlyle would need up to 700,000 for the development of plot 5. Mr Keen QC did not dispute that it was possible to have a valid contract of loan without an express statement of the elements which the Second Division had listed. He suggested in his written case that the Second Division had been considering what the parties would have treated as essential to their bargain in this case and not what were the bare essentials of a contract of loan in the general law. I think that Mr Keen QC was correct in his interpretation of what the Second Division was saying in para 58 as it is very unlikely that they disregarded Neilson v Stewart, to which they were referred, or thought that the listed elements had to be specified in all contracts of loan. But that does not assist the bank. While it was Ms Hutchisons evidence that she understood that the details of the loan had still to be worked out after the banks decision to 29. support the purchase and development of plot 5, neither party gave evidence of any understanding that it was necessary to agree these elements in this transaction before legally binding obligations could arise or of the communication of that understanding to the other party. The Second Division spoke of what the informed observer would expect. In other words the court made its own assessment of what was needed in this case to create a binding contract of loan. The court did not address whether and if so why the Lord Ordinary was not entitled to reach a contrary conclusion on what was an issue of fact, namely whether on an objective assessment the bank intended to make a legally binding promise to provide development funding. I am therefore satisfied that the Second Division did not have an adequate basis for overturning the Lord Ordinarys findings of fact. In reaching that view I do not shut my eyes to the relatively ill defined nature of the obligation to provide the development funding. The Lord Ordinary addressed the issue of legal certainty at para 42 of his opinion and reached the view, with which I agree, that it would have been possible to frame a decree of specific implement to require the bank to make available a facility of up to 700,000. He expressed the view that the rate of interest was never going to be an issue as the parties knew the rates applied to other loans. He also stated that the term of the loan was not likely to be a real issue. While he did not explain the latter comment, I interpret it as referring to the known time constraints on the development of the plot and to the fixing of a reasonable period for the completion and sale of the house. I detect no error in this. Once he was satisfied that the bank had had the intention to make a legally binding promise, he was entitled and indeed required to look for ways to give effect to that promise. In Fletcher Challenge Energy Limited v Electricity Corporation of New Zealand Limited [2002] 2 NZLR 433, the Court of Appeal of New Zealand stated in the majority judgment at para 58: The Court has an entirely neutral approach when determining whether the parties intended to enter into a contract. Having decided that they had that intention, however, the Courts attitude will change. It will then do its best to give effect to their intention and, if at all possible, to uphold the contract despite any omissions or ambiguities (Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503; [1932] All ER 494, R & J Dempster Ltd v The Motherwell Bridge and Engineering Co Ltd 1964 SC 308 and Attorney General v Barker Bros Ltd [1976] 2 NZLR 495). I agree with that statement which supports Lord Glennies approach, although there may need to be further evidence in the next stage of this case about the prior dealings between the parties and any shared understandings in order to determine what terms are to be included by implication. 30. 31. 32. (iii) Mr Keen QCs additional points I am not persuaded by any of the additional points which Mr Keen QC raised and which I set out in para 19 above. In relation to the first, the finding of fact about an agreement in principle (para 17 of the Lord Ordinarys opinion) related to Mr Carlyles evidence about the earlier project in Stewartfield in a context in which he was explaining why the request to sign the indicative terms in the Gleneagles transaction did not cause him concern that he might not already have a commitment from the bank. He was saying that he expected to sign such documents in the Gleneagles transaction. In my view the context of the Stewartfield transaction may have been quite different from the Gleneagles transaction as there was no evidence in the former transaction of a buy back clause which would have prevented Mr Carlyle from selling on an undeveloped site and which caused him in the latter transaction to seek a binding funding commitment from the bank. His reference to agreement in principle or commitment in principle does not undermine his repeated assertion that he had asked for and received a clear commitment from the bank. Those phrases were in any event consistent with an understanding that the precise sum which he would require to borrow would depend upon the income which he received from his other transactions by the time he needed the development funds. I accept Mr Dunlop QCs answer to the second point: the bank were well aware of the estimated cost of 700,000 and private banking processed the application to fund plot 5 on that basis before Ms Hutchison communicated the banks decision on 14 June 2007. I am also not persuaded by the third point. Until the developments at East Kilbride and Bothwell had been sold, the bank could only estimate the sale proceeds and therefore the sums it would have to advance for the Gleneagles project. But the bank took a view on the expected proceeds of those sales in estimating the likely extent of the lending required and proposed to protect itself in the interim by securities over all of the properties and the guarantee by Mr Carlyle. (iv) A collateral warranty 33. The pleading of a collateral warranty became a distraction in this case. It was not used as a term of article Either promise or unilateral undertaking would have been a suitable choice of words for the independent legal obligation which Mr Carlyle was asserting. The addition of the word collateral while descriptive of context, would have added nothing to the legal analysis. As the Lord Ordinary said in para 37 of his opinion, there is no magic in a collateral contract. It is simply a contract which is governed by the same rules as other contracts. 35. 34. Whether one views the undertaking as a promise to provide the development funds if he purchased the plot (as I prefer) or (as Mr Dunlop QC argued) as an obligation in a bilateral contract which became binding when Mr Carlyle borrowed the purchase funds and purchased the site does not give rise to a different answer to the question: did the bank intend to enter into a binding legal commitment?. In English contract law, the doctrine of consideration requires the recipient of the representation or promise to give consideration by entering into the envisaged other contract in order to make the representation or promise a binding contractual obligation. This appears to be behind the approach of the English courts to collateral contracts as in Dick Bentley Productions Limited v Harold Smith (Motors) Limited [1965] 1 WLR 623, Lord Denning MR at p 627; J Evans & Son (Portsmouth) Limited v Andrea Merzario Limited [1976] 1 WLR 1078, Lord Denning MR at p 1081F. In Scots law a unilateral undertaking that is intended to have legal effect, such as a promise, is binding without consideration passing from the promisee. The promise may but does not need to be collateral to another contract. The issue is simply whether a legally binding obligation has been undertaken. As in the formation of other contracts the court applies an objective test, asking what a reasonable outside observer would infer from all the circumstances. In this case Mr Carlyles proposal to enter into a contract to purchase plot 5 and, because of the buy back clause, his clearly expressed unwillingness to do so unless the bank provided development funding as well as purchase funding formed important elements of the factual context in which the Lord Ordinary assessed the legal nature of the banks statement on 14 June 2007. That was the important point. The statement that the bank would provide the development funding induced him both to contract to purchase the plot and enter into the loan agreements which funded that purchase. It is legitimate to describe the promise to provide development funding as collateral to the other agreements. But, as I have said, that does not affect the legal analysis in Scots law. (v) The banks application to amend 36. 37. The bank stated in its written case that it did not insist on its minute of amendment. Conclusion 38. I would allow the appeal, set aside the interlocutor of the Second Division dated 12 September 2013 and 3 October 2013, and remit the case to a commercial judge in the Court of Session to proceed accordingly. The Second Divisions third ground was stated in para 58 of their opinion. |
On 10 June 2010 the appellants, William Hugh Lauchlan and Charles Bernard ONeill, were found guilty in the High Court of Justiciary at Glasgow of the murder of Mrs Allison McGarrigle between 21 June and 1 September 1997, and of a subsequent attempt to defeat the ends of justice by disposing of her body at sea. The charges of which they were convicted in that trial had been separated from a number of charges on the same indictment of or relating to sexual offences against children. Their trial on the sexual offence charges took place before Lord Pentland between 26 April and 12 May 2010. Their trial on the murder charges, which is the trial to which this appeal relates, took place (between 17 May and 10 June 2010) before the same judge but with a different jury. The appellants were sentenced to life imprisonment for the murder, with punishment parts of 26 and 30 years respectively, and to concurrent sentences of eight years imprisonment for attempting to defeat the ends of justice. The appellants both appealed against their convictions at the second trial and against their sentences. Lauchlan was granted leave to appeal against his conviction for murder by the sifting judges, but this was restricted to two grounds alleging errors by the trial judge. He was also given leave to appeal against sentence. ONeill too was granted leave to appeal against sentence, but the sifting judges refused him leave to appeal against his conviction for murder. The appellants applied under section 107(8) of the Criminal Procedure (Scotland) Act 1995 (the 1995 Act) for leave to appeal against their convictions for murder on certain grounds which the sifting judges had held were unarguable. On 8 February 2012 Lauchlan was refused leave to appeal on those grounds by the Appeal Court. ONeill was given leave to appeal on one ground only which alleged an error by the trial judge: [2012] HCJAC 20. The appellants then applied for leave to appeal to this court under paragraph 13 of Schedule 6 to the Scotland Act 1998 on some of the grounds on which they were refused leave on 8 February 2012. On 19 April 2012 the Appeal Court (Lord Justice Clerk Gill, Lord Hodge and Lord McEwan) gave both appellants leave to appeal on a ground alleging undue delay. It gave ONeill leave on another ground alleging apparent bias on the part of the trial judge arising out of things that had happened in the presence of the jury at the end of the first trial: [2012] HCJAC 51. The trial judge had been shown a list of the appellants previous convictions after they had been found guilty of the sexual offence charges, and he then made a comment about their character, having regard to their records and the nature of the offences of which they had been convicted. Jurisdiction This court has jurisdiction to hear appeals in relation to criminal proceedings in the High Court of Justiciary under Part II of Schedule 6 to the Scotland Act 1998 (the 1998 Act). The opening paragraph of Part II is in these terms: 3. This Part of this Schedule applies in relation to devolution issues in proceedings in Scotland. The expression devolution issue is defined in paragraph 1 of Schedule 6, which provides: 1. In this Schedule devolution issue means (a) a question whether an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament is within the legislative competence of the Parliament, (b) a question whether any function (being a function which any person has purported, or is proposing, to exercise) is a function of the Scottish Ministers, the First Minister or the Lord Advocate, (c) a question whether the purported or proposed exercise of a function by a member of the Scottish Government is, or would be, within devolved competence, (d) a question whether a purported or proposed exercise of a function by a member of the Scottish Government is, or would be, incompatible with any of the Convention rights or with EU law, (e) a question whether a failure to act by a member of the Scottish Government is incompatible with any of the Convention rights or with EU law, (f) any other question about whether a function is exercisable within devolved competence or in or as regards Scotland and any other question arising by virtue of this Act about reserved matters. The Scotland Act 2012 (the 2012 Act) made a number of important changes to this courts jurisdiction to deal with devolution issues under Schedule 6 to the 1998 Act. They came into effect on 22 April 2013: The Scotland Act 2012 (Commencement No 3) Order 2013 (2013/6 (C1). This is also the relevant date for the purposes of The Scotland Act 2012 (Transitional and Consequential Provisions) Order 2013 (2013/7 (S1)) (the 2013 Order): see article 1(2) of that Order. This appeal was heard one week later on 29 and 30 April 2013. Section 36(4) of the 2012 Act provides: In paragraph 1 of Schedule 6 (devolution issues), after sub paragraph (f) insert But a question arising in criminal proceedings in Scotland that would, apart from this paragraph, be a devolution issue is not a devolution issue if (however formulated) it relates to the compatibility with any of the Convention rights or with EU law of (a) an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament, (b) a function, (c) the purported or proposed exercise of a function, (d) a failure to act. The effect of the exclusion of questions of the kind referred in section 36(4) of the 2012 Act from the list of devolution issues in paragraph 1 of Schedule 6 to the 1998 Act is that these questions must now be dealt with as compatibility issues under the 1995 Act. Section 288ZA(2), which was inserted into the 1995 Act by section 34(3) of the 2012 Act, provides that compatibility issue means a question, arising in criminal proceedings, as to (a) whether a public authority has acted (or proposes to act) (i) in a way which is made unlawful by section 6(1) of the Human Rights Act 1998, or (ii) in a way which is incompatible with EU law, or (b) whether an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament is incompatible with any of the Convention rights or with EU law. Section 288ZB(4), which was inserted into the 1995 Act by section 35 of the 2012 Act, provides for references of compatibility issues to the Supreme Court by a court consisting of two or more judges of the High Court of Justiciary. Subsection (6) of that section provides that, on a reference to it under that section, the powers of the Supreme Court are exercisable only for the purpose of determining the compatibility issue. Subsection (7) provides that, when it has determined a compatibility issue on a reference under that section, the Supreme Court must remit the proceedings to the High Court. Section 288AA, which was inserted into the 1995 Act by section 36(6) of the 2012 Act, provides for appeals to the Supreme Court. It contains the same directions in subsections (2) and (3) as to the way this courts powers are to be exercised in the case of appeals as those in subsections (6) and (7) of section 288ZB which relate to references. Article 2 of the 2013 Order provides: (1) A convertible devolution issue is a question arising in criminal proceedings before the relevant date which (a) is a devolution issue; (b) would have been a compatibility issue had it arisen on or after that date; and (c) has not been finally determined before the relevant date. (2) But a devolution issue arising in criminal proceedings before the relevant date is not a convertible devolution issue if (a) the issue has been referred, or a determination of the issue has been appealed, to the Supreme Court under Schedule 6 to the 1998 Act; and (b) the hearing of the reference or appeal commences before the relevant date. Article 3(1) provides that, subject to qualifications which do not apply in this case, a convertible devolution issue becomes a compatibility issue for all purposes on the relevant date. The allegation of undue delay raised a devolution issue within the meaning of paragraph 1(d) of Schedule 6 to the 1998 Act. It arose in criminal proceedings before 22 April 2013, it satisfied the other tests set out in article 2(1) of the 2013 Order and the hearing of the appeal did not commence before 22 April 2013. So it was a convertible devolution issue, and it has now become a compatibility issue by virtue of article 3(1). As it has come before the Supreme Court as an appeal against the determination of that issue by the Appeal Court, it is to be treated as an appeal under section 288AA(1) of the 1995 Act: 2013 Order, articles 4(2) and 7(2). So the powers of this court must be exercised in the manner provided for by section 288AA(2) and (3) of the 1995 Act. The allegation of apparent bias was the subject of an amended note of appeal which had been lodged on ONeills behalf before the hearing before the Appeal Court of his application under section 107(8) of the 1995 Act. It made no mention of any act on the part of the Lord Advocate, so it does not appear to have raised a devolution issue at that stage. But it was submitted on ONeills behalf by his solicitor advocate when he was applying for leave to appeal to this court that this allegation did raise a devolution issue: [2012] HCJAC 51. Lord Hodge explained the position in paras 6 and 7 of the Appeal Courts opinion: 6. In additional ground 15 of his grounds of appeal Mr ONeill complained about the comments of the trial judge, Lord Pentland, at the end of the first phase of the trial. We expressed our views on this ground in paragraphs 81 to 88 of this courts opinions. Mr Carroll submitted that the challenge raised a devolution issue as the Lord Advocate had persevered with the prosecution in the face of what was evidence of an unfair trial. 7. For the reasons which we stated in those paragraphs we did not think that the points which Mr Carroll raised were arguable. We adhere to that view. But we recognise that the splitting of the trial into two phases before two juries and the resulting presentation of previous convictions and the judges remarks at the end of the first phase were very unusual circumstances. We are satisfied that it is appropriate to give leave to appeal on this ground. The way the argument on this ground of appeal proceeded in the Appeal Court suggests that, as it was not presented as a devolution issue at the stage of the application under section 107(8) of the 1995 Act, there has been no determination of that issue by that court against which there could have been an appeal under paragraph 13 of Schedule 6 to the Scotland Act 1998. But the Appeal Court had power under paragraph 11 of the Schedule to refer any devolution issue which arose in proceedings before it to this court, and that is what seems to have happened in this case. By the same process of reasoning as applies to the allegation of undue delay, this issue was a convertible devolution issue and is now a compatibility issue. This means that this court has jurisdiction to consider it, and that its powers must be exercised in the manner provided for by section 288ZB(6) and (7) of the 1998 Act. Undue delay (a) the issue The period of time relied on in this case extends from 17 September 1998, when the appellants were detained under section 14 of the 1995 Act on suspicion of conspiracy to murder, to 10 June 2010 when they were convicted. It was not until 5 April 2005 that the appellants appeared on petition at Kilmarnock Sheriff Court on charges which ultimately formed the basis for the charges in the indictment of which they were convicted. There was a further period until 10 September 2008 when the indictment was served on them, but the focus of attention at this stage is on that which occurred between 17 September 1998 and 5 April 2005. The question which this court has been asked to decide requires it to identify the right starting point for the purposes of the reasonable time guarantee in article 6(1) of the European Convention on Human Rights. The issue was focussed by Lord Hodge in the Appeal Courts opinion of 19 April 2012 in this way: 2. Mr McVicar on behalf of Mr Lauchlan sought leave to argue before the Supreme Court that the decision of that court in Ambrose v Harris (2011 SLT 1005) had the result that the starting point in the assessment of reasonable time under article 6 of the European Convention on Human Rights (ECHR) was not, as the Appeal Court had held in ONeill v HM Advocate (2010 SCCR 357), the stage when an accused person appeared on petition but the earlier stage when the accused was interviewed by the police under caution in the exercise of their powers under section 14 of the 1995 Act. Mr Carroll on behalf of Mr ONeill adopted Mr McVicars submissions. 3. We have decided to grant leave to appeal on this ground. We set out our reasoning in paragraphs 25 29 of this courts opinions but recognise that the issue raised is one which arises from statements in a decision of the Supreme Court on which that court may wish to provide further guidance. The parties agree that the issue can be formulated in this way: whether for the purposes of their right to a trial within a reasonable time in terms of article 6(1) of the European Convention on Human Rights the appellants were charged on 17 September 1998. That, say the appellants, is the date that should be taken to be the starting point. The Crown contends, on the other hand, that the correct starting point is 5 April 2005. It was suggested by the appellants in the statement of facts and issues that this court should also say whether or not the period between 17 September 1998 and 10 June 2010 when the appellants were convicted constituted an unreasonable delay in the process of determination of the charges against them. But it was accepted during the hearing of the oral argument that this issue would raise questions of fact which are best left for determination by the Appeal Court. (b) the facts The deceased, Mrs Allison McGarrigle, had a son named Robert who was subject to a residential supervision requirement under the Social Work (Scotland) Act 1968. It required him to live during the week with his father in Kilmacolm but he was permitted to visit his mother, who was divorced from his father, during the day on Saturdays. On Saturday 14 June 1997 Robert did not return to his fathers address after visiting his mother. Instead he and his mother went to Largs, where they met the appellants and went to live with them in a property which they were then occupying in that town. On or about 20 June 1997 a drinking session took place there at which a number of people including the appellants, Mrs McGarrigle and Robert were present. Mrs McGarrigle was no longer there the following morning, and she was never seen by Robert again. On 16 February 1998 she was reported to the police as a missing person by her ex husband. The exact date when she was last seen was marked as unknown, but it was noted that she had cashed a benefit cheque in Rothesay on 12 June 1997. By September 1998 the police enquiry into Mrs McGarrigles disappearance was being referred to by the Procurator Fiscal at Kilmarnock as a disappearance in suspicious circumstances, and by the Head of the Crown Office Appeals Unit and Crown Counsel as a murder enquiry. In the meantime, on 17 June 1998, the appellants were convicted of a number of sexual offences including offences against Robert McGarrigle. These offences had been committed between March 1993 and 27 July 1996 when Robert and his mother were living close to where the appellants were then living in Rothesay. On 18 August 1998 the appellants were sentenced in respect of these convictions to periods of 6 years and 8 years imprisonment respectively and became subject to notification requirements under the Sex Offenders Act 1997. They were taken to Peterhead Prison to serve their sentences. On 14 September 1998 the Procurator Fiscal at Kilmarnock wrote to the Governor of Peterhead Prison requesting that the appellants be released into the custody of the police for questioning. On 17 September 1998 they were taken from custody and detained by officers of Grampian Police under section 14 of the 1995 Act on suspicion, as that section requires, of having committed an offence punishable by imprisonment. The offence which they were suspected of having committed was conspiracy to murder. They were taken to a police station in Aberdeen where they were each questioned separately by two police officers. Lauchlan was questioned from 11.14 to 16.45 hours, with breaks between 11.51 and 12.25 hours and 15.18 and 16.01 hours. He was cautioned at the start of his interview. He made it clear when it began that, on the advice of his solicitor, he would not be answering any questions that were put to him, and he maintained that attitude throughout what was a long and unproductive interview. One or two passages are, however, of interest. During the early stages of the interview the police restricted themselves to asking a series of questions. Lauchlan remained silent in response to all of them. He was then told (Appendix 1, p 492, MS p 820): What youve got to realize here is this is not going to go away we are not going to go away. Shortly afterwards Lauchlan broke his silence and this conversation took place (Appendix 1, p 497, MS p 825): WL Look if youre going to charge me with something charge me Ive had enough. DC2 I didnt mention, I have not mentioned charging you with anything. WL If not give this up. DC2 No Im interviewing you William okay. I intend to carry out the interview with or without your co operation I intend to carry out the interview. As the interview went on the questioning became more direct. Lauchlan was asked (Appendix p 512, MS p 840): Did you murder Allison McGarrigle? He did not respond. This question was then put to him (Appendix p 515, MS p 843): DC2 I will ask you for a final time with the weight of the evidence against you and your friend knowing something about the disappearance of Allison McGarrigle will you help us to find her remains? There was no response, so the question was put to him again: DC2 Im not asking you at this stage if you killed her. Im not asking you at this stage if you know who killed her. Im asking you at this stage whether or not you would consider helping us to find her remains. Its a separate question. Are you? .Are you prepared to help us to find Allison McGarrigle yes or no? Answer that one question Ill put to you . Ill finish the interview and put the tape off. So you dont, youre not interested in helping us. Canny go any further than that Wullie As the interview drew to a close one further attempt was made to elicit a response (Appendix p 526, MS p 854): DC1 . If you did not have anything to do with Allison McGarrigles death you have no reason not to speak to us, would you agree wi that? Youre not, your refusal to speak to us. The only reason I can think of is that you have something to do with her death. or that someone very close to you had something to do with her death and that out of loyalty you will not tell us. Which is it? Which is it William? Unless you can come up with another reason why you should refuse to speak to us about it. Its got to be one of those two. So which is it? Convince me otherwise. As the interview was about to end these final questions were put (Appendix p 528, MS p 856): DC2 Did you murder Allison McGarrigle? Did you? DC1 Did you kill Allison McGarrigle? Were you present when someone else did? Lauchlan did not answer them. He remained silent. ONeill was questioned from 10.53 to 16.31 hours, with a break from 13.02 to 14.19 hours. He was cautioned at the start of the interview. He gave his name and age and said that he was unemployed. But he refused to answer any further questions, most of which were met by the words No comment. Several minutes after the opening stage of the questioning there was this exchange (Appendix p 534, MS p 862): charging me and taking me to court. O/N Youre going to charge me int you? Youd be as well just DC1 Charlie, Charlie, were here, weve explained to you what were doing and were speaking to you right. Its as simple as that. I am hoping that you might find it within yourself to give us some assistance, right. Were no up here to crucify Charlie ONeill. As the questioning went on there was no change in ONeills attitude. In the course of a long narrative of the information that was in the hands of the police he was told (Appendix p 578, MS p 906): Im asking you quite bluntly Allison McGarrigles dead, youre involved in her death, youre the only person that can say how much or how little involvement you have but from the information that we have here there is no doubt whatsoever that you are involved in her death. Im giving you the opportunity sitting here in this room the noo tae say tae me, this is what happened, this is how it happened, it may even be why it happened ah dont know and here is what you need to know. Because its no going away Charlie, itll never go away. Itll never go away. Sometime later he was asked (Appendix p 597, MS p 925): Did you kill her Charlie? Was she just too much bother for you? He made no comment in reply. In the course of the next question he was told directly that the reason why he would not answer questions was quite simple: Because you killed her. At the end of the interview one of the interviewing officers said (Appendix p 602, MS p 930): Right what well do at the minute Charlie is well stop the interview. Well need to go and seek some advice. The appellants were not arrested or charged at the conclusion of their interviews, but were returned to Peterhead Prison to continue serving their sentences. Lauchlan was released on licence on 18 January 2002. In March of the following year, in breach of the notification requirements, he travelled to Spain. ONeill was released on licence on 22 May 2003. He too travelled to Spain shortly afterwards in breach of those requirements and met Lauchlan. On 22 April 2004 they were arrested in connection with the apparent abduction of a fourteen year old boy. Steps were then taken for them to return to the United Kingdom to face charges that they were in breach of the notification requirements under the Sex Offenders Act. On 15 March 2005 they pled guilty to these charges, and on 4 April 2005 they were each sentenced to three years imprisonment. On 5 April 2005 they were charged with the murder of Allison McGarrigle and with concealing and disposing of her body in an attempt to pervert the course of justice. They appeared on petition at Kilmarnock Sheriff Court where they were committed for further examination and remanded in custody. (c) articles 6(1) and (3)(c) Article 6(1) of the Convention states that in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. In Attorney Generals Reference (No 2 of 2001) [2003] UKHL 68, [2004] 2 AC 72, para 20, Lord Bingham of Cornhill analysed the article in this way: First, the right of a criminal defendant is to a hearing. The article requires that hearing to have certain characteristics. If the hearing is shown not to have been fair, a conviction can be quashed and a retrial ordered if a fair trial can still be held. If the hearing is shown to have been by a tribunal lacking independence or impartiality or legal authority, a conviction can be quashed and a retrial ordered if a fair trial can still be held. If judgment was not given publicly, judgment can be given publicly. But time, once spent, cannot be recovered. If a breach of the reasonable time requirement is shown to have occurred, it cannot be cured. In Dyer v Watson [2002] UKPC D1, [2004] 1 AC 379, 2002 SC (PC) 89, para 73, I said that these four rights can and should be considered separately, and that a complaint that one of them has been breached cannot be answered by showing that the other rights were not breached: see also Darmalingum v The State [2000] 1 WLR 2303, 2307 2308, per Lord Steyn. Delay is therefore to be seen as affording an independent ground of relief, whether or not there was prejudice or any threat to the fairness of the trial. The fact that an accused person has been convicted after a fair hearing by a proper court cannot justify or excuse a breach of his guarantee of a disposal of the charge against him within a reasonable time: Dyer v Watson, para 94. As Lord Bingham observed in Attorney Generals Reference (No 2 of 2001), para 26, the requirement that a criminal charge be heard within a reasonable time poses the inevitable questions: when, for the purposes of article 6(1), does a person become subject to a criminal charge? When, in other words, does the reasonable time begin? That is the question to which this issue is directed. But it is necessary also to notice article 6(3), which states that everyone charged with a criminal offence has certain minimum rights, including (c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require. This is because it has been recognised that a person has a Convention right of access to a lawyer under that article, read in conjunction with article 6(1), before answering any questions put to him by the police in circumstances where the questioning might affect his right to a fair trial: Salduz v Turkey (2008) 49 EHRR 421; Cadder v HM Advocate [2010] UKSC 43, 2011 SC (UKSC) 13, [2010] 1 WLR 2601. The question posed by article 6(1) read together with article 6(3) is a different question from that posed by the reasonable time guarantee, although both questions require a date to be identified. That it should be within a reasonable time is one of the characteristics required of a hearing by article 6(1): see para 25, above. So too is the requirement that the hearing is fair. But the answer to the question whether the hearing is fair may depend on things that happened before it is known when the hearing will take place, or whether there will be a hearing at all. So the question can be put this way: when does the person become entitled to that protection to preserve his right to a fair trial? When, in other words, is he to be taken to have been charged for the purposes of those articles? In Ambrose v Harris [2011] UKSC 43, [2011] 1 WLR 2435, 2012 SC (UKSC) 53, the questions were raised as to the correct starting point for the purposes of the right to legal advice under article 6 in accordance with the principle in Salduz. In para 62 I said: The correct starting point, when one is considering whether the persons Convention rights have been breached, is to identify the moment as from which he was charged for the purposes of article 6.1. The guidance as to when this occurs is well known. The test is whether the situation of the individual was substantially affected: Deweer v Belgium [1980] 2 EHRR 439, para 46; Eckle v Germany [1982] 5 EHRR 1, para 73. His position will have been substantially affected as soon as the suspicion against him is being seriously investigated and the prosecution case compiled: Shabelnik v Ukraine (Application No 16404/03) (unreported) given 19 February 2009, para 57. In Corigliano v Italy [1982] 5 EHRR 334, para 34 the court said that, whilst charge for the purposes of article 6.1 might in general be defined as the official notification given to the individual by the competent authority of an allegation that he has committed a criminal offence, as it was put in Eckles case 5 EHRR 1, para 73, it may in some instances take the form of other measures which carry the implication of such an allegation. As the Appeal Court indicated when it gave leave to appeal on this ground, it is with reference to this passage that further guidance is needed, as the appellants argument is that the date of their police interviews should be taken as being the date when the reasonable time begins: [2012] HCJAC 51, paras 2 and 3. Of the four cases decided by the Strasbourg court to which I referred in para 62 of Ambrose, however, only Shabelnik v Ukraine was concerned with the protection that is afforded by article 6(3)(c). Corigliano and Eckle were concerned with the reasonable time guarantee, and Deweer was concerned with the question whether the proceedings were within the scope of the article. The discussion in Shabelnik, para 52, of the manner in which articles 6(1) and (3)(c) are to be applied makes the point that article 6 may be relevant before a case is sent for trial, if and so far as the fairness of the trial is likely to be seriously prejudiced by an initial failure to comply with its provisions: see also Imbroscia v Switzerland (1993) 17 EHRR 441, para 36. In Ambrose v Harris, para 63 I said that the Lord Advocates submission that the protection of article 6(3)(c) was not engaged until the individual was taken into custody could not withstand the emphasis that the Strasbourg court puts on the consequences of an initial failure to comply with its provisions, as in Salduzs case, para 50 and Zaichenko v Russia (Application No 39660/02) (unreported) given 18 February 2010, para 35. These remarks were directed to the first of the three characteristics of a hearing required by article 6(1) that the hearing is fair not to the reasonable time guarantee. Yet the court went on in Shabelnik v Ukraine, para 52, to say this: The manner in which article 6(1) and (3)(c) is to be applied during the preliminary investigation depends on the special features of the proceedings involved and on the circumstances of the case. The moment from which article 6 applies in criminal matters also depends on the circumstances of the case, as the prominent place held in a democratic society by the right to a fair trial prompts the Court to prefer a substantive, rather than a formal, conception of the charge contemplated by article 6(1). This passage suggests, as does the first sentence of para 62 in Ambrose, that the date when a person becomes subject to a criminal charge and the reasonable time begins is the same as that when the person is charged for the purposes of article 6(3)(c): see also Yankov and Manchev v Bulgaria (Applications Nos 27207/04 and 15614/05) (unreported) given 22 October 2009, para 18, where the starting point was taken to be the date when the police took a statement from the applicant in which he confessed to taking part in the commission of the offence and not the date when a formal charge was directed against him. In some cases the same date may be equally appropriate for each of these two purposes. But they are separate guarantees, and it is not obvious that the relevant date for each of them must be the same. In Salduz v Turkey, para 50 the Grand Chamber pointed out that the right in article 6(3)(c) is one element, among others, of the concept of a fair trial in criminal proceedings in article 6(1). In para 55 it said that, in order for the right to a fair trial to remain sufficiently practical and effective, article 6(1) required that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police unless there were compelling reasons to restrict that right. In Eckle v Germany, on the other hand, the court said in para 73 that in criminal matters the reasonable time referred to in article 6(1) begins to run as soon as a person is charged, and that this may occur on a date prior to the case coming before the trial court, such as the date of arrest, the date when the person was officially notified that he would be prosecuted or the date when the preliminary investigations were opened. In Attorney Generals Reference (No 2 of 2001), para 27 Lord Bingham said that as a general rule the relevant period for this purpose will begin at the earliest time at which a person is officially alerted to the likelihood of criminal proceedings against him a formulation which he hoped might be easier to apply in this country. The reasoning in paras 50 55 of Salduz v Turkey at no point examines the meaning of the word charged but concentrates instead on the requirements of a fair trial. This suggests that different approaches can be applied to the two guarantees as to what is the relevant date. Article 6(3)(c), which applies where a person is charged with a criminal offence, must now be read in a way that makes the guarantee of a fair trial practical and effective. The first interrogation of a suspect may take place, and often does, before the person is officially alerted to the likelihood of criminal proceedings against him. To wait until the stage is reached when there is sufficient evidence to bring a charge before the suspect has the right of access to a lawyer could seriously prejudice his right to a fair trial. So the focus, for the purposes of this part of article 6, is on the state of affairs when the suspect is first interrogated. Contrast that with the focus of the reasonable time guarantee in article 6(1). It is on the running of time, not on what is needed to preserve the right to a fair trial. Its rationale is that a person charged should not remain too long in a state of uncertainty about his fate: Wemhoff v Federal Republic of Germany (1968) 1 EHRR 55, para 18; Stgmuller v Austria (1969) 1 EHRR 155, para 5. As Lord Bingham said in Attorney Generals Reference (No 2 of 2001), para 16, a person who is facing conviction and punishment should not have to undergo the additional punishment of protracted delay, with all the implications that it may have for his health and family life. So the date as from which time runs is taken to be the date as from which his position has been substantially affected by the official notification. Practice as to how these matters are handled varies from state to state, but in the United Kingdom this could well be some time after the date when he was first subjected to police questioning. (d) discussion It is, of course, plain that the appellants were entitled to the protection of article 6(1) read together with article 6(3)(c) on 17 September 1998 when they were interviewed. Salduz v Turkey had not yet been decided, nor had Cadder v HM Advocate. So they were not offered the protection of having a lawyer present during the police questioning. In the event the absence of a lawyer made no difference, because the appellants knew perfectly well that they were entitled to remain silent and were able steadfastly to resist all attempts to persuade them to provide the police with answers that might incriminate them. Their position was, however, indistinguishable from that of the appellant in Cadder. Like him, they were being questioned as detainees under section 14 of the 1995 Act. They were also being questioned as suspects. In Ambrose v Harris, para 63, I said that the moment at which the individual is no longer a potential witness but has become a suspect provides as good a guide as any as to when he should be taken to have been charged for the purposes of article 6(1). For completeness I should have said for the purposes of article 6(1) read in conjunction with article 6(3)(c), as it is the guarantee of a fair trial that the Salduz protection seeks to serve. I would hold therefore that the date as from which reasonable time begins to run is the subject of a separate guarantee from the guarantee that the trial will be fair, and that it requires to be approached separately. It is not enough that the appellants were being subjected to questioning in circumstances that might have affected their right to a fair trial. The question is whether they were charged on that date, in the sense indicated by Eckle v Germany, para 73, as explained by Lord Bingham in Attorney Generals Reference (No 2 of 2001), para 27. Were they officially notified that they would be prosecuted as it was put in Eckle, or officially alerted to the likelihood of criminal proceedings against them as it was put by Lord Bingham, when they were being interviewed? The appellants were certainly not at any stage of their interviews charged in the formal sense. They both asked the police whether they were going to be charged, and they both received indications to the contrary: see paras 19 and 22, above. Lauchlan was told that he was being interviewed. In ONeills case the interviewer avoided the question. But the fact that the question was asked at all is quite revealing. The appellants had been through this process before. They knew what to expect. It must have been obvious to them that the reason why they were not being charged was that the police did not yet have enough evidence to do so. They were both asked directly whether they had killed Mrs McGarrigle. But, in the context in which these questions were being put, it cannot be said that that this amounted to an official notification that they were likely to be prosecuted. All the indications during the prolonged questioning to which they were subjected were that the police were not in a position to report the proceedings with a view to prosecution without having obtained more evidence. The attitude of the police at this stage was entirely understandable. They had not yet established that Mrs McGarrigle was dead. Her body had not been found. In the absence of any evidence to show where, when and how she had died, they were in no position to initiate criminal proceedings against the appellants for her murder. All they had were suspicions based on a volume of circumstantial evidence. That was why so much of the appellants questioning was directed to trying to establish where her body was. It was not until 5 November 1998 that the missing person investigation was scaled down due to lack of progress. The police were still seeking additional evidence by means of press releases, including publications in the Big Issue magazine in June 2002. In August 2003 they received hearsay information to the effect that the appellants had killed Mrs McGarrigle and disposed of her remains in a wheelie bin which was thrown off the back of a boat in Largs. That led to the further inquiries that resulted in their being in a position to charge the appellants on 5 April 2005. That was not the state of affairs when they were being interviewed. I would therefore hold that the date when the reasonable time began was 5 April 2005, and not 17 September 1998 when the appellants were detained and interviewed under section 14 of the 1995 Act. Apparent bias (a) the facts The indictment which was served on the appellants on 10 September 2008 contained eighteen charges, of which the first three concerned the murder of Mrs McGarrigle. The remaining charges were of, or were related to, sexual offences against children. On 17 July 2009, after a preliminary hearing, Lord Kinclaven ordered that the murder charges were to be separated from the sexual offences charges. The consequence of his determination was that the appellants were tried in 2010 in a sequence of two trials before the same judge, Lord Pentland, but before different juries and with a different Advocate Depute. The trial of the sexual offences charges took place between 26 April and 12 May 2010. The Crown accepted pleas of not guilty to some of those charges before the trial began. It withdrew the libel on a number of others at the close of the Crown case, and a submission of no case to answer was sustained with regard to one more. In the result three charges went to the jury, all of which related to sexual offences against boys who were aged 14 and 6 years old at the time of the offences. ONeill was found guilty on all three, and Lauchlan was found guilty on two of them. When the verdicts had been returned and recorded the Advocate Depute moved for sentence. He tendered a schedule of previous convictions in respect of each appellant. He drew attention to the fact that Lauchlan had been convicted in 1998 of two charges of sodomy and four charges of shameless indecency and that in 2005 he had been convicted of offences under sections 2 and 3 of the Sex Offenders Act 1997. He also drew attention to similar convictions in 1998 and 2005 in the case of ONeill. He then mentioned that the Crown had lodged an application for a lifelong restriction order, for which a risk assessment under section 210B of the 1995 Act (as inserted by section 1 of the Criminal Justice (Scotland) Act 2003) would be required, to be made in both cases. He asked that consideration of this matter be continued until the conclusion of the trial on the murder charges. He explained, for the benefit of the jury who had not been made aware of the fact that there was to be another trial, that for this reason there had been an embargo on public reporting of the trial on the sexual offence charges. He said that, as there would be a prejudice to the next trial if the judge were to do any public act at that stage, the matter should be continued. Having ascertained that the solicitor advocates for the defence had no objection to the continuation, the trial judge addressed the appellants. The judge told them first that, as he intended to make the appropriate order under the Sexual Offences Act 2003, he was required by the legislation to state to them both that they had again been convicted of sexual offences to which Part 2 of that Act applied and that they were subject to the notification requirements contained in that Act. He told them that the court had certified those facts, and that the clerk of court would give them a copy of the relevant certificate together with a notice which gave further details of the notification requirements with which they must comply. Then, while the jury were still present, he said this: Having regard to your very serious records, and to the nature of the offence of which you stand convicted on the present indictment, it is clear that you are both evil, determined, manipulative and predatory paedophiles of the worst sort. Beyond that I intend to reserve any observations which I may have to make until the outcome of the next stage of the proceedings is known; that is after you have been tried on the remaining charges to which the advocate depute has made reference. I shall therefore adjourn all questions of sentence until Friday of next week, and I shall continue consideration of the Crowns motion made under section 210B of the 1995 Act for an assessment order. No objection was made at the start of the murder trial on 17 May 2010 to the fact that Lord Pentland was to preside over that trial too, nor was any motion made that he should recuse himself. Two events occurred in the course of that trial which were later commented on. The first occurred on 27 May 2010 when an adjournment of the trial was sought on behalf of ONeill by his solicitor advocate, Mr Carroll. He was said to be suffering from a severe headache and unable to follow what was going on. This was said to be a chronic problem for which he had a prescribed medication which he required to take. The trial judge did not accede to this request immediately but closely questioned Mr Carroll and invited the Advocate Depute to make enquiries with the prison authorities. During a brief adjournment ONeill was given paracetamol and then indicated that he was fit to continue. The second event occurred when a Crown witness, DC Wilkie, became incoherent and obviously unwell while being cross examined by Mr Carroll. The judge adjourned the proceedings immediately to allow the witness to receive medical treatment. He was fit to continue and complete his evidence the next day. (b) the issue This issue was raised on behalf of ONeill only in the Appeal Court. As has already been explained in para 10 above, it was the subject of an amended note of appeal which was lodged shortly before the hearing before the Appeal Court of his application under section 107(8) of the 1995 Act. Mr McVicar did not seek to adopt it on behalf of his client Lauchlan, although he pointed out that if the argument was sound its effect would be to his clients benefit. The devolution issue seems only to have emerged in the course of oral argument in the Appeal Court when it was considering the applications for leave to appeal to this court. It decided to give leave on this issue because it was recognised that the splitting of the trial into two phases before two juries and the resulting presentation of previous convictions and the judges remarks at the end of the first phase were very unusual circumstances. Mr Carroll said that the fact that the trial judge was shown his clients previous convictions was not important to his argument, as it was not unusual for a judge to see the accuseds previous convictions before the start of or during a trial: OHara v HM Advocate 1948 JC 90; Leggate v HM Advocate 1988 JC 127; 1995 Act, section 275A (as inserted by section 10(4) of the Sexual Offences (Procedure and Evidence) (Scotland) Act 2002). But they were the trigger, as he put it, for the comments by the trial judge on his clients character. It was to those comments that he directed his argument. The issue has been focussed in the sixth issue in the statement of facts and issues on the appellants behalf in these terms: Whether (i) the conduct of the trial judge can be said to have given rise to a legitimate concern as to the appearance of an absence of impartiality in the context of the appellants right to a fair trial by an impartial tribunal in terms of article 6(1) of the European Convention on Human Rights; and (ii) if the answer to issue 6(i) is affirmative, whether the act of the Lord Advocate in persevering with the trial was incompatible with the appellants rights under article 6(1). (c) the authorities The test for apparent bias which was laid down in Porter v Magill [2001] UKHL 67; [2002] 2 AC 357 was designed to express in clear and simple language a test which was in harmony with the objective test which had been applied by the Strasbourg court. It is set out in para 103 of the judgment in that case in these terms: The question is whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased. In Lawal v Northern Spirit Ltd [2004] 1 All ER 187, [2003] ICR 856, para 14 Lord Steyn said that the purpose and effect of the modification which it made to the common law were to bring the common law rule into line with the Strasbourg jurisprudence. Lord Bingham of Cornhill made the same observation in R v Abdroikov [2007] UKHL 37, [2007] 1 WLR 2679, para 14 when he said that there is now no difference between the common law test of bias and the requirement under article 6 of an independent and impartial tribunal. In Szypusz v United Kingdom (Application No 8400/07) (unreported) given 21 September 2010, para 39 the Strasbourg court acknowledged that its jurisprudence had been taken into account in Porter v Magill, and set out that test. It also acknowledged, in para 40, the further guidance in Helow v Secretary of State for the Home Department [2008] UKHL 62, 2009 SC (HL) 1, [2008] 1 WLR 2416 with regard to the attributes of the fair minded observer as background to the issue that it had to decide. The court is invited in this case to examine the allegation of apparent bias after the proceedings that are said to have been affected by it have taken place. But the principles to be applied are the same as those which determine the question whether, because of things he has said or done previously, the judge should recuse himself. So it may be helpful to look at cases in which it was the judges decision not to recuse himself that was in issue. In President of the Republic of South Africa v South African Rugby Football Union, 1999 (4) SA 147, 177 the Constitutional Court of South Africa made these comments on the position of judges (in that case, members of the Constitutional Court itself) who, it was said, ought to have recused themselves: The question is whether a reasonable, objective and informed person would on the correct facts reasonably apprehend that the judge has not or will not bring an impartial mind to bear on the adjudication of the case, that is a mind open to persuasion by the evidence and the submissions of counsel. The reasonableness of the apprehension must be assessed in the light of the oath of office taken by the judges to administer justice without fear or favour; and their ability to carry out that oath by reason of their training and experience. It must be assumed that they can disabuse their minds of any irrelevant personal beliefs or predispositions. They must take into account the fact that they have a duty to sit in any case in which they are not obliged to recuse themselves. At the same time it must never be forgotten that an impartial judge is a fundamental prerequisite for a fair trial and a judicial officer should not hesitate to recuse herself or himself if there are reasonable grounds on the part of a litigant for apprehending that the judicial officer, for whatever reasons, was not or will not be impartial. That passage was quoted with approval by the Court of Appeal in Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451, para 21. It referred also in paras 22 24 to three extracts from Australian authorities about the duty of the judge to hear and determine the cases allocated to him which it found to be persuasive: In re JRL, EX arte CJL (1986) 161 CLR 342, 352; In re Ebner (1999) 161 ALR 557, para 37; Clenae Pty Ltd v Australia and New Zealand Banking Group Ltd [1999] VSCA 35. In para 25 of Locabail there is an extensive discussion of the grounds on which objection to a judge could or could not reasonably be taken. While it was emphasised that every application for recusal must be decided on the facts and circumstances of the individual case, the court noted that a real danger of bias might well be thought to arise if, in a case where the credibility of any individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such persons evidence with an open mind on any later occasion. In JSC BTA Bank v Mukhtar Ablyazov (Recusal) [2012] EWCA Civ 1551, the question was whether a judge had been right not to recuse himself as the nominated judge of trial, in circumstances where he had had to hear, prior to trial, an application to commit one of the parties for contempt of court and had found a number of contempts proven, by reason of the doctrine of apparent bias in Magill v Porter. Rix LJ, delivering a judgment with which Toulson and Maurice Kay LJJ agreed, pointed out in para 65 that, although the principles of apparent bias are now well established and were not in dispute in that case, the application of them is wholly fact sensitive. In para 70 he said that it seemed to him that the critical consideration is that what the first judge does, he does as part and parcel of his judicial assessment of the litigation before him: He is judging the matter before him, as he is required by his office to do. If he does so fairly and judicially, I do not see that the fair minded and informed observer would consider that there was any possibility of bias. That was a case of civil litigation, but I do not think that there is any difference in principle between the position of a judge in a case of that type and the situation where it is said that there is apparent bias on the part of a judge in a criminal trial. In Helow v Secretary of State for the Home Department, the question was whether there was a real possibility that Lady Cosgrove was biased by reason of her membership of an association and her receipt of its quarterly publication which contained some articles which were fervently pro Israeli and antipathetic to the PLO, of which the appellant was a member. Among the reasons that were given for holding that there was not any real possibility of bias in her case were that the context is crucially important: para 4, by myself; that Lady Cosgrove was a professional judge with years of relevant training and experience: para 23, per Lord Rodger of Earlsferry; and the taking of the judicial oath, albeit as more of a symbol than of itself a guarantee of the impartiality which any professional judge is by training and experience expected to practise and display: para 57, per Lord Mance. (d) discussion What then of this case? The obvious starting point is the context. When he made his remarks, Lord Pentland was addressing the appellants in the performance of his judicial function. The fair minded and informed observer would appreciate that he was a professional judge who had taken the judicial oath and had years of relevant training and experience. He would hear and understand the context in which the remarks were made. They were made in open court from the bench while he was performing his duty as a judge at the trial. He would appreciate too, that when the judge was presiding over the next trial, he would be doing so in the performance of his duty to preside over that case. He would understand, of course, that while the facts were a matter for the jury, the judge too had functions to perform which required him to be impartial. But it would only be if the judge expressed outspoken opinions about the appellants character that were entirely gratuitous, and only if the occasion for making them was plainly outside the scope of the proper performance of his duties in conducting the trial, that he would doubt the professional judges ability to perform those duties with an objective judicial mind. The context indicates that nothing like that occurred here. The judge had just told the appellants, as he was required to do, that they were subject to the notification requirements. He had been told by the Advocate Depute that an application was to be made for a risk assessment order. He had been asked to defer consideration of it until after the conclusion of the murder trial, but the appellants were entitled to be given some indication as to what they might expect. His comments on the appellants character were directly relevant to that issue. For reasons that would have been obvious in the light of the Advocate Deputes submissions, the judge had to restrict himself to those few comments. He told them that he intended to reserve any further observations until the outcome of the next stage of proceedings was known. The observer would also understand that, if the judge had been passing sentence on the appellants, the remarks he made would have been entirely appropriate as background to the sentences which he would have been obliged to pass. There is one other circumstance which, in this case, can properly be taken into account. The appellants and their solicitor advocates were all present when the remarks were made, and they were all there again at the commencement of the murder trial. Yet no objection was made by any of them either at the end of the sexual offences trial or at the start of the murder trial to the fact that Lord Pentland was to preside over the murder trial. The fair minded and informed observer would not have overlooked this fact. It might well have seemed to him to be odd, if there was any real basis for an objection, that those with the most immediate interest did not take the opportunity of raising the point at that stage. Mr Carrolls explanation was that a challenge at that stage would not have been likely to succeed, as the judge would almost certainly have rejected it. He also said that his objection would have fallen away if the murder trial had been conducted fairly. He pointed to the contrast between the judges handling of the incident when he told the judge that his client was unwell and his handling of the incident when DC Wilkie became ill in the witness box. I am not persuaded by Mr Carrolls explanation. The point which he had to answer is not, I would stress, one of waiver. It is simply that the fair minded and informed observer would take account of the fact that it did not seem to occur to those with the most obvious interest to do so, or their advisors, that the judge had trespassed beyond the proper performance of his duties when he commented on the appellants character. As for his conduct of the trial, the judges concern that no proper reason had been given for interrupting the proceedings when he was told that the appellant was not well and his reaction to the sudden illness of DC Wilkie in the witness box were both readily understandable. I do not find here any grounds for doubting his impartiality. But the only relevant question is whether he should, or should not, have been conducting the trial at all in view of the comments he made at the end of the previous trial about the appellants character. For these reasons I cannot find any basis for the suggestion that the judge was apparently biased, and I would reject it. It follows that the Lord Advocate did not act incompatibly with the appellants article 6(1) right to a fair trial by proceeding with the appellants trial on the murder charges before Lord Pentland. We were addressed on the question whether the appellants waived their right to found on their Convention right, but I do not need to examine that issue as I do not accept that their right was breached. Conclusion (1) that the date when the reasonable time began for the purposes of the appellants article 6(1) Convention right was 5 April 2005; and (2) that the Lord Advocates act in proceeding with the trial on the murder charges was not incompatible with the appellants article 6(1) right to a trial before a tribunal that was independent and impartial. The proceedings must now be remitted to the High Court of Justiciary. I would determine the two compatibility issues that are before us by holding |
We are concerned with the employment, by the Secretary of State for Children, Schools and Families, of teachers to work in the European Schools. These are schools set up to provide a distinctively European education principally for the children of officials and employees of the European Communities. The Staff Regulations, made by the Board of Governors pursuant to the Convention defining the Statute of the European Schools, limit the period for which teachers may be seconded to work in those schools to a total of nine years (or exceptionally ten). This is made up of an initial probationary period of two years, and a further period of three years, which is renewable for a further four years. The principal question before us is whether these arrangements can be objectively justified as required by the Fixed term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034) (the Fixed term Regulations). This was the measure chosen by the United Kingdom to implement Council Directive 1999/70/EC concerning the framework agreement on fixed term work concluded by ETUC, UNICE and CEEP (the Fixed term Directive). The effect of regulation 8 is that a successive fixed term contract is turned into a permanent employment unless the use of such a contract can be objectively justified. Should the answer to the principal question be no, two subsidiary issues arise in the case of teachers who are employed to work in schools outside the United Kingdom. The first is whether the Fixed term Regulations apply to them. In other words, do they form part of the contractual arrangements between the parties? This may raise questions of European law which might have to be referred to the European Court of Justice. The second is whether the statutory protection against unfair dismissal, given to people employed in Great Britain, applies to them. Without such protection, the teachers would be limited to their contractual rights. If the answer to the principal question is yes, however, these questions do not arise. The Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal have all held that the use of successive fixed term contracts for these teachers is not objectively justified. In the case of teachers employed to work in schools outside the United Kingdom, the Employment Appeal Tribunal and the Court of Appeal have held that the Fixed term Regulations do apply. However, this might have been something of a pyrrhic victory, because the Employment Tribunal and the Employment Appeal Tribunal held, applying the test in Lawson v Serco Ltd [2006] UKHL 3, [2006] ICR 250, that the teachers were not entitled to make claims for unfair dismissal. This would have meant that they were limited to their contractual notice rights. The Court of Appeal held, applying the principle in Bleuse v MBT Transport Ltd [2008] ICR 488 that, nevertheless, it was necessary to extend the remedy of unfair dismissal to them in order to give them an effective remedy for breach of their rights in Community law. The Secretary of State appeals against the decision of the Court of Appeal, reported at [2010] ICR 815, on all save the Lawson v Serco issue and the teachers cross appeal on that issue. The background The first European School was established in 1954 for the children of officials of the European Coal and Steel Community, by agreement between the original six Member States. This later became the Statute of the European Schools and Protocol on the Setting Up of the European Schools of 1957. In 1994, the Member States and the European Communities adopted the Convention defining the Statute of the European Schools (the Schools Convention), which consolidated, updated and amended the original Statute. The Board of Governors, established under the Convention, is made up of a representative of the European Commission, a representative of each Member State, a staff representative, a parent representative and a representative of the EU Patent Office. The Regulations for Members of the Seconded Staff of the European Schools 1996 (the Staff Regulations) were made by the Board pursuant to Article 12 of the Schools Convention. Articles 28 and 29 of those Regulations define the terms for which teachers may be seconded: an initial probationary period of two years (article 28(1)); a further period of three years (article 29(a)(i)); renewable for a further period of four years (article 29(a)(i)); subject to a maximum period of nine years, although a further one year extension may be granted in special cases (article 29(a)(ii)). This is what has come to be referred to as the nine year rule. The nine year rule is an attempt to strike a balance between the need for expertise and continuity in the European Schools and the desire for cross fertilisation between those schools and the national schools of the Member States; to put it another way, to prevent the European Schools becoming an educational ghetto, isolated from the mainstream of ordinary education. Whether the supposed benefits of the rule outweigh the disruption caused to the lives of the teachers and to the education of their pupils is controversial. The staff committee has for a long time been trying to persuade the Governors to think again but so far without success. The United Kingdom government has also supported a review of the rule, which presents a particular difficulty for the United Kingdom because of the way in which teachers are employed in this country. Most of the teachers in the European Schools are not employed by the schools themselves, but are employed as teachers by the Member States and seconded to work in the European Schools. In most of the Member States, school teachers are permanent employees of the state. At the end of their secondment they return to work in their home countries. In the United Kingdom, however, school teachers are employed either by the local education authority or by the governing body of the school where they work. They are not employed by central government. Hence the Secretary of State employs teachers specifically to work in the European Schools and on fixed term contracts which correspond to the secondment periods laid down in the Staff Regulations. This of course presents problems for the teachers, who will have to look for new employment when their terms of employment end. It also presents a problem for the Secretary of State, who has no other work for these teachers once their secondment to the European Schools is over. The Directive and the Regulations It is important to understand that the Fixed term Directive is not directed against fixed term contracts as such. It has two more specific aims, set out in recital (14): The signatory parties . have demonstrated their desire to improve the quality of fixed term work by ensuring the application of the principle of non discrimination, and to establish a framework to prevent abuse arising from the use of successive fixed term employment contracts or relationships. Those two purposes are spelled out in clause 1 of the annexed Framework Agreement. Clause 4 goes on to deal with the principle of non discrimination and clause 5 deals with measures to prevent abuse: 1. To prevent abuse arising from the use of successive fixed term employment contracts or relationships, Member States, after consultation with social partners in accordance with national law, collective agreements or practice, and/or the social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce in a manner which takes account of the needs of specific sectors and/or categories of workers, one or more of the following measures: (a) objective reasons justifying the renewal of such contracts or relationships; (b) the maximum total duration of successive fixed term employment contracts or relationships; (c) the number of renewals of such contracts or relationships. The preamble and general considerations in the Framework Agreement recognise that contracts of an indefinite duration are, and will continue to be, the general form of employment relationship between employers and workers and also that they contribute to the quality of life of the workers concerned and improve performance. But they also recognise that fixed term employment contracts respond, in certain circumstances, to the needs of both employers and workers and that they are a feature of employment in certain sectors, occupations and activities which can suit both employers and workers. But the substantive provisions of the Framework Agreement do not attempt to define the circumstances in which fixed term employment is acceptable. Instead they concentrate on preventing or limiting the abuse of successive fixed term contracts, the abuse being to disguise what is effectively an indefinite employment as a series of fixed term contracts, thus potentially avoiding the benefits and protections available in indefinite employment. When implementing clause 5 of the Framework Agreement, the United Kingdom chose a mixture of options (a) and (b). Regulation 8 of the Fixed term Regulations deals with Successive fixed term contracts: (1) This regulation applies where (a) an employee is employed under a contract purporting to be a fixed term contract, and (b) the contract mentioned in sub paragraph (a) has previously been renewed, or the employee has previously been employed on a fixed term contract before the start of the contract mentioned in sub paragraph (a). Thus the regulation only applies to a fixed term contract where there has been at least one previous fixed term contract or to a fixed term contract which has been renewed. It continues: (2) Where this regulation applies then, with effect from the date specified in paragraph (3), the provision of the contract mentioned in paragraph (1)(a) that restricts the duration of the contract shall be of no effect, and the employee shall be a permanent employee, if (a) the employee has been continuously employed under the contract mentioned in paragraph (1)(a), or under that contract taken with a previous fixed term contract, for a period of four years or more, and (b) the employment of the employee under a fixed term contract was not justified on objective grounds (i) where the contract mentioned in paragraph (1)(a) has been renewed, at the time when it was last renewed; (ii) where that contract has not been renewed, at the time when it was entered into. (3) The date referred to in paragraph (2) is whichever is the later of (a) the date on which the contract mentioned in paragraph (1)(a) was entered into or last renewed, and (b) the date on which the employee acquired four years continuous employment. Thus there is no need for objective justification for the current (that is, renewed or successive) contract unless and until the employee has been continuously employed for four years. But once he has, the latest renewal or successive contract has to be justified on objective grounds. Otherwise the contract will automatically be transformed into a contract of indefinite duration. As such it will still, of course, be terminable by whatever is the contractual notice period on either side. The individual cases Mr Fletcher was employed by the Secretary of State and seconded to work in the European School in Culham, Oxfordshire, from 1 September 1998 until 31 August 2008. After his two year probationary period, therefore, he was employed for a further three year period, extended for a further four years, and then an additional one year, making the maximum total of ten years in all. His initial offer letter referred to the nine year rule, and stated that the contract was governed by English law and that the English courts had exclusive jurisdiction over it. In 2007, Mr Fletcher claimed that he was a permanent employee by virtue of regulation 8 of the Fixed term Regulations. The Employment Tribunal made a declaration to that effect on 16 November 2007. The Tribunal went through the documents showing the history of and debates about the nine year rule in some detail. They examined the three reasons for the rule recorded in the Minutes of the Board of Governors in 2002, summarised as: turnover of staff, new staff bringing new ideas, and enrichment of the national systems when teachers returned. They noted that they did not have the benefit of evidence from the Troika of Governors who had last considered the rule and found no evidence to support its supposed benefits: quite the reverse. They therefore rejected the factual justification for the rule. They also rejected the argument that the fact that Staff Regulations laid down the rule was justification in itself. They cited the rulings of the European Court of Justice in Adeneler v Ellinikos Organismos Galaktos (ELOG) (Case C 212/04) [2006] ECR I 6057 and Del Cerro Alonso v Osakidetza (Servicio Vasco de Salud) (Case C 307/05) [2008] ICR 145 that a difference in treatment could not be justified on the basis that it was provided for by a general, abstract national norm but had to be justified by the existence of precise and concrete factors, characterising the employment condition to which it relates, in the specific context in which it occurs and on the basis of objective and transparent criteria in order to ensure that the unequal treatment in fact responds to a genuine need, is appropriate for achieving the objective pursued and is necessary for the purpose. They regarded the Staff Regulations in the same light as the Greek national law in Adeneler (which simply provided that fixed term contracts were justified where national law provided for them). The Secretary of State could not therefore rely upon the Staff Regulations unless these prevailed over the Fixed term Directive. They held that the Directive prevailed. It followed that Mr Fletcher was entitled to his declaration. Both the Employment Appeal Tribunal and the Court of Appeal dismissed the Secretary of States appeal. The Court of Appeal heard the case of Mr Fletcher together with that of Mr Duncombe. Mr Duncombe was a teacher at the European School in Karlsruhe, Germany, from January 1996 until 31 August 2006. He too was employed under a series of fixed term contracts to reflect the nine year rule. He brought claims in the Employment Tribunal for wrongful dismissal or pay in lieu of notice, unfair dismissal and a declaration that he was a permanent employee. He failed on the preliminary point that he did not have the right to bring the claims because he was employed outside the United Kingdom. In both the Employment Appeal Tribunal and the Court of Appeal, he succeeded in respect of his claim for wrongful dismissal or pay in lieu of notice, and in the Court of Appeal he also succeeded in respect of his claim for unfair dismissal. The arguments on the principal question Before the Employment Tribunal the Secretary of State made what, with hindsight, was the fatal mistake of trying to justify the nine year rule on its merits. In other words, he tried to persuade the Tribunal that it was a good thing. This he conspicuously failed to do. The Tribunal was unconvinced by the argument that encouraging a turnover of staff in the European Schools was a way of bringing in staff with up to date experience of teaching in the national systems, thus with new ideas and a fresh outlook, as well as returning teachers to their national systems enriched with a European outlook. Despite the unreality of the Tribunal expecting the Governors of the European Schools to appear before them to explain themselves, it was not suggested until now that this was an exercise upon which the Tribunal should never have embarked. Before this Court, Mr Crow QC on behalf of the Secretary of State contends that it is not for a court or tribunal in one of the Member States to inquire into the factual merits of the nine year rule. The plain fact of the matter is that the Secretary of State has no choice. The United Kingdom has only one vote on the Board of Governors and has so far failed to persuade them that the rule should be changed. It has to employ teachers for the purpose of seconding them to the European Schools and the Schools will only take them on the basis of the nine year rule. All of this is made perfectly plain to the teachers when they are recruited. This in itself is objective justification for employing the teachers on successive or renewable contracts which mirror the periods in the rule. Mr Crow further argues that this is not a question of whether the Staff Regulations trump the Fixed term Directive, as the Employment Tribunal held that they had to do if the Secretary of State was to get home on this ground. There is no inconsistency between the two. The Staff Regulations do not dictate the terms of employment of seconded teachers, merely the duration of the period(s) for which they can be seconded to the schools. Furthermore, the reliance in both the Employment Tribunals and the Court of Appeal on the case of Adeneler was misplaced. There it was held that a Greek employer could not rely upon a general rule of Greek law as justification. That was in effect allowing a Member State to provide for a general opt out from the Directive. But that is not this case. It is not argued that the United Kingdom has failed to transpose the Directive properly. The rule in question is specific to the work in question and is made by an international body responsible for determining the terms of that work in circumstances over which the United Kingdom has no control. The respondent teachers are understandably aggrieved that the Secretary of State should now be putting his case rather differently from the way in which it was put in the Tribunals and Court below. But they have to grapple with the argument. Mr Giffin QC argues that the Staff Regulations are incompatible with the Directive. The Directive is there to give effect to the proposition that the norm is indefinite employment. If therefore there is an indefinite need for the work which the employee is doing, then prima facie the worker should be kept on an indefinite contract. It defeats the object to keep changing the workers doing the same job. The exceptions, where fixed term contracts may be justified, relate to the specific short term or seasonal nature of the work being done. (Thus, for example, it was justified for the European Parliament to employ people on short term contracts to coincide with the Parliamentary sessions: see the judgment of the European Union Civil Service Tribunal in Aahyan v European Parliament (Case F 65/07) (unreported), 30 April 2009.) There is therefore no escape from a factual inquiry into the evidence to see whether the practice is really justified. A practice can be justified because it is complying with a rule, but only if the rule itself is justified. The Employment Tribunal has found that this one is not and there is no right of appeal from that factual finding. Furthermore, he argues, all the Member States are bound by the Directive and by a general duty to co operate with one another in furthering its purposes. Their representatives on the Board of Governors cannot therefore use the power to make Staff Regulations in a way which means that Member State employers will be using fixed term contracts in contravention of the Directive. In short, the United Kingdom should be taking a tougher line with the Board, and invoke the dispute resolution mechanism, as the teachers have argued, rather than complain that it is between a rock and a hard place. Discussion of the principal question The teachers complaint is not against the three or four periods comprised in the nine year rule but against the nine year rule itself. In other words, they are complaining about the fixed term nature of their employment rather than about the use of the successive fixed term contracts which make it up. But that is not the target against which either the Fixed term Directive or the Regulations is aimed. Had the Secretary of State chosen to offer them all nine year terms and take the risk that the schools would not have kept them for so long, they would have had no complaint. Employing people on single fixed term contracts does not offend against either the Directive or the Regulations. This is therefore the answer to Mr Giffins attractive argument: that fixed term contracts must be limited to work which is only needed for a limited term; and that where the need for the work is unlimited, it should be done on contracts of indefinite duration. This may well be a desirable policy in social and labour relations terms. It may even be the expectation against which the Directive and Framework Agreement were drafted. But it is not the target against which they were aimed, which was discrimination against workers on fixed term contracts and abuse of successive fixed term contracts in what was in reality an indefinite employment. It is not suggested that the terms and conditions on which the teachers were employed during their nine year terms were less favourable than those of comparable teachers on indefinite contracts. It follows that the comprehensive demolition by the Employment Tribunal of the arguments for the nine year rule is nothing to the point. It is not that which requires to be justified, but the use of the latest fixed term contract bringing the total period up to nine years. And that can readily be justified by the existence of the nine year rule. The teachers were employed to do a particular job which could only last for nine years. The Secretary of State could not foist those teachers on the schools for a longer period, no matter how unjustifiable either he or the employment tribunals of this country thought the rule to be. The teachers were not employed to do any alternative work because there was none available for them to do. The Adeneler case is not in point. That concerned a national rule which provided a general get out from the requirements of the Directive. It is not a question of whether the Staff Regulations trump the Directive. There is no inconsistency between them. The Staff Regulations are dealing with the duration of secondment, not with the duration of employment. In those circumstances it is questionable whether there is any duty of co operation between the Member States. It appears that the Board of Governors did not see any conflict between the Staff Regulations and the Directive. This is scarcely surprising. The United Kingdom could have chosen to implement the Directive by setting a maximum number of renewals or successive fixed term contracts, for example by limiting them to three. It could equally have chosen to implement the Directive by setting a maximum duration to the employment, for example by limiting it to nine or ten years in total. It is readily understandable why the alternative route of requiring objective justification after four years was taken: this is more flexible and capable of catering for the wide variety of circumstances in which a succession of fixed term contracts may be used. Unless a very short maximum total had been chosen, it is more favourable to employees than the alternatives. But the fact that the alternatives would have been equally acceptable ways of implementing the Directive is yet another indication that the target is not fixed term employment as such. For these reasons I would allow the appeal of the Secretary of State on the principal issue. In those circumstances, there is no need to consider the other issues which arise in the case of Mr Duncombe and the other teachers who were employed to work in schools outside the United Kingdom. But they are both important points to which a large proportion of the argument before us was directed. The remedies issue There is now a great deal of European Union law addressing employment rights. This is not surprising as the free movement of workers is one of the fundamental rights in the Union. Mr Crow argues that these are rules designed for the protection of employees and should thus be subject to the same jurisdictional rule which applies to the protection given in our domestic law against unfair dismissal. That protection only applies to employment in Great Britain and the principles governing when an employment should be held to be in Great Britain and when it should not were laid down by the House of Lords in Lawson v Serco. It is not enough, however, simply to characterise the rules of European law relating to employment as employment protection. They are designed in part for that purpose, of course, but they are different from the law of unfair dismissal in at least three ways. First, of course, they have their source in the law of the European Union and not simply in the domestic law of the United Kingdom. Secondly, that law is designed to offer workers the same or similar protection wherever they are working in the area covered by European Union law. They must not lose the rights that they have accrued in one of the Member States because they choose to work in another Member State; nor should they have lesser rights than other workers in the country where they go to work. Thirdly, therefore, the rights which workers have are enforceable as part of the contractual arrangements between them and their employers. The question then becomes one of incorporation into those contracts. In what circumstances does a contract of employment between a United Kingdom employer and a worker who is employed to work outside the United Kingdom incorporate the protection given by European Union law? It may be that it is not enough simply to provide that the contract is governed by English law (or by the law of some other jurisdiction within the United Kingdom). Would a person employed to work in China, for example, be able to claim the benefit of all the domestic law which emanates from the European Union? It is not necessary to attempt to answer that question, because we are concerned with a person employed by an employer in the United Kingdom to work in another country within the European Union. Is it to be expected that there should be gaps in the protection offered to such workers? In other words, that they would be protected if employed by an employer in the country where they work, but not if employed by an employer in their home country? Two people doing exactly the same work would enjoy very different protection. This seems, on the face of it, an unlikely conclusion. On the other hand, there would still be differences between the two employees. One would be covered by the European Union law as implemented in the country where they both worked; the other would be covered by the law as implemented in the country where his employer was based. These would not always be identical, as the example of the Fixed term Directive shows. But the context of the European Schools shows that there may be European workers from different European countries who are subject to different contractual arrangements. At least, on this view, they would all have the benefit of the minimum requirements imposed by European Union law. I would therefore be inclined to agree with the Tribunals and the Court of Appeal that Mr Duncombe and other teachers employed by the Secretary of State in European schools abroad are covered by the Fixed term Regulations. But the intended scope of the protection given by the Directive, and others like it, is a question of European Union law to which a uniform answer should be given throughout the Union. We have not been shown any authority which indicates that the answer is acte clair, however obvious we might think the answer to be. Had it been necessary to answer the question, therefore, it would probably be necessary to refer it to the European Court of Justice. Were the answer to that simple question to be yes it would then be necessary to give further consideration to the mechanisms appropriate to achieve that end. There was much discussion before us of whether the Fixed term Directive had direct effect and whether the principle put forward by the Employment Appeal Tribunal in Bleuse v MBT Transport Ltd [2008] ICR 488 applied. There is no need to enter into that debate at present, but it would seem unlikely that, if the protection of European employment law is to be extended to workers wherever they are working in the area covered by European law, that protection should depend upon whether or not it gives rise to directly effective rights against organs of the state. A way would have to be found of extending it to private as well as public employment. The cross appeal As already indicated, the scope of protection against unfair dismissal is a different question. This does not originate in European Union law. It is a remedy devised by Parliament to fill a well known gap in the protection offered to employees by the domestic law of contract. It does not form part of the contractual terms and conditions of employment. The Employment Rights Act 1996 no longer specifies the employments to which the right not to be unfairly dismissed in section 94(1) applies whether to employees actually doing their work wholly or mainly within Great Britain or to employees who are based here or to some other employments as well. In Lawson v Serco the House of Lords held that it applied to employment in Great Britain but that there were some exceptional circumstances in which people who performed their work wholly or mainly outside Great Britain were nevertheless protected. However, it was not enough that the employer was based here. Something more was needed. This might be provided by the fact that an employee was posted abroad for the purpose of a business conducted, not in the foreign country, but here at home: for example, a foreign correspondent of a British newspaper (para 38). It might also be provided by the fact that an employee was working within what amounts for practical purposes to an extra territorial British enclave in a foreign country (para 39): for example, a civilian employee working on a British military base in Germany or an RAF base on Ascension Island. Lord Hoffmann, with whom all the other members of the committee agreed, was not able to think of any other examples: they would have to have equally strong connections with Great Britain and British employment law (para 40). Mr Giffin makes a strong case that this is another example: a British worker working for the British government within an international enclave who has no one else to whom he can turn for protection. But this last cannot be enough on its own: otherwise every person employed abroad by a British employer would be able to claim. They too have no where else to go. A British national locally engaged to work in the British Embassy in Rome would be protected: yet Lord Hoffmann had no doubt that Bryant v Foreign and Commonwealth Office (unreported) 10 March 2003 was rightly decided (para 39). The question is whether Parliament intended that they should have the extra protection afforded to employees who are based in this country. It is not necessary for us to decide the point for the purpose of the questions of European Union law which were put before us in this appeal. However, we have been told that the point is still relevant for the purpose of unfair dismissal claims based upon other grounds. Accordingly we intend to reserve our decision upon the cross appeal to a later date. Conclusion I would therefore allow the Secretary of States appeal and hold that it was objectively justified to employ these teachers on the current fixed term contracts and accordingly that these were not converted into permanent contracts by the operation of regulation 8 of the Fixed term Regulations. LORD MANCE I agree with Lady Hale that this appeal should be allowed on the principal issue for the reasons she gives. I also agree with her view on the remedies issue and that our decision on the cross appeal should be reserved. LORD COLLINS I also agree with Lady Hale that this appeal should be allowed on the main issue for the reasons she gives. I would prefer to express no view on the very interesting and difficult questions which arise on the remedies issue and reserve our decision on the cross appeal. I agree with Lady Hale that the appeal should be allowed on the principal issue LORD CLARKE Hilary Term [2011] UKSC 36 On appeal from: [2009] EWCA Civ 1355 JUDGMENT Duncombe and others (Respondents) v Secretary of State for Children, Schools and Families (Appellant) (no. 2) before Lord Rodger Lady Hale Lord Mance Lord Collins Lord Clarke JUDGMENT GIVEN ON 15 July 2011 Heard on 17 and 18 January 2011 Appellant Jonathan Crow QC Maya Lester (Instructed by Treasury Solicitors) Respondents Nigel Giffin QC Katherine Eddy Simon Henthorn (Instructed by Reynolds Porter Chamberlain LLP) LADY HALE, DELIVERING THE JUDGMENT OF THE COURT 1. This is the judgment of the court, composed of Lady Hale, Lord Mance, Lord Clarke and Lord Collins. Lord Rodger of Earlsferry presided over the panel which heard this case on 17 and 18 January 2011 and took part in our deliberations and decision upon the appeal: [2011] UKSC 14. His sudden illness and untimely death have sadly prevented him from taking any part in our deliberations and decision upon the cross appeal. 2. The case relates to the unusual employment status of teachers employed by the Secretary of State for Children, Schools and Families to work in the European Schools. The main issue in the appeal was whether the terms of that employment fell foul of the Fixed term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034) which implemented Council Directive 1999/70/EC concerning the framework agreement on fixed term work concluded by ETUC, UNICE and CEEP. This Court handed down judgment on 30 March 2011 allowing the appeal of the Secretary of State on that issue: [2011] UKSC 14. We reserved judgment in the cross appeal of the teachers. The issue in the cross appeal is whether their employment is covered by the protection against unfair dismissal conferred by section 94(1) of the Employment Rights Act 1996. 3. It is fair to say that had this issue stood alone it is unlikely that permission would have been given to bring an appeal to this Court. It is common ground that the basic principle was laid down by the House of Lords in Lawson v Serco Ltd [2006] UKHL 3, [2006] ICR 250. It is also common ground that these teachers employment does not fall within either of the specific examples given in Lawson of people employed by British employers to work outside Great Britain who would be protected from unfair dismissal. The question is whether there are other examples of the principle, of which this is one. 4. There were three cases heard together in Lawson v Serco. Mr Lawson was employed by Serco as a security supervisor at the British RAF base on Ascension Island, which is a dependency of the British Overseas Territory of St Helena. Mr Botham was employed as a youth worker at various Ministry of Defence establishments in Germany; under the NATO Status of Forces Agreement of 1951 he was part of the civil component of British Forces in Germany and treated as resident in the UK for various purposes. Mr Crofts was a pilot employed by a company which was a wholly owned subsidiary of, and provided aircrew for, Cathay Pacific Airways Ltd, the Hong Kong airline; but he was based at Heathrow under the airlines permanent basings policy. 5. Section 94(1) of the Employment Rights Act 1996, which grants employees the right not to be unfairly dismissed, no longer contains any geographical limitation. Parliament had repealed the previous exclusion of employees (mariners working on British ships apart) who ordinarily worked outside Great Britain in 1999 and put nothing in its place. But it was agreed that section 94(1) could not apply to all employment anywhere in the world. But to what did it apply? Lord Hoffmann, with whom all the other members of the appellate committee agreed, emphasised that this was a question of law (para 34), and that it was a matter of applying a principle rather than inventing a rule (para 23). The standard, normal or paradigm case was an employee working in Great Britain at the time of the dismissal (paras 25, 27). Also covered were peripatetic employees who might spend much of their time outside Great Britain but were nevertheless based here (para 30). 6. The problem of expatriate employees, who worked or were based abroad, was more difficult (para 35). Lord Hoffmann agreed with counsel for the Ministry of Defence that it might well be correct to describe the cases in which section 94(1) could exceptionally apply to employees working outside Great Britain as those where despite the workplace being abroad, there are other relevant factors so powerful that the employment relationship has a closer connection with Great Britain than with the foreign country where the employee works. But like many accurate statements, it is framed in terms too general to be of practical help. So he tried to identify the characteristics which such an exceptional case would ordinarily have (para 36). First, it would be very unlikely that the right would apply unless the employee was working for an employer who was based here; but many British companies carry on businesses in other countries, so something more would be needed (para 37). The something more might be that the employee was posted abroad for the purpose of a business carried on in Great Britain, such as the foreign correspondent of a British newspaper (para 38). Another example was an employee working within what amounts for practical purposes to an extra territorial British enclave in a foreign country (para 39). There might be other examples, but he could not think of any, and they would have to have equally strong connections with Great Britain and British employment law (para 40). 7. According to these principles, all three employees in Lawson v Serco were covered by the legislation: Mr Crofts because he was based in Great Britain, and both Mr Botham and Mr Lawson because they were working for British employers in what amounted to a British enclave. In the latter two cases, although there was a local system of law the connection between the employment relationship and the United Kingdom was overwhelmingly stronger (para 39). On the other hand, he had no doubt that Bryant v Foreign and Commonwealth Office, unreported, 10 March 2003, was correctly decided: there the Employment Appeal Tribunal held that section 94(1) did not apply to a person (who happened to be a British national) locally engaged to work in the British embassy in Rome (para 39). 8. It is therefore clear that the right will only exceptionally cover employees who are working or based abroad. The principle appears to be that the employment must have much stronger connections both with Great Britain and with British employment law than with any other system of law. There is no hard and fast rule and it is a mistake to try and torture the circumstances of one employment to make it fit one of the examples given, for they are merely examples of the application of the general principle. 9. The Employment Tribunal rightly held that neither of Lord Hoffmanns specific examples applied to teachers employed by the British Government to work in European Schools abroad. The Tribunal thought that their employment was much more firmly rooted in the European Schools than in Great Britain. However, the teachers argument is that, although their actual work might have strong connections with the particular school in which they were employed, their employment relationship had virtually no connection with the system of law in the country in which that particular school happened to be. They were not employed in a British enclave but they were employed in an international enclave. There is no applicable international system of employment law to which they can turn. In this respect they are very similar to Mr Lawson and Mr Botham, where there was a local system of law, but the connection between the employment relationship and the United Kingdom was overwhelmingly stronger. 10. The teachers also draw attention to the similarities between their case and that of Mrs Wallis and Mrs Grocott: see Ministry of Defence v Wallis and Grocott [2011] EWCA Civ 231. This case is of interest, first, because of the agreed statement of facts between the Ministry of Defence and the claimants, which was relied upon by the employment judge; and second, because on facts very similar to the present case, the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal reached a different conclusion. 11. Mrs Wallis was employed by the Ministry of Defence as a library assistant at the international school attached to the Supreme Headquarters Allied Powers Europe (SHAPE) in Belgium. Mrs Grocott was employed by the Ministry of Defence as a school secretary in the British section of the Armed Forces North International School attached to the Joint Forces Command (JFC) in the Netherlands. Both SHAPE and JFC are entities within the structure of NATO. The claimants were recruited to these jobs because they were the wives of armed forces personnel working at SHAPE and JFC. Both were dismissed from their jobs when their husbands left the British armed forces (although they continued to work for NATO at SHAPE and JFC respectively in a civilian capacity). According to the agreed statement of facts in the case, the Ministry of Defence regards it as desirable for the harmony of the family life of those engaged in the forces, or the civilian component accompanying them, that there are employment opportunities open to their spouses and other dependants and so actively tries to recruit them. Their contracts of employment are governed by English law and the Ministry of Defence goes to considerable lengths to reassure such employees that their terms and conditions are essentially English. They pay neither British nor local taxes, but do pay British national insurance contributions. These employees are in a different category from directly employed labour. The latter are employees engaged locally with the help of the host state, who are engaged on local (host state) labour terms, regardless of their nationality, and pay local taxes. 12. The employment judge rightly rejected the argument that the women were working within a British enclave. Rather, they were working within an international enclave. But their employment was so closely connected to England as to be within section 94(1) of the Employment Rights Act 1996. They were piggy backed by their husbands into the same terms and conditions as employees of the British armed forces posted to serve abroad, who undoubtedly fall within the Botham exception. They were thus in a quite different position from the locally engaged directly employed labour such as Mrs Bryant: Mrs Bryants connection with England was just the fortuitous one of nationality in what would otherwise be a standard case of directly employed labour. 13. That reasoning was described as unimpeachable by Underhill J in the Employment Appeal Tribunal and accepted by the Court of Appeal. Elias LJ said this: They were the spouses of persons who formed part of a British contingent working in an international enclave, and they obtained their employment only because of that relationship. In my judgment they have equally strong connections with Great Britain and British employment law as those employed in British enclaves abroad (para 46). Mummery LJ also rejected the Ministry of Defence submission that this would be to export British unfair dismissal law to a foreign country and contrary to the principles of sovereignty and equality of states in international law: Considerations of international comity could not possibly affect the claimants husbands access to an employment tribunal for unfair dismissal from the armed forces and I do not see how they could affect claims by the claimants if there is a sufficiently strong connection of their employment to Great Britain and its unfair dismissal law (para 35). 14. The teachers in this case point out that they too have been recruited to work in an international enclave and have even stronger links with Britain and British employment law. They have not been recruited simply because they are the dependants of British personnel posted abroad, but as British public servants to be posted abroad. Furthermore, although they were not being employed abroad for the purpose of a British undertaking conducted here, nor were they being employed for the purpose of a foreign branch of a British undertaking, they were being employed to fulfil the obligations which the United Kingdom government had undertaken to other European Union states under the Statute of the European Schools. 15. In this case, the Secretary of State was content simply to argue that it fell within neither of the cases identified as exceptional in Lawson v Serco: the teachers worked entirely overseas in a sui generis international establishment and this was not a strong enough connection with Great Britain and its employment law. The Court of Appeal had been right to defer to the judgment of the specialist Employment Tribunal. In applying for permission to appeal in the case of Wallis and Grocott, the Ministry of Defence argues that aspects of the employees personal lives have been wrongly labelled employment factors, so as to supply the necessary connection between the employment and British employment law, and that the decision fails to respect the employment laws of the countries in which the women were employed. The Ministry also makes some in terrorem arguments about the potential consequences of adding these further examples to those in Lawson v Serco. 16. In our view, these cases do form another example of an exceptional case where the employment has such an overwhelmingly closer connection with Britain and with British employment law than with any other system of law that it is right to conclude that Parliament must have intended that the employees should enjoy protection from unfair dismissal. This depends upon a combination of factors. First, as a sine qua non, their employer was based in Britain; and not just based here but the Government of the United Kingdom. This is the closest connection with Great Britain that any employer can have, for it cannot be based anywhere else. Second, they were employed under contracts governed by English law; the terms and conditions were either entirely those of English law or a combination of those of English law and the international institutions for which they worked. Although this factor is not mentioned in Lawson v Serco, it must be relevant to the expectation of each party as to the protection which the employees would enjoy. The law of unfair dismissal does not form part of the contractual terms and conditions of employment, but it was devised by Parliament in order to fill a well known gap in the protection offered by the common law to those whose contracts of employment were ended. Third, they were employed in international enclaves, having no particular connection with the countries in which they happened to be situated and governed by international agreements between the participating states. They did not pay local taxes. The teachers were there because of commitments undertaken by the British government; the husbands, in Wallis and Grocott, were there because of commitments undertaken by the British government; and the wives were there because the British government thought it beneficial to its own undertaking to maximise the employment opportunities of their husbands dependants. Fourth, it would be anomalous if a teacher who happened to be employed by the British government to work in the European School in England were to enjoy different protection from the teachers who happened to be employed to work in the same sort of school in other countries; just as it would be anomalous if wives employed to work for the British government precisely because their husbands were so employed, and sacked because their husbands ceased to be so employed, would be denied the protection which their husbands would have enjoyed. 17. This very special combination of factors, and in particular the second and third, distinguishes these employees from the directly employed labour of which Mrs Bryant was an example. There, the closer analogy was with a British, or indeed any other company, operating a business in a foreign country and employing local people to work there. These people are employed under local labour laws and pay local taxes. They do not expect to enjoy the same protection as an employee working in Great Britain, although they do expect to enjoy the same protection as an employee working in the country where they work. They do, in fact, have somewhere else to go. (It would indeed be contrary to the comity of nations for us to assume that our protection is better than any others.) To admit the cases before us as another example of the principle laid down in Lawson v Serco is scarcely to extend those exceptional cases very far or to offend against the sovereignty and equality of nations. 18. For those reasons, the cross appeal is allowed and the case will return to the Employment Tribunal. It follows that the application of the Ministry of Defence for permission to appeal on this point in the cases of Wallis and Grocott will be dismissed. for the reasons she has given. |
In a free society, it is a serious thing indeed for the state compulsorily to remove a child from his family of birth. Interference with the right to respect for family life, protected by article 8 of the European Convention on Human Rights, can only be justified by a pressing social need. Yet it is also a serious thing for the state to fail to safeguard its children from the neglect and ill treatment which they may suffer in their own homes. This may even amount to a violation of their right not to be subjected to inhuman or degrading treatment, protected by article 3 of the Convention. How then is the law to protect the family from unwarranted intrusion while at the same time protecting children from harm? In England and Wales, the Children Act 1989 tries to balance these two objectives by setting a threshold which must be crossed before a court can consider what order, if any, should be made to enable the authorities to protect a child. The threshold is designed to restrict compulsory intervention to cases which genuinely warrant it, while enabling the court to make the order which will best promote the childs welfare once the threshold has been crossed. That threshold is defined by section 31(2) of the Act as follows: A court may only make a care order or supervision order if it is satisfied (a) that the child concerned is suffering, or is likely to suffer, significant harm; and (b) that the harm, or likelihood of harm, is attributable to (i) the care given to the child, or likely to be given to him if the order were not made, not being what it would be reasonable to expect a parent to give to him; or (ii) the childs being beyond parental control. Once that threshold is crossed, section 1(1) of the Act requires the court to treat the welfare of the child as its paramount consideration, having regard to the checklist of factors listed in section 1(3). These include any harm which [the child] has suffered or is at risk of suffering (section 1(3)(e)). There are therefore three questions to be answered in any care case: first, is there harm or a likelihood of harm; second, to what is that harm or likelihood of harm attributable; and third, what will be best for the child? It is some indication of the importance of the issues that the apparently simple words of section 31(2) have been considered by the House of Lords and the Supreme Court in no less than six cases: In re M (A Minor) (Care Orders: Threshold Conditions) [1994] 2 AC 424; In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563; Lancashire County Council v B [2000] 2 AC 147; In re O (Minors) (Care: Preliminary Hearing) [2003] UKHL 18, [2004] 1 AC 523; In re B (Children) (Care Proceedings: Standard of Proof) (CAFCASS intervening) [2008] UKHL 35, [2009] AC 11; and In re S B (Children) (Care Proceedings: Standard of Proof) [2009] UKSC 17, [2010] 1 AC 678. In re M was concerned with the first limb of the first question: what is meant by is suffering significant harm? We are concerned with the second limb of that question: what is meant by likely to suffer significant harm? A child may be protected, not only if he is actually suffering harm as a result of a lack of reasonable parental care, but also if it is likely that he will do so in the future. But how is a court to be satisfied that it is likely that this particular child the child concerned will suffer significant harm in the future? It has twice been held in the House of Lords that the mere possibility, however real, that another child may have been harmed in the past by a person who is now looking after the child with whom the court is now concerned is not sufficient. The court has to be satisfied on the balance of probabilities that this person actually did harm that other child: see In re H [1996] AC 563 and In re B [2009] AC 11. But in both those cases, it was not established that the other child had been harmed at all. The issue in this case is whether it makes a difference that another child has indeed been harmed in the past and there is a possibility that this parent was responsible for that harm. Before turning to the facts and the arguments in this case, it should be emphasised that in the real world the issue hardly ever comes packaged in this simple way. There are usually many readily provable facts upon which an authority can rely to satisfy the court that a child is likely to suffer significant harm unless something is done to protect him. Cases in which the only thing upon which the authority can rely is the possibility that this parent has harmed another child in the past are very rare. As the Court of Appeal pointed out, this case has itself been artificially constructed by the decision to treat the issue as a preliminary question of law: [2012] EWCA Civ 380, [2012] 3 WLR 952, para 81. Who can say what facts the court might have found relevant had the history been fully investigated in the usual way? The history There are three children concerned in this case: HJ, a girl born on 20 June 2005, so now aged seven years and seven months; TJ, a boy born on 17 August 2006, so now aged six years and five months; and IJ, a girl born on 19 July 2009, so now aged three years and six months. The two eldest, HJ and TJ are the children of DJ, the second respondent, and his former partner, SC. They have been looked after by their father for the whole of their lives, having remained in his care when their mother left in 2008. IJ is the daughter of JJ, the first respondent, with whom DJ formed a relationship in 2008. It was originally thought that DJ was the father of IJ, but DNA testing established that her father is SW, with whom JJ had earlier had a relationship. IJ has been part of the family unit with DJ, HJ and TJ for the whole of her life. Her mother, JJ, also formed part of that family unit for 20 months after IJ was born. Then in March 2011, the local authority formed a child protection plan which required her to move out of the family home, which she did. The local authority issued care proceedings in respect of all three children in April 2011. DJ and JJ married in June 2011 and have since had a child together, RJ, who was born on 1 December 2011. The local authority quite properly took steps to protect the three older children after being made aware by another local authority of the findings of Judge Masterman in earlier care proceedings relating to JJs second child, S, who was born on 13 August 2005. Those proceedings were brought because of the death of her first born child, T L, when T L was only three weeks old. T L was born on 9 March 2004 and discharged from hospital two days later. When T L died on 29 March 2004, she was found to have multiple fractures to her ribs, caused on at least two occasions, bruising to her left jaw, right side of her face, left shoulder and left inner elbow, all caused non accidentally, and serious and untreated nappy rash. She had died as a result of asphyxia caused either by a deliberate act or by SW taking her to bed with him and JJ leaving her in SWs care. Both were held to have colluded to hide the truth. In the circumstances, the judge found that singling out a likely perpetrator does not help this couple because it must be debateable as to which is worse, to inflict this injury or to protect the person responsible. Following Judge Mastermans judgment of 24 May 2006, JJ and SW withdrew from contact with S and eventually consented to his being adopted outside the family. They remained in a relationship until August 2007, when SW committed an assault upon JJ to which he eventually pleaded guilty at Cardiff Crown Court in June 2008. This was by no means the first occasion known to the local authority upon which SW had been violent towards JJ. The current care proceedings were transferred to the High Court in September 2011, for determination as a preliminary issue whether the local authority could rely upon Judge Mastermans findings to cross the threshold in section 31(2) of the Children Act 1989. By the time that this issue came to be tried by Judge Hallam in November 2011, the local authority had conceded that the only matter that could meet the threshold criteria, at the relevant time, are the findings . as to the physical injuries sustained by T L. They do not seek to bring failure to protect into the equation. Hence the issue Judge Hallam had to determine was whether JJs inclusion in a pool of perpetrators in earlier proceedings involving a different child and a different relationship can form the basis of the threshold in relation to a subsequent child in later proceedings. After examining the earlier authorities, Judge Hallam concluded that the likelihood of significant harm . can only be proved by reference to past facts which are proved on the balance of probabilities. The only facts available to the local authority had not been proved to that standard. Hence the threshold was not met and the proceedings were dismissed. Following this judgment, JJ returned to the family home, where she has remained ever since. No proceedings have been taken in respect of RJ, who was born shortly after the judgment. Judge Hallam did remark that she was aware that the present law does cause consternation for local authorities, professionals involved in the protection of children and academic commentators. However, it is quite apparent that the higher courts have considered those concerns and taken them into account in reaching their decisions. The local authority appealed to the Court of Appeal, which reached the same conclusion in April 2012. However, the Court of Appeal took the unusual step of itself granting the local authority permission to appeal to this court. Giving the leading judgment, McFarlane LJ commented that Artificially to limit the judicial exercise in a manner which invites the court to ignore part of the evidence in the case, might well set up the legal point for determination in a clinically clear and legally accessible manner, but it cannot, in my view, represent a proper exercise of the judicial task (para 81). While I would not criticise the local authority for agreeing to isolate the issue in this way, that comment does underline the unreality of the question with which this court, in common with Judge Hallam and the Court of Appeal, has been presented. The unreality is further illustrated by the way in which Mr Stephen Cobb QC, on behalf of the appellant local authority, has framed the issue as a choice between two extremes: Where a previous court has found that there is a real possibility that one or other or both of two or more carers have perpetrated significant harm on a child in his or her care, is that finding a finding of fact that may be relied upon in subsequent proceedings relating to only one of the potential perpetrators in support of a conclusion that there is a real possibility or likelihood of a subsequent child in a new family unit of which he or she is part suffering significant harm or is it a finding that must be totally ignored in the subsequent proceedings? As will be seen, this is not the only way of framing the issue. The authorities The leading authorities are well known and have been reviewed many times, most recently by this court in In re S B [2010] 1 AC 678. However, as Mr Cobb correctly observes, they were not reviewed with this precise issue in mind and it is therefore necessary to consider them briefly once more. The starting point is the decision in In re H [1996] AC 563. The proceedings concerned three young girls whose elder sister alleged that she had been sexually abused by their mothers partner, her step father and the father of the two youngest girls, from the age of seven or eight. The judge did not find the allegations proved but held that there was a real possibility that they were true. As this was the only basis upon which it was suggested that it was likely that the other children would suffer harm in the future, the case was dismissed. The decision of the House of Lords is authority for three important propositions: first, that the standard of proof of such allegations is the simple balance of probabilities; second, that likely in section 31(2) does not mean more likely than not; rather, it means likely in the sense of a real possibility, a possibility that cannot sensibly be ignored having regard to the nature and gravity of the feared harm in the particular case (per Lord Nicholls of Birkenhead at p 585F); third, however, A decision by a court on the likelihood of a future happening must be founded on a basis of present facts and the inferences fairly to be drawn therefrom (p 590A); unresolved judicial doubts and suspicions can no more form the basis of a conclusion that the second [likelihood of harm] threshold condition in section 31(2)(a) has been established than they can form the basis of a conclusion that the first [present harm] has been established (p 589E). The third proposition was held only by a majority of three to two but has been reaffirmed in two later decisions at this level. In In re B [2009] AC 11, the essential facts were very similar to those in In re H. Care proceedings were brought in respect of three children, because the oldest of the three, a 16 year old girl, alleged that their mothers husband, her step father and the father of the two younger children, had sexually abused her and physically abused both her and her elder brother. The judge could not decide that it was more likely than not that the girl was telling the truth, but nor could he decide that it was more likely than not that the husband was telling the truth. Hence those allegations could not form the basis of a conclusion that the children were likely to suffer harm in the future. On appeal, the childrens guardian, with the support of the local authority, invited the House of Lords to over turn the decision in In re H in favour of a test that there was a real possibility that certain events had happened. The House unanimously and unhesitatingly declined that invitation (per Baroness Hale of Richmond at paras 53 54). The thoroughly convincing reasons given by Lord Nicholls were summarised thus (para 54): The threshold is there to protect both the children and their parents from unjustified intervention in their lives. It would provide no protection at all if it could be established on the basis of unsubstantiated suspicions: that is, where a judge cannot say that there is no real possibility that abuse took place, so concludes that there is a real possibility that it did. In other words, the alleged perpetrator would have to prove that it did not. Mr Cobb [for the children] accepts that it must be proved on the balance of probabilities that the child is suffering significant harm. But nevertheless he argues that those same allegations, which could not be proved for that purpose, could be the basis of a finding of likelihood of future harm. If that were so, there would have been no need for the first limb of section 31(2)(a) at all. Parliament must be presumed to have inserted it for a purpose. Furthermore the Act draws a clear distinction between the threshold to be crossed before the court may make a final care or supervision order and the threshold for making preliminary and interim orders. If Parliament had intended that a mere suspicion that a child had suffered harm could form the basis for making a final order, it would have used the same terminology of reasonable grounds to suspect or reasonable grounds to believe. The House also reaffirmed and clarified that the standard of proof was the simple balance of probabilities. No more severe standard was to be applied because of the seriousness of the allegations. The inherent probabilities were only part of deciding what was more likely than not to have happened. As Lord Hoffmann pointed out (at para 15), assaulting children is a serious matter, but if it is clear that the child has indeed been assaulted, it makes no sense to say that neither of the possible perpetrators is likely to have done it. The fact is that one of them did and the task is to decide whether it is more probable that one rather than the other was responsible. In neither In re H nor In re B had the question of identifying a perpetrator arisen. The real possibility under discussion was whether or not the alleged abuse had taken place at all. But the question did arise in In re S B [2010] 1 AC 678, a judgment of this court to which seven Justices subscribed. The case concerned two children. The older child, J, was found to have sustained non accidental bruising to his face and arms at the age of only four weeks. The judge found it likely that only one parent had been responsible and there was no question of the other having failed to protect the child. She concluded that neither parent could be ruled out as the perpetrator of the injuries, although she later indicated a 60% likelihood that it was the father. The parents had separated while the proceedings were going on and their younger child, W, was born before the hearing. He had never come to any harm, having been removed from his mother at birth. Nevertheless, the judge concluded that, because there was a real possibility that the mother had injured J, there was also a real possibility that she would injure W in future. The principal point in the case was the standard of proof to be applied in identifying the perpetrator of injuries which are found to have been non accidental. The court reaffirmed that this was the simple balance of probabilities, and pointed to the very real advantages of making such a finding where it was possible to do so (paras 36 to 38). The judge had applied too high a standard and it was not possible to treat her later 60% indication as a positive finding that the father was the perpetrator. Hence the case was sent back to be re heard. case (para 49): In relation to the younger child, W, there was another reason to remit the The judge found the threshold crossed in relation to [W] on the basis that there was a real possibility that the mother had injured [J]. That, as already explained, is not a permissible approach to a finding of likelihood of future harm. It was established in In re H [1996] AC 563 and confirmed in In re O [2004] 1 AC 523 that a prediction of future harm has to be based upon findings of actual fact made on the balance of probabilities. It is only once those facts have been found that the degree of likelihood of future events becomes the real possibility test adopted in In re H. It might have been open to the judge to find the threshold crossed in relation to [W] on a different basis but she did not do so. Strictly speaking, that paragraph may be obiter, as the case was to be remitted for re hearing in any event. However, it did constitute an independent reason for remitting the case in relation to W, a reason which would have applied to him even if the judge had applied the correct standard of proof in relation to the perpetrator of Js injuries but been unable to decide between the parents. It is that paragraph which has apparently caused consternation in some quarters and which is under challenge in these proceedings. One reason for that consternation may be that paragraph 49 is inconsistent with some observations of Wall J in In re B (Minors) (Care Proceedings: Practice) [1999] 1 WLR 238. The case concerned two year old twins, CB and JB, one of whom, CB, had suffered shaking injuries on two occasions. The judge found that the mother had shaken the child on the second of those occasions, so (the father being off the scene) there was a proper factual basis for concluding that the threshold criteria were met in relation to both children. Nevertheless, the judge went on to observe that they would have been met even if he had been unable to decide who was responsible for the shaking. His basis for doing so appeared to be that, as likely means a real possibility, there must therefore, in my judgment, be a possibility which cannot sensibly be ignored that if JB were left in the care of his parents or either of them he too will suffer significant harm (p 248E). With the greatest of respect to the undoubted wisdom and experience of the judge, that reasoning fails to distinguish between the degree of likelihood required by the word likely and the factual findings required to satisfy the court of that likelihood, a distinction which was clearly drawn by the House of Lords in the later case of In re B [2009] AC 11. It is also suggested that para 49 of In re S B [2010] 1 AC 678 is inconsistent with the two other cases which, together with In re H [1996] AC 563, make up a trilogy of House of Lords cases in which the leading opinion was given by Lord Nicholls. The second in the trilogy is Lancashire County Council v B [2000] 2 AC 147. The House of Lords was not concerned with the basis for predicting the likelihood of future harm for the purpose of section 31(2)(a) but with the proper interpretation of the second part of the threshold test, the attributability criterion in section 31(2)(b). A seven month old baby had suffered injury from having been violently shaken on at least two occasions. Care proceedings were brought in relation to that child and also in relation to the child of a child minder who looked after the injured child during working hours. The judge found that the injuries had been caused either by the mother, or by the father, or by the child minder, but he could not identify the perpetrator. He concluded that the threshold criteria were not met in respect of either child, but the Court of Appeal and the House of Lords held that they were met in respect of the injured child. However, the Court of Appeal held that they were not met in respect of the child minders child and permission to appeal that decision out of time to the House of Lords was refused. The House held that it was not necessary, for the purpose of section 31(2)(b), to make a finding that an individual parent whose parental responsibility would be curtailed by the order was responsible for the harm suffered. It was enough that the harm was attributable to the care given to the child not being what it ought to have been. What was meant by the care given to the child? Did it refer only to the care given by the parents, or by other primary carers, or by anyone who was looking after the child? The House held that it referred principally to the childs primary carers, but where, as here, the care of the child was shared, it could also embrace those who shared that care (at p 166B D). This might mean that the attributability condition was satisfied when there was no more than a possibility that the parents were responsible (at p 166F). Hence, it is now argued, the same should apply to the likelihood of harm condition in section 31(2)(a). If a parent can fall foul of the attributability criterion when there is no more than a possibility that she has harmed the child, why should she not fall foul of the likelihood criterion in the same circumstances? However, the Lancashire case was not about the likelihood criterion. There is nothing in the House of Lords decision in the case to cast doubt upon the decision of the Court of Appeal (albeit reached with no enthusiasm) that the likelihood criterion in section 31(2)(a) was not met in relation to the child minders child. That child had not suffered any harm at all. The risk of future harm could be established only on the basis of proven facts, not mere suspicion. It was clear that the parents of the injured child would play no part in the childs care in the future. It had not been established on the balance of probabilities that the child minder was the perpetrator of the injuries (per Robert Walker LJ at p155F G). The decision of the Court of Appeal in the Lancashire case is, of course, in line with para 49 of the judgment of this court in In re S B [2010] 1 AC 678. In In re F (Interim Care Order) [2011] EWCA Civ 258, [2011] 2 FLR 856, the Court of Appeal held, on similar facts, that it was bound to dismiss the local authoritys appeal. The child concerned was a baby, C, born in June 2010, who had come to no harm: indeed the hearing took place only three days after he was born. Proceedings were brought because, in 2004, his father had been party to care proceedings involving his child, J, by a different woman. At the age of six months, J had suffered two fractures to the right leg on separate occasions. The judge found that either the mother or the father was responsible and in relation to the second fracture the other parent had failed to protect J. But (as in this case) the local authority in the current proceedings relied only on the real possibility that the father was the perpetrator of Js injuries and not upon any failure to protect. In refusing the local authority permission to appeal to the Supreme Court, Wilson LJ referred both to the Lancashire case and to para 49 of In re S B. He observed that the strict status of that passage as obiter carries very little significance in circumstances in which it is all of a piece with a number of earlier, yet also recent, decisions of the House of Lords (para 14). After referring to the consternation caused by para 49, he continued, No doubt there are hard and worrying cases. But the requirement of proven factual foundation is a bulwark against the states removal of a child from his family, which I consider very precious. I also applaud the Supreme Courts regular acknowledgement of the fact that, although it can depart from its previous decisions, the exercise of departure is highly unsettling for the law and should be undertaken only with great caution (para 15). The application for permission to appeal was not renewed before this court, perhaps because the local authority had since launched new proceedings alleging that the threshold was crossed on an entirely different basis (current drug taking by the parents). Should the threshold be crossed on that basis, the question might arise as to the relevance of the inclusion of the father in a (small) pool of possible perpetrators of the injuries to J at the so called welfare stage of the inquiry, where the court is considering what order if any, will best promote the welfare of the child. Wilson LJ raised the question, which he clearly regarded as causing difficulties for a trial judge, but it was unnecessary to answer it in the circumstances. The third case in the trilogy, In re O [2004] 1 AC 523, was concerned with the welfare stage of the inquiry. There were two separate appeals. In one case, a child had suffered serious injuries; the father admitted responsibility for one of them; but the judge held that neither parent could be excluded as a possible perpetrator of the others. The Court of Appeal held that the case should proceed on the basis that there was no risk, either to the injured child or to a younger child, from the mother. In the other case, a child had died as a result of serious injuries which the judge found had been inflicted by the mothers partner. A differently constituted Court of Appeal found that there was insufficient evidence that the mothers partner was the sole perpetrator, so the judge at the welfare hearing would not be able to disregard the risk to the surviving child presented by the mother. Lord Nicholls re iterated the principles already established in In re H and Lancashire County Council v B: that in considering the likelihood of future harm for the purpose of section 31(2)(a), the court had to act only on the basis of proven facts (para 17); that likely meant a real possibility; and that the care given to the child for the purpose of section 31(2)(b) included the care given by any of the childs carers so that the threshold could be crossed even though the identity of the perpetrator was not known (para 19). It was in that connection, and not in connection with the likelihood criterion, that Lord Nicholls (para 20) referred with apparent approval to what Wall J had said in In re B [1999] 1 WLR 238, 248. He went on to hold that, once it had been proved, to the requisite standard, that a child had suffered harm or was likely to do so (para 26), the court could take into account at the welfare stage the inclusion of the parent in a pool of possible perpetrators of the childs injuries. It would be grotesque to proceed on the basis that the child was at risk from neither parent (para 27). The importance to be attached to this, as to any other feature, would depend upon the circumstances of the case (para 31). On the other hand, Lord Nicholls went on to discuss, albeit obiter, whether unproven allegations of harm could be taken into account at the welfare stage and held that they could not (para 38). This accorded with the approach of the Court of Appeal in In re M and R (Child Abuse: Evidence) [1996] 2 FLR 195 (para 39): it would be extraordinary if Parliament intended that evidence insufficient to establish harm for the purpose of section 31(2)(a) should be sufficient to establish harm for the purpose of section 1(3)(e) (para 40). Once again, therefore, it is argued that, if inclusion in a pool of possible perpetrators can be taken into account (with whatever difficulty in assessing its importance) both for the purposes of the attributability criterion and at the welfare stage of the inquiry, then why can it not be taken into account for the purposes of the likelihood criterion in section 31(2)(a)? Once again, however, there is nothing in In re O to cast doubt upon the necessity for founding a prediction of future harm upon a proven factual basis. Lord Nicholls went out of his way to reiterate the necessity for this. It is also striking that, although both appeals were concerned with a child who had not (yet) been harmed, there was no discussion of the basis upon which the threshold had been crossed in their cases. Thus there was no discussion of whether or not the possible perpetrators remained members of the same household at the relevant time: clearly, if one child has suffered harm at the hands of one of two parents who remain members of the same household, it is possible (though not inevitable) to infer that another child in that household is also likely to suffer harm. Furthermore, the discussion of the relevance of inclusion in the pool at the welfare stage was all in the context of proven harm to the child concerned. Finally, reference should be made to the case of North Yorkshire County Council v SA [2003] EWCA Civ 839, [2003] 2 FLR 849. This too was not a case about the likelihood criterion. The child concerned had suffered serious non accidental injuries. The case was about the identification of the pool of possible perpetrators for the purpose of the later stages of the inquiry. The court held that a no possibility test, ruling out only those people who could not be perpetrators, cast the net far too wide. The court preferred the test of including only those where there was a likelihood or real possibility that they were responsible (para 26). In doing so, Dame Elizabeth Butler Sloss P referred to the opinion of Lord Nicholls in In re O [2004] 1 AC 523, and expressed the view that the real possibility test which he had applied at the welfare stage should also be applied at the section 31(2) part of the case (para 21). Once again, however, this was not a case about predicting the likelihood of future harm. It was about identifying the pool of possible perpetrators at the attributability and welfare stages. Its approach at that stage was expressly approved by this court in In re S B [2010] 1 AC 678, at para 43. It is worth remembering that all of these cases, in which the judge (or the Court of Appeal) found it impossible to identify a perpetrator, were decided before the decision of the House of Lords in In re B [2009] AC 11. That includes the decision of Judge Masterman in the earlier proceedings which led to this case. As was apparent in In re B, until that case was decided, the opinion of Lord Nicholls in In re H [1996] AC 563 had frequently been misinterpreted so as to require a higher standard of proof where the allegations made were serious. The nostrum had taken hold that the more serious the allegation, the more cogent the evidence needed to prove it: In re B [2009] AC 11, para 64. Reference had been made to In re H in two House of Lords cases which were concerned with two quite different statutes: see B v Chief Constable of Avon and Somerset Constabulary [2001] 1 WLR 340 (concerning sex offender orders) and R (McCann) v Crown Court at Manchester [2003] 1 AC 787 (concerning anti social behaviour orders). These had led to suggestions that in care proceedings there was a heightened standard of proof and even that the difference between the criminal and civil standards was largely illusory. Those suggestions were firmly rejected by the Court of Appeal in In re U (A Child) (Department for Education and Skills intervening) [2005] Fam 134, and equally firmly by the House of Lords in In re B [2009] AC 11. Hence, in In re S B [2010] 1 AC 678, this court re iterated that the simple balance of probabilities was the test for the identification of a perpetrator. There were cases where the judge might find this difficult, and he was under no obligation to do so if he could not. But there were particular benefits in doing so if he could. It would promote clarity in future planning for the child (para 36). It would also enable the professionals to work with the family on the basis of the judges findings (para 37). And it would help the child in due course to understand and come to terms with what had happened and why he might have been removed from his family (para 38). It may well be that a misunderstanding of the standard of proof has been responsible for some of the difficulties. Trial judges have felt themselves unable to decide which parent was responsible for harming a child. This did not matter too much at the attributability and welfare stages, although it was bound to make the task of deciding what would be best for the child much more difficult, especially if the parents had separated after the harm was done. It clearly did matter at the stage of deciding whether another child was likely to suffer significant harm, but trial judges will no doubt have taken comfort from the dicta of Wall J in In re B [1999] 1 WLR 238 until the basis for predicting likelihood came before the House once more in In re B [2009] AC 11 and In re S B [2010] 1 AC 678. Criminal and Civil law It is also argued that the approach established in the care cases, culminating in In re S B, is out of step with the modern approach in criminal and civil law where it is clear that harm has been suffered but not clear who has caused it. Section 5 of the Domestic Violence, Crime and Victims Act 2004 (as amended in 2012) creates the offence of causing or allowing a child (or vulnerable adult) to die or suffer serious physical harm. If a child dies or suffers serious physical harm as a result of the unlawful act of a member of the childs household who has frequent contact with the child, and there was at the time a significant risk of serious physical harm being caused to the child by such a person, then such a person is guilty of an offence if either (i) he or she was the person whose act caused the death or serious physical harm or (ii) he or she was or ought to have been aware of the significant risk, failed to take such steps as he or she could reasonably have been expected to take to protect the child from the risk, and the act occurred in circumstances of the kind that he or she foresaw or ought to have foreseen. The prosecution does not have to prove whether it is (i) or (ii), thus getting round the well known problem that if a child was seriously injured or died at the hands of one of his parents, but it could not be proved which, both had to be acquitted: see, for example, R v Lane (1986) 82 Cr App R 5. It will be immediately apparent that child care law already protects the child who is injured in such circumstances. He has suffered significant harm attributable to the care given to him not being what it would be reasonable to expect a parent to give to him. As the Lancashire case [2002] 2 AC 147 made clear, it is not necessary to identify the perpetrator of the harm in order to cross the threshold. Furthermore, child care law will protect another child who is a member of the same household where the other child was injured. The criminal law is only concerned with punishing those who bear some responsibility, either directly or through a failure to protect from predictable harm, for a death or serious injury which has actually taken place. It does place a duty upon those looking after a child to protect him from the foreseeable risk of serious harm caused by others in the household. But child care law already does the same. A parent who fails to protect her child not only stands to lose that child but also stands to have that failure taken into account in predicting risks to other children. The criminal law is not addressing the question with which we are concerned, which is how the likelihood of future harm can reliably be predicted. Developments in the civil law are even less in point. In Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32, the House of Lords created an exception to the general principle that a person who has suffered harm as a result of a breach of duty can only recover damages against a person who can be shown to have caused or contributed to that harm. That exception applies only where the claimant has contracted mesothelioma, has been exposed to asbestos from more than one source, and it cannot be shown which source was responsible for the disease. Any defendant who has wrongfully exposed the claimant to asbestos is liable. But in Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229, the Supreme Court made it clear that this is a special rule, created only because of the special difficulty of proving causation in mesothelioma cases. It can scarcely be described as the herald of a brave new world in which people may be held liable for harm whether or not they have caused it. In any event, like the criminal law, the civil law is looking to the past, not the future. It seeks to compensate for harm already done, not to predict whether harm is likely in the future. Discussion As this review has shown, there is no inconsistency between para 49 of In re S B [2010] 1 AC 678 and any of the earlier House of Lords authorities. On the contrary, although it addresses a different factual situation from those addressed in In re H [1996] AC 563 and In re B [2009] AC 11, it is entirely consistent with them in principle. Nor is it inconsistent with developments in the criminal and civil law. In my view, it represents a correct statement of the law, and should be followed in preference to the obiter dicta of Wall J in Re B [1999] 1 WLR 238, 248. Time and again, the cases have stressed that the threshold conditions are there to protect both the child and his family from unwarranted interference by the state. There must be a clearly established objective basis for such interference. Without it, there would be no pressing social need for the state to interfere in the family life enjoyed by the child and his parents which is protected by article 8 of the ECHR. Reasonable suspicion is a sufficient basis for the authorities to investigate and even to take interim protective measures, but it cannot be a sufficient basis for the long term intervention, frequently involving permanent placement outside the family, which is entailed in a care order. That view is supported by the legislative history. The single threshold contained in the Children Act 1989 replaced the many separate criteria for taking or keeping children away from their families which were contained in the previous law. Most care proceedings were brought in juvenile courts under section 1 of the Children and Young Persons Act 1969. This contained a list of specific grounds for making care orders, two of which catered for the likelihood of future harm: where it was probable that this child would suffer harm in future, either because another child in the same household had already been harmed, or because a person who had been convicted of harming another child had joined the household. During the 1970s, however, local authorities increasingly resorted to taking children into care by making them wards of court: the High Court (along with the divorce courts) had power, in exceptional circumstances making it impracticable or undesirable for the child to be cared for by his parents or any other individual, to commit a ward to the care of a local authority: section 7(2) of the Family Law Reform Act 1969. The Review of Child Care Law: Report to Ministers of an Interdepartmental Working Party (1985) (DHSS), which led to the 1989 Act, rejected a broad welfare test, because it would not offer the degree of statutory protection against unwarranted interference which the preceding House of Commons Select Committee Report on Children in Care had considered essential (para 15.10). The Review also rejected the exceptional circumstances criterion, because it would add little to the broad welfare criterion and leave too much to subjective interpretation (para 15.11). Instead, it proposed a criterion of actual or likely harm (paras 15.12 to 15.25). Much of the discussion focussed on the definition of harm the Review contemplated a substantial deficit in the standard of health, development or well being which could reasonably be expected of the particular child, whereas the Act speaks of significant harm. The Review did not discuss the meaning of likely or how such a likelihood is to be predicted. It is clear, however, that the threshold was designed to be more precise than the previous wardship criterion and to focus upon what was seen as the key objective justification for state interference that the child was suffering or likely to suffer harm. The threshold comes in two limbs and each has two distinct components. In the first limb, the court must be satisfied (a) that the child is suffering significant harm, and (b) that that harm is attributable to the care given to him not being what it would be reasonable to expect a parent to give him. In the second limb, the court must be satisfied (a) that the child is likely to suffer significant harm, and (b) that that likelihood is attributable to the care likely to be given to him if the order is not made not being what it would be reasonable to expect a parent to give to him. It would, as Lord Nicholls pointed out in In re H [1996] AC 563, 591, be odd if the first limb had to be proved to the satisfaction of the court but the basis for prediction in the second limb did not. Since In re H, a clear distinction has been drawn between the degree of likelihood required by the second limb and the basis upon which the court can be satisfied of that likelihood. It was held in In re H that likely did not mean more likely than not, but a real possibility, the degree of possibility required depending upon the seriousness of the harm which was feared. The House might have held that likely meant probable, but it adopted a more flexible test. It is worth noting that Lord Nicholls did not think that adopting this more flexible test would significantly prejudice the parents interests: so far as the parents are concerned, there is no particular magic in a threshold test based on a probability of significant harm as distinct from a real possibility (p 585D). Having adopted a flexible test of likelihood, it became all the more important to hold that an objective factual basis was required from which to draw the inference that future harm was likely. This was controversial in In re H [1996] but has been firmly established ever since and for very good reasons. Care courts are often told that the best predictor of the future is the past. But prediction is only possible where the past facts are proved. A real possibility that something has happened in the past is not enough to predict that it will happen in the future. It may be the fact that a judge has found that there is a real possibility that something has happened. But that is not sufficient for this purpose. A finding of a real possibility that a child has suffered harm does not establish that he has. A finding of a real possibility that the harm which a child has suffered is non accidental does not establish that it was. A finding of a real possibility that this parent harmed a child does not establish that she did. Only a finding that he has, it was, or she did, as the case may be, can be sufficient to found a prediction that because it has happened in the past the same is likely to happen in the future. Care courts need to hear this message loud and clear. In In re S B [2010] 1 AC 678, the real possibility that the mother had harmed J was the only basis upon which the judge concluded that it was likely that W would suffer harm in the future. There was nothing else. J had suffered bruises and all bruising to a tiny baby must be taken seriously. But they had probably been caused on one occasion by one parent. It could not be suggested that the other parent had failed to protect him. What was impermissible, as stated in para 49, was to make this, and this alone, the basis for predicting that the mother was likely to harm W in the future. It may well be that when the case was re heard, facts emerged from which it was possible to make such a prediction. Cases such as In re S B are vanishingly rare. As McFarlane LJ pointed out in the Court of Appeal [2012] 3 WLR 952, para 109, the Lancashire case [2000] 2 AC 147, in respect of the child minder, was truly a one point case. There were no other adverse findings made against the childminder (he says other but he must mean no adverse findings) (para 108). Likewise, In re S B was [a case] of a one off (whodunit) injury, there was no question of failure to protect and no finding of collusion (para 111). Even in In re F [2011] 2 FLR 856, there were no adverse findings against the father (para 112). Most care cases are not one off whodunit cases. They come with a multitude of facts. It is, of course, a fact that a previous child has been injured or even killed while in the same household as this parent. No one has ever suggested that that fact should be ignored. Such a fact normally comes associated with innumerable other facts which may be relevant to the prediction of future harm to another child. How many injuries were there? When and how were they caused? On how many occasions were they inflicted? How obvious will they have been? Was the child in pain or unable to use his limbs? Would any ordinary parent have noticed this? Was there a delay in seeking medical attention? Was there concealment from or active deception of the authorities? What do those facts tell us about the child care capacities of the parent with whom we are concerned? Then, of course, those facts must be set alongside other facts. What were the household circumstances at the time? Did drink and/or drugs feature? Was there violence between the adults? How have things changed since? Has this parent left the old relationship? Has she entered a new one? Is it different? What does this combination of facts tell us about the likelihood of harm to any of the individual children with whom the court is now concerned? Does what happened several years ago to a tiny baby in very different circumstances enable us to predict the likelihood of significant harm to much older children in a completely new household? Hence I agree entirely with McFarlane LJ when he said that In re S B is not authority for the proposition that if you cannot identify the past perpetrator, you cannot establish future likelihood (para 111). There may, or may not, be a multitude of established facts from which such a likelihood can be established. There is no substitute for a careful, individualised assessment of where those facts take one. But In re S B is authority for the proposition that a real possibility that this parent has harmed a child in the past is not, by itself, sufficient to establish the likelihood that she will cause harm to another child in the future. Disposal It follows that I would dismiss the local authoritys appeal on the single issue which has been identified for the decision of this court and the courts below. But what should be the consequence of that? As McFarlane LJ pointed out, there were several facts found by Judge Masterman which might have been relevant to an assessment of whether it was likely that this mother would harm children in the future. There was (a) gross and substantial collusion expressly designed to prevent the court identifying the perpetrator; (b) failure to protect T L; (c) deliberately keeping T L away from health professionals in order to avoid the detection of injury (para 109). The local authority have chosen not to rely upon these. They acquiesced in the decision to treat this as a one point case. The result was that this mother returned to the household where she had previously been looking after the three subject children for some time without (as far as we know) giving any cause for concern. She has now been looking after her new baby for more than a year, also without (as far as we know) giving any cause for concern. In those circumstances it would be most unfair to the whole family, not only to this mother, but also to her husband and all the children, for these proceedings to continue further. If the local authority wish to make a case that any of these children is likely to suffer significant harm in the future, they will have to bring new proceedings. The current application must remain dismissed. LORD WILSON I agree that the appeal should be dismissed. I will set out the reasons for my agreement in all save the final three of the following paragraphs of this judgment. Then I will identify an issue between myself and most other members of the court which, although important, does not affect the disposal of the appeal. Where a child has suffered significant harm but the court is unable to identify its perpetrator or perpetrators, it will consign all those whose perpetration of it remains a real possibility to a pool of possible perpetrators. One of the most vexed issues in the public law relating to children surrounds the legal consequences of the consignment of a person, let us say X, to a pool of possible perpetrators. To be specific: at what stage or stages, and in what way, does a court appraise the risk posed to a child by X when his or her perpetration of significant harm to that child or to another child has been adjudged to be a real possibility yet no more than a real possibility? It is agreed that, when the threshold to the making of a care or supervision order set by section 31(2) of the Children Act 1989 (the Act) has been crossed and the court proceeds to consider, under section 1(1) of the Act, whether it would serve the welfare of the child to make such an order, the consignment of a proposed carer to a pool of possible perpetrators of harm to that child or to another child must, with whatever degree of difficulty, be weighed in the balance: for it is relevant to the harm which the child is at risk of suffering (section 1(3)(e)) and to the capacity of X to meet his or her needs (section 1(3)(f)). So the court will, in particular: (a) study the circumstances in which Xs possible perpetration of that harm took place; (b) compare them with the circumstances in which, if permitted, X would provide care for the subject child; (c) weigh the significance of any changes in X and in the circumstances surrounding him or her since the time when he or she may have perpetrated the harm; (d) have regard to the age and other characteristics of the subject child; and (e) assess the adequacy of the protective measures which are in place, or could be put in place, by way of mitigation of such risk as X may pose to the subject child. It seems that occasionally, probably in order to aid the difficult task which in the future he or another judge may face of weighing, at the welfare stage, the significance of his consignment of X, along with another person (let us say Y), to a pool of possible perpetrators, a judge has proceeded to suggest that the real possibility that Y perpetrated the injuries is stronger than the real possibility that X did so. In a case in the Court of Appeal, namely In re T (Care Proceedings: Appeal) [2009] EWCA Civ 1208, [2010] 1 FLR 1325, I suggested, at para 62, that a judge who had made such a suggestion might have been trying to dance on the head of a pin. Three weeks later, in In re S B (Children) (Care Proceedings: Standard of Proof) [2009] UKSC 17, [2010] 1 AC 678, para 44, the Supreme Court advised judges to be cautious about making such a suggestion. In my view judges would at least have to ask themselves (for, if they did not do so, an appellate court, as in In re T, might be invited to ask itself) whether their reasons for considering that the real possibility of perpetration was stronger in relation to Y than in relation to X were not, instead, reasons for concluding that the former had probably perpetrated the injuries and that therefore there should be no pool at all. But is the consignment of a person to a pool of possible perpetrators also relevant to the issue whether the threshold set by section 31(2) of the Act is crossed? The threshold has two parts: (a) that the child is suffering, or is likely to suffer, significant harm; and (b) that the harm or likelihood of harm is attributable either to the care given, or likely to be given, to him not being what it would be reasonable to expect a parent to give to him or to his being beyond parental control. The phrase not being what it would be reasonable to expect a parent to give in section 31(2)(b) covers every case in which a court concludes that the care provided by one or other of the parents or by anyone else who shared the childs care fell short of a reasonable standard, even if, provided that he must have been within those categories, the person whose care thus fell short cannot be identified: Lancashire County Council v B [2000] 2 AC 147. It is therefore only in few cases that subsection 2 (b), known as the attributability condition, presents any significant extra hurdle to the crossing of the threshold. We may thus put the attributability condition to one side and ask, more narrowly, whether the consignment of a person to a pool of possible perpetrators is also relevant to whether the child is suffering, or is likely to suffer, significant harm. Indeed we may further narrow the question by also putting to one side the child who is suffering significant harm. For in such a case, and subject to the attributability condition, the threshold is crossed irrespective of whether the perpetrator of the harm to the child can be identified. So this appeal surrounds the unharmed child, whom a local authority alleges to be likely to suffer significant harm at the hands of a person because she (or he) has been consigned to a pool of possible perpetrators of harm to another child. The Court of Appeal directed substantial criticism at the appellant local authority, Stockton on Tees Borough Council, for having presented this application for care orders to the judge on the basis that the only fact upon which it relied for the crossing of the threshold was that the first respondent, JJ, had been consigned to a pool of possible perpetrators of injuries to her deceased child, T L. In making this confined presentation Stockton took a deliberate decision not to rely on the findings of Judge Masterman that, had she not been the perpetrator of the injuries, JJ had failed to protect T L, had kept her away from health professionals in order to avoid detection of her injuries and had colluded with T Ls father in attempting to prevent the court from identifying their perpetrator. The most powerful of the criticisms made in the Court of Appeal emanated from Lord Judge CJ. He suggested that if, on Stocktons confined presentation, the ultimate verdict of the courts was to be that the threshold had not been crossed but if, on a wider presentation, the threshold would have been crossed and the court would have proceeded to make care orders, Stocktons decision might turn out irresponsibly to have left the children at risk. The Lord Chief Justice made a powerful point. It is no more than partly undermined by a provisional conclusion, derived from the limited material before the court, that it seems improbable that the welfare of the children would be served by their being taken into care or even by obliging JJs husband, namely DJ, to separate from her as a condition of the courts declining to remove some or all of them from his care. Nevertheless I decline to join in the condemnation of Stockton. The relevance or otherwise to the threshold of a carers presence in a pool of perpetrators is a question which has rightly concerned local authorities and other child care professionals for years: see In re F (Interim Care Order) [2011] EWCA Civ 258, [2011] 2 FLR 856, para 15. Local authorities need to understand the parameters of their ability to obtain care and supervision orders. The only decision of the Supreme Court directly to have addressed the question, namely In re S B (Children) (Care Proceedings: Standard of Proof), cited above, was primarily reached on another basis, which related to the standard of proof. The present appeal at last confers upon this court the opportunity, indeed imposes upon it the obligation, to decide the question, in effect once and for all. For Stocktons severe pruning of its case has ensured that the decision cannot branch out in another direction. Nevertheless in my view leading counsel for JJ and DJ are right to submit that it is a vanishing rarity for a past finding of a persons (say a mothers) possible perpetration of injuries to a child not to be accompanied by findings that, in any event, she had culpably ill treated or neglected the child. The most usual such findings, which, as I have indicated, were all made by Judge Masterman in relation to JJ, are that, even assuming in her favour that she was not the perpetrator of the injuries, she had culpably failed to protect the child from them, had failed to seek medical attention for them and, by lying, had sought to disable the court from identifying her then partner as their perpetrator. Findings of such a character can be profoundly serious because they appear to betoken a mothers willingness to sacrifice the elementary interests of a child to be safe and free from injury on the altar of some adult relationship. On reflection, I am not at all sure that such findings become irrelevant just because the mother is now living, as JJ is now living, with another partner who does not represent a risk to a subject child and from whom there is therefore no specific need for the child to be protected: for no doubt the child will continue to need protection from a variety of situations and from persons other than the new partner. More widely, such findings raise grave concerns about that mothers entire capacity for responsible care; and, if marshalled by a local authority as the factual foundation for the crossing of the threshold, they would need most carefully to be weighed against such evidence as indicated an improvement in her capacity for responsible care as at the relevant date. Stockton does not dispute that a prediction of likelihood of significant harm must be founded on proven facts. There is, of course, no express statement of such a requirement in the Act itself. It arises as a result of judicial interpretation at the highest level, namely in In re H (Minors) (Sexual Abuse: Standard of Proof)) [1996] AC 563; and the interpretation has been specifically reaffirmed in In re B (Children) (Care Proceedings: Standard of Proof) (CAFCASS intervening) [2008] UKHL 35, [2009] AC 11. I respectfully disagree with the view, which Lord Reed at para 93 describes as attractive, that the interpretation is over complicated. At all events Stockton argues, instead, that a persons consignment to a pool of possible perpetrators of harm to a child is itself a finding of fact which can found a prediction that a second child is likely to suffer significant harm; or, even if not, that, when added to a finding (being on any view a finding of fact) that the first child did suffer harm, it provides the requisite foundation upon which it would be open to the court to predict the likelihood. Is a bald statement that there is a real possibility that X caused the injuries a statement of fact? I personally do not find the answer easy. But there is no need for an answer. For the consignment of two (or more) persons to a pool of possible perpetrators goes further than that: it is a statement not only that there is a real possibility that X caused the injuries and alternatively that Y caused them but also that no one else caused them, i.e that one or other of them did cause them. I am clear that such a conclusion does amount to a finding of fact. But is it a fact relevant to the threshold? Where X and Y remain together as a unit and are putting themselves forward as carers for an unharmed child, it is certainly relevant and might well suffice in enabling the threshold to be crossed in relation to that child; for in those circumstances the fact is that somebody in the childs proposed home did perpetrate injuries to another child. But the difficulty arises in the case, reflective of the facts in this appeal, in which X and Y no longer remain together as a unit and in which only one of them, X, is put forward as a carer. The consignment of X to a pool is not a finding that X did cause the injuries. So the question arises whether in that situation such a finding of fact is relevant. Here is the crux of this appeal. Stocktons case is deeply illogical. Stockton argues that the children are at risk of suffering significant harm because of the presence in their home of JJ. So the requisite foundational facts must relate to JJ. To point to no more than the fact that T L suffered grave non accidental injuries is, on any view, insufficient. A second fact is needed such as relates to JJ. Stockton seeks to make the link with her by relying on her consignment to the pool of possible perpetrators of the injuries. But her consignment to the pool is not a relevant fact because it falls short of ascribing their perpetration to her. The result is that there is no relevant second fact. In both In re H and In re B, cited above, it was clear that, if in each case the girl had suffered harm, it had been at the hands of her step father; in the event, however, the courts conclusion was no more than that there was a real possibility that she had suffered the harm. Stockton does not challenge the principle established by those cases that such a conclusion was insufficient to found a likelihood that the step father would cause significant harm to other children. The present appeal presents the precisely obverse situation; there was no doubt that T L had suffered harm and the only issue, which in the event was unable to be resolved save in terms of a real possibility, related to the identity of the perpetrator. There is in my view no basis for departing from that principle in this precisely obverse, yet analogous, situation. The harm and the persons responsibility for it are the two planks on which any conclusion about likelihood must rest and they must be equally sturdy. If and insofar (so Stockton proceeds to submit) as the basis of the appeal is illogical, then so be it; for otherwise legalism would triumph over child protection. But in my view logic is the blood which runs through the veins of the law: allow it to escape and ultimately the edifice collapses. Nor is the rigid approach to the factual foundation properly categorised as legalism. In In re H, cited above, Lord Nicholls commented, at p 592, on the unanimous conclusion of the House that, when it turned from looking at the past to look at the future, a likelihood of significant harm meant only a real possibility of it. Therein, said Lord Nicholls, lies the protection for children. He continued: But, as I read the Act, Parliament also decided that proof of the relevant facts is needed if this threshold is to be surmounted. Before the section 1 welfare test and the welfare checklist can be applied, the threshold has to be crossed. Therein lies the protection for parents. They are not to be at risk of having their child taken from them and removed into the care of the local authority on the basis only of suspicions. My view remains that the need for the local authority to prove the facts which give rise to a real possibility of significant harm in the future is a bulwark against too ready an interference with family life on the part of the state. And, subject to the caveat that the court received no argument on the impact of article 8 of the European Convention on Human Rights, I incline to the view that nothing less than a factual foundation would justify such grave interference with the rights of the child and the parents thereunder to respect for their family life: see Olsson v Sweden (1989) 11 EHRR 259, in which, at paras 67 and 68 (which it has cited with approval on many subsequent occasions), the European Court of Human Rights stressed that a childs removal into care was justified only if it was necessary in a democratic society in the sense that it corresponded to a pressing social need and was based on reasons which were relevant and sufficient. In a final argument which found some favour with McFarlane LJ in the Court of Appeal, but which, with respect, I find puzzling, Stockton urges that the interpretation of the alternative limb of section 31(2)(a) of the Act should be no less flexible than the modern approach of the criminal law reflected in section 5 of the Domestic Violence, Crime and Victims Act 2004, as amended. Its general effect is that, where a child has died or been seriously harmed as a result of an unlawful act, a member of his household is guilty of an offence even if the jury can conclude no more than that either he perpetrated the act or he was or ought to have been aware that the child was at significant risk of harm and failed to take reasonable steps to protect him from it. In my view, however, there is no disparity of principle in this respect between the criminal law and the proper approach to the likelihood of significant harm in the subsection. In paras 103 to 109 of his judgment McFarlane LJ reverted to the findings of Judge Masterman that, if she did not perpetrate the injuries to T L, JJ was at any rate culpable in the respects summarised at para 67 above; and the Lord Justice suggested that the effect of the dismissal of the appeal would be that such findings of culpability must be ignored in evaluating the likelihood of significant harm to another child. But they are to be ignored only because, in setting up the present proceedings as a test case, Stockton has invited the court to ignore them. I therefore conclude that the mothers consignment to the pool of possible perpetrators of the injuries to T L is irrelevant to whether the three subject children are likely to suffer significant harm. The issue between myself and most other members of this court arises out of the following observations: those of Lady Hale, at paras 50 and 54, that what had been (a) impermissible in the In re S B case [2010] 1 AC 678 was for the court to have made the mothers consignment to the pool alone or by itself the basis for predicting the likelihood; (b) that of Lord Hope, at para 87, that a persons consignment to a pool may in combination with other facts and circumstances help to show that the threshold has been crossed; and those of Lord Reed, at paras 95, 96 and 98, that a persons (c) consignment to a pool cannot solely or by itself form the basis of a prediction of likelihood and that some other cause for concern, besides [the consignment], must be established. First, I hasten to make clear that I respectfully agree with a different point made by Lord Hope at para 87, namely that, in addressing the likelihood that an uninjured child will suffer significant harm, the court can treat Xs consignment to a pool of possible perpetrators of injury to a second child as information which invites further inquiry. It would therefore go too far to say that, at the threshold inquiry, the consignment should be ignored. It might enable the court to find relevant facts established. There might, for example, be a disputed allegation that X had perpetrated the injuries which a third child had suffered; and the real possibility that X had perpetrated the injuries to the second child might, when added to the other evidence, lead the court to find the allegation established. Xs perpetration of the injuries to the third child would then be a relevant fact. By no alchemy, however, could Xs possible perpetration of the injuries to the second child then become a relevant fact. My disagreement with most of my colleagues relates to their suggestion, made most explicitly by Lord Hope, that although Xs consignment to a pool cannot alone constitute a factual foundation for a prediction of likely significant harm, it can, if weighed together with other facts which are on any view relevant, figure as part of the requisite factual foundation. I feel driven to the conclusion that their suggestion is illogical; and that if, for the purpose of the requisite foundation, Xs consignment to a pool has a value of zero on its own, it can, for this purpose, have no greater value in company. I can only hope that their suggestion, highly authoritative though it will be, will not destabilise the requisite foundation; will not in practice lead to a prediction about a real possibility in the future being founded, in part, on no more than a real possibility about what happened in the past; and will not, by the back door, lead to the ascendancy over the majority view in In re H (Minors) [1996] AC 563 of the minority view which, so Lord Reed (with whom Lord Clarke and Lord Carnwath agree) indicates, would in principle have held some attraction for him. LORD HOPE It is not the function of the court to give rulings on points of law arising from a hypothetical state of facts. But I do not see this appeal, or the approach that has been taken by the local authority in pruning the case as it has done in order to present us with a single issue on which authoritative guidance is said to be needed, as open to that criticism. From time to time cases of the kind that require that sort of treatment do come up, and it is in the public interest that the court should respond to them in as helpful a way as possible. That is especially so where the problem to which its attention has been drawn is said to be due to a difficulty in applying the way judges have interpreted the provisions of a statute to a given set of facts, which need to be isolated from their usual surroundings in order to obtain a definitive ruling on the point. The court will, of course, need to be satisfied that the issue which has been raised is one which does genuinely require attention, and is not itself an artificial one. It is, no doubt, highly unusual for cases under section 31(2) of the Children Act 1989 to be decided on such a narrow basis. The question whether the threshold has been crossed must almost always be decided on a consideration of all the facts. Had it not been for the need for guidance on the point that has been raised, that would certainly have been the proper way to approach this case. But I am entirely satisfied that the issue that has been presented to us in this appeal is one of general public importance and that we should deal with it. I also think that such facts as we have at our disposal suggest that it would be wrong to criticise the local authority for having acted irresponsibly. JJs relationship with SW, with whom she was living at the time of T Ls death, ended more than five years ago. Since then she has formed a new relationship with DJ, to whom she is now married, and she has been looking after the three children who are the subject of these proceedings for about four years and her new baby for more than a year. So far as we know, there has been no cause for concern. It would be open to the local authority to take the appropriate action at any time if there were grounds for thinking that the children were suffering or were likely to suffer significant harm. I am prepared to assume in the local authoritys favour that it would not have approached this case in the way it has done if there were reasons for thinking that it was putting the children at risk of suffering significant harm by doing so. Turning to the issue that has been presented to us, the golden rule must surely be that a prediction of future harm has to be based on facts that have been proved on a balance of probabilities. I would respectfully endorse Lord Wilsons observation in para 75, repeating what he said in In re F (Interim Care Order) [2011] EWCA Civ 258, [2011] 2 FLR 856 that this is a bulwark against too ready an interference with family life on the part of the state. One has only to reflect for a moment on the tragic consequences of some of the notorious cases of two decades ago to appreciate the wisdom of this remark. They were referred to by the First Division of the Court of Session in L, Petitioners (No 1) 1993 SLT 1310, 1313: see also Rochdale Borough Council v A [1991] 2 FLR 192; Sloan v B 1991 SC 412 (the Orkney case). L was a case where eight children from three separate families in Ayrshire were made the subject of place of safety orders under Part III of the Social Work (Scotland) Act 1968 on inadequate evidence. It was several years before those orders could be set aside, and it took many months of careful and skilled work after that to bring the families who had been split up in traumatic circumstances together again. These were extreme examples. Many other cases of unjustified removal may be expected to occur if the golden rule is not adhered to. Unjustified removal can itself result in significant harm to the children the very thing that section 31 was designed to prevent. It is not just the immediate distress of separation. Long term relationships between parents and their children can be damaged too, as the court found in the Ayrshire case in the series of unreported hearings that it took to restore the situation as closely as possible to what it had been before the removal took place. To identify what is and is not a finding of fact for the purposes of the threshold, which looks to the future, is only the first step in the analysis. Views may differ as to what is truly a fact for this purpose, but I do not think that one need dwell on this question. Anything that is proved on a balance of probabilities may be taken into account to see what can be made of it. The crucial steps are to identify what is relevant and what is not, and then to determine whether what is found to be relevant is sufficient for a finding that the threshold has been crossed. If it is not, the question will be whether there are other facts and circumstances that can be brought into account to satisfy this requirement. Let us assume that the question is whether the child would be at risk while in the care of X. A finding that X is in the pool of two or more possible perpetrators of harm that a child sustained in the past is a finding of fact. It means that, because X is in the pool, it is possible that X was the perpetrator. If the perpetrators are still together, it will be relevant, and may on its own be sufficient, to show that the threshold has been crossed. If the parties have separated and X is the carer, I decline to say that a finding that X was in the pool will no longer be relevant. That is so for two reasons: first, because it is information which invites further inquiry as to whether the subsequent child is likely to suffer harm while in the care of X; and, second, because, in combination with other facts and circumstances that the inquiry reveals about Xs attitude or behaviour, it may help to show that this threshold has been crossed. It may have a bearing on the weight of the evidence when looked at as a whole, including an assessment of the balance of probabilities. Each case will turn on its own facts, and the context in which the finding is being examined will vary from case to case. It is not possible, dealing with an issue about the risk of future harm in the abstract as we are here, to be more precise than that. So I do not, with respect, agree with Lord Wilson that the finding can never be relevant. But it will not on its own be sufficient. The crucial point is this: it cannot, and must not, be treated on its own as a finding of fact that it was X who caused or contributed to the injuries. The question which has been put to us, as set out in the Statement of Facts and Issues, is whether (i) a finding that a child has suffered harm while in the care of more than one person and (ii) a finding that one or both of the carers have perpetrated that harm are findings of fact which may be relied on in subsequent proceedings relating to only one of the potential perpetrators, in support of a conclusion that a subsequent child is likely to suffer significant harm in a new family unit of which that potential perpetrator is part. The answer which I would give, applying the test set out in para 49 of In re S B (Children) (Care Proceedings: Standard of Proof) [2010] AC 678, is that these findings may be relied on only to the extent that they may be relevant to the issue the court has to decide. But to find that this information is relevant does not go far enough. This is because such findings would not be sufficient, on their own, to establish that a child in the new family unit was likely to suffer significant harm. If they are the only findings that are available, they must be disregarded in the assessment for lack of sufficiency. A prediction of future harm based on what has happened in the past will only be justified if one can link what has happened in the past directly and unequivocally with the person in the new family unit in whose care the subsequent child is living or will now live. For these reasons, and for those given by Lady Hale, Lord Wilson (except in his final three paragraphs) and Lord Reed I too would dismiss the appeal. LORD SUMPTION I share the misgivings of Lord Wilson about the suggestion that something which has not been proved to the requisite standard and therefore has no weight of its own at the threshold stage, can nevertheless add to the weight of something else that has been proved. I therefore agree with the observations at paragraphs 78 80 of his judgment. With that reservation, I agree with the judgment of Lady Hale and would, like the rest of the court, dismiss the appeal. LORD REED (with whom Lord Clarke and Lord Carnwath agree) I see the attraction of the view that the approach to the interpretation of section 31(2)(a) of the Children Act 1989 adopted by the majority in In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563 was over complicated and has had unfortunate consequences. As Lord Lloyd of Berwick said, at p 581: Parliament has asked a simple question: Is the court satisfied that there is a serious risk of significant harm in the future? The question should be capable of being answered without too much over analysis. The number of subsequent appeals concerned with the interpretation of section 31(2)(a) suggests that the approach adopted in that case may have raised problems of interpretation or application calling for repeated clarification. This is unfortunate, especially in an area of the law which has to be applied on a daily basis by courts at all levels, and in which clarity is therefore of particular importance. Nevertheless, it is too late to reconsider the decision in In re H. The view of the majority has been followed in two later decisions at the highest level, as Lady Hale has explained, and it must in my view be treated as settled law. The case of In re H was itself concerned with the question whether, where a child alleged that she had been sexually abused and that allegation was the sole cause for concern, the allegation had to be proved before the court could intervene. As Lord Nicholls of Birkenhead explained at p 591, the conclusion that it did was consistent with the terms of section 31(2)(a), which permit intervention where the child concerned is suffering, or is likely to suffer, significant harm. Why, it was asked, would Parliament have provided the former of those alternatives, if the likelihood of harm (construed as meaning a real possibility) would be sufficient in a case where previous harm was alleged but not proved? As Lady Hale has explained at paras 48 50 of her judgment, if In re H established that a real possibility of past harm was an impermissible basis for inferring a real possibility of future harm, the decisions of the Court of Appeal in Lancashire County Council v B [2000] 2 AC 147, and of this court in In re S B (Children) (Care Proceedings: Standard of Proof) [2009] UKSC 17; [2010] 1 AC 678, established that a real possibility that X was the perpetrator of past harm was an insufficient basis for inferring a real possibility that X might perpetrate future harm. This conclusion does not cause any difficulty in circumstances where all the possible perpetrators of the past harm are also responsible for the future care of the child in question: where for example a child is living with X and Y, proof that either X or Y previously harmed another child may provide a basis for inferring that either X or Y might harm the child in question, and that there is therefore a real possibility of that childs being harmed. The court cannot on the other hand draw such an inference, following Lancashire County Council and In re S B, where it is proved that either X or Y harmed another child but it is only X who is now responsible for the care of the child in question. In other words, where the person who harmed a child cannot be identified, the threshold cannot be met in relation to another child solely on the basis that a possible perpetrator of the harm is involved in the care of that child unless all possible perpetrators are so involved. In substance, as it appears to me, the court is saying that, as a matter of law, a real possibility that X harmed another child in the past is not by itself a basis upon which the court can properly be satisfied that there is a likelihood that X will harm the child in question in the future. A basis for such a rule can be found, ultimately, in the language of section 31(2)(a): as Lady Hale has explained, the decision in In re H reflected the terms of that provision, and that decision, together with the subsequent decisions of the House of Lords and the Supreme Court, including the decision in In re S B, form a coherent body of law. Support for such a rule can also be found in the contrast between section 31(2)(a) and section 43(1)(a), which applies where the court is satisfied that the applicant has reasonable cause to suspect that the child is suffering, or is likely to suffer, significant harm. The approach adopted in In re S B also derives support from the legislative history of section 31(2), as Lady Hale has explained. I am, with respect, less convinced, at least in the absence of any argument on the point, by Lord Wilsons suggestion that it is an approach which the court is compelled to adopt in order to comply with article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. Article 8 is undoubtedly relevant to the circumstances in which a care order should be made, but there seems to me to be room for argument as to whether it is engaged by a provision which merely confers upon the court the jurisdiction enabling it to make such an order. As Lord Clyde explained in the Lancashire County Council case [2000] 2 AC 147, 170, section 31(2) merely opens the way to the possibility that an order may be made. A care order will only be granted by the court after careful consideration of the case in accordance with section 1, including consideration of the matters specified in section 1(3) and the requirement in section 1(5) that an order is only to be made if the making of it would be better for the child than the making of no order at all. The need for caution and restraint in the making of an order is further underlined by the requirement that any order be proportionate in order to comply with article 8 of the Convention. Finally, I would observe that if, as has been said, the current law is causing consternation, that appears to me to be an over reaction. It is important to emphasise, as Lady Hale has done at paras 52 54, that the courts inability to establish whether X was the perpetrator of harm to a child in the past does not necessarily mean that the threshold set by section 31(2)(a) cannot be met in relation to a child now being cared for by X. It means however that some other cause for concern, besides the possibility that X was the perpetrator of the harm, must be established. The onus thereby imposed is, in a case of that kind, one which should ordinarily be capable of being discharged where substantial causes for concern currently exist. In practice, in the great majority of cases where a child has been harmed by one of its primary carers but it has not been possible to identify which of them was responsible, and only one of them is now responsible for the care of another child, it will be possible to establish facts on the basis of which a prognosis as to the future risk of harm can be made. The case at hand would itself appear to have been such a case, if the evidence before the court had not been deliberately restricted. For these reasons, and those given by Lord Hope and Lady Hale, I agree that the appeal should be dismissed. |
Is an asylum seeker or refugee who resists his or her return from the United Kingdom to Italy (the country in which she or he first sought or was granted asylum) required to establish that there are in Italy systemic deficiencies in the asylum procedure and in the reception conditions of asylum seekers . [which] amount to substantial grounds for believing that the asylum seeker would face a real risk of being subjected to inhuman or degrading treatment. (emphasis added). This formulation is taken from para 94 of R (NS) (Afghanistan) v Secretary of State for the Home Department [2013] QB 102. The mooted requirement that there be a systemic deficiency lies at the heart of this appeal. That is the first and principal issue. It also constitutes the critical finding of the Court of Appeal. But, somewhat unusually, it is an issue on which there is no significant dispute between the parties. The appellants, the interveners (UNHCR), and the respondent all assert and agree that the Court of Appeal was wrong to hold that the sole ground on which a second state is required to exercise its power under article 3(2) of Regulation 343/2003 to entertain a re application for asylum or humanitarian protection, and to refrain from returning the applicant to the state of first arrival, is that the source of risk to the applicant is a systemic deficiency, known to the former, in the latter's asylum or reception procedures (emphasis added) [2012] EWCA Civ 1336; [2013] 1 WLR 576, para 62. The parties are also agreed that the test laid down in Soering v United Kingdom (1989) 11 EHRR 439 on this issue continues to hold the field. That case had established that the removal of a person from a member state of the Council of Europe to another country is contrary to the European Convention on Human Rights (ECHR) where substantial grounds have been shown for believing that the person concerned . faces a real risk [in the country to which he or she is to be removed] of being subjected to [treatment contrary to article 3 of the Convention] para 91 of Soering. The Dublin II Regulation and domestic legislation Council Regulation 343/2003 is commonly known as the Dublin II Regulation. In certain circumstances it provides that asylum claims must be processed and acted on by the member state of the European Union in which an asylum seeker first arrives. Asylum seekers and those who have been granted asylum (refugees) may therefore be returned to the first member state by any other member state of the EU in which asylum seekers and refugees subsequently arrive. But where a person claims that his removal from the United Kingdom would expose him to the risk of breach of his human rights and/or article 3 ill treatment within the member state to which it is proposed to return him, he has a statutory right of appeal under section 82 of the Nationality, Immigration and Asylum Act 2002 against a decision to remove him. This right is exercisable from within the United Kingdom unless the Secretary of State certifies the claim to be clearly unfounded. By virtue of section 92(4)(a) of the 2002 Act and of para 5(4) in Part 2 of Schedule 3 to the Asylum and Immigration (Treatment of Claimants etc) Act 2004, claims concerning removals to a listed country (of which Italy is one) are to be certified as clearly unfounded unless the Home Secretary is satisfied that they are not. Such a certificate can be issued if "on any legitimate view" the claimants assertion that his enforced return would constitute a violation of his human rights would fail on appeal: R (Yogathas) v Secretary of State for the Home Department [2003] 1 AC 920, by Lord Hope at para 34; R (L) v Secretary of State for the Home Department [2003] EWCA Civ 25; [2003] 1 WLR 1230 and ZT (Kosovo) [2009] 1 WLR 348. The Home Secretary in each of these appeals has decided that the contention that Italy is in systemic breach of its material international obligations is clearly unfounded, and that there is no separate reason to abstain from removal. Certification that the claims are clearly unfounded has the effect of prohibiting any appeal while the applicant remains in the United Kingdom. The appellants circumstances Sir Stephen Sedley, who delivered the judgment of the court in the Court of Appeal, summarised the accounts given by the appellants in paras 13 to 28 of that judgment. The brief description of their circumstances which follows is drawn mainly from that synopsis. By way of preamble Sir Stephen correctly observed that, when deciding whether an asylum claim is capable of succeeding, it is customary to take the facts at their highest in the claimants favour. That is the approach that I intend to follow in my consideration of these cases. Where, therefore, it is stated that a particular event took place or that a certain factual proposition is established, this is for the purposes of considering the appellants cases at their reasonable height. It does not betoken any final finding or conclusion. EH is an Iranian national aged 32. He arrived in Italy on 11 November 2010 or thereabouts. It is recorded that his fingerprints were taken on that date. A short time later he left Italy and made his way to the United Kingdom. On 11 March 2011 he applied for asylum in this country on the ground that he had been tortured while a political detainee in Iran. When it became clear that he had first claimed asylum in Italy, the Italian authorities were contacted about EH. They failed to respond within the time stipulated in Dublin II and they were deemed to have accepted responsibility for his claim. (It appears that the Italian authorities subsequently accepted responsibility for the claim.) EHs claim was certified as being clearly unfounded. Removal directions were set. EH launched judicial review proceedings to challenge both the decision to certify and the removal directions. He claimed that there was a real risk that he would be subjected in Italy to inhuman and degrading conditions. He relied not on his own experience of reception in Italy, which was brief, but on that of others. There is an abundance of evidence that EH is now severely disturbed and suffering from PTSD and depression, both of which require treatment. The Court of Appeal found that there was a real risk that EH, whether as an asylum seeker or as an accepted refugee, will be homeless if returned to Italy. For the purposes of the present appeal that finding cannot be challenged. EM is an Eritrean national. It is believed that he was born on 8 January 1989. He is an Orthodox Pentecostal Christian. His father was of the same faith and had been arrested by the Eritrean authorities for having arranged prayer meetings at the family home. His uncle was concerned that EM would also be arrested on suspicion of following his fathers faith and made arrangements for him to leave Eritrea. EM arrived in Italy at Lampedusa, and was first recorded as being there on 21 August 2008. He was fingerprinted and placed in a hotel in Badia Tedalda in the Arezzo province. After about 2 months he and the other asylum seekers there were told that they must each pay 120 for further processing of their applications. Having no money, he and other asylum seekers, who were likewise without funds, were given train tickets to Milan. For some three weeks after he arrived there he was himself homeless and destitute, living among other asylum seekers in similar circumstances. A fellow asylum seeker helped him to travel clandestinely to the United Kingdom, where he claimed asylum on 11 November 2008. His fingerprints were found to correspond with fingerprints on record in Italy. On 18 November 2008 Italy was asked to accept responsibility for his claim and, having failed to respond, was deemed to have accepted responsibility. Removal directions were set, but were challenged by an application for judicial review. On 1 June 2010 the Home Secretary certified EM's asylum claim as clearly unfounded. This was also challenged in the judicial review proceedings. AE fled from Eritrea because she and her husband had been ill treated by the authorities after their arrest on suspicion that her husband was helping people to leave the country illegally. She arrived in Italy in August 2008 and was screened. After this she was placed in a hotel at Bibbiano in the north of Italy in the Emilia Romagna region. She was accommodated there for some three months and about halfway through her stay she was interviewed about her asylum claim. At the end of that period, AE was recognised as a refugee and granted a five year residence permit. At about the same time she and other inhabitants of the hotel were told that it was too expensive to house them there and they were sent to a place that she knew as Aruso but was probably Arezzo. She was given accommodation in crowded and insanitary premises which she was obliged to share with other women and with men. Vouchers which she was given for food ran out after two weeks and she depended on charities for food after that. After three months they were told that they had to leave. AE and a friend went back to Bibbiano. They were refused accommodation but managed to contact a friend who let them stay with him for a month, sharing a room with three men. They left after one of the men tried to rape AE. She and her friend managed to get train tickets to France and she then secretly boarded a lorry which took her to the United Kingdom, arriving here on 19 January 2010. Following unsuccessful judicial review proceedings she was returned to Italy on 15 October 2010. She then found herself homeless and destitute in Milan. In desperation she was forced to live in a squat where she was repeatedly raped by a number of men who threatened her with reprisals if she reported them. Finally, with 100 borrowed from a fellow Eritrean, she made her way back to this country, where she was detained on arrival. A decision was made to remove her again to Italy. Her claim that to do so would violate her human rights was certified by the Home Secretary as clearly unfounded, and an application for permission to seek judicial review of the certificate was dismissed. Psychiatric evidence was submitted to the Home Secretary to the effect that AE was traumatised as a result of her experiences in Italy and suicidal at the prospect of being returned there. It was contended that to return her to Italy would violate her rights under article 3 of ECHR. The Home Secretary rejected an application to use her discretionary power to transfer AEs refugee status to the United Kingdom and confirmed the decision to remove her to Italy. In response to a Rule 39 indication issued by the European Court of Human Rights (ECtHR), removal of AE has been stayed. On 10 November 2011 her renewed application for permission to apply for judicial review was refused by the Administrative Court. Her challenge to the refusal to transfer her refugee status to this country was not pursued but the challenge to the certification of her claim remains. MA is an Eritrean woman who reached Italy in 2005 and in April 2006 was accorded refugee status there on the ground of fear of persecution as a Pentecostal Christian. In January 2008 an agent brought her three children to Italy to join her: M, D and Y. MA's evidence is that the family, despite being recognised as refugees, had to live on the streets, sleeping under bridges, lighting fires for warmth when rain permitted and relying on charitable hand outs for food. After three months MA brought her children covertly to the United Kingdom. In the course of embarking in a lorry at Calais in the dark, she lost Y, whose whereabouts are still not known. The other two are now settled in secondary and tertiary education here and are both doing well. Because of their failure to respond to the UK's request, the Italian authorities in July 2008 were deemed under Dublin II to have accepted responsibility for MA and her children. Removal directions were set but were cancelled because the Italian police considered that they had been given inconsistent details about the children and would not accept them. MA would not cooperate with attempts to interview her about this. Instead she sought to oppose removal by reliance on medical evidence that she was HIV positive. By July 2009 Italy had accepted responsibility and fresh removal directions were set. They were cancelled because of a new application for judicial review, which was later withdrawn. They were re set for July 2010, but the family failed to check in for their departure to Italy. MA then made further allegations about her treatment both in Eritrea and in Italy. In August 2010 the Home Secretary certified MAs claim as clearly unfounded. She refused to transfer MA's refugee status to the United Kingdom and re set removal directions. These were cancelled when the present proceedings were brought. The Court of Appeal found that MA had displayed considerable deviousness. She had lacerated her fingertips to prevent identification on arrival here and had used a different name from that which she used in Italy. It was only after a third set of removal directions was given that, for the first time, she gave an account of being serially raped in both Italy and Eritrea. As the court found, however, her late accounts of rape do not necessarily make them incredible. Moreover, MA's account of the effects of her experiences is now supported by what appears to be cogent medical evidence. As to MA's two children, M, although now legally an adult, continues to form part of the mother's human rights claim. She is taking a course at an educational establishment, and staff there speak highly of her. D is at a school which has reported favourably on both his behaviour and his academic progress. Neither child has any desire to be returned to Italy, with its associations of misery and hardship. MA is reportedly suicidal at the prospect of enforced return. The Court of Appeals decision The Court of Appeal sat as a first instance court in two of the cases (AE and EH) and in its appellate jurisdiction in the cases of EM and MA [2013] 1 WLR 576. This came about because permission to allow AE and EH to apply for judicial review was refused at first instance and granted on application to the Court of Appeal which then conducted the substantive hearing in those cases. In the cases of EM and MA, appeals against substantive decisions by, respectively, Kenneth Parker J and Langstaff J were heard by the Court of Appeal in a conjoined hearing with EM and MA. that had been proffered by the Secretary of State: In para 30 of its judgment the Court of Appeal summarised the evidence Asylum seekers are accommodated in a reception centre for long enough for the Territorial Commission to evaluate their claims. If accepted as refugees, or while awaiting a decision, they are given an international protection order and assigned to a "territorial project" which forms part of SPRAR, the national system for the protection of asylum seekers and refugees. SPRAR will either provide accommodation or transfer the claimant to a public or private local provider. Access to SPRAR is by referral only. It provides food and lodging and courses designed to assist integration, but (with few exceptions) the limit of stay there is six months. On leaving, claimants can apply to charitable or voluntary providers but there is no guarantee of success. However, the international protection order affords access to free healthcare and social assistance (which does not extend to social security) equivalent to that enjoyed by nationals. This requires a fiscal code number, which in turn depends on having an address which can be verified by the police. An international protection order also allows the holder to take employment or undertake self employment, to marry, to apply for family reunification, to obtain education, to seek recognition of foreign qualifications, to apply for public housing and, after five years, for naturalisation. For those denied these rights, there is access to the Italian courts. The challenge which the appellants presented to the claims contained in this passage was set out in para 31 of the courts judgment: The claimants' case is that this may be the system in theory, but their own experience and that of many others, to which independent reports attest, is that it is not what happens in reality to a very considerable number both of asylum seekers and of recognised refugees. In short, they say, Italy's system for the reception and settlement of asylum seekers and refugees is in large part dysfunctional, with the result that anyone arriving or returned there, even if they have children with them, faces a very real risk of destitution. The Court of Appeal held that if the matter stopped [t]here they would be bound to conclude that there was a triable issue in all four cases as to whether return to Italy entailed a real risk to exposing the appellants to inhuman or degrading treatment contrary to article 3 of ECHR. This is clearly in keeping with well established jurisprudence in the area. For instance, in ZT (Kosovo) v Secretary of State for the Home Department [2009] 1 WLR 348, para 23 Lord Phillips said, If any reasonable doubt exists as to whether the claim may succeed then it is not clearly unfounded. Plainly, therefore, the Court of Appeal considered that if it could have regard to the evidence presented on behalf of the appellants, their claims could not be characterised as clearly unfounded. The Home Secretarys certificates would therefore have been of no effect and the appellants would have to be afforded an in country appeal against removal. But the court found itself deflected from giving effect to this preliminary view because of what it understood to be the Home Secretarys argument that access to article 3 and the assertion of a right of appeal could only be countenanced if it was shown that Italy was in systemic rather than sporadic breach of its international obligations and the case made on behalf of the appellants fell well short of establishing that. The Court of Appeal felt driven to this conclusion by its analysis of recent jurisprudence from ECtHR and the Court of Justice of the European Union (CJEU), particularly the trilogy of cases, KRS v United Kingdom (2008) 48 EHRR SE 129, MSS v Belgium and Greece (2011) 53 EHRR 28, and NS (Afghanistan) v Secretary of State for the Home Department Cases C 411/10 and C 493/10, [2013] QB 102. In the first of these cases, KRS, the Fourth Section of ECtHR found the applicants case to be inadmissible. He was an Iranian asylum seeker who had entered Greece before seeking asylum in the UK. Adverse reports on Greeces treatment of asylum seekers were noted by the Fourth Section but it concluded that Greeces international commitment to the European asylum system and (it was to be presumed) her compliance with that system provided a comprehensive answer to the applicants claim. Although UNHCR had advised member states to suspend returns to Greece under Dublin II, this had not displaced the presumption that Greece would abide by her obligations. In the second case, MSS, a Grand Chamber decision, ECtHR noted UNHCRs claim (in a letter to the Belgian government in April 2009) that the Fourth Section in KRS had apparently overlooked some of the criticisms that it had made of Greece. No reference had been made to whether conditions of reception conformed to regional and international standards of human rights protection or whether asylum seekers had access to fair consideration of their asylum applications or if they were able to exercise their rights under the Geneva Convention. The Grand Chamber reviewed the numerous reports and materials that had been generated about the situation in Greece since the KRS decision. It observed that these all agreed about the deficiencies of the asylum procedure in Greece. The court therefore concluded that the situation in Greece was known to the Belgian authorities; that seeking assurances from the Greek government that the applicant faced no risk of treatment contrary to ECHR was not sufficient to ensure adequate protection against the risk where reliable sources had reported practices that were tolerated by the authorities and which were manifestly contrary to the principles of the Convention; and that the Aliens Office of the Belgian government systematically applied the Dublin Regulation without so much as considering the possibility of making an exception (para 352). The Grand Chamber therefore held that there had been a violation by Belgium of article 3 of EHCR because by sending the applicant back to Greece, the Belgian authorities exposed him to detention and living conditions there which were in breach of that article. The Court of Appeal said of this decision that the assessment of risk on return is seen by the Strasbourg court as depending on a combination of personal experience and systemic shortcomings which in total may suffice to rebut the presumption of compliance (para 39). It is clear that the court felt that the personal experience of the appellants in these cases, taken in combination with documented shortcomings in the manner in which asylum seekers are dealt with in Italy, would have at least raised a case to be tried as to whether their enforced return to that country would have violated their article 3 rights (see, in particular, paras 32 and 61 of the courts judgment). But the court decided that raising an arguable case was not enough. It reached that conclusion principally because of its view as to the effect of the CJEU decision in NS. Notably, in introducing his discussion of that case, Sir Stephen Sedley said (at para 43) that, but for the fact that the decision of CJEU was binding on courts of this country, the Court of Appeal might have had to confront the problem of conflicting decisions of ECtHR and CJEU. This observation seems clearly to signify that, but for the effect of the NS case, the Court of Appeal would have come to a different conclusion from that which it felt compelled to reach. Resonances of this conflict appear later in the judgment of the Court of Appeal and will be touched on in my consideration of the NS decision. The NS case was concerned with the question whether, in deciding if it should exercise the power under article 3(2) of the Dublin II Regulation (that is the power to examine a claim which is the responsibility of another state), a member state is required to presume conclusively that the other states arrangements are compliant with its international obligations. Alternatively, is the member state which is contemplating recourse to the article 3(2) power obliged to examine whether transfer would bring a risk of violation of Charter rights or of the EU's minimum standards? CJEU decided that there was a presumption that member states would comply with their international obligations but that this was rebuttable. At para 86 of its judgment the court said: if there are substantial grounds for believing that there are systemic flaws in the asylum procedure and reception conditions for asylum applicants in the member state responsible, resulting in inhuman or degrading treatment, within the meaning of article 4 of the Charter, of asylum seekers transferred to the territory of that member state, the transfer would be incompatible with that provision. Building on that finding CJEU said this at para 94 of its judgment: to ensure compliance by the European Union and its member states with their obligations concerning the protection of the fundamental rights of asylum seekers, the member states, including the national courts, may not transfer an asylum seeker to the member state responsible within the meaning of Regulation No 343/2003 where they cannot be unaware that systemic deficiencies in the asylum procedure and in the reception conditions of asylum seekers in that member state amount to substantial grounds for believing that the asylum seeker would face a real risk of being subjected to inhuman or degrading treatment within the meaning of article 4 of the Charter. The Court of Appeal considered that CJEU had addressed in its judgment the question of what amounted to systemic deficiencies in paras 81 and 82 for, at para 46 of the Court of Appeals judgment, Sir Stephen said that CJEU had taken care in those paragraphs to draw a distinction between a true systemic deficiency and operational problems even if such problems created a substantial risk that asylum seekers would be treated in a manner incompatible with their fundamental rights. It will be necessary in due course to look at the relevant paragraphs of CJEUs judgment in order to examine whether that conclusion can be upheld. For the present, it is, perhaps, sufficient to consider its implications. A person applying for asylum in a member state might be able to establish conclusively that he would be at substantial risk of being treated in a manner incompatible with his fundamental rights if returned to a listed country but because that risk did not arise from so called systemic deficiencies it could not operate to prevent his enforced return to that country. That would be, to say the least, a remarkable conclusion. In any event, the Court of Appeal decided that proof of a systemic deficiency in the system of refugee protection had been elevated by NS into a sine qua non of intervention para 47. The court said: What in the MSS case was held to be a sufficient condition of intervention has been made by the NS case into a necessary one. Without it, proof of individual risk, however grave, and whether or not arising from operational problems in the state's system, cannot prevent return under Dublin II. It is clear that the Court of Appeal considered that NS had changed the landscape in relation to the requirements of proof of possible violation of fundamental rights from that which had hitherto obtained. At para 61 the Court of Appeal, having reviewed the evidence that had been presented on behalf of the appellants about conditions in Italy, said this: This material gives a great deal of support to the accounts given by three of the claimants of their own experiences of seeking asylum in Italy. If the question were, as Ms Carss Frisk submits it is, whether each of the four claimants faces a real risk of inhuman or degrading treatment if returned to Italy, their claims would plainly be arguable and unable to be certified. But we are unable to accept that this is now the law. The decision of the CJEU in the NS case [2013] QB 102 has set a threshold in Dublin II and cognate return cases which exists nowhere else in refugee law. It requires the claimant to establish that there are in the country of first arrival systemic deficiencies in the asylum procedure and in the reception conditions of asylum seekers . [which] amount to substantial grounds for believing that the asylum seeker would face a real risk of being subjected to inhuman or degrading treatment. A presumption of compliance The need for a workable system to implement Dublin II is obvious. To allow asylum seekers the opportunity to move about various member states, applying successively in each of them for refugee status, in the hope of finding a more benevolent approach to their claims, could not be countenanced. This is the essential underpinning of Dublin II. Therefore, that the first state in which asylum is claimed should normally be required to deal with the application and, where the application is successful, to cater for the refugees needs is not only obvious, it is fundamental to an effective and comprehensive system of refugee protection. Asylum seeking is now a world wide phenomenon. It must be tackled on a co operative, international basis. The recognition of a presumption that members of an alliance of states such as those which comprise the European Union will comply with their international obligations reflects not only principle but pragmatic considerations. A system whereby a state which is asked to confer refugee status on someone who has already applied for that elsewhere should be obliged, in every instance, to conduct an intense examination of avowed failings of the first state would lead to disarray. It is entirely right, however, that a presumption that the first state will comply with its obligations should not extinguish the need to examine whether in fact those obligations will be fulfilled when evidence is presented that it is unlikely that they will be. There can be little doubt that the existence of a presumption is necessary to produce a workable system but it is the nature of a presumption that it can, in appropriate circumstances, be displaced. The debate must centre, therefore, on how the presumption should operate. Its essential purpose must be kept clearly in mind. It is to set the context for consideration of whether an individual applicant will be subject to violation of his fundamental rights if he is returned to the listed country. The presumption should not operate to stifle the presentation and consideration of evidence that this will be the consequence of enforced return. Nor should it be required that, in order to rebut it, it must be shown, as a first and indispensable requirement, that there is a systemic deficiency in the procedure and reception conditions provided for the asylum seeker. Violation of article 3 does not require (or, at least, does not necessarily require) that the complained of conditions said to constitute inhuman or degrading conditions are the product of systemic shortcomings. It is self evident that a violation of article 3 rights is not intrinsically dependent on the failure of a system. If this requirement is grafted on to the presumption it will unquestionably make its rebuttal more difficult. And it means that those who would suffer breach of their article 3 rights other than as a result of a systemic deficiency in the procedure and reception conditions provided for the asylum seeker will be unable to avail of those rights in order to prevent their enforced return to a listed country where such violation would occur. That this should be the result of the decision of CJEU in NS would be, as I have said, remarkable. More significantly, if the Court of Appeals interpretation of NS was correct, it would give rise to an inevitable tension between the Home Secretarys obligation to abide by EU law, as pronounced by CJEU, and her duty as a public authority under section 6 of the Human Rights Act 1998. On the Court of Appeals analysis, the Secretary of State would be bound under Dublin II to return an asylum seeker or refugee to the first country in which that person had claimed or been granted asylum unless he or she could show that the anticipated breach of their article 3 rights had as its source a systemic deficiency in the asylum procedure and reception conditions. Thus, even if it could be proved conclusively that an article 3 violation was likely to occur, the return of the individual would have to take place. Such an enforced return would involve the Secretary of State in a failure to comply with the duty under section 6 of the 1998 Act not to act in a way that is incompatible with a Convention right. It may well be that, confronted by such a dilemma, the Secretary of State would have to resort to her powers under article 3(2) of the Dublin Regulation which permits each member state to examine an application for asylum lodged with it by a third country national, even if such examination is not its responsibility under the criteria laid down in the Regulation. In the event, I do not believe that it is necessary to reach a view on this because I do not consider that NS has the effect which the Court of Appeal considered it to have. NS was an Afghan national who challenged his removal under the Dublin II Regulation to Greece by the Secretary of State. He relied on material concerning the general situation in Greece for asylum seekers. A series of questions were referred to the CJEU. These raised queries about the Charter of Fundamental Rights of the European Union (the Charter) and the relationship between fundamental rights and returns under the Dublin II Regulation. In the present appeals, of course, the issue of importance from NS is the courts decision about the circumstances in which a member state must desist from transferring an asylum applicant to the state with responsibility under the Regulation. In paras 76 80 of its judgment, CJEU sets out the background to the need for mutual confidence among member states about the obligation of those states that participate in the Common European Asylum System to comply with fundamental rights including those based on the Convention relating to the Status of Refugees (the 1951 Convention) ((1951) Cmd 9171) and its 1967 Protocol ((1967) Cmnd 3906). In these paras the court also dealt with the assumption that needed to be made that the states will be prepared to fully comply. These twin considerations (the importance of the obligations and the assumption that they will be fulfilled) underpin the system a system designed to avoid blockages as a result of the obligation on state authorities to examine multiple claims by the same applicant, and to increase legal certainty with regard to the determination of the state responsible for examining the asylum claim and thus to avoid forum shopping, it being the principal objective to speed up the handling of claims in the interests both of asylum seekers and the participating member states. para 79. The aspirational aspect of this approach is readily understandable. If the system is going to work properly, if administrative delays and forum shopping are to be eliminated and if bureaucratic quagmires are to be avoided, participating states must live up to their commitments and they must inspire trust in the other participants and, in turn, repose trust in the willingness and capacity of the other participants to likewise fulfil their obligations. CJEU was therefore anxious to ensure that there was no significant compromise on the smooth operation of the inter state return of asylum seekers to the country where they first claimed asylum. The critical question is whether it sought to achieve that effective process by permitting challenges to a decision to return under Dublin II only in those cases where there is a systemic failure in the asylum procedure and reception conditions in the state to which the transfer is to take place. Before examining what CJEU said on this issue, it can be observed that an exclusionary rule based only on systemic failures would be arbitrary both in conception and in practice. There is nothing intrinsically significant about a systemic failure which marks it out as one where the violation of fundamental rights is more grievous or more deserving of protection. And, as a matter of practical experience, gross violations of article 3 rights can occur without there being any systemic failure whatsoever. One must be careful, therefore, to determine whether CJEU referred to systemic failures in order merely to distinguish these from trivial infringements of the various European asylum directives or whether it consciously decided to create a new and difficult to fulfil pre condition for asylum seekers who seek to have recourse to their article 3 rights to prevent their return to a country where it can be shown that those rights will be violated. For there can be little doubt that such a condition would indeed be difficult to fulfil. Some of the facts in the present cases exemplify the truth of that proposition. For instance, the Court of Appeal held that there was a real risk that EH, now severely disturbed and suffering from PTSD and depression, both of which require treatment, will be homeless if returned to Italy. But that is not enough to prevent his enforced return. The appalling degradation suffered by AE and the awful but distinct possibility that something of the same will happen again if she is returned to that country are not sufficient to satisfy the stringent standard which the Court of Appeal has decided must now be met. Because of the narrowly defined (by the Court of Appeal) category of systemic failures in asylum procedures and reception conditions, which these appellants have been deemed not to inhabit, they are prohibited from challenging the validity of their enforced return to a country where, if their claims are right, they will suffer breach of their article 3 rights. The unacceptable artificiality of that situation is that if a systemic failure could be demonstrated, even though the consequences were far less terrible than those which, it is anticipated, will befall these appellants, the enforced return could be resisted. With these concerns in mind, I turn to consider the critical paragraphs in the judgment of CJEU in NS. At para 80, the court said that it must be assumed that the treatment of asylum seekers in all member states complies with the requirements of the Charter, the Geneva Convention and the ECHR. Para 81 is pivotal to the courts reasoning: It is not however inconceivable that that system may, in practice, experience major operational problems in a given member state, meaning that there is a substantial risk that asylum seekers may, when transferred to that member state, be treated in a manner incompatible with their fundamental rights. The system referred to in this para is the system of the treatment of asylum seekers in all member states (see para 80). What is contemplated in para 81 is that this system may experience major operational problems in a particular member state. The circumstance that the general system may experience major operational problems in specific settings is not the same as the system having intrinsic deficiencies. The Court of Appeal in para 46 of its judgment suggested that CJEU had taken care to distinguish a true systemic deficiency from operational problems. With respect, I do not agree. What the CJEU recognised was that any system, however free from inherent deficiency, might experience operational difficulties which would cause a substantial risk that asylum seekers would be treated in a manner incompatible with their fundamental rights. The source of the risk was not systemic deficiencies (in the sense of the deficiencies deriving from intrinsic weaknesses in the system) but rather, major operational problems in a given member state. I therefore take a different view from that of the Court of Appeal in its analysis of paras 80 and 81 of the CJEU judgment. I do so on two grounds. First, I do not believe that the system (as that expression was used by CJEU in these paras) was the system in a particular member state. I consider that the words that system in para 81 are a reference back to the system of treatment of asylum seekers in all member states in para 80. Secondly, I am of the view that the source of the risk of asylum seekers being treated in a manner incompatible with their fundamental rights, which CJEU identified in these paras, is not a deficiency in the overall system but operational problems experienced in a given member state. See also in this context paras 75 and 78 of NS. Now, it is true that at a later point in the judgment, CJEU turns to refer to systemic flaws in the asylum procedure and reception conditions in Greece. At para 86 the court said: if there are substantial grounds for believing that there are systemic flaws in the asylum procedure and reception conditions for asylum applicants in the member state responsible, resulting in inhuman or degrading treatment, within the meaning of article 4 of the Charter, of asylum seekers transferred to the territory of that member state, the transfer would be incompatible with that provision. It is perhaps unfortunate that the expression systemic deficiency was employed in two different contexts to describe what are clearly distinctly different phenomena because this creates the potential for confusion. But I believe that, even in the later context, CJEU did not intend to stipulate that an anticipated violation of article 3 could only be a basis for resisting a transfer to a listed state if it could be shown that this was the result of a systemic deficiency in that countrys asylum procedures and reception conditions. Indeed, it is clear from para 89 of the courts judgment that it considered that the infringement of fundamental rights provided evidence of the systemic deficiency rather than that a systemic deficiency had to be demonstrated before violation of a fundamental right could operate to prevent the transfer. In that para the court said: The extent of the infringement of fundamental rights described in [MSS v Belgium and Greece] shows that there existed in Greece, at the time of the transfer of the applicant MSS, a systemic deficiency in the asylum procedure and in the reception conditions of asylum seekers. The important central feature of MSS and NS is that systemic deficiencies were found to be present in the asylum procedures and reception conditions in Greece. The debate in those cases therefore focused on the question of what, given that systemic deficiencies were present, the effect of those deficiencies was on the application of the presumption of compliance. There was no occasion to address the question whether systemic deficiencies had to be present before the interdict on transferring asylum seekers to the member state responsible. This is how, in my opinion, para 94 of the courts judgment in NS should be read. In that para the court said: to ensure compliance by the European Union and its member states with their obligations concerning the protection of the fundamental rights of asylum seekers, the member states, including the national courts, may not transfer an asylum seeker to the member state responsible within the meaning of Regulation No 343/2003 where they cannot be unaware that systemic deficiencies in the asylum procedure and in the reception conditions of asylum seekers in that member state amount to substantial grounds for believing that the asylum seeker would face a real risk of being subjected to inhuman or degrading treatment within the meaning of article 4 of the Charter. The focus here is on the member states awareness of systemic deficiencies which provide substantial grounds for believing that there is a real risk of inhuman or degrading treatment. In other words, does the member state proposing to transfer an asylum seeker have grounds for believing that the consequence for the person transferred will be inhuman or degrading treatment? As it happened, in both those cases the existence of systemic deficiencies which had been extensively reported on by, among others, UNHCR was the means by which the transferring states were deemed to have that knowledge but there is nothing in the reasoning of CJEU nor is there, I believe, any reason in logic to suggest that, if the transferring state acquires the same knowledge through a different medium, that it should not have the same effect. The correct approach I consider that the Court of Appeals conclusion that only systemic deficiencies in the listed countrys asylum procedures and reception conditions will constitute a basis for resisting transfer to the listed country cannot be upheld. The critical test remains that articulated in Soering v United Kingdom (1989) 11 EHRR 439. The removal of a person from a member state of the Council of Europe to another country is forbidden if it is shown that there is a real risk that the person transferred will suffer treatment contrary to article 3 of ECHR. Article 13(1) of Council Directive 2003/9/EC (the Reception Directive) requires that member states provide material reception conditions for applicants for asylum. Article 13(2) stipulates that these conditions should be such as to ensure a standard of living adequate for the health of applicants and capable of ensuring their subsistence. The Dublin Regulation and the Reception Directive must be interpreted and applied in conformity with fundamental rights: Case C 106/89 Marleasing SA v La Comercial Internacional de Alimentacin SA [1990] ECR I 4135; Joined Cases C 402/05P and 415/05P Kadi v Council of the European Union [2009] AC 1225. The preamble to Council Directive 2004/83/EC (the Qualification Directive) emphasises that, in contrast to the Reception Directive (which identifies minimum standards), the key objective is to ensure that those granted refugee status are not discriminated against in terms of access to welfare support, accommodation etc. Recital 33 is in these terms: Especially to avoid social hardship, it is appropriate, for beneficiaries of refugee or subsidiary protection status, to provide without discrimination in the context of social assistance the adequate social welfare and means of subsistence. Articles 26 29 of the Qualification Directive requires member states to provide refugees with equivalent access to that enjoyed by nationals of the member state in areas such as employment, education, social welfare and medical treatment. Article 31 requires that they be given equivalent rights as regards accommodation and article 33 calls for member states to provide appropriate integration programmes. These duties coalesce with the positive obligations on members of the Council of Europe who are also member states of the European Union. Under the EU Charter of Fundamental Rights, article 4 contains a human rights protection in equivalent language to article 3 of ECHR. The UK, as an EU member state, is obliged to observe and promote the application of the Charter whenever implementing an instrument of EU law (see article 51 of the Charter). It is common case that the positive obligations under article 3 of ECHR include the duty to protect asylum seekers from deliberate harm by being exposed to living conditions (for which the state bears responsibility) which cause ill treatment see MSS at [221]. And in R (Limbuela) v Secretary of State for the Home Department [2006] 1 AC 396 the House of Lords held that article 3 could be engaged where asylum seekers were by the deliberate action of the state, denied shelter, food or the most basic necessities of life per Lord Bingham at para 7. Where, therefore, it can be shown that the conditions in which an asylum seeker will be required to live if returned under Dublin II are such that there is a real risk that he will be subjected to inhuman or degrading treatment, his removal to that state is forbidden. When one is in the realm of positive obligations (which is what is involved in the claim that the state has not ensured that satisfactory living conditions are available to the asylum seeker) the evidence is more likely to partake of systemic failings but the search for such failings is by way of a route to establish that there is a real risk of article 3 breach, rather than a hurdle to be surmounted. There is, however, what Sales J described in R (Elayathamby) v Secretary of State for the Home Department [2011] EWHC 2182 (Admin), at para 42(i) as a significant evidential presumption that listed states will comply with their Convention obligations in relation to asylum procedures and reception conditions for asylum seekers within their territory. It is against the backdrop of that presumption that any claim that there is a real risk of breach of article 3 rights falls to be addressed. The first instance decisions In his first judgment in EM [2011] EWHC 3012 Admin, delivered on 18 November 2011, Kenneth Parker J referred approvingly to the statement in R v Home Secretary Ex p Adan [1999] 3 WLR 1274 to the effect that a system which will, if it operates as it usually does, provide the required standard protection for the asylum seeker will not be found to be deficient because of aberrations. He then said this at para 12: Following KRS, the existence of such a system is to be presumed. It is for the claimant to rebut that presumption, by pointing to a reliable body of evidence demonstrating that Italy systematically and on a significant scale fails to comply with its international obligations to asylum seekers on its territory. (original emphasis) Systematic is defined as arranged or conducted according to a system, plan, or organised method whereas the definition of the word systemic is of or pertaining to a system. Taken in context, I believe that Kenneth Parker Js statement that it had to be shown that there was a systematic and significant failure to comply with international obligations meant that the omissions were on a widespread and substantial scale. His approach is rather different from that of the Court of Appeal, therefore, in that it does not appear to suggest that it needed to be shown that there were inherent deficiencies in the system, merely that there were substantial operational problems. This approximates (at least) to what I consider is the true import of the decision in NS. On one view, therefore, Kenneth Parker Js decision is in keeping with the correct test and his decision should stand. For two reasons, however, I have decided that this would not be the correct disposal. In the first place the Court of Appeal took a different view from that of Kenneth Parker J as to the effect of the evidence. As I pointed out, (in paras 26 and 31 above) the court indicated that, but for the effect of NS, it would have been bound to conclude that there was a triable issue in all four cases as to whether return to Italy entailed a real risk to exposing the appellants to inhuman or degrading treatment contrary to article 3 of ECHR. Secondly, there is an issue as to whether Kenneth Parker Js approach accords precisely with that in Soering. In that case ECtHR had said that an extraditing contracting state will incur liability under the Convention if it takes action which has as a direct consequence the exposure of an individual to proscribed ill treatment. In order to rebut the presumption a claimant will have to produce sufficient evidence to show that it would be unsafe for the court to rely on it. On proper analysis, it may well be that Kenneth Parker J was not suggesting that there was a requirement that a person subject to an enforced return must show that his or her risk of suffering ill treatment contrary to article 3 of EHCR was the result of a significant and systematic omission of the receiving state to comply with its international obligations. It seems to me, however, that, to impose such an obligation in every instance would go beyond the Soering requirement. Since there was no reference to Soering in Kenneth Parker Js judgment and in light of this courts re assertion of the test articulated in that case, I consider that it would be sensible to have the matter revisited. In MA, Langstaff J (whose judgment is reported at [2012] EWHC 56 Admin) said (at para 62) that it could not realistically be argued that Italy systematically breaches the rights of refugees so as to involve a violation of article 3. At para 63 he rejected the argument that to rely on an absence of systematic breach avoided dealing with the practical realities of life in Italy. Langstaff J said that such realities might need to be considered if the return was to some less developed country in which the generality was for there to be such difficulties. By implication, this approach suggests that a breach of article 3, sufficient to prevent a return, could only arise where there had been systematic breach of the rights of refugees. For the reasons given earlier, I consider that a more open ended approach to the question of the risk of breach of article 3 is required. Although one starts with a significant evidential presumption that listed states will comply with their international obligations, a claim that such a risk is present is not to be halted in limine solely because it does not constitute a systemic or systematic breach of the rights of refugees or asylum seekers. Moreover, practical realities lie at the heart of the inquiry; evidence of what happens on the ground must be capable of rebutting the presumption if it shows sufficiently clearly that there is a real risk of article 3 ill treatment if there is an enforced return. Disposal I would therefore remit all four cases to the Administrative Court so that an examination of the evidence may take place to determine whether in each case it is established that there is a real possibility that, if returned to Italy, the claimant would be subject to treatment in violation of the Convention. That examination can only be conducted properly if there is an assessment of the situation in the receiving country. In appropriate circumstances, this calls for a rigorous assessment see Chahal v United Kingdom (1997) 23 EHRR 413 at para 96 and Vilvarajah v United Kingdom (1991) 14 EHRR 248 at para 108. The court must examine the foreseeable consequences of sending a claimant to the receiving country bearing in mind both the general situation there and the claimants personal circumstances, including his or her previous experience see Vilvarajah at para 108 and Saadi v Italy (2009) 49 EHRR 30 at para 130. This approach has been followed by decisions of ECtHR subsequent to MSS Hussein v Netherlands Application No 27725/10 at paras 69 and 78 and Daytbegova v Austria Application No 6198/12 at paras 61 and 67 69. The position of UNHCR The Court of Appeal recognised that particular importance should attach to the views of UNHCR and noted that ECtHR in MSS had treated UNHCRs judgment as pre eminent and possibly decisive. At para 41 Sir Stephen Sedley said this: It seems to us that there was a reason for according the UNHCR a special status in this context. The finding of facts by a court of law on the scale involved here is necessarily a problematical exercise, prone to influence by accidental factors such as the date of a report, or its sources, or the quality of its authorship, and conducted in a single intensive session. The High Commissioner for Refugees, by contrast, is today the holder of an internationally respected office with an expert staff (numbering 7,190 in 120 different states, according to its website), able to assemble and monitor information from year to year and to apply to it standards of knowledge and judgment which are ordinarily beyond the reach of a court. In doing this, and in reaching his conclusions, he has the authority of the General Assembly of the United Nations, by whom he is appointed and to whom he reports. It is intelligible in this situation that a supranational court should pay special regard both to the facts which the High Commissioner reports and to the value judgments he arrives at within his remit. I fully agree with this assessment. In a recent decision of this court, the unique and unrivalled expertise of UNHCR in the field of asylum and refugee law was acknowledged. In IA (Iran) v Secretary of State for the Home Department [2014] UKSC 6; [2014] 1 WLR 384, this court said at para 44: Although little may be known about the actual process of decision making by UNHCR in granting refugee status in an individual case, the accumulated and unrivalled expertise of this organisation, its experience in working with governments throughout the world, the development, promotion and enforcement of procedures of high standard and consistent decision making in the field of refugee status determinations must invest its decisions with considerable authority. It is of course the case that UNHCRs criticisms of the situation in Greece in its interventions in KRS and particularly MSS were more pointed and direct than they have been in the present appeal in relation to Italy. In a report of July 2012 containing recommendations in relation to Italy, UNHCR did not call for a halt to all Dublin transfers to Italy. But, as Mr Fordham QC, for UNHCR, submitted, this does not mean that the organisation considered that there were no legal obstacles to particular transfers taking place or that UNHCR had given Italy a clean bill of health. The recommendations contained in UNHCRs report of July 2012 and its more recent report of July 2013 will doubtless be examined carefully by the Administrative Court. While, because of their more muted contents, they do not partake of the pre eminent and possibly decisive quality of the reports on Greece, they nevertheless contain useful information which the court will wish to judiciously consider. Assumptions should not be made about any lack of recommendations concerning general suspension of returns under Dublin II to Italy but it is of obvious significance that UNHCR did not make any such proposal. The UNHCR material should form part of the overall examination of the particular circumstances of each of the appellants cases, no more and no less. Should refugees be treated differently from asylum seekers? Of the four appellants, two are asylum seekers (EH and EM), and two are refugees (AE and MA). AE and MA submit that their transfer to Italy is not governed by Dublin II and is not within the scope of EU law because they are refugees. The Treaty provision under which the Dublin Regulation was adopted, article 63(1) of the Treaty on European Union makes it clear that the Regulation is directed to determine which member state is responsible for considering an asylum application. Accordingly, the appellants say, the return of refugee appellants is governed exclusively by national law. The respondent, whilst agreeing that refugee appellants are not returned to member states under Dublin II, takes a rather different approach to the question whether asylum seekers and refugees should be treated similarly. It is argued that ECtHR has consistently recognised that asylum seekers are an underprivileged and vulnerable population group requiring special protection in the form of basic reception facilities whereas refugees are on a par, as regards rights and obligations with the general population see Hassan and others v Netherlands and Italy 40524/10 (27 August 2013) para 179. The Court of Appeal noted that questions had been raised in the course of argument as to whether the return to Italy of a claimant already granted refugee status there would fall under Dublin II but decided that the reasoning of the CJEU in NS required them to adopt a uniform approach to all of the present appeals see para 48. It seems to me that the relevant matter is not whether Dublin II treats refugees and asylum seekers differently or the same, but that it relates to anyone who has applied for asylum in the country from which he might be transferred, whether or not he has previously been recognised as a refugee in the country to which it is proposed he be transferred. This reflects the nature of Dublin II as a chiefly procedural instrument. Refugee is defined, but referred to only once, obliquely, in article 7: Where the asylum seeker has a family member, regardless of whether the family was previously formed in the country of origin, who has been allowed to reside as a refugee in a Member State, that Member State shall be responsible for examining the application for asylum, provided that the persons concerned so desire. An applicant or asylum seeker is defined in article 2(d) of Dublin II as a third country national who has made an application for asylum in respect of which a final decision has not yet been taken. A third country national is defined in para (a) of the same article as anyone who is not a citizen of the Union within the meaning of article 17(1) of the Treaty establishing the European Community. The appellants meet these criteria and all are subject, therefore, to the provisions of Dublin II. Whether their respective positions as asylum seekers who have previously been granted refugee status and asylum seekers who have not been granted that status will make it more or less likely that they will be at risk of violation of their article 3 rights if returned to a listed country will depend on an examination of the particular circumstances of their individual cases. One can anticipate an argument that those who have refugee status in Italy are less likely to suffer such a violation because they can assert their rights under the Qualification Directive but whether such an argument would prevail must depend on the evaluation of the evidence which is presented on that issue. |
This appeal raises important issues concerning the principle of open justice: in particular, issues concerning the legal basis of the principle, the circumstances in which it can be departed from and the procedure which should be followed. The appeal is brought by the BBC in order to challenge an order made by the Court of Session in proceedings for judicial review of a decision of the Upper Tribunal. In its order, the court permitted the applicant for judicial review to amend his application by deleting his name and address and substituting letters of the alphabet, in the exercise (or, as the BBC argues, purported exercise) of a common law power. The court also gave directions under section 11 of the Contempt of Court Act 1981 (the 1981 Act) prohibiting the publication of his name or other identifying details and directing that no picture of him should be published or broadcast. The appeal raises the following questions: i) Whether the court possesses any power at common law to protect the anonymity of a party to proceedings before it, where the Convention rights set out in Schedule 1 to the Human Rights Act 1998 are engaged. It is argued on behalf of the BBC that any common law power which might previously have been exercised in such circumstances has been superseded by the Convention rights. ii) Whether the court acted compatibly with the BBCs rights under article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), as given effect by the Human Rights Act, in making the order complained of, both in relation to the substance of its decision and in relation to the procedure which it followed. iii) Whether the order fell within the scope of section 12 of the Human Rights Act, with the consequence that the BBC should have been notified and given an opportunity to make representations before any order was made. The answers to these questions are of importance to courts, media organisations and individual litigants throughout the United Kingdom. The factual background The first respondent to this appeal, whom I shall refer to as A, is a foreign national who arrived in the UK as a visitor in 1991. Later that year he married a UK citizen, who also came from his country of origin and had a child from a previous relationship. He was then granted indefinite leave to remain in the UK. In 1996 he was convicted of sexual offences against his step child and was sentenced to 4 years imprisonment. In 1998 the second respondent, the Home Secretary, decided that he should be deported, and a notice of intention to make a deportation order was served. A and his wife were by then divorced. In 2000 he re married. He and his second wife have a number of children. Following service of the deportation notice, protracted proceedings began. The salient aspects can be summarised as follows. In 2001 As appeal against the Home Secretarys decision was dismissed. He then applied to the Home Secretary to be allowed to remain in the UK on the ground that his removal would violate his rights under articles 2, 3 and 8 of the ECHR. That application was refused, and a deportation order was served in June 2002. A then appealed against the refusal of his application to remain in the UK. Appeals to an immigration adjudicator and to the Immigration Appeal Tribunal were dismissed in 2003 and 2004 respectively. A further appeal to the Court of Session was however allowed, and it was agreed that the appeal should remitted to the Asylum and Immigration Tribunal for re hearing. Following that re hearing, the appeal was dismissed by the tribunal in 2007. As identity was withheld in the proceedings from 2001 onwards. In its 2007 decision, the tribunal noted that As claim under articles 2 and 3 of the ECHR was based on the argument that, in the event of his return to his country of origin, he would be at risk of death or ill treatment at the hands of persons enraged by his offences. The tribunal accepted that, if he faced such a risk as a known sexual offender, he was unlikely to receive effective protection from the police. The claim that such a risk existed was however largely based upon the premise that his return to his native country would receive publicity. The tribunal was not satisfied that it would. Although threats of violence had been made against him in his country of origin at the time of the criminal proceedings, when his identity had been disclosed in the media, they had not continued in more recent times. The claim based on article 8 was also rejected. For present purposes, it is relevant to note that the facts relied upon included an incident in January 2006 when A and his wife were attacked in their home in Scotland by a group of youths. Their children were then taken into care for a time because of police concerns that the house might be fire bombed. A and his wife were attacked again in June 2006 in a public park in the same town. After that incident A ceased to live with his wife and children. The incidents followed press publicity about As case, in which his name and the town in which he lived were mentioned. An appeal against the 2007 decision was allowed by the Court of Session in relation to article 8 only, and the appeal was again remitted to the tribunal for re hearing on that issue: A v Secretary of State for the Home Department [2008] CSIH 59. Following that re hearing, the appeal on the article 8 ground was dismissed by the tribunal in 2009. Leave to appeal against that decision was refused: CB v Secretary of State for the Home Department [2010] CSIH 89; 2011 SC 248. Later in 2010 A claimed asylum and submitted further representations. The claim and representations were treated by the Home Secretary as an application for the revocation of the deportation order made in 2002. That application was refused in 2011. A then appealed to the First tier Tribunal. It was agreed that the scope of the appeal was confined to articles 3 and 8 of the ECHR. In dealing with the appeal, the First tier Tribunal gave a direction to the parties under rule 45(4)(i) of the Asylum and Immigration Tribunal (Procedure) Rules 2005 (SI 2005/230) that no report of the proceedings should directly or indirectly identify the appellant or any member of his family. Although the words no report might, read in isolation, suggest that the direction operated against the media, it went on to state that it applied to the appellant and to the respondent, consistently with rule 45. The direction was given on the basis that, first, the appeal concerned personal information about the lives of children, whose welfare might be injured if such information were revealed and their names known; secondly, the appeal concerned highly personal evidence which should remain confidential; and thirdly, A or others could be put at risk of harm by publication of his name and details. As claim under article 3 was again based on evidence, including a report by an expert witness, to the effect that he would be at risk of violence if he returned to his country of origin. It was said that the risk would arise as a result of publicity. The claim under article 8 was based on his family life with his wife and children, with whom he had resumed regular contact, although he continued to live apart from them because of the risk of stigmatisation if they were known to be connected to him. The tribunal refused the appeal. In relation to article 3, the tribunal placed weight on the findings made in 2007, and added: The proceedings involving the appellant are now anonymised thus reducing the risk of his being identified. Permission to appeal to the Upper Tribunal was refused. An application to the Upper Tribunal for permission to appeal was also refused. A then applied to the Court of Session for judicial review of the decision of the Upper Tribunal to refuse his application for permission to appeal. The petition was lodged on 21 September 2012, when a first hearing (ie a full hearing of the application) was fixed for 14 December 2012. On 30 October 2012 the Secretary of State gave notice that she intended to remove A on 11 November 2012. A then applied for the suspension (ie stay) of the removal decision ad interim, pending the full hearing of his application for judicial review. The application for interim suspension came before Lord Boyd of Duncansby on 7 November 2012, together with an application to amend the petition by deleting As name and address and substituting initials. Media organisations had not been notified of the hearing, and were not represented at it. Lord Boyd allowed the petition to be amended. He also made an order under section 11 of the 1981 Act prohibiting the publication of the name of the petitioner, or any particulars or details calculated to lead to the identification of the petitioner, and directing that no picture shall be published or broadcast of the petitioner in connection with these proceedings. On 8 November 2012 Lord Boyd refused the application for interim suspension. In his opinion he explained that he had to decide whether A had established a prima facie case for setting aside the Upper Tribunals decision, applying the test laid down in R (Cart) v Upper Tribunal [2011] UKSC 28; [2012] 1 AC 663 and Eba v Advocate General for Scotland [2011] UKSC 29; 2012 SC (UKSC) 1; [2012] 1 AC 710, and, if so, whether the balance of convenience favoured the granting of interim suspension of the removal decision. He concluded that a prima facie case had not been established. One of the arguments which he considered was that the First tier Tribunal had failed to give adequate reasons for rejecting the article 3 claim, and had not properly considered the report of the expert witness. In response, it was argued that the author of the report had failed to recognise that, if the appellant were returned to his home country, that was likely to be following proceedings in which his identity was not disclosed. Lord Boyd concluded that the tribunal had been entitled to find that the risk of As being identified was reduced by anonymisation, and that the point did not satisfy the Cart and Eba test. It was envisaged at the time of the hearing before Lord Boyd that the application for judicial review would proceed to a first hearing, notwithstanding As deportation. His counsel informed the court that he intended to seek the discharge of the first hearing fixed for 14 December 2012, so that a two day hearing could be held instead in January 2013. A reclaiming motion (ie an appeal) against Lord Boyds decision to refuse the application for interim suspension was heard by the Inner House of the Court of Session on 9 November 2012. It was refused: A v Secretary of State for the Home Department [2012] CSIH 86. In the meantime, the BBC became aware of the order made under section 11 of the 1981 Act, and applied for it to be recalled (ie set aside). The application came before the court on 9 November, when it was agreed that it should be continued (ie adjourned) to be heard on a future date. It was subsequently heard by Lord Glennie on 14 and 15 November 2012. On 6 December 2012 he refused the application, and granted leave to reclaim: British Broadcasting Corporation, Applicant [2012] CSOH 185; 2013 SLT 324. Lord Glennie noted that the only issue in the proceedings before the tribunal concerned the risk of its becoming known in his country of origin that A was being sent back. If that fact were known, and particularly if it were linked to information about the timing of his return, then it was accepted that there was a real risk of As article 3 rights being infringed. That was why an anonymity direction had been made by the tribunal. In these circumstances, Lord Glennie accepted that it was necessary to allow As name and identifying details to be withheld from the public in the court proceedings, and to make a section 11 order: first, so as to safeguard As Convention rights, and secondly, so as to preserve the integrity of the court proceedings, since publication of that information would give A grounds for a fresh application to the Home Secretary and frustrate the proceedings before the court. A absconded prior to his planned deportation, and was later detained. The Home Secretary then decided to deport him on 14 December 2012. An application was made to the court for the interim suspension of that decision, and for leave to amend the application for judicial review. The amendment, which was allowed, introduced averments to the effect that, following the granting to the BBC of leave to reclaim, it was uncertain whether the section 11 order would remain in place. The Home Secretary, it was argued, could not deport A until that matter was settled, since the tribunal had relied upon the anonymity order in holding that A would not be at real risk on return to his country of origin. If the BBCs reclaiming motion was successful, a material basis of the tribunals decision would be removed. The application for interim suspension was heard on 12 December 2012. It was accepted on behalf of the Home Secretary that As deportation would be unlawful unless the section 11 order remained in place: in the absence of the order, there would be a real risk that As identity and history as a sex offender would be publicised, and that such publicity would expose him to vigilante behaviour in his country of origin, contrary to his rights under article 3. The court concluded that the BBC was unlikely to succeed in a reclaiming motion against Lord Glennies decision, and refused interim suspension of the deportation decision on that basis. A reclaiming motion against that decision was refused by the Inner House the following day. A was deported to his country of origin on 14 December 2012. The BBC reclaimed against Lord Glennies decision to refuse to recall the section 11 order, and also challenged Lord Boyds decision to make the order in the first place. The reclaiming motion was refused by the Inner House on 17 May 2013: [2013] CSIH 43; 2013 SC 533. The court considered that the material before the tribunal justified the conclusion that anonymity would be a significant protection of As article 3 rights, and that in any event the recall of the section 11 order would subvert the understanding on which As deportation had been authorised. The present appeal is brought against that decision. A first hearing of the application for judicial review has not yet taken place. At the hearing of the reclaiming motion, the court was informed that the possibility of amending the application in order to seek an order for As return to the UK was under consideration. The general principle of open justice It is a general principle of our constitutional law that justice is administered by the courts in public, and is therefore open to public scrutiny. The principle is an aspect of the rule of law in a democracy. As Toulson LJ explained in R (Guardian News & Media Ltd) v City of Westminster Magistrates Court (Article 19 intervening) [2012] EWCA Civ 420; [2013] QB 618, para 1, society depends on the courts to act as guardians of the rule of law. Sed quis custodiet ipsos custodes? Who is to guard the guardians? In a democracy, where the exercise of public authority depends on the consent of the people governed, the answer must lie in the openness of the courts to public scrutiny. The significance of the principle of open justice is illustrated by the fact that it was one of the matters covered by the constitutional legislation enacted following the accession of William and Mary. The Court of Session Act 1693, which remains in force, provides: That in all time coming, all bills, reports, debates, probations and others relating to processes shall be considered, reasoned, advised and voted by the Lords of Session with open doors, where parties, procurators and all others are hereby allowed to be present, as they used to be formerly in time of debates, but with this restriction, that in some special cases the said Lords shall be allowed to cause remove all persons, except the parties and their procurators. The corresponding Act Anent Advising Criminal Processes with Open Doors, passed on the same date, made similar provision for the High Court of Justiciary. As Lord Shaw of Dunfermline commented in Scott v Scott [1913] AC 417, 475, the two Acts formed part of the Revolution Settlement, and bore testimony to a determination to secure civil liberties against judges as well as against the Crown. The principle that courts should sit in public has important implications for the publishing of reports of court proceedings. In Sloan v B 1991 SC 412, 442, Lord President Hope, delivering the opinion of the court, explained that it is by an application of the same principle that it has long been recognised that proceedings in open court may be reported in the press and by other methods of broadcasting in the media. The principle on which this rule is founded seems to be that, as courts of justice are open to the public, anything that takes place before a judge or judges is thereby necessarily and legitimately made public, and, being once made legitimately public property, may be republished (Richardson v Wilson (1879) 7 R 237, 241 per Lord President Inglis). The connection between the principle of open justice and the reporting of court proceedings is not however merely functional. Since the rationale of the principle is that justice should be open to public scrutiny, and the media are the conduit through which most members of the public receive information about court proceedings, it follows that the principle of open justice is inextricably linked to the freedom of the media to report on court proceedings. Exceptions to the principle of open justice Since the principle of open justice is a constitutional principle to be found in the common law, it follows that it is for the courts to determine its ambit and its requirements, subject to any statutory provision. The courts therefore have an inherent jurisdiction to determine how the principle should be applied. That jurisdiction was recognised as long ago as the 1693 legislation I have mentioned. The Court of Session Act allowed the court to sit in private in some special cases, leaving it to the court to determine the circumstances in which a departure from the principle of open justice might be appropriate. The Act concerning criminal procedure declared that in the cases of rape, adultery and the like the said Commissioners [of Justiciary] may continue their former use and custom, by causing remove all persons, except parties and procurators, at the leading of the probation, as they shall see cause. That provision, which has a direct homologue in the modern law, recognised the courts power to determine when departures from the principle of open justice were appropriate in such cases. Exceptions to the principle of open justice were considered in the well known case of Scott v Scott [1913] AC 417, in which the House of Lords emphasised in the strongest terms the importance of the general principle, but also recognised that there were circumstances in which it was necessary to depart from it. Viscount Haldane LC gave the example at p 437 of a court exercising a wardship jurisdiction: such a court was sitting primarily to guard the interests of the ward, and the attainment of that object might require that the public should be excluded. Lunacy proceedings were in a similar position. Another example given by the Lord Chancellor, of greater relevance to the present case, was litigation concerning a secret process, where the effect of publicity would be to destroy the subject matter. The Earl of Halsbury considered wardship and lunacy to fall outside the scope of the general principle that justice should be administered in public, but accepted that proceedings concerning trade secrets, or to prevent the publication of private correspondence, were exceptions to that principle, observing at p 443 that it would be the height of absurdity as well as of injustice to allow a trial at law to protect either to be made the instrument of destroying the very thing it was intended to protect. Similar observations were made by Lord Atkinson at p 450 and by Lord Shaw of Dunfermline at pp 482 483. All of their Lordships stressed the need for a compelling justification for any departure from the principle of open justice. The Lord Chancellor said at pp 437 438: "As the paramount object must always be to do justice, the general rule as to publicity, after all only the means to an end, must accordingly yield. But the burden lies on those seeking to displace its application in the particular case to make out that the ordinary rule must as of necessity be superseded by this paramount consideration. The question is by no means one which, consistently with the spirit of our jurisprudence, can be dealt with by the judge as resting in his mere discretion as to what is expedient. The latter must treat it as one of principle, and as turning, not on convenience, but on necessity." A similar approach was followed in later cases in the House of Lords. In particular, the issue was considered in detail in the cases of In re K (Infants) [1965] AC 201 and Attorney General v Leveller Magazine Ltd [1979] AC 440. In the former case, Lord Devlin noted at p 238 that the ordinary principles of a judicial inquiry included the rules that justice should be done openly, that it should be done only after a fair hearing, and that judgment should be given only upon evidence that is made known to all parties, and also rules of a less fundamental character, such as the rule against hearsay. He continued: But a principle of judicial inquiry, whether fundamental or not, is only a means to an end. If it can be shown in any particular class of case that the observance of a principle of this sort does not serve the ends of justice, it must be dismissed; otherwise it would become the master instead of the servant of justice. Obviously, the ordinary principles of judicial inquiry are requirements for all ordinary cases and it can only be in an extraordinary class of case that any one of them can be discarded. This is what was so clearly decided in Scott v Scott. After citing the dictum of Viscount Haldane which I also have cited, Lord Devlin continued at p 239: That test is not easy to pass. It is not enough to show that dispensation would be convenient. It must be shown that it is a matter of necessity in order to avoid the subordination of the ends of justice to the means. More recently still, the importance of the common law principle of open justice was emphasised by nine Justices of this court in the case of Bank Mellat v Her Majestys Treasury [2013] UKSC 38; [2013] 3 WLR 179. Lord Neuberger, giving the judgment of the majority, described the principle as fundamental to the dispensation of justice in a modern, democratic society (para 2). He added that it had long been accepted that, in rare cases, a court had an inherent power to receive evidence and argument in a hearing from which the public and the press were excluded, but said that such a course might only be taken (i) if it was strictly necessary to have a private hearing in order to achieve justice between the parties, and (ii) if the degree of privacy was kept to an absolute minimum. He gave, as examples of such cases, litigation where children were involved, where threatened breaches of privacy were being alleged, and where commercially valuable secret information was in issue. It has also been recognised in the English case law, consistently with Lord Neubergers requirement of the degree of privacy being kept to a minimum, that where the interests of justice require some qualification of the principle of open justice, it may not be necessary to exclude the public or the press from the hearing: it may suffice that particular information is withheld. In Attorney General v Leveller Magazine Ltd, for example, Lord Diplock accepted at p 451 that, where the court might sit in camera in order to preserve the anonymity of a witness in the interests of national security, it could instead allow a much less drastic derogation from the principle of open justice, namely that the witness should give evidence in public but should be permitted to withhold his name from the public and the press. Viscount Dilhorne and Lord Edmund Davies agreed that the court could do so, in the exercise of its inherent jurisdiction to control its own procedure: pp 458 and 464 respectively. Viscount Dilhorne gave as an example the practice of allowing a witness complaining of blackmail to withhold his identity from public disclosure in court, judicially approved in R v Socialist Worker Printers and Publishers Ltd, Ex p Attorney General [1975] QB 637. The proposition that the court had no power to allow a witnesss name to be withheld from the public had been roundly rejected in that case: such a direction, it was held, was clearly preferable to an order for trial in camera where "the entire supervision by the public is gone" (p 652). In Scotland, as I have explained, the principle of open justice has been recognised by statute since the seventeenth century. The courts power to make exceptions to the general principle was acknowledged in the legislation of 1693. As Lord President Gill noted when the present appeal was before the Inner House, the basis of the courts power to make such exceptions is its inherent power to control its own procedure in the interests of justice: [2013] CSIH 43; 2013 SC 533, para 37. The common law power to make exceptions to the principle of open justice in the interests of justice was recognised in Sloan v B 1991 SC 412. Lord President Hope said at p 442: There is no doubt that as a general rule the proceedings of a court are open to the public, and thus to public scrutiny, at all times. Exceptions have to be made in special circumstances to allow the court to conduct its proceedings behind closed doors where the interests of justice require this to be done. But that is always the exception, and the general principle which applies equally in the sheriff court as it does in the Court of Session is that the court sits both for the hearing of cases and for the advising of them with open doors. It has also been recognised in Scotland that the qualification of the principle of open justice which is necessary in particular circumstances may not require to be as drastic as the complete exclusion of the public or the media from the proceedings, and that less extreme measures, such as the protection of the anonymity of a witness, may sometimes suffice. The point is illustrated by the case of Scottish Lion Insurance Co Ltd v Goodrich Corporation [2011] CSIH 18; 2011 SC 534, in which the court permitted the identities of the applicants to be withheld from public disclosure. The object of the proceedings was to protect the confidentiality of documents disclosing their identities, and an order designed to achieve that objective had previously been made by the court. As the court noted, the disclosure of their identities would be inconsistent with that order and would undermine the confidentiality which the proceedings were intended to preserve. The case was therefore one in which a limitation of the principle of open justice was necessary both to protect confidential information and to prevent the frustration of the judicial process. In relation to this aspect of the present case, counsel for the BBC was critical of a passage in the opinion of the Lord President, at para 38, in which he stated that the court must have regard not only to the justice of its decision, but also to the justice of the procedures by which it gives it. It therefore had the inherent power, in his opinion, to withhold the identity of a party where, regardless of the outcome of the case, the disclosure of that partys identity would constitute an injustice to him. The Lord President gave as examples cases where disclosure would endanger a partys safety or would be commercially ruinous. He added that, quite apart from the Convention related aspects of the problem, he would regard it as the courts duty to withhold the identity of a female pursuer where the decision turned on intimate medical evidence. He also considered that the courts inherent jurisdiction could be extended to the protection of third parties whose rights and interests might be affected in similar ways. The other members of the First Division expressed their agreement. This passage in the Lord Presidents opinion was obiter dictum: his Lordship records that the subject of the courts inherent jurisdiction had not been the subject of submissions by the parties, but had become a matter of some importance because of a decision made by a judge in another case, following the hearing of the instant case. The examples which the Lord President gave were at a correspondingly high level of generality. Counsel argued however that this passage was an incorrect statement of the law, and might be treated by lower courts as authoritative. That apprehension appears to have been one of the principal factors to have prompted the bringing of this appeal, as much of the argument presented on behalf of the BBC was devoted to criticism of this obiter dictum. In the circumstances, some general observations may be made. As I have explained, it has long been recognised that the courts have the power to permit the identity of a party or a witness to be withheld from public disclosure where that is necessary in the interests of justice. The Lord President was plainly right to approach the matter on the basis that the interests of justice are not confined to the courts reaching a just decision on the issue in dispute between the parties. It is necessary in the first place to recognise that the administration of justice is a continuing process: see, for example, Attorney General v Butterworth [1963] 1 QB 696, 725 per Donovan LJ. The court can therefore take steps in current proceedings in order to ensure that the interests of justice will not be defeated in the future. For example, the High Court of Justiciary has permitted undercover police officers to give evidence while screened from the sight of the general public, and without public disclosure of their identities, in order to avoid jeopardising their effectiveness in future investigations. Other cases may raise different considerations. In some cases, for example, anonymity may be necessary in view of risks to the safety of a party or a witness. The point can be illustrated by the case of A v Scottish Minsters 2008 SLT 412, where a prisoner serving a sentence for sexual offences was permitted to bring proceedings, challenging the notification requirements applicable to sexual offenders, without disclosing his identity publicly, because of the danger to his safety if the nature of his offending became known to his fellow prisoners. The same approach was followed when the case subsequently came before the Inner House. In other cases the health of a vulnerable person may be at risk. An example is the case of HM Advocate v M [2007] HCJ 2, 2007 SLT 462, where the court made a section 11 order to prevent the publication of the identity of a woman who was due to be the principal witness at the trial of a person charged with having recklessly infected her with HIV. There was evidence before the court that the womans mental health would be endangered if her identity became publicly known. There was also a risk that the woman would otherwise be unable to give evidence, in which event the prosecution could not proceed. An example of a case where harm of a different kind was considered to justify a departure from the ordinary practice is Devine v Secretary of State for Scotland (22 January 1993, unreported), an action of damages arising from the deployment of the SAS to end a prison siege, where Lord Coulsfield permitted the soldiers to give evidence while screened from the view of the general public, and without disclosing their names publicly. He did so on the basis that their evidence was essential to the proper presentation of the defence, and the Armys ability to deploy them in future operations would otherwise be compromised. In such a case, their appearance and identities were of such peripheral, if any, relevance to the judicial process that it would have been disproportionate to require their disclosure. These are only a few examples. Some of these examples may arguably go beyond the categories envisaged in some of the older authorities. As Lord Loreburn observed however in Scott v Scott at p 446, it would be impossible to enumerate or anticipate all possible contingencies. Furthermore, in this area as in others the common law is capable of development. The application of the principle of open justice may change in response to changes in society and in the administration of justice. It can also develop having regard to the approach adopted in other common law countries, some of which have constitutional texts containing guarantees comparable to the Convention rights, while in others the approach adopted reflects the courts view of the requirements of justice. To give only one example, the Supreme Court of Canada has considered some of the issues which I have mentioned, such as the anonymity of complainants in cases of sexual assault (Canadian Newspapers Co v Canada [1988] 1 SCR 122), the protection of parties to proceedings from embarrassment or humiliation (Edmonton Journal v Alberta [1989] 2 SCR 1326) and the concealment of the identity of undercover police officers (R v Mentuck [2001] 3 SCR 442). The development of the common law can also of course be influenced by the ECHR. The examples given by the Lord President of a party or witness whose safety may be endangered or who may suffer commercial ruin if his identity becomes known, or that of the female pursuer where the decision turns on intimate medical evidence, are all capable of raising issues which could warrant a qualification of the principle of open justice, applying the approach which I have explained. In relation to the last example, which was the subject of particular criticism by counsel for the BBC, I agree with the Lord President that it would be in the interests of justice to protect a party to proceedings from the painful and humiliating disclosure of personal information about her where there was no public interest in its being publicised. Whether a departure from the principle of open justice was justified in any particular case would depend on the facts of that case. As Lord Toulson observed in Kennedy v The Charity Commission [2014] UKSC 20, para 113, the court has to carry out a balancing exercise which will be fact specific. Central to the courts evaluation will be the purpose of the open justice principle, the potential value of the information in question in advancing that purpose and, conversely, any risk of harm which its disclosure may cause to the maintenance of an effective judicial process or to the legitimate interests of others. Convention rights Having considered the source and importance of the principle of open justice, as well as the source and extent of the courts common law power to derogate from it, I now turn to the ECHR standards that apply in this context. Under the Convention, the principle of open justice is expressly protected by article 6(1), which provides that in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a public hearing. Article 6(1) also provides that judgment shall be pronounced publicly. The rationale of these requirements, as explained by the European Court of Human Rights, is the same as in the common law: The public character of proceedings protects litigants against the administration of justice in secret with no public scrutiny; it is also one of the means whereby confidence in the courts can be maintained. By rendering the administration of justice visible, publicity contributes to the achievement of the aim of article 6(1), a fair hearing, the guarantee of which is one of the foundations of a democratic society (B and P v United Kingdom (2001) 34 EHRR 529, para 36). As in domestic law, the general principle set out in article 6(1) is subject to qualifications: the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. These qualifications broadly reflect the various grounds upon which exceptions to the principle of open justice are made in our domestic law, either under the common law or under statute. In relation to the last of the qualifications (where publicity would prejudice the interests of justice), the assessment is explicitly left to the opinion of the national court. In relation to the other qualifications, as in relation to the qualifications to other Convention guarantees, the European court has allowed national authorities a margin of appreciation. The court has accepted that a state can designate a class of cases, such as proceedings under the Children Act 1989, as an exception to the general rule (B and P v United Kingdom (2001) 34 EHRR 529, para 39). It has also accepted that measures short of the complete exclusion of the press and public, such as allowing a witness to remain anonymous, may be compatible with article 6(1) (see, for example, Doorson v Netherlands (1996) 22 EHRR 330, para 71), and that such measures may even be necessary in order to secure a fair trial (see, for example, V v United Kingdom (1999) 30 EHRR 121, para 87). Article 6 is not the only provision of the Convention which is relevant to the principle of open justice. Articles 2 and 3 may for example apply where parties or witnesses are in physical danger. The rights guaranteed by those articles are, in this context, unqualified. The Convention therefore requires that proceedings must be organised in such a way that the interests protected by those articles are not unjustifiably imperilled: Doorson, para 70. In our domestic law, the courts power to prevent the identification of a witness is accordingly part of the structure of laws which enables the United Kingdom to comply with its obligations under those articles: In re Guardian News and Media Ltd [2010] UKSC 1; [2010] 2 AC 697, para 27 per Lord Rodger. Article 8 may also be relevant. It protects the private lives of the parties, to which article 6(1) also refers, and in addition requires respect for the private lives of other persons who may be affected by legal proceedings, such as witnesses. It is however a qualified right: There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. The court therefore allows a margin of appreciation to national authorities in striking a fair balance between the interest in publicity of court proceedings, on the one hand, and the interests protected by article 8, on the other hand: Z v Finland (1997) 25 EHRR 371, para 99. Article 10 is also relevant to the principle of open justice, since the right to receive and impart information, which is guaranteed by article 10(1), may be engaged where measures are taken in relation to court proceedings to prevent information from becoming publicly available. The right guaranteed by article 10(1) is however qualified by article 10(2): The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary. These qualifications reflect the fact that freedom of expression may conflict with other important values, including the rights to life and to bodily security protected by articles 2 and 3 of the Convention, the integrity of legal proceedings and the rights of litigants and accused persons, protected by article 6, and the right to respect for private life, protected by article 8. Where there is a conflict between the right of the media to report legal proceedings and the rights of litigants or others under a guarantee which is itself qualified, such as article 8, a balance must be struck, so as to ensure that any restriction upon the rights of the media, on the one hand, or of the litigants or third parties, on the other hand, is proportionate in the circumstances. The approach which should be adopted was considered in detail by Lord Steyn in In re S (A Child) (Identification: Restrictions on Publication) [2004] UKHL 47; [2005] 1 AC 593, and by Lord Rodger in In re Guardian News and Media Ltd [2010] UKSC 1; [2010] 2 AC 697. Where the conflict is between the medias rights under article 10 and an unqualified right of some other party, such as the rights guaranteed by articles 2, 3 and 6(1), there can be no derogation from the latter. Care must nevertheless be taken to ensure that the extent of the interference with the medias rights is no greater than is necessary. The need for such care reflects the important role of the media in a democratic society in scrutinising the administration of justice generally, as well as their role as the conduit of information about particular proceedings which may be of public interest. Article 10(2) specifically identifies maintaining the authority and impartiality of the judiciary as a legitimate aim which may justify interference with freedom of expression. The phrase has a wide scope, as the European Court of Human Rights explained in Sunday Times v United Kingdom (1979) 2 EHRR 245, para 55: The Court first emphasises that the expression 'authority and impartiality of the judiciary' has to be understood 'within the meaning of the Convention'. For this purpose, account must be taken of the central position occupied in this context by article 6, which reflects the fundamental principle of the rule of law. The term 'judiciary' ('pouvoir judiciaire') comprises the machinery of justice or the judicial branch of government as well as the judges in their official capacity. The phrase 'authority of the judiciary' includes, in particular, the notion that the courts are, and are accepted by the public at large as being, the proper forum for the ascertainment of legal rights and obligations and the settlement of disputes relative thereto; further, that the public at large have respect for and confidence in the courts' capacity to fulfil that function. The need to maintain the authority and impartiality of the judiciary, as a justification for an interference with freedom of expression, thus overlaps with the right to a fair trial under article 6(1), and with the entitlement to derogate from the open justice principle under that article where publicity would prejudice the interests of justice. As the court indicated in the Sunday Times case, it is article 6(1) which occupies the central position in this context. Where the European court finds that a restriction of the principle of open justice is justifiable under article 6(1), it may not therefore find it necessary to consider the matter under article 10, on the basis that no separate issue arises. In the case of B and P v United Kingdom, for example, the court declined to examine a complaint under article 10 that the applicants were prohibited, upon risk of being found in contempt of court, from disclosing any documents used in proceedings under the Children Act 1989. The orders complained of were ancillary to measures taken to prevent public access to the hearing and to the judgment. Those measures had themselves been found to be justifiable under article 6(1) in order to protect the privacy of the children and the parties and to avoid prejudicing the interests of justice. The European court has accepted that the law of contempt falls within the ambit of the legitimate aim of maintaining the authority and impartiality of the judiciary. As it stated in the Sunday Times case at para 55: The majority of the categories of conduct covered by the law of contempt relate either to the position of the judges or to the functioning of the courts and of the machinery of justice: 'maintaining the authority and impartiality of the judiciary' is therefore one purpose of that law. In many later cases the court has accepted the compatibility with article 10 of restrictions on the publication of material which may prejudice the outcome of court proceedings: see, for example, Worm v Austria (1997) 25 EHRR 454 and BBC Scotland, McDonald, Rodgers and Donald v United Kingdom (Application No 34324/96) (unreported) given 23 October 1997. As the court explained in the Sunday Times case, it is unnecessary, where the aim of maintaining the authority and impartiality of the judiciary is engaged, to give separate consideration to the aim of protection of the rights of others, so far as the rights of the litigants in that capacity are concerned: In so far as the law of contempt may serve to protect the rights of litigants, this purpose is already included in the phrase 'maintaining the authority and impartiality of the judiciary': the rights so protected are the rights of individuals in their capacity as litigants, that is, as persons involved in the machinery of justice, and the authority of that machinery will not be maintained unless protection is afforded to all those involved in or having recourse to it. It is therefore not necessary to consider as a separate issue whether the law of contempt has the further purpose of safeguarding 'the rights of others'. (para 56) The balance to be achieved under article 10, in this context, is therefore between on the one hand protection of public discussion of matters of legitimate interest in a democracy, and on the other protection of the integrity of particular court proceedings or of the administration of justice more generally. If other interests protected under article 10(2) or under other articles of the Convention, such as article 8, are also involved, then they must also be taken into account. This approach is consistent with that adopted under our domestic law, as explained in para 41. The relationship between the Convention and domestic law It was submitted on behalf of the BBC that the source of the courts power to allow a party to legal proceedings not to disclose his identity publicly, in a situation where Convention rights are engaged, is to be found in the Convention rights themselves, rather than in the common law. Reference was made to In re S (A Child) (Identification: Restrictions on Publication) [2004] UKHL 47; [2005] 1 AC 593, para 23 per Lord Steyn, and In re Guardian News and Media Ltd [2010] UKSC 1; [2010] 2 AC 697, para 30 per Lord Rodger. These dicta were not however concerned with the conduct of court proceedings. They concerned a different issue, namely the jurisdiction of the English courts to make orders contra mundum restraining publicity relating to court proceedings, and in particular the publication of information identifying persons involved in those proceedings: a jurisdiction which might otherwise have been in doubt, as Lord Rodger noted. It is apparent from recent authorities at the highest level, including Al Rawi and others v Security Service and others (JUSTICE and others intervening) [2011] UKSC 34; [2012] 1 AC 531, Bank Mellat v Her Majestys Treasury [2013] UKSC 38; [2013] 3 WLR 179 and Kennedy v The Charity Commission [2014] UKSC 20, that the common law principle of open justice remains in vigour, even when Convention rights are also applicable. In another recent decision, R (Osborn) v Parole Board [2013] UKSC 61; [2013] 3 WLR 1020, this court referred at para 61 to the importance of the continuing development of the common law in areas falling within the scope of the Convention guarantees, and cited as an illustration the case of R (Guardian News and Media Ltd) v City of Westminster Magistrates Court (Article 19 Intervening) [2012] EWCA Civ 420; [2013] QB 618, where an issue falling within the ambit of article 10 was decided by applying the common law principle of open justice. Similar observations were made in Kennedy v The Charity Commission at paras 46 and 133; and the majority judgments in that case provide a further illustration of the same approach. That approach does not in any way diminish the importance of section 6 of the Human Rights Act, by virtue of which it is unlawful for the court to act in a way which is incompatible with a Convention right, unless subsection (2) applies. As was made clear in Kennedy, however, the starting point in this context is the domestic principle of open justice, with its qualifications under both common law and statute. Its application should normally meet the requirements of the Convention, given the extent to which the Convention and our domestic law in this area walk in step, and bearing in mind the capacity of the common law to develop as I have explained in para 40. As the case of V v United Kingdom demonstrates, it is however necessary to bear in mind that, although the Convention and our domestic law give expression to common values, the balance between those values, when they conflict, may not always be struck in the same place under the Convention as it might once have been under our domestic law. In that event, effect must be given to the Convention rights in accordance with the Human Rights Act. Section 11 of the Contempt of Court Act 1981 It is necessary next to return to section 11 of the 1981 Act, which provides: In any case where a court (having power to do so) allows a name or other matter to be withheld from the public in proceedings before the court, the court may give such directions prohibiting the publication of that name or matter in connection with the proceedings as appear to the court to be necessary for the purpose for which it was so withheld. Section 11 was enacted in order to implement a recommendation made in the Report of the Committee on Contempt of Court (1974) (Cmnd 5794), para 141, footnote 72, following the case of R v Socialist Workers Printers and Publishers Ltd, Ex p Attorney General [1974] 1 QB 637. As Lord Rodger explained in In re Guardian News and Media Ltd [2010] UKSC 1; [2010] 2 AC 697, para 31, section 11 does not itself confer any power upon courts to allow a name or other matter to be withheld from the public in proceedings before the court, but it applies in circumstances where such a power has been exercised. The purpose of section 11 is to support the exercise of such a power by giving the court a statutory power to give ancillary directions prohibiting the publication, in connection with the proceedings, of the name or matter which has been withheld from the public in the proceedings themselves. Section 11 thus resolves the doubt which had arisen following the Socialist Workers case as to the power of the court to make such ancillary orders at common law. The directions which the court is permitted to give are such as appear to it to be necessary for the purpose for which the name or matter was withheld. It was submitted on behalf of the BBC that section 11 does not enable an order to be made for the purpose of protecting an individuals Convention rights: such an order can only be made, it was argued, in order to protect the public interest in the administration of justice. That submission is of limited significance in the present case since, as I shall explain, one of the purposes of the order was to protect the administration of justice. Section 11 does not in any event contain any such limitation; and, where the courts are required under the Human Rights Act to impose reporting restrictions in order to protect Convention rights, they must use the means which are available to them. It was also submitted that no order could be made under section 11 unless members of the public had been present in the courtroom and had had a name or other matter withheld from them. That is however an unduly narrow construction of the provision. In the present case, for example, even if there were no members of the public present in court during the hearing before Lord Boyd, the effect of the order permitting the applicant for judicial review to be described as A was that his identity would be withheld from anyone looking at the rolls of court, either in Parliament House or on the internet, when any future hearing was listed, and from anyone present in the building when such a hearing was announced over the public address system. Anyone attending subsequent hearings in the case would hear him referred to in the same way; anyone who requested to see court documents to which the public could have access would also see him referred to in that way; and any judgments in the case, published on the internet or in the law reports, would be similarly anonymised. In all these respects, As identity would be withheld from the public. Section 12 of the Human Rights Act 1998 Section 12 of the Human Rights Act provides: (1) This section applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression. (2) If the person against whom the application for relief is made (the respondent) is neither present nor represented, no such relief is to be granted unless the court is satisfied (a) that the applicant has taken all practicable steps to notify the respondent; or (b) that there are compelling reasons why the respondent should not be notified. (3) No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed. (4) The court must have particular regard to the importance of the Convention right to freedom of expression and, where the proceedings relate to material which the respondent claims, or which appears to the court, to be journalistic, literary or artistic material (or to conduct connected with such material), to (a) the extent to which (i) the material has, or is about to, become available to the public; or (ii) it is, or would be, in the public interest for the material to be published; (b) any relevant privacy code. (5) In this section court includes a tribunal; and relief 'includes any remedy or order (other than in criminal proceedings). As Lord Nicholls of Birkenhead explained in Cream Holdings Ltd v Banerjee [2004] UKHL 44; [2005] 1 AC 253, para 15, section 12 was enacted to allay concerns about the potential impact of article 8 Convention rights upon the grant of injunctions or interdicts against the media. It appears that section 12(2), in particular, was intended to restrict the scope for pre publication injunctions or interdicts being granted against broadcasters or the press on an ex parte basis, and that section 12(3) was designed to impose a more demanding test for the grant of interlocutory injunctions than the American Cyanamid standard. The effect of the provisions depends however upon the language used by Parliament rather than upon the particular concerns which may have prompted their enactment. In the present case, the First Division considered that an order under section 11 of the 1981 Act fell within the scope of section 12(2) of the Human Rights Act, on the basis that the expression relief was wide enough to cover an order of that kind. The first respondent has taken advantage of the BBCs appeal to challenge that conclusion. As I have explained, section 11 of the 1981 Act applies where the court allows a name or other matter to be withheld from the public in proceedings before the court, and permits the court to give such directions prohibiting the publication of that name or matter in connection with the proceedings as appear to the court to be necessary. When an application is made to the court to allow a name or matter to be withheld, that is not an application for relief made against any person: no remedy or order is sought against any respondent. If ancillary directions under section 11 are also sought, prohibiting any publication of the name or matter in question, that equally is not an application for relief made against any respondent: the directions will operate on a blanket basis. In such circumstances there is no respondent who should be notified, or who might be present or represented at the hearing. There is therefore no obligation under section 12(2) of the Human Rights Act to allow the media an opportunity to be heard before such an order can be granted. The Lord President observed at para 39 that, even if the media were not entitled to be heard by virtue of section 12(2) of the Human Rights Act, they were entitled to be heard as a matter of fairness, although there was a question as to the stage at which the opportunity to be heard should be given. I agree. There are many situations in which courts make orders without having heard the persons who may be affected by them, usually because it is impractical, for one reason or another, to afford a hearing to those persons in advance of the making of the order. In such circumstances, fairness is secured by enabling any person affected to seek the recall of the order promptly at a hearing inter partes. In principle, an order under section 11 of the 1981 Act falls within the ambit of that approach. It would be impractical to afford a hearing to all those who might be affected by a section 11 order (including bloggers, social media users and internet based organisations) before such an order was made; but fairness requires that they should be able to seek the recall of the order promptly at a hearing inter partes. Article 13 of the Convention also requires that the media should have an effective remedy for any violation of their article 10 rights. That requirement is capable of being fulfilled, where a section 11 order has been made ex parte, provided its recall can be sought promptly at a hearing at which the media are able to make representations (cf Mackay and BBC Scotland v United Kingdom (2010) 53 EHRR 671, para 32). As the facts of this case demonstrate, the existing procedures in the Court of Session are capable of satisfying those requirements. That said, a conclusion that the existing procedures provide a sufficient safeguard to meet the requirements of the Convention does not mean to say that improved procedures may not be possible and desirable. Although it would be impractical to provide all those who might be affected by a section 11 order with an opportunity to make representations before such an order is made, it may nevertheless be possible in some circumstances to provide such an opportunity to some of those who would be affected. Nothing I have said is therefore inconsistent with the Lord Presidents conclusion that improved procedures should be introduced, or with the intention of the Scottish Civil Justice Council to address that issue. Any improved procedures should not however make it impossible to obtain orders restricting publicity on an ex parte basis: as the Lord President recognised, there will inevitably be circumstances in which it is necessary for such orders to be made on that basis. The present case It is necessary finally to consider the application of these principles to the present case. The BBC was aware of As identity at all material times. It would have been free to report it, were it not for the order made by Lord Boyd under section 11 of the 1981 Act. The order therefore fell within the scope of article 10 of the Convention, as given effect by the Human Rights Act. The BBC was entitled to challenge the order as being incompatible with article 10, on the assumption that a public broadcaster such as the BBC can qualify as a victim of a violation of that article. In the light of the relevant case law of the European Court of Human Rights (eg Radio France v France (2004) 40 EHRR 706; sterreichischer Rundfunk v Austria (Application No 35841/02) (unreported) given 7 December 2006; Mackay and BBC Scotland v United Kingdom (2010) 53 EHRR 671), and in the absence of argument to the contrary, I proceed on the basis that it can. As I have explained, article 10 sets out a qualified guarantee: the right of freedom of expression can be subjected to restrictions which are prescribed in law and are necessary in a democratic society for the protection of the rights of others or for maintaining the authority and impartiality of the judiciary. There is no doubt that an order made under section 11 is prescribed by law. The issue is whether the order made in the present case was necessary in a democratic society for the protection of the rights of others or for maintaining the authority and impartiality of the judiciary. There are undoubtedly features of the case which support the BBCs contention that there was at all material times a public interest in its ability to report it without restrictions. These include the fact that the case concerns the deportation of a foreign sex offender, the remarkable length of time the proceedings have taken, and the cost of the proceedings to the taxpayer. The reporting of the present case would contribute to a debate of general interest: cases concerning the deportation of foreign offenders are not infrequently reported as part of a debate about the impact of European human rights law, or about the procedure followed in such cases. It is also true that A has in the past been the subject of publicity in which his name and photograph were published. It is also undeniable that, although the BBC could report all other aspects of the case, their inability to reveal As identity would detract from the human or journalistic interest of the story. Nevertheless, the arguments in favour of Lord Boyds decision to make the order, and Lord Glennies decision not to recall it, were in my view overwhelming. It is necessary first to recall the procedural context in which those decisions were taken. The tribunal had made a decision, the effect of which was to authorise As deportation, and it had also made an anonymity direction on the ground that A could be put at risk of harm by publication of [his] name and details. Its decision to authorise As deportation, in the face of concerns about the risk of his being ill treated on his return to his country of origin, had been made on the basis that anonymity would be a significant protection of his article 3 rights. Lord Boyds order was then made in proceedings in which the validity of the tribunals decision was challenged. A date had been fixed for the hearing of As challenge to the decision, but the Home Secretary proposed to deport A several weeks before that hearing took place. The case came before Lord Boyd so that he could decide whether the deportation should be allowed to proceed before the challenge to the tribunals decision had been heard. In that situation, the publication of As identity, or of information enabling him to be identified, would have subverted the basis of the tribunals decision to authorise his deportation. That decision had been based on an assessment that there was no real risk of a violation of article 3 if As identity was not publicised in connection with the deportation proceedings. The decision would have been undermined, before the challenge to its validity was determined, if his identity was published in the meantime. A fresh application to be allowed to remain in this country could then have been made on the basis of the new factual situation created by the publication of his identity in connection with the deportation proceedings. That application would then have required to be considered by the Home Secretary, and a fresh decision made. The publication of As identity would therefore have frustrated the judicial review proceedings before the court. Indeed, the entire proceedings since at least 2007 would have been rendered largely pointless. The reasons for making the order were equally compelling if considered from the perspective of protecting As article 3 rights in the event of his deportation. The tribunal, as the fact finding body in this case, had accepted that A would be at serious risk of violence if his identity became known in his country of origin in connection with these proceedings, and had concluded that anonymity would be a significant protection of his article 3 rights. In those circumstances, the courts failure to make a section 11 order would, as the Lord President observed, have had the grave consequence that the deportation might create all the risks that the tribunals directions as to anonymity had been intended to prevent. In these circumstances, it was plainly necessary in the interests of justice, and in order to protect the safety of a party to the proceedings, to depart from the general principle of open justice to the extent involved in the making of the orders made by Lord Boyd. It follows that, subject to any issue arising under the Convention, the order allowing A to withhold his identity in the proceedings was in accordance with the common law, and the section 11 order was made in accordance with the power conferred by that provision. It also follows that the section 11 order was not incompatible with the Convention rights of the BBC. The interference with its freedom of expression was necessary to maintain the authority and impartiality of the judiciary, since its publication of As identity in connection with the proposed deportation would have completely undermined the judicial review proceedings. In these circumstances, where the publication of As identity in connection with the proceedings might well have rendered those proceedings pointless, the interference with the BBCs article 10 rights was unavoidable if the authority and impartiality of the judiciary, within the meaning of article 10(2), were to be maintained. Put shortly, the order had to be made if the court was to do its job, notwithstanding the resulting restriction upon the BBCs capacity to do its job. The interference with the BBCs article 10 rights was also necessary for the protection of the rights of others, namely the right of A not to be subjected to violent attack. As Lord Rodger observed in In re Guardian News and Media Ltd [2010] UKSC 1; [2010] 2 AC 697, para 27, the media do not have the right to publish information at the known potential cost of an individual being killed or maimed. Although the BBC was not represented before Lord Boyd, it was able to apply to the court promptly for the recall of the order. As I have explained, that application was due to be heard by the court on 9 November 2012, only two days after the order had been made. With the BBCs agreement, that hearing was postponed until 14 November 2012, when Lord Glennie heard the BBCs application over the course of two days. He concluded that the order was justified and should not be recalled. For the reasons I have explained, that decision was correct. The procedure that was followed in my opinion satisfied the BBCs entitlement under the Convention to an effective remedy. Anonymity in relation to this judgment At the outset of the hearing of this appeal, the court made an order that no one shall publish or reveal the name of the respondent who is involved in these proceedings or publish or reveal any information which would be likely to lead to the identification of the respondent in connection with these proceedings. That order was made with the agreement of the BBC. A is now residing in the country where, as the tribunal concluded, he is at risk of serious violence if his identity becomes known in connection with these proceedings. His application for judicial review of the tribunals decision to authorise his deportation has not yet been heard. In these circumstances, it is appropriate both in the interests of justice, and in order to protect As safety, that his identity should continue to be withheld in connection with these proceedings, and that the order should therefore remain in place. Conclusion For these reasons, I would dismiss the appeal. |
Do the principles referable to the admissibility of fresh evidence on appeal, as propounded in the decision of the Court of Appeal in Ladd v Marshall [1954] 1 WLR 1489, have any relevance to the determination of a spouses application to set aside a financial order in divorce proceedings on the ground of a fraudulent non disclosure of resources on the part of the other spouse? The trial judge cast his judgment on two alternative grounds and in his analysis of one ground he identified a particular relevance for the principles propounded in the Ladd case. It is now accepted that, in so holding, he was wrong and that the Court of Appeal was right so to declare. But, when so declaring, the Court of Appeal purported to identify a different relevance for the principles propounded in the Ladd case to the determination of an application to set aside. The main point of general importance which generates this further appeal is whether the Court of Appeal was right to hold that those principles have any relevance to such a determination. Introduction Mrs Gohil (whom I will call the wife notwithstanding that she was divorced from Mr Gohil, the husband, in 2004) appeals against an order of the Court of Appeal dated 13 March 2014. By a judgment delivered by McFarlane LJ, with which Arden and Pitchford LJJ agreed, the Court of Appeal then explained its decision to set aside an order made by Moylan J on 25 September 2012, [2012] EWHC 2897 (Fam); the judgments of the Court of Appeal are numbered [2014] EWCA Civ 274 and it is clear that a decision was made to report them at the highest level of authority, namely as Gohil v Gohil (No 2) [2015] Fam 89. The order of Moylan J had been to set aside part of a financial order which, by consent, Baron J had made against the husband in favour of the wife on 30 April 2004, namely the part by which she had dismissed all the wifes remaining claims against him for capital provision. Moylan J had proceeded to order that her claims be listed for further directions to be given in aid of their ultimate determination. The effect of the order of the Court of Appeal was therefore to prevent the wife from asking the court to revisit the level of capital provision made by the husband for her under the order dated 30 April 2004. This court directed that the wifes appeal be heard at the same time as the appeal in Sharland v Sharland, [2015] UKSC 60, which also raised issues in relation to the determination of a spouses application for a further hearing of her claims on the ground of the others fraudulent non disclosure of resources. Convenient though the conjoined hearing proved to be, it has nevertheless been considered preferable for the courts judgments on the two appeals to be given separately, albeit upon this same day. The wife is now aged 51. The husband is now aged 50. They were married in 1990 and lived in a house in Chislehurst owned and also occupied by the husbands parents. The parties had three children, all now adult. The husband was a solicitor and became a partner in a small firm in Mayfair, some of whose clients, often living overseas, had, by fair means or foul, become wealthy and sought the firms assistance in protecting their wealth. In 2002 the wife, with the children, moved out of the house in Chislehurst and she petitioned for divorce. In response to her financial claims the husband asserted that in effect all his ostensible wealth represented assets held by him on behalf of his clients. Shortly prior to 30 April 2004 he produced a balance sheet of what he alleged to be his personal assets which, when set against his liabilities, yielded a net deficit of 311,512. The settlement of the wifes claims was achieved at a Financial Dispute Resolution (FDR) meeting conducted by Baron J on 30 April 2004. There was a recital [recital 14] to the order then made, namely that the [wife] believes that the [husband] has not provided full and frank disclosure of his financial circumstances (although this is disputed by the [husband]), but is compromising her claims in the terms set out in this consent order despite this, in order to achieve finality. The order dated 30 April 2004 provided that the husband should make to the wife, in final settlement of her capital claims, a lump sum payment of 270,000, payable as to 100,000 by 30 June 2004 and as to the balance immediately prior to the wifes exchange of contracts for the purchase of a home. The husband alleged that he could make these payments only as a result of promised assistance on the part of his family. The order also provided for him to make periodical payments to the wife of 6,000 pa from 1 January 2005 during their joint lives until her remarriage or further order, together with periodical payments for the children. The husband duly paid the first instalment of the lump sum and in 2009, following a variation of the condition for its payment, he paid the balance. He complied with the orders for periodical payments only until 2008, since when no such payments have been made. Meanwhile, in 2007, the wife had applied for an order setting aside the order dated 30 April 2004 on the ground of the husbands fraudulent non disclosure of his resources at that time. The wifes application took the form of a simple notice issued within the divorce proceedings. The first four hearings for directions were conducted by Baron J because she had made the substantive order; then in 2008 she ruled that, having conducted the privileged FDR meeting, she should not continue to have conduct of the application. Following ten further interlocutory hearings spread over three years, the substantive hearing of the wifes application began before Moylan J on 13 February 2012. The major reason for the delay was that in 2008 the husband had been charged with offences of money laundering to a value of about 25m contrary to sections 327 and 328 of the Proceeds of Crime Act 2002 (the 2002 Act). The prosecution case had been that from mid 2005 the husband had assisted Mr Ibori, who had been a state governor in Nigeria, in the laundering of money which in that capacity Mr Ibori had corruptly obtained. In the criminal proceedings orders had been made restraining the husband from deploying his assets. In November 2010, following an eight week trial, the husband had been found guilty and remanded in custody. Thereupon a second trial had begun, at which the husband pleaded guilty to six further counts of money laundering and conspiracy to defraud. In April 2011 the husband had been committed to prison for a total of ten years, whereupon the Crown Prosecution Service (the CPS) had launched confiscation proceedings against him under the 2002 Act. They are still on foot and the husband remains in prison. Moylan J heard the wifes application over eight days in February and June 2012. The wife, who gave oral evidence, had sporadic legal representation but largely conducted the case herself. The husband, who was produced from prison in order to give oral evidence, was represented pursuant to a civil aid certificate by counsel other than counsel who have represented him in the successive appeals. The husbands father, who lives in India, gave evidence on behalf of the wife by video link. On 30 May 2012, when the wifes application was part heard, Moylan J ordered the CPS to make extensive disclosure of documents which it had obtained for the purpose of the criminal proceedings against the husband: [2013] 1 FLR 1003. It had opposed the order on the basis that many of the documents or their contents had been obtained from sources outside the UK pursuant to requests made by the Crown Court under the Crime (International Co operation) Act 2003 (the 2003 Act) and that section 9(2) of it precluded any use of them other than that specified in the requests. Applying the decision of the Court of Appeal in BOC Ltd v Instrument Technology Ltd [2001] EWCA Civ 854, [2002] QB 537, Moylan J rejected the construction of section 9(2) for which the CPS contended. The CPS appealed to the Court of Appeal against Moylan Js order and in the interim his order for disclosure was stayed. On 25 September 2012 Moylan J delivered a reserved, oral judgment, by which he granted the wifes application and set aside the order which had dismissed her remaining capital claims against the husband. The judge resolved not at that stage to set aside the order for payment of the lump sum in case its consequence should be that the lump sum, by then in the wifes hands, became subject to the restraint order obtained by the CPS against the husband. In giving judgment Moylan J, no doubt sensitive to the existing delays, did not await the determination of the pending appeal of the CPS against his order dated 30 May 2012. It follows that he never saw the documents which were the subject of that order. But the contents of some of the documents had been in evidence before him. For reference had been made to them in open court in the course of the husbands criminal trials, which the wife had attended; Moylan J had allowed her to relay in her evidence to him some of what she had then heard for challenge or otherwise by the husband; and no doubt some of her evidence in this regard reflected material which the CPS had obtained pursuant to requests made under the 2003 Act. In his judgment Moylan J laid great stress on some of the evidence thus relayed to him from the criminal trials. In the event, on 26 November 2012, the Court of Appeal allowed the appeal of the CPS against the order dated 30 May 2012: Gohil v Gohil [2012] EWCA Civ 1550, [2013] Fam 276. The court concluded that the decision in the BOC case was wrong and that it was not bound by it. It also concluded that the fact that material obtained under the 2003 Act had been adduced in open court in a criminal trial did not render it admissible in proceedings not identified in the requests. The result was that Moylan J had relied upon evidence from the criminal trials which was inadmissible insofar as it reflected material obtained under the 2003 Act. While rightly noting the inadmissibility of some of the evidence on which Moylan J relied, the Court of Appeal, in setting his order aside, was not in a position to distinguish evidence from the criminal trials which was admissible from that which was inadmissible. Were it necessary for this court to direct that the wifes application be reheard, such would be a task for the trial judge. Jurisdiction of the High Court to set aside The first ground of the husbands appeal to the Court of Appeal was that, as a judge of the High Court, Moylan J had no jurisdiction to set aside an order made in the High Court. The husband relied in particular on section 17 of the Senior Courts Act 1981 (the 1981 Act) which provides: (1) Where any cause or matter, or any issue in any cause or matter, has been tried in the High Court, any application for a new trial thereof, or to set aside a verdict, finding or judgment therein, shall be heard and determined by the Court of Appeal, except where rules of court made in pursuance of subsection (2) provide otherwise. Subsection (2) permits rules of court to provide otherwise where no error of the court at the trial is alleged but, as McFarlane LJ pointed out, the only rule ever made pursuant to the subsection did not extend to an application to set aside a financial order. As the argument before the Court of Appeal unfolded, however, the husbands jurisdictional objection to the order of Moylan J seems not to have been pressed. Perhaps the husband had no appetite for a result which might consign the wifes application to substantive consideration elsewhere. There is high authority although its consonance with section 17(1) of the 1981 Act seems never to have been established that the issue by the wife of a fresh action to set the order aside would have conferred the necessary jurisdiction on a judge of the High Court: de Lasala v de Lasala [1980] AC 546, 561. In the present case the Court of Appeal seems to have deemed the wifes application in the divorce proceedings to have been a fresh action and, on that basis, it turned to address the other grounds of the husbands appeal. It follows that no issue about the jurisdiction of Moylan J to have set aside the order dated 30 April 2004 is raised before this court. But the Family Procedure Rule Committee (the committee) is currently considering how best to formulate a clear procedure for those who aspire to set aside financial orders made by courts at every level. In those circumstances it may therefore be helpful for this court to make the following observations: (a) The Court of Appeal has itself long recognised that it is an inappropriate forum for inquiry into disputed issues of non disclosure raised in proceedings for the setting aside of a financial order: Robinson v Robinson (Practice Note) [1982] 1 WLR 786, 786, and Judge v Judge [2008] EWCA Civ 1458, [2009] 1 FLR 1287, para 48. Indeed its observations to that effect in the Robinson case were quoted with approval by Lord Brandon of Oakbrook in Livesey (formerly Jenkins) v Jenkins [1985] AC 424, 442. The Court of Appeal is not designed to address a factual issue other than one which has been ventilated in a lower court. (b) That the Court of Appeal is an inappropriate forum is clearly demonstrated by the present case: there is no way in which it would have devoted its resources to the conduct of an intensive eight day fact finding hearing, upon controversial evidence given by live witnesses and contained in a mass of documents, such as was conducted by Moylan J. (c) There is therefore need for definitive confirmation, whether by a rule made pursuant to section 17(2) of the 1981 Act or otherwise, of the jurisdiction of the High Court to set aside a financial order made in that court. A substantive order will bring the existence of ordinary civil proceedings to an end and will therefore require any attempt to set it aside to be made within a fresh action. But the same effect has never been attributed to a financial order made in divorce proceedings; so there is no need to provide that the jurisdiction of the High Court to set aside its financial orders be invoked by a fresh action, rather than by application within those proceedings. It is nowadays rare, however, for a financial order to be made in the High Court: it is normally made in the family court and, when made there by a High Court judge, he or she sits in that court as a judge of High Court level. It seems highly convenient that an application to set aside a financial order of the family court on the ground of non disclosure should, again, be made to that court and indeed at the level at which the order was made; and this convenient solution seems already to have been achieved by the provision of the Matrimonial and Family Proceedings Act 1984 recently inserted as section 31F(6), under which the family court has power to rescind any order made by it. (d) The minutes of the meeting of the committee on 20 April 2015 have been placed before this court. The committees conclusion, which in my view this court should indorse, is that its Setting Aside Working Party should proceed on the basis that: (i) there is power for the High Court and the family court to set aside its own orders where no error of the court is alleged and for rules to prescribe a procedure; (ii) financial remedy only; (iii) ; the rule should be limited so as to apply to all types of (iv) applications to set aside should be made to the level of judge (including magistrates) that made the original order; and (v) if an application to set aside can be made, any application for permission to appeal be refused. Recital 14 The husband argued unsuccessfully before Moylan J that recital 14 to the order dated 30 April 2004 disabled the wife from making any complaint about non disclosure on his part. The husband seems scarcely to have pressed the argument in the Court of Appeal and it did not figure in McFarlane LJs judgment; but, apparently emboldened by the recent decision of the Court of Appeal in Hayward v Zurich Insurance Co PLC [2015] EWCA Civ 327, the husband revives the argument in case the Court of Appeals decision in the present case needs extra defence. It is obvious that recital 14 to the order dated 30 April 2004 was inserted at the request of the husband, albeit that the wife agreed to it. Such recitals to financial orders made by consent in divorce proceedings are not common; but nor are they unknown. Those advising a husband in negotiating a settlement with a wife openly sceptical about the comprehensiveness of his financial disclosure occasionally appear to consider that such a recital has some protective effect for him against any later attempt to reopen it on the ground of his non disclosure. Are they correct? In the Hayward case the claimant alleged that his accident at work had led to specified injuries of a long term character. In their defence the employers, by their insurers, pleaded that the claimant had exaggerated his injuries and that he was guilty of lack of candour. His claim was thereupon settled in the sum of 135k. Five years later the insurers, who had received fresh evidence of the claimants full recovery prior to the settlement, sought to reclaim most of the award in an action for deceit. The Court of Appeal held that it could not do so. In the light of its pleaded assertions that the claimants presentation of his injuries had been dishonest, the insurers could not be said to have relied on his presentation when entering into the settlement. So said Underhill LJ at para 23; and at para 25 he concluded that parties who settle claims with their eyes wide open should not be entitled to revive them only because better evidence comes along later. This court has recently granted permission to the insurers to appeal against the Court of Appeals decision. In my view the reasoning of the Court of Appeal in the Hayward case, even if it were to be upheld by this court in the circumstances of that case, does not apply to a case in which the dishonesty takes the form of a spouses deliberate non disclosure of resources in financial proceedings following divorce. For the spouse has a duty to the court to make full and frank disclosure of his resources (see the Livesey case cited in para 18(a) above at p 437), without which the court is disabled from discharging its duty under section 25(2) of the Matrimonial Causes Act 1973 and any order, by consent or otherwise, which it makes in such circumstances is to that extent flawed. One spouse cannot exonerate the other from complying with his or her duty to the court. No doubt on 30 April 2004 Baron J closely scrutinised the order which she was invited to make; and scrutinised also the content of the undertakings which she was invited to accept, in the knowledge that on a later occasion she might be invited to enforce them. But what the parties found convenient to record as agreed recitals to the order was of little interest to Baron J. In the present context, namely that of a financial order in divorce proceedings, a form of words such as recital 14 has no legal effect. Ladd v Marshall In the Ladd case, cited in para 1 above, the claimant sued the defendant for repayment of 1,000. The claim turned on whether he had paid 1,000 to the defendant in the first place. The claimant called the defendants wife but she said that she recalled no such payment. The claim was dismissed. In his appeal the claimant sought to adduce further evidence or to secure a direction for a new trial at which he could adduce it. The proposed fresh evidence was to be given by the defendants wife, who intended to say that she had lied at the trial and that she had been present when the claimant had paid 1,000 to her husband. The Court of Appeal refused to receive the further evidence and dismissed the appeal. Denning LJ said at p 1491 that fresh evidence would be received, or a new trial directed, only when, first, the evidence could not have been obtained with reasonable diligence for use at the trial; second, the evidence would probably have an important influence on the result of the case; and, third, it was presumably to be believed, ie was apparently credible. The court held that the evidence of the defendants wife, who was proposing to confess to having lied, did not satisfy the third criterion. In his judgment Moylan J recorded the husbands concession, by his then counsel, that the court had jurisdiction to set aside the order dated 30 April 2004 on the basis either that material non disclosure has been proved or by application of the principles set out in Ladd v Marshall. The judge proceeded to analyse the wifes case separately on each basis and he upheld it by reference to each. On any view it was unfortunate that Moylan J accepted counsels concession uncritically. As the Court of Appeal held, the decision in the Ladd case does not propound criteria for what needs to be proved, whether in an application to set aside a financial order or otherwise. Its criteria are evidential: other legal principles will identify the facts which a claimant needs to prove and the criteria propounded in the Ladd case do no more than to identify the material upon which, in one unusual situation, litigants can rely in seeking to prove or to dispute the facts which the claimant needs to prove. The unusual situation is that in which, following a trial in which they will each have had the opportunity to adduce evidence in accordance with all general rules of evidence, one of the litigants seeks to adduce further evidence in the course of an appeal. It is thus clear that Moylan J fell into error in holding that, since she had adduced evidence which satisfied the criteria propounded in the Ladd case, the wife was entitled to have the order dated 30 April 2004 set aside. Separately, however, the judge conducted the correct exercise and held that it yielded the same conclusion. The correct exercise was that mandated by the decision in the Livesey case, to which Moylan J referred. In this separate section of his judgment Moylan J recognised that the wife needed to establish material non disclosure on the part of the husband. Notwithstanding suggestions to the contrary by the Court of Appeal (for which, with respect, I perceive little or no foundation), it is clear that over the eight days Moylan J did conduct a full fact finding hearing and did find as a fact, no doubt on the balance of probabilities, that the husband had been guilty of non disclosure. He also found as to which there could be no live dispute that the non disclosure was material in the sense in which Lord Brandon used the word in the Livesey case at p 438 and explained it at p 445, and indeed as further elucidated in para 44 of Lord Neubergers judgment below and in para 33 of the judgment given by Lady Hale today in the Sharland case. I now turn to the crux of the wifes appeal. For, having correctly held that the use made by Moylan J of the decision in the Ladd case had been misconceived, the Court of Appeal held that it was appropriate to apply the decision in a different way. For it accepted the husbands submission not only that the wife had needed to establish that he had been guilty of material non disclosure within the meaning of the Livesey case but also that the evidence which it had been open to her to adduce before Moylan J in that respect had been limited to evidence which satisfied the criteria propounded in the Ladd case. The husbands argument to this effect had first surfaced at a hearing for directions in the wifes application before Baron J on 3 April 2008. Although a transcript of her judgment is not to hand, it is clear from her order that Baron J rejected it. In his appeal against the order of Moylan J the husband revived the argument. The report of his counsels oral argument, [2015] Fam 89, 92, correctly replicates counsels written argument that [i]f jurisdiction to set aside does exist [in a High Court judge], the Ladd v Marshall principles should be applied to the question of whether any particular fresh evidence should be admitted. In paras 39 and 40 of his judgment McFarlane LJ recited counsels general argument to that effect; in para 41 he noted that counsel had, by way of example, directed his argument to the evidence given on behalf of the wife by the husbands father on the basis that, with reasonable diligence, she could have obtained it in 2004, with the result that it was inadmissible; and in para 72 he expressed his entire agreement with the argument of counsel as set out in those paragraphs. Of course, in appraising the evidence on which Moylan J relied in finding material non disclosure on the part of the husband, it was necessary for the Court of Appeal to strip out such evidence from the criminal trials as had been obtained under the 2003 Act. In the event, as explained in para 15 above, it stripped out all the evidence from the criminal trials since it was not practicable for that court to have done otherwise. But what of the other evidence on which Moylan J relied? The evidence of the husbands father was expressly held to have been inadmissible on the basis that it did not satisfy the criteria propounded in the Ladd case. But all the other evidence relied on by Moylan J seems to have been considered inadmissible on that same basis. Following appropriate hesitation and intensive study of the judgment of McFarlane LJ, I draw that inference from his thrice asserted conclusion that it was not open to Moylan J to have made a finding of material non disclosure. Such was a conclusion about the admissibility of the evidence rather than about its weight. Indeed, had McFarlane LJ disagreed with Moylan J about the weight to be attached to particular evidence, he would have been the first to acknowledge the advantage which, in having heard the application over eight days and listened to the oral evidence, Moylan J enjoyed over the Court of Appeal. The absence of any such acknowledgment confirms the conclusion that Moylan Js order was reversed on grounds of the inadmissibility of the evidence on which he had relied. The purported justification for this entirely novel inhibition on the ability of some spouses to establish a ground for the setting aside of a financial order appears to be this: (a) one avenue open to this wife would have been to seek to appeal out of time to the Court of Appeal against the order dated 30 April 2004; (b) had she so proceeded, that court would have applied the criteria propounded in the Ladd case to any evidence which she wished to adduce in support of her appeal; and (c) by choosing instead to apply to the High Court for the order to be set aside, the wife should not be able to bypass the evidential restrictions which would have confronted her in the Court of Appeal. Evidently the Court of Appeal accepted this argument. In doing so it was in my view guilty of a rare aberration for the following reasons: (a) The Court of Appeal would not have embarked on the disputed fact finding exercise required by the wifes application: see para 18(b) above. So the rules for adducing fresh evidence before that court are irrelevant. (b) The first criterion propounded in the Ladd case, namely that the evidence could not have been obtained with reasonable diligence for use at the trial, presupposes that there has already been a trial. It severely curtails a litigants enjoyment of a second opportunity to adduce evidence. It is misconceived to apply it to the evidence adduced by the wife at the hearing before Moylan J, which was only her first opportunity to do so. (c) The argument would not apply to an application to set aside a financial order made by a district judge, against which no appeal out of time would lie to the Court of Appeal in any event. But why should the level of the court which made the order precipitate different evidential rules? (d) Overarchingly, the argument loses sight of the basis of an application to set aside a financial order for non disclosure. It is that the respondent failed to discharge his duty to make full and frank disclosure. The Court of Appeal held that it was open to the wife in the present case not to have consented to the order on 30 April 2004; instead to have proceeded to a substantive hearing of her financial claims; and, if reasonably diligent, there to have adduced the evidence of the husbands resources which she adduced before Moylan J in 2012. But at that hypothetical hearing the onus would not have been on her to adduce evidence of the husbands resources. The onus would have remained on him. Answer The answer to the question in para 1 above is that the principles propounded in the Ladd case have no relevance to the determination of an application to set aside a financial order on the ground of fraudulent non disclosure. Consequence The Court of Appeal not only set aside the order dated 25 September 2012 by which Moylan J granted the wifes application to set aside the order dated 30 April 2004. It also dismissed her application. In the light of its erroneous approach to the admissibility of so it appears all the evidence which she adduced, its dismissal of her application cannot stand. But what further orders should this court make? The complication is that some of the evidence on which Moylan J relied was indeed inadmissible by virtue of section 9(2) of the 2003 Act. Has this court therefore no option but to uphold the setting aside of his order and to direct that the wifes application be reheard? Or might it nevertheless reinstate the order of Moylan J, with the result that the wifes claim for further capital provision may at once, and at last, proceed? The reinstatement of the order dated 25 September 2012 would not be justified by a conclusion that, by reference only to the evidence admissible before him, Moylan J might properly have found that the husband had been guilty of material non disclosure in 2004. It would be justified only by a conclusion that Moylan J would properly have so found. If he would properly have so found, his decision itself, as opposed to some of his reasoning, would not have been wrong within the meaning of rule 52.11(3)(a) of the CPR and the Court of Appeal should not have set his order aside. Nor would a direction for a rehearing in those circumstances be consonant with one aspect of the overriding objective of the CPR identified in rule 1.1(2)(e), namely that the court (including the Court of Appeal) should allot to the wifes application only an appropriate share of the resources of the Family Division in the light of its need to allot resources to other cases. I will summarise the clearly admissible evidence before Moylan J under three headings. I will also refer to his appraisal of it and ask whether, as the husband suggests, the appraisal can realistically be taken to have been contaminated by the attention which the judge paid to the evidence which was inadmissible by virtue of the 2003 Act. The husbands father The evidence of the husbands father (the father) was not only admissible. It was highly significant. (a) The father said that, although a flat in a suburb of Mumbai known as Bhayander, which had been purchased in 1994, had at the husbands request been placed in his, the fathers, name, the husband had provided the purchase price. In the presentation of his resources on 30 April 2004 the husband had alleged that he had no interest in the flat in Bhayander. (b) The father said that, although a flat in Ashoka, Mumbai, which had been purchased in 1999, had at the husbands request also been placed in his, the fathers, name, the husband had provided the purchase price by paying a Mr Saldhana who had paid the builders. The father admitted that he had later sold the flat and kept the proceeds. In the presentation of his resources on 30 April 2004 the husband had alleged that he had never had an interest in the flat in Ashoka and that he had no interest in the proceeds of its sale. (c) The father said that prior to 2001 the husband had purchased a car with funds taken from the Sunfor Trust. The evidence on 30 April 2004 suggested that the Sunfor Trust owned an offshore company, Sunfor Commercial Inc, which was the registered owner of a property in Sydney Street, Chelsea. But the husband had at that time alleged that he had no interest in the trust. (d) The father referred to the husbands purchase of a new Mercedes SL Convertible in 1998 for about 43,000. In the presentation of his resources on 30 April 2004 the husband had alleged that the father had paid for the vehicle. But in his evidence to Moylan J the father denied that he had paid for any part of it. (e) By letter sent to the wife soon after he had sworn his affidavit, the father referred to a BMW 300 motor car which, so he said, the husband had registered in his, the fathers, name without his knowledge. Upon its sale in 1999 the price of 15,700 had therefore been payable to him, the father, and had been paid into his bank account in Orpington. With the letter to the wife, the father enclosed a copy of the letter which he had then sent to the bank in Orpington. He alleged that it was in the husbands handwriting and that he, the father, had done no more than to sign it. The letter instructed the bank to transfer 15,700 to an account in Mauritius for the benefit of Hempton International Ltd (Hempton). In the presentation of his resources on 30 April 2004 the husband had alleged that he had never had an interest in Hempton. (f) To his affidavit the father exhibited a statement dated 5 April 1997 relating to an account in the name of himself and his wife (the mother) with Banque Indosuez, Gibraltar. He averred that he had not opened the account and, until he had been shown the statement, he had known nothing about the account. (g) The father referred to an account in the name of Odessa Management Ltd (Odessa) with Bank Schroder, Geneva. The ownership of Odessa had been in issue in the proceedings which concluded on 30 April 2004. The husband had then alleged that he held a one third interest in Odessa and that the father and the mother each also held a one third interest. But in his evidence to Moylan J the father averred that he had never paid funds into Odessa and had no interest in it; and that his signature on a document dated 8 July 1996, by which he appeared to declare to the bank that he was one of its three beneficial owners, had been forged. If true, these seven aspects of the fathers evidence manifestly established large scale material non disclosure on the part of the husband on 30 April 2004. In that Moylan J attached substantial importance to the evidence later held to have been inadmissible by virtue of the 2003 Act, he no doubt considered that it was unnecessary for him to recite the fathers evidence in the detail in which I have recited it in para 36 above. Nevertheless he specifically referred to each of the seven aspects of it apart from that to which I have referred at (d). Moylan J noted that, other than to admit the allegation at (e) and to aver that the transfer to Hempton was by way of repayment of a debt, the husband had denied the fathers allegations and he recorded his counsels submission that the estrangement between the husband and the father should lead him to afford little, if any, weight to the allegations. The judge concluded however that the fathers evidence was apparently credible. In one ground of his decision the judge, as noted in para 24 above, wrongly applied the criteria propounded in the Ladd case and his description of the fathers evidence reflects the third criterion, namely that the evidence should be apparently credible. The judge concluded, by contrast, that aspects of the evidence of the husband to which he had earlier referred were to put it mildly, unconvincing and inconsistent. The husbands contention before this court is that the judges preference for the evidence of the father rather than for the evidence of himself may partly have been induced by a low opinion of his general credibility derived from the inadmissible evidence. Moylan J was of course well aware that a person who has been dishonest in relation to one matter may well be telling the truth in relation to another matter; and the terms of his judgment well demonstrate the discharge of his duty to survey the factual disputes between the father and the husband on their merits. Insofar, however, as Moylan J took into account that the husband had been guilty of dishonesty in other respects, such was a perception likely to have been derived from something quite other than the inadmissible evidence. It was far more likely to have been derived from the fact that in 2010 the husband had been found guilty of five offences of money laundering under the 2002 Act, committed in and after 2005, and that he had then pleaded guilty to a further eight analogous offences, for all of which he had been sentenced to terms of imprisonment totalling ten years. Transactions in Odessa Moylan J stated that the evidence to which he attributed the greatest weight was not only the evidence much of which was later held to have been inadmissible but also the evidence in relation to the US dollar and sterling accounts held by Odessa with Bank Schroder. The latter evidence was, in summary, that: (a) on 25 May 2007 the husband stated, in answer to a questionnaire, that the accounts were almost depleted, retained only balances to cover guarantees for credit cards and were about to be closed; and (b) on 3 July 2007 his solicitors stated that the accounts had been closed; but (c) on 9 July 2007 40,000 was paid into the sterling account; and (d) on 18 July 2007 $90,000 was paid into, and then out of, the dollar account; and (e) by November 2007 the sterling account held about 79,000. Moylan J stated that the husband had been unable to explain the inconsistency between (a) and (b), on the one hand, and (c), (d) and (e), on the other. The funds identified at (c), (d) and (e) were, said the judge, relatively modest, although no doubt he did not, in this respect, forget the modesty of the capital provision agreed to be made for the wife on 30 April 2004. The judge found, however, that the husbands drawings from his solicitors partnership, said by the husband to have been only 18,000 in 2004 and only 13,000 in 2005 and again in 2006, had been manifestly insufficient to generate these funds and that the husband had been unable credibly to explain their source. The judge proceeded to infer, in my view legitimately, that, had the husband been willing truthfully to explain their source, the trail would be likely to have led to the discovery of other assets which ought to have been disclosed in 2004. Purchase of further flats In support of his conclusion Moylan J also referred to the purchase of two adjoining flats in Mumbai in 2006 or 2007, with which, on any view, the husband had been associated. The judge noted a variety of inconsistencies in the husbands explanations of the source of the purchase price in his written reply to a questionnaire, in the course of a hearing for directions before Baron J, in his written response to her ensuing order and in his oral evidence before Moylan J himself. The husbands explanations, so the judge concluded, were entirely lacking in credibility. Adverse inferences The husband argues that if, from the evidence in relation to the funds held by Odessa and to the purchase of the further, adjoining, flats in Mumbai, there was any ground for inferring that in 2006 and 2007 he held undisclosed assets, there remained no ground for inferring that he held them in 2004. In the light of his conviction for offences committed no earlier than 2005, any such assets, so his argument runs, were clearly the product of his criminal activities. On examination the argument is as unsound as at first sight it is unattractive. For it fails to allow for the role of adverse inferences in the courts generation of its factual conclusions. In Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415, Lord Sumption quoted at para 44 the following statement of Lord Lowry in R v Inland Revenue Comrs, Ex p TC Coombs & Co [1991] 2 AC 283, 300: In our legal system generally, the silence of one party in face of the other partys evidence may convert that evidence into proof in relation to matters which are, or are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence. Lord Sumption added at para 45 that judges exercising family jurisdiction are entitled to draw on their experience and to take notice of the inherent probabilities when deciding what an uncommunicative husband is likely to be concealing. The husband was well aware that the inquiry conducted by Moylan J was into the extent of his assets on 30 April 2004. It is clear that he held assets in 2006 and 2007 and he must have been aware of their origin. Had he demonstrated that they originated in or after 2005, they would have been irrelevant to the inquiry. Instead, however, he chose to obfuscate about their origin. In those circumstances it was reasonable for Moylan J to infer that a truthful explanation of their origin would have been probative of the existence of undisclosed assets on 30 April 2004 and that the husbands withholding of it should be no less probative. Conclusion I conclude that, even if he had referred only to the evidence admissible before him, Moylan J would still properly have found the husband to have been guilty of material non disclosure in 2004; that his order dated 25 September 2012 should therefore be reinstated; and that the wifes claim for further capital provision should therefore proceed before him. It is unclear whether her claim will succeed and, if so, to what extent. Moylan J will need to decide, no doubt with the assistance of the CPS, how best to synchronise his conduct of her application with the confiscation proceedings pending against the husband in the Crown Court; and he will need to investigate not only the extent of the husbands current assets but the extent to which they represent the proceeds of his crimes. For, although the court has jurisdiction to order a transfer to the wife of property so tainted, it will ordinarily, as a matter of public policy, decline to exercise its jurisdiction to do so (CPS v Richards [2006] EWCA Civ 849, [2006] 2 FLR 1220, para 26) and in the present case the wife has made clear that she will not ask it to do so. In its submissions to Moylan J the CPS informed him of its allegation in the confiscation proceedings, disputed by the husband, that he had realisable assets of almost 35m. With respect the Court of Appeal was wrong to say that, to the extent that they existed, the husbands realisable assets would necessarily represent the proceeds of crime; but some or indeed all of them may well do so and Moylan J faces an unenviable task in keeping the scale of his inquiry within tight bounds. LORD NEUBERGER: (with whom Lord Clarke, Lord Sumption and Lord Reed agree) I agree with the judgment of Lord Wilson. The only issue on which I have entertained doubts is whether this court could properly reinstate the order made by Moylan J setting aside the consent order of 30 April 2004 (the 2004 order), rather than directing a rehearing of the wifes application to set aside the 2004 order. For the following reasons, I have concluded that we properly can do so. The ultimate question in these proceedings is whether the 2004 order should be set aside, and that turns on whether the husband had been guilty of material non disclosure in the proceedings leading up to the hearing at which the 2004 order was made. If there had been such non disclosure, but it had been accidental or negligent, the wife would also have had to establish that the effect of the non disclosure was such that the 2004 order was substantially different from the order which would have been made (or agreed) if the husband had afforded proper disclosure see per Lord Brandon in Livesey v Jenkins [1985] AC 424, 445. However, as the non disclosure alleged by the wife in this case is said to be intentional, then, if there was such non disclosure, the 2004 order should be set aside, unless the husband could satisfy the court that the 2004 order would have been agreed and made in any event see per Lady Hale in Sharland v Sharland [2015] UKSC 60, paras 29 33. In other words, where a partys non disclosure was inadvertent, there is no presumption that it was material and the onus is on the other party to show that proper disclosure would, on the balance of probabilities, have led to a different order; whereas where a partys non disclosure was intentional, it is deemed to be material, so that it is presumed that proper disclosure would have led to a different order, unless that party can show, on the balance of probabilities, that it would not have done so. After hearing oral evidence from the husband, the wife and the husbands father, and after considering a number of documents put before him, Moylan J decided that the husband had been guilty of intentional non disclosure (and, for good measure, that it would have affected the terms of the order made in 2004), so he set aside the 2004 order. When deciding that there had been non disclosure, Moylan J relied on evidence derived from criminal proceedings which had been brought against the husband, including the Crown Prosecution Services testimony that he had realisable assets of 35m. As that evidence resulted from the Crown Courts request for assistance under section 7 of the Crime (International Co operation) Act 2003, it was in fact inadmissible (although it is only fair to add that Moylan Js conclusion to the contrary was justified at the time that he reached it in the light of the state of the authorities). In the light of this, the question to be faced is whether, as a result of the fact that Moylan J wrongly relied on the inadmissible evidence obtained under the 2003 Act, there will indeed have to be a retrial of the issue or whether Moylan Js decision can nonetheless stand. There is no doubt that Moylan J gave considerable weight to the inadmissible evidence from the criminal proceedings in coming to his conclusion that the husband had failed to disclose his assets in 2004. In justifying the statement in para 91 of his judgment that there is clearly credible evidence that the husband's resources, both income and capital, were not limited to those disclosed, Moylan J first and most fully referred, in paras 91 and 92, to the inadmissible evidence from the criminal proceedings. And when reaching his conclusion in para 100 that the husband had failed to make full and frank disclosure of his resources in 2004 and that such failure was material, the Judge said this: I have had regard to the combined effect of all the new evidence. However, the evidence to which I attribute the greatest weight is the evidence from the criminal proceedings and the evidence from the Odessa account statements. This evidence demonstrates that it is extremely unlikely that the husbands resources were limited to those disclosed by him in 2004, in other words, substantial debts and a very modest income. The husband, in my view, is very unlikely suddenly to have accumulated 35m of realisable assets from a negative base in 2004. On the other hand, there was other, undoubtedly admissible, evidence to support Moylan Js conclusion that there had been material non disclosure, and that evidence is very fully set out by Lord Wilson in paras 36 40 of his judgment. Although it is true that the evidence first identified by the Judge to support his conclusion that there had been material non disclosure was the inadmissible evidence from the criminal proceedings (paras 92 93), he relied on other evidence as well. Thus, in paras 93 94 he relied on [i]n addition, evidence as to monies passing through the Odessa account and the purchase of the Raj Classic flats. In paras 97 98, Moylan J also said that he would add that [he] found the [husbands] fathers evidence apparently credible, and that the husbands mothers assertions in her statement are clearly inconsistent with the husbands disclosure. Further in para 99, the Judge said that [o]ther aspects of the husbands evidence were, to put it mildly, unconvincing and inconsistent and support the wifes case that he had other resources available to him. And in para 100, quoted above, he did not refer only to the inadmissible evidence but also to the Odessa account. The issue whether there has been non disclosure is a question of fact which involves an evaluative assessment of the available admissible evidence. Such a question is, of course, common in civil and family litigation, and under our common law system the rule is that it can only be answered by a judge after hearing from live witnesses as well as looking at the documents. The most common exceptions to this rule are (i) cases where the evidence is so clear that there is no need for oral testimony and (ii) cases where neither party wishes, or alternatively is unable, to call any witnesses. Ignoring cases in the second category (which has no application here), attempts to seek summary judgment in relation to such disputed issues often fail even when the evidence appears very strong, because experience shows that a full investigation at a trial with witnesses occasionally undermines what appears pretty clearly to be the truth when relying on the documents alone: see eg per Sir Terence Etherton C in Allied Fort Insurance Services Ltd v Creation Consumer Finance Ltd [2015] EWCA Civ 841, paras 81, 89 and 90 and the cases which he cites. Accordingly, in practice it is only when the documentary evidence is effectively unanswerable that summary judgment can be justified. There is also a principled reason behind this rule, namely that, at least where there is a bona fide dispute of fact on which oral testimony is available, a party is normally entitled to a trial where he and his witnesses can give evidence, and he can test the reliability of the other party and/or her witnesses by cross examination. (I say normally, because, in exceptional cases, there may be reasons, such as a sanction in the form of a debarring order, for not following the rule.) The issue in this appeal is unusual, although by no means unprecedented, in that there has been a full trial with witnesses who have given oral evidence which has been tested by cross examination. However, the husband effectively relies on the rule to justify his contention that there should be a full re hearing of the non disclosure issue. He argues that, once one strips out the inadmissible evidence from the criminal proceedings, the decision of Moylan J clearly cannot stand, and that therefore one is in the same position as if there had been no trial with witnesses. In my view, there are obvious and important differences between a case where a party seeks summary judgment (ie where she applies for judgment on the documents and witness statements or affidavits, before any hearing has occurred) and a case such as the present, where a party is arguing that she should be entitled to maintain a judicial decision after a full hearing, even though the judge took into account inadmissible evidence. In the former case the rule would be abrogated whereas in the latter case it would not. Thus, in this case, the husband has had the benefit of a full hearing, which, it is worth mentioning lasted around eight days. He has called all the oral evidence he wanted, and was able to subject the testimony of the wife and her witnesses to cross examination. Accordingly, while it is vital to recognise his right to a fair trial (which includes a right not to have any issues determined by reference to inadmissible evidence), it must be acknowledged that the husband has had a full trial perhaps one may say, not entirely flippantly, too full a trial. Further, in a case such as this, where all the oral evidence which the parties wish to put before the court has been adduced and cross examined, an appellate court is in a much stronger position to reach a confident and concluded view on the facts than it would be in an appeal against an ordinary grant of summary judgment (as in Allied Fort). The appellate court knows what the parties and their witnesses would say in the witness box as they have said it. So, in this case, we can be informed about all the admissible oral evidence which the husband wanted to put before the court, including the results of any cross examination of the wifes witnesses. It is clearly open to an appellate court to make findings of fact in such circumstances, given that the trial judge could or should have done so: see CPR 52.10(1) (whereby the Court of Appeal has all the powers of the lower court), and rule 29(1) of the Supreme Court Rules 2009 2009/1603 (whereby the Supreme Court has all the powers of the court below). It is also germane to bear in mind the overriding objective in CPR 1.1, which includes requirements that courts deal with cases at proportionate cost, sav[e] expense, ensur[e] that [a case] is dealt with expeditiously, and allot to it an appropriate share of the courts resources. These factors justify a much greater reluctance on the part of an appellate court to order a rehearing in a case such as this (particularly when one bears in mind that the hearing before Moylan J lasted around eight days) than would be justified when considering whether to direct a hearing rather than award a party summary judgment. All these factors make it quite clear that, on this appeal, we should not remit the issue whether there was material non disclosure, provided that it would not involve an unavoidable injustice to the husband not to do so. The qualification is of course vital, so that, if it would be impossible to uphold Moylan Js decision without doing or risking injustice to the husband, then the factors discussed in paras 52 54 above could not prevail, and there would have to be a rehearing. The hurdle which has to be crossed in order to establish that there would be no risk of injustice to the husband can be expressed in more than one way. It could be said that we have to be satisfied that (i) Moylan J would have decided that there had been material non disclosure even if he had not heard or seen the inadmissible evidence obtained under the 2003 Act, or (ii) looking at the totality of the admissible evidence in this court, we can safely conclude for ourselves that there has been material non disclosure, or (iii) if the issue was remitted for a re hearing, the judge could only realistically come to that conclusion in the light of the totality of the admissible evidence. In my view, a party such as the wife on this appeal can succeed provided that the court is satisfied that any one of the three requirements is satisfied, although it will, I suspect, be a rare case where only one (or even two) of those requirements is (or are) satisfied: it is particularly hard to imagine circumstances where requirements (ii) and (iii) would not march together. There is in my judgment, great force in the argument that, for the reasons given by Lord Wilson in paras 36 40, we should be satisfied that there was material non disclosure and that, if the issue was remitted any judge, properly directed, would so hold ie that requirements (ii) and (iii) in para 56 above are satisfied. I would be more comfortable about reaching that conclusion if we had been provided with the transcripts of the evidence before Moylan J. That would normally be the appropriate course where an appellate court is being asked to decide for itself a question of fact which was in issue before a judge who heard relevant oral evidence. However, we have been provided with around 500 pages of documents (including applications, submissions, answers to questionnaires, letters, affidavits, and a forensic accountants report), as well as the Judges full analysis of the evidence. Furthermore, it has not been suggested that the husband has been unable to put before this court any of the testimony given to Moylan J which he wishes us to see, or that there is any relevant material in the oral evidence which was not apparent from the judgment. Accordingly, albeit with some hesitation, I am prepared to accept that requirements (ii) and (iii) are satisfied. I also have concerns about requirement (i), namely whether Moylan J would have reached the conclusion that he did if he had not been able to take account of the inadmissible evidence, in the light of the way in which he expressed himself as set out in paras 47 48 above. However, I have concluded that requirement (i) is also satisfied. Even if one strips out the reference to the inadmissible evidence obtained under the 2003 Act, Moylan J still said in para 100 that he attached the greatest weight to the evidence from the Odessa account statements, and there was the other very significant evidence which he set out in paras 93 94 and 97 98 and which is summarised in para 48 above. In addition to the positive evidence referred to in those passages (and more fully explained by Lord Wilson), there is the important point that in para 99, the Judge found aspects of the husbands evidence to put it mildly, unconvincing and inconsistent and that they support[ed] the wifes case that he had other resources available to him. In other words, the only positive oral testimony in favour of the husbands case was unconvincing and inconsistent and actually supported the case for saying that there had been material non disclosure. Accordingly, while the wife need only satisfy one of the three requirements identified in para 56 above, I am persuaded that this is an example of what I suspect would usually be the case, namely that the three requirements march together, and in this case I consider that they are all satisfied. For these reasons, I have reached the conclusion that this court can, and therefore should, decide that Moylan Js decision that the 2004 order was obtained by material non disclosure and should be set aside, can stand notwithstanding that, in reaching that conclusion, he relied in part on the inadmissible evidence obtained under the 2003 Act. |
Section 1(1) of the Protection from Harassment Act 1997 provides that a person must not pursue a course of conduct (a) which amounts to harassment of another, and (b) which he knows or ought to know amounts to harassment of the other. Harassment is both a criminal offence under section 2 and a civil wrong under section 3. Under section 7(2), references to harassing a person include alarming the person or causing the person distress, but the term is not otherwise defined. It is, however, an ordinary English word with a well understood meaning. Harassment is a persistent and deliberate course of unreasonable and oppressive conduct, targeted at another person, which is calculated to and does cause that person alarm, fear or distress: see Thomas v News Group Newspapers Ltd [2002] EMLR 78, para 30 (Lord Phillips of Worth Matravers MR). One of the more egregious forms of harassment is the stalking of women. But the Act is capable of applying to any form of harassment. Among the examples to come before the courts in recent years have been repeated offensive publications in a newspaper (as in Thomas); victimisation in the workplace (Majrowski v Guys and St. Thomass NHS Trust [2007] 1 AC 224); and campaigns against the employees of an arms manufacturer by political protesters (EDO MBM Technology Ltd v Axworthy [2005] EWHC 2490 (QB)). The present appeal arises out of an action for damages for harassment and for an injunction to restrain its continuance. The question at issue is in what circumstances can such an action be defended on the ground that the alleged harasser was engaged in the prevention or detection of crime. Section 1(3) of the Act provides: (3) Subsection (1) does not apply to a course of conduct if the person who pursued it shows (a) that it was pursued for the purpose of preventing or detecting crime, (b) that it was pursued under any enactment or rule of law or to comply with any condition or requirement imposed by any person under any enactment, or (c) that in the particular circumstances the pursuit of the course of conduct was reasonable. The plaintiff, Mr Timothy Hayes, is a businessman who used to manage a number of companies involved in software development. There is an issue about whether he also owns them, but for present purposes that does not matter. One of Mr Hayess companies, IT-Map (UK) Ltd, used to employ the defendant, Mr Michael Willoughby. In 2002, the two of them fell out. Mr Hayes accused Mr Willoughby of attempting in conjunction with three employees of another of his companies, Nucleus Information Systems Ltd, to undermine Nucleus with a view to forcing it into liquidation and buying back its business for themselves. These accusations were not fanciful. The findings of an employment tribunal in 2006 and of Judge Moloney in these proceedings show that they were substantially justified. In 2003, the two companies and the four employees were locked in litigation before employment tribunals, and Nucleus was suing all four men in the High Court for conspiracy, malicious falsehood and copyright infringement. The High Court litigation was resolved at the end of 2004, when Nucleus accepted a payment into court. The disputes about the conduct of the four employees and the resultant litigation are not themselves said to be part of the course of harassment. They are part of the background and they are the occasion for it. The course of conduct on which Mr Hayes relies began in late 2003, when Mr Willoughby embarked on an unpleasant and obsessive personal vendetta against him. Mr Willoughby alleged that his management of his companies, principally in the accounting year 2002-3, was characterised by fraud, embezzlement and tax evasion. The campaign was mainly carried on by pressing these allegations in very many letters addressed over the years to the Official Receiver, the police, the Department of Trade and Industry and other public bodies. The judge recorded that the Official Receiver estimated that no less than 400 communications on the matter were exchanged between Mr Willoughby and the Official Receiver alone. The Official Receiver obtained access to the companys records and investigated the allegations. The DTI commenced two investigations under section 447 of the Companies Act 1985. The police looked into the allegations. All of them concluded that there was nothing in them. They reported their conclusions to Mr Willoughby in increasingly strong terms, but he was not to be moved and continued to raise queries about what he professed to regard as their inadequate inquiries and illogical conclusions. The position has now been reached, said the judge, that most of the relevant bodies are refusing to have any more to do with him, in particular because of their perception that when one of his allegations is conclusively refuted he will simply change his ground and put forward another with equal force. The judge found that Mr Willoughbys words and acts constituted a course of conduct, linked by a common purpose and subject-matter, calculated to cause and in fact causing alarm, distress and anxiety to Mr Hayes. Although he did not communicate directly with Mr Hayes, Mr Willoughby was well aware that his allegations and other conduct would get back to Mr Hayes and have that effect on him. The judge concluded that this amounted to harassment, and it is no longer disputed that it does. The sole remaining issue is whether Mr Willoughby is entitled to a defence under section 1(3)(a), on the ground that his campaign was pursued for the purpose of preventing or detecting crime. On that point, the judges findings were as follows: (1) Mr Willoughbys conduct was gratuitous, for apart from some modest financial claims against Mr Hayes, almost all of which were resolved at an early stage of his campaign, he had no personal interest in establishing his allegations against Mr Hayes. He was animated, the judge said, by mixed motives, including personal animosity to H (in fairness based largely on the same suspicions) and a sort of intellectual curiosity. He quoted Mr Willoughbys evidence that it was an intellectual problem, like playing bridge. (2) Mr Willoughby has at all times sincerely believed that Mr Hayes had stolen large sums from his companies in the United Kingdom and committed a variety of offences in the course of doing so. He continues to believe this to the present day. His campaign was throughout subjectively directed at the prevention or detection of crime. (3) At the outset of the campaign, there was a reasonable basis for Mr Willoughbys suspicions. But Mr Willoughby accepted, indeed asserted, that the crucial evidence was that of the companies bank statements which if examined would either prove or refute his allegations. Once it became clear that the Official Receiver had examined this material and that it did not support Mr Willoughbys case, the judge considered that his persistence ceased to be reasonable. The judge found that this stage had been reached by 14 June 2007, when the Official Receiver reported to him the conclusion of his investigation, or at the latest by 21 September 2007 when the Official Receiver sent him a schedule accounting for substantially the whole of the book debts of IT-Map in the relevant period. Thereafter, Mr Willoughbys persistence exceeded even the widest limits of reasonableness and became unreasonable and obsessive. The inevitable conclusion, the judge said, is that he has developed an unshakeable conviction of Hs criminal guilt which now precedes rather than follows any objective assessment. (4) The three incidents of personal intrusions into Mr Hayess private life (such as the contact with his GP) were never reasonable and had no relevant connection with the prevention or detection of crime. But they did not constitute a separate course of conduct capable of amounting to harassment independent of the correspondence with the public authorities. Some of these findings seem unduly charitable to Mr Willoughby. But the judge heard the witnesses, and it is not for an appellate court lacking that advantage to substitute its own assessment of his state of mind. The question is what is the effect of the findings as a matter of law. It is common ground that in respect of the period up to June 2007 their effect is that Mr Willoughby is entitled to rely on section 1(3)(a) as a defence to the allegation of harassment. The question at issue is whether he remained entitled to do so thereafter. The judge dismissed the claim in respect of the entire period, because he considered that the test for section 1(3) of the Act was wholly subjective. It was therefore enough that Mr Willoughby genuinely believed in his allegations and wished to persist in investigating them. The Court of Appeal allowed the appeal, granted an injunction and remitted the matter to the county court to assess damages. Their reasons are given in the judgment of Moses LJ, with whom Sullivan and Gross LJJ agreed. There were, in summary, two reasons. In the first place, Moses LJ distinguished between the purpose of the alleged harasser and the purpose of his conduct, only the latter being in his view relevant. Whatever the avowed purpose of Mr Willoughby himself, the purpose of his conduct was not reasonably or rationally connected to the prevention or detection of crime after June 2007. To the extent that the course of conduct is adjudged irrational, or lacking in any reasonable connection to the avowed purpose of preventing or detecting crime, the likely conclusion will be that the purpose of the conduct was not preventing or detecting crime. As I read this statement, it is a conclusion of law derived from the judges findings, and not a rejection of those findings. Secondly, Moses LJ considered that the prevention and detection of crime had to be the sole purpose of the alleged harasser, and the intrusions upon Mr Hayess privacy, which the judge had found to be unrelated to the prevention or detection of crime, showed that it was not. The starting point of any analysis of this question is that there is no general rule as to how purpose is to be established when it is relevant to a crime or civil wrong. When purpose is relevant to the operation of a statutory provision, the question will depend on the construction of the statute in the light of the mischief to which it is directed. When it is relevant to a rule of common law, the answer will normally be found in the object of the rule. In his concurring judgment in the High Court of Australia in Williams v Spautz (1992) 174 CLR 509, para 4, Brennan J attempted a partial definition of purpose in the context of the tort of abuse of process, which is committed when a person conducts litigation for a purpose other than that for which the courts process is designed: Purpose, when used in reference to a transaction, has two elements: the first, a result which the transaction is capable of producing; the second, the result which the person or persons who engage in or control the transaction intend it to produce. Or, to express the concept in different terms, the purpose of a transaction is the result which it is capable of producing and is intended to produce. This is probably as much as can usefully be said in general terms about this protean concept. I do not accept that any distinction can be drawn of the kind that Moses LJ suggests, between the purpose of a course of conduct and the purpose of the person engaging in it. Acts such as these can have no purpose other than that of their perpetrator. The question is by what standard that persons purpose is to be assessed. In the authorities about section 1(3)(a) of the Protection from Harassment Act 1997, discussion of this question has generally been conducted in terms of a stark choice between an objective and a subjective test. In EDO MBM Technology Ltd v Axworthy [2005] EWHC 2490 (QB), paras 28-29, Paul Walker J held that the test of purpose was subjective. The trial judge in the present case agreed with him. On the other hand, Tugendhat J in KD v Chief Constable of Hampshire [2005] EWHC 2550 (QB) at [144] thought that the test was whether the conduct was objectively justified as a means of preventing or detecting crime, at any rate when it infringed the victims rights under article 8 of the European Convention on Human Rights, and Eady J in Howlett v Holding [2006] EWHC 41 (QB), para 33, thought that there must be objectively judged some rational basis for it. On this appeal the parties have adopted one or other view, according to their interest, fortifying their arguments with authorities relating to other legal contexts in which purpose is relevant. The difficulty about a wholly objective test is that it is not consistent with either the language or the purpose of the Act. The only wholly objective test which could work in this context is one based on the reasonableness of the alleged harasser in supposing that there was a crime to be prevented or detected or that his conduct was calculated to achieve those ends. But where the draftsman intended to apply a test of reasonableness, he said so in terms, notably in sections 1(1)(b) (knows or ought to know), section 1(2) (if a reasonable person... would think) and 1(3)(c) itself (if... the course of conduct was reasonable). If the defence under section 1(3)(a) was limited to cases where it was reasonable to seek to prevent or detect crime in the way that the alleged harasser set about it, it would have been unnecessary because it would have been subsumed in the general defence of reasonableness provided by section 1(3)(c). Moreover, it is hard to imagine that such a limitation would be workable as applied to public authorities even if it could be reconciled with the language of section 1. A wholly subjective test, on the other hand, such as the one that the judge applied to Mr Willoughby, is equally problematic. Before the defence can arise, it must be shown that the victim has been harassed. As Lord Nicholls pointed out in Majrowski v Guys and St. Thomass NHS Trust [2007] 1 AC 224, para 30, bearing in mind that we are concerned with conduct that is a criminal offence as well as a civil wrong, section 1 is confined to serious cases. The conduct relied upon must cross the boundary between conduct which is unattractive, even unreasonable, and conduct which is oppressive and unacceptable. To cross the boundary from the regrettable to the unacceptable the gravity of the misconduct must be of an order which would sustain criminal liability under section 2. A large proportion of those engaging in the kind of persistent and deliberate course of targeted oppression with which the Act is concerned will in the nature of things be obsessives and cranks, who will commonly believe themselves to be entitled to act as they do. Section 1(3)(a), although it was no doubt drafted mainly with an eye to the prevention or detection of crime by public authorities, applies equally to private persons who take it upon themselves to enforce the criminal law. Within broad limits, the law recognises the right of private persons to do this, but vigilantism can easily and imperceptibly merge into unlawful harassment. Cases such as the present one, where the harassment is said to consist in repeated and oppressive attempts to detect crime are quite likely to involve conduct falling within the sub- category of harassment defined as stalking by section 2A (added by section 111(1) of the Protection of Freedoms Act 2012). This includes not just sexual stalking, but any persistent course of harassment that consists in repeatedly following a person, contacting or attempting to contact them, publishing material about them, monitoring their use of the internet, loitering in any place, or watching or spying on them: see section 2A(3). Conduct said to be directed to preventing crime is likely to be an even more significant category than conduct said to be directed to its detection. Recent cases before the courts illustrate the propensity of obsessives to engage in conduct which is oppressive enough to constitute harassment, in the genuine belief that they are preventing crime. These ranging from the more extreme wings of the animal rights movement to the lone schizophrenic vigilante whom Mr Wolman (appearing for Mr Willoughby) submitted would be protected by section 1(3)(a). Those who claim to be acting for the purpose of either preventing or detecting crime may at a purely subjective level entertain views about what acts are crimes which have no relation to reality, let alone to the law. Private persons seeking to enforce the law are not amenable to judicial review, as the police are. Unless they commit some other offence or civil wrong, such as assault or criminal damage, the Act of 1997 will be the only means of controlling their activities by law. It cannot be the case that the mere existence of a belief, however absurd, in the mind of the harasser that he is detecting or preventing a possibly non-existent crime, will justify him in persisting in a course of conduct which the law characterises as oppressive. Some control mechanism is required, even if it falls well short of requiring the alleged harasser to prove that his alleged purpose was objectively reasonable. I do not doubt that in the context of section 1(3)(a) purpose is a subjective state of mind. But in my opinion, the necessary control mechanism is to be found in the concept of rationality, which Eady J touched on in Howlett v Holding [2006] EWHC 41 (QB) and Moses LJ seems to have been reaching for in his judgment in the present case. Rationality is a familiar concept in public law. It has also in recent years played an increasingly significant role in the law relating to contractual discretions, where the laws object is also to limit the decision-maker to some relevant contractual purpose: see Ludgate Insurance Co Ltd v Citibank NA [1998] Lloyds Rep IR 221, para 35 and Socimer International Bank Ltd v Standard Bank Ltd [2008] Bus LR 1304, para 66. Rationality is not the same as reasonableness. Reasonableness is an external, objective standard applied to the outcome of a persons thoughts or intentions. The question is whether a notional hypothetically reasonable person in his position would have engaged in the relevant conduct for the purpose of preventing or detecting crime. A test of rationality, by comparison, applies a minimum objective standard to the relevant persons mental processes. It imports a requirement of good faith, a requirement that there should be some logical connection between the evidence and the ostensible reasons for the decision, and (which will usually amount to the same thing) an absence of arbitrariness, of capriciousness or of reasoning so outrageous in its defiance of logic as to be perverse. For the avoidance of doubt, I should make it clear that, since we are concerned with the alleged harassers state of mind, I am not talking about the broader categories of Wednesbury unreasonableness, a legal construct referring to a decision lying beyond the furthest reaches of objective reasonableness. Before an alleged harasser can be said to have had the purpose of preventing or detecting crime, he must have sufficiently applied his mind to the matter. He must have thought rationally about the material suggesting the possibility of criminality and formed the view that the conduct said to constitute harassment was appropriate for the purpose of preventing or detecting it. If he has done these things, then he has the relevant purpose. The court will not test his conclusions by reference to the view which a hypothetical reasonable man in his position would have formed. If, on the other hand, he has not engaged in these minimum mental processes necessary to acquire the relevant state of mind, but proceeds anyway on the footing that he is acting to prevent or detect crime, then he acts irrationally. In that case, two consequences will follow. The first is that the law will not regard him as having had the relevant purpose at all. He has simply not taken the necessary steps to form one. The second is that the causal connection which section 1(3)(a) posits between the purpose of the alleged harasser and the conduct constituting the harassment, will not exist. The effect of applying a test of rationality to the question of purpose is to enable the court to apply to private persons a test which would in any event apply to public authorities engaged in the prevention or detection of crime as a matter of public law. It is not a demanding test, and it is hard to imagine that Parliament can have intended anything less. The judges findings of primary fact, fairly read, mean that after June 2007 Mr Willoughbys vendetta against Mr Hayes was more than objectively unreasonable. It was irrational. His persistence was obsessive. He was no longer guided by any objective assessment of the evidence of Mr Hayess supposed criminality and there was no longer any logical connection between his supposed purpose and his acts. In the judges words, his unshakeable conviction of Mr Hayess guilt now preceded rather than followed any objective assessment of the evidence. He was proceeding with his campaign for its own sake, regardless of the prospect of detecting any crimes of Mr Hayes. There is no other way of characterising his persistence in pressing his allegations on the official Receiver and other investigatory authorities long after they had refused to deal further with him, so that his conduct was no longer capable of furthering the supposed purpose. It follows that Mr Willoughby cannot, in the sense meant by section 1(3)(a) of the Act, be regarded as having had that purpose or of having been guided by it. In these circumstances, it is strictly speaking unnecessary to decide whether the purpose specified in section 1(3)(a) must be the sole purpose of the alleged harasser. But I should record that Mr Allen QC (who appeared for Mr Hayes) did not attempt to defend this particular ground of the Court of Appeals decision and in my view it was indefensible. A persons purposes are almost always to some extent mixed, and the ordinary principle is that the relevant purpose is the dominant one. It follows that the only relevance of the three intrusions upon Mr Hayess privacy found by the judge, is that they were evidence of Mr Willoughbys state of mind. The judge might have concluded that they demonstrated that Mr Willoughby was predominantly actuated by malice and resentment. But he did not and that is all that there is to say about this aspect of the matter. I would dismiss the appeal. On that footing there is no issue about the terms of the Court of Appeals order, which will stand. I agree that this appeal should be dismissed, essentially for the reasons given by Lord Sumption. Parliament in enacting section 1(3) of the Protection from Harassment Act 1997 must have regarded paragraphs (a) and (b) as representing situations in which the stated purpose under paragraph (a), or the relevant enactment, rule, condition or requirement under paragraph (b), would by itself constitute sufficient justification of the course of conduct constituting the assumed harassment, without any need to enquire whether in the particular circumstances the pursuit of the course of conduct was reasonable. The Court of Appeal was clearly in error both in identifying a distinction under paragraph (a) between Mr Willoughbys purpose and the purpose of his course of conduct and in holding that the purpose of preventing or detecting crime must be the sole purpose for paragraph (a) to apply. Paragraph (a) focuses on Mr Willoughbys subjective purpose and it is sufficient if his predominant purpose fell within it. The judge, as I read his judgment, found that Mr Willoughbys predominant subjective purpose was to detect crime. Very often that finding would conclude the case. But, like Lord Sumption, I do not consider that it does here. If one asks whether Parliament can really have intended there to be no limits to the pursuit of a course of conduct for the purpose of preventing or detecting crime, no matter how irrational, perverse or abusive its pursuit may have become, the answer I would give is negative. Mere unreasonableness is not the limit. But the law recognises looser control mechanisms such as complete irrationality, perversity, abusiveness or, indeed, in some contexts gross negligence. (As to the last, see eg Spread Trustee Co Ltd v Hutcheson [2011] UKPC 13, [2012] 2 AC 194, paras 50- 51 per Lord Clarke.) Which of these is in the present context adopted does not in my view ultimately matter. They all probably amount to very much the same thing. On the judges findings, Mr Willoughbys state of mind took his course of conduct outside paragraph (a), whether one describes it as irrational, perverse or abusive or as so grossly unreasonable that it cannot have been intended to be covered by that head of justification. LORD REED (dissenting) I agree that section 1(3)(a) of the Protection from Harassment Act 1997 is not subject to any requirement that the pursuit of the course of conduct, for the purpose of preventing or detecting crime, should have been reasonable: otherwise, given the terms of section 1(3)(c) (that in the particular circumstances the pursuit of the course of conduct was reasonable), section 1(3)(a) would be otiose. Having reached that conclusion, I am with respect unable to agree that Parliament may nevertheless have intended to impose a requirement that the pursuit of the course of conduct should have been rational. That is so for three reasons. First, Parliament did not say so. On its face, a test of purpose usually refers to the object or aim which the defendant had in mind: purpose connotes an intention by some person to achieve a result desired by him (Sweet v Parsley [1970] AC 132, 165 per Lord Diplock). The purpose for which a course of conduct is pursued is therefore ordinarily ascertained by reference to the intention of the person who pursues it. To introduce a requirement of objective rationality requires the court to read in words which Parliament did not use. Furthermore, as Walker J observed in EDO MBM Technology Ltd v Axworthy [2005] EWHC 2490 at para 36, in enacting the Act Parliament was significantly extending the reach of the criminal and civil law in controversial circumstances. In doing so, care was taken to identify expressly occasions when conduct was to be judged by an objective standard. I have already referred to the terms of section 1(3)(c). The language employed in section 1(1)(b) (knows or ought to know), section 1(2) (if a reasonable person would think) and section 8(1)(b) (where it would appear to a reasonable person), to give only a few examples, similarly demonstrates that Parliament made it clear when it intended to impose an objective requirement. The implication is that it did not intend to impose such a requirement in section 1(3)(a), or in the similarly worded sections 4(3)(a), 4A(4)(a) (as inserted by section 111(2) of the Protection of Freedoms Act 2012) and 8(4)(b). Moreover, I cannot readily bring to mind any example, in any context, of a statutory requirement not of reasonableness but of rationality, the latter being understood as conceptually distinct from the former. Secondly, section 1(3)(a) and the similarly worded provisions elsewhere in the Act provide defences to criminal as well as civil liability. It is trite that a statute is not normally to be construed as extending criminal liability beyond the limits which Parliament itself made clear in its enactment. Thirdly, bearing in mind again that section 1(3)(a) and the other provisions to like effect limit the scope of criminal offences, some of which are triable on indictment, I would be slow to infer that criminal liability was intended to turn upon the subtle distinction between what is unreasonable and what is irrational. Are defendants to be convicted on the basis that their conduct has overstepped the boundary separating the unreasonable from the irrational? Are juries to be required to determine where that boundary lies? It may be that appropriate directions can be devised by judges, although I do not underestimate the difficulty of devising directions which accurately reflect Lord Sumptions analysis. I have to confess that I am not sure that I understand the distinction drawn at para 14 between on the one hand rationality [as] a familiar concept in public law, which is not the same as reasonableness, and on the other hand the broader categories of Wednesbury unreasonableness; or the statement that there should be an absence of arbitrariness, of capriciousness or of reasoning so outrageous in its defiance of logic as to be perverse, but that the court is not referring to a decision lying beyond the furthest reaches of objective reasonableness; or how that test is related to the causal connection between the purpose and the conduct, discussed in para 15; or whether it is the same test as is reflected in the various standards, ranging from gross negligence to complete irrationality, mentioned by Lord Mance. In any event, a meaningful jury trial requires not merely that the jury is given a legally accurate direction, but that it is one which they can make sense of in practice and apply with confidence to the evidence they have heard. I am not convinced that Parliament can have intended that a jury should be expected to understand and apply the sophisticated distinctions which Lord Sumption seeks to draw. That Parliament should have intended section 1(3)(a) to apply, regardless of whether the pursuit of the course of conduct was objectively reasonable or not, may at first sight seem surprising, given that the conduct must otherwise constitute harassment before section 1(3)(a) can come into play. It is however understandable that Parliament should not have intended that persons genuinely pursuing a course of conduct for the purpose of preventing or detecting crime should be vulnerable to prosecution or civil action under the Act, and should then have to justify their conduct to a court. The possibility of such proceedings could inhibit not only the activities of the numerous public agencies with responsibilities relating to the prevention or detection of crime, but also other activities of other persons such as investigative journalists. The possibility that such activities might, in the absence of immunity, be the subject of proceedings under the Act is by no means fanciful, as is demonstrated by the example of the late Robert Maxwell amongst others. Indeed, journalism has already been the subject of proceedings under the Act (Thomas v News Group Newspapers Ltd [2002] EMLR 78). I do not demur from the view that it may be desirable that the courts should be able to restrain the activities of a person who causes real distress through his irrational behaviour; and this case demonstrates that mental health legislation does not provide a complete answer. But that is not in my view a sufficient reason for extending the scope of the Act beyond what Parliament intended. If Parliament wished to amend the legislation in order to apply it to persons such as the appellant, it could do so; and, if it contemplated such an amendment, it could also consider whether, and if so how, it wished to preserve the immunity which had until now been thought to be conferred by section 1(3)(a), and the other provisions to like effect, upon public agencies exercising investigative powers and upon other persons, such as investigative journalists, whose conduct may be equally upsetting to those whom they are investigating and will also, as a result of this decision, be susceptible to challenge in the courts. |
This appeal is concerned with the meaning and application of the client money rules and client money distribution rules contained in Chapter 7 of the Client Assets Sourcebook (CASS 7) issued by the Financial Services Authority for the safeguarding and distribution of client money in implementation of the Markets in Financial Instruments Directive 2004/39/EC (MiFID). The central feature of the client money rules is the requirement that CASS 7 imposes on MiFID firms to segregate money that they receive from or hold for or on behalf of their clients in the course of MiFID business by placing it into a client money account so that it is kept apart from the firms own money. Under English law the mere segregation of money into separate bank accounts is not sufficient to establish a proprietary interest in those funds in anyone other than the account holder. A declaration of trust over the balances standing to the credit of the segregated accounts is needed to protect those funds in the event of the firms insolvency. Segregation on its own is not enough to provide that protection. Nor is a declaration of trust, in a case where the clients money has been so mixed in with the firms money that it cannot be traced. So segregation is a necessary part of the system. When both elements are present they work together to give the complete protection against the risk of the firms insolvency that the client requires. That is why rule 14.1 of the Solicitors Regulation Authority Accounts Rules 2011 provides that client money must without delay be paid into a client account, except when the rules provide to the contrary. Rule 6.3.1(b) of the Law Society of Scotland Practice Rules 2011 contains a provision to the same effect. The Law Society of Scotlands guidance to rule 6.3.1(b) states that without delay normally means on the same day. These elementary principles were adopted by section 139 of the Financial Services and Markets Act 2000 (the 2000 Act) when the rule making powers conferred on the FSA relating to the handling of client money were being formulated. CASS 7 provides for the segregation of client money, and it creates a statutory trust over client money to support and reinforce the purposes of segregation. This ensures that client money is kept separate and not used for the firms own purposes. It protects the segregated funds from the claims of the firms creditors in the event that protection is most needed, which is the firms insolvency. It also enables client money to be returned to the clients without delay, as it is beyond the reach of the firms creditors. If the system works in the same way as it does under the accounts rules that regulate the activities of solicitors, the clients whose money has been segregated will be assured that their client money entitlement is not depleted by having to share the money in the clients account with others who may have claims against the firm, such as those whose client money has not been segregated and those for whom the firm does not hold any client money at all. The rules that CASS 7 sets out are complex, and in the present case they have given rise to many problems. This appeal raises three issues that are of fundamental importance to the way the system that CASS 7 lays down is to be worked out. The first is when does the statutory trust arise? Does it arise only when the money has been placed in a segregated client account, or is the money subject to the trust as soon as it is in the firms hands irrespective of where it puts the money? If the latter is the case, the trust will extend to any client money that is held in the firms house account and has not yet been segregated as well as to money that has been segregated. The second and third issues are concerned with what happens to client money in the event of the failure of the firm (described by CASS 7 as a primary pooling event). The second is directed to the rules that CASS 7 lays down for the way client money is to be distributed should that event occur. It asks whether these arrangements apply to money that is identifiable as client money in the firms house accounts or only to money that is in the segregated client accounts. The third asks whether the right to participate in the pool that is to be distributed rateably to the clients is given only to those clients for whose benefit client money is held in the segregated client accounts, or whether a client whose money ought to have been segregated but was being held in a house account when the event occurs is entitled to participate in that money too. I have had the great advantage of reading in draft Lord Walkers judgment, in which the background to the issues that we have to consider is so fully and carefully set out. Those who are interested will find most of the provisions of CASS 7 that are relevant to those issues set out in appendix 1 to the judgment of Arden LJ in the Court of Appeal [2011] Bus LR 277, 325. There are some omissions, but they are not important. All the provisions that Lord Walker refers to in his analysis of the points that matter are to be found there. As to the first issue, which is the time at which the statutory trust arises, I agree for the reasons Lord Walker gives that the trust arises on receipt of the money. But I have also found it helpful to consider the issue from the position of Scots law. As Lord Walker has explained in para 47, it is clear that CASS 7 was intended when transposing the Directives into national law to make use of the concept of holding money on trust. But this is expressed by section 139(1) of the 2000 Act to be the position in relation to England and Wales and Northern Ireland only. Section 139(3) provides: In the application of subsection (1) to Scotland, the reference to money being held on trust is to be read as a reference to its being held as agent for the person who is entitled to call for it to be paid over to him or to be paid on his direction or to have it otherwise credited to him. This provision is carried forward into the description of the statutory trust in section 7.7 of CASS which Lord Walker has quoted in full in para 41, below. The wording of section 139(3) might be taken as an indication that the concept of trust is unknown in Scots law. That would be a misconception. There certainly is a law of trusts in Scotland. This has been recognised from time to time by statute: see, for example, the Trusts (Scotland) Act 1961 and section 17(5) of the Trustee Investments Act 1961. There are significant differences between English and Scots law as to its nature and origin. For example, the law of Scotland does not accept that a relationship in trust can arise in equity. It has a more limited basis. Its origin can be traced back to mandate or commission, which is part of the law of obligations: Stair, Institutes of the Law of Scotland (1693), I.12.17. Various attempts have been made to explain the basis for the concept. They have not been successful, as its nature is considered to be of too anomalous a character to admit of a precise definition. But it can at least be said that the duty that the trustee owes to the beneficiary is fiduciary in character: Wilson and Duncan, Trusts, Trustees and Executors 2nd ed, (1995), para 1 63. In Council of the Law Society of Scotland v McKinnie 1991 SC 355 a question arose as to the character of funds held by a solicitor to the credit of his client account as at the date of his sequestration under section 31(1) of the Bankruptcy (Scotland) Act 1985. Delivering the opinion of the court Lord President Hope said at pp 358 359: The order of priority in distribution which is prescribed by section 51 of the 1985 Act leaves no room for doubt that if sums at credit of the clients account were to be regarded as having vested in the permanent trustee, these funds would be exposed to the claims of all those entitled to a ranking on the debtors estate. But property held on trust by the debtor for any other person lies outside this scheme of distribution altogether. Section 33(1)(b) of the Act provides that such property shall not vest in the permanent trustee. So if sums at credit of the clients account are to be regarded as having been held by the solicitor on trust on his clients behalf, it must follow that these sums do not vest in the permanent trustee on the sequestration of the solicitor, and accordingly that the judicial factor was right to resist the instruction by the accountant that the sums held on clients account in this case were to be made over to the permanent trustee. We are in no doubt that sums held to the credit of the clients account are fiduciary in character and that for this reason they are sums to which section 33(1)(b) of the 1985 Act applies. It is well settled that a solicitor stands in a fiduciary relation to his client in regard to all sums of money which he has received on the clients behalf. Authority for the proposition in the last sentence of that passage is to be found in Jopp v Johnstons Trustee (1904) 6 F 1028. In that case a law agent sold shares belonging to his client Mrs Jopp and lodged the money that he received for them in his own bank account, which at that time was in credit. He later died insolvent and his estates were thereafter sequestrated. It was held that, as he was in the position of a trustee in regard to the sum realised by the sale of his clients shares, the amount in his account at his death which represented the trust money still belonged to his client and did not form part of his sequestrated estate. The case was concerned principally with the problem that had been created by the fact that the clients money had been mixed by the law agent with his own funds. But some passages in the opinion of Lord Justice Clerk Macdonald are of particular interest in the present context. At p 1034 the Lord Justice Clerk said: Now, there can be no doubt whatever that throughout the whole time during which the price of these shares was dealt with, Mr Johnston stood in a fiduciary relation to Mrs Jopp. At p 1035 he referred to, and adopted, the solution to the problem that was to be found in English law: I have no difficulty in holding with Sir George Jessel MR in the case of In re Halletts Estate (1880) LR 13 Ch Div 696, 719, that, as he quoted from Lord Hatherley, if a man mixes trust funds with his own, the whole will be treated as [the] trust property, except [] so far as he may be able to distinguish what is his own. It is no doubt true that Mr Johnston was not in the strict sense of the word Mrs Jopps trustee. He was undoubtedly, while he held the money, under the obligations of trust, the obligation to hold it for another and to deal with it solely for that others interest. After referring to a passage in the judgment of Thesiger LJ in Hallett at p 723 to the same effect, he added these words: Now, here, whatever Mr Johnston did, the fiduciary relation of agent undoubtedly subsisted, and to have uplifted the whole of these deposit receipts and used the contents for his own purposes would undoubtedly have been an absolute breach of his duty and the fiduciary position in which he stood. I think that these passages tell us two things. The first thing is that, while Scots law has no difficulty in using the word trust in this context, the concept is more accurately and precisely analysed by referring to the fiduciary duty that the agent owes to his client with regard to money that he holds on his clients behalf. So the fact that a statutory trust is rejected by section 139(3) of the 2000 Act in favour of agency in the application of section 139(1) to Scotland, while at first sight surprising, does appear to have some basis in the language that was used to explain the relationship in Jopp v Johnstons Trustee. We were shown a copy of a letter by the Chairman of the Scottish Law Commission, Lord Drummond Young, to the Advocate General for Scotland dated 28 September 2010 in which the Advocate Generals attention was drawn to section 139(3) of the 2000 Act, to CASS 7.7.1G and to an almost identical provision which is to be found in Chapter 5.3 of CASS in respect of insurance moneys. Inquiries by the Commissions trust team of lawyers in HM Treasury had received a reply to the effect that the instructions for the 2000 Act did not disclose a policy reason for the choice of agency. It appeared that an identical provision in section 55(5) of the Financial Services Act 1986 had been adopted without any independent policy consideration being given to the matter when the 2000 Act was being prepared. The question was raised as to whether the CASS rules would achieve the intended level of client protection in the event of an insolvency north of the border. This brings me to the second point that can be taken from the passages that I have quoted from Jopp v Johnstons Trustee. It is directed to the question of how the agency approach that must be applied in Scotland can guide us towards a solution of the issues raised in this appeal. I would approach this question on the assumption that it was the intention of Parliament to provide the same level of client protection north of the border as was to be available in England and Wales and in Northern Ireland. This assumption is based on the fact that no policy reason has been disclosed for the different treatment that the legislation has laid down for the application of section 139(1) of the 2000 Act to Scotland. The explanation for the difference may lie with the Parliamentary draftsman in the Lord Advocates department. It is the kind of thing that would be picked up when he was checking through the legislation to see whether it should be expressed differently in the terminology of Scots law so as to achieve what he understood its effect to be in the other parts of the United Kingdom. The Lord Justice Clerks opinion in Jopp v Johnstons Trustee would have provided him with the terminology he was looking for. Returning then to the first issue, which is the time at which the statutory trust arises, the solution that would be arrived at under the agency approach is very simple. As Lord Justice Clerk Macdonald said in Jopp v Johnstons Trustee at p 1034, the agent stands in a fiduciary relation to his client throughout the whole time that the clients money is in his hands. The relationship from start to finish is one of agency. At no stage does the money cease to be the clients money and become the property of the agent. The fiduciary relationship which gives rise to the statutory trust arises on receipt of the money. There is no interval between the moment of receipt and the commencement of the fiduciary relationship during which the agent can treat the money as his own. The relationship remains throughout the period while the money is held in a client or house account until the obligation to the client has been discharged. That was held to be the position in Council of the Law Society of Scotland v McKinnie, and I would apply the same reasoning here. So if this were a Scottish case I would have no difficulty in adopting the reasons that Lord Walker gives in para 63. As he explains in para 76, the clear conclusion he reaches on the first issue is that the effect of CASS 7 is that under the alternative approach referred to in 7.4.16, as well as under the normal approach referred to in 7.4.17, a firm receives and holds clients money as a trustee, with the beneficial ownership remaining in the clients. I have no doubt that the law of Scotland would arrive at the same conclusion. Lord Walker found it helpful to consider the third issue, which is whether participation in the client money pool (CMP) is dependent on actual segregation (in other words, how the CMP is to be distributed), before the second issue, which is whether the primary pooling arrangements apply only to the client money in house accounts (in other words, what is to go into the CMP): see para 89. I agree, and like him I would approach the third issue on the basis that the CMP consists of the aggregate of the segregated funds holding clients money immediately before the primary pooling event (PPE). I also agree that the words each client in the rule of distribution set out in 7.9.6R(2) must be taken in context to mean each client for whom client money is held as identified in the last reconciliation before the PPE. The agency approach would lead one to expect that the CMP was to be distributed on the basis of what has been referred to as the contributions theory, rather than on the basis of the claims theory. Sums received from or on behalf of the client are fiduciary in character. They retain that character until all the obligations arising from the fiduciary relationship are discharged. The fiduciary relationship protects them from being used to meet claims against the agent for breach of duties that he owes to others. It would be surprising if the rule of distribution was intended to have the effect of removing that protection, which is what the claims basis of distribution would achieve. As I see it, clear language would be needed to achieve such a paradoxical result. Lord Dyson says in para 144 that the general scheme of CASS 7 is that all client money is subject to a trust that arises upon receipt of the money by the firm and that the distribution rules are intended to protect all the clients money received prior to a PPE. He disagrees with Lord Walkers description of the notion that clients must be taken to have implicitly accepted the risk, on a PPE, of having to share their segregated funds with non segregated clients as unrealistic. He finds nothing surprising in the notion that, once a PPE occurs, the treatment of client money is subject to a different regime from that to which it was subject before. Lord Neuberger of Abbotsbury MR was of the same view in the Court of Appeal. In para 216 he said that it seemed to him unlikely that the FSA would have intended that client money which had yet to be segregated was intended to be treated differently from client money which had been segregated either under the normal approach or under the alternative approach. I find it hard to understand, for my part, why it should be thought that it was the intention of the FSA to depart from the basic principles upon which the rules that regulate the activities of solicitors have been based. As I explained at the outset of this judgment, a declaration of trust, in a case where a clients money has been so mixed in with the firms money that it cannot be traced, is not enough to provide the protection that the client needs in the event of the firms insolvency. Segregation is a necessary part of the system. When both elements are present they work together to give the protection that the client requires. To construe CASS 7 in the way Lord Dyson suggests would have the effect of depriving the client of the protection which the rules were designed to achieve at the very moment when it is most needed. It is not just the exceptional nature of the facts of this case that make the consequences of his approach so striking. It affects every client whose money is handled by any firm operating in the area of MiFID business, however large or small that amount may be. If authority is needed to show that the requirement of segregation is crucial for their protection and how segregation works hand in hand with the fiduciary character that is attached to the funds that are segregated, it can be found in the observations by Professor Gower in his report, Review of Investor Protection which are quoted by Lord Collins in para 186, in the consultation papers to which he refers in para 187 and in Council of the Law Society of Scotland v McKinnie 1991 SC 355 to which I refer in para 9, above. Like Lord Walker, I agree with the conclusion that Briggs J reached as to the effect of the final words of 7.9.6R(2) (calculated in accordance with CASS 7.9.7R). Their effect, as Briggs J said in para 255, was to provide a basis for the clients rateable participation in the CMP. It makes mandatory in the event of a PPE the standard method of money reconciliation that is set out in Annex 1 to CASS 7. Given that it is to be expected that this exercise will have been carried out according to the rules at the Point of Last Segregation (PLS), it is hard to see why it must be gone over again now. But whatever the purpose is that this rule is designed to serve, it does not contain a direction of the kind that I think would be needed to override the protection that attaches to the money that clients have actually contributed in consequence of the fiduciary relationship. I agree with Lord Walker that GLGs appeal on the third issue should be allowed. The second issue has to be approached on the assumption that there were movements in the client money requirement during the gap period between the PLS and the PPE and that significant sums of client money were still traceable in the house accounts at the PPE. As Lord Walker points out in para 101, the issue resolves itself into a contest between what has been referred to as the final reconciliation theory and the general trust law theory. The problem is best focussed by looking at the position of the unsegregated last minute provider of client money. Is that client to be left to claim against LBIE as an unsecured creditor, or is its contribution to be protected in the same way as the contributions of those whose money was contributed before the PLS? Here again the agency approach tends to indicate that the money that this client provided should be protected by the fiduciary obligation which attached to that money as soon as it was received by LBIE. The alternative is hard to reconcile with the fiduciary relationship, which must be taken to have been designed to protect the client from having to claim under the general law of insolvency. It was accepted that there is nothing to prevent a final internal reconciliation from being carried out to take account of movements in clients entitlements during the gap period. In any event I would so read the relevant provisions of CASS 7. That being so, I do not find it difficult to conclude, in agreement with Briggs J and Lord Walker, that this is what ought to be done in this case. I would therefore dismiss GLGs appeal on the second point and make the order which has been proposed by Lord Walker. The question raised by the Scottish Law Commission as to whether the same level of client protection is available in Scotland as elsewhere in the United Kingdom may not have been entirely resolved by the way the questions before us in this appeal have been answered. But it respectfully seems to me that the direction in section 139(3) of the 2000 Act that the reference to money being held on trust is to be read as a reference to its being held as agent offers a level of protection that is no less effective. This is because it is to be assumed that the relationship between the agent and the client is a fiduciary relationship of the kind identified in Jopp v Johnstons Trustee and Council of the Law Society of Scotland v McKinnie. It is worth noting too that I have found it helpful to examine the problems that this case gives rise to by assuming that the relationship between LBIE and its clients was indeed one of agency. The clarity with which the effect and consequences of that relationship has been described is compelling. As it is to be assumed that the protection given by the trust approach was intended to be just as effective, I think that the Scottish approach provides strong support for the conclusions that Lord Walker has reached in accordance with the direction in section 139(1) of the Act that applies to England and Wales. I share Lord Walkers concern at the effect of the answers that the majority give to the second and third issues, and especially to the third issue which is so crucial to the protection of investors generally. LORD WALKER Introduction Lehman Brothers International (Europe) (LBIE) is incorporated in England as an unlimited company with its head office in London. It was the principal European trading company in the Lehman Brothers group. It was authorised and regulated by the Financial Services Authority (FSA). LBIE was not a licensed deposit taker but it was authorised to hold clients money. Its ultimate holding company is Lehman Brothers Holdings Inc (LBHI), a company incorporated in Delaware and based in New York, now in Chapter 11 bankruptcy. LBIE was put into administration by an order of Henderson J made before the opening of business on Monday, 15 September 2008. Many difficulties have arisen in the administration and the administrators have made several applications to the Companies Court for directions under paragraph 63 of Schedule B1 to the Insolvency Act 1986. Probably the most contentious and difficult of these is the client money application, which has led to this appeal. Nine representative claimants were joined as parties to argue the issues. On 15 December 2009 Briggs J, after a twelve day hearing, made an order giving directions on a range of issues concerned with client money: [2009] EWHC 3228 (Ch), [2010] 2 BCLC 301. Some of the issues were matters of detail but others are of general and fundamental importance to LBIEs clients. Four of these general issues were made the subject of an appeal to the Court of Appeal, and on 2 August 2010 the Court of Appeal (Lord Neuberger of Abbotsbury MR, Arden LJ and Sir Mark Waller) allowed the appeal on two of the four issues: [2010] EWCA Civ 917, [2011] Bus LR 277, [2011] 1 CMLR 27, [2011] 2 BCLC 164. Permission to appeal or cross appeal to the Supreme Court was granted on three of those issues. They are closely interconnected, and all of them depend on the application (to a complicated set of assumed facts) of what is known as CASS 7, that is, chapter 7 (Client money: MiFID business) of the Client Assets Sourcebook issued by the FSA. MiFID is an abbreviation for the Markets in Financial Instruments Directive 2004/39/EC and CASS 7 has evolved from earlier regulatory instruments into a form intended to transpose MiFID and its Implementing Directive, Commission Directive 2006/73/EC dated 10 August 2006. The FSAs powers of making rules and publishing guidance are conferred by sections 138, 139, 155 and 157 of the Financial Services and Markets Act 2000 (FSMA). Section 139(1)(a) expressly permits rules to make provision which results in clients money being held on trust in accordance with the rules. At the beginning of his judgment Briggs J (paras 2 to 7) gave an introduction to the problems in terms which I gratefully adopt: 2. When first read, CASS 7 appears to provide a relatively straightforward and intelligible code for the safeguarding of client money by regulated firms. In the barest outline, it provides for client money to be identified and promptly paid into segregated accounts, segregated that is from the firms house accounts. It provides for client money to be held on trust, in substance for the clients for whom it is received and held. Finally in the event of the failure of the firm, the rules provide for the pooling of the client money, thus far segregated and held on trust, and for its distribution to those entitled to it under that trust, pari passu in the event of a shortfall. 3. In an ideal world, the flawless operation of the scheme created by the CASS 7 rules would ensure first, that the clients money could not be used by the firm for its own account and secondly, that upon the firms insolvency, the clients would receive back their money in full, (subject only to the proper costs of its distribution) free from the claims of the firms creditors under the statutory insolvency scheme. The rules would achieve those twin objectives by ensuring that, promptly upon receipt, client money was held by a firm as trustee, separately and distinctly from the firms own money and other assets, and therefore out of the reach both of the firm (for the conduct of its business) and of the firms administrator or liquidator upon its insolvency (for distribution among its creditors). 4. In the imperfect and hugely complex real world occupied by LBIE and its numerous clients, there has on the facts which I am invited to assume for present purposes been a falling short in the achievement of both of those objectives on a truly spectacular scale. This shocking underperformance has occurred for a number of reasons, of which two stand out as prime causes. The first is that (again on the facts which I am invited to assume) LBIE failed to identify as client money, and therefore also failed to segregate, vast sums received from or on behalf of a significant number of its clients. In this respect, the most significant group of clients whose money LBIE failed to segregate were its own affiliates, that is members of the Lehman Brothers group of companies of which [LBHI] is the ultimate parent. Those affiliates have advanced client money claims against LBIE in aggregate exceeding US$3 billion. To put that extraordinary amount in perspective, the aggregate of the amounts actually held by LBIE in segregated accounts for clients for which it recognised a segregation obligation pursuant to CASS 7 when it went into administration on the morning of 15 September 2008 had a face value of only US$2.16 billion approximately. 5. To the un segregated affiliates claims in excess of US$3 billion must be added claims of independent clients of LBIE who have challenged LBIEs treatment of its relationship with them as one of debtor/creditor rather than trustee and beneficiary, pursuant to the terms of its standard form contracts. The amount of under segregation which may be attributable to that failure (if failure it be) has not been identified. In addition, LBIE routinely treated otherwise than as client money sums deriving from options and derivative OTC transactions with its clients, regardless of the terms of the agreements pursuant to which LBIE conducted such trading for those clients. The amount of potential segregation failure in respect of option transactions alone is said to have been US$146m. 6. The second main reason for under achievement of the objectives behind the CASS 7 rules lies in the insolvent failure of another LBIE affiliate, Lehman Brothers Bankhaus AG (Bankhaus), with which LBIE had deposited no less than US$1 billion of segregated client money. Bankhaus was subjected to a moratorium by the German regulator on 15 September 2008, and insolvency proceedings in relation to it were commenced on 12 November 2008. The administrators have been unable even to hazard a guess at the amount, if any, of client money which may be recovered from Bankhaus. Thus, even if there were no claims at all by clients whose client money LBIE failed to segregate, there exists a real risk that the shortfall on client account will exceed 40% due to the Bankhaus failure, quite apart from the costs and charges liable to be levied against the segregated fund in connection with its distribution, including the very large costs of this application. 7. The combination of a massive failure to identify and segregate client money, coupled with the credit loss shortfall attributable to the Bankhaus failure, has thrown up a series of fundamental problems in the interpretation and application of the rules in CASS 7 to LBIEs business and insolvency. The judge then went on to mention further complications and difficulties, some of which are still relevant to this appeal. In the course of the appeal process the number of representative claimants has been reduced. Of the original nine only four have been parties to the appeal to the Supreme Court, as follows: (1) GLG Investments plc (subfund: European Equity Fund) (GLG) was the representative of LBIEs fully segregated clients. It was the winner before Briggs J on issues 2 and 3 but the loser (with the benefit of a preemptive costs order) before the Court of Appeal on all three issues. It is the appellant (without the benefit of a preemptive costs order) in this court. GLG appeared by Mr Antony Zacaroli QC, Mr David Allison and Mr Adam Al Attar. (2) CRC Credit Fund Limited (CRC) was the principal appellant before the Court of Appeal, as a representative of what Briggs J (para 25) referred to as the wholly unsegregated end of the spectrum. Having succeeded before the Court of Appeal it is the principal respondent (with the benefit of a preemptive costs order) before this court, and it has appeared by Mr Robert Miles QC and Mr Richard Hill. (3) and (4) Lehman Brothers Inc. and Lehman Brothers Finance AG (the LB affiliates) are, on the assumed facts, largely unsegregated clients of LBIE, but they have been joined and represented separately, at their own risk as to costs, because of their special position as members of the Lehman Brothers group. They have appeared by Mr Jonathan Crow QC, Mr Jonathan Russen QC and Mr Richard Brent, who have supported and supplemented the submissions made by Mr Miles. The administrators have appeared by Mr Iain Milligan QC, Ms Rebecca Stubbs and Mr Richard Fisher. The FSA was represented by leading counsel before Briggs J and the Court of Appeal. It has not appeared by counsel in this court but has made written submissions prepared by Mr David Mabb QC and Mr Stephen Horan. The FSA was generally supportive of the respondent claimants position. In his judgment Briggs J had to answer no fewer than 26 questions, some of them subdivided. He had to go into a number of technical matters that arose from the complex and varied character of LBIEs trading activities, including futures, margins, currency transactions, stock loans, depot breaks, fails, and unapplied credits. Some of these terms are briefly explained in para 2.16 of the statement of assumed facts (SAF), most of which is reproduced in para 49 of Briggs Js judgment. In this court the argument has on the whole proceeded at a more general level. But at least a superficial acquaintance with some of the technicalities is necessary in order to understand the process of internal reconciliation of accounts that has to be undertaken on every business day by a firm operating the alternative approach described in paras 38 and 39 below. The Directives MiFID (Directive 2004/39/EC of the European Parliament and of the Council, dated 21 April 2004) replaces Council Directive 93/22/EEC on investment services in the securities field. Its general purpose is set out in Recital (2): In recent years more investors have become active in the financial markets and are offered an even more complex wide ranging set of services and instruments. In view of these developments the framework of the Community should encompass the full range of investor oriented activities. To this end, it is necessary to provide for the degree of harmonisation needed to offer investors a high level of protection and to allow investment firms to provide services throughout the Community, being a Single Market, on the basis of home country supervision. Recital (26) refers to the importance of segregation of clients funds from those of the firm: In order to protect an investors ownership and other similar rights in respect of securities and his rights in respect of funds entrusted to a firm those rights should in particular be kept distinct from those of the firm. This principle should not, however, prevent a firm from doing business in its name but on behalf of the investor, where that is required by the very nature of the transaction and the investor is in agreement, for example stock lending. The Directive is intended to state broad general framework principles to be implemented later (recital (64)). Article 13 (Organisational requirements) imposes on the home member state (that is, the state in which an investment firm has its registered or head office) the duty of requiring the firm to comply with the organisational requirements set out in paragraphs 2 to 8 of the article. These include: (7) An investment firm shall, when holding financial instruments belonging to clients, make adequate arrangements so as to safeguard clients ownership rights, especially in the event of the investment firms insolvency, and to prevent the use of a clients instruments on own account except with the clients express consent. (8) An investment firm shall, when holding funds belonging to clients, make adequate arrangements to safeguard the clients rights and, except in the case of credit institutions, prevent the use of client funds for its own account. Paragraph 10 indicates that the Commission will by the Implementing Directive specify the concrete organisational requirements to be imposed on investment firms. The Implementing Directive 2006/73/EC implemented MiFID as anticipated in article 13(10). In particular article 16(1) imposes on member states the obligation to require investment firms to keep and maintain records and accounts, to make regular reconciliations, and (in subparagraph (e)) to ensure that client funds deposited, in accordance with article 18, in [an institution authorised by article 18] are held in an account or accounts identified separately from any accounts used to hold funds belonging to the investment firm. Article 16(1)(f) requires member states to introduce adequate organisational arrangements to minimise the risk of the loss or diminution of client assets, or of rights in connection with those assets, as a result of misuse of the assets, fraud, poor administration, inadequate record keeping or negligence. Article 18(1) provides that investment firms are to be required, on receiving any client funds, promptly to place those funds into one or more accounts with a central bank, an authorised credit institution, a bank authorised in a third country, or a qualifying money market fund. Article 4 of the Implementing Directive (additional requirements on investment firms in certain cases) is concerned with what has been referred to as gold plating that is, transposing the Directive into national law in a form that imposes on investment firms requirements not imposed by the Directive itself. Article 4(1) provides: Member states may retain or impose requirements additional to those in this Directive only in those exceptional cases where such requirements are objectively justified and proportionate so as to address specific risks to investor protection or to market integrity that are not adequately addressed by this Directive, and provided that one of the following conditions is met: (a) the specific risks addressed by the requirements are of particular importance in the circumstances of the market structure of that member state; (b) the requirement addresses risks or issues that emerge or become evident after the date of application of this Directive and that are not otherwise regulated by or under Community measures. Any such requirements are to be notified and justified to the Commission. No such notification or justification has been made in respect of CASS 7. Gold plating was raised as an issue in the lower courts, as a possible argument against the imposition of an immediate trust of clients funds. It was not relied on by Mr Zacaroli in this court, but Mr Milligan mentioned it as a point which we might feel bound to consider of our own initiative. For my part I do not think it necessary to go further into the point. CASS 7 CASS 7 (Client money: MiFID business) consists of nine sections, each subdivided into paragraphs containing mandatory rules (denoted R) and (distributed through the rules in smaller print) non mandatory guidance (denoted G). Defined terms are printed in italics, the definitions being found in a separate glossary. So for instance para 7.1.1R (Application) tells the reader that: This chapter (the client money rules) applies to: (1) A MiFID investment firm: (a) that holds client money. and para 7.1.2G tells the reader that CASS 7.2 (Definition of client money) sets out the circumstances in which money is considered client money for the purposes of this chapter. There is also an annex setting out the standard method of internal client money reconciliation. The rules contain numerous cross references to the Directives, to other chapters of CASS and to other FSA regulatory instruments including COBS (the current Conduct of Business Sourcebook) and SYSC (the part of the handbook on High Level Standards which has the title Senior Management Arrangements, Systems and Controls). It is necessary to give a fairly full summary of CASS 7. For brevity I will refer to particular sections and paragraphs without the prefix CASS. The two crucial provisions are emboldened for emphasis. The general scheme of CASS 7 is that section 7.1 sets out the scope of the client money rules and section 7.2 defines client money, doing so by a wide general definition followed by numerous specific exceptions. There is no general exception for money belonging to an affiliated company (7.1.12G). 7.2.15R (discharge of fiduciary duty) lays down when money ceases to be client money. Section 7.3 lays down general organisational requirements, substantially reproducing article 13(8) of MiFID and article 16(1)(f) of the Implementing Directive. Section 7.4 (Segregation of client money) begins by reproducing the substance of article 18 of the Implementing Directive. It then addresses client bank accounts and sets out rules and guidance that call for detailed treatment. The direct quotations below follow the official text in the use of italics (though it can be something of a distraction) but use the same font size for rules and guidance alike. 7.4.11R, reproducing the substance of article 16(1)(e) of the Implementing Directive, provides: A firm must take the necessary steps to ensure that client money deposited, in accordance with CASS 7.4.1R, in a central bank, a credit institution, a bank authorised in a third country or a qualifying money market fund is held in an account or accounts identified separately from any accounts used to hold money belonging to the firm. 7.4.12G provides: A firm may open one or more client bank accounts in the form of a general client bank account, a designated client bank account or a designated client fund account (see CASS 7.9.3G). 7.4.13G explains when and how a designated client account may be used. 7.4.14G (payment of client money into a client business account) provides: Two approaches that a firm can adopt in discharging its obligations under the MiFID client money segregation requirements [defined in the glossary by reference to CASS 7.4.1R and CASS 7.4.11R] are: (1) the normal approach; or (2) the alternative approach. The following rules and guidance about the normal approach and the alternative approach must be set out in full. The alternative approach was first introduced in 1995. Originally its adoption required formal consent from the statutory regulator, but this requirement was replaced by the procedure in 7.4.15R: 7.4.15R A firm that does not adopt the normal approach must first send a written confirmation to the FSA from the firms auditor that the firm has in place systems and controls which are adequate to enable it to operate another approach effectively. 7.4.16G The alternative approach would be appropriate for a firm that operates in a multi product, multi currency environment for which adopting the normal approach would be unduly burdensome and would not achieve the client protection objective. Under the alternative approach, client money is received into and paid out of a firms own bank accounts; consequently the firm should have systems and controls that are capable of monitoring the client money flows so that the firm comply with its obligations to perform reconciliations of records and accounts (see CASS 7.6.2R). A firm that adopts the alternative approach will segregate client money into a client bank account on a daily basis, after having performed a reconciliation of records and accounts of the entitlement of each client for whom the firm holds client money with the records and accounts of the client money the firm holds in client bank account and client transaction accounts to determine what the client money requirement was at the close of the previous business day. 7.4.17G Under the normal approach, a firm that receives client money should either: (1) pay it promptly, and in any event no later than the next business day after receipt, into a client bank account; or (2) pay it out in accordance with the rule regarding the discharge of a firms fiduciary duty to the client (see CASS 7.2.15R). 7.4.18G Under the alternative approach, a firm that receives client money should: (1)(a) pay any money to or on behalf of clients out of its own account; and (b) perform a reconciliation of records and accounts required under CASS 7.6.2R (Records and accounts), SYSC 4.1.1R and SYSC 6.1.1R, adjust the balance held in its client bank accounts and then segregate the money in the client bank account until the calculation is re performed on the next business day; or (2) pay it out in accordance with the rule regarding the discharge of a firms fiduciary duty to the client (see CASS 7.2.15R). 7.4.19G A firm that adopts the alternative approach may: (1) receive all client money into its own bank account; (2) choose to operate the alternative approach for some types of business (for example, overseas equity transactions) and operate the normal approach for other types of business (for example, contingent liability investments) if the firm can demonstrate that its systems and controls are adequate (see CASS 7.4.15R); and (3) use an historic average to account for uncleared cheques (see paragraph 4 of CASS 7 Annex 1G). 7.4.20G Pursuant to the MiFID client money segregation requirements a firm should ensure that any money other than client money deposited in a client bank account is promptly paid out of that account unless it is a minimum sum required to open the account, or to keep it open. 7.4.2.1R If it is prudent to do so to ensure that client money is protected, a firm may pay into a client bank account money of its own, and that money will then become client money for the purposes of this chapter. Section 7.5 deals with transfers of client money to third parties. Section 7.6 (records, accounts and reconciliations) reproduces the substance of article 16 (1)(a), (b) and (c) of the Implementing Directive. It also introduces, in a curiously indirect way, the annex to CASS 7. 7.6.6G deals with internal reconciliations of client money balances and 7.6.6G (3) provides: The standard method of internal client money reconciliation sets out a method of reconciliation of client money balances that the FSA believes should be one of the steps that a firm takes when carrying out internal reconciliations of client money. The first set of italics sends the reader to the glossary, which defines the phrase by reference to CASS 7 Annex 1G. The provisions of the annex are summarised, so far as relevant, in paras 63 and 64 below. Section 7.7 (Statutory trust) is of central importance in this appeal. It must be set out in full: 7.7.1G Section 139(1) of the Act (Miscellaneous ancillary matters) provides that rules may make provision which result in client money being held by a firm on trust (England and Wales and Northern Ireland) or as agent (Scotland only). This section creates a fiduciary relationship between the firm and its client under which client money is in the legal ownership of the firm but remains in the beneficial ownership of the client. In the event of failure of the firm, costs relating to the distribution of client money may have to be borne by the trust. 7.7.2R A firm receives and holds client money as trustee (or in Scotland as agent) on the following terms: (1) for the purposes of and on the terms of the client money rules and the client money (MiFID business) distribution rules; subject to (3) [it is common ground that this is an error for (2) (4)], for the clients (other than clients which are insurance undertakings when acting as such with respect of client money received in the course of insurance mediation activity and that was opted in to this chapter) for whom that money is held, according to their respective interests in it; (3) after all valid claims in (2) have been met, for clients which are insurance undertakings with respect of client money received in the course of insurance mediation activity according to their respective interests in it; (4) on failure of the firm, for the payment of the costs properly attributable to the distribution of the client money in accordance with (2); and (5) after all valid claims and costs under (2) to (4) have been met, for the firm itself. Section 7.8 requires the trust affecting client money to be notified to and acknowledged by banks and other intermediaries. Section 7.9 (Client money distribution) is also of central importance. 7.9.1 to 7.9.8 must be set out in full: 7.9.1R This section (the client money (MiFID business) distribution rules) applies to a firm that holds client money which is subject to the client money rules when a primary pooling event or a secondary pooling event occurs. 7.9.2G The client money (MiFID business) distribution rules seek to facilitate the timely return of client money to a client in the event of the failure of a firm or third party at which the firm holds client money. 7.9.3G A firm can hold client money in either a general client bank account, a designated client bank account or a designated client fund account. A firm holds all client money in general client bank accounts for its clients as part of a common pool of money so those particular clients do not have a claim against a specific sum in a specific account; they only have a claim to the client money in general. A firm holds client money in designated client bank accounts or designated client fund accounts for those clients that requested their client money be part of a specific pool of money, so those particular clients do have a claim against a specific sum in a specific account; they do not have a claim to the client money in general unless a primary pooling event occurs. A primary pooling event triggers a notional pooling of all the client money, in every type of client money account, and the obligation to distribute it. If the firm becomes insolvent, and there is (for whatever reason) a shortfall in money held for a client compared with that clients entitlements, the available funds will be distributed in accordance with the client money (MiFID business) distribution rules. A primary pooling event occurs: 7.9.4R (1) on the failure of the firm; (2) on the vesting of assets in a trustee in accordance with an assets requirement imposed under section 48(1)(b) of the Act; (3) on the coming into force of a requirement for all client money held by the firm; or (4) when the firm notifies, or is in breach of its duty to notify, the FSA, in accordance with CASS 7.6.16 R (Notification requirements), that it is unable correctly to identify and allocate in its records all valid claims arising as a result of a secondary pooling event. CASS 7.9.4R (4) does not apply so long as: 7.9.5R (1) the firm is taking steps, in consultation with the FSA, to establish those records; and (2) there are reasonable grounds to conclude that the records will be capable of rectification within a reasonable period. 7.9.6R If a primary pooling event occurs: (1) client money held in each client money account of the firm is treated as pooled; and (2) the firm must distribute that client money in accordance with CASS 7.7.2R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 7.9.7R. 7.9.7R (1) When, in respect of a client, there is a positive individual client balance and a negative client equity balance, the credit must be offset against the debit reducing the individual client balance for that client. (2) When, in respect of a client, there is a negative individual client balance and a positive client equity balance, the credit must be offset against the debit reducing client equity balance for that client. 7.9.8G A clients main claim is for the return of client money held in a client bank account. A client may be able to claim for any shortfall against money held in a firms own account. For that claim, the client will be an unsecured creditor of the firm. Section 7.9 goes on to deal with client money received after a primary pooling event, and mixed remittances (7.9.10 to 7.9.12). It then deals with secondary pooling events, defined in the glossary by reference to 7.9.14R: A secondary pooling event occurs on the failure of a third party to which client money held by the firm has been transferred under CASS 7.4.1R(1) to CASS 7.4.1R(3) (depositing client money) or CASS 7.5.2R (Transfer of client money to a third party). 7.9.13R provides that if both a primary pooling event and a secondary pooling event occur, the provisions of this section relating to a primary pooling event are to apply. In this case there was a secondary pooling event (SPE), that is the failure of Lehman Brothers Bankhaus AG, mentioned in para 6 of the judgment of Briggs J and quoted in para 27 above, as well as a primary pooling event (PPE), that is the failure of LBIE. Mr Zacaroli relied on the provisions as to the consequences of SPEs (7.9.18G to 7.9.25R as regards any bank failure) as reinforcing his submission that losses on segregated and non segregated funds are in general intended to lie where they fall, and to be shared rateably between those on whom they fall (this is an argument on the correct construction of CASS 7 which does not of course depend on the fact of the failure of Bankhaus). The correct approach to construction of CASS 7 This appeal turns on the correct construction, in context, and against the background of the general law of trusts, of a small number of the provisions set out or summarised above. The crucial provisions are 7.7.2R and 7.9.6R, set out above in bold type. I have felt obliged to set out a large number of much more peripheral provisions because the text of CASS 7 has been subjected, both in the courts below and in this court, to a detailed analysis in which small verbal points (possibly an indication of no more than imperfect drafting) have been put forward and relied on as significant. That is not intended as a complaint. The correct construction of CASS 7 gives rise to real difficulties. The modern approach of the court to construing commercial or regulatory documents is to prefer a purposive to a literal approach. That approach is reinforced by the FSA Handbook, in which GEN 2.2.1R provides, Every provision in the Handbook must be interpreted in the light of its purpose. But in this case any attempt to adopt a purposive approach runs almost immediately into difficulties. It is clear that the Directives intended to achieve a high level of protection of clients money, and that the prompt and scrupulous segregation of clients money, confirmed by regular internal reconciliations and monitored by the national regulatory authority, was to be the means of achieving that end. Equally it is clear that CASS 7 was intended to transpose the Directives into national law, and in doing so to make use of a basic concept of English law, the trust (Lord Hope has in his judgment addressed the application of CASS 7 where the law of Scotland applies). It is not now contended that the use of the trust concept involves gold plating. Whatever the position may be in other member states, under United Kingdom insolvency law mere segregation of clients money, without the support of an effective trust, would not give adequate protection in the event of a firms failure. So far, so good. But neither in the Directives nor in CASS 7 is there any indication of what is to happen if the organisational requirements are not complied with, and clients money is not segregated as it should be. Both the Directives and CASS 7 assume compliance and do not address the possibility of any significant degree of non compliance, let alone non compliance on what Briggs J referred to as a truly spectacular scale. In the Court of Appeal Arden LJ (para 63) instanced 7.6.13R as an example of a provision that contemplates non compliance. It is one of three provisions (7.6.13R, 7.6.14R and 7.6.15R) which deal with the resolution of reconciliation discrepancies. These routine rules, which contemplate internal reconciliations operating effectively, cannot, with respect, be taken as negating the rules general assumption of compliance. On the contrary, their relatively trivial nature seems to me to underline a general assumption of compliance with organisational requirements that permeates CASS 7. In these circumstances, with very large sums of money at stake, it is inevitable that the text of CASS 7 should have been subject to very close analysis. Although the distinction between R rules and G guidance is important for regulatory purposes, it is common ground that for the purposes of construction provisions which contain guidance, as well as rules, should be taken into account. Summary of assumed facts The judgment of Briggs J contains quite a full account of LBIEs organisation and operating methods, partly in paras 1 to 45 of the judgment and partly in the SAF reproduced (except for its description of the claimants) in para 49. For present purposes a shorter summary is sufficient. LBIEs business was organised in three segments: capital markets, investment banking and investment management. It provided a wide range of financial services to clients (including governments, trading corporations and wealthy individuals), and also traded on its own account (proprietary trading). It regularly and on a daily basis handled money in more than 50 currencies on behalf of more than 1,500 clients in different time zones. In order to cope with this volume of varied business it adopted the alternative approach (see paras 38 and 39 above) for the segregation of clients money. As recorded in para 2.11 of the SAF: Client money would be paid directly into and out of LBIEs own bank accounts (or an affiliates bank accounts) and LBIE would segregate client money by making a single daily reconciling payment to (or withdrawal from) bank accounts used exclusively by LBIE in order to segregate client money. The amount of any such payment would be calculated by LBIE each business day morning based on data as at close of business on the previous business day. The client money segregated by LBIE would then be adjusted accordingly later that day. In calculating the amounts which it had to segregate as clients money, LBIE generally did so by reference to a range of components, which varied according to the type of financial services undertaken for a particular client, and the terms of the contract with that client. Under some contracts LBIE expressly agreed to provide client money protection. Under others LBIE sought to rely on the total title collateral transfer exemption contained in CASS 7.2 (SAF para 2.6). Clients money was received by LBIE, or was recognised as clients money by LBIE, in three different ways: payments from clients; payments from third parties; and appropriations by LBIE of its own money by segregating it in a clients money account in order to satisfy a pecuniary obligation such as a manufactured dividend on a stock lending transaction (SAF paras 2.18 and 2.19). LBIE had more than 700 different bank accounts, falling broadly into three categories: (1) accounts used exclusively for clients money, referred to as core client [money] bank accounts; (2) an intermediate category of accounts (numbering more than 300) referred to as non core client money bank accounts; and (3) house accounts (numbering over 440) containing money of which LBIE regarded itself (in some cases, on the assumed facts, wrongly) as the beneficial owner (SAF 2.20; the word money does not occur in the actual designation in 2.20.1 but it does occur elsewhere, for instance in the next line of 2.20.1 and in 2.26). In addition, clients money was held in client transaction accounts, that is accounts held in the name of LBIE in a fiduciary capacity, with about ten different clearing houses and brokers. LBIE also had house transaction accounts for the purpose of its proprietary trading. Sometimes a single transaction account was used for both clients money and proprietary trading (SAF paras 2.42 to 2.49). LBIE had a liquidity management process described in SAF paras 2.21 to 2.27. Its general object was to ensure, by projections of funding needs and appropriate transfers, that LBIE had sufficient liquidity, but not a large surplus of funds, for its trading operations. Daily transfers were made between LBIE and LBHI so as to achieve this. In the months leading up to its failure, LBIE was a net debtor of LBHI, so that the effect of transfers from LBIE to LBHI was to reduce the intra group indebtedness. SAF 2.26 describes how client money was dealt with as part of that process: All of LBIEs bank accounts were subject to the liquidity management process save that, in relation to LBIEs core client money bank accounts, surplus funds would only be withdrawn from these accounts where LBIEs reconciliation and segregation calculation permitted LBIE to reduce the amount of money segregated by it. Prior to the Time of Appointment therefore, client money first received into one of LBIEs bank accounts was regularly transferred to LBHIs bank account(s) each evening prior to LBIE segregating an equivalent amount the next morning. As to the events immediately before LBIE was put into administration by an order made at 7.56 am on Monday 15 September 2008, the last internal reconciliation of clients funds took place on the morning of Friday 12 September 2008 by reference to data as at the close of business on Thursday 11 September. SAF para 2.26 goes on to record: Given that, it is possible that client money received into LBIEs non core client money bank accounts or house accounts between [close of business] on 11 September 2008 and close of business on 12 September 2008 would have been passed up to LBHI as part of the liquidity management process prior to the Time of Appointment [of the Administrators]. There is a more detailed account of these events in SAF para 2.50. In the judgment of Briggs J the close of business on 11 September 2008 is referred to as the Point of Last Segregation (PLS) and 7.56 am on 15 September 2008 is referred to as the Time of Appointment or, in the context of CASS 7, the PPE. The appointment of the administrators on 15 September 2008 may be seen as a supervening event which made it impossible for LBIE to perform its obligation (under the alternative approach) to segregate clients money within one business day. The other failures to segregate seem to have started long before and to have continued over a long period. They are described as follows (by way of example) in SAF para 2.52: (1) LBIE did not segregate any money in relation to trading in any transactions, including margined transactions, carried out in respect of Affiliates trading on their own account. The amounts claimed by the Affiliates in connection with this exceed USD3 billion. (2) LBIE did not segregate any money in connection with certain complex arrangements that it had for the trading of various positions with its Affiliates, in connection with which amounts would fall due and payable as between LBIE and those Affiliates but would be posted to the relevant intercompany ledger account rather than always immediately paid. [A footnote refers to a separate application relating to the RASCALS process.] (3) LBIE often entered into agreements with its clients under which LBIE understood that client money protection would not be afforded to various types of money held by it for those clients. Where this was the case, LBIE did not generally segregate money on behalf of such clients. A number of clients with agreements of these types seek to argue that the particular language contained in their agreements was not effective to exclude client money protection, at least not in its entirety. Similarly where clients entered into a number of agreements with LBIE which provided for differing levels of client money protection, those clients may seek to argue that amounts which were held by LBIE for them at the Time of Appointment were held pursuant to an agreement which provided for some client money protection as opposed to another which did not. (4) LBIE did not generally segregate as client money certain amounts relating to options transactions with its clients. This was the case for all clients, irrespective of whether they had in place title transfer arrangements with LBIE. Whilst LBIE segregated premiums received for sold options and variation margin on certain options and gains on options closed out, it did not otherwise generally segregate for unrealised gains on open options positions. As at 12 September 2008, the approximate aggregate value of unrealised gains (not deducting unrealised losses) arising from options transactions which had not been segregated was USD146m. (5) LBIE did not segregate any money in respect of OTC derivatives because all such money was regarded by LBIE as being held pursuant to total title transfers in accordance with CASS 7.2.3R. (6) From time to time operational errors occurred which led to a failure by LBIE to segregate an appropriate amount for a client. There were also some potential instances of over segregation. The particular facts relevant to CRC are summarised in SAF para 6: (1) CRC was a prime brokerage client of LBIE. (2) CRC is a wholly Unsegregated Client for whom no client money was segregated by LBIE at the Time of Appointment. (3) LBIE should have segregated as client money for CRC sums including USD52m in connection with FX transactions and a cash balance of approximately USD24m in various currencies on other accounts. Claren Road Credit Master Fund Ltd (which was a party to the original application but is not represented on this appeal) is an example of a client for whom money was received on 12 September 2008 but whose money was not segregated because LBIE went into administration. Details of its interest are given in SAF para 7. The first issue The first issue is the time at which the statutory trust arises. In the case of money received from a client or from a third party, the two competing answers are time of receipt and time of segregation. In the case of satisfaction of a monetary obligation of the firm to a client (the fourth issue in the Court of Appeal) it is now common ground that the trust arises on the appropriation of funds in satisfaction of the obligation, normally by a payment into a segregated client account. On the first issue Briggs J and the Court of Appeal were in agreement that the statutory trust arises on receipt of the money; and this court, I understand, unanimously agrees that they were right. In the circumstances I can deal with the point fairly shortly, and mainly by reference to the judges reasons. Briggs J began his discussion with the observation (para 138), with which I agree, There is much to be said for the proposition, advanced by Mr Milligan in reply, that the question when the statutory trust attaches to client money is really a short point of construction, unambiguously answered by the opening words of CASS 7.7.2R: A firm receives and holds client money as trustee . I would readily adopt those reasons, expressed in the judges words, as my In paras 139 and 140 he summarised the contrary arguments (put before him not by Mr Zacaroli but by counsel for a representative unsecured non client money creditor and by counsel for LBHI). In paras 141 to 165 he gave his reasons for rejecting those arguments. own, but I can summarise them, with some loss of finesse, as follows. (1) Where money is received from a client, or from a third party on behalf of a client, it would be unnatural, and contrary to the primary purpose of client protection, for the money to cease to be the clients property on receipt, and for it (or its substitute) to become his property again on segregation. It would also be contrary to the natural meaning of the comprehensive language of 7.7.2R (paras 144 146). (2) Segregation without a trust would not achieve MiFIDs objective. Under the alternative approach an immediate trust of identifiable client money does provide protection, though mixed funds are subject to a variety of risks (para 148). (3) The absence of express restrictions, under the alternative approach, on use of clients money while held in a house account does not mean that the firm is free to use it for its own purposes. Its obligation is to segregate it promptly, and both section 7.3 of CASS and the general law of trusts would prevent use of clients money for proprietary purposes. There are at least two methods, one contemplated by 7.4.21R, of ensuring the protection of clients money temporarily held in a house account (paras 149 156). (4) The most formidable argument in favour of segregation (premised on the view that the provision of the distribution rules in 7.9.6R(1) applies only to segregated funds) is that there is under the alternative approach potentially a black hole into which clients money may vanish, so as not to be caught by the distribution rules. This is a point of substance, but it does not outweigh the opposing arguments. To allow a limited defect of the alternative approach to dictate the interpretation of the essential provisions of section 7.2 would be to let the tail wag the dog. In the Court of Appeal both Lord Neuberger MR (paras 190 203) and Arden LJ (paras 104 106) agreed with the reasoning of Briggs J, although each added some further particular reasons. In his able submissions on behalf of GLG Mr Zacaroli sought to draw a fundamental distinction between the normal approach and the alternative approach. He submitted that the latter approach is a complete contrast, under which the firm is expressly permitted to pay money into house accounts in which it would swill around with all the money in the firms house accounts. This point is largely covered by the judges reasoning as briefly summarised in para 63(3) above. I would add only that the alternative method is available not for the convenience of the firm, but as a better means of securing client protection (the judges second point in para 104 of his judgment). Both methods are intended to achieve a high degree of client protection, either by immediate segregation or by very prompt segregation. Moreover client money held temporarily in a house account does not, in the eyes of trust law, swill around but sinks to the bottom in the sense that when the firm is using money for its own purposes it is treated as withdrawing its own money from a mixed fund before it touches trust money (the point made by the judge in para 153 of his judgment). I would therefore dismiss GLGs appeal on the first issue. The second and third issues before Briggs J The second and third issues are stated in the agreed statement of facts and issues in these terms: (2) Do the primary pooling arrangements apply to client money in house accounts? (3) Is participation in the pool dependent on actual segregation? They were formulated in similar, but not identical terms in the Court of Appeal (para 6 of Arden LJs judgment). These are the issues on which the Court of Appeal unanimously differed from the judge. I shall try to summarise the main lines of reasoning in the courts below, although (again) my summary will not do justice to many of the finer points in the judgments. Briggs J covered what is now the second issue (his third issue, rather differently formulated) at paras 166 to 198. Because the issue as to the constitution of the client money pool (CMP) was differently formulated, many of the arguments which the judge had to consider have not been pursued on appeal. With hindsight derived from the hard toil of the appeal process I find it a little surprising that the judge concentrated so much on the language of 7.9.6R(1), to the exclusion of 7.7.2. The statutory trust in 7.7.2 received only an indirect mention in para 195: There is in any event a persuasive symmetry between that part of CASS 7 which requires the identification and segregation of client money by a firm while in business, and the distribution rules which, on that interpretation, require the money thus segregated to be promptly distributed to the clients entitled to it upon the firms failure. The judge concluded on this issue (para 197): (i) The CMP is constituted as at the PPE only by client money in segregated accounts. (ii) Client money outside the firms segregated accounts does not form part of the CMP. (iii) The identification of client money (if any) outside the firms segregated accounts depends upon the established principles by which a beneficiary must trace his property in order to pursue a proprietary claim in relation to it [with references to five well known cases]. As to the third issue, the basis of sharing the CMP, Briggs J approached that as a contest between what he called the contributions theory and the claims theory. This corresponds closely to the contest as to whether in CASS 7 client money entitlement refers to contractual or proprietary entitlement. It is to be noted that however the issue is formulated it arises as a problem, except in relation to the last business day, only in the event of non compliance with CASS 7. The judge saw the contest as a difficult question with large consequences, which is undoubtedly correct. He observed (para 228): Unhappily, CASS 7 provides no clear guidance on this question. This is probably because the draftsman working in the utopian world of full compliance by the firm with the client money rules before its failure, assumed that there would be no substantial difference between the amount which should have been segregated and the amount which was actually segregated for any particular client. The only differences would arise from dealings with client money during the short period between the PLS and the PPE, and then only in relation to a firm using the alternative approach. In para 234 the judge came back to the point that the Directives contemplate that the protection of clients money will be achieved by compliance with the Directives organisational requirements. In paras 238 and 239 he analysed the effect of 7.7.2R, in conjunction with other provisions, in imposing the statutory trust for the clients for whom that money is held, according to their respective interests in it. Para 241 in effect sets out the case for the contributions theory at its highest, and then notes that there are counter arguments: The result is in my judgment that the MiFID Directives, the general law and an analysis of the proprietary rights in the segregated accounts prior to pooling, all support the contributions theory as against the claims theory. There remains nonetheless the question whether, as submitted by (and for) the un segregated clients, the language of the distribution machinery contained in CASS 7.9.6R, 7R and 9R requires the application of a claims rather than contributions basis of calculation as a matter of interpretation. For that purpose, there is no escape from a painstaking analysis of the meaning and purpose of those three paragraphs, and in particular paragraph 7.9.7R. The counter arguments are summarised in seven sub paragraphs in para 242, described in the next paragraph as constituting a formidable textual argument. But the judge discerned weaknesses in it. First, the expression client money entitlement in CASS 7 does not have a single fixed meaning. Second, the draftsman could not have contemplated a disparity between the results of the two methods because his aim was (para 246) to construct a scheme of obligations with which he expected firms to comply, rather than flout. Moreover (para 250) it is no part of the distribution rules to confer upon clients whose money was, in breach of the client money rules, not contributed to the segregated accounts from which the CMP is constituted, a beneficial interest in that fund which did not exist immediately prior to the PPE. The judge then embarked on what is indeed a painstaking examination of 7.9.6R(2), 7.9.7R and 7.9.9R, which took him into the purposes and structure of the annex. He concluded (para 275): My conclusion on this issue therefore is that the basis for sharing in the CMP is the amount which the firm actually segregated for each client, as revealed by the last internal reconciliation account carried out by the firm before the PPE, and in LBIEs case (because it used the alternative approach) by reference to the PLS, subject to certain adjustments necessitated by CASS 7.9.7R, and by subsequent events, to which I will return later in this judgment. The second and third issues in the Court of Appeal In the Court of Appeal Arden LJ covered the second issue at paras 108 to 142 of her judgment, with her conclusions beginning at para 124. She saw client money account (an undefined expression) as having a wide meaning. She thought it significant that the statutory trust was a single trust, that client money entitlement in 7.9.6R(2) naturally referred to a contractual entitlement, and that 7.9.3G envisaged a pooling of all the client money, in every type of client money account (para 127). She saw the contributions theory as producing unfair results (paras 130 and 131). She rejected the argument that the claims theory involved any interference with the rights, prior to the PPE, of fully segregated clients (para 134). Similarly she discounted the judges symmetry (para 195 of his judgment, quoted in para 67 above) as a distraction (para 137). She concluded that there was to be a pooling of all client money in segregated accounts and house accounts (para 139), and that there should be a final reconciliation covering events down to the PPE (paras 140 142). Lord Neuberger MR addressed the second issue at paras 204 to 224. He could get only limited textual assistance, though he considered numerous detailed points (paras 205 to 215). He saw some force in the submission that at least on a primary pooling event, the clients of the firm are in it together, and client money is pooled and paid out to all clients on a pro rata basis, and that the claims theory was fairer in avoiding a degree of randomness (paras 217 and 218). He also attached some weight to the notion that the statutory trust was a single trust, and to the Directives aim of providing a single and consistent level of protection (paras 221 and 222). So Lord Neuberger reached the same agreement as Arden LJ on the second issue, and Sir Mark Waller agreed with both of them. Lord Neuberger does not seem to have commented on Lady Ardens view that a further, final reconciliation was appropriate, and the order of the Court of Appeal as perfected does not refer to this point. But Mr Miles in his written case (para 182) and his oral submissions (Day 4, page 96) relied on Sir Mark Wallers general agreement with Arden LJ on the topic of pooling. Arden LJ addressed the third issue at paras 143 to 163, with her conclusions beginning at para 154. She repeated that client money entitlement referred to contractual entitlement, even if it meant distributing funds to clients with no proprietary claim. It was open to the FSA, she stated, to treat the failure of the firm as a common misfortune in which those who had claims to the recovery of client money should share without distinction (para 154). She noted that even under the contributions theory, adjustments have to be made, and considered that the judges reference to a glitch (in para 265 of his judgment) understated the problem (para 157 of the judgment of Arden LJ). Referring to the words for the clients . for whom that money is held, according to their respective interests in it in 7.7.2R (3) Arden LJ stated (para 160): While the firm is a going concern those interests are the several interests of the clients but on a PPE a pooling occurs so that on any view those interests are varied. Accordingly as from the happening of a PPE, the expression their respective interests must mean their respective interests under CASS 7.9.6R. So Arden LJs conclusion was in favour of the claims theory. So was that of Lord Neuberger MR (paras 225 234). He regarded the objections to the contributions theory (set out in para 242 of the judges judgment) as not merely formidable but also decisive. He thought that client money entitlement did have a consistent meaning if the claims theory was adopted; it was only if the contributions theory was adopted that inconsistency occurred. Again, Sir Mark Waller agreed with Lord Neuberger and Arden LJ. The intricate textual arguments outlined above (and it is merely an outline) have now been debated between highly skilled counsel for a total of 20 days. Many of them seem to be the result of drafting imperfections in CASS 7. As was pointed out below, there is no definition of the expression client money account, although the glossary (which is the size of a small dictionary) does contain definitions of client bank account (as a current or deposit account at a bank, in the name of the firm, which holds the money of one or more clients) and client transaction account (explained in 7.4.16G). It is, I accept, impossible to avoid the most important of the textual arguments, particularly the formidable argument (paras 242 and 243 of the judgment of Briggs J) which ultimately persuaded Lord Neuberger, and also influenced Arden LJs conclusions (paras 154 to 160). I shall return to those arguments. But in my view the resolution of the second and third questions (which are closely bound together) depends ultimately on the general scheme and structure of the regulatory framework in CASS 7, and on seeing (in general terms) how segregation of clients money worked in practice, not merely on the catastrophic failure of the firm on the PPE, but from business day to business day during the firms trading operations. The nature of the statutory trust In the search for the essential scheme and structure of CASS 7 the outstanding feature is the statutory trust. In line with the clear conclusion reached on the first issue, the effect of CASS 7 is that under the alternative approach, as well as under the normal approach, a firm receives and holds clients money as a trustee, with beneficial ownership remaining in the clients. The trust in 7.7.2R is (1) for the purposes of and on the terms of the client money rules and the client money (MiFID business) distribution rules; (2) subject to [(4) costs of distribution on failure] for the clients [subject to an irrelevant exception] for whom that money is held, according to their respective interests in it. The client money rules are defined in the glossary as CASS 7.1 to 7.8, and the client money (MiFID business) distribution rules as CASS 7.9. The latter rules apply only in what was (until shortly before LBIEs failure) no doubt regarded as a remote contingency, that is the failure of the firm or some other event amounting to a PPE. Unless and until such an untoward event happens, the purposes of the statutory trust are those in CASS 7.1 to 7.8. This point needs to be made since Mr Miles, for understandable reasons, referred to the statutory trust as a purpose trust and placed emphasis on the purposes of the client money distribution rules in CASS 7.9, and especially 7.9.6R. Those rules came into operation on the failure of the firm on 15 September 2008. Until then clients money had been held, no doubt in some cases for years, in client money bank accounts (some general and some designated) for all the purposes of CASS 7.4, 7.5, 7.6 and 7.8 that is segregation, transfer to third parties, record keeping and internal reconciliation, and protection (by notice to banks) of client money bank accounts. Those purposes were not ends in themselves (as in a trust for charitable purposes). They were purposes directed to the protection and management of clients money in the beneficial ownership of clients who were identified beneficiaries of the trust, being (as 7.7.2R(2) puts it) those for whom that money is held, according to their respective interests in it. The biggest objection to the claims theory of interpreting 7.9.6R is that it involves, on the assumed facts of this case, a cataclysmic shift of beneficial interest on the PPE, to the detriment of those clients who must have supposed that their funds were safely segregated in accordance with CASS 7.1 to 7.8. That shift (or bifurcation, to use a term which counsel used a great deal in argument) is in striking contrast to the persuasive symmetry that Briggs J (para 195 of his judgment, para 67 above) found in the contributions method. It is a far more extraordinary bouleversement than the relatively trivial bifurcation involved in segregation of clients money being deferred, under the alternative approach, until the next business day after its receipt. In his written case (para 34) Mr Zacaroli suggested that it would amount to the segregated clients funds being used as a strange form of compensation fund for disappointed clients whose funds had not been segregated. The Court of Appeal was aware of this difficulty. Arden LJ recognised (para 134) that the court should not of course interfere with property rights but dismissed the difficulty on the ground that dealings between the firm and its clients take place on the basis of CASS 7, and thus pooling is implicit in their dealings, followed by a reference to 7.9.3G. It is true that money in a general client account is pooled, and is at a risk that it will be shared rateably between the beneficial owners in the event of a SPE (such as the failure of a bank holding clients money) occurring without a PPE. But the notion that clients must be taken to have implicitly accepted the risk of discovering, on a PPE, that their carefully segregated funds must be shared with non segregated clients (including Lehman Brothers affiliates) seems, with respect, quite unrealistic. An associated point on the judgments in the Court of Appeal is the notion that all the clients of LBIE were victims of a common misfortune or disaster. Arden LJ referred to this (para 125 and, for what she called the happenstance point, para 131). Arden LJ did not accept Mr Zacarolis submission that the correct analysis was not the common misfortune of the firms failure, but the separate misfortune (suffered by some clients but not by others) of LBIEs assumed failure, on a massive scale, to comply with its obligations under CASS 7.4. Both Arden LJ (para 131) and Lord Neuberger (para 218) seem to have accepted the submission of Mr Mabb QC (appearing for the FSA, the statutory regulator whose share of responsibility for the misfortunes of some or all of LBIEs clients is not an issue in these proceedings) that the non segregation was happenstance and that equal treatment seems fairer than randomness. With great respect to the Court of Appeal, I regard that approach as inappropriate. The court has to give directions to the administrators on the basis of the assumed facts set out in the SAF. Those assumed facts are stated for the most part at a high level of generality, and with an almost clinical detachment from what the judge referred to as LBIEs shocking underperformance. We simply do not know how it came about that so much clients money was paid into house accounts when it should have been segregated. In particular, apart from the terse statements in SAF 2.52 (para 58 above) we do not know the circumstances in which LBIE came to overlook, or decide not to apply 7.1.12G (Affiliated companies) in dealing with Lehman Brothers affiliates (SAF 2.52(1) and (2)); or the circumstances in which terms were negotiated with clients leaving room for argument as to whether client money protection was wholly or partly excluded (SAF 2.52(3)). There is no basis, in my respectful opinion, for deciding that one scheme of distribution would be fairer than another. Our task is to construe CASS 7, and then apply it to the assumed facts. In construing CASS 7 we have to look at its essential scheme and structure. Beyond that a purposive approach gives little assistance, since it is plain (as already noted) that neither the Directives nor CASS 7 contemplate non compliance with regulatory requirements (in the judges words) on a truly spectacular scale. Both Lord Neuberger and Arden LJ gave some weight to the statutory trust being a single trust, without much explanation of what that meant or why they saw it as significant. The trust is declared in simple terms as affecting client money, but the detailed guidance, especially that in 7.9.3G, shows that some client money will be pooled in general client bank accounts, while other client money will be held separately in designated client bank accounts. Some but not all clients will be entitled to interest on their client money (7.2.14R). A bank holding client money may fail (as Bankhaus did) and on a SPE any loss will fall rateably only on those clients whose money was deposited with that bank not on all clients. So the single trust argument does not provide much support for the claims theory. The majority judgments in this court Lord Dyson disagrees with the views set out in para 81 above. In his view (para 159) a purposive interpretation clearly supports the claims basis for participation. That is because the Directives overriding purpose is to safeguard the assets of all clients and to provide all clients with a high degree of protection (his emphasis). This purpose is to be achieved, in his view, by a solution which means that no client of LBIE is provided with a high degree of protection, even those whose funds were (at all times down to the PPE) meticulously segregated and accounted for in accordance with CASS 7. With the greatest possible respect, I simply cannot follow this argument. I consider the majority view also gives insufficient weight to the fact that, although CASS 7 provides a detailed code, that code is erected on the foundation of the general law of trusts. Lord Collins refers (para 186) to Professor Gowers Review of Investor Protection (1984), noting that under English law segregation of funds provides a client with insufficient protection unless it is backed by the clients continuing beneficial ownership. So (as already noted) CASS 7 was not gold plating the Directives. But it is equally clear that a trust without segregation is a very precarious form of protection because of the risk or rather, in this context, the strong probability that the element of trust property in unsegregated funds will rapidly become untraceable. Immediately before the PPE, many of the non segregated clients probably the great majority of them had no identifiable trust property held in trust for them. The funds of the segregated clients, by contrast, belonged in equity, immediately before the PPE, to the respective clients for whom they had been segregated. Lord Dyson (para 144) and the others in the majority evidently regard it as realistic to suppose that those segregated clients accepted the risk of having the bulk of their beneficial interests divested in order to compensate other non segregated clients who, immediately before the PPE, had no beneficial interest in any identifiable trust property (and of whom, and of whose affairs, the segregated clients knew nothing). The majoritys decision makes investment banking more of a lottery than even its fiercest critics have supposed. Internal client money reconciliation (the Annex) Any trustee which holds large sums of money in trust for clients must have in place appropriate procedures, keep accurate records, and regularly reconcile its balances. For a financial services firm like LBIE, which offered a wide variety of services to a large number of clients, these obligations were of particular importance, and CASS 7.6, together with the Annex, laid down detailed and fairly complicated rules. These were needed because clients did not leave their money inactive. They deployed it in trading activities in which their positions might change from day to day. So the daily internal reconciliation had to cover clients money held in client transaction accounts (SAF 2.12 and 2.42 to 2.49) or committed to futures or other margin transactions (SAF 2.28 to 2.39). These complications are reflected in the Annex. I gratefully adopt the judges summary (paras 256 to 258): 256The standard method of client money reconciliation is set out in [the Annex]. It requires a firm on each business day to identify its client money requirement (as defined by paragraph 6) and to ensure that its client money resource is at least equal to the client money requirement. 257. The firms client money requirement is (in the first of two alternative formulations in paragraph 6) the aggregate of all individual client balances, excluding negative client balances and client equity balances, together with the total margined transaction requirement, which is (as appears from paragraph 14) the aggregate of all positive client equity balances, subject to certain deductions which do not matter for present purposes. 258. Paragraphs 12, 18 and 19 of [the Annex] give the firm certain discretions as to how to carry out these calculations. Paragraph 12 gives the firm a discretion to deduct fees and other expenses due and payable by the client to the firm. Paragraph 18 (further explained by paragraph 19) gives the firm a discretion to make an offset between a positive individual client balance and a negative client equity balance, or vice versa, so as to reduce either the individual client balance or the client equity balance. Client equity balance is defined in the glossary as the amount which a firm would be liable (ignoring any non cash collateral held) to pay to a client (or the client to the firm) in respect of his margined transactions if each of his open positions was liquidated at the closing or settlement prices published by the relevant exchange or other appropriate pricing source and his account closed. That explains why the balance can be either positive or negative. Briggs J went on (paras 258 to 261) to a detailed consideration of 7.9.7 R, under which it is mandatory, after a PPE, to make the paragraph 18 offset which has until then been discretionary. That point is best considered as part of the discussion of 7.9.6R and 7.9.7R, which follows. The third issue: the effect of primary pooling Mr Miles arranged his written and oral submissions so as to deal with the third issue (how is the CMP to be distributed?) before the second issue (what is to go into the CMP?). There are advantages in that approach. The second issue, if understood (as it must be) in a way that does not pre empt the third issue, becomes a relatively narrow issue limited to any money which was held in house accounts at the PPE and was identifiable, under the general law of trusts, as clients money. Mr Zacaroli submitted that if he lost on the second issue he could still win on the third, and (he might have added) the third issue is almost certainly of much greater importance in financial terms, both to his client and to the other claimants. I shall therefore adopt Mr Miless approach and consider the third issue before the second issue. PPE: It is worth repeating the crucial provisions which come into operation on a 7.9.6R If a primary pooling event occurs: (1) client money held in each client money account of the firm is treated as pooled; and (2) the firm must distribute that client money in accordance with CASS 7.7.2R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 7.9.7R. 7.9.7R (1) When, in respect of a client, there is a positive individual client balance and a negative client equity balance, the credit must be offset against the debit reducing the individual client balance for that client. (2) When, in respect of a client, there is a negative individual client balance and a positive client equity balance, the credit must be offset against the debit reducing client equity balance for that client. At the beginning of his discussion of the second issue Briggs J observed (para 166): The (perhaps old fashioned) principle of construction that words are there for a purpose suggests that the phraseology used was designed to achieve at least the following two purposes. The first is that it was not the intention of the draftsman to capture all client money held by the firm, but only client money held in each client money account of the firm. Secondly, it was not the intention to capture all money held in each client money account of the firm, but only client money held in such accounts. I agree that that is the right starting point, not only for the second issue, but also (as they are so closely connected) for the third issue. The expression client money account is not defined in the glossary, but it naturally refers to (i) every client bank account (which is a defined term and covers every general client bank account, every designated client bank account and every designated client fund account of the firm, those being the different forms of account mentioned in 7.9.3G) and (ii) every client transaction account (which is a defined term and is explained in 7.4.16G). These are the accounts affected by the internal reconciliation obligation, as appears from the unnumbered preamble to the Annex. Arden LJ considered (para 136) that the expression client money account must have been deliberately chosen as being wider than client bank accounts and client transaction accounts but I do not understand her reasoning and I respectfully differ from her conclusion. Lord Neuberger considered the textual arguments to be much more evenly balanced (paras 205 to 215) and he seems ultimately to have decided the point by a general appeal to fairness, with which I have already expressed my respectful disagreement. For these reasons I approach the third issue on the provisional basis, at least, that the CMP the distributable pool consists of the aggregate of the segregated funds holding clients money immediately before the PPE. Those funds are assumed to have been subject to internal reconciliation on every business day, following the detailed procedure in the Annex, so that the client money resource is at least equal to the client money requirement (Annex, paras 2 and 6). That pool is to be distributed in accordance with CASS 7.7.2R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 7.9.7R. As the judge observed (para 251), had this provision stopped at the comma after 7.7.2R there would have been no doubt but that the clients entitled to participate in the distribution were those identified in the last reconciliation. They were under 7.7.2 R (2) the clients . for whom that money is held and it was to be distributed according to their respective interests in it. In the course of his excellent submission Mr Miles urged that each client in 7.9.6R must be taken as meaning what it says. But the words must be read in context. When read in context, they mean each client for whom client money is held. In In re Global Trader Europe Ltd [2009] EWHC 602 (Ch) [2009] 2 BCLC 18, para 99, Sir Andrew Park reached the same conclusion as Briggs J on this point. The second part of 7.9.6R(2) begins with the words so that. Those words are apt to introduce the natural consequences of what has gone before, rather than to herald an abrupt change. The reference to a rateable distribution of the CMP indicates the possibility of a shortfall, and in practice a shortfall is almost inevitable on the failure of the firm, since in that event the costs of distributing the CMP are to be a first charge on it under 7.7.2R(4). There are also some more technical reasons which may produce a shortfall in the CMP, though any such shortfall would probably be relatively small. These are identified in paras 262 to 269 of the judges judgment. I agree with the judges analysis and I need not repeat it. The final words of 7.9.6R(2) are calculated in accordance with CASS 7.9.7R. The judge said of this (paras 254 to 256, whose language I gratefully adopt as I cannot improve on it): 254.It is this concluding phrase, and its incorporation of CASS 7.9.7R, that lies at the heart of the argument of the protagonists for a claims basis of sharing in the CMP. Put another way, the case for rejecting a contribution basis rests wholly on an understanding of CASS 7.9.7R, to which I now turn. 255. The first thing to notice about CASS 7.9.7R is that it does not purport to constitute a comprehensive formula for the calculation of a client money entitlement. It merely provides for the offset of two particular types of accounting debit against two particular types of accounting credit. By subparagraph (1) a positive individual client balance is to be reduced by offsetting a negative equity balance. By subparagraph (2) a positive client equity balance is to be reduced by any negative individual client balance. It says nothing about the situation where a client has positive balances, or negative balances, of both types. It is, as Mr Zacaroli described it, a reducing mechanism. Its effect is, in the stated circumstances, to reduce what otherwise might have been identified as a clients client money entitlement, which is to serve as the basis for his rateable participation in the CMP. 256. In the case of a reasonably compliant firm, it may be assumed that the basis upon which the firm had segregated client money for each of its clients prior to the PPE would be disclosed from the last internal client money reconciliation account, upon the basis of which (for example) a firm using the alternative approach would have adjusted the amount of the segregated accounts as at the PLS. The judge then continued with the passage that I have already quoted at para 90 above, and went on to comment that the option conferred by paragraph 18 of the Annex permits, but does not require, a firm to carry out precisely the same offsetting process as is made mandatory after a PPE by CASS 7.9.7R (para 258). He regarded the purpose of 7.9.7R as obscure (para 232). Arden LJ noted (para 152) that it has a limited operation, but did not go further into its purpose. Nor did Lord Neuberger (paras 189 and, in a quotation from the judge, 228). I agree with Briggs J that it is very hard to see why one point of detail in the Annex has been singled out, as it were, for particular mention in 7.9.7R. But I am in full agreement with his conclusion (para 261) that this obscure provision does not necessitate a construction, contrary to all other indications, that the CMP is to be distributed on the basis of the claims theory rather than the contributions theory. For these reasons, which are the same as those of the judge, I would allow GLGs appeal on the third issue. The second issue: final reconciliation as at the PPE If the first and third issues are resolved in the way set out above, the second issue is seen to be within a relatively narrow compass. It becomes focused on movements in the client money requirement as between the PLS (close of business on Thursday, 11 September 2008, the critical time for the data on which an internal reconciliation took place on Friday, 12 September) and the PPE (7.56am on Monday, 15 September). I shall refer to this period as the gap period. This court has to decide the issue as a matter of principle, proceeding on the basis of assumed facts. But it may be worth pulling together the few passages in the SAF which touch on this point. SAF para 2.26 (quoted in paras 56 and 57 above) mentions the possibility that client money received into non core client money accounts or house accounts would have been passed up to LBHI as part of the liquidity management process. SAF 2.50.1 states that a total sum of over $45m of client money was paid to clients from house accounts during the gap period. At first instance Mr Zacaroli accepted that a client who was repaid client money during the gap period could not expect to be repaid twice (para 268 of Briggs Js judgment). SAF 2.50 does not state in terms how much client money was received during the gap period. But SAF para 2.20.3 states that 24 house accounts regularly used for client transactions had at the PLS credit balances totalling about $162m, and that at the PPE 26 accounts had credit balances totalling about $297m. The third supplement to the SAF, para 1, adds to this that the 24 accounts mentioned in SAF 2.20.3 were not swept to zero on 12 September 2008 (that point does not seem to have been picked up by Briggs J at para 110 of his judgment). Para 2 of the third supplement adds that on the current state of the administrators knowledge much of the money in these accounts was probably not clients money. It is not necessary, or indeed possible, to try to go much further into the incompletely stated (and in any event assumed) facts about movement of funds in the gap period. But the mere fact that there was no sweep under the liquidity management process on 12 September 2008 makes it possible that significant sums of client money are traceable, under the general law of trusts, as still held in LBIEs house accounts at the PPE. In practice the second issue resolves itself into a contest between two theories. (1) One theory (the final reconciliation theory) is that as soon as possible after the PPE LBIE, although then under the control of the administrators, should have carried out a final reconciliation in accordance with the provisions of the Annex. (2) The other theory (the general trust law theory) is that it was not the administrators duty to carry out a final reconciliation, but that a similar result would be produced by clients whose money was stranded in a house account during the gap period claiming it, not under CASS 7, but under the general law of trusts. In reply to a question from Lord Clarke Mr Miles said (Day 3, page 93) that exactly the same result was produced by either route. I do not think that is quite right (though I may have misunderstood Mr Miles). Under the final reconciliation theory there would be a small alteration in the constitution of the CMP and any clients making last minute contributions to the CMP would share rateably, and suffer rateably any inadequacy in the pool (whether from the failure of Bankhaus, or from the costs of distribution under 7.7.2R(4), or from any other cause). Under the general trust law theory they would claim the whole of their respective contributions, so far as sufficient client money could be traced and identified, and there might be some deduction for administrative costs under the principle in In re Berkeley Applegate (Investment Consultants) Ltd [1989] Ch 32. So the outcome would not be exactly the same, but it might well be similar. Under the general trust law theory an unsegregated last minute provider of client money would be left to his claim as an unsecured creditor only if and so far as his money was not traceable and identifiable in credit balances in house accounts. The guidance in 7.9.8G (set out in para 43 above) is therefore (to put it no higher) incomplete. Briggs J recorded (para 127) that before him leading counsel then appearing for the FSA roundly declared that it was wrong, and that the FSA intended to change it as soon as practicable. In his judgment Briggs J considered the final reconciliation theory (though not under that name) as part of an important passage (paras 199 to 226), much of which was concerned with whether LBIE was under a duty to top up the CMP out of its own funds. He held that that would be contrary to basic principles of insolvency law, and there is no appeal on that point. He then more briefly rejected the suggestion that there was an obligation to top up the CMP with any identifiable client money in house accounts, concluding (para 224): In my judgment the lacuna is sufficiently filled by the general law, which permits those clients whose money is identifiable within house accounts, and not therefore part of the CMP, to pursue proprietary claims for its recovery, if they can surmount the evidential obstacles imposed by the need to trace. It is interesting to note (para 225) that at that stage Mr Zacaroli, if correctly reported, seems to have been supporting the final reconciliation theory, or something like it. In the Court of Appeal Arden LJ expressed a clear preference for the final reconciliation theory (paras 140 to 142). I have already noted that Lord Neuberger did not cover this point, and the order of the Court of Appeal leaves it in doubt whether Sir Mark Wallers general agreement with Arden LJ should be taken as covering this particular point. Before this court Mr Miles and Mr Crow have supported the final reconciliation theory with some detailed written submissions (paras 179 to 183 and 49 to 52 of their respective written cases) as well as in oral argument. They have pointed out that it avoids a bifurcated scheme and achieves a symmetrical result. Mr Zacaroli dealt with this point quite briefly in his written case (para 213) and in his oral submissions. On this issue I accept the submissions of Mr Miles and Mr Crow. There was no real challenge to Mr Miles argument that there is nothing in CASS 7, or in the general law of insolvency applicable to administrators, to prevent a final internal reconciliation being carried out on the data as they were at the PPE, limited to taking account of events during the gap period (and not reopening previous reconciliations down to and including the PLS). That interpretation avoids bifurcation, achieves symmetry, and assimilates the effect of the alternative approach with that which would have occurred under the normal approach. I would therefore dismiss GLGs appeal on the second issue so far as it relates to movements in clients entitlements during the gap period. But I would allow the appeal to the extent of limiting the wide language of the direction or declaration in para 5 of the Court of Appeals order. Whatever the outcome of this appeal, the terms of the order are going to need careful consideration and drafting in order to give the administrators the clearest possible guidance. As a postscript, I have not overlooked the parties submissions on two points: legislative history and the need for a timely, workable solution. As to the first, counsel have been very helpful in exploring how this area of regulatory law has evolved, but I do not think it gives the court any significant assistance in the task of construing CASS 7. As to the need for the administrators to have a workable scheme which provides for a timely distribution, that is an aspiration which has already, sadly, perished. A straightforward, timely distribution is impossible because of LBIEs massive non compliance with CASS 7. Because of it, there is in one sense no commercially sensible solution to the problem, and that is the bleak situation in which the court has to give guidance to the administrators. But I have little doubt that the decision of the majority will lead to much more delay, uncertainty and expense than if the judges directions had been restored. LORD CLARKE I had initially intended simply to add my agreement with the judgment and reasons of Lord Dyson. That intention was formed on the basis that it is rarely helpful to publish a concurring judgment which does no more than repeat the conclusions and reasoning of the principal writer. However, in the light of the sharp division of opinion between the members of the court, I offer this short contribution. I remain of the view that this appeal should be dismissed for the reasons given by Lord Dyson. I also agree with the reasoning in the short judgment written by Lord Collins. In particular, I agree with them that the questions raised by the issues in this appeal depend, not upon the ordinary law of trusts, but on the true construction of the relevant provisions of CASS 7. Lord Dyson has described with clarity the factual background against which CASS 7 must be construed. The most important features of that background are MiFiD and the Implementing Directive, the purposes of which include providing a high level of protection for all clients who provide moneys for investment on their behalf. As I see it, one of the principal purposes of CASS 7 is to provide protection as between clients on the one hand and the firm on the other. Clients as a whole have a higher level of protection if all clients who have provided money and who have a claim against the company are entitled to claim against the pool than if such claims are limited to those with a proprietary right. I do not see anything odd or inappropriate in such a conclusion. On the contrary, it seems to me to be consistent with the principles underlying MiFiD and the Implementing Directive. All the judges who have considered the issues have concluded that a trust arises on receipt of client moneys by the firm. Thus CASS 7.7.2(1)R provides that a firm receives and holds money for the purposes of the client money rules and the distribution rules. By CASS 7.2.1 client money means any money that a firm receives or holds for or on behalf of a client. It follows that the fiduciary duties imposed by CASS are owed by the firm before there is segregation of client moneys and whether or not there has been segregation. By CASS 7.2.15, which is under the heading Discharge of fiduciary duty, money ceases to be client money in certain specific circumstances, notably when it is paid away on the instructions of the client. Until then, the money remains client money and, importantly, the firm retains fiduciary duties in relation to it. I agree with Lord Collins approach to the first issue. In particular I agree with Lord Collins conclusion at para 192 that, if the trust does not arise until segregation, then whether or not clients are protected by CASS 7 would become arbitrary and dependent upon the firms own practices; and the greater the level of incompetence or misconduct on the part of the firm, the less the protection for the clients. This consideration seems to me to support the conclusion that CASS 7 is intended to protect all clients who provided money and have contractual claims. Similar considerations support Lord Dysons conclusions on the second issue at paras 161 to 167, namely that money received by the firm before a PPE is to be treated as pooled, whether it is received before or after the PLS. In particular I agree with his conclusions at paras 164 to 167. By CASS 7.9.6R(1), if a PPE occurs, client money held in each client money account of the firm is treated as pooled. I agree with Lord Dyson at para 164 (and Lord Neuberger of Abbotsbury MR [2011] Bus LR 277, paras 207 and 208), that the expression client money account of the firm should be given the wider meaning, namely that it extends to any account of the firm into which client money has been paid and that it is not restricted to segregated client money accounts. I agree with Lord Dyson at para 165 that to exclude identifiable money in house accounts from the distribution regime runs counter to the policy underlying CASS, which is to provide a high degree of protection to all clients in respect of money in each money account of the firm (Lord Dysons emphasis). As I read CASS, it is only CASS 7.9.6R(1) which governs what money is treated as pooled. Thus it is only client money held in a client money account. If the narrower meaning is given to that expression, only money held in a segregated account is included. All other client money, whether received in the gap period between the PLS and the PPE, or before the PLS and not segregated (although it ought to have been), will not be treated as pooled because it would not be covered by CASS 7.9.6R(1) and there is no other provision of CASS under which it would be so treated. Yet it is accepted by Lord Walker and Lord Hope that it would be unsatisfactory to exclude money which could not have been segregated because it was received by the firm after the PLS because of the inevitable time gap between segregations. They therefore accept that unsegregated moneys received by the firm between the PLS and the PPE should be treated as pooled and that a reconciliation should take place as at the PPE. They prefer that approach (the final reconciliation theory), to the general trust theory, under which clients whose money is stranded in a house account during the gap period would have to rely upon the general law of trusts. I agree with them that it would be unsatisfactory to exclude money which was received after the PLS. However, as I see it, the difficulty with the final reconciliation theory, if it is limited to money received in the gap period between the PLS and the PPE, is that it has no support in CASS. I agree with Arden LJ [2011] Bus LR 277, para 142 and Lord Walker that there must be a final reconciliation as at the PPE. I can however see no reason why it should be limited to money received after the PLS and in this respect I agree with Arden LJ at para 142. It seems to me that it must be the duty of the administrators to conduct the reconciliation exercise fully and effectively. Thus, in principle, it must be their duty to conduct the reconciliation in accordance with CASS 7. I see no warrant for their being entitled to assume that the segregation as at the last PLS had been carried out correctly. Indeed, in a case where the failure of the firm has caused the PPE, it is not unlikely that the firm will not have done so. There are many possible ways in which the firm may have carried out the last segregation otherwise than in accordance with CASS. For example, there may have been no segregation for several days (or more) before the PPE. Or the firm may have segregated only the funds of one client (or some clients) and not others, or it may have segregated only some of a particular clients (or particular clients) money. A number of questions arise. For example, what would be the position if the firm had conducted no segregations at all for some days preceding the PPE? Would the administrators final reconciliation cover: (a) all identifiable moneys deposited between the date of the last actual segregation and the PPE; or (b) all identifiable moneys deposited between the date when the last segregation ought to have taken place and the PPE? Neither option seems satisfactory. Option (a) draws a sharp dividing line at the time of the last actual segregation, no matter how limited (would a single act of segregation suffice?) or ineffectual (would segregation of 1 suffice?) it may have been. However option (b) draws an arbitrary distinction between clients who deposited moneys during the last business day before the PPE and all other clients. If LBIE wholly failed to comply with their segregation obligation for several days in a row, why afford preferential treatment to clients who deposited funds on the last day before the PPE? All these clients funds would be unsegregated and, as I see it, they should be treated in the same way. Either they should all be treated as having money in the pool or none of them should be so treated. As I understand it, Lord Walker and Lord Hope accept that unsegregated client money received by the firm between the PLS and a PPE must be treated as pooled under CASS 7.9.6R(1). In my opinion, that is only permissible on the basis that client money in a firm account is held in a client money account of the firm. It seems to me that, if that is so, there is no reason not to hold that client money held in a firm account before the PLS is also in a client money account of the firm. In these circumstances, in agreement with Lord Dyson at paras 165 and 167 and with the Court of Appeal (per Arden LJ at paras 124 to 142 and Lord Neuberger at paras 204 to 224), I would hold that the primary pooling arrangements apply to client money in firm accounts whenever it was paid in and that issue 2 should be answered on that basis. That conclusion seems to me to be entirely consistent with the conclusion (reached by everyone) that a trust comes into existence on receipt of client money by the firm. The answer to issue 2 seems to me to point the way to the answer to issue 3. Although I can see that, if issue 3 is taken first, it can be said with some force that the reverse is the case, it does seem to me that, logically, it is sensible to take issue 2 first, as the Court of Appeal did. It makes more sense to identify the CMP before deciding who should share in it rather than the other way round. I agree with Lord Neuberger at para 226 that, as he put it, it could be dangerous to look at the general law of trusts because CASS 7 is intended to be a code. The distribution model underlying the CASS 7 trust differs markedly from that of private trust law. The focus of issue 3 is CASS 7.9.6R(2), which provides that, if a PPE occurs: (2) the firm must distribute that client money in accordance with CASS 7.7.2R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 7.9.7R. It appears to me that, if that paragraph is read as a whole, as to my mind it should be, the words after the comma are of considerable importance because they tell the firm that it must distribute client money so that each client receives a sum which is rateable to the client money entitlement in accordance with CASS 7.9.7R. In short, the distribution must be in accordance with CASS 7.9.7. Reference to that provision seems to me strongly to support the claims basis. I agree with Lord Neubergers conclusion at para 227 that, once one accepts that client money includes such money when paid into a mixed money house account, then the concept of "client money entitlement" carries with it the notion of all money, which (in my opinion correctly) he says is a point reinforced by CASS 7.9.1R. As Lord Dyson notes at para 152, the judge (at para 243) described the respondents case on the construction of CASS as involving a formidable textual argument. With apologies for repetition, but because of what I regard as its significance in this appeal, I set out the argument again here. In para 242, after referring to CASS 7.9.6R(2) and underlining calculated in accordance with CASS 7.9.7R, the judge said: ii) CASS 7.9.7R requires, on a client by client basis, a netting process to be carried out between each client's individual client balance and that client's client equity balance. iii) CASS 7.9.9R(2) makes it clear (albeit for a different purpose) that the client money entitlement for each client will be calculated in accordance with CASS 7.9.7R as at the time of the PPE. iv) The phrase client equity balance is defined in the Glossary by reference to the amount which a firm would be liable to pay to a client in respect of that clients margined transactions if each of his open positions was liquidated at the prices published by the relevant exchange and his account closed. It is a form of entitlement having nothing to do with the amount contributed by the client to the firm's segregated accounts. v) The phrase individual client balance is not a term defined in the Glossary, but it is fully explained in paragraph 7 of Annex 1, again in terms which are based upon the contractual position between the client and the firm, rather than the amount actually contributed by the client to the firm's segregated accounts. vi) Thus it necessarily follows that the phrase client money entitlement, where used both in CASS 7.9.6R(2) and 7.9.9R(2) is a reference to the clients contractual entitlement to have money segregated for it, rather than to the client's proprietary interest in the CMP, derived from having had its money actually segregated, ie paid into the segregated accounts from which the CMP is constituted. Lord Dyson has considered and rejected the reasons given by the judge for not accepting the textual argument. I agree with Lord Dysons conclusions at paras 152 to 160. In particular, I agree with him that there is no legitimate basis upon which CASS 7.9.6R(2) can be construed by disregarding the words after the comma. On the contrary, as indicated above, they point the way. Moreover, they are mandatory and clear. I agree with Lord Dyson that there is no good reason for construing the expression each client in CASS 7.9.6(2) as being limited to each client for whom money is held. As I see it, each client means what it says and thus includes each client who deposited money and has a claim. Further, I see nothing ambiguous in the reference in CASS 7.9.6(2) to CASS 7.9.7R. It simply provides that the client money entitlement must be calculated in accordance with CASS 7.9.7R. There are a number of difficulties with the contributions approach. For example, the consequence of treating the PLS as the critical moment is that parties whose moneys were deposited in house accounts after the PLS would certainly have their funds effectively segregated by the administrators (provided that those moneys are still identifiable). Those parties would therefore be able to participate in the CMP. By contrast, clients whose moneys were deposited before the PLS would only be able to participate in the CMP if the firm actually complied with their obligation to segregate those funds. Given the firms widespread failure to comply with this obligation, many of those clients would not be able to participate in the CMP. The net effect would be that parties who deposited funds in house accounts after the PLS would be likely to be in a better position than parties who deposited funds in house accounts before the PLS. This seems to me to be a strange result. If, as I believe to be the case, CASS 7.9.7R applies to any distribution, there can in my opinion be no real doubt that the claims basis must be correct. If the basis of the right to claim were a contributions basis, a clients entitlement to participate in the CMP would depend on whether or not it had made a contribution to the CMP. Yet the distribution rules, namely CASS 7.9.6R and 7.9.7R, make it clear that the quantum of a participants share depends not upon the size of their contribution to the pool but upon the size of their contractual entitlement vis vis the firm. In this regard I agree with the conclusions of Arden LJ at paras 154 to 164. In particular I agree with her concerns expressed in paras 156 and 157 that, on the contributions basis, significant problems arise which cannot be dismissed as a glitch in the way in which they were by the judge at para 265. In short I agree with Lord Dyson, Lord Neuberger, Arden LJ (and indeed Sir Mark Waller) that the natural construction of the CASS rules is that client moneys as at the PPE are to be distributed on a claims and not a contributions basis. I also agree with them that such a construction gives better effect to the underlying purpose of the CASS code, namely the protection of all those who deposited money with the firm. LORD DYSON I am grateful to Lord Walker for setting out the facts and the relevant documentation so clearly and so comprehensively. This appeal raises three issues concerning the true construction of CASS 7. These are (i) when does the statutory trust created by 7.7.2(R) arise; (ii) do the primary pooling arrangements apply to client money held in house accounts; and (iii) is participation in the notional client money pool (CMP) dependent on actual segregation of client money? I agree with the conclusions of Briggs J, the Court of Appeal and Lord Walker, Lord Hope and Lord Collins on the first issue. I cannot improve on their reasons for holding that the statutory trust created by 7.7.2(R) arises at the time of the firms receipt of the client money. But I have reached a different conclusion from that of Briggs J, Lord Walker and Lord Hope on the second and third issues. Before I turn (to the extent that it is necessary to do so) to the points of detail that have been debated so meticulously, I wish to make two preliminary points. Two preliminary points The first point is that CASS 7 provides a detailed code for the safeguarding of client money by firms regulated by the Financial Services Authority. On the assumed facts, there was shocking underperformance by LBIE. As the judge put it, there was non compliance with the regulatory requirements on a truly spectacular scale (para 4). Furthermore, the most significant group of clients whose money LBIE failed to segregate was its own affiliates, who have advanced money claims against LBIE in excess of $US 3 billion. But it is important not to allow these exceptionally striking facts to influence the outcome of this appeal. The issues of construction that are raised are of general application. Their resolution cannot depend on the size of the firm or the scale of its non compliance or the identity of the particular client in question. Indeed, 7.1.12G states that a firm that holds money on behalf of, or receives money from, an affiliated company in respect of MiFID business must treat the affiliated company as any other client of the firm for the purposes of [chapter 7]. The second point that I wish to emphasise at the outset is that the client money which is subject to the statutory trust is any money that a firm receives from, or holds for, or on behalf of, a client in the course of, or in connection with, its MiFID business unless otherwise specified in this section (7.2.1R). Accordingly, unless otherwise specified in section 7.2, all client money is subject to the statutory trust. The Directives It is not in issue that CASS 7 was made for the purpose of fulfilling the EU requirements contained in the Markets in Financial Instruments Directive 2004/39/EC (MiFID) and the Commission Directive 2006/73/EC (the Implementing Directive) and that CASS 7 should therefore be interpreted, as far as possible, so as to give effect to these Directives: see, for example, HM Revenue and Customs Comrs v IDT Card Services Ireland Ltd [2006] STC 1252. As Arden LJ explained at paras 59 to 62 of her judgment, this requires a two stage test to be applied. The first involves interpreting the Directives. The second involves interpreting CASS 7 in the light of the meaning of the Directives. At para 57 of his judgment, Briggs J correctly stated that domestic legislation which is made for the purposes of fulfilling the requirements of EU law contained in a Directive must be interpreted in accordance with the following principles: (i) it is not constrained by conventional rules of construction; (ii) it does not require ambiguity in the legislative language; (iii) it is not an exercise in semantics or linguistics; (iv) it permits departure from the strict and literal application of the words which the legislature has elected to use; (v) it permits the implication of words necessary to comply with Community law; and (vi) the precise form of the words to be implied does not matter. The purposes of MiFID and the Implementing Directive include providing a high level of protection for clients and safeguarding their rights to funds in the event of the insolvency of the firm to which their funds have been entrusted. The recitals to MiFID include recital (2) which states it is necessary to provide for the degree of harmonisation needed to offer investors a high level of protection (emphasis added); recital (17) which states that persons who provide the investment services and/or perform their investment activities covered by this Directive should be subject to authorisation by the home member states in order to protect investors and the stability of the financial system; and recital (26) which provides: in order to protect an investors ownership and other similar rights in respect of securities and his rights in respect of funds entrusted to a firm, those rights should in particular be kept distinct from those of the firm. The aim of protecting investors is also expressed in recitals (31), (44), (61) and (71). Article 13(7) of MiFID requires an investment firm to make adequate arrangements in relation to financial instruments belonging to clients to safeguard clients ownership rights, especially in the event of the investment firms insolvency. Article 13(8) requires an investment firm, when holding funds belonging to clients, to make adequate arrangements to safeguard the clients rights and prevent the use of client funds for its own account. The Implementing Directive contains detailed rules for giving effect to the objectives of MiFID. Its recital (2) states that rules for the implementation of the regime governing organisational requirements for investment firms should be consistent with the aim of [MiFID]. Recital (5) states that the rules for the implementation of the regime governing operating conditions for the performance of investment services and activities should reflect the aim underlying that regime. That is to say they should be designed to ensure a high level of investor protection to be applied in a uniform manner through the introduction of clear standards and requirements governing the relationship between an investment firm and its client (emphasis added). Article 16 of the Implementing Directive contains rules for safeguarding client assets and gives effect to article 13(7) and (8) of MiFID. Article 16(1) makes provision for record keeping and accounts (para (1)(a) and (b)); conduct of reconciliations (para (1)(c)); ensuring that client financial instruments and funds that are deposited are identified separately, ie are segregated (para (1)(d) and (e)); and organisational arrangements designed to minimise the risk of loss or diminution of client assets or of rights in connection with those assets, as a result of fraud, poor administration, inadequate record keeping or negligence (para (1)(f)). Article 16(2) provides: If, for reasons of the applicable law, including in particular the law relating to property or insolvency, the arrangements made by investment firms in compliance with paragraph 1 to safeguard clients rights are not sufficient to satisfy the requirements of article 13(7) and (8) of [the MiFID Directive], member states shall prescribe the measures that investment firms must take in order to comply with those obligations. It follows that the effect of article 13(7) and (8) of MiFID and article 16(2) of the Implementing Directive is that member states are under a duty to prescribe measures that firms should take to ensure that there are adequate arrangements under the domestic law relating to insolvency to safeguard the clients rights to funds belonging to them in order to achieve the investor protection purpose of MiFID. When dealing with the first issue, Briggs J acknowledged the importance of interpreting CASS 7 by reference to the MiFID Directives (para 148). He said in relation to the first issue that an interpretation of 7.7.2R by reference to the Directives was strongly supportive of the case that a trust of client money received by a firm arises upon receipt, rather than only upon segregation. He added: Quite simply, that analysis better serves the MiFID objectives of protecting clients rights in relation to their funds, both from use of those funds for the firms own purposes, and from the consequences of the firms insolvency. He added that the imposition of a statutory trust was the kind of additional requirement contemplated by article 16(2) of the Implementing Directive necessary to make the requirements set out in article 16(1) effective in the context of the domestic law of a particular member state. I entirely agree with this approach. When he came to deal with the third issue, he did not derive decisive assistance from an analysis of the purposes behind the MiFID Directives. He said (para 234): On the one hand it may be said that the general aspiration to provide a high level of investor protection is best served by conferring a right to share in the CMP upon all clients whose money should have been segregated, whether or not it was. On the other hand, the MiFID Directives are, as I have sought to explain, aimed at the establishment of obligations and organisational requirements which, if complied with, would protect clients funds both from misuse by the firm, and from loss occasioned by the firms insolvency. The contemplation of the Directives was that this would be achieved by identification, reliable accounting and segregation, such that clients money actually dealt with in that way would be protected, but not otherwise. I shall examine the third issue later in this judgment. It seems that the judge considered that the underlying purpose of the Directives was sufficiently met by the introduction into our domestic law of the organisational requirements specified in article 16(1) of the Implementing Directive. In other words, the requirement in article 13(7) and (8) of MiFID to make adequate arrangements to safeguard the clients rights in relation to financial instruments and funds would be satisfied by meeting the specific requirements of article 16(1) of the Implementing Directive. But the requirements prescribed by article 16(1) are not to be equiparated with the requirements stated in article 13(7) and (8) of MiFID. Indeed, as the judge recognised when he addressed the first issue, article 16(2) contemplates that the arrangements made by investment firms in compliance with article 16(1) might not be sufficient to satisfy the requirements of article 13(7) and (8) of MiFID. The important point, however, is that the judge rightly acknowledged the principle that it is necessary to construe CASS 7 in a manner which promotes the purpose of providing a high level of protection for clients as required by the Directives. The third issue The second and third issues are closely related. Lord Walker and Lord Hope prefer to start with the third issue. I am content to take the same course. The question raised by this issue is whether participation in the CMP is based on (i) the amount of client money which has actually been segregated at the date of the primary pooling event (PPE) (the so called contributions basis for participation) or (ii) the amount which ought to have been segregated at that date (the so called claims basis for participation). The resolution of this issue depends on the proper interpretation of 7.9.6R, 7.9.7R and 7.7.2R. The starting point is 7.7.2R which provides that a firm receives and holds client money (ie any money that it receives from or holds for, or on behalf of, a client) on the terms set out in 7.7.2R (1) to (5). The beneficiaries of the trust are identified at 7.7.2R (2) as being the clients. for whom [the client money] is held, according to their respective interests in it and the trust is for the purposes of and on the terms of the client money rules and the client money (MiFID business) distribution rules (7.7.2R(1)). The client money rules are defined as the rules contained in 7.1 to 7.8. The client money (MiFID business) distribution rules (the distribution rules) are defined as the rules contained in 7.9. I accept that until a PPE occurs, client money is held for the purposes of 7.3, 7.4, 7.5, 7.6 and 7.8 (ie safeguarding, segregation, transfer to third parties, record keeping and internal reconciliation and protection (by notice to banks) of client money bank accounts). As Lord Walker says (para 77), these purposes are directed to the protection and management of clients money in the beneficial ownership of clients who are identified beneficiaries of the trust, being those (as 7.7.2R(2) puts it) for whom that money is held, according to their respective interests in it. Lord Walker says (at para 78) that the biggest objection to the claims basis of interpreting 7.9.6R is that it involves on the assumed facts of this case a cataclysmic shift of beneficial interest on the PPE, to the detriment of those clients who must have supposed that their funds were safely segregated in accordance with CASS 7.1 to 7.8. It would amount to the segregated clients funds being used as a strange form of compensation fund for disappointed clients whose funds had not been segregated. It is true that, on the assumed facts of this case, the claims basis can be said to involve a cataclysmic shift of beneficial ownership on the PPE. But that is because, on the assumed facts, there was a spectacular failure to comply with the CASS 7 rules for a very long period. But I have already counselled against allowing the exceptional nature of the assumed facts to compel a particular conclusion to the issues of construction that arise in this case. More importantly, CASS 7.7.2R provides that the trust is for the purposes and on the terms of the client money rules and the distribution rules. Thus 7.7.2R itself points to the beneficiaries under the distribution rules as being all the clients for whom the firm has received and is holding client money. In other words, such interest under the trust as any clients have is expressly on the terms of the distribution rules, of which 7.9.6R is the principal operative provision. Lord Walker says that the notion that clients must be taken to have implicitly accepted the risk of discovering, on a PPE, that their carefully segregated funds must be shared with non segregated clients (including LBIEs own affiliates) seems quite unrealistic (para 79). I respectfully disagree. The general scheme of CASS 7 is that all client money is subject to a trust that arises upon receipt of the money by the firm. This includes money received from the firms affiliated companies. I have already referred to the wide definition of client money in 7.2.1R (para 130 above). The client money rules are, therefore, intended to protect all the clients money received prior to a PPE. The distribution rules are intended to protect all the clients money in the event of a PPE. There is nothing surprising in the notion that, once a PPE occurs, the treatment of client money is subject to a different regime from that to which it was subject before. It is the exceptional nature of the assumed facts in this case which makes the consequences of a change of regime so striking. I accept that, in order to reach a conclusion on the third issue, it is necessary to examine the language of the relevant rules. But I start from the position that it is not inherently unlikely that the draftsman intended that clients with established proprietary interests in segregated funds should have those interests disturbed by the distribution rules in the event of a PPE. There is no a priori reason why the draftsman would not have intended to produce a scheme pursuant to which the protection afforded to clients is modified in the event of a PPE. There is nothing unrealistic in a scheme which provides that, in the event of the failure of a firm, the beneficial interests in the client money are adjusted so as to provide that each client receives a rateable proportion of the aggregate of all the client money; in other words that all clients share in the common misfortune of the failure. The draftsman had to decide what provision to make for the distribution of client money in the event of a PPE. He could have decided that pooling and distribution was to be limited to client money which had been segregated or that it should include all client money. That was a policy choice he had to make. Which choice he made depends on the true construction of CASS 7. In my view, it does not depend on a consideration of any general principles of trust law. I acknowledge that segregation is an important part of the CASS 7 system. But it does not follow that the draftsman intended that upon a PPE only segregated client money would qualify for distribution under the distribution rules. As Mr Miles points out, on any view of the distribution rules, client money which has been segregated is treated as pooled on a PPE and must be distributed so that each client receives a rateable share of the CMP. The distribution model underlying the CASS 7 trust therefore differs from that of private trust law. To this extent at least, the notion that a client has a fixed beneficial interest in the segregated moneys which cannot be disturbed on the failure of a firm is incorrect. The only question is how far that disturbance goes: is the rateable sharing with other segregated clients or with all clients? As I have said, the resolution of this question depends on the true construction of the relevant provisions of CASS 7. But in approaching this question of construction, it is necessary to bear in mind that (i) all client money is subject to the statutory trust and, (ii) where there is a choice of possible interpretations, the court should adopt the one which affords a high degree of protection for all clients who have client money with the firm and to safeguard their interests, thereby furthering the purposes of the Directives. It is not the purpose of the Directives to provide a level of protection only for those clients who are recorded in the firms ledger as clients with client money entitlements when the firm calculated the net amount to segregate at the last reconciliation. Lord Walker is of the view that, in construing CASS 7, we have to look at its essential scheme and structure. Beyond that, he says, a purposive approach gives little assistance, since it is plain that neither the Directives nor CASS 7 contemplate non compliance with regulatory requirements (paras 48 and 81). But even if the premise that the Directives did not contemplate non compliance with regulatory requirements is correct, it does not follow that rules introduced by member states to give effect to the Directives should not be construed in the manner which best fulfils the overriding purpose of the Directives to provide a high degree of protection to money entrusted by clients to investment firms. If there are two possible interpretations of CASS 7, it seems to me to be axiomatic that the interpretation which more closely meets the purpose of the Directives should be adopted. I do not see how this can be affected by whether the Directives did or did not contemplate non compliance with the regulatory requirements. As I have already said, the judge did not derive decisive assistance from the Directives because he considered that their purpose was met by the incorporation in CASS 7 of requirements which satisfy the provisions of article 16(1) of the Implementing Directive. But article 16(2) makes it clear that member states are required to prescribe the measures that firms must take in order to comply with the obligations set out in article 13(7) and (8) of MiFID, if compliance with article 16(1) does not suffice. I do not see why the existence in domestic law of rules which satisfy the requirements of article 16(1) makes it unnecessary to interpret the distribution rules contained in 7.9, so far as possible, as imposing obligations which satisfy the requirements of article 13(7) and (8) of MiFID, thereby affording clients a high degree of protection. I now turn to examine some of the detailed points arising from the language of the relevant provisions of CASS 7. So far as material, 7.9.6R provides: If a primary pooling event occurs: (1) (2) client money held in each client money account of the firm is treated as pooled; and the firm must distribute that client money in accordance with CASS 7.7.2R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 7.9.7R. Mr Miles relies on the reference to a calculation in accordance with CASS 7.9.7R as supporting the claims basis rather than the contributions basis for participation. The steps in the argument were carefully set out by the judge at para 242 of his judgment as follows: (i) CASS 7.9.6R(2) requires the firm to distribute client money in accordance with CASS 7.7.2R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 7.9.7R [his underlining]. (ii) CASS 7.9.7R requires, on a client by client basis, a netting process to be carried out between each clients individual client balance and that clients client equity balance. (iii) CASS7.9.9R(2) makes it clear (albeit for a different purpose) that the client money entitlement for each client will be calculated in accordance with CASS 7.9.7R as at the time of the PPE. (iv) The phrase client equity balance is defined in the Glossary by reference to the amount which a firm would be liable to pay to a client in respect of that clients margined transactions if each of his open positions was liquidated at the prices published by the relevant exchange and his account closed. It is a form of entitlement having nothing to do with the amount contributed by the client to the firms segregated accounts. (v) The phrase individual client balance is not a term defined in the Glossary, but it is fully explained in paragraph 7 of Annex 1, again in terms which are based upon the contractual position between the client and the firm, rather than the amount actually contributed by the client to the firms segregated accounts. (vi) Thus it necessarily follows that the phrase client money entitlement, where used both in CASS 7.9.6R(2) and 7.9.9R(2) is a reference to the clients contractual entitlement to have money segregated for it, rather than to the clients proprietary interest in the CMP, derived from having had its money actually segregated, ie paid into the segregated accounts from which the CMP is constituted. (vii) By way of a postscript, Mr Knowles submitted that, in any event, not all contributions to the segregated accounts were made in respect of particular clients. For example, he pointed to the prudential payments contemplated by CASS 7.4.21R. Segregation in relation to depot breaks is another example: see below. At para 243, the judge described this as a formidable textual argument. He rejected it for the following principal reasons. First, the phrase client money entitlement means different things in different places, so that its meaning in any particular paragraph must be informed by its context. Secondly, (for the reasons that he gave at paras 255 to 262) the correct interpretation of 7.9.7R does not support the claims basis for participation in the CMP. He pointed out that 7.9.7R does not purport to constitute a comprehensive formula for the calculation of a client money entitlement. It merely provides for the offset of two particular types of accounting debit against two particular types of accounting credit. It is a reducing mechanism, whose effect is, in the stated circumstances, to reduce what otherwise might have been identified as a clients client money entitlement, which is to serve as the basis for his rateable participation in the CMP (para 255). He said that the existence of these offsetting provisions is not sufficient to indicate that it was intended to go behind the last internal reconciliation account to establish if necessary by enormous forensic endeavour and even litigation, the true contractual entitlements of the firms clients to have their money segregated, without limitation in historical time, so as to include un segregated and partially segregated clients as beneficiaries of the CMP, with obvious adverse consequences in terms of the timely and efficient distribution of the pooled client money to the clients entitled to it (para 261). Both the judge (para 232) and Lord Walker (para 97) said that the purpose of 7.9.7R is obscure and, at least by inference, that the reference to it in 7.9.6R(2) cannot bear the weight that Mr Miles seeks to place on it. But I do not think that the reference in 7.9.6R (2) to the sum being calculated in accordance with CASS 7.9.7R can be brushed aside so easily. CASS 7.9.7R provides for a calculation which takes account of each clients individual client balance and client equity balance. The individual client balance calculation is dealt with in detail in para 7 of Annex 1. The client equity balance is defined in the glossary as the amount which a firm would be liable (ignoring any non cash collateral held) to pay to a client (or the client to the firm) in respect of his margined transactions if each of his open positions was liquidated at the closing or settlement prices published by the relevant exchange or other appropriate pricing source and his account closed. As Mr Miles says, the calculation involves an assessment of the clients actual and objective entitlement in respect of client money. It has nothing to do with the amount which may or may not in fact have been segregated for the client, nor with the ledger entries which the firm may have made in respect of any particular segregation or reconciliation. The reducing mechanism interpretation favoured by the judge (and supported by Mr Zacaroli) treats the phrase client money entitlement in 7.9.6R(2) as envisaging (i) a calculation by reference to the historical amounts recorded in the ledgers, and (ii) (as a downward adjustment) a calculation by reference to 7.9.7R. But there is no support for this two fold scheme of calculation in the language. As Mr Miles points out, 7.9.6R(2) simply refers to the client money entitlement being calculated in accordance with 7.9.7R. Like Lord Neuberger MR (para 230), I do not consider that there are sound reasons for rejecting the formidable textual argument. Lord Walker at para 94 (in agreement with the judge) says that, if 7.9.6R(2) had stopped at the comma after in accordance with CASS 7.7.2R, there would have been no doubt that the right to receive a distribution from the CMP was limited to those clients for whom the firm had actually segregated client money or those identified as entitled to participate in the distribution in the last reconciliation. They were under 7.7.2R(2) the clients for whom that money is held and it was to be distributed according to their respective interests in it. Lord Walker says that each client in 7.9.6R does not mean what it says; in context, it means each client for whom client money is held. I see the force of this argument. But 7.9.6R(2) must be read as a whole, including the words which follow the comma after in accordance with CASS 7.7.2R. So read, I think the better interpretation is that the right to share in a distribution is given to each client of the firm, so that all clients with a client money entitlement are entitled to share. That is what 7.9.6R(2) says. The reason for referring back to 7.7.2R is not to identify the client money that is to be distributed (that is done in 7.9.6R(1) and (2)). It is to introduce the order of priorities referred to in 7.7.2R. Thus, for example, the incorporation of 7.7.2R(2) throws the costs properly attributable to the distribution of client money on to the client money (rather than on to the general assets of the firm). The costs of distribution will have to come from the trust before division to clients. One final textual point. I think that Mr Miles is right to say that some support for his case on the meaning of client money entitlement can be found in 7.9.9R(2). This creates an exception from the usual rule that all client money received by the firm after a PPE must be returned to the client. The exception is where it is client money relating to a client, for whom the client money entitlement, calculated in accordance with CASS 7.9.7R, shows that money is due from the client to the firm at the time of the primary pooling event. This is a reference to a calculation being performed in the manner prescribed in Annex 1 (albeit with mandatory off setting). The exercise is intended to establish whether, objectively and in fact, the client is a debtor of the firm, in which case the firm can keep the money. In the context of 7.9.9R(2), client money entitlement has nothing to do with the amounts actually segregated for a client by the firm. It is telling that 7.9.9R(2), like 7.9.6R(2), requires the client money entitlement to be calculated in accordance with 7.9.7R as at the date of the PPE. To summarise, for the reasons that I have given, the language of the relevant provisions of CASS 7 tends to support the claims basis for participation in the CMP. I accept, however, that the linguistic points are not conclusively supportive of this interpretation. That is why it is necessary to stand back from the detail and ask which interpretation better promotes the purpose of CASS 7. In my view, a purposive interpretation clearly supports the claims basis for participation. This basis better reflects the fact that all client money is subject to the statutory trust and that CASS 7 is intended to give effect to the Directives whose overriding purpose is to safeguard the assets of all clients and to provide all clients with a high degree of protection. I should add that we heard detailed submissions about the complexities of the process that the claims basis would entail and the inevitable costs and delay that it would occasion. The judge was impressed by these points: see, for example, para 152 above. I have little doubt that distribution on the claims basis in this case would be complex and would take a long time to complete. That is because of the extraordinary circumstances of this case. In other cases, the position might well be very different. But it has not been shown that, in a typical case, the complexity of the claims basis will necessarily be greater than that of the contributions basis. Still less has it been shown that, in a typical case, the complexity of the claims basis will be so much greater than that of the contributions basis that the draftsman could not have intended the former. I do not think that it would be right to allow the scale of the exercise that would be required in this case to lead to a solution which, for the reasons that I have given, would defeat the underlying purpose of CASS 7. For the reasons that I have given, I have reached the strong provisional conclusion that participation in the CMP is not dependent on actual segregation at the time of the PPE. But I recognise that the second and third issues are closely linked. The third issue concerns the true construction of 7.9.6R(2). The second issue concerns the true construction of 7.9.6R(1). The closeness of the link between the two issues is seen clearly in 7.9.6R(2) which provides that the firm must distribute that client money in accordance with CASS 7.7.2R (underlining added). That client money is the client money referred to in 7.9.6R(1), ie client money held in each client money account of the firm. The second issue focuses on whether the client money to be distributed must be in a client account or may be identifiable client money held in a house account of the firm. The second issue If, as Lord Walker and Lord Hope would hold, participation in the CMP is dependent on actual segregation at the time of the point of last segregation (PLS), then the second issue is limited to the question whether there is anything in CASS 7 or the general law of insolvency to prevent a final internal reconciliation from being carried out on the data as they were at the PPE, but limited to taking account of events during the gap period between the PLS and the PPE (and not reopening previous reconciliations down to and including the PLS). In the light of the conclusion that I have reached on the third issue, the second issue cannot be viewed so restrictively. It is necessary to decide whether 7.9.6R(1) requires all identifiable client money to be treated as pooled, or only that client money which is held in the firms segregated client accounts. The phrase client money account of the firm is not defined. As a matter of ordinary language, the phrase client money account is capable of meaning (i) an account which contains or is intended to contain exclusively client money or (ii) an account of the firm which contains client money. Even where a firm is fully compliant, CASS 7 contemplates that client money will be held in the firms own account. Thus, where the alternative approach of payment of client money into a client bank account is adopted under 7.4.16G, 7.4.18G and 7.4.19G, the firm may receive client money into its own bank account before (on the next business day) paying it out to or on behalf of the client (see 7.4.18G). The question of whether a house account in which client money is held is a client money account of the firm arises, therefore, both in relation to money held by the firm where it adopts the alternative approach and where (as in the present case) it wrongly retains client money in its own account. A number of detailed textual points have been made on both sides of the argument. Some of these are discussed by Lord Neuberger at paras 205 to 215 of his judgment. I agree with his conclusion on these (para 223) that they are fairly limited in their value and pretty finely balanced in their relative strengths and that overall they do not favour either interpretation. I, therefore, see no point in rehearsing them in this judgment. Since an examination of the text shows that there are two possible interpretations of the phrase each client money account of the firm, it seems to me that the correct interpretation is the one which best promotes the purpose of CASS 7 as a whole. As I have already explained, the fundamental purpose of CASS 7 is to provide a high level of protection for client money received by financial services firms. That is why all client money received from or held for or on behalf of a client in the course of, or in connection with its MiFID business (7.2.2R) is held on trust upon receipt and why the other client money rules in 7.1 to 7.8 are expressed as they are; and that is the policy underlying the distribution rules. To exclude identifiable client money in house accounts from the distribution regime runs counter to this policy. It creates what was referred to in argument as a bifurcated scheme which provides clients with different levels of protection, namely a right to claim in the CMP under the CASS 7 rules for those whose money is held in segregated client accounts but no right (other than a right to trace in equity) to those whose money is held in the firms house accounts. The purpose of the scheme (as required by the Directives) is to provide a high level of protection to all clients and in respect of client money held in each money account of the firm. That purpose would be frustrated if the protection were restricted in this way. As Mr Miles and Mr Crow point out, a bifurcated scheme would provide clients with different levels of protection based on the happenstance of whether the firm has segregated money on behalf of that client. That is an arbitrary basis for a scheme which is intended to provide protection to all clients who entrust their money to a firm. It is unlikely that the draftsman of CASS 7 intended the scheme to have this effect. It is improbable that the draftsman contemplated that there would be two regimes substantially in operation for the distribution of client money (one under the CASS 7 rules set up for the purpose and one under equitable tracing principles and outside CASS 7). There is the further point that, in view of the overriding purpose of the scheme, it is unlikely that client money which had yet to be segregated under the alternative approach was intended to be treated differently from client money which had been segregated, whether under the normal approach or the alternative approach. It is unlikely that the draftsman would have intended that a client who makes a payment to a firm which adopts the alternative approach should, albeit for a short period, be at risk in a way in which a client who makes a similar payment to a firm which adopts the normal approach would not be. Lord Walker and Lord Hope recognise the force of this last point. They would meet it by holding that a final reconciliation must be carried out on the data as they were at the PPE limited to taking account of events during the gap period (and not reopening previous reconciliations down to and including the PLS). I accept that, in relation to client money received after the PLS, this interpretation avoids bifurcation, achieves symmetry and assimilates the effect of the alternative approach with that which would have occurred under the normal approach. But it does not avoid bifurcation or achieve symmetry as between client money received before the PLS which is held in segregated clients accounts and client money which is held in the firms house accounts. I would hold, in agreement with the Court of Appeal, that the primary pooling arrangements apply to client money in house accounts. This conclusion is consistent with and reinforces the conclusion which I have expressed on the third issue. In these circumstances, it is not necessary to deal with the alternative submission of Mr Miles that, as at the PPE, the firm remains a regulated firm subject to CASS 7 and is therefore obliged to perform a final reconciliation as at the PPE. This is the submission that Arden LJ accepted at para 142 of her judgment. Lord Walker and Lord Hope accept this submission, but only so as to take account of events during the gap period between the PLS and the PPE. I agree with them, but am inclined to think that there is no good reason why the final reconciliation should be limited in the way that they suggest. There is nothing in the language of 7.6 which supports such a limitation. Since (as I have held) all client money is held by the firm on trust for the purpose of distribution in accordance with the distribution rules, if it were necessary to decide the point, I would hold that the final reconciliation should not be limited to an examination of what has happened between the PLS and the PPE. Overall conclusion I would, therefore, dismiss this appeal. I would hold that (i) client money is held on the statutory trust imposed by CASS 7.7. from the time of receipt by a firm; (ii) the money treated as pooled at the PPE should be distributed to clients in accordance with their respective client money entitlements under CASS 7 construed in accordance with this judgment; and (iii) the pooling at the PPE includes all client money identifiable in any account of LBIE into which client money has been received and is not limited to client money in the firms segregated accounts. If the implications of these holdings call for further decision, application should be made to Briggs J for directions. LORD COLLINS The issues on this appeal are of great importance to financial institutions and regulatory authorities, and the amount of money involved is enormous. They raise some difficult questions of construction of CASS 7 in accordance with settled principles, but not points of law of general importance. Two of these questions have divided the courts below and the members of this court. I agree with the judgments of Lord Walker and Lord Hope on the first issue, and those of Lord Dyson and Lord Clarke (and with the conclusions of Lord Neuberger MR, Arden LJ, and Sir Mark Waller in the Court of Appeal) on the second and third issues. I begin with my views on the first issue, namely whether the statutory trust over client money contained in CASS 7.7 attaches only to client money in segregated accounts or whether it also extends to client money which LBIE was entitled to, and did, pay or receive into its own house accounts. The question is whether the statutory trust over clients funds arises on receipt of the funds, as CASS 7.7.2R seems to say (A firm receives and holds client money as trustee) and as Briggs J and the Court of Appeal decided, or whether it arises only when the money is received and segregated. Recital 26 of the Markets in Financial Instruments Directive 2004/39/EC (MiFID) recites that In order to protect an investors ownership and other similar rights in respect of securities and his rights in respect of funds entrusted to a firm those rights should in particular be kept distinct from those of the firm, . Article 13(8) of MiFID provides: An investment firm shall, when holding funds belonging to clients, make adequate arrangements to safeguard the clients' rights and, except in the case of credit institutions, prevent the use of client funds for its own account. Article 16(1) of Commission Directive 2006/73/EC (the Implementing Directive) provides that: Member states shall require that, for the purposes of safeguarding clients rights in relation to financial instruments and funds belonging to them, investment firms comply with the following requirements (e) they must take the necessary steps to ensure that client funds deposited, in accordance with article 18, in a central bank, a credit institution are held in an account or accounts identified separately from any accounts used to hold funds belonging to the investment firm; (f) they must introduce adequate organisational arrangements to minimise the risk of loss or diminution of client assets, or of rights in connection with those assets, as a result of misuse of assets, fraud, poor administration, inadequate record keeping or negligence. and article 16(2) provides: If, for reasons of the applicable law, including in particular the law relating to property or insolvency, the arrangements made by investment firms in compliance with paragraph 1 to safeguard clients rights are not sufficient to satisfy the requirements of article 13(7) and (8) of [MiFID], member states shall prescribe the measures that investment firms must take in order to comply with those obligations. Section 139(1)(a) of the Financial Services and Markets Act 2000 (FSMA) provides for rules to make provision which results in clients money being held on trust in accordance with the rules. CASS 7.3 (Organisational requirements: client money) provides: Requirement to protect client money 7.3.1R A firm must, when holding client money, make adequate arrangements to safeguard the client's rights and prevent the use of client money for its own account. [Note: article 13(8) of MiFID] Requirement to have adequate organisational arrangements 7.3.2R A firm must introduce adequate organisational arrangements to minimise the risk of the loss or diminution of client money, or of rights in connection with client money, as a result of misuse of client money, fraud, poor administration, inadequate record keeping or negligence. [Note: article 16(1)(f) of the MiFID implementing Directive] CASS 7.2.1R defined client money as any money that a firm receives from or holds for, or on behalf of, a client. CASS 7.7 (Statutory trust) provides (omitting the special provisions for insurance undertakings): 7.7.1G Section 139(1) of the Act (Miscellaneous ancillary matters) provides that rules may make provision which result in client money being held by a firm on trust (England and Wales and Northern Ireland) or as agent (Scotland only). This section creates a fiduciary relationship between the firm and its client under which client money is in the legal ownership of the firm but remains in the beneficial ownership of the client. In the event of failure of the firm, costs relating to the distribution of client money may have to be borne by the trust. Requirement 7.7.2R A firm receives and holds client money as trustee (or in Scotland as agent) on the following terms: (1) and the client money (MiFID business) distribution rules; (2) that money is held, according to their respective interests in it; (4) on failure of the firm, for the payment of the costs properly attributable to the distribution of the client money in accordance with (2); and (5) for the firm itself. subject to (3) [an error for (4)], for the clients for whom for the purposes of and on the terms of the client money rules after all valid claims and costs under (2) to (4) have been met, CASS 7.8 requires the trust affecting client money to be notified to and acknowledged by banks and other intermediaries. Where client money is held in a client bank account, the firm is obliged to notify the third party bank that the account is a trust account, and to require from the third party bank an acknowledgment that money standing to the credit of the account is trust money, and that the bank is not entitled to combine the account with any other account or to exercise any right of set off or counterclaim against the money in that account: CASS 7.8.1R. The client money rules do not impose any such obligation where client money is held in a house account. The essence of the appellants elaborate argument that the enormous sums which Lehman failed to segregate in this case are not subject to the statutory trust comes down to two main points: the first is that as a matter of construction the statutory trust does not arise before segregation. The second, which is put at the forefront of the argument, is that CASS 7 allows client money to be paid into the firms house accounts under the alternative approach. The essential feature of a trust is that the trustee must deal with the trust property solely for the purposes of the trust. Under the alternative approach the firm is free to use the client money paid into its house accounts for its own purposes, and that is inconsistent with an intention that such funds are held on trust for others. The first argument, on the construction of the wording, is that the opening words of CASS 7.7.2R (A firm receives and holds client money as trustee on the following terms) do not show that the trust was intended to apply to all client money from the moment of its receipt by the firm. The use of the phrase receives and holds is explained by the fact that it tracks the definition of client money in CASS 7.2.1R, being any money that a firm receives from or holds for, or on behalf of, a client, which reflects the fact that the firm may come under an obligation to treat money as client money in two separate circumstances: (1) where it receives money from or on behalf of a client; and (2) where, as a result of a transaction involving a client, the firm is obliged to segregate some of its own money into a client bank account as client money. There is nothing in MiFID in general, or in article 13(8) of MiFID or article 16(1) and (2) of the Implementing Directive or in CASS 7.3 in particular, which requires a trust to be imposed from the moment of receipt. The second argument is essentially that the use of the alternative approach by investment firms such as LBIE operating in a complex environment is inconsistent with the imposition of a trust on receipt. In practice it is impossible in such an environment for the firm to keep track, on a real time basis, of the extent to which each trade, or movement in the market, or payment relating to a particular client gives rise to a requirement to make a payment into or out of the segregated client bank accounts (as required by the normal approach). As a result, with auditor certification, the firm is permitted to receive client money from or on behalf of clients into its own accounts, and to pay any money to or on behalf of clients out of its own accounts. The firm is required to maintain in the client bank accounts an amount equal to the aggregate amount of client money it is required to hold for clients (less the amount held in the client transaction accounts). Since it is impossible to achieve this on a real time basis, an adjustment is required to be done daily, by performing a reconciliation of records and accounts required under CASS 7.6.2R, and adjusting the balance held in its client bank accounts to accord with that reconciliation, until the process is repeated on the next business day. The firm is under no obligation in relation to the actual money received as client money; but it is obliged to make payments to or on behalf of clients out of the funds in its own accounts (ie its own funds), and permitted to receive client money into its own accounts. It must, on a daily basis, ensure that there is sufficient money in the segregated accounts to satisfy the client money requirement as at the close of business on the previous business day. If necessary, this will involve a payment from the firms own accounts into the client bank accounts, but it may instead involve a withdrawal from the client bank accounts, or no change to the aggregate balance in the client bank accounts. The appellants say that under the alternative approach the firm is free to use the client money paid into its house accounts for its own purposes, and that is inconsistent with an intention that such funds are held on trust for others: Henry v Hammond [1913] 1 KB 515, 521; Paragon Finance Plc v DB Thakerar & Co (a firm) [1999] 1 All ER 400, 416. A trust over client money in the firms house accounts would create practical problems which the draftsman cannot have intended. It is in practice impossible for the firm to monitor, on a real time basis: (1) the payments made into its house accounts which attract the MiFID client money segregation requirements; (2) the payments which do not; and (3) the payments out of its house accounts which would impact on the application of those requirements. The draftsman must have envisaged that a firm which received client money into its house accounts under the alternative approach would necessarily be unable to distinguish what was client money in each account from its own funds, and would therefore in the ordinary course make payments from its house accounts without differentiating between them. In my judgment, the appeal on the first issue fails. That the trust arises on receipt is not only consistent with the objectives of the Directives and the Rules, but also emerges clearly from the wording of CASS 7.7.2R in its context. The statutory trust to safeguard clients funds pre dates MiFID. It has its origin in section 55(2)(a) of the Financial Services Act 1986. In his report Review of Investor Protection, Report: Part 1 (1984) (Cmnd 9125) (which preceded the Financial Services Act), para 6.31, Professor Gower noted that under English law mere segregation of funds was not enough to protect those funds from the firms creditors in the event of its insolvency, and investors money could be safeguarded by segregation only if it was segregated in such a way that ownership remained with them, ie under a trust: The ultimate safeguard for investors is an assurance that on the failure of the investment business such of their money or investments as have not been disposed of in the legitimate conduct of that business are recoverable by them. In most cases this can be achieved only by a combination of two methods. The first is by the segregation of clients money and investments from the firms money and investments. This is effective only if clients money and investments are segregated in such a way that ownership remains with them. This is not achieved merely by holding their money in a designated clients account. Unless that account is held on trust for the clients it will not afford protection, as many clients of recently liquidated investment managers and commodity dealers have learnt to their cost. In its 2000 consultation paper, Protecting Client Money on the failure of an authorised firm, para. 4.13, the FSA said: All consumers have an interest in the system of regulatory protection that safeguards client money held by a firm. When a firm fails, its clients will want to know that their money can be returned to them as quickly as possible. When it amended the client money rules to take account of the Directives, the FSA retained the existing trust mechanism. In its consultation paper 06/14, Implementing MiFID for Firms and Markets (July 2006) at para 10.17 it said: MiFIDs segregation provisions require a firm, on receiving any client funds, promptly to segregate those funds in an account or accounts identified separately from any accounts used to hold funds belonging to the investment firm. Our view is that under English law, a trust is the most appropriate mechanism for segregating client money and a statutory trust has advantages over a private law trust. For example, the incorporation of the client money distribution rules into the statutory trust assists in the efficient and prompt distribution of client money. The FSA proposed (para 10.18): to use the existing requirements concerning the establishment of the statutory trust and the segregation and operation of client money accounts. This will provide certainty as to beneficial ownership and the authority of the firm. And it would preserve the solid foundation for action by us, or liquidators or other persons appointed on their behalf, in the event of firm default. A statutory trust does not necessarily bear all the indicia of a trust as would be recognised by a Court of Chancery. Thus in Ayerst v C&K (Construction) Ltd [1976] AC 167, 180, Lord Diplock said (in the context of a trust arising on insolvency) that all that might be meant by the use of the word trust was giving property the essential characteristic which distinguishes trust property from other property; namely, it cannot be used or disposed of by the legal owner for his own benefit but must be used or disposed of for the benefit of others. Thus CASS 7.7.1G provides that the statutory trust creates a relationship under which client money is in the legal ownership of the firm but remains in the beneficial ownership of the client. Consequently, it does not follow that, when the word trust is used, that brings with it the full range of trust indicia associated with a traditional private law trust, particularly so when the trust is imposed by statute and is in the context of the exercise of a public function: cf In re Ahmed & Co [2006] EWHC 480 (Ch); 8 ITELR 779. The starting point on issue 1 is the wording of CASS 7.7.2R, which expressly provides that [a] firm receives and holds client money as trustee on the following terms. There is nothing to suggest that the trust does not arise on receipt. Other provisions of CASS 7 are consistent with the conclusion that a firm which receives client money is under an immediate fiduciary duty, including (1) the definition of client money in CASS 7.2.1R which refers to a firm receiving or holding money; (2) CASS 7.2.15R, which provides for the limited situations in which client money is released from fiduciary obligations on the part of the firm, and (3) CASS 7.4.23G (Mixed remittance), which provides that pursuant to the client money segregation requirements, a firm operating the normal approach which receives a mixed remittance (part client money and part other money) must pay the full sum into a client bank account promptly, and in any event, no later than the next business day after receipt; and pay the money that is not client money out of the client bank account promptly, and in any event, no later than one business day of the day on which the firm would normally expect the remittance to be cleared. That conclusion is also inevitable in the light of the requirement in article 13(8) of MiFID, which obliges member states to require an investment firm when holding funds belonging to clients to prevent the use of client funds for its own account. CASS 7 must be construed in order to comply with that requirement. It is also supported by articles 16(1) and 16(2) of the Implementing Directive, and by CASS 7.3. Article 16(1) of the Implementing Directive provides that client funds are to be held in accounts separate from the firms funds, and that firms must introduce adequate organisational arrangements to minimise the risk of loss or diminution of client assets, as a result of (inter alia) the misuse of assets. Most important, if because of insolvency law the arrangements are not sufficient to safeguard clients rights, member states have to prescribe the measures that investment firms must take in order to comply with those obligations: article 16(2). CASS 7.3.1R provides that the firm must prevent the use of client money for its own account. I accept the respondents argument that if the trust did not arise until segregation, then whether or not clients are protected by the CASS rules would become arbitrary and dependent on the firms own practices: the greater the level of incompetence (or misconduct) on the part of the failed firm, the lesser the protection for clients. As for the arguments based on the use of the alternative approach, the starting point is that the alternative approach is merely a method which firms are entitled to adopt, in certain circumstances, if to do so would achieve the client protection objective. The alternative approach is not expressly contemplated by MiFID and is an option permitted only if the firm has in place systems and controls which are adequate to enable it to operate the alternative approach effectively: CASS 7.4.15R. The alternative approach does not, and cannot, assist in the interpretation of the Directives, nor does it help in the interpretation of CASS 7.7.2R. I agree with Briggs J (at [144]) that since the purpose of the statutory trust is to protect client money from misuse, it would be odd if client money (originally the client's beneficial property) ceased to be the client's property upon receipt by the firm, and it (or substitute money) then became the clients property again upon segregation shortly thereafter. There is no doubt that money in a mixed fund may be held on trust, and that a trust of money can be created without an obligation to keep it in a separate account: In re Kayford Ltd [1975] 1 WLR 279, 282, per Megarry J. The supposed difficulties in operating the alternative method if there were a continuing trust of client money are in my judgment of no substance, and in any event irrelevant to the question whether the trust arises on receipt. For those reasons I would uphold the conclusions of Briggs J and the Court of Appeal [2011] Bus LR 277 on the first issue. I add only a few words about the third issue. Lord Walker and Lord Dyson have between them set out fully all of the textual and policy considerations which divide them. My principal reasons for coming to the conclusion that the claims basis is the right basis (as does Lord Dyson, and as did Lord Neuberger MR, Arden LJ and Sir Mark Waller in the Court of Appeal) are these: (a) although CASS 7 uses trust concepts, it is not intended to codify, or be limited by, the ordinary rules of trust law; (b) the exercise is purely one of construction of CASS 7; (c) CASS 7.7.2R provides that the trust is for the purposes and on the terms of the client money rules and the distribution rules; (d) CASS 7.9.6R provides that, on a primary pooling event, client money held in each client money account of the firm is treated as pooled; and the firm must distribute that client money in accordance with CASS 7.7.2R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 7.9.7R; (e) client money entitlement is a reference to the contractual entitlement to have money segregated for the client; (f) that interpretation better serves the purposes of MiFID and the Rules. |
The liability of employers for deaths caused by mesothelioma has pre occupied courts and legislators over recent years. The present appeals concern claims to pass the burden of this liability on to insurers, made either by employers or in the case of insolvent employers by the personal representatives of former employees using the mechanism of the Third Party (Rights against Insurers) Act 1930. The appeals concern employers liability insurance. This is in contrast with Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 where public liability insurance was in issue. Employers liability focuses necessarily upon the relevant employment relationships and activities. Public liability relates to any of the insureds relationships and to activities affecting the world at large. Another feature of employers liability is that, under the Employers Liability (Compulsory Insurance) Act 1969 (the ELCIA), it has since 1 January 1972 been compulsory for every employer other than local authorities carrying on any business in Great Britain to insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain The appeals arise because the relevant insurers maintain that the employers liability insurances which they issued respond (or, better, could only have responded) to mesothelioma which developed (or, possibly, manifested itself) as a disease during the relevant insurance periods all long past. In contrast, the relevant employers and personal representatives maintain that the insurances respond to mesothelioma which develops and manifests itself later; all that is required, they say, is exposure of the victim during the insurance period to asbestos in circumstances where the law attributes responsibility for the mesothelioma to such exposure. These alternative bases of response (or triggers of liability) have been loosely described as an occurrence (or manifestation) basis and an exposure (or causation) basis. It is in issue whether the ELCIA, after it came into force, mandated any particular basis of response. A secondary issue, arising if the insurances only respond on an occurrence basis, is whether the aetiology of mesothelioma justifies a conclusion that there was during the relevant insurance period an occurrence sufficient to trigger liability under the insurances. Burton J, [2008] EWHC 2692 (QB), concluded that the relevant insurances all responded on an exposure basis. The Court of Appeal, [2010] EWCA Civ 1096, by a majority (Rix and Stanley Burnton LJJ), upheld the judge in relation to some of the insurances (particularly those covering disease contracted during the relevant insurance period); but they concluded that others (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. Smith LJ would have upheld the judges judgment in its entirety. The full judgments in both courts repay study. They have been of great assistance to this court and make it possible to go directly to the heart of the issues. Mesothelioma is a hideous disease that is inevitably fatal. In most cases, indeed possibly in all cases, it is caused by the inhalation of asbestos fibres: Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229, para 1, per Lord Phillips. It is a cancer of the pleura, which are thin linings around the lungs and on the inside of the rib cage. It is usually undetectable until shortly before death. Its unusual features include what Burton J in this case at para 30 described as the unknowability and indescribability of its precise pathogenesis. In particular, it is impossible to know whether any particular inhalation of asbestos (at least any occurring more than ten or so years prior to diagnosability) played any or no part in such development. Because of this unusual feature, the law has developed a special rule. The special rule was the product of judicial innovation in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and in Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572. It was modified by statutory intervention in the form of the Compensation Act 2006, section 3. Leaving aside exposures occurring within the ten or so years prior to diagnosability, the rule can now be stated as being that when a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a "material increase in risk" of the victim contracting the disease will be held to be jointly and severally liable in respect of the disease. Burton Js findings in the present case justify certain further propositions, mostly also corresponding with the summary in Lord Phillips judgment in Sienkiewicz (para 19): (i) A significant proportion of those who contract mesothelioma have no record of occupational exposure to asbestos. The likelihood is that (vi) in their case the disease results from inhalation of asbestos dust that is in the environment. There is, however, a possibility that some cases of mesothelioma are "idiopathic", i.e. attributable to an unknown cause other than asbestos. (ii) The more fibres that are inhaled, the greater the risk of contracting mesothelioma. (iii) There is usually a very long period between the exposure to asbestos and the development of the first malignant cell. Typically this can be at least 30 years. (iv) For a lengthy period (perhaps another five years) after the development of the first malignant cell, there remains a possibility of dormancy and reversal, but at a point (Burton J thought a further five years or so before the disease manifested itself, and was thus diagnosable) a process of angiogenesis will occur. This involves the development by malignant cells of their own independent blood supply, so assuring their continuing growth. (v) The mechanism by which asbestos fibres cause mesothelioma is still not fully understood. It is believed that a cell has to go through 6 or 7 genetic mutations before it becomes malignant, and asbestos fibres may have causative effect on each of these. It is also possible that asbestos fibres have a causative effect by inhibiting the activity of natural killer cells that would otherwise destroy a mutating cell before it reaches the stage of becoming malignant. Mesothelioma currently claims about 3000 lives a year in the United Kingdom. This speaks to the common use of asbestos materials up to the 1960s and 1970s. In Annex I to his judgment Rix LJ set out the insuring clauses of the various forms of policy wording in use from time to time. Subject to re ordering to reflect the development of the language, Annex A to this judgment includes the same and some further wording. It can be seen that the Excess policies and the first two MMI policies promise to indemnify the insured employer against liability if at any time during the period of insurance (or of any renewal) any employee shall sustain under the earlier policies personal injury by accident or disease or under the later policies [any] bodily injury or disease in the case of the first Excess policy while engaged in the service of the Employer or in other cases arising out of and in the course of [his] employment by the insured employer. In the case of the Independent policy, the insurer, under the recital, promised to indemnify the employer during the period of insurance or of any renewal. The insuring clause itself contains no express limitation to any period. It promises indemnity against all sums for which the employer shall be liable for damages for such injury or disease if any employee shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule. The third MMI policy and the BAI policies were in more developed form. The former promises indemnity in respect of legal liability for sums payable as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any employee when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The latter promised indemnity against all sums which the Insured may become liable to pay to any Employee . in respect of any claim for injury sustained or disease contracted by such Employee during the period of insurance or any renewal. The insurers party to the present appeals have at all times represented only a small part of the employers liability insurance market. By far the larger part of the market consists of companies who until the late 1960s (when competition rules intervened) operated a tariff system which bound them to adopt a specified policy form and specified rates. Until 1948 tariff insurance was focused on Workmens Compensation Act claims, but in 1948 legislative changes (in particular the abolition by the Law Reform (Personal Injuries) Act 1948 of the doctrine of common employment) made a common law claim for future accruing causes of action much more attractive. It may well have been in anticipation of these changes that the tariff companies introduced a new form of policy in May 1948, still in widespread use today, providing indemnity if any employee shall sustain any personal injury by accident or disease caused during the period of insurance. Under this tariff wording, sustain looks to the occurrence of an accident or development of a disease at any time, while caused makes clear that the trigger to cover is that the accident or disease has been caused during the insurance period. The present insurers were non tariff companies, and have always been free to set their own wordings. From dates after the insurances the subject of this appeal, three of the insurers in fact ceased to use the wordings set out in Annex A, and themselves moved expressly to causation based wordings Excess in about 1976, Independent in the mid 1980s, and BAI in 1983. As a matter of insurance practice, however, until the decision in Bolton in 2006, all these wordings, whether tariff or non tariff and whether using the language caused, sustain or sustained or contracted, paid out on long tail claims (including the mesothelioma claims which became increasingly frequent in the 1980s) by reference to the date(s) of exposure. Where successive employers with different insurers had exposed a particular employee victim to asbestos, liability was in practice apportioned between the employers, and so insurers, broadly according to the extent of exposure for which each employer was responsible. The rival cases Insurers submit that all the wordings in Annex A require the injury or disease to occur during the period of insurance or of any renewal. In the alternative, if the use of the word contracted in the third MMI policy and the BAI policies or the different formulation of the Independent policy leads to any different conclusion in any of such cases, they submit that this leaves unaffected the clear meaning of the Excess and first two MMI policy wordings. The employers and interested employees contend that all these policies are to be understood as operating on an exposure or causation basis. The implications of these alternative interpretations are clear. On insurers primary contention, the policies set out in Annex A would not respond to current mesothelioma claims. It is unlikely that most of them would have responded to many, if any, mesothelioma claims, since it was only in the 1980s that such claims began to emerge to any great extent. Policies written on a causation basis since the dates indicated in paragraph 10 above would also not respond to current mesothelioma claims. Insurers response is that any insurance must be read according to its terms. Until 1 January 1972, when the ELCIA came into force, it was not obligatory for employers to have any form of employers liability insurance. Further, viewed on an occurrence or manifestation basis, the policies would pick up long tail claims arising from exposure occurring at any time in the past. In this connection, it is to be noted that various long tail diseases were well recognised perils from the era of Workmens Compensation legislation before 1948. Instances were scrotal cancer, pneumoconiosis and more specifically (from the time of Merewether and Prices 1930 Report on Effects of Asbestos Dust on the Lungs and Dust Suppression in the Asbestos Industry) asbestosis. All these would only develop over and could manifest themselves after considerable periods of years. Following upon the 1930 report, The Asbestos Industry Regulations 1931 (SI 1931/1140) were introduced to regulate factories handling and processing raw fibre, and in 1969 The Asbestos Regulations 1969 (SI 1969/690) extended this regulation more widely it appears in the light of an appreciation that mesothelioma could result from exposure to small quantities of asbestos dust (see In re T & N Ltd (No 3) [2006] EWHC 1447 (Ch), [2007] 1 All ER 851, para 118). The Court of Appeals conclusions The force of insurers case rests in the use of the word sustain, whether in connection with the phrase personal injury by accident or disease or bodily injury or disease or in the conjunction injury or disease . sustained or contracted or injury sustained or disease contracted. Rix and Stanley Burnton LJJ concluded that the word sustain looked prima facie at the experience of the suffering employee rather than its cause (paras 232 and 343). Insurances responding to injury or disease sustained during the insurance period would not, on this basis, cover mesothelioma sustained long afterwards. Rix LJ had some compunction about the result because of what he (though not Stanley Burnton LJ) felt was a tension with the commercial purpose of employers liability insurance in the extraordinary context of mesothelioma (para 235). Rix LJ would have liked to hold that mesothelioma sufferers sustained sufficient injury on exposure to asbestos to trigger the insurances in force at the date of such exposure, but felt bound by Bolton to conclude the contrary (paras 277 289). However, Rix LJ, though not Stanley Burnton LJ, considered that the particular wording of the Independent insurances did not explicitly require the injury or disease to be sustained during the insurance period, and could be read as covering the sustaining of injury at any time arising out of and in the course of employment during the insurance period (paras 300 and 350). Rix and Stanley Burnton LJJ differed as to the significance of the ELCIA extension provisions included in the Independent wording, the third MMI wording and the second BAI wording, as quoted in Annex A. Rix LJ thought that the ELCIA required employers to insure on a causation basis (paras 184 and 186) although, since he also expressed the view that an insurance arranged and maintained on a sustained basis could comply with the ELCIA, he may perhaps only have meant required in practice. At all events, he held that the ELCIA extension provisions covered liability incurred to the personal representatives of employees on a causation basis, while enabling insurers to recoup themselves so far as possible from the relevant employers in respect of liability they would not otherwise have had to meet (paras 292, 300 and 302). Stanley Burnton LJ did not agree that the ELCIA required causation wording (para 342), but considered that it required insurance to be taken out and maintained in respect of ex employees, or at least those who were or had been employed at any time after the coming into force of ELCIA (para 342; and see Rix LJs comments at paras 305 307). Rix, Smith and Stanley Burnton LJJ were all agreed that, where provision was made for disease contracted, this could and should be construed as introducing cover on a causation basis, even if or though wording such as injury (or disease) sustained could only respond on an occurrence basis. Analysis Annex A sets out the insuring clauses. Insurers case is, as I have said, rooted most strongly in the word sustain, particularly when it is used by itself, rather than in conjunction with a more ambivalent alternative in the phrase sustained or contracted. The natural meaning of the word sustain, taken in isolation and as defined in the Shorter Oxford English Dictionary from an appropriate date (1965, 3rd ed), is, with respect to injury, undergo, experience, have to submit to, or, possibly, to have inflicted upon one, suffer the infliction of. But the insurance cover granted (and no doubt required) extended expressly beyond injury by accident to embrace disease. This was achieved by less natural conjunctions, such as sustain [any] personal injury by accident or disease or sustain [any] bodily injury or disease. Conscious perhaps that the verb sustain does not fit naturally with the concept of disease, some companies (MMI in its third wording and BAI in its first and second wordings) introduced the different verb contracted in the formulations sustained or contracted or injury sustained or disease contracted. This use of contracted with respect to disease is considerably more natural, but is clearly open to an interpretation that it looks back to the initiating or causative factor of the disease, and (whatever the answer on that point) highlights a question whether any substantial difference exists in this connection between such wordings and other wordings referring more awkwardly to the sustaining of personal injury by disease or the sustaining simply of disease. To resolve these questions it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more broadly. As Lord Mustill observed in Charter Reinsurance Co Ltd v Fagan [1977] AC 313, 384, all such words must be set in the landscape of the instrument as a whole and, at p 381, any instinctive response to their meaning must be verified by studying the other terms of the contract, placed in the context of the factual and commercial background of the transaction. The present case has given rise to considerable argument about what constitutes and is admissible as part of the commercial background to the insurances, which may shape their meaning. But in my opinion, considerable insight into the scope, purpose and proper interpretation of each of these insurances is to be gained from a study of its language, read in its entirety. So, for the moment, I concentrate on the assistance to be gained in that connection. A first point, made very clearly below by Rix LJ (para 263), is that the wordings on their face require the course of employment to be contemporaneous with the sustaining of injury. This leaves open what is meant either by sustaining or by injury. Rix LJ thought that the Independent wording could be understood differently in effect, as if it had expressly read: If any person who is under a contract of service or apprenticeship with the Insured shall at any time sustain bodily injury or disease arising out of and in the course of his employment by the Insured during the policy period in connection with the Contract specified or type of work described in the Schedule . That interpretation assumes that sustain in this context equates with the occurrence, rather than causation, of the injury or disease, and only arises for consideration if that assumption is correct. A second point is that the insurance wordings demonstrate a close link between the actual employment undertaken during each insurance period and the premium agreed to be payable for the risks undertaken by insurers in respect of that period. Premium is linked expressly to actual wages, salaries and earnings during the insurance period under the Excess policies, the first MMI wording and the BAI policies. The second and third MMI wordings contemplate that premium may be linked to wages, salaries and earnings, and, to the extent that any inference regarding the general nature and scope of cover under these standard wordings can be drawn from such a link, it must be capable of being drawn whether or not premium was actually so linked in any particular case. As to the Contractors Combined Policy issued by the Independent, it is a probable inference that the estimates which were provided and were to be updated will have included, in respect of the employers liability cover in section 1, wages, salaries and other earnings paid. Finally, the Independent cover is linked to the actual contract or work which the employer is undertaking during the insurance period. These links are in my view significant. True, premium may sometimes be calculated on a rough and ready basis. Minor discrepancies between the premium calculation and the risk may be understandable: see e.g. Ellerbeck Collieries, Ld v Cornhill Insurance Co [1932] 1 KB 401, 418, per Greer LJ (who pointed out that any such discrepancy there was more apparent than real, since workmen not earning wages because off work would not actually be at risk of any fresh accident, even though they would remain susceptible to certification for disablement). Here the position is quite different. Great care is taken in all the policies to tie premium to the actual employment undertaken during the insurance period, and in the case of the Excess, Independent and MMI policies to tie cover to a business, contract or activities described in the schedule. The natural expectation is that premium is measured by reference to actual employment or work during the insurance period because it is the risks attaching to such employment or work which are being undertaken by insurers. At the very least, the drawing of this link makes improbable the contention advanced by some of the insurers that the present insurances were apt to pick up liabilities emerging during the insurance period which could be attributable to employment and activities undertaken and negligent conduct committed at times long past. The number of employees, their employment activities and the risks involved at those times could be very different. The significance which attaches to the employment current during the insurance period is underlined by legal and practitioner texts. As long ago as 1912, MacGillivray on Insurance (1st ed), pp 966 wrote: The nature and scope of the employers business must be clearly defined in the insurance policy, and workmen employed outside the scope of the assureds business as described in the policy will not be covered In the section on Employers Liability Insurance in Stone & Coxs Accident, Fire and Marine Year Book (1957), pp 688 689, the authors stressed the importance of identifying any special hazards, such as signs of careless management or lack of control or careless workmen, and observed: The surveying of Employers Liability risks has probably become more general than formerly. Apart from the question of the possibilities of accident, there is now the serious question of disability due to disease and in particular the disease known as pneumoconiosis. In 1974 MMI produced a Guide to Insurance Officers in Local Government, which it said that it would like to see on the desk of every insurance officer for ready reference at any time; this, after noting that employers liability was almost invariably dealt with by a separate policy and that its importance had been increased by the ELCIA, went on: "7. Premiums are usually based on wages and salaries this is not only a convenient yardstick but is logical since loss of earnings usually represents a substantial part of claims. Rates of premiums vary according to the nature of the work of the labour force, and the claims experience. 8. A feature of employers liability claims is the length of time which often elapses between the date of the accident and the final settlement, and the cost of servicing claims tends to be high. Injury caused at work during the period of insurance even though it may not be diagnosed till years afterwards can be a liability under the policy." I note in parenthesis that 1974 was the year in which MMI changed from a pure sustain form of wording to a form covering bodily injury or disease suffered, when sustained or contracted during the currency of the policy. Yet there is no suggestion in the Guide of any change in substance. It is in this light improbable that the present insurances can or should be read as offering cover in respect of ancient, as opposed to current, employment and activities. But there is a third point. If insurances in the present form only address risks arising from employment during the insurance period, then, on insurers case, there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to injury or disease in another later period. If the employment relationship spans both insurance periods and the employer remains insured with the same insurers in both periods, there may be no problem. The employee is employed at all relevant times and the insurance may be viewed as a single continuing contract. The policy wordings set out in Annex A, with their references to insurance during the period of insurance or during any subsequent renewal period, would support the latter view. But, even in the days of more stable long term employment and insurance relationships, employees could and would move employment or retire, or employers would cease business, or change insurers. On the basis that the insurances only cover risks arising from employment during the insurance period, there would be no cover unless the liability arose from and in the course of and involved injury or disease during the currency of the same employment and the same insurance (including any renewal). Fourthly, on insurers case, employers would as a result be vulnerable to any decision by insurers not to renew; and such a decision might arise from the simple performance by employers of their common law duty to disclose past negligence to insurers upon any renewal. Employers who discovered or came to appreciate that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease (e.g. by exposing their employees to asbestos) would have such a duty. Insurers could then, on their own case, simply refuse any renewal or further cover. Employers could then have to disclose that refusal also to any further insurers to whom they made a proposal for cover. One response made by insurers to such problems is that they would not arise in the large bulk of cases. That is no doubt true. Most employers liability cases involve short tail claims: typically, an accident involving injury. It is not surprising if the language of the insurances fits more easily with situations in which cause and effect coincide in time. But, by the same token, this does not mean that the underlying risk being assumed was in either partys mind limited to circumstances in which a cause gave rise to an effect during one and the same insurance period. Rix LJ, in accepting that cover depended upon injury being sustained in the sense of experienced during the insurance period, was influenced by the thought that this was not an absurd or meaningless interpretation. The insurance could operate entirely successfully in some 99% of cases (para 235). In the light of this Courts recent decision in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, para 30, this, in my view, gives too little weight to the implications of the rival interpretations and to the principle that where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense. The 1% of cases in which there might be no cover could not be regarded as insignificant. Well before 1948, there was general awareness of the existence of long tail diseases which would only develop and manifest themselves after considerable periods of years (see para 12 above; and see also Cartledge v E Jopling & Sons Ltd [1963] AC 758). The connection between asbestos exposure and mesothelioma became generally known in the mid 1960s, following the publication in 1965 of Newhouse and Thompsons report on Mesothelioma of pleura and peritoneum following exposure to asbestos in the London area and a Sunday Times article. Yet on insurers case, the present insurances would not cover any situation where, after the termination of employment or the expiry of an insurance, injury or disease developed from an employers breach of duty to a relevant employee during an insurance period. A fifth point concerns the way in which the policies deal with the issue of extra territorial scope. The first Excess wording stands apart from the others in its treatment of that issue. Cover only exists in respect of any employee in the employers service who shall sustain any personal injury by accident or disease while engaged in the service of the employer in Great Britain, Northern Ireland, the Isle of Man or Channel Islands, in work forming part of the process in the employers business. As soon as one postulates a delay in time between the causation and experiencing of a disease, it becomes apparent that this wording could operate to very curious effect if sustain looks to the latter rather than the former. A disease (e.g. a cancer) experienced during employment could be covered although caused by pre employment exposure, while a disease caused by employment would not be covered if only experienced while working abroad. The natural inference to draw from the references to being engaged in the employers service and in work forming part of the employers business process is that it was envisaged that the accident or disease would and should arise out of such service and work, rather than merely occur during it. That points to an underlying focus on causation, even if the assumption was that in the majority of cases causation and experiencing of any injury by accident or disease would coincide. As to the other policies, at the very least, the way they deal with territorial issues throws doubt on any proposition that their wordings are so carefully or well chosen that a court should be careful to stick literally to whatever might be perceived as their natural meaning. They address territorial scope by specific exclusions, but the cover and the exclusions use different language. Thus, although the second and third Excess wordings cover liability to employees who sustain personal injury by accident or disease, the territorial exclusion is in respect only of accidents occurring outside Great Britain, etc, leaving it unclear how disease, whether caused or developing outside Great Britain, should be dealt with. The Independent wording also covers liability to employees who sustain bodily injury or disease, while the territorial exclusion is for injury, illness, loss or damage caused elsewhere than in Great Britain, etc. While the contrast in language is capable of lending some support to a view that sustain looks to experiencing, rather than to causation, an alternative possibility is that the two words were understood as having the same effect and that the cover was understood as focused on causation. The language of this exclusion thus cuts both ways, as Rix LJ recognised (para 297). A similar position applies to the contrast between injury or disease sustained and injury or disease caused outside Great Britain, etc. under the first two MMI wordings. Under the third wording, the language of the cover and the exclusion have been deliberately matched. Under the BAI wordings, however, there is an incongruity between cover for injury sustained or disease contracted and the exclusion in respect of liability for accidents . arising outside the United Kingdom. Again, this leaves the position in respect of disease unclear, and the difference between injury sustained and accidents arising can be read either as deliberate or as suggesting that no significance was attached to the difference or that the real concern was with causation. The history and Workmens Compensation Acts Much attention was, both below and before the Supreme Court, paid to the development of employees rights to compensation in respect of personal injury and disease, at common law and under the scheme of the Workmens Compensation Acts (WCAs). The WCAs were in force from 1897 until replaced in 1948 under the National Insurance (Industrial Injuries) Act 1946. The history and a number of the decisions under the WCAs were examined by Rix LJ in paras 126 to 165 of his judgment. He concluded that such an examination yields in the present context not a lot. To a considerable extent, I agree and I shall not repeat the whole exercise, but identify some potentially relevant aspects. Etymologically, some of the language presently in issue can be traced back to statutory language found in the Employers Liability Act 1880 and the WCA 1897. The 1880 Act modified the common law doctrine of common employment, by entitling employees to recover common law compensation for injury caused by specified matters for which employers were responsible, provided that they gave notice, within six weeks of sustaining the injury of its cause and the date at which it was sustained. The 1897 Act, applying to personal injury by accident arising out of and in the course of employment, also required notice to be given of the accident as soon as it occurred, stating the cause of the injury and the date at which it was sustained. These Acts therefore distinguished the causation and the sustaining of an injury, but not in any presently relevant context. Further, any reference to sustaining disappeared from the Workmens Compensation scheme in the 1906 Act, which amended the scheme to require a notice stating the cause of the injury and the date at which the accident happened. The 1906 WCA also expressly extended the scheme to cover certain diseases specified in section 8. In that context, it provided that, where a workman was certified as disabled or suspended from employment or died due to a disease and the disease is due to the nature of any employment in which the workman was employed at any time within the twelve months previous the date of the disablement or suspension, whether under one or more employers, then he or his dependants shall be entitled to compensation under this Act as if the disease or such suspension . were a personal injury by accident arising out of and in the course of that employment . Section 8(a) provided: The disablement or suspension shall be treated as the happening of the accident. Under section 8(c), the compensation was recoverable from the employer last employing the employee within the previous twelve months, providing the employee furnished that employer with particulars of all his other employers in the employment to the nature of which the disease was due. It was not necessary to prove that the disease actually arose from the last employment, merely to prove that the relevant employment gave rise to a risk of such a disease: Blatchford v Staddon and Founds [1927] AC 461. The 1906 Act may be regarded in this respect as involving an early statutory instance of the kind of liability recognised in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572. However, failing such particulars, the last employer could excuse himself upon proving that the disease was not contracted whilst the workman was in his employment (section 8(c)(i)). The last employer might also join any other employer (within the last twelve months) and it was provided that upon proof that the disease was in fact contracted whilst the workman was in the employment of that other employer, that other employer shall be the employer from whom the compensation is to be recoverable (section 8(c)(ii)). Finally, section 8(c)(iii) provided that: if the disease is of such a nature as to be contracted by a gradual process, any other employer within the last twelve months was liable to make such contributions as might be agreed or determined by arbitration under the Act. Under this scheme, therefore, compensation for disease was initially based upon the nature of the employment and its potential for causing, rather than upon proof that it caused, such a disease. The paternal benevolence of the Legislature (as Visc Sumner put it in Blatchford: p 469) is well known, and if the price of that benevolence is paid by the last employer, who thus has to bear others burdens, that is nothing new in this kind of legislation. However, the last relevant employer could seek, in specified circumstances, to avoid or to pass on to another employer responsibility by proof that the disease was not actually contracted in his employment. Alternatively, in the case of a disease of such a nature as to be contracted by a gradual process, all relevant employers within the last twelve months would be liable to contribute. The scheme was, as I see it, concerned with either the risk of or actual causation, and in its use of the word contracted it appears to me to have been directing attention to the causation, rather than the mere experiencing or manifestation, of disease. The WCA scheme was the subject of further amendment by the 1925 Act. Section 43 superseded section 8 of the 1906 Act as regards scheduled diseases, while section 47 made specific provision for the introduction of a parallel scheme covering silicosis. Effect was given to this by inter alia the Metal Grinding Industries (Silicosis) Scheme which came into force in July 1927, making provision for obtaining compensation from the last employer within the previous three years, and giving such employer rights to look to other such employers within the last five years. An insurance covering employers liability in this connection was considered in Smith & Son v Eagle Star (1933) 47 Ll. L.R. 88, (1934) 48 Ll. L.R. 67. Mr Hill had been employed in processes giving rise to silicosis for some 20 years. For the last two of these years, from 31 March 1928 to 16 June 1930, he worked for Smith & Son. From 30 June 1927 to 17 June 1930, Smith & Son had an insurance against WCA liability in respect of any personal injury or disease which at any time during the continuance of this policy shall be sustained or contracted by any workmen . The policy was expressly extended to cover any liability in connection with any claim made by employees in respect of silicosis, and the decision of the Court of Appeal rested on this ground. But Scrutton LJ also examined the main policy language, and in particular what was meant by contracted. He noted that there has been a good deal of discussion in the Courts about a disease which is gradually contracted commencing at some stage and through the process going on increasing the disease until at last it results in total disablement (p 70), and concluded that the word was not to be read as first contracted, but in the sense of influenced or increased until it ultimately comes to total disablement. This, although not directly focusing on the first development of a disease from some earlier cause, suggests a flexible view of the word contracted, directed once again to the employments responsible for causing the disease. Confirmation that this was Scrutton LJs view can be found in the earlier case of Ellerbeck Collieries Ltd v Cornhill Insurance Co [1932] 1 KB 401. Two workmen who had been in the colliery companys service for many years were on respectively 11 and 12 March 1929 (dates they were actually off work) certified as suffering from miners nystagmus. The Cornhill had on 8 March 1929 issued the colliery company with a three month provisional cover note insuring in terms matching the wording of the insuring clause in the first Excess wording (i.e. against liability in respect of any employee who shall sustain any personal injury by accident or disease while engaged in the service of the employer). Failing a satisfactory survey, the cover note actually expired on 18 March 1929. The first point decided was whether the employees had sustained personal injury by accident or disease during the period of validity of the cover note (8 to 18 March 1929). It was held that they did. The judgments in the Court of Appeal are of interest for a number of reasons. First, both Scrutton LJ (p 408) and Greer LJ (p 417) approached the question of construction on the basis that the policy was intended to protect the employers against their liability to their workmen under the WCAs. Scrutton LJ added that it seems to me that the policy was intended to cover the liability of the employers for the results of industrial diseases caused by the employment (p 409). His description of the policy, covering in terms any employee sustaining personal injury by accident or disease in service, as intended to cover liability . for the results of diseases caused by the employment fits precisely with the analysis which I consider correct (paragraphs 18 28 above). Second, Scrutton LJ went on to refer to the difficulties in saying when an industrial disease, such as miners nystagmus or lead poisoning, begins, and in these circumstances the difficulty for an employee to pick the proper employer to sue. He described the way in which Parliament, by what became section 43 of the WCA 1925, had addressed such difficulties by providing a conventional and artificial means for enabling the workman to get compensation, leaving the various employers to fight out their proportion of the liability between themselves (p 409). He said that the last employer, liable under the WCA scheme, then claims on the insurance company on the ground that he is liable to make compensation for an injury by disease, and the date of the injury or disablement is by statute and certificate fixed as happening between the dates for which he is provisionally covered (p 411). On this basis, and in the light of the House of Lords decision in Blatchford, Scrutton LJ concluded that he was bound to hold that an accident has happened within the period of the provisional cover against the consequences of which the insurance company is bound to indemnify the employer (p 413). In short, the conventional and artificial provisions of the WCA defined what constituted an accident and when personal injury by accident or disease was sustained for the purposes of the insurance. Greer LJ, more shortly, adopted the same approach (p 418). Only Slesser LJ (p 421) expressed a reservation about the possibility that the artificial deeming provisions of section 43(a) of the WCA 1925 might only apply as between employee and employer, and that it might have been necessary to consider separately the date of the sustaining of injury as between the employer and the insurer, had there been any admissible evidence that the two employees had actually contracted the scheduled disease before the granting of the statutory medical certificate. Commercial purpose and practice Much general evidence was directed or elicited before Burton J in relation to the commercial purpose of the present insurances, and to practice relating to their operation in the years before the present issue arose. It was argued that there was, prior to the decision in Bolton, a universal usage of the insurance industry to pay out mesothelioma or similar claims under [employers liability] policies by reference to the date of inhalation/exposure whatever the wording, or an estoppel by convention to like effect. Burton J rejected the argument (paras 180 to 201, esp. para 201), for the reasons that, first, there was no evidence relating to years earlier than the 1980s which could be put down to any kind of arguable usage, second, any usage was not certain, not least because of the multiplicity of approaches to or bases for it and, third, it was not binding. It was not incorporated into the insurance contracts. No issue of estoppel by convention was pursued to the Court of Appeal (Rix LJ, para 24, and Stanley Burnton LJ, paras 332 and 335) and the issue of a universal custom was only pursued by Zurich Insurance Company (Rix LJ, para 24). By a multiplicity of approaches to or bases for insurers practice, Burton J was referring to evidence that insurers followed the practice they did in some cases because they believed that their contracts were to be interpreted on a causation/exposure basis, in others because they believed that the aetiology of diseases such as mesothelioma was such that injury was in fact sustained (in the sense of experienced) at the date of inhalation, while yet others may have failed to realise that their historically relevant wordings had been on a different basis to the causation wordings to which they had since switched or may have failed to address their minds to any relevant issue at all in relation to an insured who was usually a longstanding repeat client. Rix LJ (para 228) contented himself with agreeing with Burton Js reasoning on this aspect, while Stanley Burnton LJ noted and agreed in particular with Burton Js second reason, relating to the believed aetiology of mesothelioma (para 335). Smith LJ, on the other hand, treated the commonly held understanding that diseases such as mesothelioma involved injury at the date of inhalation as part of the factual matrix of all the insurance contracts (paras 322 323), and considered against that background that no difference in meaning should be held to exist between policies using sustained and causation wording, until the time when the two sides of the insurance industry should be considered to have appreciated that some diseases, including mesothelioma, do not occur until many years after exposure to the causative agent (para 327). She put that as around the time of the decision in Bolton, after which parties using a sustained wording must be taken to have meant only to cover injuries actually occurring during the policy period (para 327). The argument of a binding usage was not pursued before the Supreme Court, rightly so for the reasons given by the judge and the majority in the Court of Appeal. Equally, there has been no suggestion of estoppel by convention, along the lines recognised as possible in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, para 47. However, on the issues of policy interpretation, Mr Stuart Smith QC for Zurich Insurance, maintained before the Supreme Court an argument that there was a consensus based on market practice, whereby, for one reason or another, such policies would respond to long tail diseases by reference to the date of exposure, and that this could constitute relevant background to their construction. Assuming that, short of a binding usage or estoppel by convention, a practice, if known to or shared by the relevant parties, could in some circumstances be relevant background (see e.g. Reardon Smith Line Ltd v Yngvar Hansen Tangen [1976] 1 WLR 989), still, in my opinion the argument fails in the present case. It fails in particular in the light of the judges findings, even in relation to policies made in and after the 1980s. A practice based on a mistaken understanding, by only some insurers, that the policies operated on a causation basis cannot be relevant background to the interpretation of every policy; on the judges findings other insurers do not appear to have understood that the policies operated on that basis. A practice based on a mistaken understanding by others in the market as to when long tail diseases could be said to have been experienced or to involve injury is likewise an unpromising start for construing all policies; if the understanding were good, it would mean that such diseases fell within the policies, even though the policy cover was restricted to injury or disease experienced during the policy period. The understanding would not therefore carry any imperative to read a sustained wording as meaning caused. Before the Supreme Court, both employers and employees continued to rely upon the evidence given at trial regarding the general purpose of employers liability insurance as part of the background to the interpretation of the present insurances. Rix LJ (paras 223 to 235) gave it some weight as such, but Stanley Burnton LJ thought that there was little if any assistance to be gained by reference to the commercial purpose of EL insurance, as this was simply to provide the cover defined in the policy (para 333). The Supreme Court was provided with a useful summary of the considerable volume of evidence relied upon in this connection. It consisted in general of answers given by insurers, two at least of them with experience going back to the 1940s. They were asked (frequently in response to leading though not inadmissible on that score questions in cross examination) about their or others views, understandings or perceptions as to the purpose of the policies, and the way in which these would or should respond, in relation to injuries arising from exposure in the course of activities during the policy period. In my judgment, Stanley Burnton LJ was right to reject such evidence as inadmissible. The parties cannot be asked what they meant by their contract, and, failing any binding usage, it is equally inadmissible to ask other persons operating in the market to give general evidence as to what they would have understood the parties to have meant by the words used in the context in which they were used. The evidence does not seem to have amounted to more than that. However, I do not agree with Stanley Burnton LJs suggestion that no useful conclusions can be drawn about the commercial purpose of the policies, save that it was to provide the defined cover. In my opinion, relevant conclusions about the general nature and purpose of the individual policies can be drawn in this case, just as they could in the case of the different (and wordier) instrument in issue in In re Sigma Finance Corporation [2009] UKSC 2, [2012] 1 All ER 571 (see especially paras 10, 12 and 37). They can be drawn from an overall consideration of the individual insurance wordings, and particularly from the features which tie cover to the employees and activities during the relevant policy period and the five points considered in paragraphs 18 to 28 above. Further, if the policies are on any view apt to cover employers liability for long tail diseases which initiate during, but only manifest themselves years after, the original policy period, one may look with scepticism at an interpretation which distinguishes this situation from other situations where a long tail disease is caused but does not strictly begin during the policy period, and only manifests itself years later. This is particularly so if a conclusion that the latter diseases fell outside the policy cover meant that they would or might well not fall within any subsequent employers liability policy. ELCIA 1969 Section 1 of the ELCIA provides: 1. (1) Except as otherwise provided by this Act, every employer carrying on any business in Great Britain shall insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain (3) For the purposes of this Act (a) approved policy means a policy of insurance not subject to any conditions or exceptions prohibited for those purposes by regulations. 4. (1) Provision may be made by regulations for securing that certificates of insurance in such form and containing such particulars as may be prescribed by the regulations, are issued by insurers to employers entering into contracts of insurance in accordance with the requirements of this Act . (2) . the employer shall during the currency of the insurance and such further period (if any) as may be provided by regulations (a) comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees; . The only conditions or exceptions ever prohibited were certain exemptions from liability. Under section 3, the ELCIA did not however apply to local authority employers, such as most of MMIs insureds. Under section 4, provision might be made for certificates of insurance to be issued to employers, and in that event the employer was, obliged during the currency of the insurance and such further period (if any) as may be provided by regulations to comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees. In reaching his conclusions on the ELCIA (para 16 above), Rix LJ engaged in an impressive analysis, to which I would refer (paras 166 to 186). The only doubt this leaves is how, if the ELCIA requires a causation wording, an employer could properly insure on a wording which only covered injury sustained in the sense of experienced (see para 186 and paragraph 16 above). The scope of the ELCIA is, as Rix LJ indicated, open to three alternative analyses: that it requires cover in respect of (i) all future liability incurred during the insurance period, whenever the negligence or injury, or (ii) liability for all future injury or disease sustained (in the sense of experienced) by employees during the insurance period, whenever the negligence, or (iii) liability for all negligence or breach of statutory duty during the insurance period giving rise to liability as in (ii). The retrospectivity of cover involved in (i) and (ii) is unlikely to have been intended. The only one of the three possibilities not involving a degree of retrospectivity is (iii). A duty on every employer to insure, and maintain, insurance is consistent with a requirement to have the insurance in place during, though to maintain it after, the relevant insurance period. The provision, contemplated by section 4, for copies of insurance certificates to be issued by insurers and to be displayed by any employer for the information of his employees during the currency of the insurance and such further period as may be provided by regulations indicates, first, a desire to assure employees of their insurance protection during the relevant insurance period, and, secondly, an awareness that this assurance might need to remain in place after such insurance period; it is therefore suggestive of (iii), rather than (i) or (ii). As Rix LJ observed, it is only cover in accordance with (iii) that can give an employee the assurance that any injury or disease suffered as an employee and arising out of and in the course of [his] employment will be covered by insurance, the benefit of which would, if necessary, be available to him at the time under the Third Party (Rights against Insurers) Act 1930. An obligation to have a policy in force only at or by the time when injury is actually experienced would leave employees or ex employees at the mercy of compliance with the statute by their employers or ex employers at uncertain future dates. It would also leave such employees or ex employees at the mercy of employers who, for whatever reason, ceased to carry on business either in Great Britain or (for example due to insolvency) at all. Further, if injury or disease suffered or contracted bears the same meaning as insurers suggest that injury or disease sustained or contracted bears, then an employee, who had the misfortune to succumb to a disease abroad caused by his employment or previous employment in Great Britain, would not be covered (unless regulations intervened to ensure that he was). Stanley Burnton LJ thought that any issue as to the nature of the insurance required under ELCIA was resolved by its use of the word sustained, rather than caused. He went on to conclude that the ELCIA covered any injury sustained (in the sense of experienced) during a period of insurance, by anyone who was then or had at any previous time been an employee. However, that latter conclusion introduces a retrospectivity into the scope of the ELCIA, which, as already indicated, I think unlikely to have been intended. The statute could have used the tariff wording of causation instead of sustained. But in the statutory language the word sustained is not coupled with a phrase such as during the period of the insurance. Even if sustained means experienced in the context of the statute, the statute may require insurance on what is effectively a causation basis; the words sustained by his employees may well mean sustained at any future time by his current employees. The key to the meaning of the statutory language seems to me the combination of the phrases arising out of and in the course of their employment in Great Britain and not including injury or disease suffered or contracted outside Great Britain. Together, and for reasons given in the last two paragraphs, they indicate a statutory requirement to insure in respect of activities during the course of employment in Great Britain which may in the future give rise in or out of Great Britain to liability to the employees involved in such activities. In my judgment, therefore, the conclusion which gives proper effect to the protective purpose of the legislation is that the ELCIA requires insurance on a causation basis. The ELCIA extension provision to the Independent and second BAI wordings (see Annex A), as well as a similar extension provision to the MMI policy intended for insureds who were not local authorities, achieved this result expressly in relation to policies written subsequent to the coming into force of the ELCIA, at least for the purpose of ensuring that employees claims were covered by insurance. Any other subsequent insurances not containing that extension provision should, if possible, be read as providing the relevant employers cover required by statute. This is a powerful tool in the interpretation of such insurances. Bolton M.B.C. v Municipal Mutual Insurance Ltd The Court of Appeal in the present case was bound by its previous decision in Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 on public liability policies. The majority regarded that case as, in effect, determining the meaning which must be put on the word sustained in the present employers liability policies: see paras 284, per Rix LJ, and 339, per Stanley Burnton LJ, who however also found the logic of Longmore LJs judgment convincing in relation to the latter type of policies. Smith LJ on the other hand considered that public liability and employers liability insurances gave rise to different considerations (para 328). In my opinion, that is right. Employers liability policies are subject to particular terms and considerations, analysed above (particularly in paragraphs 18 28 and, in the case of policies effected after the coming into effect of the ELCIA, paragraphs 41 46). These considerations are not or certainly not necessarily applicable to public liability insurances. The present case was concerned with employers liability not public liability insurances, and it may well be that not all the relevant facts relating to the latter are before us. We certainly have not heard full argument on the proper conclusions which may be drawn regarding the basis of liability or trigger generally applicable under the latter. In these circumstances, I would proceed on the basis that we are not bound by Bolton, that this does not involve any view about the correctness or otherwise of Bolton, but only that it is unnecessary to consider what the position generally may be under public liability policies. Assuming that, in relation to public liability insurance, the position generally is as stated in Bolton, that does not alter the conclusions which I reach. It merely means, in their light, that public liability insurance generally and the present employers liability policies operate on different bases, because of their different backgrounds, terms and purposes. Contracted There is no difficulty about treating the word contracted as looking to the causation or initiation of a disease, rather than to its development or manifestation. In relation to the two BAI wordings and the third MMI wording, this interpretation obtains strong support from the general nature and purpose of the relevant policies, derived from their immediate context and terms and analysed in paragraphs 18 to 28 and 41 above. To the limited extent that the WCA background may assist to inform the meaning of later policies, it can be seen overall as a legislative scheme which was concerned with either the risk of or actual causation (para 32 above). Even if, in the phrase sustained or contracted or injury sustained or disease contracted, the word sustained is to be understood as meaning experienced, that would reflect no more than the fact that the cause and effect of an injury commonly coincide; I would still unhesitatingly conclude, as did the Court of Appeal, that the word contracted used in conjunction with disease looks to the initiating or causative factor of the disease. Sustained The majority of the Court of Appeal considered that it was impossible to view policies with pure sustained wordings as operating by reference to the initiating or causative factor of a disease. They did so primarily by reference to the wording of the insuring clauses. In my view, as indicated in paragraphs 18 19 above, a broader approach is necessary. The general nature and purpose of these policies can be derived from their immediate context and terms, analysed in paragraphs 18 to 28 and 41 above. It is true, as Rix LJ said, that phrases such as injury sustained by an employee or an employee who shall sustain injury, in either case by accident or disease, appear to address the impact of the accident or disease on the employee. But the underlying focus of the insurance cover is on the employees and activities current during the insurance period. The cover would be potentially incomplete, and employers would be potentially exposed to uninsured risks, were sustained to be understood as meaning developed or manifested. This is so, even before the ELCIA came into force. Any policies written subsequent to the coming into force of the ELCIA either afford cover consistent with the Acts requirements by virtue of an ELCIA extension provision, or, to the extent that this is not the case, should be construed, if at all possible, as meeting employers obligations under that Act. In my view, such obligations included taking out insurance in respect of negligence during the insurance period affecting an employee in a manner giving rise to bodily injury or disease then or at any subsequent time. On this basis, I consider that, although the word sustained may initially appear to refer to the development or manifestation of such an injury or disease as it impacts employees, the only approach, consistent with the nature and underlying purpose of these insurances both before and after the ELCIA, is one which looks to the initiation or causation of the accident or disease which injured the employee. The disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself subsequently. Disease sustained, read as meaning experienced or incurred Rix LJ was attracted by the submission that, even if sustaining disease meant experiencing or incurring it during the period of the insurance, long tail diseases could be said to have been sustained during the period of insurance in this sense. He asked rhetorically whether an employee who had inhaled asbestos had not sustained an injury in the form of an assault of the fibres, as a result of which he was worse off through having dangerous fibres in his lungs (para 280). He noted that, although there was at most trivial injury or damage, and nothing that could create actionable damage, nevertheless, when mesothelioma develops, it is the risk of mesothelioma created by the exposure which is the damage (see . Barker ) and it is the exposure, and the risk of mesothelioma, that is the damage (para 281). He only felt bound to reject this analysis (para 284) because of the Court of Appeals previous decision in Bolton. It may be that in the case of some long tail diseases, the victim can be said to have incurred or caught them at the same time as the initial ingestion or scratch giving rise to them. But it is clear that this is not the position with inhalation of asbestos in relation to either asbestosis or mesothelioma. No cause of action arises from exposure or inhalation alone: Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281. Further, for reasons which I develop in paragraphs 64 65 below, the exposure and risk are not by themselves damage in any sense known to the law. Damage is only incurred when mesothelioma develops. Only when it develops does the victim incur damage which is legally relevant, and even then this is not because any physical link necessarily exists or can be proved between the mesothelioma and the original exposure. The rule in Fairchild and Barker imposes liability for the mesothelioma upon persons who have exposed the victim to asbestos, and so created a risk of mesothelioma. But it is not a rule which, even as between employers and employees, deems the latter to have suffered injury or disease at the time of any exposure. And, even if it were viewed simply as a rule imposing retrospective liability on employers for exposing their employees to the risk of mesothelioma, the insurance policies do not insure risks of physical injury or disease, but only actual injury or disease. The application of the insurances in respect of mesothelioma At the outset of these appeals, the application of the insurances in respect of mesothelioma suffered by employees exposed to asbestos during their employment by an insured employer did not appear controversial. This changed after a question from Lord Phillips on day 4 of the hearing, followed by a later written note. All the same, the transcript pages containing any argument on the point numbered only 40 out of a total of some 1140. So far as Mr Edelman made any submissions on this point, in his written case or orally, they were to this effect: if the correct analysis of the Houses decision in Fairchild be that an employer who exposes an employee to asbestos is deemed to have caused that employees mesothelioma, then employers liability insurances held by the employer on a causation basis should respond; but, if the policies do not respond on a causation basis, there is no justification for treating the employee as having suffered injury or a disease during their currency, because employers cannot prove that any particular inhalation caused any injury. This led to some discussion, particularly with counsel for employers and employees, of the points which I have already addressed in paragraphs 50 52 above. The point now expressed forcefully by Lord Phillips in his judgment is that exposure to the risk of mesothelioma is the correct analysis of the Fairchild principle, at least as subsequently interpreted, and that such exposure can satisfy neither the concept of injury nor the concept of causation for the purposes of the policies. If that is right, then the present insurance claims must all fail. Indeed, the great bulk of insurance claims settled by other insurers (e.g. former tariff insurers) or by the present insurers under the causation policies they have issued in more recent years (paragraph 10 above) should presumably also have failed. The only exception may be the case of an employee exposed to asbestos in only one employment by an employer holding insurance throughout with only one insurer. In such a case it might (perhaps) be said that, whichever particular inhalation(s) may have been responsible for the employees mesothelioma, it (or they) must have been insured. Even then, the logic of the Supreme Courts reasoning in Fairchild and Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229 might lead to the conclusion that causation was still unprovable in the light of the possibilities of environmental or idiopathic causation of mesothelioma. Rules regarding causation are created by the courts for the purpose of determining when liability arises in particular contexts. Normally, they reflect a common sense understanding of what is ordinarily understood when we speak of a cause in a particular context. In their leading work on Causation in the law (Clarendon Press, 2nd ed 1985) Professor H. L. A. Hart and Tony Honor examined both this understanding and its relationship to legal decision making. Generally, but not always, a cause must involve an act or omission that was at least a sine qua non of the injury in respect of which responsibility attaches (the but for test). But sometimes two separate acts or omissions may each independently have been sufficient to give rise to that injury (as when A and B simultaneously, but independently shoot C dead), and then we may as a matter of legal policy accept a weaker causal relationship for the imposition of responsibility: see p lxv in the preface to and p 123 of the 2nd edition. Other cases where causal requirements have been relaxed include Bonnington Castings Ltd v Wardlaw [1956] AC 613; there, materially contributing to part of an accumulation of dust which cumulatively led to pneumoconiosis gave rise to liability for the whole disease (although it has been suggested that some apportionment might now be possible in fact and law). Another relevant authority is McGhee v National Coal Board [1973] 1 WLR 1; there, liability for dermatitis was held to exist because the defendant had materially contributed to part of the claimants exposure to dirt, any part of which might, independently of any other, have given rise to the abrasion leading to the claimants dermatitis. It was recognised that this involved liability based on materially contributing to the risk of the injury. Lord Reid at p.4G H described the result as reached taking a broader view of causation, and Lord Wilberforce at p 5G viewed it as involving a conclusion as to the causal connection that had to exist between the default and the disease complained of. The contrary view (viz, that proof of risk was insufficient without proof that the risk caused or materially contributed to the disease) had a logic which Lord Wilberforce acknowledged, but rejected for policy and evidential reasons set out at p.6C F. In Fairchild, McGhee was seen as a precursor of the decision there reached. Putting aside the possibility of an idiopathic or environmental cause, a Fairchild type situation exists when (a) there are two separate potential causes exposing the claimant to the same risk, one involving an act or omission by the defendant, (b) either one of which causes would have been sufficient to give rise to the injury, and (c) one of which did so, but (d) neither of which can as a matter of probability be shown to have done so. Taking into account the later decisions in Barker v Corus and Sienkiewicz, the Fairchild principle extends to any case where there has been an act or omission exposing a person to asbestos, which exposure may have caused the mesothelioma, but which cannot be shown as a matter of probability to have done so. On that basis, the House held in Barker v Corus that each or any persons liability should only be proportionate to the extent that he had exposed another to the risk of mesothelioma. Parliament by the Compensation Act 2006 reversed that conclusion and made each such person liable in respect of the whole of the damage caused by the mesothelioma. Lord Phillips in his judgment addresses the basis of Fairchild in the light of Barker v Corus, the 2006 Act and Sienkiewicz. He accepts that, if Fairchild is now correctly to be understood as a special rule deeming employers who have exposed an employee to asbestos to have caused any subsequently suffered mesothelioma, then the insurance policies should apply (para 109). But he concludes that Fairchild must be understood as creating liability not for the disease, but for the creation of the risk of causing the disease. It follows in his view that employers and employees gain no assistance from the special rule in asserting that mesothelioma suffered by any person was caused or initiated in any particular policy period. On this basis, even though the insurances respond to injuries caused or initiated during their periods, the employers and employees fail for want of proof. It is not fruitful to repeat the exercise undertaken in Barker v Corus of examining in detail the significance of the speeches in Fairchild. The House was not agreed about this in Barker, but the majority speeches of Lords Hoffmann, Scott and Walker were at pains to reject any analysis of Fairchild as proceeding upon a fiction that each exposure had caused or materially contributed to the disease: see paras 31, 61 and 104; they each also referred to the liability created by Fairchild as being not for causing the disease, but for materially increasing the risk of the mesothelioma which was in fact suffered: paras 31, 36 and 40, 53, 61 and 113. Lord Rodger (dissenting) perceived the majority to be misinterpreting Fairchild by failing to acknowledge that it was based on an equation of materially increasing risk with materially contributing to causation, an equation which he thought had been accepted as sufficient causation in Bonnington Castings Ltd v Wardlaw [1956] AC 613 and McGhee v National Coal Board [1973] 1 WLR 1. It is on the apparently bright line distinction said to have been drawn by the majority in Barker between materially contributing to increasing the risk of, and causing, a disease that Lord Phillips now founds his judgment in these appeals. The Compensation Act 2006 applies where a person who has exposed someone to asbestos is liable in tort in connection with damage caused to the latter by mesothelioma whether by reason of having materially increased a risk or for any other reason (section 3(1)(d)). It makes the former person liable in respect of the whole of the damage (section 3(2)(a)). On its face, the Act assumes rather than creates the liability, and only alters the measure of recovery. That was the view expressed in Sienkiewicz by Lords Phillips, Rodger and Brown (paras 70, 131 and 183). However, on further analysis, the distinction identified in paragraphs 58 59 above proves more elusive. Even in Barker itself, Lord Walker described exposing the employee to the risk of mesothelioma as being equated with causing his injury and the result as an explicit variation of the ordinary requirement as to causation (para 104), and spoke of the rule as one by which exposure to the risk of injury is equated with legal responsibility for that injury (para 109). However, it is conceivable that he meant that the ordinary requirement of causation of the disease was entirely replaced by another liability creating rule. It is in the later authority of Sienkiewicz that the difficulty of drawing any clear cut distinction between creating a risk and causation of the disease becomes most apparent. Lord Phillips there stated that the rule in its current form was that the person responsible for the exposure and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease (para 1). Later, he said that the law was presently contained in Fairchild and Barker which had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances (para 70). That was the analysis of Fairchild advanced by Lord Rodger in Barker v Corus (paras 73 and 83) but rejected there by the majority. Lord Brown in Sienkiewicz spoke of a more relaxed approach to causation (para 178) and flexibility in the approach to causation (para 187). I referred to Fairchild and Barker as involving a special rule of causation (para 188), and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims (para 196) and to adjustments in the burden of proof (paras 198 and 200). Lord Rodger was, on the other hand, loyal to the majority view in Barker by referring to liability as based on materially increas[ing] the risk (para 113), and Lord Dyson was cautious in speaking of materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Lord Phillips has in para 123 set out a passage from an extra judicial commentary written by Lord Hoffmann in Perspectives on Causation (2011), p 8. In it, Lord Hoffmann describes the two ways in which the changes introduced by Fairchild and Barker could be characterised, one as changing the causal requirements for an action for damages for mesothelioma ; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent; the other as creat[ing], exceptionally, a cause of action for the increased risk of mesothelioma, rather than for the disease itself. Lord Hoffmann notes that the House in Barker (Lord Rodger dissenting) adopted the second explanation of what had happened in Fairchild. But in the next sentence, not quoted by Lord Phillips, Lord Hoffmann went on: Parliament almost immediately reversed this decision by a statute giving effect to the first explanation, which had been advocated by Lord Rodger in his dissenting speech. Lord Hoffmanns extra judicial (or judicial) words cannot by themselves alter the true effect of a statute, but his comments do again show that the suggested distinction is more fluid than might at first appear. It is relevant to look more closely at what Barker decides. In Barker, Lord Hoffmann spoke of Fairchild as applying an exceptional and less demanding test for the necessary causal link between the defendants conduct and the damage (para 1) and of the requirement of a sufficient causal link between the defendants conduct and the claimants injury (para 17). In his note in Perspectives on Causation, he picked up this language with references to the causal requirements of the relevant rule and to the issues in cases of mesothelioma and analogous situations as involving the causal requirements for an action for damages for mesothelioma. Lady Hale in Barker also viewed the common law rules governing the measure of recovery as closely linked to the common laws approach to causation, and said that there was no reason in principle why the former rules should not be modified as the latter approach is courageously developed to meet new situations (para 122). In paras 123 and 124, she made clear that in her view the issue in Barker could be seen as arising from the expanded perceptions or developed concept of causation which the law had accepted. These citations all suggest that it is both possible and appropriate to characterise the position achieved by the common law after Barker v Corus as one concerned with the issue of the causal requirements or causal link, as between the defendants conduct and the disease, which the common law requires in order for there to be an action for mesothelioma. But analysis of the rule arrived at after Fairchild and Barker justifies further propositions. Despite the apparent clarity of the suggested distinction between liability for a risk and for a disease, no cause of action at all exists unless and until mesothelioma actually develops. Neither the exposure to asbestos nor the risk that this may one day lead to mesothelioma or some other disease is by itself an injury giving rise to any cause of action: see Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281; the House there decided that not even the emergence of pleural plaques marking the past exposure to asbestos constituted injury for the purpose of giving a cause of action. In order to fall within the principle in Fairchild and Barker, the development of mesothelioma is a pre condition: see Barker, per Lord Hoffmann (para 48) and Lord Scott (para 53). Lady Hale went further, stressing that she in fact agreed with Lord Rodgers view that the damage which is the gist of these actions is the mesothelioma and its physical and financial consequences. It is not the risk of contracting mesothelioma (para 120). In reality, it is impossible, or at least inaccurate, to speak of the cause of action recognised in Fairchild and Barker as being simply for the risk created by exposing someone to asbestos. If it were simply for that risk, then the risk would be the injury; damages would be recoverable for every exposure, without proof by the claimant of any (other) injury at all. That is emphatically not the law: see Rothwell and the statements in Barker itself, cited above. The cause of action exists because the defendant has previously exposed the victim to asbestos, because that exposure may have led to the mesothelioma, not because it did, and because mesothelioma has been suffered by the victim. As to the exposure, all that can be said (leaving aside the remote possibility that mesothelioma may develop idiopathically) is that some exposure to asbestos by someone, something or some event led to the mesothelioma. In the present state of scientific knowledge and understanding, there is nothing that enables one to know or suggest that the risk to which the defendant exposed the victim actually materialised. What materialised was at most a risk of the same kind to which someone, who may or may not have been the defendant, or something or some event had exposed the victim. The actual development of mesothelioma is an essential element of the cause of action. In ordinary language, the cause of action is for or in respect of the mesothelioma, and in ordinary language a defendant who exposes a victim of mesothelioma to asbestos is, under the rule in Fairchild and Barker, held responsible for and in respect of both that exposure and the mesothelioma. This legal responsibility may be described in various ways. For reasons already indicated, it is over simple to describe it as being for the risk. Another way is to view a defendant responsible under the rule as an insurer, but that too is hardly a natural description of a liability which is firmly based on traditional conceptions of tort liability as rooted in fault. A third way is to view it as responsibility for the mesothelioma, based on a weak or broad view of the causal requirements or causal link appropriate in the particular context to ground liability for the mesothelioma. This third way is entirely natural. It was adopted by Lords Reid and Wilberforce in McGhee, by Lord Hoffmann, Lady Hale and (possibly) Lord Walker in Barker and by Lord Hoffmann in his extra judicial commentary. It seems to have received the perhaps instinctive endorsement of a number of members of this Court, including myself, in Sienkiewicz. Ultimately, there is no magic about concepts such as causation or causal requirements, wherever they appear. They have the meanings assigned to them and understood in ordinary usage in their context. A logician might disagree with a reference to causation or a causal link in a particular context, but that is not the test of meaning: see Lord Wilberforces words in McGhee, p 6C F (cited in para 56 above). The present appeals concern the meanings we assign to the concept of causation, first in the context of considering employers liability to their employees and then in considering the scope of employers insurance cover with respect to such liability. It is instructive in this connection to look more closely at the Compensation Act 2006. Section 3(3) states that section 3(2) does not prevent (a) one responsible person from claiming a contribution from another, or (b) a finding of contributory negligence. Section 3(4) goes on to provide that [I]n determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible . Section 3(3) necessarily relates to the legal bases for claiming contribution or asserting contributory negligence, which are to be found in, respectively, the Civil Liability (Contribution) Act 1978 and the Law Reform (Contributory Negligence) Act 1945. The 1978 Act addresses the situation where two or more persons are liable in respect of the same damage (section 1(1)), while section 2(1) provides for contribution in such situations to be such as may be found by the court to be just and equitable having regard to the extent of that persons responsibility for the damage in question. Although under section 3(4) of the 2006 Act, the court must have regard to the relative lengths of the exposure for which each was responsible, the same damage which is a pre condition to the application of the 1978 Act must be the mesothelioma. It cannot be the risk created by the person by or from whom contribution is sought, because each person and exposure creates a separate risk, and no one person or exposure creates the total risk resulting from all exposures. The 2006 Act, by its reference to the 1978 Act, thus assumes that every person, who has exposed to asbestos a victim who later experiences mesothelioma, incurs responsibility for the mesothelioma. That language again fits an analysis whereby the rule in Fairchild and Barker identifies the appropriate weak or broad causal link between the exposure and the mesothelioma. A similar position applies under the 1945 Act. Under section 1(1), that Act applies [w]here any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons. In that event, the damages recoverable are to be reduced to such extent as the court thinks just and equitable having regard to the claimants share in the responsibility for the damage. The application of this section, as contemplated by the 2006 Act, is only possible on the basis that a mesothelioma sufferer may be said to have suffered the mesothelioma partly as the result . of the fault of anyone who has exposed him to asbestos. In other words, the rule in Fairchild and Barker must have been viewed by the drafters in my opinion entirely understandably as establishing a causal link, between the exposure and the mesothelioma, sufficient for it to be said that the mesothelioma was the result of each (and every) exposure. A similar view is also implicit in the provisions of the Act drafted on the basis that insurers who would commonly of course be employers liability insurers would be among the persons by or for whose benefit or against whom contribution would be sought in cases of multiple responsible persons: see section 3(7)(b) and (10)(a) of the 2006 Act. Those provisions necessarily assume that employers liability insurances, written generally on a causation basis, would respond to Fairchild/Barker type liability incurred by employers. Ultimately, the present appeals raise the questions how the present employers liability insurance policies respond as a matter of construction in circumstances within the rule in Fairchild and Barker. Where two contracts are linked, the law will try to read them consistently with each other. This is so with language in a bill of lading, incorporated from a charterparty: The Njegos [1936] P 90. A similar approach applies to language in a reinsurance incorporated from the insurance: Forsikringsaktieselskapet Vesta v Butcher [1989] AC 852 and Groupama Navigation et Transports v Catatumbo CA Seguros [2000] 2 Lloyds Reports 350, even though there is no guarantee that a reinsurance will in every possible circumstance that may develop pick up every liability that may be held to exist under an insurance: see Wasa International Insurance Co Ltd v Lexington Insurance Co [2009] UKHC 40, [2010] 1 AC 180. The intention under the present insurances must be taken to have been that they would respond to whatever liability the insured employers might be held to incur within the scope of the risks insured and within the period in respect of which they were insured. Thus, as Scrutton and Greer LJJ accepted in the Ellerbeck Collieries case (paragraph 34 above), an employers liability insurance could have been expected to respond to the conventional and artificial definition in the WCAs as to what constituted an accident and when personal injury by accident or disease was sustained for the purposes of employers liability to employees. Furthermore, if the common law during or even after the currency of an insurance develops in a manner which increases employers liability, compared with previous perceptions as to what the common law was, that is a risk which the insurers must accept, within the limits of the relevant insurance and insurance period. Eady J correctly identified this in Phillips v Syndicate 992 Gunner [2003] EWHC 1084 (QB), [2004] Lloyds Insurance and Reinsurance Reports 426, 429 (left). The declaratory theory does not presume the existence of an ideal system of the common law, which the judges from time to time reveal in their decisions. But it does mean that, when judges state what the law is, their decisions do . have a retrospective effect in the sense that the law as stated will, generally speaking, be applicable not only to the case coming before [them] but, as part of the common law, to other comparable cases which come before the courts, whenever the events which are the subject of those cases: Kleinwort Benson Ltd v Lincoln CC [1999] 2 AC 349, 378G H, per Lord Goff. The declaratory theory is a pragmatic tool, essential when cases can only come before the court some time, perhaps some years after the relevant events occurred, and when the law [must] be applied equally to all, and yet be capable of organic change (p 379A). A similar principle must, generally speaking, apply in relation to a statute such as the Compensation Act 2006, which changes or corrects the common law to what Parliament perceives to be a more appropriate result for the purposes of all future cases coming before the courts, whenever the events giving rise to them. In the case of that Act, the result was one which the courts might as a matter of common law well have themselves accepted (and which indeed Lord Rodger in his powerful dissent in Barker v Corus believed that the common law had accepted) in Fairchild. Concluding, as I have done, that the present insurances covered employers liability for injuries or diseases caused during the relevant insurance periods, the question is whether they cover employers liability for mesothelioma arising under the rule in Fairchild and Barker from having exposed employees to asbestos during such periods. It is not in dispute that, if the rule is characterised as a rule of deemed causation, then the policies must respond. A parallel example, so familiar that it is easy to overlook, is the vicarious liability to an employee, A, which rests on any employer, B, who has not himself been negligent but must answer vicariously for the negligence of another employee, C. We have no hesitation in saying that the employer B has in such a case caused the injury or disease suffered by A. But this is so in reality only because a rule of law requires us to equate the acts or omissions of C with those of B. The argument, accepted by Lord Phillips, is that the rule in Fairchild and Barker is not one of deemed causation of or, therefore, liability for the disease, but one of liability for the risk created by the exposure. For reasons which I have set out, I regard this distinction as too simple. The liability arises only because of the incurring of the disease and is for the disease. A condition of such liability is that the employer (negligently) exposed the victim to asbestos. The insurance policies, read as operating on a causation basis, are aimed at covering liability generated by employers activities during their insurance periods: see paragraphs 18 28 and 41 above; unless liability for mesothelioma flowing from negligent exposure during an insurance period is covered by the policies, this aspect of employers activities will not in practice be covered at all. In my view, these considerations justify a conclusion that, for the purposes of the insurances, liability for mesothelioma following upon exposure to asbestos created during an insurance period involves a sufficient weak or broad causal link for the disease to be regarded as caused within the insurance period. It would, I think, have been anomalous and unjust if the law by deeming there to have been causation of the disease could have created policy liability (which is common ground), but the law by insisting that the liability in respect of mesothelioma was for the risk of causation achieved a quite different result. As I have sought to show, it is not in any event accurate to treat the liability as being either solely or strictly for the risk. The risk is no more than an element or condition necessary to establish liability for the mesothelioma. The reality, reinforced by provisions in the 2006 Act, is that the employer is being held responsible for the mesothelioma. For this purpose, the law accepts a weak or broad causal link. The link is to exposure which may but cannot be shown on the ordinary balance of probabilities to have played a role in the actual occurrence of the disease. But for the purposes of the policies the negligent exposure of an employee to asbestos can properly be described as having a sufficient causal link or being sufficiently causally connected with subsequently arising mesothelioma for the policies to respond. The concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the rule in Fairchild and Barker. Viewing the point slightly more broadly, if (as I have concluded) the fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them, then the liability for mesothelioma imposed by the rule in my opinion fulfils precisely the conditions under which these policies should and do respond. Conclusion I would therefore dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. ANNEX A The policy wordings (dates are approximate) (1) Excess First Wording (late 1940s): Whereas . (hereinafter called The Employer) carrying on the business of . has made a proposal . this Policy witnesseth that in consideration of the payment of . as premium to the Company on the estimated total amount, as set forth in the Schedule hereto, of the wages, salaries, and other earnings of Employees, a description of whom is set forth in the said Schedule (which premium is subject to adjustment as hereinafter provided) the Company agrees to indemnify the Employer in the manner following, namely That if at any time during the period commencing on theday of19 , and ending on theday of19 (both days inclusive) and for such further period or periods as may be mutually agreed upon, any employee in the Employer's immediate service shall sustain any personal injury by accident or disease while engaged in the service of the Employer in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands, in work forming part of or process in the business above mentioned, and in case the Employer shall be liable to damages for such injury, either under or by virtue of the Common Law, the Fatal Accidents Acts 1846 to 1908, or the Law Reform (Miscellaneous Provisions) Act 1934, the Company will indemnify the Employer The Schedule required a description of the insured companys employees and their estimated total wages, salary and other earnings. Condition 1 of the policy further provided that: the Employer shall truly record in a wages book the name of every employee and the amount of wages, salary and other earnings paid to him. Second Wording (late 1950s to 1960s): Whereas the Employer . carrying on the business described in the . Schedule has made . a written proposal and declaration, containing particulars and statements which it is hereby agreed are the basis of this Contract . and has paid the premium mentioned in the Schedule, which premium is subject to adjustment as hereinafter provided, this Policy witnesseth that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in work forming part of the process in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease The policy provided that the Company should not be liable under it in respect of accidents occurring elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. The policy provided that premiums were to be regulated by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with a wages book being kept open to inspection for that purpose and the employer supplying the correct amounts within one month of the expiry of each insurance period. Condition 1 and the Schedule were in similar form to those in the first wording. Third Wording (1970 to 1976) After a recital in the same form as the second wording, this wording provided: that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease Under the third wording, there was the same territorial limitation as under the second wording in relation to accidents occurring elsewhere than in Great Britain, etc. Premiums were also regulated by reference to wages, salaries, etc. and condition 1 and the Schedule were in the same terms as in the second wording. (2) Independent Sole wording in Issue (1972 to 1987): This was a Contractors Combined Policy, covering Employers Liability (section 1), Public Liability (section 2) and Loss of or Damage to Contract Works (section 3). It provided: NOW THIS POLICY WITNESSETH that during the Period of Insurance or during any subsequent period for which the Company may accept payment for the continuance of this Policy and subject to the terms, exceptions and conditions contained herein and or endorsed hereon, the Company will indemnify the Insured as hereinafter specified. SECTION 1 EMPLOYERS' LIABILITY If any person who is under a contract of service or apprenticeship with the Insured shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule the Company will indemnify the Insured against all sums for which the Insured shall be liable at law for damages for such injury or disease The Policy provided that the Company was not to be liable for injury, illness, loss or damage caused elsewhere than in Great Britain, the Isle of Man or the Channel Islands. As a result of the ELCIA 1969 making insurance in respect of employers liability compulsory, the Independent wording also contained the further provision (the ELCIA extension provision): "AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY The indemnity granted by section 1 of this Policy is deemed to be in accordance with the provisions of any law relating to compulsory insurance of liability to employees in Great Britain. It is agreed the Insured shall repay to the Company all sums paid by the Company which the Company would not have been liable to pay but for the provisions of such law. " The policy Schedule contains spaces for entry of first, annual and minimum premium, as well as of the name of the Principal for whom the insured is undertaking work, the details of the contract or type of work covered by the policy and its situation. Condition 7 provides that the premium is based on estimates provided by the Insured, for record keeping, for the supply of updated information as required by the Company within one month of the expiry of each insurance period and for adjustment of the premium on that basis. (3) MMI First Wording (1949 to 1958) the Company hereby agrees that if at any time during the period of insurance specified in the schedule or thereafter during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified in the said schedule, or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any personal injury by accident or disease arising out of and in the course of his employment by the Insured in their activities described in the schedule and if the Insured shall be liable to pay damages for such injury or disease then, subject to the terms and conditions contained herein or endorsed hereon, the Company shall indemnify the Insured against all sums for which the Insured shall be so liable The policy was expressed not to apply to or include liability in respect of injury or disease caused elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. Condition 5 regulated premiums by reference to wages, salaries, etc, and made provision for a wages book and adjustment to like effect to the Excess second wording. The policy Schedule provided for the classification of staff and employees according to departments and job description, with corresponding figures for estimated total remuneration. Second Wording (1958 to 1974) the Company hereby agrees that if at any time during the First Period of Insurance specified in the said Schedule or during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified as the Renewal Premium in the said Schedule or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any bodily injury or disease arising out of and in the course of his employment by the Insured in the Insured's activities described in the said Schedule and if the Insured shall be liable to pay damages for such injury or disease or for death resulting from such injury or disease then, subject to the terms, exceptions and conditions contained herein or endorsed hereon or set out in the Schedule to this Policythe Company will indemnity the Insured against all sums for which the Insured shall be so liable. Like the first wording, this wording contained a territorial exclusion of liability in respect of injury or disease caused elsewhere than in Great Britain, etc. The policy Schedule provided for the entry of the Estimates (if any) on which the premium is calculated, including in particular any such estimate of wages, salaries, etc. paid to staff, and cross referred to condition 7, which provided that, if the premium had been based on any estimates, an accurate record should be kept (of actual amounts), the insured should provide insurers with such particulars and information as might be required within one month of the expiry of the policy period and the premium adjusted accordingly. Third Wording (1974 to 1992) The Company agrees to indemnify the Insured in respect of all sums without limit as to amount which the Insured shall be legally liable to pay as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any person under a contract of service or apprenticeship with the Insured when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The policy Schedule contemplated a premium adjustable in accordance with condition 5, which in turn provided (in like manner to condition 7 of the second wording) for the adjustment of any premium so calculated by reference to actual amounts at the end of the policy period. (4) BAI First Wording (1953 to 1974) . the Company willindemnify the Insured against all sums of money which the Insured may become liable to pay to any Employee engaged in the direct service of the insured or any dependent of such Employee in respect of any claim for injury sustained or disease contracted by such Employee betweenandboth inclusive The policy carried the note: This policy does not cover the insureds liability for accidents to workmen arising outside the United Kingdom. Conditions 1 and 2 made elaborate provision for the regulation of premiums by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with pay sheets and books of account being kept open to inspection for that purpose and the employer making a return, and the premium being adjusted, subject to a minimum, at the end of each insurance period. Second Wording (1974 to 1983) the Company willindemnify the Insured against all sums of money which the Insured may become legally liable to pay in respect of any claim for injury sustained or disease contracted by any person engaged in and upon the service of the Insured and being in the Insured's direct employment under a Contract of Service or Apprenticeship between theday ofand theday ofboth inclusive This wording also excluded insurers from liability in respect of accidents to employees arising outside the United Kingdom. Like the Independent and third MMI wordings, the BAI second wording also included the ELCIA extension provision. Conditions 1 and 2 provided for the regulation and adjustment of premiums by reference to actual wages, salaries, etc. during each insurance period, in like terms to conditions 1 and 2 in the first wording. (5) Zurich The Municipal First Select wording (1993 to 1998) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury sustained during the Period of Insurance by any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The Municipal Second Select wording (1998 ) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury caused during the Period of Insurance to any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The tariff wording (1948 ) if any person under a contract of service or apprenticeship with the Insured shall sustain any personal injury by accident or disease caused during the period of insurance and arising out of and in the course of his employment by the Insured in the business above mentioned and if the Insured shall be liable to pay damages for such injury or disease the Association shall indemnify the Insured against all sums for which the Insured shall be so liable. LORD CLARKE Like other members of the Court, I agree with Lord Mance on the construction issue. Thus I agree that, for the purposes of the EL policies, mesothelioma is sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the asbestos fibre or fibres which cause the disease. I do not wish to add to Lord Mances reasoning on the construction issue. I do however wish to add some words of my own on the causation issue which sharply divides Lord Phillips and Lord Mance. I wish to say shortly why I prefer the conclusion of Lord Mance to that of Lord Phillips. As I see it, the effect of Fairchild, Barker and Sienkiewicz may be summarised in this way. An employer who, in breach of duty, has exposed an employee to asbestos is liable in damages if the employee subsequently suffers the disease. The employees cause of action is not that he was exposed to the risk of mesothelioma. He has no claim unless he in fact suffers the disease. It is the disease which represents the damage which completes the cause of action and it is only then that his cause of action accrues and the relevant time limit begins to run. It is axiomatic that, in order to succeed in tort, the employee must show a sufficient causal link between the breach of duty, namely the exposure to asbestos, and the disease which represents the damage, namely mesothelioma. The effect of the majority opinion in Barker is that, where there are two or more employers who have exposed the claimant to the risk of mesothelioma, they are not jointly and severally liable to the claimant for the whole of the consequences of the disease but only severally liable for an aliquot part. That decision was reversed by the Compensation Act 2006, so that such employers are jointly and severally liable for the whole of the consequences. The question in this appeal is whether the employers liability insurers are liable to indemnify the employers in respect of that liability. It would in my opinion be a remarkable result if they were not. Lord Phillips notes at para 109 that Mr Edelman QC accepted that, if the correct analysis of the special rule, which (using Lord Phillips definitions) was the result of the combined effect of the special approach in Fairchild and Barker and the Compensation Act 2006, was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust, the insurers would be liable. Lord Phillips accepts that that concession was correctly made. I agree, for the reasons he gives at paras 109 to 114. The question is therefore whether the correct analysis of the special rule is indeed that the employers were deemed to have caused the mesothelioma. I accept that in such a case the employee cannot show on the balance of probabilities that the employers negligence caused the disease. The effect of Fairchild and Sienkiewicz was however that the employer is liable where the exposure contributed to the risk that the employee would suffer the disease and where the employee in fact suffers the disease. That is not in dispute. Lord Phillips says at para 124 that the majority in Barker drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease. He quotes para 2 of Lord Hoffmanns speech as follows: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Phillips further notes that at para 125 Lord Hoffmann advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. See also the passages to like effect referred to by Lord Mance at para 61. I accept that Lord Hoffmann and others did indeed advance that view of Fairchild but it is I think important to note that it was in the context of the question whether, in a case of two or more employers, each was severally liable for a proportion of the consequences of the mesothelioma or whether each was jointly and severally liable for the whole. Lord Hoffmann cannot have intended to hold, without more, that the basis of liability was the wrongful creation of the risk or chance of causing the disease because there would be no liability at all but for the subsequent existence of the mesothelioma. It seems to me that, whether the majority in Barker were correct or not, there is no escape from the conclusion that, in all these cases, where it is not possible to show that the particular employer caused the claimant to suffer mesothelioma, the underlying question is who should be held responsible for causing the mesothelioma which in fact struck down the employee. None of the cases is authority for the proposition that causation is irrelevant. On the contrary, the quest is for the employer who can fairly be held liable for the consequences of the disease and therefore for the employer who can fairly be said to have caused the disease. The courts have embarked on similar quests over the years. Lord Mance has given a number of examples. As Lord Mance shows at para 56, they include Bonnington and McGhee, where Lord Reid was prepared to take a broad view of causation and Lord Wilberforce rejected a traditional approach for policy or evidential reasons. In my opinion the reasoning in Sienkiewicz is of some significance in this context. Lord Mance has given the relevant references in para 61. Thus, as Lord Mance observes, at para 61 Lord Phillips said that Fairchild and Barker had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances. Lord Mance further refers to Lord Brown speaking of a more relaxed approach to causation and flexibility in the approach to causation at paras 178 and 187. Lord Mance had himself referred to Fairchild and Barker as involving a special rule of causation at para 188, and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims at para 196 and to adjustments in the burden of proof at paras 198 and 200. Again, as Lord Mance observes at para 61 above, Lord Dyson referred (at para 207) to materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Both Mr Beloff QC and Mr Stuart Smith QC addressed these issues in their oral submissions. They both in effect submitted that the effect of Fairchild, Barker and Sienkiewicz was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust. They both recognised that the ordinary rule of causation could not apply and that some element of policy or doctrine was required in order to explain Fairchild. Mr Stuart Smith submitted that the effect of Fairchild was that each material exposure to asbestos dust is doctrinally held responsible for the mesothelioma. Mr Beloffs submission was to much the same effect. He relied upon a dictum of Lord Walker in Barker at para 109: A rule of law by which exposure to risk of injury is equated with legal responsibility for that injury entails the possibility that an employer may be held liable for an injury which was not in fact caused by that exposure (though in the present state of medical science, that fact can be neither proved nor disproved). The injury is of course the mesothelioma, which is necessary to complete the cause of action. On that basis it seems to me that Lord Walkers statement that the risk of injury is equated with legal responsibility for the injury is in effect to say that, by creating the risk of mesothelioma in the future, the employer is deemed to have caused the mesothelioma, if it should develop in the future. It appears to me that these conclusions are supported by Lord Mances analysis of section 3 of the Compensation 2006 at paras 67 and 68, with which I agree and to which I do not wish to add anything. Given Mr Edelmans concession that, if that is correct, the employers are liable under the policies (and this Courts acceptance of it) I would hold that the causation point does not assist the insurers. I would only add this. It appears to me that, once it is held that, on these facts, the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies. Rather as in AXA, the whole purpose of the policies was to insure the employers against liability to their employees. That purpose would be frustrated if the insurers submissions on this point were accepted. I agree with Lord Mance, for the reasons he gives at paras 69 73 that these policies respond to these claims. For these reasons, I too would dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD DYSON I too agree with Lord Mance on the construction issue. As to the causation issue, I agree with the reasoning of Lord Mance and Lord Clarke. Accordingly, I would dismiss the appeals by insurers in so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD PHILLIPS Introduction So called long tail industrial diseases have raised peculiar difficulties in the field of tort. These diseases result from the effect on the body of exposure to noxious substances. The effect can be long, drawn out and mysterious, in as much as medical science has not yet identified the precise mechanism, or chain of causation, by which the noxious substance causes the disease. Mesothelioma is a long tail disease in which the problems raised have been particularly acute. The problems arise in the application of principles of law that do not ordinarily give rise to difficulty. An employer will be liable in damages if by an act or omission that is negligent or in breach of statutory duty he causes physical harm to an employee. In the vast majority of cases there will be no difficulty in identifying the moment at which the negligence or breach of duty causes the physical harm, for the harm will take the form of an obvious injury. This is not the position in respect of mesothelioma. Asbestos dust, inhaled into the lungs, is the agency that causes mesothelioma, but as long as forty or fifty years may elapse before the effects on the body of dust inhaled culminate in symptoms of mesothelioma. Once the symptoms are felt, the disease will develop swiftly to bring about an inevitable and extremely unpleasant death. Where a victim of mesothelioma was exposed to asbestos dust over a period of years it is impossible, even with hindsight, to determine on balance of probabilities whether dust inhaled in a particular year caused or contributed to the development of the mesothelioma. It follows that, where the victim worked for a series of employers, each of whom exposed him to asbestos dust, it is impossible to prove on balance of probability that any particular employer caused or contributed to the victims mesothelioma. This means that the normal principles of the law of tort provide no remedy to the employee or his dependants. The manifest injustice of this position led the House of Lords in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572 to create what I shall describe as a special approach to causation in respect of mesothelioma, whose effect was immediately varied by Parliament by section 3 of the Compensation Act 2006. I shall describe the composite result achieved by the House of Lords and Parliament as the special rule. I shall examine the nature of this special rule in due course. Its effect was, however, to place each employer in the same position as that employer would have been under at common law if it were proved, on balance of probability, that its negligence or breach of duty in exposing the employee to asbestos dust had contributed to causing the employees mesothelioma. These developments of the law of tort have formed the backdrop to the issue that has occupied almost all of the eight days that this Court has devoted to this appeal. I shall call this issue the construction issue. The construction issue relates to the true construction of a number of policies of insurance against employers liabilities (EL policies) with similar, but not identical, provisions as to the cover provided. The EL policies provided cover by reference to specific periods usually of a year. The central issue relates to the event or events that, on true construction of each policy, had to occur within the period of the policy in order to render the insurer liable to indemnify the employer in respect of liability for causing an employees mesothelioma. The policies provided cover in respect of diseases sustained or contracted during the period of the policy. The meaning of each of those words, in its context, lies at the heart of the construction issue. It does not seem that the construction issue initially received a great deal of consideration. Insurers treated the policies as if they covered an employer whose breach of duty within the period of the policy had contributed to causing the disease and regarded this requirement as satisfied if the employer was held liable because he had exposed the employee to asbestos dust during that period. Where more than one insurer was liable on this basis, they apportioned liability according to the period of exposure covered by each. The attitude of four of the five insurers party to this appeal changed as a result of the decision of the Court of Appeal in Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50; [2006] 1 WLR 1492. Those insurers are MMI, Excess, BAI and Independent, each of which is in run off. I shall describe them collectively as the insurers. Their opponents I shall describe collectively as the employers, although they embrace solvent employers, individuals claiming under the Third Party (Rights against Insurers) Act 1930, and Zurich, which has a community of interest with these. Bolton concerned the scope of cover of a public liability policy (PL policy) in relation to liability for causing mesothelioma. The policy provided cover in respect of an injury that occurs during the currency of the policy. The argument proceeded on the premise that the chain of causation of mesothelioma, once it was diagnosed, could be traced back to the initial inhalation of asbestos dust. The issue was whether the mesothelioma could properly be said to have occurred at the time of the initial inhalation. The Court of Appeal held that it could not. The injury only occurred, at earliest, at the stage of development of the disease at which malignancy occurred. This was, on the evidence, ten years, give or take a year, from the date on which it became possible to diagnose the existence of the tumour but very many years after the initial inhalation of asbestos dust. This decision led the insurers to take the point that a similar approach should be taken to the interpretation of the cover afforded by the EL policies. Mesothelioma was not, on true construction of the policies, sustained or contracted at the time of the initial inhalation of asbestos dust. It was only sustained or contracted at the much later stage when, as a consequence of the process initiated by asbestos dust, an actionable injury in the form of malignancy, developed. Before Burton J, the Court of Appeal and this Court the construction issue has been argued at great length and in great detail. I agree, as do the other members of the Court, with the conclusions reached by Lord Mance on the construction issue. These conclusions have application not merely to mesothelioma but to employers liabilities in relation to other long tail industrial diseases such as asbestosis and pneumoconiosis. For the purpose of EL policies, these diseases are sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the noxious substance that causes, or contributes to the cause or the extent of, the disease. Throughout the hearing of this appeal there has lurked a second issue. It has not been the subject of argument below, nor does it feature in the agreed Statement of Facts and Issues. This is, perhaps, because it relates to a point that does not arise out of Bolton. It has always been there for the taking, but insurers have not hitherto chosen to raise it, perhaps because its consequences are unattractive. It arises out of a problem that is similar to that which led the House of Lords to formulate the special approach in Fairchild and Barker. It is not possible for an employer to prove that an employees mesothelioma was, in fact, caused in whole or in part by any particular period of exposure to asbestos dust. Thus the employer cannot prove, on balance of probability, that the mesothelioma for which he has been held liable under the special rule was, in fact, initiated in any particular policy year. How, then, can he prove that his liability falls within the scope of the cover, even if the policy bears the construction contended for by the employers and upheld by this Court? How can he prove that his liability arises out of disease sustained or contracted within the policy period, giving these words the same meaning as initiated? I shall call this issue the causation issue. The causation issue and the judgments below Although the causation issue was not raised in argument below, it was dealt with, at least implicitly, in the judgments of both courts. Burton J at first instance, and Rix and Stanley Burnton LJJ in the Court of Appeal proceeded on the basis that, in the case of a mesothelioma victim, exposing the victim to asbestos dust could be treated as equivalent to causing his disease. This approach was based on the special rule. Thus Burton J at paras 42 to 58 summarised, without significant comment, what he described as the special mesothelioma jurisprudence as it was at the time of his judgment. This included Fairchild, Barker and the 2006 Compensation Act. He thereafter proceeded on the basis that exposing a mesothelioma victim to asbestos dust could be treated as having been equivalent to causing the victim to contract the disease. Thus, when summarising his conclusions at para 243 he said: I conclude, in relation to the policies in issue before me, that they respond, just as would policies with caused wording, to claims against insurers where employers are liable on the basis of inhalation by employees during the policy period. They respond, consistently with other EL policies, in respect of mesothelioma claims, on an exposure basis. For the purposes of these policies, injury is sustained when it is caused and disease is contracted when it is caused, and the policies fall to be so construed. Rix LJ drew a distinction between the meaning of contracted and sustained. Contracted referred to the time of the diseases causal origins para 245. He felt constrained by Bolton, however, to hold that no injury was sustained until the disease reached the malignant stage. Implicit in his judgment was the premise that exposure to asbestos dust during the period of the policy could be treated as the causal origin of the disease see for example his comments at para 244. A difficult passage in his judgment at paras 280 283, when considering the meaning of injury, suggests that this premise was founded on the special rule. Thus he was able to conclude that the disease was contracted at the time that the victim was exposed to asbestos dust albeit that injury was not sustained at that point. In a short judgment Stanley Burnton LJ adopted similar reasoning. He stated, at para 338: We are agreed that in any year in which there was substantial exposure to asbestos, mesothelioma was caused by that exposure during that year. The fact that the disease did not develop for some years does not break the chain of causation. Submissions on the causation issue The causation issue was not raised by the insurers as a discrete issue. It none the less surfaced in a passage of the written case for Excess that was addressing the employers case that personal injury by disease was sustained at the moment of inhalation of asbestos dust that triggered the process of sustaining personal injury by disease. One of the arguments advanced by Excess in answer to this submission read as follows: Medically and empirically, one cannot be said to have suffered an injury on a particular day because it cannot be known in (say) a 10 year occupational exposure period on which of the 3652 days the fatal dose was inhaled (and it may be on more than one). It is likely that any ingestion on a particular day was irrelevant to the development of the final condition. There has been a tendency on the part of the claimants to treat inhalation as a single event from which an unbroken line can be drawn to malignancy. It is not. Inhalation (and hence on this theory) injury may occur over several thousands of days. Each day does not bring injury. Any particular day cannot therefore be selected as injury day. To overcome problems of medical causation in a personal injury action against an employer, the House of Lords extended the McGhee principle to mesothelioma in Fairchild. However this was a rule of causation and not definition. There is no such rule in insurance policies which defines what amounts to an injury. The Supreme Court in Sienkiewicz stressed the limits of the Fairchild exception in no uncertain terms, and it is submitted that it would be quite wrong for it now to invade the law of contract. A liability policy responds only to indemnify against a liability (i.e. actionable injury). There is no such liability on inhalation. Injury occurs when the claimant has a personal injury by disease. Thus Excess took the point that the special rule could not properly be invoked to establish that, on true construction of the contracts of insurance, injury was sustained upon inhalation of asbestos dust. This passage appeared after a submission at para 209 that it was only possible to equate the inhalation of a culpable quantity of asbestos dust with sustaining personal injury by disease by, inter alia, creating a special rule governing the response of EL policies in respect of mesothelioma, and possibly other long tail diseases. This proved to be what counsel for the employers sought to do when invited by the Court to address the causation issue. They did so in short oral submissions that cannot, when taken together, have occupied more than half an hour of the eight day hearing. The relevant submissions made by Mr Beloff QC for Akzo and AMEC and the Local Authorities are reported at pp 120 122 of the transcript for 15 December 2011. He started by observing that we had to cut the Gordian knot. He suggested that we should do so by equating creation of a risk with causing bodily injury. This he submitted was permissible because the object of the policy was to provide cover to an employer who, in breach of duty to employees, caused them compensatable damage. Were this approach not adopted, it would be impossible to show that any of a number of insurers providing cover over a period of years was liable. The law should rebel against such a result. In support of this submission Mr Beloff cited a statement by Lord Walker of Gestingthorpe in Barker at para 109 suggesting that the special approach to mesothelioma equated the exposure to the risk of injury with legal liability for the injury. Mr Stuart Smith QC for Zurich dealt with the causation issue at rather greater length in a passage reported at pp 126 to 131 of the same transcript. He started by accepting that it was impossible to know when the metabolic changes that led to the development of mesothelioma in fact occurred. Fairchild dealt with this problem by creating a doctrinal rule under which each significant exposure to asbestos dust was held to be responsible for the mesothelioma. Thus doctrinally the process of developing mesothelioma started upon inhalation. This doctrinal framework for the application of the law of tort was that within which policies of insurance against tortious liability had to operate. Mr Stuart Smith agreed with this summary of his argument advanced by Lord Mance: If the law of tort treats someone, an employee, as having sustained a personal injury and treats the employer as liable to pay damages for such personal injury, then the policy answers. These submissions on behalf of the employers raise the following questions: i) Will the policies respond to fictional or doctrinal events that are deemed to have occurred under the special rule? If so: ii) Does the special rule deem that events have occurred to which the policies should respond? If not: iii) Can this Court properly reformulate the special rule in such a way as to require the policies to respond? Will the policies respond to fictional or doctrinal events? On the premise that he failed on the construction issue, Mr Edelman accepted that, if the correct analysis of the special rule was that the employers were deemed to have caused the mesothelioma by exposing the victims to asbestos dust, then the policies should properly respond. Because of the view that I take of the next two questions I do not need to decide whether the concession was properly made. I have, however, concluded that it was. The policies exist to provide protection against employers liability in tort. If the law of tort, whether laid down by the courts or by Parliament, resorts to legal or doctrinal fictions, it seems logical that the policies should respond as if the fictions were facts. A purposive approach to construction of the policies would lead to this result. Two examples illustrate this approach. Ellerbeck Collieries Ltd v Cornhill Insurance Co Ltd [1932] 1 KB 401 involved a policy of insurance against liability under the Workmens Compensation Act 1925. The terms of the policy entitled the employer to indemnity if at any time during the currency of the insurance any employee sustained any personal injury by accident or disease. The 1925 Act imposed a fictitious test for identifying when an industrial disease was sustained, namely the date on which a certifying surgeon issued a certificate that the employee was suffering from the disease. On the strength of a certificate issued within the currency of a policy of insurance an employer was held liable to two workmen who had, in fact, sustained the relevant disease before the period of the insurance began. The Court of Appeal held that this liability fell within the cover of the policy. The argument for applying the fictional date was a strong one because, as Greer LJ observed at p 417, the policy was intended to cover the employers liability under the Act. The parallel between Ellerbeck and the present case would have been stronger had the relevant policies been taken out after the special rule had been created. In Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] AC 281 the House of Lords held that pleural plaques caused by exposure to asbestos dust did not constitute actionable injury because they produced no adverse physical effects. The Scottish Parliament responded to this decision by introducing the Damages (Asbestos related Conditions) (Scotland) Act 2009 (the Scottish Act). That Act provides by section 1 that asbestos related pleural plaques constitute a personal injury which is not negligible and that accordingly they constitute actionable harm for the purpose of an action for damages for personal injury. In AXA General Insurance Ltd v HM Advocate [2011] UKSC 46, [2011] 3 WLR 871 the Supreme Court rejected a challenge by insurers to the lawfulness of this Act. The Scottish Act effected a limited alteration to the common law in decreeing that asymptomatic pleural plaques constituted non negligible personal injury and thus actionable damage. Lord Mance at para 88 suggested that the main target of the legislation was employers insurers. He went on at para 89 to consider whether the Act would, in fact, alter the meaning to be given to bodily injury under a policy of insurance: A Scottish Act will not on the face of it change the legal effect of an English insurance contract, even in Scotland. However, depending upon the particular policy language, the scope of the concept of bodily injury under a worldwide policy may respond to different conceptions of bodily injury in different parts of the world. Here, the question would be whether it would respond to a development or change, such as that introduced retrospectively by the 2009 Act, in the conception of bodily injury. I say no more about the answer, which may be elicited in another context or suit. While Lord Mance left open the effect of the Scottish Act on the construction of policies of liability insurance, Lord Brown was in no doubt that the effect of the Scottish Act was to subject insurers to liabilities to which they would not have been subject prior to that Act. He referred at para 80 to the undoubted, and deliberate, impact of the legislation upon pending claims. Earlier, at para 77, he drew an analogy with the effect of the decision in Fairchild on EL insurers liability: Had the House of Lords in Rothwell decided that asymptomatic pleural plaques of themselves constitute a non negligible personal injury and thus actionable damage decided in other words that in this particular context the common law should develop in this admittedly novel way the appellants would doubtless have deplored the decision but they could certainly not have questioned its legitimacy. No doubt they would have resented the fact that, as a consequence of the decision, they would unexpectedly have had to pay out on claims resulting from the employees exposure to asbestos upwards of 20 years (quite likely up to 40 years) previously. But they could no more have advanced an [article 1, Protocol 1] challenge to this development of the law than they could have challenged the House of Lords decision some four years earlier in Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32 to adopt a less stringent than the usual but for test for establishing the necessary causal connection between an employers negligence and a claimants condition in, most notably, mesothelioma cases. Employers (and their liability insurers) necessarily take the risk of the common law developing in ways which may adversely affect them with regard to personal injury claims. In this passage Lord Brown assumed that the effect of Fairchild was to bring employers liabilities in respect of mesothelioma within the scope of the cover afforded by EL policies. I am about to consider whether he was correct in this. I agree, however, with the general principle expressed in the last sentence of the extract from his judgment that I have just cited. It is for this reason that I would give an affirmative answer to the first of the three questions posed at para 108 above. I turn to the second. What is the special rule? The employers submissions on the causation issue proceed on the premise that the special rule deems exposure to asbestos dust of an employee who is subsequently diagnosed with mesothelioma to have been a cause of the mesothelioma. I have reached the conclusion that that premise is unsound. In Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 I summarised the special rule as follows at para 1: When a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease. This is certainly the effect of the special rule, but in order to discover the juridical basis of the rule it is necessary first to identify the basis of the special approach adopted by the House of Lords in Fairchild and Barker and then to consider the effect of section 3 of the Compensation Act, which adapted the special approach into the special rule. The special approach In Sienkiewicz, at para 70, I stated that Fairchild and Barker developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances, which include ignorance of how causation in fact occurs. As I shall show, this was not an accurate summary of the special approach adopted in those cases. In Fairchild the House of Lords confronted the position where a mesothelioma victim had worked consecutively for a number of employers, each of which had exposed him to asbestos dust. One or more of these had caused his mesothelioma, but because of the limits of medical knowledge it was not possible, on balance of probability, to identify which. In these circumstances their Lordships adopted a special approach that enabled them to find that each of the employers was jointly and severally liable for the mesothelioma. In doing so they purported to be following a similar approach adopted by the House of Lords in McGhee v National Coal Board [1973] 1 WLR 1. They were not, however, all agreed as to the basis of that approach. Lord Hutton, at para 109, held that it was based on the drawing of a factual or legal inference leading to the conclusion that the breach of duty [in exposing the employee to asbestos dust] was a cause of the disease. The majority of the House did not agree. Lord Bingham said, at para 35: I prefer to recognise that the ordinary approach to proof of causation is varied than to resort to the drawing of legal inferences inconsistent with the proven facts. Lord Nicholls of Birkenhead said, at para 42: So long as it was not insignificant, each employer's wrongful exposure of its employee to asbestos dust, and, hence, to the risk of contracting mesothelioma, should be regarded by the law as a sufficient degree of causal connection. This is sufficient to justify requiring the employer to assume responsibility for causing or materially contributing to the onset of the mesothelioma when, in the present state of medical knowledge, no more exact causal connection is ever capable of being established." Lord Hoffmann at para 65 rejected the suggestion that the House in McGhee held that materially increasing the risk of the disease should be treated as equivalent to material contributing to the injury. He concluded: I would respectfully prefer not to resort to legal fictions and to say that the House treated a material increase in risk as sufficient in the circumstances to satisfy the causal requirements for liability. Lord Rodger of Earlsferry did not agree. His reasoning was close to that of Lord Hutton. He held, at para 168: Following the approach in McGhee I accordingly hold that, by proving that the defendants individually materially increased the risk that the men would develop mesothelioma due to inhaling asbestos fibres, the claimants are taken in law to have proved that the defendants materially contributed to their illness. What then happened has been summarised by Lord Hoffmann in Perspectives on Causation (2011) at p 8: There are two ways in which one could characterise this change in the substantive law of negligence. One is to say that the causal requirements for an action for damages for mesothelioma have been changed; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent. The other is to say that the House created, exceptionally, a cause of action for the increased risk of mesothelioma rather than for the disease itself. In the former case, satisfying the new causal requirement would entitle the claimant to sue for the whole injury caused by contracting the disease. In the latter case, he would be able to sue only for the loss caused by the risk of his contracting the disease having been increased. That would be a proportion of the injury caused by the disease, depending on the extent to which the risk had also been created by other causes. In Barker v Corus the House of Lords (Lord Rodger of Earlsferry dissenting) adopted the second explanation of what had happened in Fairchild. I believe that this summary of the position is essentially correct. The majority in Barker were persuaded that justice would best be served if the special approach adopted in Fairchild were applied in such a way as to render each defendant who had wrongfully exposed the claimant to asbestos dust severally liable for that proportion of the mesothelioma that represented the proportion of the wrongful exposure attributable to that defendant. This was achieved by holding that the liability of each defendant resulted from adding to the risk that the employee would contract mesothelioma. It did not result from an implication that each defendant had actually contributed to the cause of the disease. At the start of his speech at para 2 Lord Hoffmann drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Hoffmann went on to adopt the latter analysis as the basis of liability in Fairchild. At para 31 he held that the majority in Fairchild had not proceeded upon the fiction that a defendant who had created a material risk of mesothelioma was deemed to have caused or materially contributed to the contraction of the disease. The creation of a material risk of mesothelioma was sufficient for liability. At para 35 he advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. Liability for the mesothelioma that developed should be apportioned according to the contribution that each defendant made to the risk that mesothelioma would be contracted. Lord Scott of Foscote and Lord Walker of Gestingthorpe expressly agreed with both Lord Hoffmanns conclusion that liability for the mesothelioma fell to be apportioned and with his reasons for so concluding. Lord Scott held at para 53 that it was essential to keep firmly in mind that liability in Fairchild was not imposed on any of the defendant employers on the ground that the employers breach of contract had caused the mesothelioma. That causative link had not been proved against any of them. It was imposed because each, by its breach of duty, had materially contributed to the risk that the employee would contract mesothelioma. At para 61 he emphasised that the Fairchild principle was not based on the fiction that each defendant had actually caused the eventual outcome. It was based on subjecting the victim to a material risk. Lord Walker, having stated that he was in full agreement with Lord Hoffmanns reasons went on at para 104 to make a statement that was inconsistent with them, this being to the same effect as the statement relied on by Mr Beloff see para 106 above. Lord Walker stated that the decision in Fairchild equated exposing the victim to the risk of injury with causing his injury. This was the same mistake as I made in Sienkiewicz see para 117 above. Had this been the case, each defendant would have been jointly and severally liable for the injury. Lord Walker went on to say, however, that the result in Fairchild was achieved, not by some fiction, but as an explicit variation of the ordinary requirement as to causation. At para 113 he stated that Fairchild was decided by the majority, not on the fictional basis that the defendants should be treated as having caused the victims damage, but on the factual basis that they had wrongfully exposed him to the risk of damage. Lady Hale did not adopt Lord Hoffmanns thesis that the creation of risk constituted the damage for which each defendant was liable. In general, however, she agreed with the majority. She held that in Fairchild, for the first time in our legal history defendants were made liable for damage even though they might not have caused it at all. It was not said that the defendants had caused or materially contributed to the harm. All that could be said was that each had contributed to the risk of harm. In these circumstances it was sensible and fair to apportion liability for the harm in proportion to the contribution that each had made to the risk of harm. Lord Rodger of Earlsferry vigorously dissented from the reasoning of the majority and from the result in so far as it apportioned liability. He observed at para 71 that the majority were not so much reinterpreting as rewriting the key decisions in McGhee and Fairchild. At para 85 he stated that the new analysis that the House was adopting would tend to maximise the inconsistencies in the law. I have some sympathy with the observations of Lord Rodger. It would, I think, have been possible for the House in Barker to have defined the special approach in Fairchild as one that treated contribution to risk as contribution to the causation of damage. The important fact is, however, that the majority did not do so. They were at pains to emphasise that the special approach was not based on the fiction that the defendants had contributed to causing the mesothelioma. Liability for a proportion of the mesothelioma resulted from contribution to the risk that mesothelioma would be caused and reflected the possibility that a defendant might have caused or contributed to the cause of the disease. This was no obiter expression of opinion. It formed the basis of the substantive decision that liability was severable and not joint. The special rule The special approach rendered each employer who had wrongfully exposed a mesothelioma victim to asbestos dust liable for a proportion of the mesothelioma without creating any inference or legal fiction that the employer in question had actually contributed to causing the disease. Section 3 of the Compensation Act altered the position by imposing joint and several liability on those who were only severally liable under the special approach. Did the special rule that resulted involve a different basis of liability to that which formed the basis of the special approach? This question is considered by Jonathan Morgan in his interesting Chapter 4 of Perspectives on Causation headed Causation, Politics and Law: The English and Scottish Asbestos Saga. At p 79 he poses the following question: Has Parliament, by implication, therefore also reversed Lord Hoffmanns principled reinterpretation of Fairchild? Is the nature of Fairchild liability now after all for causing mesothelioma and not increasing risk? Mr Morgan gives a negative answer to this question, expressing the view that Barker has altered the jurisprudential basis of the Fairchild liability irrevocably. I agree that section 3 of the Compensation Act did not alter the jurisprudential basis of the special approach laid down by the House of Lords in Fairchild and Barker. All that it did was to alter the effect of the special approach by making each defendant jointly and severally liable for the whole of the injury sustained. Section 3(1) provides that the section applies where (c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure [for which the defendant was responsible]or another exposure which caused the victim to become ill, and (d) the responsible person is liable in tort(whether by reason of having materially increased a risk or for any other reason). It is not possible to read section 3 as imposing a different basis of liability to that identified by the majority in Barker. The consequence of the special rule Having regard to its jurisprudential basis I cannot see how the employers can found upon the special rule as identifying the policy year or years in which a victims mesothelioma is initiated. The position is that it is impossible to prove on balance of probability when mesothelioma is initiated, or contracted, or sustained, giving each of those words the same meaning. The special rule does not fill the gap for it raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. Should this Court redefine the special rule in order to engage the EL policies? The special approach of the majority in Barker had the object of ensuring that employers who had wrongfully subjected their employees to asbestos dust should bear what the majority considered to be a fair share of responsibility for their wrongdoing. It does not seem likely that the majority gave consideration to the implications for the responsibility of EL insurers of the manner in which this object was achieved. Should this Court now redefine the special rule with the object of enabling claims to be brought under the EL policies? This would, I think, involve holding that the majority in Barker erred in their analysis and that the true basis of the special approach in Fairchild was that contribution to risk should be deemed to be contribution to causation. I would give a firm No to this question. The adoption of the special approach in Fairchild has provoked considerable criticism, both judicial and academic. An example of the former is to be found in the judgment of Lord Brown in Sienkiewicz. An example of the latter is Mr Morgans closely reasoned Chapter 4 of Perspectives on Causation. But the object of the special approach in Fairchild and Barker was at least to ensure that those who had breached the duties that they owed to their employees did not escape liability because of scientific uncertainty. It would be judicial law making of a different dimension to create a legal fiction as to the policy years in which cases of mesothelioma were initiated in order to render liable insurers who could not otherwise be shown to be liable. The Secretary of State has intervened in this appeal and has submitted that, should the claims of employees or their dependants not be met by insurers, they are likely to be a burden on the public purse. It is open to question whether this is a proper consideration, even when considering whether the special rule should be redefined for what are essentially reasons of policy. In any event it seems to me that the position is somewhat more complex than the Secretary of State suggests. The burden of claims in respect of mesothelioma on a scale that was never anticipated is reducing both employers and insurers to insolvency. If this Court were to redefine the special rule so as to impose liability for mesothelioma claims on EL insurers where it could not otherwise be made out, this would in many cases be at the expense of others with claims on the same insurers founded on facts and not legal fictions. The liabilities in respect of mesothelioma will increase the overall shortfall on the part of insurers and this is also likely to have implications for the public purse. So far as I am concerned, however, these considerations have little relevance. Even if there were a compelling case for contending that a means should be found to render EL insurers liable, my reaction would be that this was a matter for Parliament not the courts. It would be wrong in principle for this Court to depart from the reasoning of the majority in Barker for the sole purpose of imposing liability on EL insurers. |
Dr Verma is a doctor specialising in oral and maxillo facial surgery. She trained as a dentist in India but later qualified as a doctor. She has been working in the United Kingdom since 1996. She worked in training grade posts from March 1998 until August 2002. From September 2002 to September 2006 she held a series of locum positions in career grade posts, two of them at Specialist Registrar level. In November 2006 she took a six month appointment with the Luton and Dunstable Hospital NHS Foundation Trust. That appointment was described in the appointment letter as Trust grade doctor in oral surgery (Hospital Practitioner equivalent) for two sessions per week. She left that post in early 2007. She was then offered a post as a Foundation Year 1 Pre Registration House Officer with the respondent (the Trust). This is a training post, typically for newly qualified doctors, but sometimes for more senior doctors who need further training. For Dr Verma it was a necessary step to her qualifying for an appointment as a consultant, having originally trained as a dentist. The contractual terms The relevant contractual terms are in the NHS Terms and Conditions of Service for Hospital Medical and Dental Staff and Doctors in Public Health Medicine and the Community Health Service (England and Wales), which came into force in September 2002. They were promulgated by the Secretary of State but represented the outcome of negotiations with representatives of the medical and dental professions. (Revised terms, which included revised pay protection arrangements, came into force on 1st August 2007, but do not apply to Dr Vermas contract which took effect from 31st July 2007.) Paragraph 1 (a) provides that practitioners shall be paid at the rates set out in Appendix I. That in turn refers to the latest Advance Letter (otherwise referred to as the Pay Circular). A fresh Pay Circular is issued each year. Annex A is headed Basic rates of pay per annum effective from 1 April in each year. It consists of a schedule setting out figures for each of fifteen grades, the highest being Consultant (pre 2003 contract) and the lowest Hospital practitioners. For each grade there is a series of levels of pay running from Min and then from 1 to 13, though the number of levels varies from grade to grade. It is common ground that these levels correspond to the incremental points referred to in the terms and conditions. For all grades other than Hospital Practitioner the figures given are annual figures for full time work. For hospital practitioners the figures relate to sessions. Paragraph 6 is headed Hospital Practitioner Grade. To qualify a medical practitioner should have been fully registered for at least four years; a dental practitioner for five. Posts are limited to a maximum of five notional half days each week. A half day (or session) is treated as the equivalent of a period of 3 hours flexibly worked (para 61). A full week notionally consists of eleven sessions. Thus, while Dr Vermas appointment was for two sessions only per week, it was inherent in the nature of her Hospital Practitioner post that it could not be for more than five sessions. That limitation is also reflected in paragraph 69, which restricts the maximum remuneration for part time appointments in the Hospital Practitioner grade to five notional half days. It also provides that where a practitioner holds part time appointments with more than one authority, the maxima shall apply to the aggregate remuneration from all the authorities concerned. This latter provision may be contrasted with paragraphs 94 and 105, dealing respectively with part time medical officers and part time general dental practitioners, which enable such a practitioner holding appointments with more than one authority to have his remuneration calculated separately for each. Paragraph 132, relating to pay protection, is the provision most directly material for the purposes of this appeal. It is part of a group of sections relating to salaries, which starts at paragraph 121, headed Starting salaries and incremental dates; followed by paragraphs 122 125 (Counting of previous service) and paragraphs 126 131 (Increments on first appointment to a grade). The latter contain detailed rules for increases above the minimum, fixed generally by reference to incremental points on the scale in Annex A. Thus, for example, paragraph 131 provides, in the case of a hospital practitioner: Authorities shall have discretion to fix the starting salary of a hospital practitioner on first appointment to any of the three next incremental points above the minimum of the scale by reason of age, special experience and qualifications taken as a whole. At the heart of the present discussion are paragraphs 132 (Protection) and 135 (Interpretation). The former provides: 132 Where a practitioner takes an appointment in a lower grade which is recognised by the appropriate authority as being for the purpose of obtaining training (which may include training to enable the practitioner to follow a career in another speciality), the practitioner shall, while in the lower grade, continue to be paid on the incremental point the practitioner had reached in his or her previous appointment. Such a practitioner shall receive the benefit of any general pay awards. On reappointment to the higher grade or on appointment to another higher grade, the practitioner's starting salary should be assessed as if the period spent in the approved training post had been continuing service in the previous higher grade. Practitioners whose previous appointment was in the Northern Ireland, Isle of Man or Channel Islands hospital service are eligible for protection of salary under the terms of this paragraph. Paragraph 135, so far as relevant, provides: a. the rate of salary for a part time practitioner shall be taken to be the corresponding point in the salary scale, except for a practitioner employed as a part time medical or dental officer under paragraphs 94 or 105, for whom it shall be the maximum amount appropriate to nine notional half days c. the rate of salary in the previous post shall be taken to be the present rate of remuneration for such a post, whether or not this rate was in fact paid The main elements of paragraph 132 are not in issue. Dr Vermas position with the Trust was recognised as being for the purpose of obtaining approved training. Her previous appointment was her post with the Luton and Dunstable Trust. Although she had not strictly been eligible for a Hospital Practitioner grade post, because she was not a registered GP, it had been treated as equivalent to such a post, and has been so treated for the purpose of pay protection. It is accepted therefore that account must be taken of her previous entitlement in that post; the question is how. The Employment Tribunal held that her protection was limited to five sessions, which was the maximum period which she could have worked in her previous post (para 86). The Trust had argued that the limit should be two sessions, as the period she in fact worked; but that submission was not adopted by the tribunal, and has not been renewed. In the Employment Appeal Tribunal (presided over by the President, Underhill J) the area of dispute was defined by reference to two possibilities for practitioners in Dr Vermas position (para 17): (i) that they should enjoy pay protection only in respect of the number of hours that they worked in the previous appointment (so that for example a Consultant who had previously worked half time would be paid as a Consultant for half of his or her training post work as, say, a Registrar, but as a Registrar for the balance); or (ii) that he or she would be paid as a Consultant for the full time worked as a Registrar. The difference could be expressed as being between (i) protecting the amount received in the previous post and (ii) protecting the rate. The EAT preferred the latter interpretation. Particular reliance was placed on paragraph 135(a): the words the corresponding point in the salary scale could only mean the full time rate shown on the scale for that post. That construction was supported by the words of exception: Paras 94 and 105, which are the subject of the exception, provide for the pay applicable to certain appointments held only by part time practitioners e.g. in convalescent homes or GP maternity hospitals. We were not shown the detailed provisions covering their terms, but it is clear from para. 94 that the unit of payment is the notional half day. The thinking behind the maximum of nine half days was not explained to us; but its importance for present purposes is that the necessary implication is that the corresponding point would otherwise be ten (or eleven) half days, i.e. the equivalent full time figure. (para 20(5)) The EAT saw nothing surprising in that position. While the purpose of pay protection might arguably be met if the protection were limited to the number of hours worked in the previous appointment, it was not inconsistent with that purpose for a more generous approach to be taken, based on the full time equivalent of the actual pay received in the previous post: The rate reflects not only the actual value of the work done but also the seniority and experience of the person doing it, and those factors are present and apply to the entirety of the hours worked. We have no difficulty in seeing that it would feel fair to all concerned that, say, a former Consultant filling a Registrar post, so as to re train in a way which will benefit the NHS as much as herself, should be paid as a Consultant for the entirety of the hours worked; and indeed that it might feel positively unfair and anomalous for her to receive different rates for different hours within a single job. There is a further factor, in as much as she may have given up other remunerative work and in any event the opportunity of doing such work in the hours that she was not working under the part time contract, which it is not unreasonable to value at the same rate that she was receiving for her (part time) NHS work; and although these foregone hours are not compensated as such under para 135 there is an equity in recognising their value by paying the protected rate for the entirety of the hours worked. We can see how in those circumstances a form of pay protection which extended only to part of the hours worked might be a real disincentive to a part time hospital doctor being prepared to step down in order to re train, with a consequent disbenefit to the NHS. (para 22) Later, dealing with Dr Vermas own position, they accepted that it might seem surprising that she should receive this level of protection, given that she herself had worked only two sessions per week, and that the resulting figure was almost three times that of an ordinary hospital practitioner at her level. They commented: As to the former point, however, if the principle that pay protection protects rates is correct, as we believe it is, there is no principled basis for drawing any distinction between cases where the practitioner's previous part time work was 80% of full time and cases where it was only 20%. As to the latter, of course it is in the nature of protected pay that the beneficiary may receive far more than the normal rate for the job. The Appellant was not a young doctor straight out of medical school but an experienced maxillo facial surgeon. It seems that Hospital Practitioners are well paid if annualised, their rates are higher than those paid to any grade save Consultant and the Appellant was at the top of the incremental scales It has however to be borne in mind that Hospital Practitioners may be GPs of great experience who may well be earning for the part of their work that they do in general practice amounts which compare favourably with what they receive from their hospital post: (para 28) In anticipation of the one difference between the EAT and Elias LJ in the Court of Appeal, it is to be noted that there appears to have been no material dispute at this stage about the method of calculation. The judgment recorded as common ground that the sessional rates in Annex A needed to be converted into an appropriate salary figure. The appellant did not accept that it was appropriate simply to multiply the figure for a single 3 hour session by eleven, since that would produce a figure for a 38 hour week, rather than the 40 hours for which she worked. They commented: Her case is accordingly that the sessional figure has to be reduced to an hourly rate and then multiplied to produce an annual salary entitlement appropriate to a 40 hour week. Subject to its other points considered below, the Trust does not challenge that method of calculation. (para 16) The Court of Appeal In the Court of Appeal, there was a difference of view between Elias LJ, who gave the first judgment, and subject to one point supported the reasoning of the EAT, and the other two members of the court (Rix and Rimer LJJ) who broadly accepted the Trusts case. Since the respective submissions before us largely reflect these two contrasting positions it is helpful to refer to the reasoning in some detail. Elias LJ relied principally on what he regarded as the natural construction of paragraph 132 itself (paras 18 21). In the case of a full time employee undertaking training, the employee would continue to be paid precisely what he or she was paid in the previous job. He saw nothing to suggest that the salary should vary with the hours worked in the previous post. The natural construction was that the employee would continue to receive pay on the incremental point by which pay is determined for the previous job and to receive it for the basic hours required to perform the training job. In summary: the natural reading of paragraph 132 is that the practitioner, whether full time or part time, would in the training post have his or her pay determined by reference to the incremental point in the previous scale. Since the training post is full time for everyone, there is then no basis for limiting the payment merely because the practitioner in the previous job was undertaking a part time post. (paras 19 and 21) Although he did not think that paragraph 135(a) provided significant help on the construction of paragraph 132, he considered in detail the submissions relating to its effect and found nothing inconsistent with his preferred view (paras 22 35). The leading judgment for the majority was the third judgment, given by Rix LJ. It is difficult in a short summary to do justice to his carefully reasoned analysis of the relevant paragraphs (paras 63 78). In paragraph 132, the critical words in his view were shall continue to be paid on the incremental point reached in his or her previous appointment. The incremental point was a reference to the amounts set out in Annex A which were not hourly rates, but annual rates and in one case rates per session. He found it difficult to the point of impossibility to construe paragraph 132 as referring to hourly rates, in the absence of any reference to hourly rates as such. He thought that the word continue at the end of the first sentence, and the concept of unbroken continuity embedded in the final sentence, emphasised that what continues is what has been and will be the relevant salary rate, which in our case is a rate per session (para 66). That led to the question, at the heart of the appeal: What happens if the practitioner who is entitled to protected pay under the provisions of paragraph 132 has been working on a part time rather than a full time basis? His answer was: In such circumstances, just as the annual income of an employee in the grade of hospital practitioner will depend ultimately on the number of sessions he or she will work throughout the year, so the annual income of an employee in any of the other grades will depend on whether he or she works full time or part time. Thus it is reasonable to assume that the salary would be adjusted, in the cases where an annual salary is identified, by reference to both the annual salary in question (ie the rate for the job) and the amount of part time work undertaken, and, in the case of the hospital practitioner, by reference to the number of sessions which are performed in that role, where it is the rate for the session, rather than the rate for the year, which is definitive of the rate for the job. (para 67) Turning to paragraph 135(a) he thought it highly unlikely that any of the language of paragraph 135 will provide that a person performing work in any of the specified grades in Annex A will, if working only part time, have his or pay protected as if he or she was working full time. (para 70) Following detailed analysis of paragraphs 135(a) and (b), he concluded: 79. In sum, there is in my judgment nothing in paragraphs 132 or 135 to supersede or undermine the natural, rational and purposive interpretation of these provisions relating to protected pay as protecting the practitioner for the pay in a previous role which he or she earned, at the rate to which he or she was entitled to (ie either the rate earned or, where that rate has been improved under current awards, at the current rate), and not as extending their pay to a figure possibly far in excess of any figure previously earned. It is simply counter intuitive to suppose that the less a part time practitioner worked in a previous post, the more he or she is "protected" in a training post Rimer LJ agreed with Rix LJs judgment, but added his own comments. Like Rix LJ he found counter intuitive the notion that Dr Verma should be entitled to pay protection at a salary level which she did not earn and could not have earned in her post as a Trust grade doctor (para 49). He also placed emphasis on the use of the word continue in paragraph 132, and the lack of any reference to hourly rates: The word 'continue' in that context is not necessarily conclusive on the point, but it would seem to me that its more natural interpretation in the context is that it is referring to a continuation of that which the practitioner had previously enjoyed. It is therefore pointing against any notion that he will overnight become entitled to an immediate hike in his former pay and receive a level of remuneration that he had not previously earned. That result could only be achieved if condition 132 is interpreted as concealing within it an unspoken scheme by which the required task is to identify the hourly rate at which the practitioner was formerly paid and then to apply that hourly rate to the hours worked in the lower grade. There is, however, nothing in condition 132 or anywhere else in the conditions that says or suggests that this is the scheme. (para 52) Discussion It is disturbing that a condition designed to confer important rights on employees should be so obscure. The differences of view between such experienced judges, even after the intense analysis to which the condition was subjected in the Court of Appeal, is testament enough that the condition is not well drafted, and requires reconsideration. This would be a matter for real and urgent concern if there were evidence that it has caused or is causing wider problems in practice. That possibility was noted as one of the reasons for the grant of permission to appeal to the Court of Appeal. In the event Mr Welch for the Trust has not pursued this point. He has not suggested that the EATs interpretation of the condition is likely to cause problems outside the relatively unusual circumstances in the present case. In retrospect, this may be another case where it would have been better to have left the case where it stood following consideration by the specialist appeal tribunal. This view gains support from written submissions on behalf of the intervener, NHS Employers (NHSE), the body which represents employers in the NHS. From them we learn that the grade of Hospital Practitioner is rare, and is now what is called a closed grade: that is a grade to which no new entrants are permitted. There are currently only 650 practitioners in this grade, predominantly practising GPs who undertake limited session work in hospitals. The issue of protection in such cases is said to be extremely rare, no other case having been recorded by NHSE since its creation in 2004. Both before the tribunals and in the Court of Appeal, there were expressions of regret at the lack of information about the background of the negotiations which led to these terms, and no evidence about what the parties assumed they were protecting in paragraph 132 with respect to part timers (CA para 17 per Elias LJ). Since then the diligence of Mr Kemp, junior counsel for Dr Verma, has led to the unearthing of considerable information about the earlier versions of the terms and conditions, going back to 1949. We must be grateful for these efforts, but it is not suggested by either party that the history throws significant light on what we have to decide. The majority reasoning of the Court of Appeal was strongly influenced by their view as to the improbability of the EATs construction on the facts of Dr Vermas case. By contrast the EAT, and Elias LJ, regarded that result as the possibly surprising, but not unacceptable, result of the application to an unusual case of a rule intended to be of more general application. I see force in both points of view, but for that reason find neither of much assistance in resolving the issue of construction. The majority were also influenced by the lack of any direct basis in paragraph 132 for converting sessional rates into hourly equivalents. This concern also led Elias LJ to differ from the EAT on the calculation of the weekly figure. However, as I have noted, it was recorded as common ground before the EAT that such a conversion had to be made, and that there was no disagreement with the appellants use of 40 rather than 38 hours as a multiplier. Before us Mr Welch challenged the general approach of both the EAT and Elias LJ, but did not, as I understood him, offer any convincing reason for going back on the method of calculation which had been accepted by both sides in the EAT. ordinary principles of construction, the object being to In these circumstances, the issue has to be approached by applying ascertain the intention of the parties by examining the words they used and giving them their ordinary meaning in their contractual context Effect is to be given to every word, so far as possible, in the order in which they appear in the clause in question. Words should not be added which are not there, and words which are there should not be changed, taken out or moved from the place in the clause where they have been put by the parties. It may be necessary to do some of these things at a later stage to make sense of the language. But this should not be done until it has become clear that the language the parties actually used creates an ambiguity which cannot be solved otherwise. (per Lord Hope, Multi link Leisure Developments Ltd v North Lanarkshire Council [2010] UKSC 47, 2011 SC (UKSC) 53, para 11). In paragraph 132 the critical words are the practitioner shall continue to be paid on the incremental point the practitioner had reached in her previous appointment. The incremental point is clearly a reference to the relevant point in the scale for the practitioners grade as shown in Annex A. Since, for Dr Vermas grade, that point is expressed in terms of sessional rates some means must be found to convert those rates into a form which can be applied to the different terms of her training post, in which her periods of work were measured in hours not sessions. Even if it had not been common ground before the EAT, the most obvious way of doing this was by conversion of the sessional rates to hourly rates. It may be counter intuitive that these rates should not be limited in some way by reference to the number of sessions which were, or could have been, worked in the former post. Mr Welch relied in particular on the surprising consequence that the sessional rate for a hospital practitioner, which in practice was limited to five sessions per week, is notionally converted into an annual salary greater than that of the top grade, that of a consultant. However, there is nothing in the wording of paragraph 132 which can be relied on to support the limitation which he asserts. One might have expected to find such a limitation in the interpretation provision, but there is none. Paragraph 135(a) simply confirms that no distinction is to be made in the application of the rates in annex A between part time and full time practitioners. I also agree with the EAT that the exceptions relating to part time medical and dental officers tend if anything to support their construction. As has been seen, such practitioners, unlike other part time appointments (paragraph 69), are not confined to the remuneration from a single such NHS appointment (paragraphs 94(b) and 105). As Rix LJ said, the reasoning behind the limitation to nine notional half days is not entirely clear. He regarded it as a special case governed by complex provisions from which no wider inference could be drawn (para 76). However, the existence of such a specific limitation makes it more difficult to imply some other unspoken limitation applicable in Dr Vermas case. In conclusion I would allow the appeal, upholding the reasoning and conclusion of the EAT, and restore their order. In accordance with that order the case will have to be remitted to the Employment Tribunal to determine the outstanding issues identified in the order. |
The Clapham omnibus has many passengers. The most venerable is the reasonable man, who was born during the reign of Victoria but remains in vigorous health. Amongst the other passengers are the right thinking member of society, familiar from the law of defamation, the officious bystander, the reasonable parent, the reasonable landlord, and the fair minded and informed observer, all of whom have had season tickets for many years. The horse drawn bus between Knightsbridge and Clapham, which Lord Bowen is thought to have had in mind, was real enough. But its most famous passenger, and the others I have mentioned, are legal fictions. They belong to an intellectual tradition of defining a legal standard by reference to a hypothetical person, which stretches back to the creation by Roman jurists of the figure of the bonus paterfamilias. As Lord Radcliffe observed in Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696, 728: The spokesman of the fair and reasonable man, who represents after all no more than the anthropomorphic conception of justice, is and must be the court itself. It follows from the nature of the reasonable man, as a means of describing a standard applied by the court, that it would misconceived for a party to seek to lead evidence from actual passengers on the Clapham omnibus as to how they would have acted in a given situation or what they would have foreseen, in order to establish how the reasonable man would have acted or what he would have foreseen. Even if the party offered to prove that his witnesses were reasonable men, the evidence would be beside the point. The behaviour of the reasonable man is not established by the evidence of witnesses, but by the application of a legal standard by the court. The court may require to be informed by evidence of circumstances which bear on its application of the standard of the reasonable man in any particular case; but it is then for the court to determine the outcome, in those circumstances, of applying that impersonal standard. In recent times, some additional passengers from the European Union have boarded the Clapham omnibus. This appeal is concerned with one of them: the reasonably well informed and normally diligent tenderer. The reasonably well informed and diligent tenderer The RWIND tenderer, as he has been referred to in these proceedings, was born in Luxembourg. He owes his existence to the EU directives concerned with public procurement. For present purposes, the most significant directive is Directive 2004/18/EC of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ L 134, 30 April 2004, p 114). The background to the Directive, as explained in the second recital to the preamble, is that the award of contracts by public authorities in the member states is subject to the principles of freedom of movement of goods, freedom of establishment and freedom to provide services, and to other principles derived from those, such as the principles of equal treatment, non discrimination, mutual recognition, proportionality and transparency. In particular, as explained in the forty sixth recital: Contracts should be awarded on the basis of objective criteria which ensure compliance with the principles of transparency, non discrimination and equal treatment and which guarantee that tenders are assessed in conditions of effective competition. To ensure compliance with the principle of equal treatment in the award of contracts, it is appropriate to lay down an obligation established by case law to ensure the necessary transparency to enable all tenderers to be reasonably informed of the criteria and arrangements which will be applied to identify the most economically advantageous tender. These general principles are reflected in the requirements laid down in Directive 2004/18. In particular, article 2 requires that contracting authorities shall treat economic operators equally and non discriminatorily and shall act in a transparent way. Article 41 entitles unsuccessful candidates to be informed of the reasons for the rejection of their applications. Article 53 sets out requirements governing the disclosure of the criteria for the award of public contracts. It was in order to articulate the standard of clarity required in this context by the principle of transparency that the European Court of Justice invoked the RWIND tenderer. In the case of SIAC Construction Ltd v County Council of the County of Mayo (Case C 19/00) [2001] ECR I 7725, where there was a disagreement between the parties as to the interpretation of tender documents, the court stated: 41. Next, the principle of equal treatment implies an obligation of transparency in order to enable compliance with it to be verified (see, by analogy, Case C 275/98 Unitron Scandinavia and 3 S [1999] ECR 1 8291, paragraph 31). More specifically, this means that the award criteria must be formulated, in the contract documents or the contract notice, in such a way as to allow all reasonably well informed and normally diligent tenderers to interpret them in the same way. In that passage, the court explained what the legal principle of transparency meant in the context of invitations to tender for public contracts: the award criteria must be formulated in such a way as to allow all RWIND tenderers to interpret them in the same way. That requirement set a legal standard: the question was not whether it had been proved that all actual or potential tenderers had in fact interpreted the criteria in the same way, but whether the court considered that the criteria were sufficiently clear to permit of uniform interpretation by all RWIND tenderers. The objective nature of the standard to be applied also appears from the opinion of Advocate General Jacobs in the same case: The national court should take into consideration not merely the literal terms of the contract documents but also the way in which they may be presumed to be understood by a normally experienced tenderer (para 51: emphasis supplied). That the standard is objective also appears from the opinion of Advocate General Sharpston in Lmmerzahl GmbH v Freie Hansestadt Bremen (Case C 241/06) [2008] 1 CMLR 462. The case concerned another directive which is relevant to the present appeal, namely Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ L 395, 30 December 1989, p 33). Article 1 of the Directive requires member states to take the measures necessary to ensure that: as regards contracts falling within the scope of Directive 2004/18/EC, decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible in accordance with the conditions set out in articles 2 to 2f of this Directive, on the grounds that such decisions have infringed Community law in the field of public procurement or national rules transposing that law. The issue in the case was whether a national time limit for the bringing of proceedings was compatible with Directive 89/665. The time limit started to run if the alleged irregularity was identifiable on the basis of the tender notice. The Advocate General posed the question as to what was the degree or nature of knowledge of an irregularity which might be attributed to a tenderer without breaching the effectiveness principle underlying Directive 89/665. She observed: 66. It seems to me that a requirement of actual, or subjective, knowledge on the part of the tenderer would run counter to legal certainty. Furthermore, in circumstances such as those of the present case, it could be difficult to prove that a tenderer had actual knowledge of an irregularity, and a requirement of such proof would hardly be consistent with the need for a rapid review process. 67. It therefore seems preferable to formulate the test in terms of a standard of deemed, or objective, knowledge. The court already applies an objective standard in respect of tenderers' ability to interpret award criteria against the yardstick of equality of treatment in public procurement, namely the ability of a reasonably well informed and normally diligent tenderer. The same formula seems appropriate in the context of what knowledge of an irregularity in the tender procedure it is reasonable to deem a tenderer to possess. As the Advocate General noted in that passage, the yardstick of the RWIND tenderer is an objective standard applied by the court. An objective standard of that kind is essential in order to ensure equality of treatment, as the court explained in SIAC. In addition, as the Advocate General explained, such a standard is consistent with legal certainty: something which would be undermined by a standard which depended on evidence of the actual or subjective ability of particular tenderers to interpret award criteria in a uniform manner. Furthermore, to require proof of the subjective understanding of tenderers would be inconsistent with the need for review to be carried out as rapidly as possible, as required by article 1 of Directive 89/665. The latter requirement has also been emphasised by the Court of Justice: see for example Universale Bau AG v Entsorgungsbetriebe Simmering GmbH (Case C 470/99) [2002] ECR I 11617, para 74. Judgments of the Court of Justice subsequent to SIAC are consistent with this approach. An example is the case of EVN AG v Austria (Case C 448/01) [2003] ECR I 14527, which concerned the award of a contract for the supply of electricity. The invitation to tender required tenderers to state the amount of electricity which could be supplied from renewable sources. It was contended by an unsuccessful tenderer that that requirement lacked the transparency required by the predecessor directive to Directive 2004/18, because there was a failure to specify the period of time in respect of which the amount that could be supplied was to be stated. The Court of Justice said: 56. It is clear from the court's case law that the procedure for awarding a public contract must comply, at every stage, with both the principle of the equal treatment of potential tenderers and the principle of transparency so as to afford all parties equality of opportunity in formulating the terms of their tenders (see, to that effect, Universale Bau, paragraph 93). 57. More specifically, this means that the award criteria must contract documents or the contract be formulated, in the notice, in such a way as to allow all reasonably well informed tenderers of normal diligence to interpret them in the same way (SIAC Construction, paragraph 41). 58. Consequently, in the case at issue in the main proceedings, the fact that in the invitation to tender the contracting authority omitted to determine the period in respect of which tenderers had to state in their tenders the amount of electricity from renewable energy sources which they could supply could be an infringement of the principles of equal treatment and transparency were it to transpire that that omission made it difficult or even impossible for tenderers to know the exact scope of the criterion in question and thus to be able to interpret it in the same way. 59. Inasmuch as that requires a factual assessment, it is for the national court to determine, taking account of all the circumstances of the case, whether, despite that omission, the award criterion at issue in the main proceedings was sufficiently clearly formulated to satisfy the requirements of equal treatment and transparency of procedures for awarding public contracts. The rationale of the standard of the RWIND tenderer is thus to determine whether the invitation to tender is sufficiently clear to enable tenderers to interpret it in the same way, so ensuring equality of treatment. The application of the standard involves the making of a factual assessment by the national court, taking account of all the circumstances of the particular case. The standard of the RWIND tenderer has been applied by the Court of Justice and the General Court in a number of cases in which those courts have themselves had to determine whether tender documents complied with the standard. An example is the case of Commission of the European Communities v Netherlands (Case C 368/10) [2012] 3 CMLR 234, which concerned the compatibility with Directive 2004/18 of a tender specification for drinks machines which contained generally expressed requirements relating to sustainability. The court stated: 109. The principle of transparency implies that all the conditions and detailed rules of the award procedure must be drawn up in a clear, precise and unequivocal manner in the notice or contract documents so that, first, all reasonably informed tenderers exercising ordinary care can understand their exact significance and interpret them in the same way and, secondly, the contracting authority is able to ascertain whether the tenders submitted satisfy the criteria applying to the relevant contract 110. As the Advocate General stated in point 146 of her opinion, it must be held that the requirements relating to compliance with the criteria of sustainability of purchases and socially responsible business and the obligation to contribute to improving the sustainability of the coffee market and to environmentally, socially and economically responsible coffee production are not so clear, precise and unequivocal as to enable all reasonably informed tenderers exercising ordinary care to be completely sure what the criteria governing those requirements are. The same applies, and all the more so, in relation to the requirement addressed to tenderers that they state in their tender in what way [they] fulfil those criteria or in what way [they] contribute to the goals sought by the contracting authority with regard to the contract and to coffee production, without precisely indicating to them what information they must provide. In that case, as in other direct actions where the RWIND tenderer test has been applied (such as Evropaki Dynamiki Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v Commission of the European Communities) (Case T 59/05) (unreported) 10 September 2008 and Evropaki Dynamiki Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v European Maritime Safety Agency (EMSA) (Case T 70/05) [2010] ECR II 313), the court arrived at its conclusion on the basis of its consideration of the relevant documents, without requiring evidence as to the interpretation placed on the documents by actual or potential tenderers. The provision of reasons As I have explained, article 41 of Directive 2004/18 imposes on contracting authorities a duty to inform any unsuccessful candidate, on request, of the reasons for the rejection of his application. Guidance as to the effect of that duty can be found in the judgment of the Court of First Instance in Strabag Benelux NV v Council of the European Union (Case T 183/00) [2003] ECR II 138, paras 54 58, where the court stated (para 54) that the obligation imposed by an analogous provision was fulfilled if tenderers were informed of the relative characteristics and advantages of the successful tenderer and the name of the successful tenderer. The court continued (para 55): The reasoning followed by the authority which adopted the measure must be disclosed in a clear and unequivocal fashion so as, on the one hand, to make the persons concerned aware of the reasons for the measure and thereby enable them to defend their rights and, on the other, to enable the court to exercise its supervisory Jurisdiction. The Court of Justice stated in Evropaki Dynamiki Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v Commission of the European Communities (Case C 561/10 P), judgment of 20 September 2011 (unreported), paras 25 and 27, that the contracting authority is not obliged to produce a copy of the evaluation report or to undertake a detailed comparative analysis of the successful tender and of the unsuccessful tender. The present case The present case concerns a tendering process carried out by the respondent in 2010 in respect of the provision of medical services to health authorities in Scotland. The appellant was the existing supplier of the services in question, but was unsuccessful in a tender competition for a replacement contract. It challenged that decision on the ground that the respondent had breached certain of its duties under the Public Contracts (Scotland) Regulations 2006 (SSI 2006/1), which implemented Directives 89/665 and 2004/18. In particular, it complained that the criteria in the invitation to tender were insufficiently clear, and that the reasons given to it for the rejection of its tender were unclear and lacking in detail. Following an eight day proof, at which the appellant adduced evidence from a number of witnesses to the effect that they had not understood the criteria in the same way as the successful tenderer, the appellants case was rejected by the Lord Ordinary, Lord Hodge: [2012] CSOH 75. In relation to the clarity of the criteria, he expressed the opinion that it was unrealistic to require a contracting authority to frame its invitation to tender in such detail that two reasonable people could not reach different views on its interpretation. He noted that there were practical limits to the extent to which a contracting authority could spell out every aspect of what its criteria might entail, and stated that it was implicit in the RWIND tenderer test that the court should ask what would have been reasonably foreseeable by a RWIND tenderer as being encompassed by the stated criteria. Applying that objective approach to the invitation to tender, in the light of evidence as to the relevant context, he concluded that the criteria met the required standard of clarity. In relation to the reasons given, he applied the approach which I have described in paragraph 17 in the light of the evidence, and concluded that the reasons which had been given were adequate: the appellant could have been left in no real doubt as to why it had been unsuccessful, and as to the relative characteristics and advantages of the successful tenderer. The appellant was able to assert its rights before the courts. An appeal to the Inner House was refused, for reasons set out in an opinion delivered by the Lord Justice Clerk, Lord Carloway: [2013] CSIH 22; 2013 SC 411. In his opinion, the Lord Justice Clerk recalled what the Court of Justice had said about the requirement of transparency in SIAC, namely that the test was whether the invitation to tender had formulated the criteria in such a way as to allow all reasonably well informed and normally diligent tenderers to interpret them in the same way (para 52). He observed (para 57): The criteria must be formulated in such a manner as to allow all reasonably well informed and diligent tenderers to interpret them uniformly. If such a tenderer could, understandably and plausibly have construed the criteria in different ways then the criteria must be deemed insufficiently transparent. However, that is a long way from a proposition that the mere fact that a tenderer, who might normally be regarded as reasonably well informed and diligent, construed the criteria in his own particular way is destructive of the process. For such an outcome, the court has to be satisfied that the interpretation was open to the hypothetical tenderer and not simply that the unsuccessful tenderer had been reasonably well informed and diligent and in fact reached that interpretation. The Lord Justice Clerk also observed that it was relevant to consider what the hypothetical RWIND tenderer would have anticipated was entailed by the criteria, but expressed doubt as to whether it was useful or appropriate to employ in this context the concept of reasonable foreseeability: a concept which appeared to add nothing to the established jurisprudence in this field but which, because of its familiarity in other branches of the law, might cause confusion in this context. In the appeal to the Inner House, counsel for the appellant founded on evidence which had been led before the Lord Ordinary as to witnesses understanding of the invitation to tender. Counsel sought to rely on the evidence in order to establish how a RWIND tenderer would have understood the criteria in question. The Lord Justice Clerk considered however that the attempt to establish by evidence how the RWIND tenderer would have understood the criteria was misguided (para 60). The Lord Justice Clerk also observed that it was of considerable importance that decisions of the courts on the validity of a tendering process were taken with all due expedition, so that the parties could know, without delay, whether or not the contract was going to proceed. Unless there was a strong reason to suppose that it would cause injustice, such decisions ought to be capable of being taken in the absence of detailed oral testimony. If it were otherwise, a swift decision would be almost impossible. In relation to the adequacy of the reasons given, the Inner House followed the same approach as the Lord Ordinary and arrived at the same conclusion. The appeal In its appeal to this court, the appellant challenges the conclusions reached by the courts below both in relation to the clarity of the tender criteria and in relation to the adequacy of the reasons given for the rejection of its tender. In relation to the tender criteria, the appellant submits that the Inner House erred in treating the RWIND tenderer as a hypothetical construct, and in applying the RWIND tenderer standard not according to the evidence of witnesses as to what an actual tenderer did or thought, but according to the courts assessment of what a hypothetical RWIND tenderer would have done or thought. The evidence of witnesses from an actual tenderer as to their understanding of the tender criteria, far from being irrelevant, established what RWIND tenderers actually understood, unless it were shown that the witnesses were not reasonably well informed or normally diligent. The courts below had, it was submitted, confused the RWIND tenderer test with the interpretation of a contract: an objective test was appropriate in the latter context, but not in the former. For the reasons I have explained at paragraphs 2 3 and 7 12, these submissions are in my view ill founded. I agree with the way in which this issue was dealt with by the Lord Justice Clerk: The court's decision will involve it placing itself in the position of the reasonably informed tenderer, looking at the matter objectively, rather than, as occurred here to a degree, hearing evidence of what such a hypothetical person might think Although different from an orthodox exercise in contractual interpretation, the question of what a reasonably well informed and normally diligent tenderer might anticipate or understand requires an objective answer, albeit on a properly informed basis. Just like those other juridical creations, such as the man on the Clapham omnibus (delict) or the officious bystander (contract), the court decides what that person would think by making its own evaluation against the background circumstances. It does not hear evidence from a person offered up as a candidate for the role of reasonable tenderer. In a disputed case, the court will, no doubt, need to have explained to it certain technical terms and will have to be informed of some of the particular circumstances of the terms or industry in question, which should have been known to informed tenderers. However, evidence as to what the tenderers themselves thought the criteria required is, essentially, irrelevant. (para 60) As the Lord Justice Clerk made clear, evidence may be relevant to the question of how a document would be understood by the RWIND tenderer. The court has to be able to put itself into the position of the RWIND tenderer, and evidence may be necessary for that purpose: for example, so as to understand any technical terms, and the context in which the document has to be construed. But the question cannot be determined by evidence, as it depends on the application of a legal test, rather than being a purely empirical enquiry. Although, as counsel for the appellants emphasised, the question is not one of contractual interpretation the issue is not what the invitation to tender meant, but whether its meaning would be clear to any RWIND tenderer it is equally suitable for objective determination. I also agree with the Lord Justice Clerk that it is unnecessary, and potentially confusing, to introduce the concept of reasonable foreseeability in the present context. The Lord Ordinarys reference to reasonable foreseeability did not however lead him into error: in substance, he and the Inner House applied the same objective test by considering what a RWIND tenderer would have understood as being encompassed or entailed by the terms of the invitation to tender. Counsel for the appellant also submitted that the Lord Ordinary and the Inner House had erred in concluding that a number of specific aspects of the invitation to tender complied with the requisite standards of transparency. In each case, the argument was essentially that the court had erred in holding that the meaning of the relevant criterion would have been sufficiently clear to a hypothetical RWIND tenderer, in the light of evidence that it had not been clear to witnesses whose understanding was said to be representative of that of a RWIND tenderer. Once it is accepted, however, that the courts below applied the correct legal test, this court will not readily interfere with the conclusion which they reached in the light of their evaluation of the evidence (cf Biogen Inc v Medeva plc [1997] RPC 1, 45; In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 WLR 1911). There is no suggestion that circumstances entitling this court to interfere might exist in the present case, if the principal submission, that the courts below erred in law in their treatment of the evidence in question, were rejected. In these circumstances, it is unnecessary to repeat the analysis carried out by the Inner House. It was also submitted that the courts below had erred in concluding that the reasons given to the appellants for the rejection of their tender were adequate. As I have explained, however, the courts below applied the approach laid down by the Court of Justice. It is not the function of this court to review their findings, in the absence of any error of law in their approach to the evidence or some other recognised ground for interfering with their assessment. Conclusion For these reasons, I would dismiss the appeal. |
The appeal concerns a proposed development by Crisp Maltings Group Ltd (CMGL) at their Great Ryburgh plant in Norfolk, in the area of the North Norfolk District Council (the council). It was opposed by the appellant, Mr Matthew Champion, a member of the Ryburgh Village Action Group. The proposal involved the erection of two silos for 3,000 tons of barley, and the construction of a lorry park with wash bay and ancillary facilities, on a site close to the River Wensum. Permission was granted by the council, following consultation with the relevant statutory bodies, notably Natural England (NE) and the Environment Agency (EA), on 13 September 2011. The river is a Special Area of Conservation, part of the EU Natura 2000 network of sites, and thus entitled to special protection as a European site under the EU Habitats Directive (Directive 97/62/EC), which is given effect in this country by the Conservation and Habitats Species Regulations 2010 (the Habitats Regulations). The river was described in one council report as . probably the best whole river of its type in nature conservation terms, with a total of over 100 species of plants, a rich invertebrate fauna and a relatively natural corridor. The river supports an abundant and diverse invertebrate fauna including the native freshwater crayfish (a European protected species) as well as a good mixed fishery. The appellants complaint, in short, is that the council failed to comply with the procedures required by the regulations governing Environmental Impact Assessment (EIA) and appropriate assessment, respectively under EIA and Habitats Regulations. Legislation Environmental Impact Assessment Directive 2011/92/EU (the EIA Directive) provides the framework for the national regulations governing environmental assessment. The preamble (para (2)) states that Union policy is based on the precautionary principle and that effects on the environment should be taken into account at the earliest possible stage in all the technical planning and decision making processes. By article 2 the EIA Directive requires member states to adopt all measures necessary to ensure that projects likely to have a significant effect on the environment are subject to environmental impact assessment before consent is given. The projects to which it applies are those defined in article 4 and annexes I and II. Projects in annex I require assessment in any event; those in annex II (which covers the present project) require a determination by the competent authority whether it is likely to have a significant effect, so as to require assessment (article 4(2)). The competent authority is the authority designated for that purpose by the member state (article 1(f)). For projects subject to assessment member states are required to adopt the measures necessary to ensure that the developer supplies in an appropriate form the information specified in annex IV, which includes details of the project and its anticipated effects, and the measures proposed to prevent or reduce adverse effects (article 5). That information is to be made available to the public likely to be affected, who must be given early and effective opportunities to participate in the decision making process (article 6). In the United Kingdom the environmental assessment procedure is integrated into the procedures for granting planning permission under the planning Acts. The current regulations are the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 2011. It will be convenient to refer to these (the EIA Regulations), although they replaced the 1999 Regulations which were in force at the time of the present application. The Regulations do not follow precisely the form of the EIA Directive, but there is no suggestion of any failure of implementation. The starting point is the expression EIA development, defined by reference to Schedules 1 and 2 (corresponding to annexes I and II of the EIA Directive). Although the Regulations do not in terms designate a competent authority, it is clear at least by implication that this role is given in the first instance to the local planning authority, which is given the task of determining whether Schedule 2 development is EIA development (see eg regulation 4(6)). The mechanism by which the authority determines whether assessment is required is referred to in the Regulations as screening (not an expression used in the EIA Directive). A screening opinion may be given in response to a specific request by the developer (regulation 5), or, in various circumstances where an application is received by the authority for development which appears to require EIA and is not accompanied by an environmental statement (regulations 7 10). Regulation 3 prohibits the grant of consent for EIA development without consideration of the environmental information, defined (by regulation 2) to include the environmental statement and any representations duly made about the environmental effects of the development. The contents of the environmental statement are defined by reference to Schedule 4 (which corresponds to annex IV of the EIA Directive, and like it includes a reference to measures envisaged to prevent, reduce or offset any significant adverse effects on the environment). The environmental statement, in proper form, is central to this process. In Berkeley v Secretary of State for the Environment [2001] 2 AC 603, Lord Hoffmann rejected the submission that it was enough if the relevant information was available to the public in the various documents provided for inspection: I do not accept that this paper chase can be treated as the equivalent of an environmental statement. In the first place, I do not think it complies with the terms of the Directive. The point about the environmental statement contemplated by the Directive is that it constitutes a single and accessible compilation, produced by the applicant at the very start of the application process, of the relevant environmental information and the summary in non technical language. It is true that article 6(3) gives member states a discretion as to the places where the information can be consulted, the way in which the public may be informed and the manner in which the public is to be consulted. But I do not think it allows member states to treat a disparate collection of documents produced by parties other than the developer and traceable only by a person with a good deal of energy and persistence as satisfying the requirement to make available to the public the annex III information which should have been provided by the developer. (p 617D F) Habitats Directive Council Directive 92/43/EEC (the Habitats Directive) provides for the establishment of a European network of special areas of conservation under the title Natura 2000. Article 6 imposes duties for the protection of such sites. By article 6(3) Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site's conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public. Article 6(4) provides for limited exceptions, but only for imperative reasons of overriding public interest, including those of a social or economic nature. The relevant implementing regulations are the Conservation of Habitats and Species Regulations 2010 (the Habitats Regulations). Regulation 61 reproduces the effect of article 6(3). A competent authority, before deciding to give consent for a project which is likely to have a significant effect on a European site (either alone or in combination with other plans or projects) must make an appropriate assessment of the implications for that site in view of that sites conservation objectives. It may agree to the project only after having ascertained that it will not adversely affect the integrity of the European site, having regard to any conditions or restrictions subject to which they propose that the consent should be given. Authoritative guidance on the interpretation of article 6(3) has been given by the Court of Justice of the European Union (CJEU) in (Case C 127/02) Waddenzee [2006] 2 CMLR 683 (relating to a proposal for mechanical cockle fishing in the Waddenzee Special Protection Area). There is an elaborate analysis of the concept of appropriate assessment, taking account of the different language versions, in the opinion of Advocate General Kokott (paras 95 111). In its judgment the court made clear that the article set a low threshold for likely significant effects: 41. the triggering of the environmental protection mechanism provided for in article 6(3) of the Habitats Directive does not presume as is, moreover, clear from the guidelines for interpreting that article drawn up by the Commission, entitled Managing Natura 2000 Sites: The provisions of article 6 of the Habitats Directive (92/43/EEC) that the plan or project considered definitely has significant effects on the site concerned but follows from the mere probability that such an effect attaches to that plan or project. The court noted that article 6(3) adopts a test essentially similar to the corresponding test under the EIA Directive. (para 42), and that it subordinates the requirement for an appropriate assessment of a project to the condition that there be a probability or a risk that the latter will have significant effects on the site concerned. The Habitats Directive had to be interpreted in accordance with the precautionary principle which is one of the foundations of Community policy on the environment (para 44). It concluded: 45. In the light of the foregoing, the answer to Question 3(a) must be that the first sentence of article 6(3) of the Habitats Directive must be interpreted as meaning that any plan or project not directly connected with or necessary to the management of the site is to be subject to an appropriate assessment of its implications for the site in view of the sites conservation objectives if it cannot be excluded, on the basis of objective information, that it will have a significant effect on that site, either individually or in combination with other plans or projects. As to the content of such appropriate assessment, the court said: 52. As regards the concept of appropriate assessment within the meaning of article 6(3) of the Habitats Directive, it must be pointed out that the provision does not define any particular method for carrying out such an assessment. 53. None the less, according to the wording of that provision, an appropriate assessment of the implications for the site concerned of the plan or project must precede its approval and take into account the cumulative effects which result from the combination of that plan or project with other plans or projects in view of the sites conservation objectives. 54. Such an assessment therefore implies that all the aspects of the plan or project which can, either individually or in combination with other plans or projects, affect those objectives must be identified in the light of the best scientific knowledge in the field. Those objectives may, as is clear from articles 3 and 4 of the Habitats Directive, in particular article 4(4), be established on the basis, inter alia, of the importance of the sites for the maintenance or restoration at a favourable conservation status of a natural habitat type in annex I to that Directive or a species in annex II thereto and for the coherence of Natura 2000, and of the threats of degradation or destruction to which they are exposed 56. It is therefore apparent that the plan or project in question may be granted authorisation only on the condition that the competent national authorities are convinced that it will not adversely affect the integrity of the site concerned. More recently in Sweetman v An Bord Pleanla (Galway County Council intervening) (Case C 258/11) [2014] PTSR 1092 the court spoke of the two stages envisaged by article 6(3): 29. That provision thus prescribes two stages. The first, envisaged in the provisions first sentence, requires the member states to carry out an appropriate assessment of the implications for a protected site of a plan or project when there is a likelihood that the plan or project will have a significant effect on that site [citing Waddenzee (above) paras 41, 43] 31. The second stage, which is envisaged in the second sentence of article 6(3) of the Habitats Directive and occurs following the aforesaid appropriate assessment, allows such a plan or project to be authorised on condition that it will not adversely affect the integrity of the site concerned, subject to the provisions of article 6(4). 40. Authorisation for a plan or project, as referred to in article 6(3) of the Habitats Directive, may therefore be given only on condition that the competent authorities once all aspects of the plan or project have been identified which can, by themselves or in combination with other plans or projects, affect the conservation objectives of the site concerned, and in the light of the best scientific knowledge in the field are certain that the plan or project will not have lasting adverse effects on the integrity of that site. That is so where no reasonable scientific doubt remains as to the absence of such effects The application and its consideration Before addressing the issues of law, it is necessary to return to the factual background. The application for planning permission was initially made on 1 October 2009, but not validated until 15 April 2010. It was accompanied by a Site Specific Flood Risk Assessment, which recognised that the proposal involved the potential to discharge surface water runoff to the nearby ditch system and could lead to pollution reaching the River Wensum. This risk was to be mitigated by a staged system of drainage, involving an interceptor/separator facility and thereafter a storage infiltration basin to be planted with indigenous plants to act as a secondary passive treatment system. The lengthy process of investigation and consultation, which led eventually to the grant of conditional permission for the proposal on 13 September 2011, is described in detail in the judgments below. For present purposes the process can be divided into three main phases: ii) i) October 2009 to June 2010: the initial supporting material, consultations with statutory agencies, and EIA screening (23 April 2010); July 2010 to January 2011: submission of July Flood Risk Assessment (updated in August) and Phase II Ecological Assessment, leading to withdrawal of statutory objections and the decision of the planning committee on 20 January 2011 to give delegated powers to officers to approve the development subject to conditions; June 2011 to September 2011: correspondence with appellants solicitors leading to a reference back to the committee and final decision to approve on 8 September 2011. iii) Phase 1 It became apparent at a very early stage that the main environmental issue was the possible effect of run off from the site to the river. On this there was a substantial degree of common ground between all concerned that more information was required, and that appropriate assessment under the Habitats Regulations was likely to be needed: i) In response to an informal approach by CMGLs planning consultant, Natural England on 3 December 2009 expressed concern in respect of the possible effect on the river of the drain system, particularly in relation to the potential for diesel spillage and polluted run off from the water bay when lorries are washed down. They said that if hydrological connectivity could be established, it was likely that an ii) appropriate assessment would be required under the Habitats Regulations. In February 2010 a Phase I Ecological Assessment, commissioned by CMGL from specialist consultants, recorded that the potential risks to the River Wensum SAC had not been fully evaluated. It was essential that pollution control measures and operation of the Interceptor were adequate for the lorry park in all conditions, particularly during heavy rainfall. It was assumed that an Appropriate Assessment will be required under the Habitats Regulations 1994 which will fully address risks to the SAC and identify further mitigation requirements. iii) On 14 May 2010 Natural England objected to the application on the basis that there was insufficient information for them to advise whether the proposal was likely to have significant effects on the river under the Habitats Regulations. The applicant should be required to submit information relating to the hydrological connectivity between the Surface Water Infiltration Basin and drain system adjacent to the proposed lorry park, and the River Wensum SAC. iv) On the same day the planning officer wrote to CMGL expressing his own concerns that the submitted water measures would be inadequate. He observed that the details submitted in respect of flood risk and surface water management were very sketchy and imprecise regarding the actual management train to be used to handle surface water pollutants. Advice from the Construction Industry Research and Information Association (CIRIA) suggested that the use of oil receptors should be avoided where possible, primarily because of the management required to maintain them, and the risk that inadequate management in heavy rain could result in pollutants not being properly contained. v) On 28 May 2010, the Environment Agency wrote to the council recording their objection on the basis of the inadequate flood risk assessment, noting in particular the lack of information on the infiltration test and the design of the infiltration basin. The screening opinion The formal registration of the application in April 2010 seems to have triggered the EIA screening process. The evidence comes in a copy of the standard form filled in by the relevant planning officer, Mr Lyon, acting under delegated powers, and signed by him on 23 April 2010. That was supplemented by a witness statement. According to this, he contacted Natural England by way of telephone call on 23 April, and spoke with Mr Mike Meadows: I explained the proposed development to Natural England and was advised that, subject to pollution prevention measures being clearly identified and addressed, an Environmental Impact Assessment would not be required. The screening form, as completed by him, indicated that the site was in a sensitive area and that the development fell within Schedule 2 of the Regulations, but that it was not likely to have significant effects on the environment and no EIA was required, the reasons being given as follows: Subject to the applicant/agent ensuring that appropriate mitigation and safeguarding measures are put in place to prevent the possible discharge of pollutants and contamination from the site in the River Wensum (SAC & SSSI). Advice received from Natural England (Mike Meadows) that subject to pollution prevention measures being clearly identified and addressed, EIA would not be necessary. Given the views expressed by Natural England in December 2009 and again in May 2010 as to the need for further information and the likely need for appropriate appraisal, this report of Mr Meadowss views seems surprising. He also gave evidence of the same conversation. Although he confirmed Mr Lyons account as broadly accurate, it was not a formal consultation and he had kept no record. It was not Natural Englands role to decide whether an EIA is necessary and he did not purport to do so on this occasion. His advice was solely related to the degree to which there might be a significant effect on the SPA on the basis that CMGL would advance suitable pollution prevention control measures. In the same evidence he makes clear that on the information then available he could not exclude the risk of significant effects on the SAC. Phase 2 On 10 July 2010 new consultants for CMLG produced a Flood Risk Assessment and Pollution Prevention Strategy (the July 2010 FRA). Part of the scope of the report was to carry out an assessment of the environmental impacts of the proposals to the water environment (and provide potential solutions) including pollution risks to groundwater, surface water and the adjacent SSSI. This contained detailed information about site conditions and hydrology, and set out detailed mitigation measures, to be formulated in accordance with the relevant guidance. The responses of the statutory authorities to this new information were mixed: i) On 13 August 2010, Natural England withdrew their objection, indicating that the new material had addressed satisfactorily the concerns raised in their previous letter. ii) The Environment Agency, by letter dated 19 August 2010, maintained its objection on a number of grounds, including the absence of details about future maintenance. In response CMGLs consultants prepared a further report (the August 2010 FRA), which included further details of run off and peak rainfall proposed by the Environment Agency were incorporated, and proposals for a larger separator, and also set out the proposed maintenance regime. This satisfied the Agency, which on 13 September 2010 withdrew its previous objection, on the condition that a surface water drainage scheme in accordance the August 2010 FRA be implemented prior to the completion and occupation of the development. iii) On 3 October a report from the councils own Conservation, Design and Landscape team maintained their objections, commenting on inadequacies in the two FRAs. On 9 December 2010, following receipt of further information from CMGL, they withdrew their objections. The judge noted (para 85), and as I understand accepted, the evidence of the planning officer as to the reasons for their change of position. It follows that by the time the proposal came before the committee on 20 January 2011 the concerns of all the statutory consultees on the SAC issue had been overcome. The committee resolved by a bare majority to give the senior planning officer delegated powers to approve the development, subject to the imposition of a number of planning conditions. Phase 3 The January decision was met by a large number of complaints locally. On 10 June 2011, solicitors for the appellant, acting for the Ryburgh Village Action Group, wrote complaining that there had been a failure to comply with the requirements of the Habitats and EIA Directives. Of the former they noted that NEs view in early correspondence that assuming hydrological connectivity with the SAC an appropriate assessment would be required, but that, although hydrological connectivity had been established, no appropriate assessment had been undertaken. Of the latter, they said that the EIA screening dated 23 April 2010 had been defective because it failed to assess the specifics of the environmental issues raised in the application, and asking for the council to revise its EIA screening to require the developer to carry out a full environmental assessment. On 2 August 2011, the council wrote to the appellants solicitors noting that the application was to be referred back to a future Development Committee. The letter drew attention to the current views of Natural England on this issue, and invited any further specific comments or evidence to support the assertion that an appropriate assessment under the Habitats Directive or an Environmental Impact Assessment under the EIA Directive was still required. A response was requested within 21 days. Apart from a holding letter, there was no substantive response to this letter before the meeting of the Development Control Committee, which took place on 8 September 2011. At that meeting the committee had a detailed officers report. As the judge noted (para 99), the report summarised the extensive representations against the proposed development, including concerns about light pollution, noise pollution, the storage of hazardous fuel, environmental degradation, wildlife habitat destruction, water table and river pollution, but also extensive representations in support on local economic grounds. In relation to an objection concerning drainage, it was reported that consent would be needed from the Internal Drainage Board, which had requested a number of conditions. In relation to the Habitats Directive, it summarised the views of Natural England and stated: [Officers] are of the view that no appropriate assessment is required in light of all the information that now exists and that there would not be a likely significant effect on the River Wensum SAC as a result of this proposal and that the requirements of the Habitats Directive and Habitats Regulations have been satisfied. In relation to the EIA Directive, the officers' view remains that the proposal is not EIA development on the basis that there are not likely to be significant environmental effects. This view was supported by the recent response from Natural England confirming that there would not be a likely significant effect on the River Wensum SAC as a result of this proposal if the proposed mitigation measures are put in place. The committee were invited first to agree the officers view that the proposal was not EIA development, and that it was entitled to determine the planning application without the need for an environmental statement or appropriate assessment. This was approved (by nine votes to zero with one abstention). The officers then recommended that the application be approved subject to the conditions, including implementation of a surface water drainage scheme in accordance with the details set out in the August 2010 FRA (conditions 13 and 14). There followed a substantive debate on whether the application for planning permission should be granted. In particular, there was discussion of one councillors continuing concern about the risk of substantial run off from the site into the River Wensum. She proposed that water monitoring should be carried out over a period of time to assess whether there were any pollution issues. The committee then resolved (by ten votes to two) to approve the application subject to appropriate conditions to deal with this point. The formal planning permission was issued on 13 September 2011. The conditions included conditions 23 and 24 relating to monitoring of water quality and remedial measures if needed, as requested by the councillor. The present proceedings The proceedings for judicial review were commenced by a claim form filed on 12 December 2011. They were heard in April 2013 before James Dingemans QC, sitting as a Deputy High Court Judge, who allowed the application and quashed the permission. In his judgment (paras 119 121) the judge accepted that the committee would have been entitled on the material before them in 2011 rationally to reach the conclusion that there was no relevant risk requiring appropriate assessment or an EIA. However, he thought such a conclusion was inconsistent with their decision at the same time to impose a requirement for testing of water quality and remediation if necessary: These conditions, which could only be imposed where the Committee considered them necessary, suggested that the Committee considered that there was a risk that pollutants could enter the river. This would also have been a rational and reasonable conclusion available to the Committee, in the light of the detailed matters set out above. It does not seem to me that the council could, rationally, adopt both positions at once. I do not consider that it is open for me to consider that this inconsistency was simply a function of local democracy at work, and that it could be ignored. He did not think that the decision could be saved by exercising a discretion not to quash. Accordingly he ordered that the grant of permission be quashed. At the same time he dismissed a separate claim to quash the response given by Natural England, which he considered to have been based on the correct Waddenzee test. There has been no appeal against that part of his judgment. In the Court of Appeal the only substantive judgment was given by Richards LJ. He set out the relevant statutory provisions relating to both the EIA and the Habitats Directives. In connection with the former he noted that in determining the likelihood of significant effects, it is open to the decision maker to have regard to proposed remedial measures, citing Gillespie v First Secretary of State [2003] EWCA Civ 400, [2003] Env LR 30, and R (Jones) v Mansfield District Council [2003] EWCA Civ 1408, [2004] Env LR 21. He added: The only other point I should mention in relation to the EIA Regulations is that they make provision for a local planning authority to adopt an early screening opinion as to whether a proposed development requires an EIA. A defective screening opinion does not, however, invalidate the entire decision making process. The ultimate question is whether planning permission has been granted without an EIA in circumstances where an EIA was required: see R (Berky) v Newport City Council [2012] EWCA Civ 378, [2012] Env LR 35, per Carnwath LJ at para 22 (para 12). I would respectfully question Richards LJs reliance on my own remarks in Berky, which were not directed to the same issue. However, the judgment thereafter seems to have proceeded on the basis (which does not seem to have seriously challenged) that a defect in the screening process at an early stage could be remedied by proper consideration at the time of the actual grant. Having set out the facts, he addressed the appeal against the judges decision to quash the permission (paras 42 49). He was unable to support the judges reasoning. The committees decision on the issues arising under the Directives showed that they were satisfied that there would be no significant adverse effects. That was not inconsistent with the imposition of conditions as a precautionary measure for the purposes of reassurance, without considering that in their absence there was a likelihood that pollutants would enter the river. Although this point was not abandoned by Mr Buxton in this court, it was not strongly pressed in his written or oral submissions. In my view the Court of Appeal was clearly right on this issue, and I need say no more about it. On the other grounds of challenge, Richards LJ noted that the main thrust of the submissions of Mr Harwood QC (then appearing for Mr Champion) had been that the committee at its meeting on 8 September 2011 was not in a position to make a lawful decision as to whether an EIA or appropriate assessment was required, having been given insufficient information for that purpose: for example as to how low the threshold of likelihood was, as to the relevant criteria and the significance of proximity to a sensitive location, or as to the case law on the relevance of mitigation measures (para 51). Richards LJ did not accept that submission. He said: It is true that the decision making process got off to a bad start, with a flawed screening opinion. But that did not lead in practice to any failure to consider relevant matters. The concerns expressed by Natural England and the Environment Agency, in particular, ensured that the question of mitigation measures was properly addressed. The measures proposed in the resulting flood risk assessments served to meet those concerns. Natural Englands final view that there would not be a likely significant effect was re stated in emphatic terms in its letter of 26 July 2011, which was one of the documents before the Committee and was highlighted in the officers report The committee had all the necessary information before them, and there was nothing to suggest that they applied too relaxed a test. The significance of the sites proximity to the River Wensum SSSI and the SAC was spelled out very clearly in the report, as was the relevance of mitigation measures to the assessment. He concluded: In my view, therefore, the Committee was put in a position where it could properly make the requisite assessment as to the likely effect of the development on the SSSI and the SAC, and I agree with the deputy judge that the decision not to have an EIA or an Appropriate Assessment was a rational and reasonable conclusion available to the Committee on the material before it. (para 52) He also rejected, in the same terms as the judge, the grounds of challenge relating to matters other than effects on the SAC. In view of these conclusions, it was not necessary for the court to consider the possible exercise of discretion in relation to remedies. The arguments in the appeal Before this court, the argument for Mr Champion has been presented for the first time by Mr Richard Buxton, appearing as a solicitor advocate. The emphasis appears to have shifted from the arguments as presented to the courts below, and certainly as addressed in their judgments. At their heart are two related issues, first the timing of the decision whether EIA (or appropriate assessment) is required, and secondly the relevance of mitigation measures. They are put perhaps most succinctly in his printed case in the context of the EIA Regulations (para 14): domestic law (in line with the [preamble to the EIA Directive]) anticipates a decision on whether or not EIA is required to be made by the decision making authority at an early stage. It is accepted that it may happen for whatever reason that a decision not to have EIA is made erroneously at an earlier stage and this can and must be rectified. Indeed the decision maker should keep a negative screening under review. However what is not permitted, but which occurred starkly in the present case, is reliance on mitigation measures during the consenting process (here, measures contained in the [July FRA]) to convert a project that is likely to have significant effects on the environment into one which is judged not to do so and thus screen out the project from the assessment process. No objection has been taken to this reformulation. The issues, as set out in the agreed statement of facts and issues, are in summary: i) The correct approach towards the timing of screening for the need for EIA and AA, in the process of applying for planning permission or other consents; ii) Whether or to what extent mitigation measures may be taken into iii) account in EIA screening. If either the first or second issue is decided in the appellants favour, whether the court nevertheless can and should exercise its discretion to refuse to quash the planning permission. iv) Whether the answers to the above points under European law are sufficiently clear not to require a reference to the CJEU. Screening and the Habitats Directive It is convenient first to address Mr Buxtons contention that a process analogous to EIA screening is an implicit requirement of the Habitats Directive. As he puts it in his case: In summary as the CJEU explains the HD process is a two step process and the decision maker has to be sure at stage one (the screening stage) that the possibility of adverse effects can be excluded before dispensing with the requirement for AA. In order to satisfy the HD, the decision maker doing the screening must identify the conservation objectives of the site and the risks posed by the project and reach a decision that the risks to the conservation objectives can be excluded on the basis of objective information. If the risks are not excluded and an AA is required at stage 2, the project can only be authorised if the decision maker can be sure that no reasonable scientific doubt remains as to an absence of adverse effects to the conservation objectives. This two stage view of the process under the Habitats Directive was not as such challenged by Mr Lockhart Mummery. To some extent, as I understood him, he felt constrained by the fact that a similar approach had been adopted by the council itself. However, since there seems to be some confusion on the point, it is important that we should address it as a matter of principle. As has been seen, the Habitats Directive and Regulations contain no equivalent to screening under the EIA Regulations. Mr Buxton relies on the opinion of Advocate General Sharpston in Sweetman itself. She was principally concerned to dispel confusion created by different terminology used in some of the cases to describe the test under article 6(3). In her view all that was needed at what she called the first stage of article 6(3) was to show that there may be a significant effect (para 47): 49. The threshold at the first stage of article 6(3) is thus a very low one. It operates merely as a trigger, in order to determine whether an appropriate assessment must be undertaken of the implications of the plan or project for the conservation objectives of the site 50. The test which that expert assessment must determine is whether the plan or project in question has an adverse effect on the integrity of the site, since that is the basis on which the competent national authorities must reach their decision. The threshold at this (the second) stage is noticeably higher than that laid down at the first stage. That is because the question (to use more simple terminology) is not should we bother to check? (the question at the first stage) but rather what will happen to the site if this plan or project goes ahead; and is that consistent with maintaining or restoring the favourable conservation status of the habitat or species concerned? Mr Buxton suggests that her first stage (Should we bother to check?) can be regarded as analogous to screening. He points also to use of the term screening in a document entitled Assessment of plans and projects significantly affecting Natura 2000 sites Methodological guidance (prepared by consultants for the European Commission in 2001). It identifies four stages in the process under article 6(3): stage one screening; stage two appropriate assessment; stage three assessment of alternative solutions; stage four assessment where no alternative solutions exist and where adverse effects remain. However, there is nothing in the language of the Habitats Directive to support a separate stage of screening in any formal sense. Nor is it reflected in the reasoning of the CJEU itself. In Sweetman the first stage was the appropriate assessment, the second the decision whether in the light of its conclusions the project could be permitted. Triggering was simply the word the CJEU used to set the threshold for the first stage. The same approach is also found in the European Commissions guidance Managing Natura 2000 Sites: The Provisions of article 6 of the Habitats Directive 92/43/EEC, which adds a third stage, with reference to article 6(4): Article 6(3) and (4) define a step wise procedure for considering plans and projects. (a) The first part of this procedure consists of an assessment stage and is governed by article 6(3), first sentence. (b) The second part of the procedure, governed by article 6(3), second sentence, relates to the decision of the competent national authorities. (c) The third part of the procedure (governed by article 6(4)) comes into play if, despite a negative assessment, it is proposed not to reject a plan or project but to give it further consideration. The applicability of the procedure and the extent to which it applies depend on several factors, and in the sequence of steps, each step is influenced by the previous step. (para 4.2) It is true that the guidance, when commenting on the low threshold required to trigger the safeguards in article 6(3) and (4), observes that the formula is almost identical to that in the EIA Directive, and it comments on the close relationship in practice between the two procedures (paras 4.4.2, 4.5.1). The guidance also extends to the content of the assessment, again drawing parallels with the methodology envisaged by the EIA Directive (para 4.5.2). However, there is no suggestion that this imposes any separate legal obligation analogous to EIA screening. It is important to emphasise that the legal requirements must be found in the legislation, as interpreted by the CJEU itself, not (with respect) in the opinions of the Advocates General nor in guidance issued by the Commission (however useful it may be as an indication of good practice). At least in this country the use of the term screening in relation to the Habitats Directive is potentially confusing, because of the technical meaning it has under the EIA Regulations. The formal procedures prescribed for EIA purposes, including screening, preparation of an environmental statement, and mandatory public consultation, have no counterpart in the Habitats legislation. As Sullivan J said in R (Hart District Council) v Secretary of State for Communities and Local Government [2008] EWHC 1204 (Admin), [2008] 2 P & CR 302, para 71: Unlike an EIA, which must be in the form prescribed by the EIA Directive, and must include, for example, a non technical summary, enabling the public to express its opinion on the environmental issues raised (see Berkeley v the Secretary of State for the Environment [2001] 2 AC 603 per Lord Hoffmann at p 615), an appropriate assessment under article 6(3) and regulation 48(1) does not have to be in any particular form (see para 52 of Waddenzee judgment), and obtaining the opinion of the general public is optional A similar argument by Mr Buxton was rejected by the Court of Appeal in No Adastral New Town Ltd (NANT) v Suffolk Coastal District Council [2015] EWCA Civ 88, paras 63 69. Richards LJ considered the language of article 6(3), which focuses on the end result of avoiding damage to an SPA and the carrying out of an AA for that purpose. He noted the difference in Sweetman between the Advocate Generals formulation, but found no support in the courts judgment for the contention that there must be a screening assessment at an early stage in the decision making process: In none of this material do I see even an obligation to carry out a screening assessment, let alone any rule as to when it should be carried out. If it is not obvious whether a plan or project is likely to have a significant effect on an SPA, it may be necessary in practice to carry out a screening assessment in order to ensure that the substantive requirements of the Directive are ultimately met. It may be prudent, and likely to reduce delay, to carry one out [at] an early stage of the decision making process. There is, however, no obligation to do so. (para 68) The process envisaged by article 6(3) should not be over complicated. As Richards LJ points out, in cases where it is not obvious, the competent authority will consider whether the trigger for appropriate assessment is met (and see paras 41 43 of Waddenzee). But this informal threshold decision is not to be confused with a formal screening opinion in the EIA sense. The operative words are those of the Habitats Directive itself. All that is required is that, in a case where the authority has found there to be a risk of significant adverse effects to a protected site, there should be an appropriate assessment. Appropriate is not a technical term. It indicates no more than that the assessment should be appropriate to the task in hand: that task being to satisfy the responsible authority that the project will not adversely affect the integrity of the site concerned taking account of the matters set in the article. As the court itself indicated in Waddenzee the context implies a high standard of investigation. However, as Advocate General Kokott said in Waddenzee: 107. the necessary certainty cannot be construed as meaning absolute certainty since that is almost impossible to attain. Instead, it is clear from the second sentence of article 6(3) of the Habitats Directive that the competent authorities must take a decision having assessed all the relevant information which is set out in particular in the appropriate assessment. The conclusion of this assessment is, of necessity, subjective in nature. Therefore, the competent authorities can, from their point of view, be certain that there will be no adverse effects even though, from an objective point of view, there is no absolute certainty. In short, no special procedure is prescribed, and, while a high standard of investigation is demanded, the issue ultimately rests on the judgement of the authority. In the present case, in the light of the new information provided and the mitigation measures developed during the planning process, the competent authority, in common with their expert consultees, were satisfied that any material risk of significant effects on the SAC had been eliminated. Although this was expressed by the officers as a finding that no appropriate assessment under article 6(3) was required, there is no reason to think that the conclusion would have been any different if they had decided from the outset that appropriate assessment was required, and the investigation had been carried out in that context. Mr Buxton has been unable to point to any further action which would have been required to satisfy the Waddenzee standard. The mere failure to exercise the article 6(3) trigger at an earlier stage does not in itself undermine the legality of the final decision. It follows that issue (i), relating to the timing of screening as a matter of law, is one which can only arise under the EIA Regulations. Timing of EIA screening It is not in dispute that authorities should in principle adopt screening opinions early in the planning process. That intention is expressed in the preamble to the EIA Directive, and carried into the trigger events in the EIA Regulations. Equally, it is not in dispute that a negative screening opinion may need to be reviewed in the light of later information. In R (Mageean) v Secretary of State for Communities and Local Government [2011] EWCA Civ 863, [2012] Env LR 3, in the context of screening directions made by the Secretary of State, it was held that that circumstances may require initial screening decisions to be reviewed where other material facts come to light. In R (Loader) v Secretary of State for Communities and Local Government [2012] EWCA Civ 869, [2013] PTSR 406, Pill LJ applied the same reasoning to the adoption of screening opinions by local planning authorities: 40. Mr Maurici [for the Secretary of State] accepted that screening decisions will usually be made at an early stage of the planning process. However, if a council came to the belief during the course of making the decision that the proposed development might have significant effects on the environment it would be open to the council to require an environmental statement at that stage Mr Lockhart Mummery QC (for the respondents) also relies on words of Elias J in British Telecommunications Plc v Gloucester City Council [2001] EWHC (Admin) 1001, [2002] 2 P & CR 33. The issue in that case was different. The council had failed to adopt a screening opinion within the three week period provided for by the Regulations; the claimant argued that it was too late to require an environmental statement. In dismissing this argument, Elias J made some more general comments on the procedure: Provided the procedures relating to consultation are complied with, and the representations are before the planning authority when it makes its decision, neither logic nor common sense nor the public interest dictate that the courts should treat the exercise as invalid merely because the planning authority only realised the need for the statement late in the day. Similarly, in my view it also follows that if a decision is taken not to call for a statement, that is capable of being a valid decision notwithstanding that it was not taken until shortly before the permission was given. There would be no point in requiring a fresh application in which the authority would again conclude that no statement was required. (para 58, emphasis added) While the actual decision in that case was unremarkable, the second sentence in the passage quoted above (Similarly ) is perhaps open to misinterpretation. It is one thing to say that a negative opinion, lawfully arrived at on the information then available, may need to be reviewed in the light of subsequent information. It is quite another to say that a legally defective opinion not to require EIA, or even a failure to conduct a screening exercise at all, can be remedied by the carrying out of an analogous assessment exercise outside the EIA Regulations. Even if that exercise results in the development of mitigation measures which are in themselves satisfactory, it would subvert the purposes of the EIA Directive for that to be conducted outside the procedural framework (including the environmental statement and consultation) set up by the Regulations. In the present case, there is no disagreement that it was appropriate for the authority to undertake a screening exercise in April 2010, once the application was formally registered. Nor is it now in dispute that the exercise was legally defective. As the judge said: in circumstances where the pollution prevention measures had not been fully identified at that stage the council could not be satisfied that the mitigation measures would prevent a risk of pollutants entering the river, when the mitigation measures were not known (para 60) Mr Lyon evidently relied on his understanding of the advice of Mr Meadows, but he in turn had not regarded it as a formal consultation, and it was not part of his role to advise on EIA issues. More importantly, it was impossible at that stage to reach the view that there was no risk of significant adverse effects to the river. All the expert opinion, including that of CMGLs own advisers, was to the effect that there were potential risks, and that more work was needed to resolve them. It was also clear that the mitigation measures as then proposed had not been worked up to an extent that they could be regarded as removing that risk. This could be regarded as an archetypal case for environmental assessment under the EIA Regulations, so that the risks and the measures intended to address them could be set out in the environmental statement and subject to consultation and investigation in that context. In my view that defect was not remedied by what followed. It is intrinsic to the scheme of the EIA Directive and the Regulations that the classification of the proposal is governed by the characteristics and effects of the proposal as presented to the authority, not by reference to steps subsequently taken to address those effects. No point having been taken about delay since the date of the defective screening opinion (an issue to which I shall return), Mr Buxtons request in June 2011 that the development should be reclassified as EIA development was in principle well founded. It was not enough to say that the potential adverse effects had now been addressed in other ways. Mitigation measures The second agreed issue relates to the relevance of mitigation measures in EIA screening. It is said to be common ground that mitigation measures may be considered as part of the process of appropriate assessment once it has been decided following screening that appropriate assessment should be carried out. In the case as presented by Mr Buxton, the issue is not so much the relevance of mitigation measures in general, but the reliance on them at the permission stage to dispense retrospectively with the requirement for EIA which should have been initiated at the outset. The relevance of mitigation measures at the screening stage has been addressed in a number of authorities. One of the first was R (Lebus) v South Cambridgeshire DC [2002] EWHC 2009 (Admin), [2003] Env LR 17 (relating to a proposed egg production unit for 12,000 free range chickens). Sullivan J said: 45. Whilst each case will no doubt turn upon its own particular facts, and whilst it may well be perfectly reasonable to envisage the operation of standard conditions and a reasonably managed development, the underlying purpose of the Regulations in implementing the Directive is that the potentially significant impacts of a development are described together with a description of the measures envisaged to prevent, reduce and, where possible, offset any significant adverse effects on the environment. Thus the public is engaged in the process of assessing the efficacy of any mitigation measures. 46. It is not appropriate for a person charged with making a screening opinion to start from the premise that although there may be significant impacts, these can be reduced to insignificance as a result of the implementation of conditions of various kinds. The appropriate course in such a case is to require an environmental statement setting out the significant impacts and the measures which it is said will reduce their significance Of the particular proposal in that case, he said that it must have been obvious that with a proposal of this kind there would need to be a number of non standard planning conditions and enforceable obligations under section 106, and that these were precisely the sort of controls which should have been identified in a publicly accessible way in an environmental statement prepared under the Regulations it was not right to approach the matter on the basis that the significant adverse effects could be rendered insignificant if suitable conditions were imposed. The proper approach was to say that potentially this is a development which has significant adverse environmental implications: what are the measures which should be included in order to reduce or offset those adverse effects? Those passages to my mind fairly reflect the balancing considerations which are implicit in the EIA Directive: on the one hand, that there is nothing to rule out consideration of mitigating measures at the screening stage; but, on the other, that the EIA Directive and the Regulations expressly envisage that mitigation measures will where appropriate be included in the environmental statement. Application of the precautionary principle, which underlies the EIA Directive, implies that cases of material doubt should generally be resolved in favour of EIA. We were shown various statements on the same issue, with arguably differing shades of emphasis, in a number of judgments of the Court of Appeal: Gillespie v First Secretary of State [2003] Env LR 30, paras 37, 48, 49; R (Jones) v Mansfield District Council [2004] Env LR 21, paras 38 39; R (Catt) v Brighton and Hove City Council [2007] EWCA Civ 298, [2007] Env LR 32, paras 33 35. Some were cited by the Court of Appeal in the present case. Mr Lockhart Mummery, rightly in my view, did not rely on any of those statements as representing a material departure from the approach of Sullivan J. They simply illustrate the point that each case must depend on its own facts. In R (Jones) v Mansfield District Council (in a judgment with which I agreed), Dyson LJ said: 39. I accept that the authority must have sufficient information about the impact of the project to be able to make an informed judgment as to whether it is likely to have a significant effect on the environment. But this does not mean that all uncertainties have to be resolved or that a decision that an EIA is not required can only be made after a detailed and comprehensive assessment has been made of every aspect of the matter. As the judge said, the uncertainties may or may not make it impossible reasonably to conclude that there is no likelihood of significant environmental effect. It is possible in principle to have sufficient information to enable a decision reasonably to be made as to the likelihood of significant environmental effects even if certain details are not known and further surveys are to be undertaken. Everything depends on the circumstances of the individual case. As far as concerns the present case, it is not now in dispute that the screening opinion should have gone the other way. The mitigation measures as then proposed were not straightforward, and there were significant doubts as to how they would be resolved. I do not ignore Mr Meadows evidence to the court that the proposed mitigation did not represent novel or untested techniques and that similar methods have and are being successfully used around the country. But that was said in the light of the further reports produced in July 2010, and even then there remained unresolved problems for the Environment Agency and the councils own officers, for example in relation to the maintenance regime. The fact that they were ultimately resolved to the satisfaction of Natural England and others did not mean that there had been no need for EIA. The failure to treat this proposal as EIA development was a procedural irregularity which was not cured by the final decision. Discretion Having found a legal defect in the procedure leading to the grant of permission, it is necessary to consider the consequences in terms of any remedy. Following the decision of this court in Walton v Scottish Ministers [2012] UKSC 44, [2013] PTSR 51, it is clear that, even where a breach of the EIA Regulations is established, the court retains a discretion to refuse relief if the applicant has been able in practice to enjoy the rights conferred by European legislation, and there has been no substantial prejudice (para 139 per Lord Carnwath, para 155 per Lord Hope). Those statements need now to be read in the light of the subsequent judgment of the CJEU in Gemeinde Altrip v Land Rheinland Pfalz (Case C 72/12) [2014] PTSR 311. That concerned a challenge to proposals for a flood retention scheme, on the grounds of irregularities in the assessment under the EIA Directive. A question arose under article 10a of the Directive 85/337 (article 11 of the 2011 EIA Directive), which requires provision for those having a sufficient interest to have access to a court to challenge the substantive or procedural legality of decisions under the Directive. One question, as reformulated by the court (para 39), was whether article 10a was to be interpreted as precluding decisions of national courts that make the admissibility of actions subject to conditions requiring the person bringing the action to prove that the procedural defect invoked is such that, in the light of the circumstances of the case, there is a possibility that the contested decision would have been different were it not for the defect and that a substantive legal position is affected thereby. In answering that question, the court reaffirmed the well established principle that, while it is for each member state to lay down the detailed procedural rules governing such actions, those rules in accordance with the principle of equivalence, must not be less favourable than those governing similar domestic actions and, in accordance with the principle of effectiveness, must not make it in practice impossible or excessively difficult to exercise rights conferred by Union law (para 45) Since one of the objectives of the Directive was to put in place procedural guarantees to ensure better public information and participation in relation to projects likely to have a significant effect on the environment, rights of access to the courts must extend to procedural defects (para 48). The judgment continued: 49. Nevertheless, it is unarguable that not every procedural defect will necessarily have consequences that can possibly affect the purport of such a decision and it cannot, therefore, be considered to impair the rights of the party pleading it. In that case, it does not appear that the objective of Directive 85/337 of giving the public concerned wide access to justice would be compromised if, under the law of a member state, an applicant relying on a defect of that kind had to be regarded as not having had his rights impaired and, consequently, as not having standing to challenge that decision. 50. In that regard, it should be borne in mind that article 10a of that Directive leaves the member states significant discretion to determine what constitutes impairment of a right 51. In those circumstances, it could be permissible for national law not to recognise impairment of a right within the meaning of subparagraph (b) of article 10a of that Directive if it is established that it is conceivable, in view of the circumstances of the case, that the contested decision would not have been different without the procedural defect invoked. 52. It appears, however, with regard to the national law applicable in the case in the main proceedings, that it is in general incumbent on the applicant, in order to establish impairment of a right, to prove that the circumstances of the case make it conceivable that the contested decision would have been different without the procedural defect invoked. That shifting of the burden of proof onto the person bringing the action, for the application of the condition of causality, is capable of making the exercise of the rights conferred on that person by Directive 85/337 excessively difficult, especially having regard to the complexity of the procedures in question and the technical nature of environmental impact assessments. 53. Therefore, the new requirements thus arising under article 10a of that Directive mean that impairment of a right cannot be excluded unless, in the light of the condition of causality, the court of law or body covered by that article is in a position to take the view, without in any way making the burden of proof fall on the applicant, but by relying, where appropriate, on the evidence provided by the developer or the competent authorities and, more generally, on the case file documents submitted to that court or body, that the contested decision would not have been different without the procedural defect invoked by that applicant. 54. In the making of that assessment, it is for the court of law or body concerned to take into account, inter alia, the seriousness of the defect invoked and to ascertain, in particular, whether that defect has deprived the public concerned of one of the guarantees introduced with a view to allowing that public to have access to information and to be empowered to participate in decision making in accordance with the objectives of Directive 85/337. Allowing for the differences in the issues raised by the national law in that case (including the issue of burden of proof), I find nothing in this passage inconsistent with the approach of this court in Walton. It leaves it open to the court to take the view, by relying on the evidence provided by the developer or the competent authorities and, more generally, on the case file documents submitted to that court that the contested decision would not have been different without the procedural defect invoked by that applicant. In making that assessment it should take account of the seriousness of the defect invoked and the extent to which it has deprived the public concerned of the guarantees designed to allow access to information and participation in decision making in accordance with the objectives of the EIA Directive. Judged by those tests I have no doubt that we should exercise our discretion to refuse relief in this case. In para 52 of its judgment, the Court of Appeal summarised the factors which in its view entitled the authority to conclude that applying the appropriate tests, and taking into account the agreed mitigation measures, the proposal would not have significant effects on the SAC. That, admittedly, was in the context of its consideration whether the committee arrived at a rational and reasonable conclusion, rather than the exercise of discretion. However, there is nothing to suggest that the decision would have been different had the investigations and consultations over the preceding year taken place within the framework of the EIA Regulations. This was not a case where the environmental issues were of particular complexity or novelty. There was only one issue of substance: how to achieve adequate hydrological separation between the activities on the site and the river. It is a striking feature of the process that each of the statutory agencies involved was at pains to form its own view of the effectiveness of the proposed measures, and that final agreement was only achieved after a number of revisions. It is also clear from the final report that the public were fully involved in the process and their views were taken into account. It is notable also that Mr Champion himself, having been given the opportunity to raise any specific points of concern not covered by Natural England before the final decision, was unable to do so. That remains the case. That is not to put the burden of proof on to him, but rather to highlight the absence of anything of substance to set against the mass of material going the other way. For completeness I should mention that, in his written submissions to this court, Mr Buxton attempted to rely on a witness statement which had been prepared for the High Court in support of an additional ground relating to failure to consider cumulative effects of incremental development at the site over many years. This he suggests can be used as evidence that it is at least possible that lawful screening might produce a different substantive result. However, as he accepts, this ground, and the evidence in support, were not admitted in the High Court. This court can only proceed on the evidence properly before it. Conclusion For the reasons given, I would dismiss the appeal, albeit for somewhat different reasons from those of the Court of Appeal, taking account of the different emphasis of the arguments before us. Although the proposal should have been subject to assessment under the EIA Regulations, that failure did not in the event prevent the fullest possible investigation of the proposal and the involvement of the public. There is no reason to think that a different process would have resulted in a different decision, and Mr Champions interests have not been prejudiced. Finally, I see no need for a reference to the CJEU. As I have attempted to indicate, the principles, in so far as not clear from the Directives themselves, are fully covered by existing CJEU authority, and the only issues are their application to the facts of the case. I would add two final comments. First, as I have said, no issue has been taken on the delay which elapsed between the screening opinion in April 2010 and the date when it was first challenged in correspondence more than a year later. The formal provision, in both the EIA Directive and the Regulations, for a decision on this issue at an early stage seems designed to provide procedural clarity for the developer and others affected. It is in no ones interest for the application to proceed in good faith for many months on a basis which turns out retrospectively to have been defective. However, in R (Catt) v Brighton & Hove City Council [2007] Env LR 32, para 39ff, it was decided by the Court of Appeal (applying by analogy the decision of the House of Lords in R (Burkett) v Hammersmith and Fulham LBC [2002] 1 WLR 1593) that a failure to mount a timeous legal challenge to the screening opinion was no bar to a challenge to a subsequent permission on the same grounds. Although we have not been asked to review that decision, I would wish to reserve my position as to its correctness. I see no reason in principle why, in the exercise of its overall discretion, whether at the permission stage or in relation to the grant of relief, the court should be precluded from taking account of delay in challenging a screening opinion, and of its practical effects (on the parties or on the interests of good administration). Secondly, although this development gave rise to proper environmental objections, which needed to be resolved, it also had support from those who welcomed its potential contribution to the economy of the area. It is unfortunate that those benefits have been delayed now for more than four years since those objections were, as I have found, fully resolved. I repeat what I said, in a similar context, in R (Jones) v Mansfield District Council [2003] EWCA Civ 1408: 57. The appellant (who is publicly funded) lives near the site, and shares with other local residents a genuine concern to protect her surroundings. With hindsight it might have saved time if there had been an EIA from the outset. However, five years on, it is difficult to see what practical benefit, other than that of delaying the development, will result to her or to anyone else from putting the application through this further procedural hoop. 58. It needs to be borne in mind that the EIA process is intended to be an aid to efficient and inclusive decision making in special cases, not an obstacle race. Furthermore, it does not detract from the authority's ordinary duty, in the case of any planning application, to inform itself of all relevant matters, and take them properly into account in deciding the case. In this case also CMGL may feel in retrospect that it would have been better if they had prepared an environmental statement under the EIA Regulations on their own initiative rather than simply relying on the negative opinion of the planning officer. That might in any event have been a more logical response to the advice of their own consultant that appropriate assessment under the Habitats Directive was likely to be required. Jones was decided at a time when the extent of the courts discretion to refuse relief in such cases was less clear. It is to be hoped that this appeal has enabled this court to lay down clearer guidance as to the circumstances in which relief may be refused even where an irregularity has been established. In future cases, the court considering an application for permission to bring judicial review proceedings should have regard to the likelihood of relief being granted, even if an irregularity is established. (I emphasise that this is said without any reference to the new section 31A(2) of the Senior Courts Act 1981, which as is agreed does not apply to this appeal.) |
These three appeals raise questions as to the circumstances in which the Parole Board (the board) is required to hold an oral hearing. One of the appeals (that of the appellant Osborn) concerns a determinate sentence prisoner who was released on licence but then recalled to custody. The other appeals (those of the appellants Booth and Reilly) concern indeterminate sentence prisoners who have served their minimum terms. reached. In order to comply with common law standards of procedural i) fairness, the board should hold an oral hearing before determining an application for release, or for a transfer to open conditions, whenever fairness to the prisoner requires such a hearing in the light of the facts of the case and the importance of what is at stake. By doing so the board will also fulfil its duty under section 6(1) of the Human Rights Act 1998 to act compatibly with article 5(4) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, in circumstances where that article is engaged. It is impossible to define exhaustively the circumstances in which an ii) oral hearing will be necessary, but such circumstances will often include the following: a) Where facts which appear to the board to be important are in dispute, or where a significant explanation or mitigation is advanced which needs to be heard orally in order fairly to determine its credibility. The board should guard against any tendency to underestimate the importance of issues of fact which may be disputed or open to explanation or mitigation. b) Where the board cannot otherwise properly or fairly make an independent assessment of risk, or of the means by which it should be managed and addressed. That is likely to be the position in cases where such an assessment may depend upon the view formed by the board (including its members with expertise in psychology or psychiatry) of characteristics of the prisoner which can best be judged by seeing or questioning him in person, or where a psychological assessment produced by the Ministry of Justice is disputed on tenable grounds, or where the board may be materially assisted by hearing evidence, for example from a psychologist or psychiatrist. Cases concerning prisoners who have spent many years in custody are likely to fall into the first of these categories. c) Where it is maintained on tenable grounds that a face to face encounter with the board, or the questioning of those who have dealt with the prisoner, is necessary in order to enable him or his representatives to put their case effectively or to test the views of those who have dealt with him. d) Where, in the light of the representations made by or on behalf of the prisoner, it would be unfair for a paper decision made by a single member panel of the board to become final without allowing an oral hearing: for example, if the representations raise issues which place in serious question anything in the paper decision which may in practice have a significant impact on the prisoners future management in prison or on future reviews. In order to act fairly, the board should consider whether its iii) independent assessment of risk, and of the means by which it should be managed and addressed, may benefit from the closer examination which an oral hearing can provide. iv) The board should also bear in mind that the purpose of holding an oral hearing is not only to assist it in its decision making, but also to reflect the prisoners legitimate interest in being able to participate in a decision with important implications for him, where he has something useful to contribute. v) The question whether fairness requires a prisoner to be given an oral hearing is different from the question whether he has a particular likelihood of being released or transferred to open conditions, and cannot be answered by assessing that likelihood. vi) When dealing with cases concerning recalled prisoners, the board should bear in mind that the prisoner has been deprived of his freedom, albeit conditional. When dealing with cases concerning post tariff indeterminate sentence prisoners, it should scrutinise ever more anxiously whether the level of risk is unacceptable, the longer the time the prisoner has spent in prison following the expiry of his tariff. vii) The board must be, and appear to be, independent and impartial. It should not be predisposed to favour the official account of events, or official assessments of risk, over the case advanced by the prisoner. viii) The board should guard against any temptation to refuse oral hearings as a means of saving time, trouble and expense. ix) The boards decision, for the purposes of this guidance, is not confined to its determination of whether or not to recommend the prisoners release or transfer to open conditions, but includes any other aspects of its decision (such as comments or advice in relation to the prisoners treatment needs or the offending behaviour work which is required) which will in practice have a significant impact on his management in prison or on future reviews. Paper decisions made by single member panels of the board are x) provisional. The right of the prisoner to request an oral hearing is not correctly characterised as a right of appeal. In order to justify the holding of an oral hearing, the prisoner does not have to demonstrate that the paper decision was wrong, or even that it may have been wrong: what he has to persuade the board is that an oral hearing is appropriate. xi) oral hearing if it is in doubt whether to do so or not. xii) The common law duty to act fairly, as it applies in this context, is influenced by the requirements of article 5(4) as interpreted by the European Court of Human Rights. Compliance with the common law duty should result in compliance also with the requirements of article 5(4) in relation to procedural fairness. xiii) A breach of the requirements of procedural fairness under article 5(4) will not normally result in an award of damages under section 8 of the Human Rights Act unless the prisoner has suffered a consequent deprivation of liberty. In applying this guidance, it will be prudent for the board to allow an The legislative framework Section 239(2) of the Criminal Justice Act 2003 (the 2003 Act) provides that it is the duty of the board to advise the Secretary of State with respect to any matter referred to it by him which is to do with the early release or recall of prisoners. This includes advising on licence conditions: R (Brooke) v Parole Board [2008] EWCA Civ 29; [2008] 1 WLR 1950, para 47. Section 239(5) permits the Secretary of State to make rules with respect to the proceedings of the board. Section 239(6) permits the Secretary of State to give the board directions as to the matters to be taken into account by it in discharging its functions under Chapter 6 of Part 12 of the 2003 Act, which concerns the release, licences and recall of determinate sentence prisoners, or under Chapter II of Part II of the Crime (Sentences) Act 1997 as amended (the 1997 Act), which concerns the release, licences and recall of indeterminate sentence prisoners. It will be necessary to return to the rules and directions which were in force at the material time. Determinate sentence prisoners who are serving a sentence of 12 months or more are automatically entitled to be released on licence at the halfway point in their sentence: section 244 of the 2003 Act. Section 254 confers on the Secretary of State the power to revoke the licence and to recall the prisoner to prison. There is no obligation on the Secretary of State to consult the board before doing so, and any direct challenge to the Secretary of States decision to revoke a licence can only be made by way of an application for judicial review. At the material time, section 255C(4) of the 2003 Act (as inserted by the Criminal Justice and Immigration Act 2008) imposed a duty upon the Secretary of State to refer the recalled prisoners case to the board. Section 255C(5) provided that, where on such a reference the board recommended the prisoners immediate release, the Secretary of State must give effect to that recommendation. In relation to indeterminate sentence prisoners, section 28(5) of the 1997 Act imposes a duty on the Secretary of State to release the prisoner as soon as he has served the tariff part of his sentence and the board has directed his release. Section 28(6) prohibits the board from giving such a direction unless it is satisfied that it is no longer necessary for the protection of the public that the prisoner should be confined. The Rules The rules in force at the material time were the Parole Board Rules 2004 as amended by the Parole Board (Amendment) Rules 2009 (the rules): those currently in force, the Parole Board Rules 2011 (SI 2011/2947), contain analogous provisions. The rules applied where an indeterminate sentence prisoners case was referred to the board for a decision as to whether he should be released. It is common ground between the parties that they had no application where a determinate sentence prisoners case was referred, following his recall, for a decision as to whether he should be re released. The rules therefore applied in the cases of the appellants Booth and Reilly, but not in the case of the appellant Osborn. The rules made provision for the listing of the prisoners case, following which the Secretary of State was required to serve on the board, and on the prisoner or his representative, specified information and reports. The prisoner was then required to serve on the board and on the Secretary of State any representations about his case that he wished to make. Rule 11 provided for the initial consideration of a prisoners case by a single member of the board, without a hearing. It provided: 11. (1) Within 14 weeks of the case being listed, a single member panel shall consider the prisoners case (sic) without a hearing. 11. (2) The single member panel must either (a) decide that the case should receive further consideration by an oral panel, or (b) make a provisional decision that the prisoner is unsuitable. 11. (3) The decision of the single member panel shall be recorded in writing with reasons, and shall be provided to the parties within a week of the date of the decision. It was implicit in rule 11(2) that an oral hearing would always be held before an indeterminate sentence prisoner was released. Rule 12 was headed Provisional decision against release, and applied where a decision was taken under rule 11(2)(b). It provided: 12. (1) In any case where the single member panel has made a provisional decision under rule 11(2)(b) that the prisoner is unsuitable for release, the prisoner may request an oral panel to give consideration to his case with a hearing. 12. (2) Where the prisoner does so request consideration of his case with a hearing, he must serve notice to that effect, giving full reasons for the request on the board and the Secretary of State within 19 weeks of the case being listed. 12. (3) If no notice has been served in accordance with paragraph (2) after the expiry of the period permitted by that paragraph, the provisional decision shall become final and shall be provided to the parties within 20 weeks of the case being listed. The rules were silent as to how requests for an oral hearing were to be decided and by whom. Where a decision was made under rule 11(2)(a) or a hearing was ordered pursuant to a request under rule 12(2), Part 4 of the rules applied. Provision was made for such matters as the prisoners attendance at the hearing, the submission of documentary evidence and the calling of witnesses. In relation to the procedure to be followed at the hearing, rule 19 provided that the panel was required so far as possible to make its own enquiries in order to satisfy itself of the level of risk of the prisoner. The parties were entitled to appear and be heard and to take such part in the proceedings as the panel thought fit. They were permitted to hear each others evidence, put questions to each other, call any witnesses whom the board had authorised to give evidence, and put questions to any witness or other person appearing before the panel. After all the evidence had been given, the prisoner was to be given a further opportunity to address the panel. Under the rules as introduced in 2004, an indeterminate sentence prisoner was entitled under rule 12(1), in any case where a single member panel had made a provisional decision under rule 11(2)(b), to require a three member oral panel to give consideration to his case with a hearing. This right was taken away by the Parole Board (Amendment) Rules 2009 (SI 2009/408), which came into effect on 1 April 2009. There is a difference between the position in England and Wales following that amendment and the position in the rest of the United Kingdom, where indeterminate sentence prisoners (and some other categories of prisoner) remain entitled to an oral hearing: see the Parole Board (Scotland) Rules 2001 (SSI 2001/1315) rule 20, and the Parole Commissioners Rules (Northern Ireland) 2009 (SR 2009 No 82), rule 17(2). The directions At the time when the appellants cases were considered by the board, the directions given by the Secretary of State in relation to determinate sentence prisoners recalled to prison, such as the appellant Osborn, stated that the assumption is that the board will seek to re release the prisoner or set a future re release date in all cases where it is satisfied that the risk be safely managed in the community (sic). The board was required to consider a number of matters, including the likelihood of the offender complying with the requirements of probation supervision. In assessing that likelihood, the board was required to consider the offenders conduct during the licence period to date. In relation to indeterminate sentence prisoners such as the appellants Booth and Reilly, the board was required by the relevant directions to consider a number of matters, including whether the prisoner had made positive and successful efforts to address the attitudes and behavioural problems which led to the commission of the index offence, the nature of any offences against prison discipline which he had committed, his attitude and behaviour to other prisoners and staff, any medical, psychiatric or psychological conditions, particularly if there was a history of mental instability, and any indication of predicted risk as determined by a validated actuarial risk predictor model, or any other structured assessments of risk and treatment needs. Other directions assumed that the board had the power to recommend the transfer of indeterminate sentence prisoners to open conditions, and to give directions relating to the exercise of that power. Practice determinate sentence prisoners recalled to custody In relation to determinate sentence prisoners recalled to custody, such as the appellant Osborn, the practice of the board, following the decision of the House of Lords in R (West) v Parole Board [2005] UKHL 1; [2005] 1 WLR 350, was to grant an oral hearing to any prisoner who requested one following a provisional decision. That practice changed in February 2007, when the board published a notice stating that it would require reasons from the prisoner when applying for an oral hearing, and would grant such applications only where it appeared to the board that a hearing was necessary and fell within the ambit of the House of Lords ruling. The practice followed by the board in relation to such prisoners is set out in unpublished guidance to panels. That guidance states: All recalled prisoners are initially considered by a paper panel. That panel can decide whether to send the case to an oral hearing. An oral hearing will normally be granted in three sets of circumstances: 1. where the prisoner disputes the circumstances of the recall and the facts of the recall are central to the question of risk and re release; or 2. where the prisoner argues that the recall incident was not justified for some reason, or was not as serious as alleged and this affects the assessment of risk; 3. any case where the assessment of risk requires live evidence from the prisoner and/or witnesses. Where the prisoner asks for an oral hearing, the panel should: Consider whether it is possible to decide the issues and release on the papers; Otherwise, send the case for an oral hearing Where a prisoner submits representations challenging his or her recall the panel should: Consider whether it is possible to decide the issues and release on the papers; or Refuse the representations . or Send the case to an oral hearing. This should only be done when the panel is unable to decide the issues on the papers and concludes that they can only be determined after hearing oral evidence. (emphasis in original) Practice indeterminate sentence prisoners Historically, as I have explained, indeterminate sentence prisoners were entitled to an oral hearing. Following the amendment of the rules in 2009, guidance was issued which was in force at the material time. It stated: Decisions on oral hearings will be taken by the ICM [Intensive Case Management] member. The member will consider this in all cases, regardless of whether the prisoner has requested one. An oral hearing will normally be granted in two sets of circumstances: 1. Where the ICM member considers there is a realistic prospect of release or a move to open conditions; or 2. In any case where the assessment of risk requires live evidence from the prisoner and/or witnesses. This would include a case where a progressive move is not a realistic outcome, but where live evidence is needed to determine the risk factors. It is envisaged that this will be a rare step to take and would normally only be necessary where experts disagreed about a risk factor; for example, whether or not there was a sexual element to an offence that needed exploring. It is only intended to apply this principle where there is a dispute about whether an issue is a risk factor at all, not necessarily whether it has been addressed or not. An oral hearing will not be granted where there is no realistic prospect of release or open conditions, but where such outcomes are requested by the prisoner, detailed reasons will be given for refusing, in particular where the prisoner is already in category C or D. This guidance is thoroughly illogical. First, if an oral hearing will normally be granted in two sets of circumstances, the first being that there is a realistic prospect of release or a move to open conditions, it cannot be correct to say that an oral hearing will not be granted where there is no prospect of release or open conditions: if that were true, the second alternative would not exist. Secondly, if, applying the guidance, the board has been able to conclude that there is no realistic prospect of release or a move to open conditions, then it is difficult to see how it can nevertheless consider that the assessment of risk requires live evidence. The facts Michael Osborn The appellant Osborn was convicted in 2006 of putting people in fear of violence by harassment, and possession of an imitation firearm, during an incident when he was said to have brandished the imitation firearm at the home of his estranged wife. He received a sentence of six years imprisonment, the custodial element of which expired on 20 February 2009, when he was released on licence. He was assessed as presenting a very high risk of harm, and was placed under surveillance from the point of his leaving prison. He was recalled to custody the same day, after arriving at the hostel where he was to live 20 minutes after the time when he was required by his licence conditions to be there, having visited an address at a village in Staffordshire en route. His licence was revoked the same day. He was informed by the Ministry of Justice that he had been recalled to prison because it had been reported by the probation service that he had breached a condition of his licence by failing to confine himself to an address approved by his supervising officer during the hours of a curfew. He was informed that his licence had been revoked by the Secretary of State for Justice because in view of the offences for which he was originally sentenced, the risk suggested by his offending history and his behaviour as described in the breach report completed by the probation service, the Home Secretary (sic) was no longer satisfied that it was right for him to remain on licence. The appellants case was then listed before the board, which was provided with a request for recall report or recall pack, written with a view to justifying the recall, and a report for review of re release. These documents, prepared by the Ministry of Justice or its agencies, contained accounts of events prior to and after his release by his offender manager, a line manager and a senior manager, all of whom agreed that he could not be safely released. In particular, the offender manager raised concerns about the appellants willingness to comply with licence conditions. He reported that the appellant had stated to him, before being released, his refusal to comply with the requirements of his licence, initially challenging whether he should be required to reside at approved premises, and also challenging the extent of an exclusion zone. The offender manager had also received information that on the day of his release, when reminded that he could not have access to firearms, the appellant had said not for another two hours. He was reported to have said that he would be back in prison shortly after he had done what he needed to do. It was also reported that shortly before the appellant had left the address which he had visited en route to the hostel he had telephoned the hostel manager to tell her that he would be late, saying falsely that he was on the A38. On returning to his car he had removed and rearranged items in the boot. This gave rise to concern in view of his comment about access to firearms. He was also reported to have told the hostel manager earlier that week that he could not share a room as he had a multi personality disorder. In view of this reported statement, the offender manager considered it crucial that the prisoner should undergo a full psychiatric assessment before being considered for release. In a letter dated 6 April 2009, the appellants solicitors made representations to the board in support of his release, attaching a handwritten statement in which the appellant provided a detailed account of the events of the day on which he had been released and recalled to custody. He maintained that there had been a delay in his release while the prison waited for the surveillance team to arrive, and that the hostel manager had in consequence agreed to a 30 minute extension of the deadline for his getting there. He had arrived at the hostel before that deadline expired. He had stopped in the village in order to drop off his sister in law, who was one of the passengers in the car in which he had been collected from prison. The solicitors accepted that the appellant had expressed initial concerns about the licence conditions, but said that he had now been advised of the proper channels for challenging such conditions and understood that they were binding. They stated that he had demonstrated in custody that he could behave well, and that he could be expected to comply with his licence. They maintained that any risk could be safely managed within the community, as probation reports indicated. His previous offending, before the index offence, had taken place when he was 16 or 17 years of age. He was now 37. His record within prison had been good: he held trusted employment and was adjudication free. His risk level had been altered to very high on the day before his release, by his recently appointed offender manager, without a proper review or assessment, so as to enable the surveillance and emergency recall to be arranged. The solicitors also said that the offender managers report had only been received that day, and that they had not been able to obtain the appellant's comments on the allegations made against him. They noted that the offender manager had stated that the appellant was devoid of any victim sympathy/awareness, but commented that he had had very little contact with their client. They confirmed that the appellant suffered from mental health problems, but said that the probation service was fully aware of them. It was understood that the prison service had also been aware of them throughout the appellants incarceration, and that he had remained in contact with the psychiatric nurse at his current prison until being signed off. On 22 April 2009 the appellants case was considered by a paper panel comprising an anonymous member of the board, who decided to make no recommendation that he should be released. In its written decision, the panel noted the nature of the index offence and the previous record. It summarised the offender managers account of the appellants attitude towards the licence conditions and of events on the date of release. The removal and rearrangement of items in the car boot were again linked to the alleged comment about access to firearms. The panel stated that it had considered representations dated 2 March 2009 submitted by the appellants legal advisers. It was noted that those representations provided no explanation for the appellants detour to the village. The risk assessments were noted, including the assessment of a lack of victim empathy. It was noted that the hostel was unwilling to accommodate the appellant, and that report writers considered that other approved premises were unlikely to offer him accommodation until his motivation to comply improved. The panel referred to the appellants apparent unwillingness to comply with the requirements of licence supervision: an important finding based on the account of events provided by the offender manager. It was concluded that the assessment of risk was such that it could not be safely managed within the community. The panel does not appear to have considered the letter from the appellants solicitors dated 6 April 2009 or the appellants statement, enclosed with that letter. The appellant was notified of the decision by a standard form letter from the Ministry of Justice (not the board) dated 24 April 2009. The letter informed him that he was entitled to request an oral hearing within 14 days. His solicitors did so, by letter dated 28 April 2009. In the letter, they pointed out that the appellants statement did not appear to have been taken into account. They commented that the panel had relied on information which had not been disclosed to them and which they had not had an opportunity to consider, such as the information about the availability of hostel accommodation. They requested directions that specified witnesses and written documentation should be available at the oral hearing. The proposed witnesses included the hostel manager, who could confirm the appellants account of the telephone calls and could give evidence about the availability of a hostel place; the prison officer who was the source of the allegations about the appellants statements on the day of his release; the minutes of the body responsible for altering the appellants risk level the day before his release; the appellants sister in law, whom he claimed to have dropped off in the village; the offender manager; and a psychologist, in case his evidence should be necessary. In a further letter dated 13 May 2009 the solicitors reiterated that the appellant disputed the allegations made against him by the offender manager. By a decision dated 5 June 2009 the request for an oral hearing was refused by another anonymous single member panel. The decision stated that the panel had seen the oral hearing request from the prisoner/solicitor, together with the paper recall panel decision dated 22.4.09 and the dossier they reviewed. The decision then stated that the request for an oral hearing had been refused for the following reasons: Michael Osborn's solicitor's representations dated 27/5/09 and 28/4/09 dispute parts of the behaviour on the day of release which led to recall (eg Mr Osborn's detour) as well as brandishing a firearm in the index offences. This panel has carefully considered the full dossier and concludes that the disputed facts are not central either to the recall decision or the panel's risk assessment of the panel (sic) on 22/4/09; Mr Osborn's denial of the index offences was known to the panel already. So far as appears from the decision, this panel proceeded on the basis of the same material as had been before the earlier panel, with the addition of two subsequent letters from the appellants solicitors. There is no indication that the letter dated 6 April, or the appellants statement, were taken into account. The appellants claim that the time when he was due to arrive at the hostel had been extended does not appear to have been considered. The fact that the appellant disputed many of the allegations made against him, and the potential bearing of that dispute upon the assessment of risk, do not appear to have been taken into account. Langstaff J dismissed the appellants application for judicial review ([2010] EWHC 580 (Admin)). The judge considered that the facts in the appellants case were only minimally in contention, that the focus of the letter dated 28 April 2009 had been on matters which were peripheral to the decision made, and that the bulk of the letter indicated a desire to ask questions about matters of fact which were not in dispute and did not have any relevance to the risk to the public on re release. On appeal to the Court of Appeal ([2010] EWCA Civ 1409, [2011] UKHRR 35), where the case was considered together with that of the appellant Booth, Carnwath LJ (with whom Sedley and Moses LJJ agreed) accepted that there was some force in the submission that, contrary to the understanding of the judge, there were significant factual disputes on matters relevant to the decision (para 45). He considered however that the judge was right to consider that the boards decision on release did not ultimately depend on resolution of these issues (para 47). The lack of information about the appellants current mental health status and the recommendation that a full psychiatric assessment should be carried out, combined with the very high risk of harm should he re offend, provided ample reason for not allowing release (ibid). The appellant was eventually allowed an oral hearing in November 2010. His application for release was refused. The facts John Booth The appellant Booth received a discretionary life sentence in 1981 for attempted murder, with a minimum term of six and a half years. The conviction concerned the attempted murder by strangulation of an elderly woman in a train compartment. He has remained in custody ever since, save for a short period in 1993, when he was released but recalled after three months. Psychiatric treatment has continued throughout his sentence. Although he has progressed to open conditions on various occasions, he has failed on each occasion in that setting, most recently in 2003. In July 2009 the appellants case was referred to the board by the Secretary of State under section 28 of the 1997 Act, to consider whether or not it would be appropriate to direct the appellants release. If the board did not consider it appropriate to direct release, it was invited to advise the Secretary of State whether the appellant should be transferred to open conditions. If the board made such a recommendation, it was invited to comment on the degree of risk involved. It was also invited to advise the Secretary of State on the continuing areas of risk that needed to be addressed. The dossier provided to the board included reports from the deputy lifer manager, the appellants offender supervisor, and a psychologist in training. The appellant was described in the dossier as a very institutionalised man who, if not encouraged, would be satisfied to remain in custody for the remainder of his life. The referral letter, following the standard form, requested the board to give full reasons for its decision or recommendation, but also stated that the board was not being asked to comment on or make any recommendation about any specific treatment needs or offending behaviour work required. Notwithstanding that statement, it is apparent from the papers concerning the appellants Booth and Reilly that in practice the board may comment on treatment needs and on the offending behaviour work required. It is indeed difficult for it to avoid doing so, if it is to give reasons for its decisions and recommendations which address the matters that it is required by the Secretary of States directions to consider, and if it is to comply with the request for advice about areas of risk that need to be addressed. It also appears that such comments may have an impact on the prisoners management in prison and on the courses offered to him, as one would expect. The appellant subsequently received from the board a letter in a standard tick box form, dated 21 October 2009. It stated: The Parole Board has decided not to direct your release (or recommend your transfer to open conditions if applicable). This is a decision taken on the papers and the full decision is attached. The letter continued: You can appeal the decision and ask for a full oral hearing before a panel of the Parole Board if you believe that there are significant and compelling reasons for this. You have four weeks (28 days) from the date of this letter to decide if you wish to lodge an appeal. This letter mischaracterises the nature of the single member decision, the rights of the prisoner following the making of such a decision, and the function of the board at that stage under rules 11 and 12. The implication of the letter is that the board has decided that the prisoner should not be released or recommended for transfer to open conditions, subject to a right of appeal. The prisoner is requested by the form either to signify his acceptance of that decision or to put forward reasons why he does not accept it: in other words, his grounds of appeal. The reference to compelling reasons implies that there is a significant onus on the prisoner. As I have explained, however, the decision made by the single member under rule 11(2)(b) is merely provisional. Where a provisional decision is made, the prisoners entitlement under rule 12(1) is not to appeal against that decision, but to request an oral panel to give consideration to his case with a hearing. The board then has to consider that request. If it grants the request, the matter is then considered by an oral panel de novo, as I have explained. Enclosed with the letter was the decision taken by an anonymous intensive case management (ICM) member. It stated: A single Parole Board member reviewed your case on the papers on the 14th October 2009. The Parole Board is empowered to direct your release if it is satisfied that it is no longer necessary for the protection of the public that you continue to be detained. The member was not so satisfied and does not direct release; nor recommend transfer to open conditions. There was nothing in the decision to indicate its provisional nature. The decision summarised the appellants history as set out in the dossier, and stated: In order to improve your ability to cope the thinking skills programme (TSP) has been recommended for you and this was considered a good starting point in order to start addressing your risk and to deal with your long term problems of dealing with stress The report by the psychologist reports that you have made progress with your coping skills as evidenced by your current behaviour as compared to the severe difficulties you have had in the past. The concern, however, is that you have little awareness of what may unsettle you in the future and that your relapse prevention strategies rely solely on professional support. The report states you do not see it as your responsibility to change but for others to look after you. The psychologist recommends the TSP for you In order to fully benefit from this programme it is suggested that some 1:1 work with the treatment team would be needed before you started the programme No report writers are in a position to recommend release or a progressive move to open conditions for you. You feel you may benefit from a direct release to Box Tree Cottage which offers a high level of supportive accommodation for offenders but it is felt that such plans are somewhat premature for you although the offender manager and the psychologist have not ruled out this type of progression in the longer term. In response to the letter, the appellants solicitors requested an oral hearing by letter dated 17 November 2009. They stated that the appellants was a complex case. Since his last review, he had been working on a one to one basis with a psychiatrist in the prison on cognitive skills, and was currently covering some of the elements of the thinking skills programme. He had completed work to reduce his risk since his last review. He had not had any adjudications. He had had successful releases on temporary licence. His application for release might therefore be successful. He would require psychiatric intervention when released. This needed to be considered at an oral hearing. His probation officer was currently arranging for him to visit Box Tree Cottage, which provided accommodation with psychiatric support on hand. It was likely that he would request direct release to that accommodation. By letter dated 19 November 2009, headed Appeal against Paper Decision, the board informed the appellant that the appeal has been refused. The letter stated: The ICM assessor's duty is to consider whether the grounds of the appeal are justified and if an oral hearing would make any material difference to the paper hearing decision. The implication of that statement is that a decision which was taken before any representations were received from the prisoner should be reconsidered only if representations subsequently made demonstrated that an oral hearing would result in a different decision. The letter continued: The criteria for granting an oral hearing is (sic) where the member considers there is a realistic chance of release or open conditions and where the assessment of risk requires live evidence to determine the risk factors. In Mr. Booth's case the offender manager, the offender supervisor and the prison psychologist all agree on the current risk factors which are thinking skills deficits and anger management issues and that interventions need to be completed to address these risk factors. They all conclude that Mr. Booth is unsuitable for release or open conditions. There is no evidence or argument put forward in the representations which persuades the ICM assessor that an oral hearing is justified. The paper decision is therefore final. The decision does not explain why the points made on behalf of the appellant in the letter dated 17 November 2009 had been discounted by the anonymous ICM assessor, beyond reiterating the contrary opinions of the offender manager, the offender manager and the prison psychologist. Langstaff J refused permission to apply for judicial review ([2010] EWHC 1335 (Admin)). He held that the board had been entitled to take the view that there was no realistic likelihood of immediate release or transfer to open conditions. On appeal ([2010] EWCA Civ 1409), Carnwath LJ agreed with the judge, holding that although the points raised on Mr Booths behalf might be relevant to his future handling in custody, there was (it was said) no dispute about the need for him to remain in custody for the time being. Since (it was said) that was the question for the board, they could properly form the view that there was no practical possibility of an oral hearing changing that position for the time being (para 50). The facts James Reilly The appellant Reilly was convicted in 2002 of offences of robbery, attempted robbery and possession of an imitation firearm, relating to the attempted robbery of a post office and the robbery of another post office. He had 19 previous convictions, two of which were for robbery. He received an automatic life sentence with a minimum term of six years and eight months, which expired in September 2009. During the course of his sentence he was transferred to Northern Ireland, but remained subject to the jurisdiction of the board under section 28 of the 1997 Act. By letter dated 3 March 2009 the board notified the appellant that he was being considered for release. He was told that he would receive a copy of his dossier and would have 28 days to submit written representations. The board would consider his case and notify him of its decision whether to grant an oral hearing. He would then have 28 days to decide whether he accepted the decision or whether he wished to appeal the decision. On 19 March 2009 the appellants solicitors replied, requesting an oral hearing and indicating that the appellant would be legally represented. On 29 April 2009 they wrote to the board, drawing to its attention that they had not yet received the dossier. On 8 May 2009 the solicitors were informed by the board that the appellant had a target month for oral hearing of September 2009, and that it had not yet received the dossier. On 21 May 2009 the solicitors wrote to the prison authorities requesting confirmation that the dossier had been submitted to the board. On 3 June they learned that a copy of the dossier had been provided to the appellant, but not to them. At some point in about June 2009 the appellant received an undated letter from the board, in the standard form described in para 33. Like the similar letter addressed to the appellant Booth, it informed the appellant that the board had decided not to direct his release or to recommend his transfer to open conditions, and that he could appeal the decision and ask for a full oral hearing. Enclosed with the letter was an undated and anonymous decision. It took as its starting point a pre tariff review carried out by the board in 2006, which stated that the appellant needed to show a sustained period of good behaviour, and that he was working on drug relapse prevention and undertaking specified courses. In relation to the first of these, the panel noted that since 2007 the appellant had been adjudicated upon for matters including possession of unauthorised articles, attempted assault on staff, damaging prison property, possession of a knife, disobeying orders and abusive behaviour. He had failed a number of drug tests. He had undertaken one of the relevant courses with apparent success, but the drug tests indicated that he had been unable to translate this work into positive action. Given the drug test results, he was unsuitable for the other recommended course. The panel concluded that there was more work to be done, particularly in relation to the use of violence, and that the appellant would need to demonstrate that he could maintain his behaviour and motivation before less secure conditions could be considered. By letter dated 10 July 2009 the appellants solicitors requested an oral hearing. They pointed out, first, that the panel had not had before it any representations from the appellant. Secondly, they noted that the major reservations in the panels decision reflected the comments in the dossier about the appellants prison record and failed drug tests. They submitted that the appellants adjudication record did not on examination indicate an unacceptable risk. The charge of possession of unauthorised articles related to items from the tuck shop. The charge of attempted assault concerned his flicking a sock in the direction of a prison officer. The charge of damaging prison property concerned a torn bed sheet. Possession of a knife concerned a knife which the appellant had removed from another prisoner in order to avoid an incident. In relation to disobeying orders, the appellant had objected to being in the vicinity of heavy machinery in the prison workshop as he was epileptic. Following the adjudication he worked instead in another part of the prison. The charge of abusive behaviour had been dismissed. In relation to the drugs tests, during the relevant periods the appellant had been prescribed medications which might account for the results. It was submitted that the appellant had progressed sufficiently to be seriously considered for open conditions. It was believed that the necessary remaining courses could be accessed by prisoners in such conditions. Not all the report writers had commented on the appropriateness of open conditions. By letter dated 20 July 2009, headed Appeal Against Paper Decision, the appellant was notified that his appeal had been refused. The letter, whose author was unidentified, stated: The appeal has been refused on the grounds that while individual adjudications may have explanations there still remains significant offending behaviour work for you to carry out, particularly with regard to instrumental violence. Until such work is successfully completed, the risk of reconviction or of causing serious harm cannot be regarded as reduced. No report writers recommend a move to open or release at this review. This panel endorses the view that no recommendation can be made at this time and the appeal is refused. The paper decision is therefore final. The letter did not address the possibility that the recommendations of the report writers had been influenced by the appellants history of adjudications and failed drug tests, to which they had referred, or the possibility that the boards independent assessment might be affected if the appellants explanations were accepted. Nor did it address the possibility, raised in the appeal, that any further courses might be undertaken in open conditions. There is no indication that the explanation put forward for the failed drug tests was taken into account. By letter dated 23 July 2009 the appellant was informed that the Secretary of State agreed with the panels recommendation for the reasons which it gave, and considered that a number of risk factors were outstanding and required further work. In particular, the appellant needed to address his behaviour and drug use in prison over a sustained period. It appears from the latter conclusion, which did not form part of the appeal decision, that the Secretary of State may have been proceeding on the basis of the paper decision, which had become final. On an application for judicial review, Treacy J held that the board had acted in breach of its common law duty to act fairly, and incompatibly with the appellants Convention rights under article 5(4), in failing to provide him with an oral hearing ([2010] NIQB 46). In a subsequent judgment ([2010] NIQB 56), Treacy J decided that the appropriate remedy was the award of certiorari to quash the boards decision. He declined to make an award of damages under section 8 of the Human Rights Act, noting that it was agreed that the appellant could not establish that he had been deprived of liberty as a result of the decision, and concluding that any frustration or distress which he might have suffered was not of such intensity as to justify an award of damages. An appeal against the first of these decisions was allowed by the Court of Appeal in Northern Ireland ([2011] NICA 6). The court followed the approach which had been adopted by the Court of Appeal of England and Wales in the cases of the appellants Osborn and Booth, and concluded that, since the factual issues highlighted by the appellants solicitors were not of critical importance, it followed that the board could fairly conclude that an oral hearing would not assist it in its determination of the relevant issue. The appellant was eventually allowed an oral hearing in May 2011. His application for release was refused. Domestic law and Convention rights The submissions on behalf of the appellants focused on article 5(4), and paid comparatively little attention to domestic administrative law. As I shall explain, that approach does not properly reflect the relationship between domestic law (considered apart from the Human Rights Act) and Convention rights. The guarantees set out in the substantive articles of the Convention, like other guarantees of human rights in international law, are mostly expressed at a very high level of generality. They have to be fulfilled at national level through a substantial body of much more specific domestic law. That is true in the United Kingdom as in other contracting states. For example, the guarantee of a fair trial, under article 6, is fulfilled primarily through detailed rules and principles to be found in several areas of domestic law, including the law of evidence and procedure, administrative law, and the law relating to legal aid. The guarantee of a right to respect for private and family life, under article 8, is fulfilled primarily through rules and principles found in such areas of domestic law as the law of tort, family law and constitutional law. Many other examples could be given. Article 5, in particular, is implemented through several areas of the law, including criminal procedure, the law relating to sentencing, mental health law and administrative law: indeed, article 5(4) is said to have been inspired by the English law of habeas corpus (Sanchez Reisse v Switzerland (1986) 9 EHRR 71, 88). As these examples indicate, the protection of human rights is not a distinct area of the law, based on the case law of the European Court of Human Rights, but permeates our legal system. The values underlying both the Convention and our own constitution require that Convention rights should be protected primarily by a detailed body of domestic law. The Convention taken by itself is too inspecific to provide the guidance which is necessary in a state governed by the rule of law. As the European court has said, a norm cannot be regarded as a law unless it is formulated with sufficient precision to enable the citizen to regulate his conduct (Sunday Times v United Kingdom (1979) 2 EHRR 245, 271). The Convention cannot therefore be treated as if it were Moses and the prophets. On the contrary, the European court has often referred to the fundamentally subsidiary role of the Convention (see eg Hatton v United Kingdom (2003) 37 EHRR 611, para 97). In relation to article 5(4) in particular, the court has made it clear that in order for there to be compliance with that guarantee, there must in the first place be compliance with the relevant substantive and procedural rules of domestic law (Koendjbiharie v The Netherlands (1990) 13 EHRR 820, para 27). Domestic law may however fail to reflect fully the requirements of the Convention. In that situation, it has always been open to Parliament to legislate in order to fulfil the United Kingdoms international obligations; as it has done, for example, in response to judgments of the European court concerning the application of article 5(4). The courts have also been able to take account of those obligations in the development of the common law and in the interpretation of legislation. The Human Rights Act has however given domestic effect, for the purposes of the Act, to the guarantees described as Convention rights. It requires public authorities generally to act compatibly with those guarantees, and provides remedies to persons affected by their failure to do so. The Act also provides a number of additional tools enabling the courts and government to develop the law when necessary to fulfil those guarantees, and requires the courts to take account of the judgments of the European court. The importance of the Act is unquestionable. It does not however supersede the protection of human rights under the common law or statute, or create a discrete body of law based upon the judgments of the European court. Human rights continue to be protected by our domestic law, interpreted and developed in accordance with the Act when appropriate. That approach is now well established. A few examples may be given. In R (Daly) v Secretary of State for the Home Department [2001] UKHL 26; [2001] 2 AC 532 a policy that prisoners should be absent from their cells while they were being searched for contraband, as applied to a prisoner who had correspondence with his solicitor in his cell, was held to be unlawful on the ground that it infringed the prisoners common law right that the confidentiality of privileged legal correspondence be maintained. Lord Bingham of Cornhill noted in the final paragraph of his speech that that result was compatible with article 8 of the Convention. In that regard he adopted the observations of Lord Cooke of Thorndon, who said (para 30): It is of great importance, in my opinion, that the common law by itself is being recognised as a sufficient source of the fundamental right to confidential communication with a legal adviser for the purpose of obtaining legal advice. Thus the decision may prove to be in point in common law jurisdictions not affected by the Convention. Rights similar to those in the Convention are of course to be found in constitutional documents and other formal affirmations of rights elsewhere. The truth is, I think, that some rights are inherent and fundamental to democratic civilised society. Conventions, constitutions, bills of rights and the like respond by recognising rather than creating them. When the House of Lords considered in R (West) v Parole Board [2005] UKHL 1; [2005] 1 WLR 350 the circumstances in which determinate sentence prisoners recalled to prison were entitled to an oral hearing before the board, it took the common law as its starting point, and considered judgments of the European court, together with judgments from a number of common law jurisdictions, in deciding what the common law required. It went on to hold that the boards review of the prisoners case would satisfy the requirements of article 5(4) provided it was conducted in a manner that met the common law requirements of procedural fairness. That decision is of obvious relevance to the present appeals. Similarly, when the House of Lords rejected the admission of evidence obtained by torture, it did so on the basis of the common law: A v Secretary of State for the Home Department (No 2) [2005] UKHL 71; [2006] 2 AC 221. Lord Bingham observed at para 51 that English common law had regarded torture and its fruits with abhorrence for over 500 years, and concluded at para 52 that the principles of the common law, standing alone, compelled the exclusion of third party torture evidence. He noted that that was consistent with the Convention. More recently, the importance of the continuing development of the common law, in areas falling within the scope of the Convention guarantees, was emphasised by the Court of Appeal in R (Guardian News and Media Ltd) v City of Westminster Magistrates Court (Article 19 intervening) [2012] EWCA Civ 420; [2013] QB 618. The case concerned access by the Press to documents referred to in court, and was decided on the basis of the common law, including authorities from other jurisdictions, rather than on the basis of article 10 of the Convention. Toulson LJ, with whose reasoning the other members of the court agreed, stated at para 88: The development of the common law did not come to an end on the passing of the Human Rights Act 1998 . It is in vigorous health and flourishing in many parts of the world which share a common legal tradition. This case provides a good example of the benefit which can be gained from knowledge of the development of the common law elsewhere. Finally, in this connection, in R (Faulkner) v Secretary of State for Justice [2013] UKSC 23; [2013] 2 WLR 1157, para 29, the ordinary approach to the relationship between domestic law and the Convention was described as being that the courts endeavour to apply and if need be develop the common law, and interpret and apply statutory provisions, so as to arrive at a result which is in compliance with the UKs international obligations, the starting point being our own legal principles rather than the judgments of the international court. Against the background of those authorities, the error in the approach adopted on behalf of the appellants in the present case is to suppose that because an issue falls within the ambit of a Convention guarantee, it follows that the legal analysis of the problem should begin and end with the Strasbourg case law. Properly understood, Convention rights do not form a discrete body of domestic law derived from the judgments of the European court. As Lord Justice General Rodger once observed, it would be wrong to see the rights under the European Convention as somehow forming a wholly separate stream in our law; in truth they soak through and permeate the areas of our law in which they apply (HM Advocate v Montgomery 2000 JC 111, 117). Procedural fairness at common law three preliminary matters Following the approach I have described, it is necessary to begin by considering the practice followed by the board in the light of domestic principles of procedural fairness. In doing so, it may be helpful to clarify three matters at the outset. The first matter concerns the role of the court when considering whether a fair procedure was followed by a decision making body such as the board. In the case of the appellant Osborn, Langstaff J refused the application for judicial review on the ground that the reasons given for refusal [to hold an oral hearing] are not irrational, unlawful nor wholly unreasonable (para 38). In the case of the appellant Reilly, the Court of Appeal in Northern Ireland stated at para 42: Ultimately the question whether procedural fairness requires their deliberations to include an oral hearing must be a matter of judgment for the Parole Board. These dicta might be read as suggesting that the question whether procedural fairness requires an oral hearing is a matter of judgment for the board, reviewable by the court only on Wednesbury grounds. That is not correct. The court must determine for itself whether a fair procedure was followed (Gillies v Secretary of State for Work and Pensions [2006] UKHL 2; 2006 SC (HL) 71; [2006] 1 WLR 781, para 6 per Lord Hope of Craighead). Its function is not merely to review the reasonableness of the decision makers judgment of what fairness required. The second matter to be clarified concerns the purpose of procedural fairness. In the case of the appellant Osborn, Langstaff J stated at para 6 that in determining whether an oral hearing was necessary, what fell to be considered was the extent to which an oral hearing would guarantee better decision making in terms of the uncovering of facts, the resolution of issues and the concerns of the decision maker, due consideration being given to the interests at stake. In the Court of Appeal, Carnwath LJ interpreted Lord Binghams speech in R (West) v Parole Board [2005] UKHL 1; [2005] 1 WLR 350 as implying that the underlying rationale of procedural fairness at common law was one in which the emphasis is on the utility of the oral procedure in assisting in the resolution of the issues before the decision maker (para 38). There is no doubt that one of the virtues of procedurally fair decision making is that it is liable to result in better decisions, by ensuring that the decision maker receives all relevant information and that it is properly tested. As Lord Hoffmann observed however in Secretary of State for the Home Department v (AF (No 3) [2009] UKHL 28; [2010] 2 AC 269, para 72, the purpose of a fair hearing is not merely to improve the chances of the tribunal reaching the right decision. At least two other important values are also engaged. The first was described by Lord Hoffmann (ibid) as the avoidance of the sense of injustice which the person who is the subject of the decision will otherwise feel. I would prefer to consider first the reason for that sense of injustice, namely that justice is intuitively understood to require a procedure which pays due respect to persons whose rights are significantly affected by decisions taken in the exercise of administrative or judicial functions. Respect entails that such persons ought to be able to participate in the procedure by which the decision is made, provided they have something to say which is relevant to the decision to be taken. As Jeremy Waldron has written (How Law Protects Dignity [2012] CLJ 200, 210): Applying a norm to a human individual is not like deciding what to do about a rabid animal or a dilapidated house. It involves paying attention to a point of view and respecting the personality of the entity one is dealing with. As such it embodies a crucial dignitarian idea respecting the dignity of those to whom the norms are applied as beings capable of explaining themselves. This point can be illustrated by Byles Js citation in Cooper v Wandsworth Board of Works (1863) 14 CB (NS) 180, 195 of a dictum of Fortescue J in Dr Bentleys Case (R v Chancellor of Cambridge, Ex p Bentley (1748) 2 Ld Raym 1334): The laws of God and man both give the party an opportunity to make his defence, if he has any. I remember to have heard it observed by a very learned man, upon such an occasion, that even God himself did not pass sentence upon Adam before he was called upon to make his defence. The point of the dictum, as Lord Hoffmann explained in AF (No 3) at para 72, is that Adam was allowed a hearing notwithstanding that God, being omniscient, did not require to hear him in order to improve the quality of His decision making. As Byles J observed (ibid), the language used by Fortescue J is somewhat quaint, but has been the law from that time to the present. This aspect of fairness in decision making has practical consequences of the kind to which Lord Hoffmann referred. Courts have recognised what Lord Phillips of Worth Matravers described as the feelings of resentment that will be aroused if a party to legal proceedings is placed in a position where it is impossible for him to influence the result Secretary of State for the Home Department v AF (No 3) [2009] UKHL 28; [2010] 2 AC 269, para 63). In the present context, research has established the importance attached by prisoners to a process of risk assessment which provides for their contribution to the process (see Attrill and Liell, Offenders Views on Risk Assessment, in Who to Release? Parole, Fairness and Criminal Justice (2007), ed Padfield). Other research reveals the frustration, anger and despair felt by prisoners who perceive the boards procedures as unfair, and the impact of those feelings upon their motivation and respect for authority (see Padfield, Understanding Recall 2011, University of Cambridge Faculty of Law Research Paper No 2/2013 (2013)). The potential implications for the prospects of rehabilitation, and ultimately for public safety, are evident. The second value is the rule of law. Procedural requirements that decision makers should listen to persons who have something relevant to say promote congruence between the actions of decision makers and the law which should govern their actions (see eg Fuller, The Morality of Law, revised ed (1969), p 81, and Bingham, The Rule of Law (2010), chapter 6). The third matter to be clarified concerns the cost of oral hearings: a consideration which appears to have underlain some of the changes to the rules and practice of the board which have given rise to the present appeals, and which is reflected in the boards annual reports, where figures are given for the savings achieved by the refusal of oral hearings in recall cases. The easy assumption that it is cheaper to decide matters without having to spend time listening to what the persons affected may have to say begs a number of questions. In the context of parole, where the costs of an inaccurate risk assessment may be high (whether the consequence is the continued imprisonment of a prisoner who could safely have been released, or re offending in the community by a prisoner who could not), procedures which involve an immediate cost but contribute to better decision making are in reality less costly than they may appear. In the present cases, counsel for the board accepted that cost was not a conclusive argument against the holding of oral hearings. R (West) v Parole Board The circumstances in which the board should afford an oral hearing to determinate sentence prisoners who have been released on licence and then returned to prison were considered by the House of Lords in R (West) v Parole Board [2005] UKHL 1; [2005] 1 WLR 350. The case was decided at a time when such prisoners were entitled to challenge the revocation of their licence before the board (whereas now, as explained earlier, the board cannot adjudicate directly upon the appropriateness of the revocation of the licence, but must determine whether the prisoner should be re released, having regard to his conduct during the licence period, amongst other matters). The case was also decided at a time when indeterminate sentence prisoners in England and Wales were entitled to an oral hearing. The House considered the requirements of procedural fairness in the light of a wide ranging review of authorities from a number of common law jurisdictions, and also a number of judgments of the European court, including Waite v United Kingdom (2002) 36 EHRR 1001, to which it will be necessary to return. Lord Bingham, with whose speech the majority of the committee expressed agreement, stated (para 31): While an oral hearing is most obviously necessary to achieve a just decision in a case where facts are in issue which may affect the outcome, there are other cases in which an oral hearing may well contribute to achieving a just decision. The duty to afford an oral hearing therefore exists where there are facts in dispute which may affect the outcome, but it is not confined to such circumstances. Lord Bingham did not attempt to define exhaustively the other circumstances in which an oral hearing was required, but gave some examples, and some general guidance (para 35): Even if important facts are not in dispute, they may be open to explanation or mitigation, or may lose some of their significance in the light of other new facts. While the board's task certainly is to assess risk, it may well be greatly assisted in discharging it (one way or the other) by exposure to the prisoner or the questioning of those who have dealt with him. It may often be very difficult to address effective representations without knowing the points which are troubling the decision maker. The prisoner should have the benefit of a procedure which fairly reflects, on the facts of his particular case, the importance of what is at stake for him, as for society. Lord Hope added two observations about the approach then followed by the board in relation to cases of the type in question, according to which it professed its willingness to hold oral hearings where the decision turned on disputed issues of fact, but in practice rarely held such hearings. First, there appeared to be a long standing institutional reluctance on the part of the board to deal with cases orally: It would not be surprising if a consequence of that reluctance was an approach, albeit unconscious and unintended, which undervalued the importance of any issues of fact that the prisoner wished to dispute (para 66). As Lord Hope pointed out, this approach was liable to lead to reliance upon assumptions based on general knowledge and experience, and to a lack of focus on the prisoner as an individual. The institutional reluctance of the board to hold oral hearings in determinate recall cases appears to have continued during the period with which these appeals are concerned. The boards annual report for 2009 2010 records, in relation to determinate recall cases considered under the Criminal Justice and Immigration Act 2008, that of a total of 12,388 cases considered that year, only 145 were sent to an oral hearing: in other words, 1%. The proportion the following year was the same. That reluctance can also be detected in the tone of the internal guidance discussed earlier. The statistics also indicate a low rate of success in applications for oral hearings by indeterminate sentence prisoners: of 1054 negative paper decisions considered by ICM assessors in 2009 2010, 174 were sent to an oral hearing on appeal: in other words, 83% of appeals were refused. Lord Hopes second observation concerned the allowance of oral hearings where there were disputed issues of fact: The question is not whether the case ultimately turns on a disputed issue of fact when the decision is taken. It is whether, when the papers are first looked at, it is likely to do so (para 67). In other words, one cannot decide whether a disputed issue of fact will prove to be determinative at the stage of considering whether an oral hearing is appropriate. The most one can do at that stage is to identify the issues which appear to be important, and then decide in the light of that assessment (and other relevant factors) whether an oral hearing should be held. Finally, in relation to West, it is useful to note how the House dealt with the cases before it. The appellant West had breached his licence conditions in a number of ways. He had an explanation for some but not all of the breaches. He was refused an oral hearing. The House concluded that his explanations could not properly be rejected without hearing him. In so far as he had no explanation, the question whether the breach had an unacceptable impact on the risk posed to the public could not fairly be resolved without an oral hearing. The appellant Smith had repeatedly used class A drugs after his release on licence, while living in designated hostels. He maintained that he had succeeded in freeing himself from drugs while in prison, but had relapsed in the hostels because of the prevailing drug culture. He did not request an oral hearing, but it was nevertheless held that such a hearing should have been offered: the board might have been assisted by evidence from his psychiatrist, and should have allowed the appellant an opportunity to persuade it that the community would be better protected by allowing him to remain on licence under supervision than by returning him to prison with the prospect of eventual unsupervised release. The circumstances in which fairness requires an oral hearing What fairness requires of the board depends on the circumstances. As these can vary greatly from one case to another, it is impossible to lay down rules of universal application. The court can however give some general guidance. Generally, the board should hold an oral hearing whenever fairness to the prisoner requires such a hearing in the light of the facts of the case and, as was said in West, the importance of what is at stake. The board should consider whether its independent assessment of risk, and of the means by which it should be managed and addressed, may benefit from the closer examination which an oral hearing can provide. It is presumably because of the possibility of such assistance that the board must hold an oral hearing under rule 11(2)(a) in any case where an indeterminate sentence prisoner appears to the single member panel to be potentially suitable for release or for a transfer to open conditions. The assumption must be that an oral hearing has the potential to make a difference. But that potential may also exist in other cases. The boards annual report for 2005 2006 contains a statement by a psychiatrist member of the board which demonstrates how valuable oral hearings can be: I find the oral hearings particularly rewarding in that the evidence on the day can sometimes illuminate a situation sufficiently to turn around my preliminary view of the case. There is no substitute for being able to hear from, and ask questions of the prisoner. The board should also bear in mind that the purpose of holding an oral hearing is not only to assist it in its decision making, but also to reflect the prisoners legitimate interest in being able to participate in a decision with important implications for him, where he has something useful to contribute. An oral hearing should therefore be allowed where it is maintained on tenable grounds that a face to face encounter with the board, or the questioning of those who have dealt with the prisoner, is necessary to enable him or his representatives to put their case effectively or to test the views of those who have dealt with him. When dealing with cases concerning recalled prisoners, the board should bear in mind that the prisoner has been deprived of his freedom, albeit conditional: a factor upon which Lord Bingham placed emphasis in West. In relation to cases concerning post tariff indeterminate sentence prisoners, it has been said more than once that the board should scrutinise ever more anxiously whether the level of risk is unacceptable, the longer the time the prisoner has spent in prison following the expiry of his tariff (R v Parole Board, Ex p Bradley [1991] 1 WLR 134, 146; R v Parole Board, Ex p Wilson [1992] QB 740, 747). It also has to be borne in mind that the issues which are considered by the board are not in practice confined to the question whether the prisoner should or should not be released or transferred. As I have explained, the statutory directions given to the board require it to consider numerous matters. The boards findings in relation to these matters may in practice affect the prisoners future progress in prison, for example in relation to the courses which he is required to undertake and his future reviews. The board may also be asked specifically to advise the Secretary of State on matters affecting the prisoner. For example, when post tariff indeterminate sentence prisoners are referred to the board, it is generally asked to advise on the continuing areas of risk that need to be addressed. In such cases, the fair disposal of issues of that kind may require an oral hearing even if the question whether the prisoner should be released or transferred does not. In accordance with the guidance provided in West, an oral hearing is required when facts which appear to be important are in dispute, or where a significant explanation or mitigation is advanced which needs to be heard orally if it is to be accepted. An oral hearing is also necessary when for other reasons the board cannot otherwise properly or fairly make an independent assessment of risk, or of the means by which it should be managed and addressed. That is likely to be the position in cases where such an assessment may depend upon the view formed by the board (including its members with expertise in psychology or psychiatry) of characteristics of the prisoner which can best be judged by seeing or questioning him in person, or where a psychological assessment produced by the Ministry of Justice is disputed on tenable grounds, or where the board may be materially assisted by hearing evidence, for example from a psychologist or psychiatrist. As is illustrated by the judgments of the European Court of Human Rights in Hussain v United Kingdom (1996) 22 EHRR 1, Singh v United Kingdom 21 February 1996, Reports of Decisions and Judgments, 1996 I, p 280 and Waite v United Kingdom (2002) 36 EHRR 1001, cases concerning prisoners who have spent lengthy periods in custody are likely to fall into the first of these categories, since an independent assessment of their continuing dangerousness will require a judgment to be made of the extent to which they have developed over the period since their conviction: a matter which cannot normally be independently and fairly assessed without seeing the person concerned. Whether a prisoners right to a fair hearing requires the holding of an oral hearing does not depend on his establishing that his application for release or transfer stands any particular chance of success: that approach would not allow for the possibility that an oral hearing may be necessary in order for the prisoner to have a fair opportunity of establishing his prospects of success, and thus involves circular reasoning. The point can be illustrated by the example of a prisoner who is unable to participate effectively in a written procedure due to learning difficulties. To decide whether he should be allowed an oral hearing on the basis of his prospects of success as they appeared on the basis of the official dossier and his written representations, if any, would plainly be unfair. The problem with reliance on the prospects of success, as they appear from the written material, as the touchstone of what fairness requires is not however confined to prisoners who are manifestly disadvantaged by a written procedure. In so far as the boards practice is to require that a realistic prospect of success be demonstrated, as a precondition of the grant of an oral hearing, that practice should therefore cease. It is in addition fundamental to procedural fairness that the board must be, and appear to be, independent and impartial. The dossier provided to the board by the Ministry of Justice is plainly important to the boards discharge of its functions: it records the prisoners progress in the prison system and the rehabilitation courses which he has undertaken, and it includes expert views on the likelihood of his re offending. Nevertheless, as was said in R (Brooke) v Parole Board [2008] EWCA Civ 29; [2008] 1 WLR 1950 at para 96, the board has to evaluate the material placed before it by the Ministry and reach its own objective judicial decision. The board should therefore have no predisposition to favour the official version of events, or the official risk assessment, over the case advanced by the prisoner. In that regard, the court was referred to a study of the recall of determinate sentence prisoners which concluded that the single member panels were little more than a rubber stamp (Padfield, Understanding Recall 2011, University of Cambridge Faculty of Law Research Paper No 2/2013 (2013) p 40). That conclusion is supported, in relation to the period when the appellant Osborns case was considered, by the statistics which I have mentioned. It is equally important that the board should not give way to the temptation, identified in West by Lord Hope, to discount the significance of matters which are disputed by the prisoner in order to avoid the trouble and expense of an oral hearing. It is also important that the administrative procedure adopted by the board should be well adapted to ensuring that an oral hearing is held when such a hearing is necessary. In that regard, it has to be said that the procedural rules in force at the material time, and the analogous rules currently in force, are liable to give rise to a number of problems, as the present appeals demonstrate (problems which might be avoided if the board took a decision about the appropriate form of hearing, and nothing else, only after any representations on behalf of the prisoner had been received). First, the rule requiring a single member panel either to decide that the case should receive further consideration by an oral panel, or to make a provisional decision that the prisoner is unsuitable for release or for a transfer to open conditions, should not be understood as meaning that an oral hearing is appropriate only if the single member panel forms the provisional view that the prisoner is suitable for release or transfer. Secondly, it is important to understand the provisional nature of a decision made by the single member panel that the prisoner is unsuitable for release. The right conferred on the prisoner, following that decision, to request an oral hearing is not a right of appeal. The prisoner does not have to demonstrate that the decision was (or may have been) wrong: what he has to persuade the board is simply that an oral hearing is appropriate. The unfairness which results from the boards treatment of the request for an oral hearing as an appeal is illustrated by the case of the appellant Booth, in which the ICM assessor identified the critical question as being whether the grounds of the appeal are justified and if an oral hearing would make any material difference to the paper decision. The request for an oral hearing was thus decided on the basis that the earlier decision was presumptively correct. This is to put the cart before the horse. If fairness requires an oral hearing, then a decision arrived at without such a hearing is unfair and cannot stand. The question whether an oral hearing is required cannot therefore be decided on the basis of a presumption that a decision taken without such a hearing is correct. Thirdly, since the effect of the refusal of an oral hearing is that the provisional decision becomes final, it follows that an oral hearing should be granted in any case where it would be unfair to the prisoner for that to happen. For example, if the representations made in support of the prisoners request for an oral hearing raise issues which place in question anything in the provisional decision which may in practice have a significant impact on the prisoners future management in prison or on his future reviews, such as reports of poor behaviour or recommendations that particular courses should be undertaken to reduce risk, it will usually follow that an oral hearing should be allowed for that reason alone, even if there is no doubt that the prisoner should remain in custody or in closed conditions (see eg Roose v Parole Board [2010] EWHC 1780 (Admin)). The present appeals The requirements of procedural fairness at common law were not met in the cases of the appellants. In the case of the appellant Osborn, there were several facts which the paper recall panel treated as important and which were in dispute, or for which a significant explanation or mitigation was advanced: the appellants attitude to the licence conditions; the basis of the official assessment of the risk which he presented; the events on the date of his release, including his alleged statement about firearms; his claim that the hostel manager had agreed to put back the time when he was due to arrive; and his explanation for the detour to the village. An oral hearing should therefore have been held. In the case of the appellant Booth, the approach adopted by the board to the application of rule 12(1) was mistaken, as explained in paras 94 and 95. The points put forward in support of his so called appeal raised significant issues on which the input of his psychiatrist might have been helpful and which merited the depth of consideration which only an oral hearing could provide. In that regard, it is relevant that the appellant had spent so long in custody post tariff and that the board had been asked to advise on continuing areas of risk that needed to be addressed. In the case of the appellant Reilly, the history of adjudications and failed drugs tests was treated as important by the paper panel, and must have influenced the risk assessments which were before it; but that history was disputed in some significant respects, and in other respects was open to explanation or mitigation, according to the representations made on the appellants behalf. An oral hearing should therefore have been held. The unfairness resulting from the failure to hold such a hearing was compounded, in the manner explained in para 96, when his appeal was refused and the paper panel decision became final. The Secretary of State then expressed agreement with the decision and required the appellant to undertake work aimed at addressing misbehaviour and drug use in prison: matters which the ICM assessor had left out of account because they were not considered critical to the question whether to recommend release or transfer, but which remained part of a decision which had become final. Furthermore, the approach adopted by the board to the application of rule 12(1) was also mistaken, as explained in para 94. Convention rights It is unnecessary to consider Convention rights in order to determine the validity of the decisions in question. It is however appropriate to do so in order to consider whether compliance with common law requirements will satisfy the requirements of article 5(4) of the Convention, or whether that article imposes more far reaching obligations in respect of the holding of oral hearings. It is also necessary to consider article 5(4) for the purpose of determining the claim advanced on behalf of the appellant Reilly for an award of damages under section 8 of the Human Rights Act. Article 5(4) and the present appeals Article 5(4) of the Convention provides: Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. As was explained in A v United Kingdom (2009) 49 EHRR 625, paras 202 203, prisoners are entitled under article 5(4) to a review of the lawfulness of their detention in the light of the requirements of domestic law and of the Convention. The review must be carried out in accordance with a procedure which has a judicial character and provides guarantees appropriate to the type of deprivation of liberty in question. As explained earlier, prisoners who have been recalled to prison following release on licence are entitled to a review by the board of whether they should be re released, the test under the relevant directions being whether the risk posed by the prisoner can be safely managed in the community. Indeterminate sentence prisoners whose tariff period has expired are entitled to a review by the board of whether their continued detention is necessary for the protection of the public. It is not in issue in these appeals that the board possesses the essential features of a court within the meaning of article 5(4). On that basis, the boards discharge of its functions should satisfy the requirements of article 5(4), provided its reviews are conducted speedily and in accordance with a procedure which meets Convention standards of fairness. In R (West) v Parole Board [2005] UKHL 1; [2005] 1 WLR 350, Lord Bingham cited a number of judgments of the European Court of Human Rights, including the case of Waite v United Kingdom, in his discussion of the common law, in accordance with the long established understanding that the Convention is relevant to the development of the common law. Having provided the guidance as to the requirements of common law fairness which I have discussed, Lord Bingham concluded, in agreement with the other members of the appellate committee, that review by the board would satisfy the requirements of article 5(4) provided it was conducted in a manner that met the requirements of the common law (para 37). Lord Hope also referred to the case of Hussain v United Kingdom (1996) 22 EHRR 1. The case of Hussain concerned an applicant who had been convicted of murder at the age of 16 and sentenced to detention during Her Majestys pleasure, with a tariff of 15 years. Following the expiry of the tariff, he was reviewed by the board on several occasions, but had no opportunity to take part in the proceedings in any way, and did not see the reports before the board. Its recommendations were not binding upon the Secretary of State, and were not followed. By the time his case was considered by the European court, he had been detained for over 17 years. In its judgment, the court observed that an indeterminate term of detention for a young person, which might be as long as that person's life, could only be justified by considerations based on the need to protect the public. Those considerations, centred on an assessment of the young offender's character and mental state and of his or her resulting dangerousness to society, must of necessity take into account any developments in the young offender's personality and attitude as he or she grew older (para 53). Following the expiry of the tariff, the applicant was entitled under article 5(4) to take proceedings to have the justification for his continuing detention decided by a court at reasonable intervals (para 54). The board could not be regarded as a court for the purposes of article 5(4), given that it could not order the release of a prisoner, and the proceedings before it were not of an adversarial nature (para 58). The court continued: 59. The court recalls in this context that, in matters of such crucial importance as the deprivation of liberty and where questions arise which involve, for example, an assessment of the applicant's character or mental state, it has held that it may be essential to the fairness of the proceedings that the applicant be present at an oral hearing. 60. The court is of the view that, in a situation such as that of the applicant, where a substantial term of imprisonment may be at stake and where characteristics pertaining to his personality and level of maturity are of importance in deciding on his dangerousness, article 5(4) requires an oral hearing in the context of an adversarial procedure involving legal representation and the possibility of calling and questioning witnesses. As I understand this passage, para 59 contains general observations reflecting the previous case law, whereas para 60 expresses a principle applicable specifically to cases such as that of the applicant, where (1) a substantial term of imprisonment may be at stake and (2) characteristics pertaining to his personality and level of maturity are of importance in deciding on his dangerousness. The court repeated paras 59 60 of its Hussain judgment in the case of Singh v United Kingdom 21 February 1996, Reports of Decisions and Judgments, 1996 I, p 280, issued on the same day as Hussain. That case also concerned a young offender sentenced to detention during Her Majestys pleasure, who had been released on licence and then had his licence revoked in the light of concerns as to his conduct. The case of Waite v United Kingdom also concerned a young offender who had been sentenced to detention during Her Majestys pleasure, released on licence, and then had his licence revoked in the light of concerns as to his conduct, which included misuse of drugs, a sexual relationship with a minor, attempted suicide and failure to maintain contact with his supervising officer. The board upheld the decision to revoke his licence without holding an oral hearing. The court held that there had been a breach of article 5(4), and rejected the contention that, since the applicant had admitted the facts leading to his recall, the board was bound to conclude that public protection required that he should be confined: Art 5(4) is first and foremost a guarantee of a fair procedure for reviewing the lawfulness of detention an applicant is not required, as a precondition to enjoying that protection, to show that on the facts of his case he stands any particular chance of success in obtaining his release (para 59). That passage is consistent with, and supports, the approach which I have concluded applies at common law. The court continued (ibid): In matters of such crucial importance as the deprivation of liberty and where questions arise involving, for example, an assessment of the applicant's character or mental state, the court's case law indicates that it may be essential to the fairness of the proceedings that the applicant be present at an oral hearing. In such a case as the present, where characteristics pertaining to the applicant's personality and level of maturity and reliability are of importance in deciding on his dangerousness, art 5(4) requires an oral hearing in the context of an adversarial procedure involving legal representation and the possibility of calling and questioning witnesses. The first sentence in that passage repeats the summary of the earlier case law in para 59 of the Hussain judgment. The second sentence repeats the principle stated in para 60 of that judgment. Although Waite, like Hussain and Singh, concerned a person who had committed the index offence as a young offender, the language of the second sentence is not confined to young offenders. The conditions mentioned by the European court are likely to apply to most indeterminate sentence prisoners who have served their minimum terms. That is not to say that they will necessarily apply on every occasion when such a prisoners case is considered by the board: a prisoners case may be considered in different circumstances and at different intervals of time. Bearing in mind however that the continued detention of a post tariff prisoner must be justified by his continuing dangerousness as independently assessed by the board, and taking account of the importance of what is at stake, it will in most cases be necessary as a matter of fairness that he should have an opportunity to appear in person before the board. That is consistent with the common law, as explained earlier. Since the board failed in its duty of procedural fairness to the appellants at common law, it follows that it also failed to act compatibly with article 5(4). Damages The appellant Reilly sought to have his case remitted to the High Court for consideration of an award of damages as just satisfaction under section 8 of the Human Rights Act. The circumstances in which such an award is appropriate in respect of a breach of article 5(4) were considered in R (Faulkner) v Secretary of State for Justice [2013] UKSC 23; [2013] 2 WLR 1157. Although that case was principally concerned with breaches of the requirement that a review of the lawfulness of detention must be held speedily, the court also considered violations of the requirement that reviews must follow a fair procedure. At paras 55 61, the court considered in particular the judgment of the Grand Chamber in Nikolova v Bulgaria (1999) 31 EHRR 64 and the later judgment in HL v United Kingdom (2004) 40 EHRR 761. In the latter case, Nikolova was described as having endorsed the principle that, where a violation of article 5(3) or (4) was of a procedural nature, just satisfaction could be awarded only in respect of damage resulting from a deprivation of liberty which would not otherwise have occurred. Although, as was noted in Faulkner at para 61, there have been cases since Nikolova, not concerned with delay, in which modest awards of damages have been made as compensation for frustration and anxiety, none of those cases is comparable with that of the appellant. In particular, the cases mentioned there which concerned post tariff indeterminate sentence prisoners, such as Curley v United Kingdom (2000) 31 EHRR 401 and Von Blow v United Kingdom (2003) 39 EHRR 366, date from the period when there was no review of the continued lawfulness of detention by a body with the power to order release or with a procedure containing judicial safeguards. It is not argued that the appellant Reilly has suffered any deprivation of liberty as a result of the breach of article 5(4): damages are sought in respect of feelings of frustration and distress which the court is invited to assume he experienced. In the circumstances, taking into account the principles applied by the European court as required by section 8(4) of the Human Rights Act, the finding of a violation constitutes sufficient just satisfaction. Conclusion oral hearing, and was accordingly in breach of article 5(4) of the Convention. I would in each case allow the appeal, and make a declaration that the board breached its duty of procedural fairness to the appellant by failing to offer him an |
Supplies of education to students in the United Kingdom are exempt from value added tax (VAT) if they are made by a college of a university within the meaning of Note 1(b) to Item 1, Group 6 of the Value Added Tax Act 1994 (the VAT Act). This appeal concerns the criteria to be applied in determining whether an undertaking is such a college. In these proceedings the appellant (SEL) contends that its supplies of education to students in the United Kingdom were and are exempt from VAT because it was and remains a college of Middlesex University (MU). For this reason, it appealed against assessments raised by the Commissioners for Her Majestys Revenue and Customs (the Commissioners) in respect of its accounting periods 1 May 2009 to 29 February 2012. It has also appealed against subsequent assessments, but these have been stayed by agreement with the Commissioners pending the outcome of this appeal. SELs appeal was allowed by the First tier Tribunal (the FTT, Judge John Clark and Dr Michael James MBE) by its decision dated 28 February 2014: TC/2011/022521. The Commissioners appealed that decision to the Upper Tribunal (the UT, Judge Colin Bishopp and Judge Guy Brannan) which allowed the appeal by its decision dated 25 April 2016: [2016] UKUT 193 (TCC); [2016] STC 1837. SEL then appealed to the Court of Appeal. The appeal was heard over three days in June 2017. The Court of Appeal dismissed the appeal by its decision dated 28 July 2017 (Patten, Black and Sales LJJ): [2017] EWCA Civ 1116; [2017] STC 2166. SEL now appeals to this court. In broad terms the appeal gives rise to the following questions: first, whether the Court of Appeal adopted the correct approach in determining whether SEL was a college of MU for the purposes of Note 1(b) to Item 1, Group 6 of the VAT Act; and secondly, if it did not, whether, upon application of the correct test, SEL was such a college. The relevant facts SEL is an English company and a subsidiary of SAE Technology Group BV, a Dutch company. Both are part of the SAE group of companies which trades around the world under the name SAE Institute (SAEI). SAE is an acronym for School of Audio Engineering and SAEI has for many years provided education in audio and digital media technologies, and as a result has gained a significant reputation in that field. SAEI has conducted business in the United Kingdom since 1985, first through SAE Educational Trust Ltd (SETL) and, since 1 May 2009, through SEL. From that date SEL has taught in the United Kingdom the higher education courses to which I shall come in a moment. MU is a United Kingdom university within the meaning of the VAT Act, Group 6, Item 1, Note 1(b). It has never had any financial interest in any SAE group company, and no MU employee has ever been a director of any such company. Similarly, no SAE group company has had a representative on MUs governing body or has played any direct part in its governance. Nevertheless, the relationship between MU and SAEI has been very close and is a reflection of a series of agreements addressing the nature of that relationship, the validation by MU of SAEI programmes of education and the accreditation of SAE group companies. As early as 1998 SAEI and MU agreed a memorandum of cooperation which provided for the teaching by SAE Technology College of Bachelor of Arts (BA) degree courses in Recording and Multimedia Arts at specified campuses. These courses were described as validated collaborative programmes of MU. Overall responsibility for the courses was retained by MU but their day to day direction was undertaken by employees of an SAEI group company. Over the years that followed this memorandum was superseded by other memoranda of cooperation and the validation of BA degree courses in Multimedia, Interactive Animation and Games Programming. In 2009 another memorandum of cooperation was agreed which consolidated into a single framework the programmes which had by that time been validated by earlier memoranda. It set out the terms on which MU agreed to validate specified courses and how entry requirements were to be set and satisfied. In short, admission requirements would be set by SAEI but conform to MUs general requirements; students who met those requirements would be selected by SAEI using procedures agreed by MU; selected students would be enrolled by SAEI for one of MUs qualifications; enrolled students would be considered members of MU and taught by SAEI subject to MUs quality safeguards; and in due course those enrolled students would be assessed by SAEI subject to MUs regulations and, if they completed their programmes of study successfully, would be awarded a degree by MU. From time to time SAEI and MU also entered into what have been termed partnership agreements which made more general provision relating to the relationship between them. The first such agreement, entered into in 2003, recorded the intention of the parties to work together to develop undergraduate and taught graduate degree courses at SAEI centres in the United Kingdom and around the world. It was intended at that time that within five years MU would consider an application from SAEI for MU accreditation which would allow SAEI to validate for itself courses leading to the award of undergraduate degrees by MU. In 2009 SAEI and MU entered into another partnership agreement which recorded that within 12 months MU would consider an application from SAEI for such accreditation. To this end, it was agreed that senior executives of MU and SAEI would meet three times a year to develop their collaboration on undergraduate and postgraduate courses of study. In September 2010 SAEI was accredited by MU to validate, provide, monitor and review courses of study leading to MU BA degrees in Recording Arts, Film Making, Digital Film Animation and Multimedia articles The instrument of accreditation permitted SAEI to conduct MU graduation ceremonies but graduating students could also attend a graduation ceremony at MU if they so wished. A memorandum of cooperation confirmed the independent status of SAEI and allowed it to retain its own governing council and academic board and responsibility for its own financial management. In July 2011 MU and SAEI entered into what was described as a Special Associate College Agreement (SACA). This recorded their successful cooperation over 14 years in the provision of courses of education, including courses leading to MU undergraduate and graduate awards. It provided, by clause 2: As a further extension of that special relationship in the context of higher education in the United Kingdom, the University and SAE Education, UK (hereinafter referred to as SAE UK) have agreed a long term partnership, which is detailed below. This builds upon the existing status of SAE UK as a Middlesex University Associate College. The legal framework The origin of the common system for the collection of VAT in the European Union lies in the First Council Directive 67/227/EC of 11 April 1967 on the harmonisation of legislation of member states concerning turnover taxes (the First Directive). This recognised the interest of the common market in achieving a harmonisation of legislation concerning turnover taxes so as to eliminate, so far as possible, factors which might distort competition, and it provided, in article 2, that the principle of the common system involved the application to goods and services of a general tax on consumption which was proportional to their price. The Second Council Directive 67/228/EEC, also of 11 April 1967, on the harmonisation of legislation concerning turnover taxes and procedures for application of the common system of VAT (the Second Directive) made further provision for harmonisation and recorded in its fifth recital that the introduction of zero rates of tax gave rise to difficulties and it was highly desirable to limit strictly the number of exemptions. However, article 10 of the Second Directive exempted from VAT in any member state the supply of goods to places outside the territory of that state and the provision of services relating to such goods or goods in transit, and, of particular relevance to this appeal, also provided that, subject to consultation, any member state could determine the other exemptions it considered necessary. The First and Second Directives were followed by the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of member states relating to turnover taxes (the Sixth Directive). This recited the need for a common system of exemptions and, in Title X, article 13, part A, made express provision for the exemption of certain activities in the public interest, including the supply of services related to education. Article 13A(1) provided, so far as material: A. Exemptions for certain activities in the public interest 1. Without prejudice to other Community provisions, member states shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any possible evasion, avoidance or abuse: (i) childrens or young peoples education, school or university education, vocational training or retraining, including the supply of services and of goods closely related thereto, provided by bodies governed by public law having such as their aim or by other organizations defined by the member state concerned as having similar objects. Article 13A(2) contained examples of the conditions member states might impose when recognising other organisations having similar objects to those of public bodies. It provided, so far as material: 2(a) Member states may make the granting to bodies other than those governed by public law of each exemption provided for in (1) (i) of this article subject in each individual case to one or more of the following conditions: they shall not systematically aim to make a profit, but any profits nevertheless arising shall not be distributed, but shall be assigned to the continuance or improvement of the services supplied, exemption of the services concerned shall not be likely to create distortions of competition such as to place at a disadvantage commercial enterprises liable to value added tax. In due course the Sixth Directive was itself recast by Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (the Principal VAT Directive). Recital (4) of the Principal VAT Directive reiterates the objective of the legislative scheme as being to harmonise legislation on turnover taxes and eliminate, so far as possible, factors which may distort competition. It reads: The attainment of the objective of establishing an internal market presupposes the application in member states of legislation on turnover taxes that does not distort conditions of competition or hinder the free movement of goods and services. It is therefore necessary to achieve such harmonisation of legislation on turnover taxes by means of a system of value added tax (VAT), such as will eliminate, as far as possible, factors which may distort conditions of competition, whether at national or Community level. Title IX sets out various exemptions, including the exemption concerning the provision of university education first introduced in the Sixth Directive in the manner I have described. Article 131 of Chapter 1 of Title IX provides: The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the member states shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse. Chapter 2 of Title IX contains Exemptions for certain activities in the public interest. Article 132(1)(i) of this Chapter says that member states shall exempt: the provision of childrens or young peoples education, school or university education, vocational training or retraining, including the supply of services and of goods closely related thereto, by bodies governed by public law having such as their aim or by other organisations recognised by the member state concerned as having similar objects. Article 133 contains examples of the conditions member states may impose when recognising other organisations having similar objects to those of public bodies. It echoes article 13(2) of the Sixth Directive and reads, so far as relevant: Member states may make the granting to bodies other than those governed by public law of each exemption provided for in points (i) of article 132(1) subject in each individual case to one or more of the following conditions: (a) the bodies in question must not systematically aim to make a profit, and any surpluses nevertheless arising must not be distributed, but must be assigned to the continuance or improvement of the services supplied; (d) the exemptions must not be likely to cause distortion of competition to the disadvantage of commercial enterprises subject to VAT. These provisions of the Principal VAT Directive and the general scheme of which they form a part were considered by the Court of Justice of the European Union (the CJEU) in Minister Finansw v MDDP sp z oo Akademia Biznesu, sp komandytowa, (Case C 319/12) [2014] STC 699. MDDP, a Polish undertaking, carried on the business of organising for profit specialised training courses and applied to the Polish Minister for Finance for confirmation that it was entitled to deduct input VAT levied on the goods and services it needed for its business. The Minister refused to provide that confirmation and so MDDP issued proceedings in which it claimed that its activities should not be exempt from VAT but subject to it, and that Polish law, which provided that such activities were exempt, was incompatible with the Principal VAT Directive. A reference by the Polish court to the CJEU asked, in substance, whether articles 132(1), and 133 of the Principal VAT Directive must be interpreted as meaning that educational services provided for commercial purposes not governed by public law were precluded from exemption from VAT. In addressing that question, the CJEU explained (at paras 33 to 36) that articles 132(1)(i) and 133 do not preclude educational services provided for commercial purposes by bodies not governed by public law from being exempt from VAT; however, under article 132(1)(i), supplies of educational services are exempt only if they are provided by bodies governed by public law or by other organisations recognised by the member state concerned as having similar objects. It followed that the exemption in issue, which applied generally to all supplies of educational services, whatever the aim pursued by the private organisations providing those services, was incompatible with article 132(1)(i). The CJEU continued (at paras 37 to 38) that, in so far as article 132(1)(i) does not specify the conditions or procedures for defining those similar objects, it is for the national law of each member state to lay down rules, and that member states have a discretion in that respect; and it is for the national courts to examine whether member states, in imposing such conditions, have observed the limits of their discretion in applying the principles of EU law, in particular the principle of equal treatment, which, in the field of VAT, takes the form of the principle of fiscal neutrality. The answer to the referred question necessarily followed, as the CJEU explained at para 39: point (i) of article 132(1), article 133 and article 134, of the VAT Directive must be interpreted as meaning that they do not preclude educational services provided for commercial purposes by bodies not governed by public law from being exempt from VAT. However, point (i) of article 132(1) of that directive precludes a general exemption of all supplies of educational services, without consideration of the objects pursued by non public organisations providing those services. VAT was introduced to the United Kingdom by the Finance Act 1972 (the FA 1972) which implemented the First and Second Council Directives. Parliament chose to exercise the wide discretion then conferred upon member states by exempting the various supplies set out in Schedule 5. These included as Group 6, Item 1: The provision of education if it is provided by a school or university; or it is of a kind provided by a school or university (a) (b) and is provided otherwise than for profit. Note (3) defined university as including a university college and the college, school or hall of a university. The United Kingdom has given effect to the Principal VAT Directive (and before it, the Sixth Directive) in the VAT Act. Exempt supplies are set out in Schedule 9. Items 1 and 4 of Group 6 of Schedule 9 read, so far as material: 1. The provision by an eligible body of (a) education; 4. The supply of any goods or services (other than examination services) which are closely related to a supply of a description falling within item 1 (the principal supply) by or to the eligible body making the principal supply provided (a) the goods or services are for the direct use of the pupil, student or trainee (as the case may be) receiving the principal supply; and (b) where the supply is to the eligible body making the principal supply, it is made by another eligible body. Note (1) then explains that: (1) For the purposes of this Group an eligible body is (b) a United Kingdom university, and any college, institution, school or hall of such a university; (e) a body which is precluded from distributing and does (i) not distribute any profit it makes; and (ii) applies any profits made from supplies of a description with this Group to the continuance or improvement of such supplies; It can be seen that Parliament has not expressly limited the bodies it has recognised in Note 1(b) to those which do not make a profit. It will also be noted that the phrase any college, institution, school or hall of such a university in Note (1)(b) is similar to the phrase college, school or hall of a university in Schedule 5, Group 6, Item 1, Note (3) of the FA 1972, and this is a matter to which I must return. Domestic authorities The provisions of the VAT Act to which I have referred have been considered in a number of decisions of the courts in this jurisdiction. For the purposes of this appeal, I must refer to three of them for they form an important part of the background to the decisions of the FTT, the UT and the Court of Appeal in this case. The first is that of Burton J in Customs and Excise Comrs v School of Finance and Management (London) Ltd [2001] STC 1690. The School of Finance and Management London (SFM) delivered a number of courses of study for the University of Lincolnshire and Humberside and claimed to be exempt from VAT as a college of a university under Note (1)(b) to Group 6 of Schedule 9 to the VAT Act. The tribunal found that SFMs fundamental purpose was to provide education services leading to the award of a university degree and that it was fairly to be regarded as a college of the university. On appeal, the Commissioners contended first, that, having regard to the provisions of the Sixth Directive set out above, Note (1)(b) only encompassed bodies governed by public law having education as their aim; secondly, that SFM was not a college; and thirdly, if SFM was a college, it was not a college of a United Kingdom university. The judge rejected all three contentions and dismissed the appeal. So far as the third was concerned, the parties put forward a non exhaustive list of 15 relevant factors termed the SFM factors which fell to be considered. For their part, the Commissioners relied on eight factors, the first four of which were said to be determinative: (i) the presence of a foundation document establishing the college as part of the university by way of a constitutional link; (ii) an absence of independence on the part of the college; (iii) the financial dependence of the college on the university or the financial interdependence of each on the other; (iv) the absence of distributable profit; (v) an entitlement to public funding; (vi) the presence of permanent links between the college and the university; (vii) the physical proximity of the college to the university; and (viii) an obligation on the college to offer a minimum number of university places. SFM accepted that all of these factors were arguably relevant but argued that none was determinative. It contended that of more relevance were seven further factors: (ix) the possession by the college of a similar purpose to that of the university; (x) the provision by the college of courses leading to a degree from the university; (xi) the supervision by the university of the colleges courses and the regulation by the university of the quality standards of those courses; (xii) the admission of students of the college as members of the university with university identity cards; (xiii) the submission of students of the college to disciplinary regulations and requirements of the university; (xiv) the entitlement of successful students of the college to receive a degree from the university at a university degree ceremony; and (xv) the description of the college as an associate/affiliated college of the university. The Commissioners accepted these were relevant (subject to their submissions as to the determinative nature of the first four of their own features). Shortly after Burton J handed down his judgment, the Court of Appeal gave judgment in Customs and Excise Comrs v University of Leicester Students Union [2001] EWCA Civ 1972; [2002] STC 147. Here the issue was whether supplies of drinks by the students union of Leicester University were exempt from VAT. The Commissioners took the view that they were not. By an interim decision on a preliminary issue, the Manchester VAT tribunal held that the union was an integral part of the university and so an eligible body, and it was entitled to an exemption in respect of any supplies which were closely related to the supply of education within the meaning of Item 4 of Group 6 of Schedule 9. On appeal, the judge considered that the real question was whether the union was an integral part of the university such that it could properly be said that the soft drinks sold in the union were sold by the university. He held it could not, and that, in consequence, the tribunal ought to have held that the soft drinks were not supplied by the eligible body making the principal supply of education within the meaning of Item 4. On further appeal to the Court of Appeal, the substantial argument was, as before the judge, whether the union was an integral part of the university and as such an eligible body. The Court of Appeal found it was not. It was not encompassed by the phrase a United Kingdom university for it was an entity distinct from the university. Further, it was not an institution of such a university within the meaning of Note 1(b) because it supplied no education. Peter Gibson LJ, with whom Morland J agreed, explained at para 36: 36. Note 1(b) on its face refers to five entities, a United Kingdom University, and four entities of such a University. The conjunction connecting a United Kingdom University with the four other entities is the word and, not including. Further, the four other entities are alternative to each other as can be seen by the conjunction or between school and hall. On the ordinary and natural meaning of the words used in note 1(b) I would construe them as covering both a university itself and, in those cases where there are separate entities which are nevertheless parts of that university, any of those separate entities. Furthermore, the common characteristic of all those four entities in my opinion is that they are suppliers of education. Arden LJ considered that the students union did promote an object of utility within the university community and was potentially an institution of the university. But the question for her was whether the term institution had a narrower meaning in the context of Note (1)(b). She answered that question in two steps, the first of which was to consider the meaning of the expression of such a university: 55. Note 1(b) uses the expression the university and of the university. In the latter expression the word of cannot mean belong to or form part of since the former is not the case with regard to Oxbridge colleges (which are presumably intended to be covered) and the latter is included within the expression the university. In other words, the expression of the university seems to me to denote a state of affairs whereby the university is in some sense an umbrella organisation which provides education and related services in conjunction with other bodies or wherein the body in question has some form of status under the University statutes, for example to present candidates for matriculation. The second was to consider the meaning of the word institution in this context. Here she did not agree that a college, institution, school or hall of a university had itself to be a supplier of education. For her the key question was whether the body in question had academic links with the university and so recognition from the university, and this the union did not have. The third decision is that of the Court of Appeal in Finance and Business Training Ltd v Revenue and Customs Comrs [2016] EWCA Civ 7; [2016] STC 2190. Here the question was whether the taxpayer, FBT, a profit making enterprise, was exempt from VAT in respect of the supply of courses leading to the grant of degrees by the University of Wales. The FTT decided it was not. Although it supplied a university education, FBT also had to show that it was an integrated part of the university, and that it had failed to do. In reaching this conclusion, the FTT applied the SFM factors and attached particular weight to the nature of the relationship between FBT and the university, which it found to be short term, commercial and held out as being one of partnership. An appeal to the UT was dismissed. On further appeal to the Court of Appeal, it was argued by FBT, among other things, that Parliament had failed to set conditions for the education exemption in accordance with EU law and, in particular, the principles of legal certainty and fiscal neutrality. Arden LJ (with whom Gloster and Sharp LJJ agreed), rejected that submission. She explained that it was up to each member state to set the conditions under which bodies not governed by public law would be entitled to the education exemption, and how it did so was a matter for national law. It was therefore open to Parliament to decide which non public bodies would qualify, and it had done so in Note (1)(b). However, Parliament was constrained by article 132(1)(i) as to which bodies it could include. She continued, at paras 55 to 57: 55. In those circumstances, it has taken the view that the body must be one which provides education in like manner to a body governed by public law, that is, there must be a public interest element in its work. It has decided to draw the line, in the case of universities to those colleges, halls and schools which are integrated into universities and which are therefore imbued with its objects. 56. For FBT to show that its exclusion from this group is a breach of the fiscal neutrality principle would require it to say that it belongs to the same class as those institutions which meet the integration test in Note (1)(b). Neither of the tribunals made any findings that would support that conclusion and this court is hearing an appeal only on a point of law. 57. FBT contends that Parliament has not met the requirements of the EU law principle of legal certainty by setting out criteria which are to apply to determine when non public bodies seek to enjoy the education exemption. The criteria have to be neutral, abstract and defined in advance. In my judgment, this is achieved by the combination of note (1)(b) and the SFM factors. These factors are neutral, they are abstract and defined in advance. By applying them, it is possible to know what supplies and which suppliers qualify for exemption. The decisions below (a) The First tier Tribunal The FTT carried out a multi factorial assessment in order to determine whether SEL was sufficiently integrated with MU to justify the conclusion that it was a college of the university and for that purpose considered each of the 15 SFM factors. In carrying out that exercise, it conducted an extensive analysis of the evidence. Having done so, it was satisfied that SEL, as the United Kingdom arm of SAEI, had since May 2009 been an Associate College of MU, and a college of MU within the meaning of Note 1(b). It set out the factors which it considered carried the greatest weight at para 293: (1) Status of Associated College, combined from September 2010 with status of Accredited Institution. (2) Long term links between SAE Institute and MU. Similar purposes to those of a university, namely the provision of higher education of a university standard. (3) Courses leading to a degree from MU, such courses being supervised by MU, which regulated their quality standards. (4) Conferment of degrees by MU, received by SAE students at MU degree ceremonies. (b) The Upper Tribunal On further appeal by the Commissioners, the UT adopted an approach which differed in some respects from that of the FTT. It explained that it is necessary to adopt a multi step evaluation of the relationship between the undertaking and the university. It must first be determined whether they had a common understanding of their relationship. If they did, the next question is whether they had a common understanding that the undertaking was a college of the university. If the answer to that question is also in the affirmative, it must be considered whether the relationship was sufficiently close to justify the conclusion that the undertaking was indeed a college of the university within the meaning of Note 1(b), and it is here that the SFM factors are relevant. If the relationship was sufficiently close, the final step is to consider whether the undertaking supplied university level education. It was the UTs view that the FTT failed properly to take the first and second steps, and had it done so it would have found that they should be answered in the negative. It therefore allowed the Commissioners appeal. (c) The Court of Appeal The approach of the Court of Appeal differed from those of both the FTT and the UT. Patten LJ (with whom Black and Sales LJJ agreed) explained that the test of whether an undertaking is part of a university is considerably more hard edged than earlier decisions had suggested. It is necessary for the relevant undertaking to show that it is a part of the university in the sense of being a constituent part with all the rights and privileges for its students which that entails. Inherent in this test is the need to demonstrate some legal relationship which establishes and confirms the status of the undertaking. It matters not whether this relationship is embodied in a formal foundation or constitutional document or whether it is based upon some other binding agreement. But it has to be one which in a real sense makes the undertaking a constituent part of the university. It had not been established that SEL was a part of MU in a constitutional or structural sense and so the appeal fell to be dismissed. Note 1(b) the correct approach The starting point for a consideration of the proper interpretation of Note 1(b) to Schedule 9, Group 6, Item 1 of the VAT Act must be articles 131 to 133 of the Principal VAT Directive. These make clear that member states must exempt transactions involving the provision of, among other things, university education by bodies governed by public law having such education as their aim. Member states must also exempt transactions by other organisations which they have recognised as having similar objects to those governed by public law and which also have education as their aim. In accordance with well established principles, the terms used in articles 131 to 133 to specify exemptions from VAT must be construed strictly. Nevertheless, they must also be construed in a manner which is consistent with the objectives which underpin them and not in such a way as to deprive them of their intended effects. The general objective of the exemptions in articles 133 to 135 is, I think, readily apparent and, so far as university education is concerned, it is to ensure that access to the higher educational services this necessarily involves is not hindered by the increased costs that would result if those services were subject to VAT. This was explained by the CJEU in Commission of the European Communities v Federal Republic of Germany (Case C 287/00) [2002] ECR I 5811; [2002] STC 982, a decision which concerned article 13A(1)(i) of the Sixth Directive, which, as we have seen, is an exemption drawn in very similar terms to those of article 132(1)(i) of the Principal VAT Directive. The court said this about the purpose of the Article in considering the concept of services which are closely related to university education, and whether research activities fell within its scope: 47. Nevertheless, that concept does not require an especially strict interpretation since the exemption of the supply of services closely related to university education is designed to ensure that access to the benefits of such education is not hindered by the increased costs of providing it that would follow if it, or the supply of services and of goods closely related to it, were subject to VAT (see, by analogy, in relation to article 13(A)(1)(b) of the Sixth Directive, Commission v France (Case C 76/99) [2001] ECR I 249, para 23). However, if the undertaking by State universities of research projects for consideration is made subject to VAT, that does not have the effect of increasing the cost of university education. That does not mean that all organisations which provide educational services may be granted a tax exemption by member states, however. The services must be provided by organisations governed by public law or by other organisations recognised by the member state in issue as having similar objects. It is essentially for this combination of reasons that the CJEU held in MDDP that articles 132(1) and 133 of the Principal VAT Directive do not preclude the inclusion of educational services provided by private organisations for commercial purposes in the tax exemption but do preclude a general exemption of all supplies of educational services without consideration of the objects pursued by the private organisations which are providing them. In implementing articles 132 and 133 of the Principal VAT Directive, the United Kingdom and other member states therefore had a discretion in deciding which bodies, other than those governed by public law, they would recognise as providing educational services, including university education. But that discretion was limited in the manner I have described, and whilst it was open to member states to exempt educational services provided by private bodies for commercial purposes, they could not do so without consideration of the objects those bodies pursued. It was also limited in other important respects for, in implementing the Directive, member states were required to respect the general principles of law that form part of the order of the European Union, including the principles of fiscal neutrality, legal certainty and proportionality. As I have explained, Parliament has chosen to exercise the discretion conferred upon it by exempting from VAT, so far as relevant, the provision of education by a United Kingdom university and any college of such a university. The term university is not defined in the VAT Act. However, the conditions under which a body in the United Kingdom is entitled to use the word university in its title are regulated by statute. Over 100 bodies are presently entitled to call themselves a university and they vary greatly in character. A small but nonetheless significant number of them are private and run for profit. Some, such as the University of London, are collegiate federal universities in which, for many purposes, the constituent colleges operate on an independent basis. Others, such as the University of Oxford and the University of Cambridge, comprise a kind of federal system of colleges, schools and faculties, in which the colleges are generally financially independent and self governing. These are just examples. Other universities also comprise or have close relationships with colleges, including the University of the Arts London, the University of the Highlands and Islands and Queens University of Belfast. The connection between each of these universities and its respective colleges has its own particular character and is a reflection of the history of the institutions involved. It is against the background of the range of possible arrangements between universities and their colleges that the meaning of the phrase college of such a university in Note (1)(b) falls to be determined. In my judgment the following points are material. First, for its activities to fall within the scope of Item 1(a), any college of a university, as an eligible body, must provide education. Secondly and as we have seen, the supply of educational services is exempt only if it is provided by bodies governed by public law or by other bodies recognised by the member state as having similar objects. Parliament has exercised the discretion conferred upon it by recognising for this purpose the provision of education by universities, and it has done so regardless of whether those universities are charities or are private and run for profit. If, as I believe, the phrase a United Kingdom university in Note 1(b) therefore extends to private universities which are run for profit then in my opinion the same must apply to the expression any college of such a university. There can be no justification for treating the scope of the two expressions differently in this respect. Further, were it otherwise, private colleges of a university providing higher education services would be obliged to charge VAT on their supplies, rendering them more expensive and so restricting the opportunities of students to access them, contrary to the purpose of the exemption. Thirdly, there is in my view nothing in Note 1(b) or the broader context which would justify limiting the scope of the phrase any college of such a university to colleges which are a constituent part of a university in a constitutional or structural sense. To the contrary, if satisfaction of such a constituent part test were required, it would effectively exclude commercial providers such as SEL from the exemption for it is a test they will rarely if ever be able to satisfy. That, so it seems to me, would be contrary to the principle of fiscal neutrality in the light of the decision by Parliament not to limit the bodies it has recognised in Note 1(b) to those which do not make a profit. Fourthly, the United Kingdom must be taken to have recognised that a college (or, for that matter, a school or hall) of a university within the meaning of Note 1(b) has similar objects to those of a university which is governed by public law and which provides education to young people. In my opinion this consideration focuses attention on the objects of the body in issue, the nature of the educational services that it supplies, and how integrated those services are with those of the university. Put another way, it is necessary to examine the characteristics of those educational services and the context in which they are delivered rather than the precise nature of the legal and constitutional relationship between the body that provides them and its university. Of course, I recognise that if a college is a part of a university in a constitutional or structural sense then it is overwhelmingly likely that any educational services it provides will reflect this relationship and so the college may properly be regarded as a college of that university within the meaning of Note 1(b). But it does not follow that the converse is also true. It is entirely possible that an independent and private body which conducts its business of providing education for profit will be so integrated with a university that its educational activities and objects are indistinguishable from those of a college which is constitutionally part of the university or, indeed, from those of the university itself. All of these matters point to the conclusion that the integration test explained in the SFM case and adopted by the FTT is essentially correct. However, I think the factors to be considered do need some refinement. As I have said, the presence of a foundation or constitutional document or some other legal relationship establishing the college as a constituent part of the university in a constitutional or structural sense will be sufficient to prove that it is a college of the university within the meaning of Note 1(b), save in an exceptional case. But that is not a necessary condition. In assessing whether a body is a college of a university the following five questions are also likely to be highly relevant: (i) whether they have a common understanding that the body is a college of the university; (ii) whether the body can enrol or matriculate students as students of the university; (iii) whether those students are generally treated as students of the university during the course of their period of study; (iv) whether the body provides courses of study which are approved by the university; and (v) whether the body can in due course present its students for examination for a degree from the university. If a body can establish the presence of each of these five features, focused as they are on the objects of the body, the relationship between the students of the body and the university and the degree to which the activities of the body are recognised by and integrated with the university, then in my judgment it is highly likely to be a college of the university within the meaning of Note 1(b). Again, I do not suggest that there may not be other cases where the degree of integration of the activities of the body and the university is such that it may properly be described as a college of the university in light of some or most of the factors I have identified and other aspects of the services it supplies. All will depend on the particular circumstances of the case. However, some of the SFM factors are, in my view, likely to be of much less assistance in light of the matters to which I have referred. Here I have in mind: (i) whether the body is independent from the university; (ii) whether the body is financially dependent on the university, or whether the body and the university are financially interdependent; (iii) whether the body generates any distributable profit; (iv) whether the body is entitled to public funding; (v) the presence or absence of permanent links between the body and the university; (vi) the degree of physical proximity between the body and the university; and (vii) whether the body has any an obligation to offer a minimum number of university places. I do not suggest that none of these matters will ever have any evidential weight. For example, the duration of the relationship between the body and the university and how long it may be expected to last may have some relevance, if only as part of the background, but these and similar matters are unlikely to be determinative. In my judgment it follows that the reasoning of Peter Gibson LJ in the University of Leicester Students Union case at para 36 (which I have set out at para 34 above) needs some qualification. I accept that the words in those cases where there are separate entities which are nevertheless parts of the university, any of those separate entities in Note 1(b) include a college, institution, school or hall of a university which is separate from the university but which is nevertheless a part of it in a constitutional or structural sense. But, for the reasons I have given, I do not accept that the scope of Note 1(b) is limited to such entities, and if that is what Peter Gibson LJ meant by the use of these words, I respectfully disagree with him. In my view the correct approach was expressed succinctly by Arden LJ in FBT at para 55, which I have recited above. The question is whether the college and the university are so integrated that the entity is imbued with the objects of the university, and that is best answered in the manner I have described. Did the Upper Tribunal and the Court of Appeal fall into error? The UT did not reject the integration approach or question the value of the SFM factors but introduced the sequential test which I have set out at para 39 above. I recognise that if a taxpaying body is a college of a university one would expect to see some recognition of that by the university. I also accept the importance of establishing that the university and the body have a common understanding that the body is a college of the university. But it seems to me that these are matters which are best addressed in the context of and as part of the general assessment of their relationship, the extent to which their activities are integrated and whether they share the same objects. That brings me to the judgment of Patten LJ in the Court of Appeal, with which Black and Sales LJJ agreed. It is carefully reasoned and merits great respect. His analysis began with the FA 1972. He noted, entirely correctly, that it exempted the provision of education by an eligible body and that it defined the term university as including a university college and the college, school or hall of a university. He also observed, again correctly, that at the time this exemption came into effect the relevant EU provisions on exemptions were those contained in article 10 of the Second Directive which, as we have seen, gave each member state a broad discretion as to which exemptions to create beyond the supply of goods to places outside that state, and services relating to such goods or goods in transit. He concluded, and I agree, that the language of item 1 in the FA 1972 must be taken to represent what Parliament considered at that time should constitute the scope of the exemption for the supply of education by a university. Patten LJ turned next to the meaning of the phrase college, school, or hall of a university in the context of United Kingdom universities as they operated in 1972. Here, focusing on the universities of Oxford and Cambridge, he observed that their colleges and private halls, though self governing and legally independent, formed an integral part of the structure of their respective universities and that their members made up the universitys teaching staff and students. Patten LJ also found support for his approach in the provisions of the Education Reform Act 1988 (the 1988 Act) and the Education (Listed Bodies) (England) Order 2010 (the 2010 Order) made under it. The 1988 Act makes it an offence to award a degree that is not a recognised award. Under section 214(2), a recognised award includes an award granted or to be granted by a university which is authorised by Royal Charter or Act of Parliament to grant degrees, and any award granted or to be granted by any body for the time being permitted by a university to act on its behalf. Any such body falls within the definition of a recognised body in section 216(4). Section 216(2) of the 1988 Act requires the Secretary of State to compile and publish by order a list of the names of the bodies which appear to him to fall within section 216(3) which provides, so far as relevant: (3) A body falls within this subsection if it is not a recognised body and it: (b) is a constituent college, school or hall or other institution of a university which is a recognised body. The 2010 Order was made pursuant to section 216(2) and, as Patten LJ observed, it lists, among other bodies, all the colleges and halls of the universities of Oxford, Cambridge, Durham and Queens University Belfast, and the Institutes constituting the School of Advanced Study in the University of London. I would add that the 2010 Order was revoked and replaced by The Education (Listed Bodies) (England) Order 2013 which came into force on 30 December 2013. This expands the list of colleges and halls and includes one college of the University of South Wales and several colleges of the University of the Highlands and Islands. It was notable, Patten LJ continued, that the provisions of section 216(3)(b) were all but identical to those of Schedule 5, Group 6, Item 1 of the FA 1972 in defining what was included in a university, and it was unlikely that the similarity between the provisions was accidental. He recognised that the purpose of the two sets of provisions was very different but thought that both of them were seeking to identify the constituent parts of a university; and further, that the 1988 Act and the 2010 Order provided a useful illustration of how essentially the same statutory language had come to be interpreted and applied, albeit in the regulation of the granting of degrees. Patten LJ turned next to the VAT Act. Here he noted what he termed the stylistic and grammatical differences between Note 1(b) of Schedule 9, Group 6, Item 1 of the VAT Act and the definition of a university in Note (3) of Schedule 5, Group 6, Item 1 of the FA 1972 but he could see nothing in these differences or in the Sixth Directive to justify giving what he thought was essentially the same language a much wider meaning. He was of the view that there was nothing in the EU legislation which compelled member states to cast the scope of the exemption more widely than, in the case of the United Kingdom, it had previously chosen to do. He thought the focus of Note 1(b), and that of Note (3) before it, was on identifying the constituent parts of the university. The phrase of a university was common to both statutes and in his opinion this was determinative of the position. Patten LJ also considered the decisions in SFM, University of Leicester Students Union and FBT. Having done so, he was still of the view that it was necessary for SEL to establish what he understood Peter Gibson LJ to have described in University of Leicester Students Union, namely that it was a part of the university in the sense of being a constituent part with all the rights and privileges for its students and other members which that entailed. In my judgment Patten LJ has fallen into error in the following important respects. First, in focusing on the colleges of Oxford and Cambridge, all of which form a part of the structure of their respective universities, he has failed to take into account the variety of reasonable and foreseeable arrangements between a university and a college. Secondly, the 1988 Act is in my view of no real assistance in construing the provisions of Schedule 9, Group 6 of the VAT Act. The 1988 Act does not purport to implement or give effect to any EU legislation, let alone the Sixth Directive or the Principal VAT Directive. Further and as Patten LJ himself recognised, the purposes of the 1988 Act and the orders made under it are very different from those of the VAT Act. The 1988 Act is concerned with the grant of awards. The relevant provisions of the VAT Act, on the other hand, are concerned with the provision of education. Thirdly, Patten LJ has in my view failed properly to take into account the difference between the provisions of the First and Second Directives, on the one hand, and those of the Sixth Directive and the Principal VAT Directive, on the other, namely the scope and nature of the discretion they respectively confer on member states to exempt supplies of education from VAT. The provisions of the VAT Act are not the same as those of the FA 1972 and, most importantly, must be interpreted in the light of the wording and purpose of the Sixth Directive and now the VAT Directive, the breadth of the discretion conferred on member states by those Directives, and the need for Parliament, in exercising that discretion, to apply the relevant principles of EU law, including the principle of equal treatment. Finally, and for the reasons I have given, the judgment of Peter Gibson LJ in University of Leicester Students Union does not provide any sound support for the conclusion Patten LJ reached. I have therefore come to the conclusion that the Court of Appeal has fallen into error. The correct approach is to ascertain the nature and purpose of the educational activities of the college in issue, and whether those activities are so integrated with those of its university that it may properly be said to have the same objects as that university. That exercise may conveniently be carried out in the manner I have described at paras 47 to 56 above. The application of the correct approach In my judgment the analysis of the evidence carried out by the FTT was careful and comprehensive. It found, among other things, that SEL, as the United Kingdom arm of SAEI, had been an Associate College of MU since May 2009 and that the parties had proceeded on that basis; that the links between SAEI and MU were well established and likely to endure; that most of SELs courses were supervised by MU and their quality was regulated by MU; that SELs purposes were similar to those of MU; that SELs students became students of MU and received degrees from MU; and that the activities of SEL were substantially integrated into those of MU. It identified the factors upon which it particularly relied in the passage I have set out at para 38 above. In my judgment these findings had a sufficient basis in the evidence and there is no proper ground for interfering with them. In allowing the appeal, the UT considered that the FTT failed to distinguish between the activities of SAEI and those of SEL. It found that the various agreements relied upon by SEL were made between SAEI and MU; that SAEI was not a college of MU and SEL had the same status as SAEI; that MU was initially unaware of SELs existence as a corporate entity and so there was no common understanding between them; and that the FTT failed properly to consider what was meant by the term Associate College. In my judgment these are not fair criticisms. In May 2009 SEL stepped into the shoes of SETL and from that point was the entity through which the activities of SAEI were conducted in the United Kingdom. The factual findings of the FTT were sufficient to justify its conclusion that SELs activities were integrated into those of MU and that it shared the objects of MU. In my opinion the FTT was entitled to find that in May 2009 SEL became and thereafter remained a college of MU within the meaning of Schedule 9, Group 6, Item 1, Note (1)(b) of the VAT Act. Conclusion For the reasons I have given, I would allow the appeal. |
This appeal arises out of an unfortunate but isolated oversight in the offices of the West London Mental Health NHS Trust. It occurred over the New Year period at the end of 2010. The consequences have long since ceased to have any practical significance for any of the parties. No relief, financial or otherwise, is now sought in these proceedings against the trust itself. The appeal has been pursued to this court solely against the Secretary of State, on the basis that it raises a question of general importance. That question is formulated by Mr Gordon QC, in his printed case as follows: As: (i) a public body with obligations in public law and (ii) a public authority under the Human Rights Act 1998 'HRA' can the Secretary of State for Health 'the S/S' lawfully refuse to refer a patient's case to the First tier Mental Health Review Tribunal 'MHRT' under section 67(1) of the Mental Health Act 1983 'MHA' in circumstances where the MHRT has unlawfully declined to hear that patient's application to it under section 66(1) (2) and where the patient requests that there be a section 67(1) referral? Factual and procedural background The facts can be shortly stated. Mrs Modaresi, who suffers from schizophrenia, was admitted to hospital on 20 December 2010 for assessment under section 2 of the Mental Health Act 1983, which permits detention for a limited period not exceeding 28 days. By section 66(1)(a) she had a right to apply to the First tier Tribunal within 14 days to review her detention and if appropriate obtain an order for her discharge. Under the rules applying to an application under section 66(1)(a), the tribunal would have been obliged to arrange a hearing within seven days of receiving the application (SI 2008/2699, rule 37(1)). On the afternoon of 31 December 2010 she gave a completed application form to a member of staff on her ward, who faxed it to the appropriate office of the trust. Unfortunately, the relevant administrator was out of the office that day and the form was not seen by others in the office. The office was closed over the New Year holiday until 4 January 2011, when the form was found and faxed immediately to the tribunal. Officials in the tribunals office determined that it was out of time, and they wrote to her solicitors to that effect on 5 January. That letter was received by the solicitors on 7 January 2011. On the preceding day Mrs Modaresis status had changed. She had ceased to be detained for assessment under section 2, but instead became detained for treatment under section 3. As such she was entitled to make a separate application to the tribunal under section 66(1)(b). Under that provision there is no specific time limit for holding the hearing. Her solicitors wrote immediately to the Secretary of State asking him to exercise his discretion to refer the case to the tribunal under section 67. They referred to her detention under section 2. They explained that she had completed the application form to the tribunal within the 14 day time limit, but that as a result of the bank holiday weekend it had not been faxed to the tribunal until 4 January, which was then outside the 14 day time limit, and that it had been rejected by the tribunal as invalid. The application to the Secretary of State was made on the basis that this had come about through absolutely no fault of our client, and due to no procedures being in place at the hospital for applications to be submitted when no Mental Health Act administrator is on duty. Of her change of status the letter said: While our client is now detained under section 3 and therefore is eligible to submit a new application for a First tier Tribunal, to do this would deprive our client of her hearing to which she was entitled as a section 2 patient. Should the Secretary of State agree to make the requested referral, this will ensure that our client will retain her right of application under section 3 in due course. The Secretary of State replied on 10 January, declining to make a reference under section 67. This is the decision now under review. According to the letter, it was not thought that a reference must invariably be made where a patient has failed to exercise her right to apply for a hearing within 14 days: The 14 day limit exists for a purpose. The Act makes no special provision for public or bank holidays or other non working days. The letter noted, without disagreement, the claim that the time limit had been missed due to the lack of appropriate arrangements within the trust. However the Secretary of State having considered all the information before him had decided not to exercise his power to refer: In reaching his decision, he took into account that as Ms Modaresi is now detained under section 3 of the Act, she can make her own application to the First tier Tribunal. In the event that Ms Modaresi did not make an application, the hospital managers would have to make a reference under section 68 of the Act as of 20 June 2011, when Ms Modaresi would have been detained under the MHA for more than six months. However, should Ms Modaresi make an application to the First tier Tribunal and the tribunal panel were to uphold her detention under the Act, the Secretary of State would consider any further request for a section 67 reference submitted during her current period of detention. Mrs Modaresi did not take up that suggestion. Instead, on 17 January 2011, she began proceedings for judicial review against the three agencies concerned: against the tribunal for unlawfully declining to entertain her application as out of time; against the Secretary of State for unlawfully declining to refer her case to the tribunal under section 67; and against the trust for its failure to have in place lawful arrangements. so as to comply with the requirements of article 5(4) European Convention on Human Rights. On 26 January 2011 Cox J granted permission to apply for judicial review, following which, on 1 February 2011, the Secretary of State reconsidered his position and made a referral under section 67 as requested. Before the application was heard by the tribunal, on 18 February 2011 she became the subject of a Community Treatment Order, with the result that her detention came to an end. She nonetheless pursued her claim for judicial review. It was heard by Edwards Stuart J on 22 February 2011 and dismissed for reasons given in a judgment dated 3 March 2011. He held in summary that the tribunal had been correct to treat the original application as out of time; that the Secretary of State's decision was neither unreasonable nor in breach of her rights under the Convention; and that an isolated failure by the trust did not give rise to a breach of article 5(4). Her appeal to the Court of Appeal was dismissed on 23 November 2011, for reasons given by Black LJ, with whom the other members of the court agreed. By that time attention had been drawn by the court itself to the decision of the House of Lords in Mucelli v Government of Albania [2009] 1 WLR 276, dealing with the latitude to be allowed where time for service expires on a bank holiday. Following that authority, the court held that the application to the tribunal should have been treated by it as in time (as indeed is now common ground). The claim against the trust accordingly failed, as its oversight had not resulted in the deadline being missed. The claim against the Secretary of State was also dismissed. Black LJ held that he had been under no separate duty to check the time limit for himself, no doubt having been raised on that point in the solicitors letter. In relation to article 5(4) the only suggested disadvantage of her right to apply under section 3, as compared to section 2, was the potential loss of the right to make a further application within six months, which had been properly addressed in the Secretary of States offer to reconsider the use of section 67 in the future. Statutory provisions Sections 2 and 3 come within Part II of the Act, headed Compulsory admission to hospital and guardianship. Section 66(1)(a) and (b) provide, respectively, for applications to the First tier Tribunal on admission to hospital for either assessment (under section 2) or treatment (under section 3). Section 72 requires the tribunal to direct the discharge of the patient if not satisfied that the detention is justified under the criteria there set out. Procedure is governed by rules made under the Tribunals, Courts and Enforcement Act 2007. By section 11 of that Act, a decision of the First tier Tribunal is subject to a right of appeal, with permission, to the Upper Tribunal. Alternatively, the tribunal may review its own decision, if for example a clear error has been made (section 9; for the practice see R (RB) v First tier Tribunal [2010] UKUT 160 (AAC)). It is unnecessary to set out the relevant provisions in detail, since there is no issue about their effect in this case. In particular it is not in dispute (i) that, even if the Secretary of State had agreed to refer the application on 10 January, the seven day limit would have had no direct application, and the timing of the hearing would have been in the discretion of the tribunal; (ii) that the application would have been heard in accordance with the criteria applicable under section 3, not section 2; but (iii) that these would have been no less favourable from her point of view. Section 67(1) which is central to the appeal provides: The Secretary of State may, if he thinks fit, at any time refer to the appropriate tribunal the case of any patient who is liable to be detained under Part II of this Act The appellants submissions As Mr Gordon rightly submits, the apparently unrestricted terms in which section 67 is expressed must be read subject to the ordinary constraints which apply to statutory discretions. It must be exercised in accordance with the purposes of the statute (Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997), and not in such a way as adversely affects the legal rights of the citizen or the basic principles on which the law of the United Kingdom is based (R v Secretary of State for the Home Department, Ex p Pierson [1998] AC 539, 575D per Lord Browne Wilkinson). It must also (under the Human Rights Act 1998) be exercised consistently with the relevant provisions of the European Convention on Human Rights. Mr Gordon relies in particular on article 5(4) of the Convention, by which: Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. Further, Strasbourg case law emphasises the importance of this protection for vulnerable people such as mental health patients. Thus it has been held that article 5 lays down a positive obligation on the state to protect the liberty of its citizens, and to provide effective protection for vulnerable persons (Storck v Germany (2005) 43 EHRR 96, para 102); and that special procedural safeguards may be needed to protect the interests of those who on account of their mental disabilities, are not fully capable of acting for themselves (Winterwerp v The Netherlands (1979) 2 EHRR 387, para 60). Although he puts his submissions in a number of different ways, his central point as I understand it is a short one. It is that, where as here, through no fault of her own, the appellant has been deprived of her fundamental right, under the statute and the Convention, of speedy access to a court or tribunal to review her detention, the discretion under section 67 becomes in effect a duty. Failure to exercise it in the circumstances of this case was a breach of that duty, whether viewed by reference to the Human Rights Act, to constitutional norms, or to ordinary public law principles. Discussion So far as the appellants case relies on fundamental principles of access to the court, under article 5(4) or otherwise, there is in my view a short answer. She was not deprived of her right of access to a court or tribunal to review her detention. She had such a right under section 3. The issue was not the existence of the right, but how speedily it might be exercised and whether it was as advantageous as might have been the case if her original application had been accepted. It is notable that speed of access was not an issue raised by the letter to the Secretary of State. Nor is it one which can, in my view, arise on the case as it stands. It is common ground that section 67 did not enable the Secretary of State to insist on a hearing in seven days, as would have been required on an application under section 2. The timing would have been in the discretion of the tribunal, as it would under section 3 and section 66(1)(b). Mr Gordon hinted that the intervention of the Secretary of the State might have been more persuasive in that respect. There is, however, no evidence to support such a submission. An application could have been made to the tribunal under section 3 with a request for an urgent hearing, supported by explanation of the circumstances in which she had lost her right under the rules through no fault of her own. I see no reason to think that the tribunal would not have viewed it sympathetically, but in any event it is not clear what additional weight could have been given to such a request by the Secretary of State. On the face of it, a direct approach to the tribunal would have offered the prospect of a much speedier resolution than the roundabout procedure actually adopted. So far as appeared from the solicitors letter, the only practical reason for inviting an application under section 67 was to avoid the loss of her right to make a second reference, if needed, at a time chosen by her. On that point I cannot do better than repeat Black LJs words, with which I agree: What article 5(4) requires is that a patient should have the entitlement to take proceedings to have the lawfulness of his or her detention decided speedily by a court; the appellant had that entitlement under section 66(1) in association with her detention under section 3. Article 5(4) does not prescribe further than that. If there came a time when having unsuccessfully used up her section 3 application at an early stage, the appellant wished to make a further application to the tribunal, she was entitled to ask the Secretary of State again to refer her case to the tribunal under section 67 and he had indicated that he would consider so doing. Of course, that was not a guarantee that he would refer it and to that extent the appellant's position was less favourable than it would have been had she not had to use her section 3 application in the first place. But the Secretary of State is bound to exercise his discretion under section 67 in accordance with normal public law principles and judicial review would be available to the appellant should he fail to do so, thus ensuring that there would be no breach of article 5(4). Accordingly, I do not consider that the disadvantage to the appellant of having to use up her section 3 application at an early stage was such as to make it unlawful for the Secretary of State to decline to exercise his section 67 power in the expectation that she would do so. (para 43) I would emphasise, as Black LJ recognised, that section 67 may in certain circumstances have a significant role in ensuring compliance with the Convention. That is well illustrated by the decision of the House of Lords in R (H) v Secretary of State for Health [2006] 1 AC 441, on which Mr Gordon also relied. In that case, the appellant, who had been detained for assessment under section 2, was too disabled to make an application to the court on her own behalf. There was a dispute between her mother, as her nearest relative, and the responsible medical officer over her treatment, following which an application was made to the county court under section 29 for the functions of the nearest relative to be exercised by an approved social worker rather than the mother. This had the effect (under section 29(4)) of extending the period of detention until that application was disposed of. At the mothers request, the Secretary of State then exercised his power under section 67 to refer the case to the tribunal, which heard the case but declined to discharge her. She brought judicial review proceedings challenging the compatibility of section 29(4) with article 5(4). In rejecting that contention, Lady Hale commented on the nature of the Secretary of States role under section 67, and the advantages of section 67 over the alternative route through the county court: This is preferable because mental health review tribunals are much better suited to determining the merits of a patient's detention and doing so in a way which is convenient to the patient, readily accessible, and comparatively speedy. As already seen, a reference is treated as if the patient had made an application, so that the patient has the same rights within it as she would if she herself had initiated the proceedings. It can, of course, be objected that this solution depends upon the Secretary of State being willing to exercise her discretion to refer. But the Secretary of State is under a duty to act compatibly with the patient's Convention rights and would be well advised to make such a reference as soon as the position is drawn to her attention. In this case this happened at the request of the patient's own lawyers. Should the Secretary of State decline to exercise this power, judicial review would be swiftly available to oblige her to do so. (para 30) I would only add that the advantages of convenience and accessibility to which she referred have been reinforced by the changes in the legal and administrative structures of the tribunal following the 2007 Act. That passage provides additional support for Black LJs approach. Given the appellants right to apply under section 3, there was no present conflict with article 5(4). The Secretary of State was entitled to proceed on that basis. The position might well have been different, as Mr Eadie QC seemed inclined to accept, if she had continued to be detained under section 2, and had not acquired a separate right under section 3. In circumstances where she had lost her right of immediate access to the tribunal wholly through the fault of the trust, itself an agent of the state for these purposes, it could well be said that the Secretary of State had a positive duty to remedy the position. It is however unnecessary to decide that point, which does not arise on the facts before us. As things were, given the existence of her section 3 right, the risk of a breach would only arise if and when her first application had failed, and her circumstances had changed sufficiently to make a second application realistic. It is true that the Secretary of State had not promised to make a reference at that stage. Section 67 gave him no power to commit himself in that way. All he could do was to agree to consider the use of that power if and when it became necessary. But that discretion would, as Black LJ said, be underpinned by his duty to avoid a breach of article 5(4). Finally, I should briefly address Mr Gordons alternative submission, not so fully developed, that the Secretary of States decision was vitiated in any event by his error over the applicable time limit, even if that error was shared at the time with everyone else, including the appellants solicitor. Nonetheless, it is said, that was an error of law, and as such was sufficient in itself to render the decision liable to be set aside. I find this a surprising argument. A competent tribunal had made a decision on a procedural matter, and the claimant had both a right of appeal and access to solicitors advice on its merits. The Secretary of State was under no duty to do the solicitors work for him, even if it would have been appropriate for him to second guess the decision of the tribunal on this point. It had been open to the appellant to ask the tribunal to review its decision, if thought wrong, or to appeal. Failing such a challenge, it is hard to see why the Secretary of State was not entitled to proceed on the basis of that decision of a competent tribunal. In any event the argument does not lead anywhere. If the Secretary of States decision were to be set aside solely on the basis that the original application was in fact made in time, it would not help the appellant. Rather it would further undermine her case against the Secretary of State under article 5(4) or analogous common law principles, since it would show that there had been a right of access to the tribunal all along, and therefore no breach by the Secretary of State of any implied duty to provide one under section 67. Conclusion Notwithstanding Mr Gordons forceful submissions, in my view, this case turns on its own facts and raises no point of general principle. In the particular circumstances, the Secretary of States response to the solicitors letter of 7 January 2011 was both lawful and reasonable. Accordingly, in agreement with the reasoning of the Court of Appeal, I would dismiss the appeal. LADY HALE I entirely agree that this appeal should be dismissed for the reasons which Lord Carnwath gives. However, the appellant has undoubtedly been let down by the system through no fault of her own and there are some important lessons to be learnt. Under article 5(4) of the European Convention on Human Rights, she had the right to take proceedings by which the lawfulness of [her] detention shall be decided speedily by a court and [her] release ordered if the detention is not lawful. Under article 5(1), her detention was only lawful if it was in accordance with a procedure prescribed by law. The Mental Health Act 1983 gave her the right to apply to the First tier Tribunal within 14 days of her detention on 20 December 2010. Had her application of 31 December 2010 been processed as it should have been, her case would have been heard by the tribunal within seven days after its receipt, that is no later than 11 January (as required by rule 37(1) of the tribunal rules). The tribunal would have had a duty to discharge her if it was not satisfied that the criteria for detention were satisfied and the power to discharge her even if they were (section 72(1)). As by that date her detention under section 2 had been replaced by detention under section 3, it is common ground that the more exacting criteria for section 3 detention would have applied to her case. The system let her down in a number of ways. First, the hospital failed to transmit her application to the tribunal on the day that it was made. The judge held that, if the hospital trust had a reasonable system in place for transmitting these applications, an isolated failure would not give rise to a remedy by way of judicial review (para 65). He also held that, if the trust believed that the tribunal would calculate time from the date when the application was signed, as opposed to the date when it was received, then it was not unreasonable for it to have a system which did not provide for applications made outside normal hours to be transmitted without delay to the tribunal (para 81). Once it became aware that the tribunal would calculate time from the date on which an application was received, such a system would not be reasonable (para 82). Further, even if it had no reasonable grounds for its belief that the tribunal would calculate time from when the form was signed, it would not have been unreasonable to have the system that it did, provided that it explained, in the information given to patients, that applications would have to be made during normal working hours (para 83). On appeal, as is recorded by Black LJ, the appellant wished to argue (1) that in order to comply with article 5(4), the hospital trust had a duty to have in operation a system that enabled patients to make applications to the tribunal in time; (2) that the judge was wrong to consider that failing to transmit an application in time because of an oversight or neglect could excuse the hospital from responsibility; and (3) that the judge was wrong to consider that the system actually in place was reasonable. The Court of Appeal held that it was the tribunal, and not the hospital, which had created the problem, by wrongly refusing to accept an application which it had, in fact, received in time. Hence the court declined to entertain further argument on these points, on the ground that, if these arguments were to be deployed, it would be better that this is done in a case in which they would have the potential to affect the outcome of the proceedings (para 33). There has been no appeal to this court against the dismissal of the proceedings against the hospital trust. We have therefore heard no argument on these issues. But in my view it would be unwise for hospitals to conduct themselves on the basis that the judge was correct in his approach. These proceedings were brought by way of judicial review, but it was alleged that the patient had been unlawfully deprived of her liberty, in other words that her Convention rights had been violated. It is the hospital which deprives the patient of her liberty. It is incumbent upon the hospital to do this in accordance both with the domestic law and with the patients Convention rights. A failure which deprives the patient of the right of access to a tribunal which the law provides may well (I put it no higher) be a breach of the patients Convention rights. The only safe course is to have a system which ensures that this does not happen. The Mental Health Act 1983 Code of Practice (Department of Health, 2008) reminds hospitals that patients must be told, both orally and in writing, of their right to apply to the tribunal and how to do so (para 2.17). This is a statutory duty under section 132(1) of the Act. The Code also advises that hospital managers should ensure that patients are offered assistance to make an application to the tribunal (para 2.18). It would be helpful if the Code were also to advise that the hospital should ensure that tribunal applications which are given to hospital staff are transmitted to the tribunal without delay. A detained patient is in no position to ensure that her application reaches the tribunal unless the hospital affords her the facilities for it to do so. Secondly, the tribunal let her down by failing to accept her application when it arrived. This may be understandable, given that her lawyers and the judge both made the same mistake (see [2011] EWHC 417 (Admin), para 45). But it is a little surprising. As Mr Gordon pointed out, the House of Lords did not make new law in Mucelli v Government of Albania [2009] 1 WLR 276. At para 84, they adopted what had already been decided 40 years ago by the Court of Appeal in Pritam Kaur v S Russell & Sons Ltd [1973] QB 336: that when an Act of Parliament prescribes a period for doing an act which can only be done if the court office is open on the day when time expires then, if it expires on a day when the court office is not open, the time is extended to the next day on which it is open. No doubt that message has now been heard loud and clear in the tribunal offices and the same mistake will not be made again. That is another good thing to have come out of these proceedings. Had either of those two mistakes not been made, the patient should have had her tribunal hearing on or before 11 January 2011 (the tribunal has a more than 90 per cent record in achieving this). We cannot know what the result would have been. Given that she was in fact placed on a community treatment order on 18 February 2011, it is not impossible that it would have been successful. Instead of bringing these proceedings, however, she might have made an application immediately following the replacement of her admission for assessment under section 2 with an admission for treatment under section 3 on 6 January 2011. No deadline for hearing section 3 applications is laid down in the tribunal rules, and the normal target time is six to eight weeks. But it is always possible to ask for an early or urgent hearing. In a case where a patient has, for whatever reason, just missed the deadline for a section 2 application, the tribunal might well be sympathetic to such a request. In any event, the patient would be more likely to obtain the speedy hearing of her case before a tribunal with power to discharge her than by the roundabout route of applying to the Secretary of State for a reference under section 67 and bringing judicial review proceedings if he refused. Thirdly, therefore, the Secretary of State did not let her down. He dealt promptly and sensibly with the request for a reference. As with a section 3 application, there is no deadline within which the tribunal must hear such references. The Secretary of State might request expedition but one hopes that if there is a good case for expedition (as in this case) the tribunal would be as likely to grant it at the request of the patient or her representatives as it would be at the request of the Secretary of State. Furthermore, a reference inevitably involves additional procedures as there are more parties involved, so it is likely to take longer to be heard than an ordinary application. For all those reasons, although these proceedings have been unsuccessful, and the patient would have been better served by a different route, they have not been entirely in vain. |
This appeal raises three questions. The first is whether a court, when entertaining a claim for possession by a private sector owner against a residential occupier, should be required to consider the proportionality of evicting the occupier, in the light of section 6 of the Human Rights Act 1998 and article 8 of the European Convention on Human Rights (the Convention). The second question is whether, if the answer to the first question is yes, the relevant legislation, in particular section 21(4) of the Housing Act 1988, can be read so as to comply with that conclusion. The third question is whether, if the answer to the first and second questions is yes, the trial judge would have been entitled to dismiss the claim for possession in this case, as he said he would have done. The factual and procedural background The substantive facts The appellant, Fiona McDonald, is aged 45 and, sadly, she has had psychiatric and behavioural problems since she was five. Dr Peter Sargent, an experienced psychiatrist, explained in his expert evidence that she had an emotionally unstable personality disorder and at times when her mental state has deteriorated she has presented with frank psychotic symptoms. She has been unable to hold down any employment, and has not worked since 1999; since that time she lost two public sector tenancies owing to her behaviour. In those circumstances, her parents, who are technically the respondents to this appeal, decided to buy a property for her to occupy. Accordingly, in May 2005, they purchased 25 Broadway Close, Witney (the property) with the assistance of a loan from Capital Home Loans Ltd (CHL), which was secured by way of a registered legal charge over the property. From about June 2005, the respondents granted the appellant a series of assured shorthold tenancies (ASTs) of the property, on the basis that the rent would be covered by housing benefit. The last of those ASTs was granted in July 2008 for a term of one year from 15 July 2008. The appellant continues to live in the property. The financial arrangements between the respondents and CHL were that the respondents were to pay interest on the loan by way of monthly instalments, and that the loan was to be repayable in full after eight years ie on 12 May 2013. Initially, the respondents paid the interest instalments as they fell due. However, owing to financial difficulties which they unfortunately encountered in their business, they failed to meet all the interest as it fell due. Accordingly, in August 2008, CHL appointed Andrew Hughes and Julian Smith (the Receivers) to act as receivers of the property under section 109 of the Law of Property Act 1925. Having been appointed under that provision, the Receivers, although appointed by the chargee, CHL, were entitled to take steps in relation to the property on behalf of, and in the name of, the chargors, the respondents. As the rent was being regularly paid, and the arrears of interest were not substantial, the Receivers took no immediate steps to end the AST or to sell the property. However, not least because the arrears persisted, albeit not on a very large scale, the Receivers served a notice, in the name of the respondents, on the appellant on 13 January 2012, indicating that they would be seeking possession of the property. The notice was served under section 21 of the Housing Act 1988 (the 1988 Act) and it expired on 14 March 2012. The procedural history On the expiry of that notice, the Receivers then issued the instant proceedings, again in the names of the respondents, for possession of the property in the Oxford County Court. In the light of the appellants mental health, her brother, Duncan McDonald, was appointed her litigation friend. The proceedings came on for trial before His Honour Judge Corrie, who heard them on 4 December 2012 and 7 March 2013. The evidence of Dr Sargent included the following passages, which were quoted by the judge in his judgment: [Homelessness], I am sure, would have a major detrimental effect on [the appellants] mental health and she would decompensate entirely, very probably requiring admission to hospital. I think that if she was evicted from the current accommodation she would have real difficulty in finding alternative rented accommodation that would accept her on benefits and in view of her mental health history including at times aggression towards others. I think that there is a significant possibility that she would become homeless as a consequence. Even if alternative accommodation is found for her, I think that the stress and upheaval of trying to find and move into alternative accommodation would also very likely have a significantly detrimental effect on her mental health with the possibility of harm to herself or suicide, or the possibility of violence towards others which she has exhibited on a number of occasions when she has previously de compensated under stress. Judge Corrie gave judgment on 22 April 2013. In his judgment, he considered a number of issues which are no longer live between the parties, including whether the respondents had misled CHL (they had not), and whether the Receivers had had authority to serve the notice and bring the proceedings (they had). Accordingly, the judge concluded that, subject to the appellants reliance on article 8, the court had no alternative to make an order for possession. He then turned to consider the appellants article 8 case, and held that it was not open to her to require the court to consider the proportionality of making an order for possession against a residential occupier, given that the person seeking possession was not a public authority. He went on to hold that, if he was wrong on that issue, and he had been entitled to consider the proportionality of making an order for possession, he would have dismissed the action, because, on balance, he would have taken the view that those circumstances were sufficiently exceptional to justify dismissing the claim for possession on the basis that it was disproportionate. The appellant appealed to the Court of Appeal, who dismissed the appeal [2014] EWCA Civ 1049; [2015] Ch 357. The main judgment was given by Arden LJ, Tomlinson LJ gave a brief concurring judgment, and Ryder LJ gave a concurring judgment agreeing with them both. The Court of Appeal agreed with the judge that article 8 could not be invoked by a residential occupier in possession proceedings brought by a private sector landowner, as a ground for opposing the making of, or the terms of, the order for possession. However, they considered that, if article 8 could have been invoked in this case, the judge would have been wrong to dismiss the claim as he had indicated that he would have done. The appellant now appeals to this court. Before turning to the three issues identified in para 1 above, it is appropriate to explain the relevant provisions of the 1988 Act, and, albeit in very summary terms, the history of the policy of successive Governments towards renting in the private sector. Private sector residential tenants and the relevant statutory provisions Government policy since 1977 In the late 1970s, residential tenants in England and Wales had two forms of protection, which applied even if their tenancies had contractually expired, namely (i) protection from summary eviction and (ii) security of tenure. The first, which applied to all residential tenants and most licensees, was under the Protection from Eviction Act 1977, which, among other things, precluded their eviction other than through court proceedings. That statute remains in force, and, although it has been amended from time to time (sometimes for the purpose of strengthening or extending), its original provisions remain substantially in place. There were also statutory provisions governing the amount of time which a court could allow an occupier before an order for possession took effect and could be executed. Security of tenure, which only applied to tenants with private sector landlords, was accorded by the Rent Act 1977, whose provisions extended to most but not all such tenancies. In very summary terms, that Act (i) precluded a court making an order for possession against most such tenants unless one or more of a number of specified grounds could be established, (ii) permitted family members to succeed on the death of the tenant in some circumstances, and (iii) limited the level of rent which a landlord could recover from the tenant, often to a rate considerably below the market level. Under Chapter II of Part I of the Housing Act 1980, later replaced by Part IV of the Housing Act 1985, residential public sector tenants were for the first time given a substantially similar degree of security of tenure. In 1987, the Conservative government published a White Paper, Housing: The Government's Proposals (Cm 214, 1987). One of its principal aims was to reverse the decline of rented housing and to improve its quality para 1.1. An important part of its thesis was that the protection afforded to tenants by the Rent Act 1977 and similar predecessor legislation, not least because of the security of tenure thereby afforded to tenants, had greatly reduced both the supply and the quality of housing in the private rented sector, which was to the disadvantage of residential tenants as a group paras 1.8 and 3.1. The 1987 White Paper therefore made proposals which were intended according to para 1.15 to ensure that the letting of private property will again become an economic proposition. The White Paper therefore proposed two new types of tenancy, namely (i) an assured tenancy, which would be at a freely negotiated rent, but with the tenant having security of tenure (albeit somewhat more attenuated than under the Rent Act 1977), and (ii) an AST, under which the tenant would have very limited security of tenure, and either party could have an appropriate rent determined (which would be substantially less restricted than the rent fixed under the Rent Act 1977) para 3.11. The Bill which became the 1988 Act was introduced to give effect to these proposals (as well as giving effect to other proposals). As originally enacted, the 1988 Act defined an AST as being a fixed term tenancy for at least six months, which could not be determined earlier by the landlord, and in respect of which the tenant had been given a notice in a prescribed form before the tenancy was granted. The 1988 Act set out a number of grounds upon which a landlord could seek possession against a tenant under a shorthold tenancy (including an AST); it also contained provision for the landlord to serve a notice seeking possession at any time after the contractual term of an AST had expired, and then provided that the court should grant possession. (Housing Associations which had previously been treated as public sector landlords were brought into the ambit of the 1988 Act by section 140(2) and Schedule 18). In 1995, the Conservative government published another White Paper, Our Future Homes: Opportunity, Choice and Responsibility (Cm 2901, 1995). This White Paper noted the increase in the number of private sector tenancies in the residential sector between 1988 and 1994, and ascribed it largely to the 1988 Act, which had made renting out property a much more attractive alternative for owners p 21. It also emphasised the need to reduce unnecessary regulation and control p 24. The 1995 White Paper led to provisions in the Housing Act 1996 (the 1996 Act), whose effect was that (subject to exceptions) all assured tenancies granted after March 1997 would be ASTs; the 1996 Act also abolished the requirements for a six month minimum term and for the service of a prescribed notice (although it gave some protection under section 21(5) and it also required certain information to be given to tenants). At the same time, an accelerated procedure was introduced whereby landlords could obtain possession against tenants under ASTs which had been the subject of notice of determination (see CPR 55.11 to 55.19 and CPR PD55A). Around the same time, the so called buy to let sector began in earnest, and it subsequently has undergone an expansion, reflecting the structural and demographic trends towards a larger [private rental sector] according to a Treasury consultation paper, Financial Policy Committee powers of direction in the buy to let market, published in December 2015. Following the general election in 1997, the Labour Government stated that it did not intend to reverse the reforms affected by the 1988 and 1996 Acts, but rather to build on them by promoting choice in both the public and private sectors, to quote from para 2.68 of a Law Commission Consultation Paper No 162 Renting Homes 1: Status and Security (2002), citing a paper published by the Department for Transport, Local Government and the Regions, Quality and Choice: A Decent Home for All, The Way Forward for Housing (December 2000). That policy was continued by the Coalition government in 2010 and there is no reason to think that the Conservative government, elected in 2015, has different ideas. Accordingly, since 1996, although the 1988 Act has been amended from time to time, its basic provisions have remained unaffected and continue to apply in England. (The Welsh Assembly has enacted a scheme based upon the Law Commissions recommendations on Renting Homes: The Final Report (2006, Law Com No 297) which preserves essentially the same distinction between private and public sector tenancies.) Successive reports emanating from government departments have claimed that the decrease in statutory protection effected by the 1988 and 1996 Acts has been at least one of the factors which has served to reinvigorate the private residential rented sector in England and Wales over the past 25 years see eg the annual English Housing Surveys issued by the Department for Communities and Local Government. The Housing Act 1988 in its current form Chapters I and II of Part I of the 1988 Act are concerned with assured tenancies generally and ASTs respectively. Section 1 provides that a tenancy under which a dwelling house is let as a separate dwelling to an individual or individuals, who occupy it as her or their only or principal home is an assured tenancy, subject to certain specified exceptions (including cases where a local authority is the landlord). None of those exceptions apply here. Section 19A (as inserted by section 96(1) of the 1996 Act) provides that, subject to certain irrelevant exceptions, an assured tenancy entered into after March 1997 shall be an AST. Section 5 of the 1988 Act (as amended by section 299 of, and paragraph 6 of Schedule 11 to, the Housing and Regeneration Act 2008) is in these terms, so far as relevant: (1) An assured tenancy cannot be brought to an end by the landlord except by (a) obtaining an order of the court for possession of the (i) dwelling house under section 7 or 21, the execution of the order, and (ii) and, accordingly, the service by the landlord of a notice to quit is of no effect in relation to a periodic assured tenancy. (1A) Where an order of the court for possession of the dwelling house is obtained, the tenancy ends when the order is executed. (2) comes to an end otherwise than by virtue of If an assured tenancy which is a fixed term tenancy an order of the court [of] the kind mentioned in (a) subsection(1)(a) , or (b) tenant, a surrender or other action on the part of the then, subject to section 7 and Chapter II below, the tenant shall be entitled to remain in possession of the dwelling house let under that tenancy and his right to possession shall depend upon a periodic tenancy arising by virtue of this section. Section 7(1) of the 1988 Act provides that [t]he court shall not make an order for possession of a dwelling house let on an assured tenancy except on one or more of the grounds set out in Schedule 2. Section 7(3) (as amended by paragraph 18 of Schedule 11 to the Anti social Behaviour, Crime and Policing Act 2014) requires the court to make an order for possession if any of those grounds is made out, subject, inter alia, to any available defence based on the tenants Convention rights, within the meaning of the Human Rights Act 1998. Section 7(6) provides that a landlord can only rely on section 7 if the AST has expired or could be brought to an end on the ground on which possession is sought. A common ground relied on under section 7 is arrears of rent, which represent a mandatory ground for possession if the rent is more than a specified period, between eight weeks and three months (depending on how frequently it is to be paid), in arrear see ground 8 of Schedule 2. Section 19A provides that (subject to certain exceptions which are irrelevant for present purposes) an assured tenancy entered into after March 1997 is an AST. Section 20A (as inserted by section 97 of the 1996 Act) requires a landlord under such a tenancy to provide the tenant with certain information in writing, failing which the landlord is liable to be convicted. Section 21(1) of the 1988 Act (as amended by section 193 of, and paragraph 103 of Schedule 11 to, the Local Government and Housing Act 1989 and section 98(2) of the 1996 Act) states at the time of the service of notice and the hearing in the County Court in this case: [O]n or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy, a court shall make an order for possession of the dwelling house if it is satisfied (a) that the assured shorthold tenancy has come to an end and no further assured tenancy (whether shorthold or not) is for the time being in existence, other than an assured shorthold periodic tenancy (whether statutory or not); and (b) the landlord has given to the tenant not less than two months notice in writing stating that he requires possession of the dwelling house. (Various other restrictions on a courts power to order possession in relation to an AST have been added by the Housing Act 2004, the Deregulation Act 2015 and the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations (SI 2015/1646) but nothing hangs on them for period proposed.) Section 21(4) (as amended by section 98(3) of the 1996 Act) is at the centre of this case. It states that: Without prejudice to any such right as is referred to in subsection (1) above, a court shall make an order for possession of a dwelling house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied (a) that the landlord has given to the tenant a notice in writing stating that, after a date specified in the notice, being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling house is required by virtue of this section; and that the date specified in the notice under (b) paragraph (a) above is not earlier than the earliest day on which, apart from section 5(1) above, the tenancy could be brought to an end by a notice to quit given by the landlord on the same date as the notice under paragraph (a) above. Accordingly, a landlord under an AST can obtain an order for possession from a court against the tenant either (i) under section 21, after giving two months notice once the AST has come to an end, or (ii) under section 7, where the AST is a periodic tenancy or has come to an end or could be brought to an end, and one of the specified grounds is made out by the landlord. In practice, the majority of possession proceedings issued against tenants who have been granted ASTs are brought under section 21 rather than section 7. Chapter IV of the 1988 Act reinforces the protection to residential tenants afforded by the Protection from Eviction Act 1977. In particular, it imposes a fairly steep measure of damages on a landlord who unlawfully evicts a residential occupier, and extends the ambit of the offence of harassment. It is also relevant to refer to section 89(1) of the Housing Act 1980 which applies to possession orders against tenants under ASTs. That section provides that, subject to certain exceptions (which do not include orders for possession in respect of an AST): Where a court makes an order for the possession of any land , the giving up of possession shall not be postponed (whether by the order or any variation, suspension or stay of execution) to a date later than 14 days after the making of the order, unless it appears to the court that exceptional hardship would be caused by requiring possession to be given up by that date; and shall not in any event be postponed to a date later than six weeks after the making of the order. The issues In summary terms, the appellants argument is that, when considering whether to make an order for possession against her, and if so on what terms, the judge should have taken into account the proportionality of making any such order, bearing in mind in particular article 8 and the interference which would be occasioned by the making of the order to her enjoyment of her home, and that, had he done so, he would have been entitled to refuse to make an order for possession and to dismiss the claim. The effect of this argument would be that, despite the apparently mandatory requirements of section 21(4) of the 1988 Act (set out in para 25 above), the judge could have refused to make an order for possession in favour of the respondents, or, despite the apparently mandatory terms of section 89(1) of the 1980 Act (set out in para 28 above), he could have suspended or delayed the operation of the order for possession for a substantial, or even an indeterminate, period. This argument gives rise to the three issues set out at para 1 above. We shall take them in turn. The first issue: can the appellant rely on proportionality? Introductory Article 8 of the Convention provides as follows: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. Section 6(1) of the Human Rights Act 1998 provides that [i]t is unlawful for a public authority to act in a way which is incompatible with a Convention right, which, of course, includes an article 8 right. Section 6(1) is subject to subsection (2), which provides that subsection (1) does not apply if the authority is required so to act as a result of primary legislation or provisions made thereunder which cannot be construed in any other way. Where the party seeking possession of residential property is a local authority, or other public authority within the meaning of section 6 of the Human Rights Act 1998, it is now well established that it is, in principle, open to the occupier to raise the question whether it is proportionate to make an order for possession against her, and if it is, to invite the court to take that into account when deciding what order to make. That is the effect of the decisions of this court in Manchester City Council v Pinnock [2011] 2 AC 104 and Hounslow London Borough Council v Powell [2011] 2 AC 186. Pinnock represented the resolution of a protracted inter judicial dialogue between the House of Lords and the Strasbourg court, discussed in paras 25 50. The view originally taken by the House of Lords was that, although a claim for possession of residential property by a local authority engaged the article 8 right of the residential occupier, the proportionality of making an order for possession was already taken into account by Parliament through the legislation which limited the landlords right to obtain possession. However, the Strasbourg court took the view that the existence of the legislation did not prevent an occupier in such a case from raising her article 8 rights when possession of her home was being sought. In Pinnock, para 49, this court concluded that, in the light of the Strasbourg courts clear and constant jurisprudence, if our law is to be compatible with article 8, where a court is asked to make an order for possession of a persons home at the suit of a local authority, the court must have the power to assess the proportionality of making the order, and, in making that assessment, to resolve any relevant dispute of fact. However, the Supreme Court also made it clear in paras 51 and 54 that it would only be in very highly exceptional cases that it will be appropriate for the court to consider a proportionality argument and that where the local authority is entitled to possession as a matter of domestic law, there will be a very strong case for saying that making an order for possession would be proportionate. In Pinnock, it was made clear that the Supreme Courts conclusion, that proportionality should, if raised, be addressed (albeit that in the great majority of cases it could and should be summarily rejected) in every possession action against a residential occupier, only applied in cases where the person seeking possession was a local authority or other public authority. That was because section 6(1) of the 1998 Act only applied to a public authority, which is unsurprising, given that the Convention is intended to protect individual rights against infringement by the state or its emanations. Thus, in Pinnock, para 50, the Supreme Court made it clear that nothing said in the judgment in that case was intended to bear on cases where the person seeking the order for possession is a private landowner, and added that it was preferable for this court to express no view on the issue until it arises and has to be determined. The present appeal raises that issue, and it therefore now falls to be determined. A private sector landlord, such as the respondents, who are individuals, or CHL, which is a limited company trading for profit, is not a public authority. However, the appellant argues that, because a court is specifically included within the expression public authority by section 6(3)(a) of the 1998 Act, no judge can make an order for possession of a persons home without first considering whether it would be proportionate to do so, and, if so, what terms it would be proportionate to include in the order. Again, it can be said with some force that this is not, at least on the face of it, a particularly surprising proposition, as a domestic court would be regarded by the Strasbourg court as part of the state, and therefore obliged to respect individual rights enshrined in the Convention. Accordingly, runs the appellants argument, in terms of article 8 proportionality, the position of a private sector residential tenant facing eviction is quite similar to that of a public sector residential tenant, as determined in Pinnock and Powell. Having said that, it is, I think, accepted by the appellant that the position of a private sector tenant is rather weaker in that a private sector landlord can claim that any delay in giving him possession of the property to which he is entitled would be an interference with his rights under article 1 of the First Protocol to the Convention (A1P1), which provides as follows: Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. Accordingly, as Ms Bretherton QC accepts on behalf of the appellant, unlike in the case of a public sector landlord, a judge invited to make an order for possession against a residential occupier by a private sector landlord would, if the appellants argument is correct, have to balance the landlords A1P1 rights against the occupiers article 8 rights. Either party would have a potential claim against the United Kingdom in Strasbourg if the balance were struck in the wrong place. Preliminary view In the absence of any clear and authoritative guidance from the Strasbourg court to the contrary, we would take the view that, although it may well be that article 8 is engaged when a judge makes an order for possession of a tenants home at the suit of a private sector landlord, it is not open to the tenant to contend that article 8 could justify a different order from that which is mandated by the contractual relationship between the parties, at least where, as here, there are legislative provisions which the democratically elected legislature has decided properly balance the competing interests of private sector landlords and residential tenants. In effect the provisions of the Protection from Eviction Act 1977, section 89 of the Housing Act 1980 and Chapters I and IV of the 1988 Act, as amended from time to time, reflect the states assessment of where to strike the balance between the article 8 rights of residential tenants and the A1P1 rights of private sector landlords when their tenancy contract has ended. (It is true that the balance was initially struck in statutes enacted before the 1998 Act came into force in 2000. However, the effect of those statutes has not only been considered and approved in government reports since 2000, as mentioned in para 19 above, but they have been effectively confirmed on a number of occasions by Parliament, when approving amendments to those statutes since 2000). To hold otherwise would involve the Convention effectively being directly enforceable as between private citizens so as to alter their contractual rights and obligations, whereas the purpose of the Convention is, as we have mentioned, to protect citizens from having their rights infringed by the state. To hold otherwise would also mean that the Convention could be invoked to interfere with the A1P1 rights of the landlord, and in a way which was unpredictable. Indeed, if article 8 permitted the court to postpone the execution of an order for possession for a significant period, it could well result in financial loss without compensation for instance if the landlord wished, or even needed, to sell the property with vacant possession (which notoriously commands a higher price than if the property is occupied). The contrary view would also mean that article 8 could only be invoked in cases where a private sector landowner, or other private sector entity entitled to possession in domestic law, was either required by law, or voluntarily chose, to enforce its rights through the court, as opposed to taking the law into its own hands eg by changing the locks when the residential occupier was absent. There are a number of types of residential occupiers who are not protected by the Protection from Eviction Act 1977, and who can therefore be physically (albeit peaceably) evicted, such as trespassers, bare licensees, sharers with the landlord and some temporary occupiers, as well, it appears, as mortgagors see Ropaigealach v Barclays Bank plc [2000] 1 QB 263. The risk of otherwise facing an article 8 defence seems a somewhat perverse incentive for a private sector landowner to take the unattractive course of locking out the occupier rather than the more civilised course of seeking possession through the courts. More broadly, it would be unsatisfactory if a domestic legislature could not impose a general set of rules protecting residential tenants in the private sector without thereby forcing the state to accept a super added requirement of addressing the issue of proportionality in each case where possession is sought. In the field of proprietary rights between parties neither of whom is a public authority, the state should be allowed to lay down rules which are of general application, with a view to ensuring consistency of application and certainty of outcome. Those are two essential ingredients of the rule of law, and accepting the appellants argument in this case would involve diluting those rules in relation to possession actions in the private rented sector. It is, of course, true that a court, which is a public authority for the purposes of the 1998 Act (and is regarded as part of the state by the Strasbourg court), actually makes the order for possession which deprives the tenant of his home and indeed puts an end to the AST. However, as Lord Millett explained in Harrow London Borough Council v Qazi [2004] 1 AC 983, paras 108 109, the court is merely the forum for the determination of the civil right in dispute between the parties and once it concludes that the landlord is entitled to an order for possession, there is nothing further to investigate. This conclusion does not mean that a tenant could not contend that the provisions of the 1988 Act did not, for some reason, properly protect the article 8 rights of assured shorthold tenants: that would involve arguing that the legislature had not carried out its obligations under the Convention. However, quite rightly, no such argument was advanced on behalf of the appellant in this case. As the summary in paras 11 19 above shows, the Governments approach to the private rented sector in England has been designed to confer a measure of protection on residential occupiers, without conferring so much protection as to deter private individuals and companies from making residential properties available for letting. The extent of the protection afforded to tenants under ASTs is significant, if limited, and it enables both landlords and tenants to know exactly where they stand. While there will of course occasionally be hard cases, it does not seem to us that they justify the conclusion that in every case where a private sector landlord seeks possession, a residential tenant should be entitled to require the court to consider the proportionality of the order for possession which she has agreed should be made, subject to what the legislature considers appropriate. Of course, there are many cases where the court can be required to balance conflicting Convention rights of two parties, eg where a person is seeking to rely on her article 8 rights to restrain a newspaper from publishing an article which breaches her privacy, and where the newspaper relies on article 10. But such disputes arise not from contractual arrangements made between two private parties, but from tortious or quasi tortious relationships, where the legislature has expressly, impliedly or through inaction, left it to the courts to carry out the balancing exercise. It is in sharp contrast to the present type of case where the parties are in a contractual relationship in respect of which the legislature has prescribed how their respective Convention rights are to be respected. Given that that is our view as a matter of principle, it is necessary to consider the jurisprudence of the Strasbourg court to see whether it points to a different conclusion. The Strasbourg jurisprudence There are two admissibility decisions of the European Commission on Human Rights which are inconsistent with the appellants case, and are understandably relied on by Mr Jourdan QC for the respondents. They are Di Palma v United Kingdom (1986) 10 EHRR 149 and Wood v United Kingdom (1997) 24 EHRR CD 69. Di Palma was a case where a private sector landlord forfeited a long and valuable residential lease for non payment of a relatively small amount of service charge, and the court refused the tenant relief from forfeiture owing to her refusal to apply within the statutorily prescribed time. The Commission rejected the tenants application, which was based on articles 6, 8, 13 and 14 and on A1P1, as manifestly ill founded, as the Governments Convention responsibilities were not engaged by an exclusively private law relationship between the parties (p 154). The Commission also said that the fact that a domestic court made the orders granting forfeiture and refusing relief made no difference, as the court merely provided a forum for the determination of the civil right in dispute between the parties (p 155). In Wood, the same reasoning led to the conclusion that a mortgagor had no article 8 complaint if a private sector mortgagee sought and obtained possession of her home in circumstances in which she had failed to pay instalments due under the mortgage, which gave the mortgagee the right to seek possession as a matter of domestic law. If these decisions represent the view in Strasbourg, they would be fatal to the appellants case. However, Ms Bretherton QC contends that the Strasbourg jurisprudence has developed in a very different direction over the past 15 years. So far as possession actions brought by public sector landlords are concerned, this is undoubtedly correct, as the decisions discussed in Pinnock, paras 31 43, demonstrate. However, as we have explained, and as Ms Bretherton fairly accepts, there is a fundamental difference between public sector landlords (who owe their residential tenants an article 8 duty) and private sector landlords (such as those in the two admissibility decisions described in para 48 above, who do not). Accordingly, we do not consider that the decisions concerning cases where a public sector landlord seeks possession are of much relevance. Of those decisions discussed in Pinnock, it appears to us therefore that Connors v United Kingdom (2004) 40 EHRR 9, Blei v Croatia (2006) 43 EHRR 48, McCann v United Kingdom (2008) 47 EHRR 40, osi v Croatia (2011) 52 EHRR 39, Pauli v Croatia (Application No 3572/06) (unreported) 22 October 2009 and Kay v United Kingdom [2011] HLR 13 take matters little further for present purposes, as the party seeking possession was a public institution. The same applies to the decisions in Orli v Croatia [2011] HLR 44 and in Buckland v United Kingdom (2013) 56 EHRR 16 (where the local authority owned the site see para 60). The furthest any observations in those eight decisions can be said to go for present purposes is to support the notion that, whenever an order for possession is made by a court, article 8 is engaged. However, observations which appear to have that effect when read on their own in the context of claims by public authorities, cannot be confidently translated to cases involving private sector landlords seeking to enforce a contractual right to possession subject to legislative constraints. And, even if they can be so read, they beg the question whether a domestic court can be required to take into account the proportionality of making the order for possession required by the contractual terms as softened by domestic legislation. Zehentner v Austria (2009) 52 EHRR 22 is at first sight of some assistance to the appellant, because the Strasbourg court held that article 8 rights could be invoked where the court had ordered a sale of the applicants home to reimburse her creditors. However, quite apart from the fact that Austria does not seem to have challenged the contention that article 8 was engaged, the case was not concerned with the enforcement of a landlords right to possession, but with statutorily created powers of a court to enforce debts owed to creditors by ordering the sale of the debtors assets, including her home. The basis of the courts finding of incompatibility was that the decision of the domestic court refusing the applicant any opportunity to pay off what was owing to her creditors had been disproportionate, principally in the light of the absence of any procedural safeguards and the applicants mental incapacity, which meant that the debts were unenforceable see paras 61 65. The furthest this decision goes in assisting the appellant is to support the notion that article 8 is engaged whenever a court determines a tenancy of residential property and makes an order for possession. However, once again, the decision does not support the notion that article 8 can be invoked by a residential occupier to curb her private sector landlords reliance on its contractual right to possession, where the statutory regime according her a degree of protection is not said to infringe the Convention. Zrili v Croatia (Application No 46726/11) (unreported) 3 October 2013 is unhelpful for the same sort of reasons. It involved the partition and sale of a residential property. Croatia does not seem to have challenged the contention that article 8 could be invoked by the applicant, once she established that the property concerned was her home (see paras 42 and 59). Quite apart from this, the case involved the domestic court exercising its own powers of partition and sale, rather than enforcing the contractual rights of the parties subject to specific legislative protective provisions, and it was a case where both parties had article 8 rights. Thus, in para 65, the Strasbourg court described the domestic courts function as being to seek a partition model which would be feasible and appropriate in the circumstances of the case. In any event, the application was rejected on the merits. In two other cases involving Croatia, article 8 was successfully invoked by a residential tenant against whom a private sector landlord had obtained an order for possession. In Breec v Croatia [2014] HLR 3, the land owner was a private company, but it had been a state owned company when the tenancy was granted a factor which the court plainly thought relevant (see para 48). In any event, Croatia did not rely on the subsequent privatisation to justify an argument that article 8 could not be invoked (see para 33). It therefore seems to us that the judgment in that case can take matters no further on this appeal. The same points can be made about the subsequent decision in Lemo v Croatia (Application No 3925/10, etc) (unreported) 10 July 2014 (see paras 28 and 43). For completeness, it is right to mention Belchikova v Russia (Application No 2408/06) (unreported) 25 March 2010, which also involved a private land owner seeking possession (having inherited the property concerned after the former owners death), but the decision is of no assistance as there appears to have been no challenge to the contention that article 8 could be invoked, it appears that the domestic law may well have involved a balancing exercise, and in any event the application was held to be manifestly ill founded on the facts. It is worth noting concurring opinions in two of the Strasbourg court decisions mentioned above, which are very much in line with Lord Milletts observation in Qazi, cited in para 44 above. In Buckland, para OI 1, Judge De Gaetano said that while it is perfectly reasonable to require that an eviction notice issued by the Government or by a local authority should be capable of being challenged on the grounds of proportionality, when the landlord is a private individual the tenants right should in principle be limited to challenging whether the occupation has in fact come to an end according to law. He added that [i]n this latter case the proportionality of the eviction in light of the relevant principles under article 8 should not come into the equation. In Breec, at pp 37 38, Judge Dedov, having pointed out that the applicant did not challenge the privatisation of the properties, observed that, if the domestic court could hold that it was disproportionate to grant the land owner possession when domestic law entitled him to it, it would represent an interference with the private owners claims, and that it would have amounted to interference with the owners rights and such interference would be arbitrary from the very outset, since the private owner cannot be responsible for the states social obligations. Another decision which deserves mention is Mustafa and Tarzibachi v Sweden (2008) 52 EHRR 24, where the Strasbourg court considered a claim by applicants who had been evicted by a court order at the suit of their landlords, who had determined their tenancy for installing a satellite dish in breach of covenant. The Strasbourg court held that this infringed the applicants article 10 rights, but did not go on to consider their claim in so far as it was based on article 8 (see para 54). It is fair to say that the domestic courts involvement was enough to render the application based on articles 8 and 10 admissible (see paras 33 34). However, as we have already said, that does no more than establish that article 8 is engaged in a case where a private sector claimant seeks possession of a defendants home pursuant to the terms of the contract between them. Beyond that, it does not seem to us that Mustafa is of any assistance. Contrary to the submission on behalf of the appellant, we do not consider that this decision involved holding that article 10 could be invoked to vary the contractual rights as agreed between two private persons, in a case such as the present, where there is no suggestion that the legislature has failed to protect the relevant Convention rights. The effect of the decision in Mustafa, as we see it, was that the Swedish Government had failed to enact legislation to satisfy article 10, so far as individuals rights to receive information by satellite were concerned, and that in those circumstances, unless the court had power to give effect to such rights despite the terms of the relevant contract, the applicants article 10 rights would be infringed (see again para 34). Indeed, it is worth noting that the Strasbourg court in Mustafa considered that para 59 of its earlier judgment in Pla v Andorra (2006) 42 EHRR 25 was in point (see footnote 8). In that paragraph the Strasbourg court said that it could not remain passive where a national courts interpretation of a legal act, be it a testamentary disposition, a private contract, a public document, a statutory provision or an administrative practice appears unreasonable, arbitrary or, as in the present case, blatantly inconsistent with the prohibition of discrimination established by article 14 and more broadly with the principles underlying the Convention. That is a long way from what this case is about. Conclusion on the first issue In these circumstances, while we accept that the Strasbourg court jurisprudence relied on by the appellant does provide some support for the notion that article 8 was engaged when Judge Corrie was asked to make an order for possession against her, there is no support for the proposition that the judge could be required to consider the proportionality of the order which he would have made under the provisions of the 1980 and 1988 Acts. Accordingly, for the reasons set out in paras 40 46 above, we would dismiss this appeal on the first issue. This renders it unnecessary to address the second and third issues. However, both issues are of potential importance. The second issue is relevant to many cases when the court is faced with a choice between making an order under section 3 or under section 4 of the 1998 Act. The third issue is of importance in terms of giving guidance to judges faced with an article 8 proportionality argument by a residential occupier in the context of a possession claim by a public sector land owner. Accordingly, we will go on to consider those two issues. The second issue: could section 3 have applied? Section 3(1) of the 1998 Act provides that So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights. The appellant argues that, if this court could read down section 143D(2) of the 1996 Act (as inserted by paragraph 1 of Schedule 1 to the Anti social Behaviour Act 2003) in Pinnock and section 127(2) of the same Act in Powell, then there is no reason not to do the same for section 21(4) of the 1988 Act. Their wording is in similarly mandatory terms. Section 21(4) (para 25 above) states that the court shall make an order for possession of a dwelling house let on an assured shorthold tenancy which is a periodic tenancy if satisfied, in effect, that the landlord has served the correct two months notice. Section 143D(2) of the 1996 Act, which relates to demoted tenancies, states that The court must make an order for possession unless it thinks that the procedure under sections 143E and 143F has not been followed. Section 127(2) of the 1996 Act, which relates to introductory tenancies, states that The court shall make [an order for possession] unless the provisions of section 128 apply. If those two mandatory provisions can be read down so as to allow for the court to assess the proportionality of making the order, why can section 21(4) not be read in the same way? What is the difference between the notice requirements in section 21(4) and the requirements in sections 143E and 143F or section 128 respectively? This is an attractive argument, so much so that the second interveners, the Residential Landlords Association, are persuaded that section 21(4) could be read in this way (although they argue that it should not). Indeed, we were ourselves initially attracted by it. There are, however, powerful arguments to the contrary. Both demoted and introductory tenancies can only be granted by a public authority landlord. There are three inter linked reasons why decisions made by public authorities under the 1996 Act are different from decisions made by private landlords. First, public authorities are obliged to use their powers lawfully in accordance with the general principles of public law; it is open to a tenant to defend possession proceedings on the ground that the authority has acted unlawfully: see Wandsworth London Borough Council v Winder [1985] AC 461. As Lord Scott of Foscote pointed out in Doherty v Birmingham City Council [2009] 1 AC 367, at para 69, this concept of lawfulness has no application to a private landlord, who is entitled to recover possession of his property in accordance with the law for whatever reason he likes. He is not subject to the constraints of Wednesbury reasonableness: see Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223. Second, section 143E of the 1996 Act (as inserted by paragraph 1 of Schedule 1 to the 2003 Act) requires the landlord seeking to bring a demoted tenancy to an end to serve a notice giving reasons for doing so and informing the tenant of his right to seek a review of the decision under section 143F (as inserted by paragraph 1 of Schedule 1 to the 2003 Act). Similarly, section 128 of the 1996 Act requires the landlord seeking to bring an introductory tenancy to an end to serve a notice giving reasons and informing the tenant of his right to seek a review. In short, both are reasons based processes. There is nothing equivalent in section 21(4) of the 1988 Act, which is purely mechanical the right form of notice must be given at the right time to expire at the right time. Third, of course, by section 6(1) of the 1998 Act, it is unlawful for a public authority landlord to act incompatibly with the Convention rights. By section 7(1)(b) a person who claims that a public authority has acted or proposes to act in a way which is made unlawful by section 6(1) may rely on the Convention right concerned in any legal proceedings. None of this applies to a private landlord, who is not obliged to act compatibly with the Convention rights. It was for this combination of reasons that this court, in both Pinnock and Powell, held that it was possible to read the relevant provisions of the 1996 Act in such a way as to include the article 8 requirement of proportionality in the courts assessment of the lawfulness of the public authoritys actions in seeking possession. It is true, as the third interveners, Shelter, point out, that there are constraints on a private landlords freedom of action, other than those laid down in section 21(4) itself (an example is the Equality Act 2010, which prohibits unlawful discrimination in bringing possession proceedings). But all of these are laid down by statute or statutory instrument. And none of them imports the public sector obligations, in particular the duty to act compatibly with the Convention rights, set out above. There is therefore not the same flexibility inherent in the language of section 21(4) of the 1988 Act as there is in the language of sections 143D and 127(2) of the 1996 Act such as to enable the court to read into it a requirement that the court consider the proportionality of making an order for possession. More importantly, however, there are substantive limits to what the courts can achieve under section 3(1) of the 1998 Act. It is possible to do a great deal with words. In the leading case of Ghaidan v Godin Mendoza [2004] UKHL 30; [2004] 2 AC 557, it was possible to read as husband and wife to include two people of the same sex. The courts had already learned what could be achieved by interpretation in order to make statutory provisions conform to a higher law, under the European Communities Act 1972 and in construing the legislation of certain Caribbean islands compatibly with the fundamental rights protected by their Constitutions. As Lord Rodger of Earlsferry put it in Ghaidan at para 119, Such cases are instructive in suggesting that, where the court finds it possible to read a provision in a way which is compatible with Convention rights, such a reading may involve a considerable departure from the actual words. But there is a difference between interpretation, which is a matter for the courts and others who have to read and give effect to legislation, and amendment, which is a matter for Parliament. While the boundary may not always be easy to discern, the difference was neatly encapsulated by Lord Rodger in Ghaidan at para 121: If the court implies words that are consistent with the scheme of the legislation but necessary to make it compatible with Convention rights, it is simply performing the duty which Parliament has imposed on it and on others. It is reading the legislation in a way that draws out the full implications of its terms and of the Convention rights. And, by its very nature, an implication will go with the grain of the legislation. By contrast, using a Convention right to read in words that are inconsistent with the scheme of the legislation or with its essential principles as disclosed by its provisions does not involve any form of interpretation, by implication or otherwise. It falls on the wrong side of the boundary between interpretation and amendment of the statute. Notably, Lord Rodger was looking at the legislation itself when seeking to draw the line, rather than its broader policy. In the case before us, the scheme of the legislation is to draw a careful distinction between those cases in which good grounds must be shown for obtaining possession and those cases, such as this, where no ground need be shown. The essential principles disclosed by its provisions are that private landlords letting property under an AST should have a high degree of certainty that, if they follow the correct procedures and comply with their own obligations, they will be able to regain possession of the property. Reading in an obligation to assess the proportionality of doing so in the light of the personal circumstances of the individual tenant would not go with the grain of the legislation but positively contradict it. All this can be concluded without considering the broader policy of the 1988 Act, which (as we have explained at paras 12 to 19 above) was to stimulate the re growth of the private rented sector and in doing so to increase the supply of homes available to rent. For all those reasons, we conclude that it would not be possible to read section 21(4) in the way contended for by the appellant. Had we been persuaded that it was incompatible with the Convention rights, the only remedy would have been a declaration of incompatibility under section 4. As was said (in a different context) in Powell, at para 64, this is an area where the choice of if, and how, to remedy any incompatibility should be left to Parliament. The third issue: would the judge have been entitled to dismiss the claim? Even supposing that a proportionality assessment were required, at least where the occupier has crossed the high threshold of showing an arguable case, and section 21(4) could be read so as to accommodate it, what should the consequences be? The judge in this case held, that had proportionality arisen, he would on balance have taken the view that the appellants personal circumstances were sufficiently exceptional to justify dismissing the claim for possession on the basis that it was disproportionate. In reaching that obiter conclusion, he did not consider whether there were other solutions to the problems than dismissing the claim. In those rare cases where the court is required to assess the proportionality of making a possession order, the court has at least four possible options. One is to make a possession order, and if it does so, its powers to suspend or postpone the effect of the order are severely limited by section 89(1) of the Housing Act 1980 (set out at para 28 above). In Powell, at para 62, this court held that the language of section 89(1) was so strong that any reading down to enable the court to postpone the execution of a possession order for a longer period than the statutory maximum would go well beyond what section 3(1) of the 1998 Act permits. As Lord Phillips pointed out in Powell at para 103, the effect of section 89(1) is to increase the options available to the court. It may (a) make an immediate order for possession; (b) make an order for possession on a date within 14 days; (c) in cases of exceptional hardship make an order for possession on a date within six weeks; or (d) decline to make an order for possession at all. The cases in which it would be justifiable to refuse, as opposed to postpone, a possession order must be very few and far between, even when taken as a proportion of those rare cases where proportionality can be successfully invoked. They could only be cases in which the landlords interest in regaining possession was heavily outweighed by the gravity of the interference in the occupiers right to respect for her home. The evidence filed on behalf of Shelter indicates that Pinnock defences hardly if ever succeed against public authority landlords save in combination with some other public law factor (although they may well provide a helpful bargaining counter in particularly deserving cases). Were a proportionality defence to be available in section 21 claims, it is not easy to imagine circumstances in which the occupiers article 8 rights would be so strong as to preclude the making, as opposed to the short postponement, of a possession order. In this case, the judge referred to the fact that the arrears of interest on the mortgage were insubstantial and the rent was always up to date. That is, however, only part of the story. The loan which enabled the appellants parents to buy this house was for a period of only eight years, expiring on 12 May 2013, three weeks after the judge gave his judgment. The lenders were entitled to their money back then. The amount due (apart from legal costs) was nearly 164,000. The best chance of recovering all that was due to them was to sell the property with vacant possession. It may be, as the appellant argues, that they could recoup everything by selling the property with the appellant as sitting tenant. This does, however, seem unlikely, as her parents would have been advised to do this if they could have done. It was also in their interests to achieve the best price possible on the property, in the hope of realising some equity (which might have helped their daughter find another home). In any event, it would be for the appellant to show that a possession order would be disproportionate, and that to refuse a possession order would not prevent the lenders from recovering the sums to which they were entitled. It is difficult to see how the appellants circumstances, most unfortunate though they undoubtedly are, could justify postponing indefinitely the lenders right to be repaid. In the circumstances, therefore, and on the evidence available to the judge, it seems likely that the most the appellant could hope for on a proportionality assessment would be an order for possession in six weeks time. Conclusion For these reasons, we would dismiss this appeal. |
In 1680, in the city of Rheims, Jean Baptiste De La Salle founded an Institute known as the Brothers of the Christian Schools (the Institute). The members of the Institute are lay brothers of the Catholic Church. They are now to be found in many countries, including the United Kingdom. Their Rules, approved by Papal Bull in 1724, provided that they should make it their chief care to teach children, especially poor children, those things which pertain to a good and Christian life. That has remained the mission of the Institute and the mission and apostolate of each brother. This appeal is concerned with the legal implications of acts of physical and sexual abuse committed, or alleged to have been committed, by brothers who were, or should have been, pursuing that mission at a residential institution at Market Weighton for boys in need of care called St Williams (the school) The Institute is, in civil law, an unincorporated association of its members. It has, however, corporate features, including a hierarchy of authority. Steps have been taken on behalf of the Institute to create legal bodies that are capable of owning property and entering into legal relations in pursuance of the Institutes mission. Some of these are reflected in the identity of the individual defendants who have been described collectively as the De La Salle Defendants. Expert evidence was given as to the nature and status of the Institute as a matter of canon law. These matters have not been explored before this Court. The preliminary issue with which this Court is concerned is whether the Institute is responsible in law for the alleged acts of sexual and physical abuse of children at St Williams committed by its members. To a large extent this preliminary issue has been canvassed as if the Institute were a corporate body having separate legal identity. I shall refer to the Institute as if this were the case, although it will be necessary in due course to grapple with the nature of the Institute. This appeal requires this Court to review the application of the principles of vicarious liability in the context of sexual abuse of children. Unhappily this is today not an unusual context and it is one in which vicarious liability has received recent consideration not merely by other courts in the United Kingdom, but at the highest level in Canada and Australia. The claims in this group action are brought by 170 men in respect of abuse to which they allege that they were subjected at St Williams between 1958 and 1992. The claims are brought against two groups of defendants. The first group consists of the Middlesbrough Defendants. They took over the management of the school in 1973 and inherited, under statute, the liabilities of the managers of the school before that date. They, or those they represent, concluded contracts of employment with the brother teachers. They were held at first instance to be vicariously liable for acts of abuse by those teachers and no longer challenge that liability. By this appeal they seek, however, to challenge the judges finding, confirmed by the Court of Appeal, that the second group of defendants, the De La Salle Defendants, were not also vicariously liable for the acts of abuse committed by members of the Institute. The claimants are content to look to the Middlesbrough Defendants for their relief and anxious not to risk liability in respect of the costs of the appeal to this Court. Accordingly they have played no part in the appeal. This case is almost a carbon copy of McE v De La Salle Brothers [2007] CSIH 27; 2007 SC 566, in which a similar preliminary issue was tried. In that case a single pursuer claimed damages in respect of physical abuse to which he had been subjected by Brother Benedict, a De La Salle brother, while at a school in Scotland. The claim was however a test case as there were pending some 150 additional cases where abuse was alleged at the hands of brothers at that school. The Court of Session held that there was no basis upon which the allegation of vicarious liability on the part of the Institute could succeed and the claim was accordingly dismissed. The facts No significant challenge has been made in respect of the facts found by the judge of first instance, His Honour Judge Hawkesworth QC, sitting as a judge of the High Court and these have formed the basis of the Statement of Agreed Facts and Issues. The Institute The head of the Institute is the Superior General in Rome, elected by the General Chapter of the brothers, which is itself made up of elected representatives of all brothers. For the purposes of administration the Institute is divided into districts called Provinces, each headed by a Provincial. At different times there has been a London Province, an English Province and a Great Britain Province. Within a province the brothers live in communities, each headed by a Director. The brothers are bound together by lifelong vows of chastity, poverty and obedience and by detailed and very strict rules of conduct (the Rule). The Rule has its origin in the rules approved by the Pope in 1724, but these were amended from time to time. During the period to which this action relates the relevant rules were the Common Rules of 1947. The vow of obedience carries the obligation to obey the superiors of the Institute, including the Provincial and the Director of the community. Each brother undertakes to go wherever I may be sent and to do whatever I may be assigned by the [Institute] or its superior The Rule is highly particular and governs all aspects of the life and conduct of a brother including such matters as the taking of communal meals and other required communal activities. It contains provisions governing how the children taught are to be treated, including a chapter on correction or punishment which prohibits touching a child or corporal punishment. One chapter deals with chastity and this includes a provision that They shall not touch their pupils through playfulness or familiarity, and they shall never touch them on the face. There is a requirement to advertise to each other any faults of which they are conscious and extreme reserve is required, for example in speaking to women. Pursuant to the vow of poverty, any brother who is employed to teach by an outside body has to hand over all his earnings to the Institute. In England this duty is performed by entering into a deed of covenant to pay the earnings to a charitable trust. The pleadings disclose that there is a 1947 Trust relating to property held in connection with first the London province and subsequently the Great Britain province, and a 1953 trust relating to property held in connection with the England province. Judge Hawkesworth at paras 30 and 31 recorded that Brother Thomas gave evidence that the DLS trust had substantial funds derived from the sale of its properties and from the covenanted funds of the brothers employed in education at St Williams and elsewhere. The Institute provides the brothers with the wherewithal to live and looks after them after their retirement. The Institute owns schools, presumably through its charitable trusts. Where it does so the teaching is provided by a community of brothers who will usually live within the school. The Director of the community almost always acts as the headmaster of the school. However the Institute never owned St Williams. St Williams In paras 25 to 34 of the leading judgment in the Court of Appeal [2010] EWCA Civ 1106 Hughes LJ has set out the history of St Williams, as found by Judge Hawkesworth. It was founded in or about 1865 by a group of Catholic benefactors who placed the school in the ownership of a charitable trust. It was managed by a group of local people as a reformatory school for boys. They entrusted the running of the school to a religious congregation called the Rosminians. They did not prove satisfactory and, in 1912 the managers replaced them with the Institute, under a formal agreement made with the Superior General of the Institute. This agreement effectively delegated the running of the school to the Institute. Thereafter, up to 1933, the school was entirely staffed by brothers of the Institute. These were members of a community whose bedrooms and refectory were within the school grounds. Most of the brothers in the community worked in the school, but there were some who did not. The Director of the community was almost always the headmaster of the school. In 1933 the regime changed pursuant to provisions of the Children and Young Persons Act 1933. St Williams became an approved school, for the detention of boys up to the age of 17 who had been convicted of custodial offences. Under the 1933 Act, and the Approved School Rules 1933 made under it, the staff became the direct statutory responsibility of the managers. All teaching staff had to be employed by them under written contracts and the headmaster was made responsible to the managers for the efficient conduct of the school. The managers at this time, as described by the judge, at para 25, were a self perpetuating group of like minded people, linked by their Catholic faith, who would be appointed subject to the Bishops approval. From this time the managers began to employ lay teachers in addition to the brothers and the proportion of brother teachers to lay teachers fluctuated but generally diminished. In 1954 there were 5 brother teachers and 5 lay teachers. The regime changed again in 1973 when the provisions of the Children and Young Persons Act 1969 took effect. St Williams then became an assisted community home for children in the care of the local authority. Under section 42 of the 1969 Act the responsibility for managing St Williams was vested in the voluntary organisation responsible for its management, equipment and maintenance or the responsible organisation. The Middlesbrough Diocesan Rescue Society (MDRS) undertook this role, replacing the previous managers. The MDRS was an unincorporated association consisting of the Catholic bishop of the diocese, as President, and priests appointed by him. On 28 July 1982 the Catholic Child Welfare Society (Diocese of Middlesbrough) (CCWS), an incorporated charitable company, replaced the MDRS as the responsible organisation. After 1973 the proportion of brother teachers to lay staff diminished further. After 1976 there were never more than two brother teachers and for much of the time there was only one, while there were as many as a dozen lay teachers. Some of these lived on the site in premises apart from those of the dwindling community of brothers. Other lay teachers lived in the town. At all times the managers chose to leave it to the Institute, in the form of the relevant Provincial, to designate a brother to act as headmaster of the school. In 1976 the headmaster, Brother Reginald, retired. With the agreement of the MDRS the Provincial replaced him with Brother James, who had been a brother teacher and housemaster at St Williams since 1968. Brother James is now Mr Carragher, having been expelled from the Institute. This expulsion followed his dismissal in disgrace from the post of headmaster in 1990 because it had been discovered that he had been guilty of systematic sexual abuse of the boys in his care. In 1993 Mr Carragher pleaded guilty to a number of offences of sexual abuse and was sentenced to 7 years imprisonment. In 2004, after a 10 week trial, he was found guilty of 21 counts of serious sexual offences against boys, spanning a period of some 20 years, and sentenced to 14 years imprisonment. Some of the claimants allege that they were abused by Mr Carragher. Others allege abuse by other brothers. Of the 150 claimants on whose behalf particulars have been given, 146 allege that they were abused by members of the Institute. After the dismissal of Mr Carragher the number of boys at the school dwindled. The Institute disengaged from the school and it finally closed in 1994. Control The undertaking by each brother to go wherever he might be sent meant that the Institute controlled where it was that the brothers taught. The Institute could not, of course, control whether schools owned by third parties engaged brothers as teachers. It could, however, control whether a brother worked in a school that was prepared to engage him. Because the managers of St Williams were always keen to have a brother as headmaster of the school, the Institute in effect determined who the headmaster of the school should be. Thus in 1963 the Provincial informed the managers of the school that Brother Dominic would replace Brother Vincent as headmaster and this was accepted. In 1965, by decision of the Superior General in Rome responsibility for St Williams was transferred from the English province to the London province. This resulted in the three brothers, including the headmaster and the deputy headmaster, resigning and being replaced by other brothers. The managers, with a degree of reluctance, accepted this. It is an agreed fact that If a brother was sent to a school managed by a third party, the Institutes control over his life remained complete. He remained bound by his vows, and every year the Provincial made an annual visit of inspection of the community and the brothers living in it, which embraced their role within the school. An overview of the issues The law of vicarious liability is on the move. On 12 July 2012, shortly before the hearing of the appeal in this case, the Court of Appeal handed down its judgments in JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust [2012] EWCA Civ 938. That case was concerned with the preliminary issue of whether the Diocesan Trust could be vicariously liable for acts of sexual abuse committed by a parish priest in the diocese. The court held, by a majority, that he could. Before us Mr Leggatt QC, for the Middlesbrough Defendants, suggested that the Court would no doubt wish to read the judgments in full. He was right to do so. The hearing of that case before the Court of Appeal lasted but a day, but the impressive leading judgment of Ward LJ evidences consideration of case law and academic writings that goes far beyond the material to which counsel can have had time to refer in that short hearing. At paras 20 and 21 of his judgment Ward LJ traces the origin of vicarious liability back to the middle ages, but rightly identifies that the law upon which he and I cut our teeth rendered the employer, D2, liable for the tortious act of the employee, D1, provided that the act in question was committed in the course of the employees employment. Thus, in a case about vicarious liability, the focus was on two stages: (1) was there a true relationship of employer/employee between D2 and D1? (2) was D1 acting in the course of his employment when he committed the tortious act? Since Ward LJ and I cut our teeth the courts have developed the law of vicarious liability by establishing the following propositions: i) It is possible for an unincorporated association to be vicariously liable for the tortious acts of one or more of its members: Heatons Transport (St Helens) Ltd v Transport and General Workers Union [1973] AC 15, 99; Thomas v National Union of Mineworkers (South Wales Area) [1986] Ch 20, 66 7; Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366. ii) D2 may be vicariously liable for the tortious act of D1 even though the act in question constitutes a violation of the duty owed to D2 by D1 and even if the act in question is a criminal offence: Morris v CW Martin & Sons Ltd [1966] 1 QB 716; Dubai Aluminium; Brinks Global Services v Igrox [2010] EWCA Civ; [2011] IRLR 343. iii) Vicarious liability can even extend to liability for a criminal act of sexual assault: Lister v Hesley Hall [2001] UKHL 22; [2002] 1 AC 215. iv) It is possible for two different defendants, D2 and D3, each to be vicariously liable for the single tortious act of D1: Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2005] EWCA Civ 1151; [2006] QB 510. None of these developments of the law of vicarious liability has been challenged by Lord Faulks QC, who has represented the Institute. I consider that he was right not to challenge them, for they represent sound and logical incremental developments of the law. They have, however, made it more difficult to identify the criteria that must be demonstrated to establish vicarious liability than it was 50 years ago. At para 37 of his judgment in this case Hughes LJ rightly observed that the test requires a synthesis of two stages: The first stage is to consider the relationship of D1 and D2 to see i) whether it is one that is capable of giving rise to vicarious liability. ii) Hughes LJ identified the second stage as requiring examination of the connection between D2 and the act or omission of D1. This is not entirely correct. What is critical at the second stage is the connection that links the relationship between D1 and D2 and the act or omission of D1, hence the synthesis of the two stages. Both stages are in issue in the present case. There is an issue as to whether the relationship between the Institute and the brothers teaching at St Williams was one that was capable of giving rise to vicarious liability. There is also an issue as to whether the acts, or alleged acts, of sexual abuse were connected to that relationship in such a way as to give rise to vicarious liability. It is the Institutes case that the relationship of the individual brothers to the Institute, considered as a body, is insufficiently close to give rise, of itself, to vicarious liability on the part of the Institute for sexual abuse by brother teachers. Only a body managing a school and employing a brother in that school as a teacher, will have a sufficiently close relationship to that brother teacher to be vicariously liable for his wrongdoing. That is why the Middlesbrough Defendants are liable and the De La Salle Defendants are not, as held by the courts below. It is the Middlesbrough Defendants case, as developed by Mr Leggatt, that the courts below have failed to give effect to the principles properly to be derived from the relevant authorities, particularly those dealing with vicarious liability for sexual abuse. The necessary closeness of connection between the relationship between the Institute and the brothers and the abuses committed by the brothers is provided by the fact that the Institute sent the brothers to St Williams to further the purpose of the Institute, clothed with the status of members of the Institute, and thereby significantly increased the risk that brothers would sexually abuse the children with whom they were in close physical proximity. This is indeed a synthesis of stage 1 the relationship of the brothers with the Institute and stage 2 the connection between that relationship and the acts of abuse. A closer view of the issues I turn then to the central issue that divides the parties. Is the relationship between the individual brothers who taught at the school and the Institute such as to give rise to vicarious liability on the part of the Institute for acts of sexual abuse committed in the school? The Institute accepts that the relationship between the brother teachers and the Middlesbrough Defendants has given rise to vicarious liability on the part of the latter, but contends that this is because the Middlesbrough Defendants entered into contracts of employment with the brothers and managed and controlled both them and the school. The Institute contends that the relationship between the brothers and the Institute lacks these critical features. The Institute further contends that it cannot be held to be vicariously liable in addition to the Middlesbrough Defendants unless the criteria for dual liability laid down by the Court of Appeal in Viasystems are demonstrated. It contends that these criteria are not demonstrated. Hughes LJ reached a similar conclusion. His judgment focussed largely on the extent to which the brothers were under the control of the Institute, and he concluded that this was insufficient to give rise to vicarious liability. The Middlesbrough Defendants rely on the recent decisions on vicarious liability for sexual abuse as demonstrating that the relationship of employer/employee is not an essential prerequisite. They submit that the closeness of the relationship between brothers and the Institute, the fact that the brothers were sent out to further the object of the institute, namely to teach boys, and the fact that this created a risk of sexual abuse of the boys by the brothers, sufficed to render the Institute vicariously liable for the abuse committed by the brothers. The nature of the Institute Before considering stage 1 of the test for vicarious liability I must address the problem of the Institute. Hughes LJ held, and Lord Faulks now accepts, that it is possible for vicarious liability to arise out of the relationship between one member of an unincorporated association and the other members, at least where the former acts on behalf of the others. He held, however, at para 57 that there was not a sufficiently close connection between the brothers of the Institute scattered all over the world and the torts committed by the brother teachers at St Williams to give rise to vicarious liability. This raises the question of whether it is right to treat the De La Salle Defendants as being simply an unincorporated band of brothers scattered around the world. A similar problem perplexed Ward LJ in JGE. The issue in that case was whether there was vicarious liability for sexual abuse committed by a Roman Catholic priest. He observed at para 5 that there had been other occasions on which the Church had been called on to answer for the acts of its clergy and that JGE was the first occasion on which the Church had challenged the allegation that it was the employer of its clergy. The issue had always before been simply whether the acts of abuse had been committed in the course of that employment. The defendants against whom the claim was brought were the Trustees of the Portsmouth Roman Catholic Diocesan Trust. Ward LJ observed at para 8 that because English law did not recognise the Catholic Church as a legal entity in its own right but saw it as an unincorporated association with no legal personality, the diocese usually established a charitable trust to enable it to own and manage property and otherwise conduct its financial affairs in accordance with domestic law. At para 18 Ward LJ remarked that there had been understandable confusion as to whom to sue and that the case had proceeded effectively against the Bishop, though it was the trustees who would be covered by the relevant insurance should liability be established. He added that intuitively one would think that, as a priest is always said to be a servant of god, the Roman Catholic Church itself would be the responsible defendant, but the Roman Catholic Church could not be a party as it had no legal personality. In those circumstances Ward LJ treated the Bishop as being the person whose vicarious liability was in issue. There are parallels between this aspect of JGE and the present case. The choice of defendants suggests that the claimants may well have been in doubt as to whom they should sue, as they have adopted something of a scatter gun approach. Of the 35 defendants on the pleadings, the action has proceeded against 13. Of these I select as a typical De La Salle defendant the 10th defendant, Patrick Joseph Campbell sued on his own behalf and as a former trustee of the 1947 trust and as representing all persons (other than any other party to the claim) who were at any time relevant to the claimants claims: i) members of the Order ii) members of the English Province or the Great Britain Province iii) responsible for the supervision management or direction of brothers carrying on the work of the England Province or the Great Britain Province, or iv) Trustees of the 1947 trust before 14 July 1992. I can appreciate Hughes LJs difficulty in accepting that a De La Salle brother in Australia could be vicariously liable for the sexual assault by a brother at St Williams. Indeed, there is something paradoxical in the concept of an attempt to hold vicariously liable a world wide association of religious brothers, all of whom have taken vows of poverty and so have no resources of their own. So far as individual defendants are outside the jurisdiction this might also have given rise to an interesting question of conflict of laws. This is, however, a long way from the realities of these proceedings and Lord Faulks has not taken any point on the nature of the Institute. It is open to the claimants on the pleadings to seek to establish vicarious liability on the part of an unincorporated association made up at the relevant times of the brothers world wide, or of members of the London Province, or of the England Province, or of the Great Britain Province. At the end of the day what is likely to matter will be access to the funds held by the trusts, or to insurance effected by the trustees. Whether one looks at the picture world wide, or within Great Britain, the salient features are the same. The Institute is not a contemplative order. The reason for its creation and existence is to carry on an activity, namely giving a Christian education to boys. To perform that activity it owns and manages schools in which its brothers teach, and it sends its brothers out to teach in schools managed by other bodies. The Institute is, for administrative purposes divided into Provinces, each administered by its Provincial. To carry out its activities it has formed trusts that have recognised legal personality. The trusts are funded in part from the earnings of those brothers who receive payment for teaching. The trust funds are used to meet the needs of the brothers and the financial requirements of the teaching mission. It seems to me more realistic to view the brothers of the Province from time to time responsible for the area in which Market Weighton lies as members of the relevant unincorporated association rather than the Order as a whole, but I doubt if it makes any difference in principle. Because of the manner in which the Institute carried on its affairs it is appropriate to approach this case as if the Institute were a corporate body existing to perform the function of providing a Christian education to boys, able to own property and, in fact, possessing substantial assets. Stage 1: the essential elements of the relationship Vicarious liability is a longstanding and vitally important part of the common law of tort. A glance at the Table of Cases in Clerk & Lindsell on Torts, 20th ed (2010) shows that in the majority of modern cases the defendant is not an individual but a corporate entity. In most of them vicarious liability is likely to be the basis upon which the defendant was sued. The policy objective underlying vicarious liability is to ensure, insofar as it is fair, just and reasonable, that liability for tortious wrong is borne by a defendant with the means to compensate the victim. Such defendants can usually be expected to insure against the risk of such liability, so that this risk is more widely spread. It is for the court to identify the policy reasons why it is fair, just and reasonable to impose vicarious liability and to lay down the criteria that must be shown to be satisfied in order to establish vicarious liability. Where the criteria are satisfied the policy reasons for imposing the liability should apply. As Lord Hobhouse pointed out in Lister at para 60 the policy reasons are not the same as the criteria. One cannot, however, consider the one without the other and the two sometimes overlap. The relationship that gives rise to vicarious liability is in the vast majority of cases that of employer and employee under a contract of employment. The employer will be vicariously liable when the employee commits a tort in the course of his employment. There is no difficulty in identifying a number of policy reasons that usually make it fair, just and reasonable to impose vicarious liability on the employer when these criteria are satisfied: i) The employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability; ii) The tort will have been committed as a result of activity being taken by the employee on behalf of the employer; iii) The employees activity is likely to be part of the business activity of the employer; iv) The employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employee; v) The employee will, to a greater or lesser degree, have been under the control of the employer. The significance of control In days gone by, when the relationship of employer and employee was correctly portrayed by the phrase master and servant, the employer was often entitled to direct not merely what the employee should do but the manner in which he should do it. Indeed, this right was taken as the test for differentiating between a contract of employment and a contract for the services of an independent contractor. Today it is not realistic to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee. Many employees apply a skill or expertise that is not susceptible to direction by anyone else in the company that employs them. Thus the significance of control today is that the employer can direct what the employee does, not how he does it. Control and the transfer of vicarious liability There is one area of the law of vicarious liability where control has been of critical importance. I must explore it because it is relevant on the facts of this case. It has long been recognised that there are circumstances in which vicarious liability for the tortious act of a workman can be transferred from his employer to a third person who is using the employees services under a contract, or other arrangement, with his employer see Donovan v Laing, Wharton & Down Construction Syndicate Ltd [1893] 1 QB 629. The circumstances in which such a transfer could take place were considered by the House of Lords in Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd [1947] AC 1. Their Lordships imposed a test that was so stringent as to render a transfer of vicarious liability almost impossible in practice. It may well be that that was their intention. The negligence in question was that of the driver of a crane, which had been hired, together with the services of the driver, by the drivers employer to a firm of stevedores. Viscount Simon at pp10 and 11 said that a heavy burden of proof lay on the general or permanent employer to shift responsibility for the negligence of servants engaged and paid by such employer to the hirer for the time being who had the benefit of the services rendered. This could only be achieved where the hirer enjoyed the right to control the way in which the act involving negligence was done. The inquiry should concentrate on the relevant negligent act and then ask whose responsibility it was to prevent it. Lord Macmillan at p 14, Lord Porter at p 17 and Lord Uthwatt at pp 22 23 applied the same test. Mersey Docks remained the leading case in this area of the law at the time of the decision in Viasystems where, unusually for a case of such importance, only two members of the Court of Appeal sat on the appeal. Modern construction enterprises often involve a chain of contractors and sub contractors working together to a common end, and such a situation can lead to a dispute between them as to who is vicariously liable for the negligence of a workman employed on the project. That was the position in Viasystems. The claimants engaged the first defendants to install air conditioning in their factory. The first defendants sub contracted ducting work to the second defendants. The second defendants contracted with the third defendants to provide fitters and fitters mates on a labour only basis. They were working under the supervision of a self employed fitter contracted to the second defendants. One of the fitters mates in a moment of folly crawled through a section of ducting and negligently fractured the fire protection filter system, flooding the factory. At first instance the third defendants were held vicariously liable for the damage caused and the second defendants held not to be vicariously liable. The Court of Appeal raised the question of whether it was possible in law to have dual vicarious liability and, after considering the authorities, decided that, although for 180 years courts had always proceeded on the basis that only one defendant could be vicariously liable for a tortious act, there was no case that bound the court so to find. Academic writers favoured the possibility of dual vicarious liability and, on the facts of the case, this was the principled solution. At para 16 May LJ, applying Mersey Docks, held that the enquiry should concentrate on the relevant negligent act and then ask whose responsibility it was to prevent it. Who was entitled, and perhaps theoretically obliged, to give orders as to how the work should or should not be done? The answer on the facts of the case was both the second and the third defendants. There was dual control and thus there should be dual vicarious liability. Rix LJ reached the same conclusion, but his reasoning was not the same. At para 55 he commented that the basis of vicarious liability was, generally speaking, that those who set in motion and profit from the activities of their employees should compensate those who are injured by such activities, even when performed negligently. Liability was extended to the employer on the practical assumption that because he could spread the risk through pricing and insurance, he was better organised and able to bear the risk and was, at the same time, encouraged to control the risk. Dealing with the test of control, Rix LJ observed at paras 59 and 64 that the right to control the method of doing work had long been an important and sometimes critical test of the master/servant relationship. The courts had, however, imperceptibly moved from using the test of control as determinative of the relationship of employer and employee to using it as the test of vicarious liability of a defendant. At para 79 he questioned whether the doctrine of vicarious liability was to be equated with control. Vicarious liability was a doctrine designed for the sake of the claimant, imposing a liability incurred without fault because the employer was treated at law as picking up the burden of an organisational or business relationship which he had undertaken for his own benefit. Accordingly, what one was looking for was: a situation where the employee in question, at any rate for relevant purposes, is so much a part of the work, business or organisation of both employers that it is just to make both employers answer for his negligence. The brothers who taught at the school were not contractually employed by the Institute; they were contractually employed by or on behalf of the Middlesbrough Defendants. By this appeal the Middlesbrough Defendants seek to establish dual vicarious liability. The question arises of whether the approach of May LJ or that of Rix LJ should be applied in determining whether the Institute is also vicariously liable for the brothers torts. The test that May LJ applied was that applied in Mersey Docks. I do not consider that there is any justification for applying this stringent test when considering whether there is dual vicarious liability. Where two defendants are potentially vicariously liable for the act of a tortfeasor it is necessary to give independent consideration to the relationship of the tortfeasor with each defendant in order to decide whether that defendant is vicariously liable. In considering that question in relation to each defendant the approach of Rix LJ is to be preferred to that of May LJ. Two subsequent decisions of the Court of Appeal, Hawley v Luminar Leisure Ltd [2006] EWCA Civ 18; [2006] Lloyd's Rep IR 307 and Biffa Waste Services Ltd v Maschinenfabrik Ernst Hese GmbH [2008] EWCA Civ 1257; [2009] QB 775 applied the test of control when holding only one of two defendants to be vicariously liable. It is arguable that the facts of each case could have supported a finding of dual vicarious liability. At paragraph 35 above I have identified those incidents of the relationship between employer and employee that make it fair, just and reasonable to impose vicarious liability on a defendant. Where the defendant and the tortfeasor are not bound by a contract of employment, but their relationship has the same incidents, that relationship can properly give rise to vicarious liability on the ground that it is akin to that between an employer and an employee. That was the approach adopted by the Court of Appeal in JGE. JGE was specifically concerned with stage 1 of the test of vicarious liability. The claimant alleged that when, as a young girl, she was resident in a childrens home run by the first defendants, an order of nuns, she was sexually abused by a visiting Roman Catholic priest who had been appointed by the second defendant trust, which stood in the place of, and could be equated with, the diocesan bishop. A preliminary issue was ordered as to whether the relationship between the priest and the trust was one that was capable of giving rise to vicarious liability. Although this issue was restricted to the stage 1 test MacDuff J at first instance held that it could not be considered in isolation from stage 2, as the test of vicarious liability involved a synthesis of the two stages. In a lucid and bold judgment he held that the relationship could give rise to vicarious liability: see E v English Province of Our Lady of Charity [2011] EWHC 2871 (QB); [2012] 2 WLR 709. There was no contract of employment between the trust and the priest. As the headnote summarised the evidence, there were no terms, conditions, wages or right of dismissal except through the church in Rome and effectively no control over a priest once appointed since, although he was subject to canon law and owed the bishop obedience, he was free to conduct his ministry as he saw fit without interference from the bishop, whose role was advisory not supervisory. But at paras 35 and 36 MacDuff J queried the relevance of these matters when the question was whether, in justice, the trust should be responsible for the tortious acts of the man appointed and authorised by it to act on its behalf. The crucial features were that the priest was appointed in order to do the work of the church with the full authority to fulfil that role, being provided with the premises, the pulpit and the clerical robes. He was directed into the community and given free rein to act as representative of the church. He had been trained and ordained for that purpose and his position of trust gave him great power. In the Court of Appeal [2012] EWCA Civ 938 Ward LJ essentially adopted the reasoning of MacDuff J. He did so, however, on the footing that what MacDuff J had identified as the crucial features created a relationship between the priest and the bishop that was akin to employment. When considering vicarious liability it was not appropriate to apply tests of employment laid down by the courts when dealing with unfair dismissal, or taxation, or discrimination. Nor was control any longer to be treated as the critical touchstone of employment, albeit that it was an important consideration. The question of control should not be approached merely by enquiring whether an employer could tell the workman how to do his work, but in terms of whether the workman was under the management of and accountable to an employer. It was necessary to identify whether the workman was working on behalf of an enterprise or on his own behalf and, if the former, how central the workmans activities were to the enterprise and whether these activities were integrated into the organisational structure of the enterprise. In applying these criteria Ward LJ acknowledged the assistance that he had derived from an article by Professor Richard Kidner, Vicarious Liability: for whom should the employer be liable? (1995) 15 LS 47. Ward LJ concluded that the relationship of the bishop and the priest was so close in character to one of employer/employee that it was just and fair to hold the employer vicariously liable (para 73). He was accountable to the bishop in as much as he owed him reverence and obedience and could be dismissed from his office by him in the event of gross breach of his duties under Canon law. His activities in ministering to the souls of the faithful were central to the objectives of the organisation the Roman Catholic Church, which in its organisational structure looked like a business. He was part and parcel of that organisation and wholly integrated in it. In his work he behaved more as if he was an employee than someone in business on his own account (paras 73 to 79). Davis LJ delivered a concurring judgment. He also concluded that the relationship between the bishop and the priest was sufficiently akin to employment to be capable of giving rise to vicarious liability. The bishop had a degree of control over the priest. The priests activity of visiting the residential home where the claimant lived was carried out in furtherance of the bishops aims and purposes, namely perpetuating the works of Christ in the diocese. Tomlinson LJ dissented. He agreed with the passage in Lord Milletts speech in Lister that I have quoted at para 71 below, but held that it could not be transposed so as to treat a priest as carrying on his work for the benefit of the bishop. In JGE the claimant is also seeking to establish vicarious liability on the part of the charity which ran the home in which the abuse is alleged to have taken place. The Court of Appeal did not consider that the possibility of dual vicarious liability affected the test to be applied. In summary, in JGE MacDuff J found the bishop vicariously liable for the acts of the priest notwithstanding that the relationship between them was significantly different from a contract of employment (para 35). In the Court of Appeal, Ward and Davis LJJ found it possible to describe the relationship between the bishop and the priest as being akin to employment. Ward LJ achieved this by treating the ministry of the Roman Catholic Church as a business carried on by the bishop, by finding that the priest carried on that business under a degree of control by the bishop and by finding that the priest was part and parcel of the organisation of the business and integrated into it. Ward and Davis LJJ distinguished the decision of the Court of Appeal in the present case. Ward LJ did so implicitly and Davis LJ for reasons that I do not find persuasive. The truth is that the case for finding vicarious liability is much stronger in the present case than it was in JGE. In the context of vicarious liability the relationship between the teaching brothers and the Institute had many of the elements, and all the essential elements, of the relationship between employer and employees: The institute was subdivided into a hierarchical structure and i) conducted its activities as if it were a corporate body. ii) The teaching activity of the brothers was undertaken because the Provincial directed the brothers to undertake it. True it is that the brothers entered into contracts of employment with the Middlesbrough Defendants, but they did so because the Provincial required them to do so. iii) The teaching activity undertaken by the brothers was in furtherance of the objective, or mission, of the Institute. iv) The manner in which the brother teachers were obliged to conduct themselves as teachers was dictated by the Institutes rules. The relationship between the teacher brothers and the Institute differed from that of the relationship between employer and employee in that: The brothers were bound to the Institute not by contract, but by their i) vows. ii) Far from the Institute paying the brothers, the brothers entered into deeds under which they were obliged to transfer all their earnings to the Institute. The Institute catered for their needs from these funds. Neither of these differences is material. Indeed they rendered the relationship between the brothers and the Institute closer than that of an employer and its employees. Hughes LJ held at para 54 that the brothers no more acted on behalf of the Institute than any member of a professional organisation who accepts employment with that status is acting on behalf of the organisation when he does his job. I do not agree with this analysis. The business of the Institute was not to train teachers or to confer status on them. It was to provide Christian teaching for boys. All members of the Institute were united in that objective. The relationship between individual teacher brothers and the Institute was directed to achieving that objective. For these reasons I consider that the relationship between the teaching brothers and the Institute was sufficiently akin to that of employer and employees to satisfy stage 1 of the test of vicarious liability. There is a simpler analysis that leads to the conclusion that stage 1 was satisfied. Provided that a brother was acting for the common purpose of the brothers as an unincorporated association, the relationship between them would be sufficient to satisfy stage 1, just as in the case of the action of a member of a partnership. Had one of the brothers injured a pedestrian when negligently driving a vehicle owned by the Institute in order to collect groceries for the community few would question that the Institute was vicariously liable for his tort. Stage 2: The connection between the brothers acts of abuse and the relationship between the brothers and the Institute. Where an employee commits a tortious act the employer will be vicariously liable if the act was done in the course of the employment of the employee. This plainly covers the situation where the employee does something that he is employed to do in a manner that is negligent. In that situation the necessary connection between his relationship with his employer and his tortious act will be established. Stage 2 of the test will be satisfied. The same is true where the relationship between the defendant and the tortfeasor is akin to that of an employer and employee. Where the tortfeasor does something that he is required or requested to do pursuant to his relationship with the defendant in a manner that is negligent, stage 2 of the test is likely to be satisfied. But sexual abuse can never be a negligent way of performing such a requirement. In what circumstances, then, can an act of sexual abuse give rise to vicarious liability? Vicarious liability for sexual abuse The extension of statutory periods of limitation coupled with the identification of the serious psychiatric injury that is often caused by child abuse has led to something of a proliferation of claims by adults for personal injury caused by sexual abuse in their childhood. Unhappily in quite a number of cases the abuse was perpetrated by a priest or a member of a religious order. Such cases can raise problems both at stage 1 and at stage 2 of the analysis. Although the law in this area is developing, there are some priests who do not serve under contracts of employment and the question then arises of whether the priest has a relationship with any body that can give rise to vicarious liability on the part of the body. If there is such a body, the second question is whether there is a connection between the priests relationship with that body and the sexual abuse committed by the priest that can make that body vicariously liable for the priests actions. JGE was such a case, albeit that the preliminary issue focussed on stage 1. In dealing with stage 2 I propose to start with two Canadian cases on sexual abuse, where the tortfeasors were lay employees, so that no issue arose in relation to stage 1. These cases have had a significant influence on the English jurisprudence. Bazley v Curry (1999) 174 DLR (4th) 45 was one of two decisions involving child abuse given by the Supreme Court of Canada on the same day. A not for profit organisation, D2, ran two residential care facilities for the treatment of emotionally troubled children. They unwittingly employed a paedophile, D1, who sexually abused one of the children in the home. The court, in a judgment delivered by McLachlin J, held D2 vicariously liable for the abuse. The issue related to stage 2. Could acts of sexual abuse properly be the subject of vicarious liability and, if so, on what basis? The court held that this question should be directly addressed in the light of considerations of policy. Two particular principles of policy were identified. The first was that where an employer puts into the community an enterprise carrying with it certain risks and those risks materialise and cause injury it is fair that, having created the enterprise and the risk, the employer should bear the loss. The second was that holding the employer vicariously liable might have a deterrent effect, causing employers to exercise a greater degree of care in relation to the appointment and supervision of employees. So far as the legal test of liability was concerned, para 42 of the judgment summarised the position as follows: there must be a strong connection between what the employer was asking the employee to do (the risk created by the employers enterprise) and the wrongful act. It must be possible to say that the employer significantly increased the risk of the harm by putting the employee in his or her position and requiring him to perform the assigned tasks. Markesinis and Deakins Tort Law, 6th ed (2007) describe this as the enterprise risk approach. The court had no difficulty in finding that the test was satisfied in Bazley, for D1s duties under his employment by D2 included bathing the children and putting them to bed, In Jacobi v Griffiths (1999) 174 DLR (4th) 71, the other decision reached on the same day, the court applied the same test but, by a majority, reached a different conclusion on the facts. In that case D1 was employed by D2 to run a youth club. D1 sexually abused two children whom he had met in the club, but the abuse did not take place on the clubs premises or in connection with club activities. The majority held that there was not the strong connection between D1s employment at the club and his acts of abuse that was necessary to give rise to vicarious liability. The Canadian Supreme Court returned to the theme in John Doe v Bennett [2004] 1 SCR 436, a case whose facts are closer to those with which we are concerned, and even closer to those of JGE. On this occasion the court was presided over by McLachlin CJ, who gave the judgment of the court. A Roman Catholic priest had sexually assaulted boys in his parishes. The relevant issue was whether the diocesan Episcopal corporation sole, which was equated with the bishop, was vicariously liable. The priest was not employed by the corporation sole or the bishop. The court held, however, at para 27 that the relationship between a bishop and a priest in a diocese was akin to an employment relationship, inasmuch as the priest took a vow of obedience to the bishop, the bishop exercised extensive control over the priest, including the power of assignment, the power to remove the priest from his post and the power to discipline him. At para 17 the court stated that the justification for vicarious liability was that as the person responsible for the activity or enterprise in question, the employer or principal should be held responsible for loss to third parties that result from the activity or enterprise. At para 20 the court put forward a variation on this theme: Vicarious liability is based on the rationale that a person who puts a risky enterprise into the community may fairly be held responsible when those risks emerge and cause loss or injury to members of the public (my emphasis). Applying Bazley, the court held that the necessary connection between the employer created or enhanced risk and the wrong complained of was established. The Bishop provided the priest with the opportunity to abuse his power, this opportunity being incidental to the functions of a parish priest. The priests wrongful acts were strongly related to the psychological intimacy inherent in his role as priest. Finally, in his remote parishes the status of a priest carried with it immense power. The court declined, on the ground of inadequacy of the record, to consider whether the Roman Catholic Church itself was vicariously liable for the priests wrongdoing. In conclusion of this review of the Canadian authorities it is of interest to note that 11 days after the English Court of Appeal held in Viasystems that it was possible in law to have dual vicarious liability for a single tortious act, McLachlin CJ, giving the judgment of the Supreme Court, reached the same conclusion in Blackwater v Plint (2005) 258 DLR (4th) 275. Applying the test in Bazley, the court held both the Government of Canada and the United Church of Canada vicariously liable for sexual assaults committed by a dormitory supervisor in a school which they jointly managed and controlled. In Lister v Hesley Hall Ltd [2002] 1 AC 215 the House of Lords, reversing previous authority, held the owners and managers of a school vicariously liable for sexual assaults committed by the warden of a boarding house, employed by them. Although the result was unanimous the reasoning of the House was not identical. Lord Steyn at para 27 referred to Bazley and Jacobi as luminous and illuminating judgments which would henceforth be the starting point for consideration of similar cases. He held, however, that it was not necessary to express views on the full range of policy considerations examined in those decisions. At para 10 he stated that those cases enunciated a principle of close connection and at para 28 he said that the question was whether the wardens torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable. He gave an affirmative answer to that question, observing that the sexual abuse was inextricably interwoven with the carrying out by the warden of his duties at the school. Lord Clyde also referred with approval to the Canadian decisions. He held at para 48 that their essence lay in the recognition of a sufficient connection between the acts of the employee and the employment. At para 50 he found that connection in the fact that the wardens position brought him into close contact with the boys and the fact that the defendants had delegated to the warden the general duty to look after and care for the boys. Lord Hutton agreed with the speech of Lord Steyn. Lord Millett began his judgment with a review of academic writings about the nature of vicarious liability. These identified the underlying policy that an employer ought to be liable for those torts which could fairly be regarded as reasonably incidental risks to the type of business carried on. Lord Millett commented at para 65 that the relevant passages: are not to be read as confining the doctrine to cases where the employer is carrying on business for profit. They are based on the more general idea that a person who employs another for his own ends inevitably creates a risk that the employee will commit a legal wrong. If the employers objectives cannot be achieved without a serious risk of the employee committing the kind of wrong which he has in fact committed, the employer ought to be liable. The fact that his employment gave the employee the opportunity to commit the wrong is not enough to make the employer liable. He is liable only if the risk is one which experience shows is inherent in the nature of the business. At para 70 he also stated that it was critical that attention should be directed to the closeness of the connection between the employees duties and his wrongdoing and, in that context, referred with approval to the Canadian decisions. As to the test of closeness, Lord Millett placed importance on the employees act being an abnegation of a specific duty imposed upon him by his employment. At para 83, referring again to the Canadian decisions, he said: Experience shows that in the case of boarding schools, prisons, nursing homes, old peoples homes, geriatric wards, and other residential homes for the young or vulnerable, there is an inherent risk that indecent assaults on the residents will be committed by those placed in authority over them, particularly if they are in close proximity to them and occupying a position of trust. This suggests an endorsement of the Canadian Supreme Courts approach to treating the creation of risk as a basis for the imposition of vicarious liability in cases of abuse. Lord Hobhouse agreed with Lord Steyn (para 63). At para 55 he, like Lord Millett, singled out schools, prisons and hospitals as being places where vicarious liability was likely to be incurred, but in doing so he treated vicarious liability as being based on an assumption of a duty of care by the employer the performance of which is then entrusted to the employee. At para 60 he drew a distinction between the reasons of policy that justified vicarious liability and the legal criteria that gave rise to this. He expressed the view that creation of risk fell into the former rather than the latter category. It is not easy to deduce from Lister the precise criteria that will give rise to vicarious liability for sexual abuse. The test of close connection approved by all tells one nothing about the nature of the connection. Lord Clyde and Lord Hobhouse found it significant that the tortfeasors employment involved exercising care for the victim. Only Lord Millett expressly endorsed the importance that the Canadian decisions attached to the creation of risk. This has, however, been identified as of significance in most of the cases that have followed. The reasoning in Lister was applied by the House of Lords in a commercial context. In Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366 the relevant issue was whether dishonest conduct by a solicitor could involve the firm in liability under section 10 of the Partnership Act 1890 as having been carried on in the ordinary course of the business of the firm. Giving the leading speech Lord Nicholls held that it was necessary to apply the legal policy underlying vicarious liability, which he stated at para 21: is based on the recognition that carrying on a business enterprise necessarily involves risks to others. It involves the risk that others will be harmed by wrongful acts committed by the agents through whom the business is carried on. When those risks ripen into loss, it is just that the business should be responsible for compensating the person who has been wronged. This has strong echoes of the enterprise risk approach of the Canadian Supreme Court and, indeed, Lord Nicholls went on at para 23 to cite with approval from the judgment of McLachlin CJ in Bazley. When considering the stage 2 test of the ordinary course of employment he suggested at para 23 that the wrongful conduct must be so closely connected with the acts the employee was authorised to do that the wrongful conduct might fairly and properly be regarded as done in the ordinary course of employment. The authorities on vicarious liability for unauthorised wrongful acts were reviewed by Lord Steyn when giving the advice of the Board in Bernard v Attorney General for Jamaica [2004] UKPC 47; [2005] IRLR 398. He endorsed the close connection test, observing at para 23 that the principle of vicarious liability was not infinitely extendable. At para 18 he held that a relevant factor was the risks to others created by an employer who entrusts duties, tasks and functions to an employee. He added that this strand in the reasoning in Lister was best expressed in the passage from the speech of Lord Millett that I have quoted at para 72 above. In Brown v Robinson [2004] UKPC 56, a differently constituted Board of the Privy Council at para 11 of the advice delivered by Lord Carswell endorsed the view expressed by Lord Hobhouse in Lister that risk, while it might be a strong policy consideration, was not a criterion of vicarious liability. In Majrowski v Guys and St Thomas NHS Trust [2006] UKHL 34 Lord Nicholls, with whom Lady Hale, Lord Carswell and Lord Brown agreed, again stressed the importance of the creation or augmentation of risk in relation to the doctrine of vicarious liability. Maga v Archbishop of Birmingham and another [2010] EWCA Civ 256; [2010] 1 WLR 1441 is a case that bears a factual resemblance to JGE. The difference is that employment was conceded. A claim was brought against the Birmingham Archdiocese of the Roman Catholic Church in respect of sexual abuse that had been committed by a priest, employed by the Archdiocese, upon the claimant when a boy. The claimant was not a Catholic and the grooming that preceded the sexual abuse occurred in the course of youth work carried on by the priest for the benefit of Catholics and non Catholics alike. Nonetheless the Court of Appeal unanimously held that vicarious liability was established. Giving the leading judgment Lord Neuberger MR applied the close connection test, identifying a number of factors that led to the test being satisfied. He further held that the material increase of risk test applied in the Canadian cases was also satisfied. Longmore LJ, concurring, also applied the close connection test, observing at para 86 that McLachlin Js exposition of the law in Bazley, including the material increase in risk test, was highly relevant to the position of the priest. For completion I should add that the High Court of Australia, when considering whether a school authority could be vicariously liable for sexual assault committed on a pupil by a teacher, has shown a bewildering variety of analysis: New South Wales v Lepore [2003] HCA 4; 212 CLR 511. Only Gleeson CJ and Kirby J were prepared to consider following the approach of the Canadian and English decisions. Discussion Sexual abuse of children is now recognised as a widespread evil and the Criminal Records Bureau was established under Part V of the Police Act 1997 to reduce the risk of this by enabling screening of those seeking positions involving greater contact with young people and vulnerable adults. In Lister at para 48 Lord Clyde said that cases of sexual abuse by an employee should be approached in the same way as other cases in the context of vicarious liability. None the less the courts have been tailoring this area of the law by emphasising the importance of criteria that are particularly relevant to this form of wrong. In this way the courts have succeeded in developing the law of vicarious liability so as to ensure that a remedy for the harm caused by abuse is provided by those that should fairly bear that liability. Where those who have abused children have been members of a particular church or religious order and have committed the abuse in the course of carrying out activities in that capacity claimants have had difficulty in establishing the conventional relationship of employer/employee. What has weighed with the courts has been the fact that the relationship has facilitated the commission of the abuse by placing the abusers in a position where they enjoyed both physical proximity to their victims and the influence of authority over them both as teachers and as men of god. The precise criteria for imposing vicarious liability for sexual abuse are still in the course of refinement by judicial decision. Sexual abuse of children may be facilitated in a number of different circumstances. There is currently concern at the possibility that widespread sexual abuse of children may have occurred within the entertainment industry. This case is not concerned with that scenario. It is concerned with the liability of bodies that have, in pursuance of their own interests, caused their employees or persons in a relationship similar to that of employees, to have access to children in circumstances where abuse has been facilitated. Starting with the Canadian authorities a common theme can be traced through most of the cases to which I have referred. Vicarious liability is imposed where a defendant, whose relationship with the abuser put it in a position to use the abuser to carry on its business or to further its own interests, has done so in a manner which has created or significantly enhanced the risk that the victim or victims would suffer the relevant abuse. The essential closeness of connection between the relationship between the defendant and the tortfeasor and the acts of abuse thus involves a strong causative link. These are the criteria that establish the necessary close connection between relationship and abuse. I do not think that it is right to say that creation of risk is simply a policy consideration and not one of the criteria. Creation of risk is not enough, of itself, to give rise to vicarious liability for abuse but it is always likely to be an important element in the facts that give rise to such liability. This case In this case both the necessary relationship between the brothers and the Institute and the close connection between that relationship and the abuse committed at the school have been made out. The relationship between the brothers and the Institute was much closer to that of employment than the relationship between the priest and the bishop in JGE. The Institute was subdivided into a hierarchical structure and conducted its activities as if it were a corporate body. The brothers were subject to the directions as to their employment and the general supervision of the Provincial, their superior within that hierarchical structure. But the relationship was not simply one akin to that of employer and employee. The business and mission of the Institute was the common business and mission of every brother who was a member of it. That business was the provision of a Christian education to boys. It was to achieve that mission that the brothers joined and remained members of the Institute. The relationship between the Institute and the brothers enabled the Institute to place the brothers in teaching positions and, in particular, in the position of headmaster at St Williams. The standing that the brothers enjoyed as members of the Institute led the managers of that school to comply with the decisions of the Institute as to who should fill that key position. It is particularly significant that the Institute provided the headmasters, for the running of the school was largely carried out by the headmasters. The brother headmaster was almost always the Director of the Institutes community, living on the school premises. There was thus a very close connection between the relationship between the brothers and the Institute and the employment of the brothers as teachers in the school. Living cloistered on the school premises were vulnerable boys. They were triply vulnerable. They were vulnerable because they were children in a school; they were vulnerable because they were virtually prisoners in the school; and they were vulnerable because their personal histories made it even less likely that if they attempted to disclose what was happening to them they would be believed. The brother teachers were placed in the school to care for the educational and religious needs of these pupils. Abusing the boys in their care was diametrically opposed to those objectives but, paradoxically, that very fact was one of the factors that provided the necessary close connection between the abuse and the relationship between the brothers and the Institute that gives rise to vicarious liability on the part of the latter. There was a very close connection between the brother teachers employment in the school and the sexual abuse that they committed, or must for present purposes be assumed to have committed. There was no Criminal Records Bureau at the time, but the risk of sexual abuse was recognised, as demonstrated by the prohibition on touching the children in the chapter in the Rule dealing with chastity. No doubt the status of a brother was treated by the managers as an assurance that children could safely be entrusted to his care. The placement of brother teachers in St Williams, a residential school in the precincts of which they also resided, greatly enhanced the risk of abuse by them if they had a propensity for such misconduct. This is not a borderline case. It is one where it is fair, just and reasonable, by reason of the satisfaction of the relevant criteria, for the Institute to share with the Middlesbrough Defendants vicarious liability for the abuse committed by the brothers. I would allow this appeal. |
This appeal is concerned with the systematic collection and retention by police authorities of electronic data about individuals. The issue in both cases is whether the practice of the police governing retention is lawful, as the appellant Police Commissioner contends, or contrary to article 8 of the European Convention on Human Rights, as the respondents say. A particular feature of the data in question is that they consist entirely of records made of acts of the individuals in question which took place in public or in the common spaces of a block of flats to which other tenants had access. The information has not been obtained by any intrusive technique such as bugging or DNA sampling. In the first appeal, Mr John Catt objects to the retention on a police database of records of his participation in political demonstrations going back to 2005. In the second appeal, Ms T objects to the retention on a police database of a record of a minor altercation with a neighbour which the latter reported to the police. Each of them accepts that it was lawful for the police to make a record of the events in question as they occurred, but contends that the police interfered with their rights under article 8 of the European Convention on Human Rights by thereafter retaining the information on a searchable database. I shall have to say more about the facts of these cases in due course. Both applications failed at first instance. In the Court of Appeal, they were heard together, and both appeals were allowed: [2013] 1 WLR 3305. Historically, one of the main limitations on the power of the state was its lack of information and its difficulty in accessing efficiently even the information it had. The rapid expansion over the past century of mans technical capacity for recording, preserving and collating information has transformed many aspects of our lives. One of its more significant consequences has been to shift the balance between individual autonomy and public power decisively in favour of the latter. In a famous article in the Harvard Law Review for 1890 (The Right to Privacy, 4 Harvard LR 193), Louis Brandeis and Samuel Warren drew attention to the potential for recent inventions and business methods to undermine the autonomy of individuals, and made the case for the legal protection not just of privacy in its traditional sense but what they called the more general right of the individual to be let alone. Brandeis and Warren were thinking mainly of photography and archiving techniques. In an age of relatively minimal government they saw the main threat as coming from business organisations and the press rather than the 4. state. Their warning has proved remarkably prescient and of much wider application than they realised. Yet although their argument was based mainly on English authority, the concept of a legal right of privacy whether broadly or narrowly defined fell on stony ground in England. Its reception here has been relatively recent and almost entirely due to the incorporation into domestic law of the European Convention on Human Rights. Is article 8 engaged? Article 8 of the Convention confers on everyone a qualified right to respect for his private and family life, his home and his correspondence. It has proved to be the most elastic of the rights protected by the Convention and, as Lord Rodger pointed out in R (Countryside Alliance) v Attorney General [2008] AC 719, para 92, has for many years extended well beyond the protection of privacy in its narrower sense. A long series of individual decisions, each in itself of limited scope, culminated in the following statement of the European Court of Human Rights in Pretty v United Kingdom (2002) 35 EHRR 1, para 61: As the court has had previous occasion to remark, the concept of private life is a broad term not susceptible to exhaustive definition. It covers the physical and psychological integrity of a person . It can sometimes embrace aspects of an individual's physical and social identity . Elements such as, for example, gender identification, name and sexual orientation and sexual life fall within the personal sphere protected by article 8 . Article 8 also protects a right to personal development, and the right to establish and develop relationships with other human beings and the outside world . Though no previous case has established as such any right to self determination as being contained in article 8 of the Convention, the court considers that the notion of personal autonomy is an important principle underlying the interpretation of its guarantees. In common with other jurisdictions, including the European Court of Human Rights and the courts of the United States, Canada and New Zealand, the courts of the United Kingdom have adopted as the test for what constitutes private life whether there was a reasonable expectation of privacy in the relevant respect: see Campbell v MGN Ltd [2004] 2 AC 457, para 21 (Lord Nicholls) and Kinloch v HM Advocate [2013] 2 AC 93, paras 19 21 (Lord Hope). In one sense this test might be thought to be circular. It begs the question what is the privacy which may be the subject of a reasonable 5. expectation. Given the expanded concept of private life in the jurisprudence of the Convention, the test cannot be limited to cases where a person can be said to have a reasonable expectation about the privacy of his home or personal communications. It must extend to every occasion on which a person has a reasonable expectation that there will be no interference with the broader right of personal autonomy recognised in the case law of the Strasbourg court. This is consistent with the recognition that there may be some matters about which there is a reasonable expectation of privacy, notwithstanding that they occur in public and are patent to all the world. In this context mere observation cannot, save perhaps in extreme circumstances, engage article 8, but the systematic retention of information may do. In Rotaru v Romania (2000) 8 BHRC 449, para 43, the Grand Chamber held that public information can fall within the scope of private life where it is systematically collected and stored in files held by the authorities. Cf SegerstedtWiberg v Sweden (2006) 44 EHRR 14, para 72. In PG v United Kingdom (2001) 46 EHRR 1272, the court found a violation of article 8 by covertly recording the applicants voices at a police station in the presence of police officers, for the purposes of future voice recognition. At para 57 the court said: There are a number of elements relevant to a consideration of whether a persons private life is concerned by measures effected outside a person's home or private premises. Since there are occasions when people knowingly or intentionally involve themselves in activities which are or may be recorded or reported in a public manner, a person's reasonable expectations as to privacy may be a significant, although not necessarily conclusive, factor. A person who walks down the street will, inevitably, be visible to any member of the public who is also present. Monitoring by technological means of the same public scene (for example, a security guard viewing through closed circuit television) is of a similar character. Private life considerations may arise, however, once any systematic or permanent record comes into existence of such material from the public domain. It is for this reason that files gathered by security services on a particular individual fall within the scope of article 8, even where the information has not been gathered by any intrusive or covert method. In Bouchacourt v France, 17 December 2009, Application No 5335/06, a case concerning the inclusion of persons in a register of convicted sex offenders, it was held at para 57 that the mere storing by a public authority of data relating to the private life of an individual engaged article 8 of the Convention so as to require to be justified. In S v United Kingdom (2008) 48 EHRR 1169 the Strasbourg court held that article 8 was engaged by the mere storage of cellular samples, DNA profiles and fingerprints: see paras 77, 86. This was because of the sensitivity and amount of the personal information in question, and the uses to which it might conceivably be put: paras 70 86. The same principle has been recognised and applied in English case law. As Lord Hope of Craighead DPSC observed in R (L) v Comr of Police of the Metropolis (Secretary of State for the Home Department intervening) [2010] 1 AC 410, para 27, even public information such as a criminal conviction may become part of a persons private life once it recedes into the past and other people are likely to have forgotten about it. 6. These cases, and others like them, all have particular features which differentiate them both from each other and from the present cases. But it is clear that the states systematic collection and storage in retrievable form even of public information about an individual is an interference with private life. For that reason I think that the Court of Appeal was right to hold (overruling the Divisional Court in Catt) that article 8(1) was engaged. It follows that the present appeals turn on article 8(2) of the Convention, and in particular on whether the retention of the data is (i) in accordance with law, and (ii) proportionate to its objective of securing public safety or preventing disorder or crime. The domestic legal framework 7. At common law the police have the power to obtain and store information for policing purposes, ie broadly speaking for the maintenance of public order and the prevention and detection of crime. These powers do not authorise intrusive methods of obtaining information, such as entry upon private property or acts (other than arrest under common law powers) which would constitute an assault. But they were amply sufficient to authorise the obtaining and storage of the kind of public information in question on these appeals. 8. The exercise of these powers is subject to an intensive regime of statutory and administrative regulation. The principal element of this regime is the Data Protection Act 1998. The Act was passed to give effect to Directive 95/46/EC on the protection of individuals with regard to the processing of personal data, a harmonisation measure designed to produce a common European framework of regulation ensuring a high level of protection satisfying (among other standards) article 8 of the Convention: see recitals 10 and 11. On ordinary principles of statutory construction the Act will as far as possible be interpreted in a manner consistent with that objective. It is primarily concerned to regulate the processing of data by any data controller or any other person who processes data on behalf of a data controller. For this purpose, personal data means data relating to a living individual identifiable from the data (whether or not in conjunction with other information or data available to the controller). Processing means obtaining, recording or holding information or data or carrying out any operation upon it including retrieval, consultation, use or disclosure. For present purposes, the relevant provisions can be summarised as follows: (1) Subject to exceptions of no present relevance, a data controller is required by section 4(4) to comply with the data protection principles in Schedule 1. So far as they are relevant to the present appeals, the data protection principles are as follows: Principle 1 is that personal data may not be processed at all unless it is necessary for a relevant purpose. In the case of the police, the relevant purposes are the administration of justice and the exercise of any other function of a public nature exercised in the public interest. Principle 2 is that personal data may be obtained only for lawful purposes and may not be further processed in a manner incompatible with those purposes. Principle 3 is that the data must be adequate, relevant and not excessive for the relevant purpose. Principle 5 is that the data may not be kept for longer than is necessary for those purposes. Principle 7 is that proper and proportionate measures must be taken against the unauthorised or unlawful processing of the data. (2) There is a statutory right in any data subject on request to be given access to any personal data concerning him: section 7. This is subject to an exception under section 29 for personal data processed for the purpose of (among other things) preventing or detecting crime or apprehending or prosecuting offenders. The effect of the exception is to protect information relating to current police investigations or operations. (3) There is a statutory right in a data subject to require a data controller not to process personal data, on the ground that it is causing or is likely to cause unwarranted and substantial damage or substantial distress to him or to someone else: section 10(1). This right would not apply to processing which is necessary for the administration of justice or for the exercise of other public functions in the public interest. But it would apply in any case where that limitation has been exceeded: section 10(2) and Schedule 2, para 5. (4) Complaints about breach of a data controllers obligations may be pursued in the courts or by way of complaint to the regulator, the Information Commissioner: sections 13 and 14. The relief available includes damages. 9. These provisions are supplemented in the case of the police by published administrative codes. Under section 39A of the Police Act 1996 the Secretary of State is empowered to issue codes of practice for the purpose of promoting the efficiency and effectiveness of police forces. A Code of Practice on the management of police information was issued by the Secretary of State in July 2005. The Code follows fairly closely the provisions of the Data Protection Act, while relating them more directly to the particular functions of the police. The central concept underlying it is the limitation of the handling of police information to police purposes. These are defined at paragraph 2.2 as protecting life and property, preserving order, preventing crime, bringing offenders to justice and performing any legal duty or responsibility of the police. Subsequent provisions of the Code deal with the use, review and deletion of information originally recorded for police purposes. Paragraph 4.7 provides for the sharing of information within the United Kingdom police service if it is required for police purposes and the recipient observes the Code. Paragraph 4.8 provides for the sharing of information outside the service on the authority of a chief officer of police if he is satisfied that it is reasonable and lawful to do so for police purposes. Paragraph 4.10 imposes a duty directly on those receiving information in these ways to use it only for the purpose for which it was supplied. Under paragraphs 4.5 and 4.6, information originally recorded for police purposes must be reviewed at intervals. At each review the likelihood that it will be used for police purposes should be assessed, and it should be considered for retention or deletion. 10. The Code of Practice provides for more detailed provision to be made by way of guidance which will (among other things) identify minimum standards of information management to be observed. Guidance on the Management of Police Information (or MOPI) was originally issued by the Association of Chief Police Officers in 2006, and updated by a new edition in 2010. This was in turn superseded by the Authorised Professional Practice: Information Management Retention, review and disposal, published by the College of Policing in 2013. Section 7 of the 2010 document deals with the review of information for retention or disposal. It requires police information to be managed in compliance with the Convention, the Human Rights Act and the Data Protection Act. Paragraph 7.1 begins: Reviewing information held by forces to determine its adequacy and continuing necessity for a policing purpose is a reliable means of meeting the requirements of the Data Protection Act. Review procedures should be practical, risk focused and able to identify information which is valuable to the policing purpose and needs to be retained. Review procedures should not be overly complex but should be as straightforward as is operationally possible. Paragraph 7.4 provides: All records which are accurate, adequate, up to date and necessary for policing purposes will be held for a minimum of six years from the date of creation. This six year minimum helps to ensure that forces have sufficient information to identify offending patterns over time, and helps guard against individuals efforts to avoid detection for lengthy periods. Beyond the six year period, there is a requirement to review whether it is still necessary to keep the record for a policing purpose. The review process specifies that forces may retain records only for as long as they are necessary. Paragraph 7.3.1 provides that the object of the review is to ensure that there is a continuing policing purpose for holding the record, that the record is adequate, up to date and not excessive, that the Data Protection Act is complied with, and that the assessment of the level of risk that the person presents is correct. A number of detailed criteria for carrying out this exercise are then set out. Records are required to be subjected to an initial evaluation, and then kept for a minimum of six years. Thereafter, they are subject to: (i) triggered reviews, when information is added about the person in question or a statutory demand for access or disclosure is received or a request for information is made by another law enforcement agency; and (ii) scheduled reviews, which occur automatically at intervals varying with the nature of the information and the gravity of the risk: paragraphs 7.6.2 and 7.6.3. The criteria for retention or deletion are directed to the risk of harm to the public or to vulnerable sections of the public. Only in the case of persons convicted or suspected of involvement in offences involving the highest level of danger to the public are records to be retained indefinitely. Information which is no longer required must be irretrievably deleted. Substantially similar provisions appear in the current Guidance of 2013. In accordance with the law 11. The requirement of article 8(2) that any interference with a persons right to respect for private life should be in accordance with the law is a precondition of any attempt to justify it. Its purpose is not limited to requiring an ascertainable legal basis for the interference as a matter of domestic law. It also ensures that the law is not so wide or indefinite as to permit interference with the right on an arbitrary or abusive basis. In R (Gillan) v Comr of Police of the Metropolis [2006] 2 AC 307, para 34, Lord Bingham of Cornhill observed that the lawfulness requirement in the Convention addresses supremely important features of the rule of law: The exercise of power by public officials, as it affects members of the public, must be governed by clear and publicly accessible rules of law. The public must not be vulnerable to interference by public officials acting on any personal whim, caprice, malice, predilection or purpose other than that for which the power was conferred. This is what, in this context, is meant by arbitrariness, which is the antithesis of legality. In the context of the retention by the police of cellular samples, DNA profiles and fingerprints, the Grand Chamber observed in S v United Kingdom (2008) 48 EHRR 1169, para 99, that there must be clear, detailed rules governing the scope and application of measures, as well as minimum safeguards concerning, inter alia, duration, storage, usage, access of third parties, procedures for preserving the integrity and confidentiality of data and procedures for its destruction, thus providing sufficient guarantees against the risk of abuse and arbitrariness. For this purpose, the rules need not be statutory, provided that they operate within a framework of law and that there are effective means of enforcing them. Their application, including the manner in which any discretion will be exercised, should be reasonably predictable, if necessary with the assistance of expert advice. But except perhaps in the simplest cases, this does not mean that the law has to codify the answers to every possible issue which may arise. It is enough that it lays down principles which are capable of being predictably applied to any situation. 12. The Data Protection Act is a statute of general application. It is not specifically directed to data obtained or stored by the police. But it lays down principles which are germane and directly applicable to police information, and contains a framework for their enforcement on the police among others through the Information Commissioner and the courts. It deals directly in section 29 and in Schedule 2, paragraph 5 with the application of the principles to law enforcement. The Data Protection Principles themselves constitute a comprehensive code corresponding to the requirements of the EU Directive and the Convention. The effect of the first principle, read in conjunction with the requirements of Schedule 2, is that data cannot be obtained, recorded, held or used by the police unless it is necessary for them to do so for the purpose of the administration of justice or the performance of their other functions. The fifth principle prevents the retention of data for any longer than is necessary for this purpose. These principles are supplemented by a statutory Code of Conduct and administrative Guidance compliance with which is mandatory. The relevant functions of the police are limited to policing functions which are clearly and narrowly defined in para 2.2 of the statutory Code of Practice. 13. There are discretionary elements in the statutory scheme as there must inevitably be, given the great variety of circumstances that may give rise to allegations that personal data have been improperly processed. But their ambit is limited. In the first place, the Code of Practice governing police information is an administrative document whose contents are determined by police organisations subject to the approval of the Home Secretary. It leaves room for discretionary judgment by the police within specified limits, notably in the area of the duration of retention. But both the Code and the Guidance issued under it are subordinate instruments which are subject to the Data Protection Principles. Neither the Information Commissioner nor the courts are bound or indeed entitled to apply them in a manner inconsistent with those principles. Secondly, the Commissioner has a discretion whether to take action. He need not, for example, necessarily issue an enforcement notice in a trivial case or one in which a contravention has caused no appreciable damage or distress. But he is bound to enforce the Act, and his performance (or non performance) of his functions is subject to judicial review in the ordinary way. 14. Much of the argument advanced on behalf of Mr Catt and Ms T on this point amounted to a complaint that this material did not enable them to know precisely what data would be obtained and stored or for how long. But these arguments were not in my opinion realistic. The infinite variety of situations in which issues of compliance may arise and the inevitable element of judgment involved in assessing them make complete codification impossible. However, any person who thinks that the police may hold personal information about him may call for access to it under section 7 of the Act, subject (in the present kind of case) only to the exception in section 29. Armed with the information any person who objects to its retention or use can bring the matter before the Information Commissioner. 15. Before leaving this aspect of the current appeals, I should say something about two cases on which the respondents particularly relied. They are the decision of the European Court of Human Rights in MM v United Kingdom, 13 Nov 2012, Application No 24029/07, and the decision of this court in R (T) v Chief Constable of Greater Manchester Police (Liberty intervening) [2015] AC 49. Both cases concerned the disclosure of information from police records under the Police Act 1997 to potential employers and regulatory bodies, as a result of which the complainants were unable to obtain employment involving contact with children or vulnerable adults. Section 113A of the Police Act 1997 required the disclosure of convictions (including cautions), and section 113B required the disclosure of other information on police records which the relevant chief officer of police reasonably believed to be relevant and which in his opinion ought to be disclosed. Since these disclosures were required by statute, the provisions of the Data Protection Act 1998 restricting their disclosure had no application: see section 35(1) of that Act. In MM, the European Court of Human Rights held that disclosure in accordance with sections 113A and 113B was not in accordance with law because it was mandatory. The relevant provisions involved no rational assessment of risk and contained no safeguards against abuse or arbitrary treatment of individuals. In T, the Supreme Court, on materially indistinguishable facts, applied the same principle. The present appeals, however, come before us on a very different basis. There has been no disclosure to third parties, and the prospect of future disclosure is limited by comprehensive restrictions. It is limited to policing purposes, and is subject to an internal proportionality review and the review by the Information Commissioner and the Courts. In MM, the Strasbourg court criticised the generous approach of the law of the United Kingdom to the exercise of police power to retain personal data even before disclosure (para 170). It does not, however, follow from these criticisms that retention of personal data in the United Kingdom is not in accordance with law. In the first place, at the time which was relevant to the 16. applicants complaint in MM, challenges to the retention of data were seriously inhibited by the decisions of the House of Lords in R (S) v Chief Constable of the South Yorkshire Police [2004] 1 WLR 2196, which concerned the statutory power of the police to retain DNA profiles taken from persons who had been arrested but who were subsequently acquitted or not prosecuted, and Chief Constable of Humberside Police v Information Comr (Secretary of State for the Home Department intervening) [2010] 1 WLR 1136, which concerned the retention of records of minor convictions. In both cases, the courts had doubted whether article 8 of the Convention was even engaged, but on the footing that it was engaged considered that the interference with private life was minor and justified. Things have moved on since then. There is no longer any doubt about the application of article 8 to the systematic retention of processable personal data, and the test of justification has become more exacting since the decision of the Strasbourg court in S v United Kingdom (2008) 48 EHRR 1169. The decisions of this court in R (GC) v Comr of Police for the Metropolis [2011] 1 WLR 1230 and R (L) v Comr of Police of the Metropolis (Secretary of State for the Home Department intervening) [2010] 1 AC 410 were important milestones. Secondly, the purpose for which the rules and practices about data retention were reviewed by the Strasbourg court in MM was not to ascertain the legality of the retention but to assess the adequacy of domestic remedies having regard to the applicants alleged failure to exhaust them before petitioning the Strasbourg court. Thirdly, it is clear that the retention of the data in MM was relevant not so much in itself as because it exposed the applicant to future disclosure. The problem with which the Strasbourg court was concerned was that once the data were entered into the system, there was no way of preventing their disclosure under the mandatory provisions of the Police Act. It followed that the only legal protection against disclosure consisted in the restrictions on the obtaining or retention of the data in the first place. The point is well captured in the courts conclusion, at para 207. It was not satisfied that there were, and are, sufficient safeguards in the system for retention and disclosure of criminal record data to ensure that data relating to the applicant's private life have not been, and will not be, disclosed in violation of her right to respect for her private life. The retention and disclosure of the applicant's caution data accordingly cannot be regarded as being in accordance with the law. 17. In my opinion, the retention of data in police information systems in the United Kingdom is in accordance with law. The real question on these appeals is whether the interference with the respondents article 8 rights was proportionate to the objective of maintaining public order and preventing or detecting crime. For this purpose, it is necessary to look separately at the two cases before us, for the relevant considerations are very different. Proportionality: Mr Catt 18. Mr Catts complaint relates to the recording and retention of information relating to his participation in political protests. Before addressing his own position, it is necessary to summarise, so far as it is relevant to these proceedings, how and why information of this kind is dealt with by the police. 19. Political protest is a basic right which the common law has always recognised, within broad limits directed to keeping the peace and protecting the rights and property of others. It is also a right protected by articles 10 and 11 of the Convention. It is an unfortunate but inescapable fact that some extremist groups deliberately adopt tactics which are likely to involve serious criminal damage to property, assaults against police officers and others, and serious acts of aggravated trespass, harassment and intimidation. This case is mainly concerned with one such group, called Smash EDO. Its object is to close down the activities in the United Kingdom of EDO MBM Technology Ltd, a US owned company which manufactures weapons and weapon components and has a factory in Brighton. Not all of those who attend demonstrations organised by Smash EDO are intent on violence, but the evidence is that some are. Recorded crimes associated with the groups operations against EDO include assault on police officers, sometimes by organised groups (black blocs) who arrive with missiles and other weapons, padding and body armour. They also include: extensive and repeated criminal damage to EDO premises by smashing windows, blocking air conditioning units, throwing fireworks and glass bottles of red oxide paint, forcibly entering premises and breaking equipment; damage to cars belonging to their employees; harassment and intimidation of staff both at their place of work and at home; and conducting secondary campaigns by similar methods against companies supplying services to EDO, such as couriers and banks. In his witness statement, Detective Chief Superintendent Tudway of the Metropolitan Police describes Smash EDO as amongst the most violent in the UK and the only one that would be attended by anarchists prepared to use black bloc tactics. 20. The local organisation of police forces in England makes it necessary for police forces to create organisations to coordinate their response to threats which transcend the limits of individual police areas. At the time when he wrote his witness statement, Detective Chief Superintendent Tudway was the National Coordinator for Domestic Extremism, an office established in 2004 under the auspices of the Association of Chief Police Officers (ACPO) but which subsequently became part of the Metropolitan Police. The National Coordinator is responsible for a number of units whose function is to coordinate the police response to domestic extremism, which is currently defined by ACPO as the planning or commission of crimes motivated by a political or ideological point of view. One of these is the National Domestic Extremism and Disorder Intelligence Unit, formerly known as National Public Order Intelligence Unit (or NPOIU). The Unit was created in 1999 but has its origins in an organisation created in 1986 to coordinate police intelligence about animal rights extremists who were responsible during the 1980s and 1990s for a particularly violent and destructive campaign of criminality directed against the use of animals in research institutions. The Unit exists to support local police forces by gathering, evaluating and disseminating among police forces intelligence relating to threats to public order, including those arising from domestic extremism. The police routinely collect information at public demonstrations. Much of this is done overtly, no intrusive techniques being employed. Very often, they do not retain the information if no offences have occurred and the demonstration was a one off event. However, where a demonstration is part of a regular and long running campaign which gives rise to repeated acts of crime and disorder, the practice is to retain it even if offences have not been committed on that particular occasion or at any rate not by the individual whose presence or activities are recorded. Each incident is recorded on Information Reports, which generally contain a brief description of what occurred, with the names of those attending, so far as recognised. Some individuals are the subject of a nominal record, which will collect together Information Reports referring to them. These records are stored on a database which has been referred to in these proceedings as the Domestic Extremism Database. Its formal title is the National Special Branch Intelligence System. 21. Nominal records, and Information Reports, are reviewed for retention or deletion in accordance with current MOPI recommendations, which I have already summarised. More stringent procedures are followed in the case of photographs, which until recently were reviewed automatically every three years, and are now reviewed every year. These processes were, however, accelerated as a result of a report by HM Inspectorate of Constabulary published in January 2012 on undercover police operations designed to obtain intelligence about protest movements. The report concluded (among other things) that information was being unnecessarily retained in police records. Although the report was concerned with covertly obtained intelligence, it led to an extensive review of the existing database covering overtly obtained intelligence as well, so as to ensure that its continued retention was justified. This resulted in the deletion of a large number of nominal records and associated Information Reports. 22. Mr Catt is a 91 year old man living in Brighton. By his own account, he has been active in the peace movement since 1948, and has been a regular attender at public demonstrations throughout that period. Since 2005, he has frequently participated in demonstrations organised by Smash EDO, generally in Brighton. Mr Catt has twice been arrested at Smash EDO demonstrations for obstructing the public highway, but he has never been convicted of any offence. For my part, I am happy to take at face value his statement that he believes in peaceful protest and practises it. 23. From March 2005, Mr Catt began to appear in police information reports relating to Smash EDO protests in Brighton. As a result of his being identified on these occasions, he occasionally appeared in addition in Information Reports relating to other protests in which he participated, some of them away from Brighton. In March 2010, Mr Catt made an access request under section 7 of the Data Protection Act 1998 for information relating to him. As a result of the disclosure made in response to that request, and of the evidence in these proceedings, the position in relation to Mr Catt can be summarised as follows. There had at one stage been a nominal record for Mr Catt, but it was deleted some time before these proceedings were begun (November 2010). Presumably it had already been deleted when Mr Catt made his access request in March 2010, or its existence would have been disclosed. Nominal records for other persons and Information Reports concerning demonstrations, which incidentally mention Mr Catt had been retained. Some entries from these documents relating to incidents between March 2005 and October 2009 were retrieved which referred to Mr Catt, and these were disclosed to him in response to his access request, in addition to a photograph of him taken at a demonstration in September 2007. In January 2012, information was supplied about three further reports mentioning Mr Catt, which were received in July 2011. In the great majority of cases, all that was recorded about Mr Catt was his presence, date of birth and address. In some cases his appearance is also described. 24. Mr Catt believes that he was specifically targeted by the police. There is, however, no evidence of this. His name appears along with the names of other participants about whom the same sort of information is recorded, together with the names of witnesses and victims. Nominal records about other people which mention Mr Catt were reviewed for deletion or retention in accordance with the criteria which I have summarised. The intervals between scheduled reviews will depend on the category of risk to which the subject of the nominal record belongs. Mr Catts photograph came up for automatic review in July 2010, and was deleted. Subsequently, as a result of the general review of the database undertaken since 2012, the number of nominal reports and Information Reports which mentioned Mr Catt was reduced to two. 25. Do these considerations justify the retention of information including some which relates to persons such as Mr Catt against whom no criminality is alleged? In my opinion, they do. 26. The starting point is the nature and extent of the invasion of privacy involved in the retention of information of this kind. I am conscious that the Strasbourg court has in the past taken exception to the characterisation of interferences by English courts with private life as being minor (see, notably, MM, at para 170), but the word seems to me to be appropriate to describe what happened in this case. The information stored is personal information because it relates to individuals, but it is in no sense intimate or sensitive information like, for example, DNA material or fingerprints. It is information about the overt activities in public places of individuals whose main object in attending the events in question was to draw public attention to their support for a cause. Although the collation of the information in the form in which it appears in police records is not publicly available, the primary facts recorded are and always have been in the public domain. No intrusive procedures have been used to discover and record them, another marked contrast with DNA material. The material records what was observed by uniformed police officers in public places. 27. The retention in a nominal record about a particular person or in an Information Report about a demonstration of information about other persons such as Mr Catt who were participating in the same event does not carry any stigma of suspicion or guilt. Mr Catt takes exception to what he regards as the inference that all those mentioned as participating in events such as Smash EDO protests are extremists. But that is not a fair inference. The relevant police units are concerned with extremism, in the sense of the pursuit of a political cause by criminal means, but it does not follow that all those who are recorded as attending these events are being characterised as extremists in that or any other sense. Unlike the records of criminal convictions or cautions, the information would not be regarded as discreditable to those who were merely recorded as attending an event at which they were not alleged to have committed offences. But in fact, the material is not usable or disclosable for any purpose other than police purposes, except as a result of an access request by the subject under the Data Protection Act. It is not used for political purposes or for any kind of victimisation of dissidents. It is not available to potential employers or other outside interests. There are robust procedures for ensuring that these restrictions are observed. Finally, the material is periodically reviewed for retention or deletion according to rational and proportionate criteria based on an assessment of danger to the public and value for policing purposes. 28. Mr Catt has characterised the practice of retaining such information on a database as secret, but to my mind this is somewhat extravagant. The retention by the police of personal data about persons and events of interest to them is the subject of a statutory Code of Practice and administrative Guidance. These are public documents. With limited exceptions relating mainly to current investigations or operations, any personal data in the possession of the police can be accessed by the subject by a request under the Data Protection Act. The existence of specialised police units dealing with political demonstrations which are thought liable to degenerate into criminality is widely known. The fact that they record information about them and those who participate in them has never been concealed from those who wish to know about these matters. They have been referred to in the press and in reports of HM Inspectorate of Constabulary. Our attention was drawn to a report on the BBC News web site dating from 2002 and an HMIC report of 2003. Given the high profile of some protest groups and their association with criminality, these are the kind of matters which, even in the absence of specific information, most people would expect the police to record and retain. 29. Even a comparatively minor interference with a persons right to respect for private life calls for justification. I turn therefore to the question why is it necessary to retain such material at all, especially in the case of a person like Mr Catt who has a clean record and for whom violent criminality must be a very remote prospect indeed. The purposes for which the evidence about participants in demonstrations is retained are described in Detective Chief Superintendent Tudways witness statement, with a fair amount of specific illustrative detail: (1) (2) (3) It is retained in order to enable the police to make a more informed assessment of the risks and the threats to public order associated with demonstrations forming part of an identifiable campaign, and the scale and nature of the police response which may be necessary in future. It is retained in order to investigate criminal offences where there have been any, and to identify potential witnesses and victims. It is retained in order to study the leadership, organisation, tactics and methods of protest groups which have been persistently associated with violence, and other protest groups associated with them. Links between protest groups are potentially important. There is a significant correlation between participation in a group such as Smash EDO and other extremist groups such as animal rights activists. The evidence is that out of 242 Smash EDO activists recorded in the database at the time when these proceedings were begun, 42 also had links with animal rights protest groups. There is considerable cross fertilisation of ideas between different extremist causes on tactics and methods. 30. These are all proper policing purposes. The evidence of the police is that a significant contribution is made to all of them by the retention of information of this kind. That evidence is supported by illustrative examples, and this court has no evidential basis or personal experience on which to challenge that assessment. And, to put it at its lowest, the evidence is credible. The proper performance of these functions is important not only in order to assist the prevention and detection of crime associated with public demonstrations, but to enable the great majority of public demonstrations which are peaceful and lawful to take place without incident and without an overbearing police presence. 31. These points need to be considered in the light of some basic, and perhaps obvious, facts about the nature of intelligence gathering. Most intelligence is necessarily acquired in the first instance indiscriminately. Its value can only be judged in hindsight, as subsequent analysis for particular purposes discloses a relevant pattern. The picture which is thus formed is in the nature of things a developing one, and there is not always a particular point of time at which one can say that any one piece in the jigsaw is irrelevant. The most that can be done is to assess whether the value of the material is proportionate to the gravity of the threat to the public. This is the principle on which the review procedures are required to be conducted by the Code of Practice and the successive editions of the Guidance. The fact that some of the information recorded in the database relates to people like Mr Catt who have not committed and are not likely to commit offences does not make it irrelevant for legitimate policing purposes. The composition, organisation and leadership of protest groups who are persistently associated with violence and criminality at public demonstrations is a matter of proper interest to the police even if some of the individuals in question are not themselves involved in any criminality. The longer term consequences of restricting the availability of this resource to the police would potentially be very serious. It would adversely affect police operations directed against far less benign spirits than Mr Catt. Organised crime, terrorism, drug distribution and football hooliganism are all obvious examples. One cannot look at an issue of this kind simply in relation to Mr Catt. 32. Even if it were consistent with the purpose and proper use of the database to exclude people like Mr Catt from it, the labour involved would be disproportionate to the value of the exercise to them. The current weeding process in relation to nominal records involves an assessment of the threat posed by the subject of each such record. Mr Catt is not the subject of a nominal record, but merely appears as part of the cast in incidents with which the subjects of nominal records are associated. To fillet all the nominal records not simply in order to review the retention of information relating to the subject of the record but to examine the individual position of every other person mentioned in it would be a major administrative exercise. The alternative of not retaining information in a nominal record about any other members of the cast would significantly undermine the value of the record. 33. Although the jurisprudence of the European Court of Human Rights is exacting in treating the systematic storage of personal data as engaging article 8 and requiring justification, it has consistently recognised that (subject always to proportionality) public safety and the prevention and detection of crime will justify it provided that sufficient safeguards exist to ensure that personal information is not retained for longer than is required for the purpose of maintaining public order and preventing or detecting crime, and that disclosure to third parties is properly restricted: see Bouchacourt v France, 17 December 2009, Application No 5335/06, paras 68 69, and Brunet v France, 18 September 2014, Application No 21010/10, para 36. In my opinion, both of these requirements are satisfied in this case. Like any complex system dependent on administrative supervision, the present system is not proof against mistakes. At least in hindsight, it is implicit in the 2012 report of HMIC and the scale on which the database was weeded out over the next two years that the police may have been retaining more records than the Code of Practice and the MOPI guidelines really required. But the judicial and administrative procedures for addressing this are effective, as the facts disclosed on this appeal suggest. 34. Mr Catt could have complained about the retention of his personal data to the Information Commissioner. He has in fact chosen to proceed in court by way of application for judicial review. The result of that process, in my opinion, is that the police have shown that the retention of data about his participation in demonstrations in the nominal records of other persons and in other event reports is justified by the legitimate requirements of police intelligence gathering in the interests of the maintenance of public order and the prevention of crime. 35. This was substantially the view taken by Gross LJ, delivering the judgment of the Divisional Court. He dealt with the point quite shortly, because he regarded it as plain that the retention of the data concerning Mr Catt was both in accordance with law and justifiable as a proportionate measure for proper policing purposes. The Court of Appeal (Lord Dyson MR, and Moore Bick and McCombe LJJ) disagreed. They expressed no view on the question whether it was in accordance with law, because they were satisfied that it was disproportionate to the admittedly legitimate purpose of proper policing of the community. But they considered that the information retained about Mr Catt had been indiscriminately collected and that it had not been shown to have any value for policing purposes. They thought that while Detective Chief Superintendent Tudway had state[d] in general terms that it is valuable to have information about Mr Catts attendance at protests because he associates with those who have a propensity to violence and crime, he did not explain why, given that Mr Catt was not alleged to have committed crimes himself or encouraged others to do so (para 44). In my view, this does not do justice to the points made by Detective Chief Superintendent Tudway, which I have summarised at para 29, nor does it take account of the reality of police intelligence work, which I have addressed at para 31. It also misses the point that the material is relevant not primarily for the purpose of establishing criminality against Mr Catt but for the purpose of studying the methods and organisation of a violent organised group whose demonstrations he attends. I would therefore allow the appeal in Mr Catts case, and dismiss his claim. Proportionality: T 36. Section 1(1) of the Protection from Harassment Act 1997 makes it a civil wrong and a criminal offence for a person to pursue a course of conduct (a) which amounts to harassment of another, and (b) which he knows or ought to know amounts to harassment of the other. 37. Ms T lives in a block of flats in London managed by a housing association. On 20 July 2010 a minor incident occurred there. Ms T had previously complained about the noise coming from the flat of a neighbour, Mr B. On leaving the flat, she saw Mr S, a friend of Mr B. There is a dispute about what happened next. Mr S later reported to the police that she had called him a faggot. He said that he associated this with insulting remarks which she had made to him on earlier occasions, which he had interpreted as homophobic. A Crime Reporting Information System record (CRIS) was completed, recording the facts as alleged by Mr S and that a decision had been made to serve on Ms T a Prevention of Harassment Letter. The police made a number of attempts to visit Ms T at home, but no one answered the door. Finally, the letter was pushed through her letter box on 7 October 2010. It was a standard form on Metropolitan Police headed paper in the following terms: 38. An allegation of harassment has been made against you: Details of alleged conduct (specific actions that are cause for complaint): On the 20/07/2010 you went outside Flat 5 and told a visitor who was making a phone call YOU FAGGOT HARASSMENT IS A CRIMINAL OFFENCE under the Protection from Harassment Act 1997. A person must not pursue a course of conduct which amounts to harassment of another and which he/she knows, or ought to know, amounts to harassment of the other. Harassment can take many forms and examples can include: wilful damage to property, assault, unwarranted verbal or physical threats, abusive communication or repeated attempts to talk to or approach a person who is opposed to this. It is important that you understand that should you commit any act or acts either directly or indirectly that amount to harassment, you may be liable to arrest and prosecution. A copy of this letter which has been served on you will be retained by police but will not be disclosed now to the alleged victim. However a copy could be disclosed in any subsequent criminal proceedings against you as proof that police have spoken to you about this allegation. This does not in any way constitute a criminal record and will only be referred to should further allegations of harassment be received. 39. The service of such notices appears to be a common practice by police forces across the country, although they are not all in this form. Moreover, different police forces retain the original hard copy of the Harassment Letter for different periods, in some cases as short as eight months. The current practice of the Metropolitan Police is to retain a copy of the Harassment Letter on their electronic records for at least seven years, and the corresponding CRIS for 12 years. The issue of the letter is not tantamount to a criminal conviction, like a caution, but it would in theory be disclosable to a potential employer in response to a request for an Enhanced Criminal Record Certificate under section 113B of the Police Act 1997, if the relevant chief officer considered that the allegation was sufficiently relevant. 40. Ms Ts complaint was originally directed mainly at the issue of the notice. She was outraged, because she regarded it as an accusation which treated Mr Ss allegation as true, when her side of the story had not been heard. This was the main point made by her solicitors when, on 3 December 2010, they wrote to the Metropolitan Police in accordance with the pre action protocol for judicial review. But they added that they had also advised that the retention of the information was a violation of Ms Ts article 8 rights. They called for the withdrawal of the notice and the removal of any reference to it in police records. Proceedings were begun on that basis on 23 December 2010. Before us, however, Ms T was unsuccessful in her application for permission to cross appeal on the question whether the letter was lawfully issued, and has founded her case only on the retention of the information on police records. That point has, however, lost much of its practical substance, since January 2013, when the Metropolitan Police wrote to her solicitors notifying them that, having re examined the materials in the course of preparing for the appeal, they had decided to delete the material in any event. The reason was that there have been no ongoing concerns regarding risk and there are no reports of any further incidents. It is now retained solely for the purpose of these proceedings. As a result both the nature of Ms Ts complaint and its factual basis have significantly changed in the course of these proceedings. 41. Against this background, Ms Ts appeal can be dealt with quite shortly. 42. The purpose of the Prevention of Harassment letter is plain enough from its terms. Under the Act, harassment requires a course of conduct, not just a single incident. The Prevention of Harassment Letter is intended to warn the recipient that some conduct on his or her part may, if repeated, constitute an offence. It also seeks to prevent the recipient from denying that he or she knew that it might amount to harassment. It therefore serves a legitimate policing function of preventing crime and, if a repetition occurs, it may also assist in bringing the accused to justice. It is, however, impossible to conceive how, in the circumstances of this case, that purpose could justify the retention of the letter in police records for as long as seven years or of the corresponding CRIS for 12. It seems obvious that within a few months the incident on 20 July 2010 would have become too remote to form part of the same course of conduct as any further acts of harassment directed against Mr S It is not suggested that the material has any relevance to the investigation or prevention of possible offences by others. 43. It may well be that longer periods, even much longer periods, of retention would have been justified in a more serious case arising under the Protection from Harassment Act 1997: for example in a case of stalking (section 2A) or putting people in fear of violence (sections 4 and 4A). These kinds of offence are often characterised by the development of abusive behaviour over a long period of time. This is especially true of domestic violence, a difficult and sensitive area in which the protection of persons at risk may require sensitive monitoring over a considerable period. However, this is a long way away from that kind of case. It arises, if the allegation is true, from a relatively trivial act of rudeness between neighbours who did not get on. The real problem is that the period of retention seems to be a standard period which applies regardless of the nature of the incident and regardless of any continuing value that the material may have for policing purposes. It was only because of these proceedings that the retention of the material was reviewed and the decision made in January 2013 to delete it. This is in my view difficult to reconcile with the Data Protection Principles in the Act. Nonetheless, I do not think that Ms Ts article 8 rights have been violated, because although the Metropolitan Polices policy envisages the retention of the material for seven or 12 years, it was in fact retained for only two and a half years before the decision to delete it was made. The latter period can be justified by reference to the need to relate the incident of 20 July 2010 to future incidents, bearing in mind that some time may elapse after a repetition before a complaint is made to the police. 44. The Court of Appeal considered that the retention of the material for seven or 12 years, or indeed for any period of more than a year or so at the most was disproportionate (para 61). They therefore overruled Eady J, who had held, with some hesitation, that the standard periods of seven and 12 years were justifiable. It follows from what I have said that I agree that seven or 12 years could not be justified, but I would not wish to lay down a limit of one year, because the circumstances which may give rise to harassment notices are too varied to permit such a generalisation. The time which elapsed before the police in fact deleted the material was in my view at the far end of the spectrum. But I am not prepared to say that it was too long. 45. The main lesson of this case is that a minor incident has been allowed to get out of hand by a heavy handed response on both sides. The form of Prevention of Harassment Letter used by the Metropolitan Police is unnecessarily menacing and accusatorial, given that no crime has been committed and that the facts have not always been fully investigated. The form used by Dyfed Powys Police is an example of the far clearer and more reasonable documentation used by some other police forces. On Ms Ts side, the decision to proceed by way of application for judicial review may have made sense on the footing that the object was to have the original notice quashed, but that permission to pursue that objective was refused by this court. What remained was a straightforward dispute about retention which could have been more appropriately resolved by applying to the Information Commissioner. As it is, the parties have gone through three levels of judicial decision, at a cost out of all proportion to the questions at stake. Much of that cost will have been incurred after Ms Ts object had been achieved as a result of the polices agreement to delete the material in January 2013. I would accordingly allow the appeal in Ms Ts case also. 46. LADY HALE: 47. I too agree that the systematic collection and retention of information about Mr Catt and Ms T constitutes an interference with their right to respect for their private life protected by article 8, even though, in the case of Mr Catt, the information collected related to his activities in public. I also agree that, as Lord Sumption has explained, the combination of the requirements of the Data Protection Act 1998, coupled with the Code of Practice issued by the Secretary of State under the Police Act 1996 and the detailed Guidance on the Management of Police Information issued by the Association of Chief Police Officers, provided sufficient protection against arbitrary police behaviour, so that the collection and retention of this information was in accordance with the law for the purpose of article 8(2) of the Convention. 48. No one doubts that this information was collected and kept for several of the important purposes permitted by article 8(2): certainly for the prevention of disorder or crime and probably also for the protection of the rights and freedoms of others. We do not need any reminding, since the murder of two little girls by a school care taker in Soham and the recommendations of the Report of the Bichard Inquiry which followed (2004, HC 653), of the crucial role which piecing together different items of police intelligence can play in preventing as well as detecting crime. 50. However, it has been clear since at least the decision in S v United Kingdom (2008) 48 EHRR 1169 that the police may not be able to retain information indefinitely (indeed in that case even if it could very well be useful, even vital, in the prevention and detection of crime). Safeguards are certainly needed against the keeping of personal information for longer than is reasonably necessary. Such general guidance as the Strasbourg court was able to give was based on the Council of Europe Convention for the protection of individuals with regard to automatic processing of personal data of 1981 (the Data Protection Convention) and Recommendation R (87) 15 of the Committee of Ministers regulating the use of personal data in the police sector: 103. The domestic law should notably ensure that such data are relevant and not excessive in relation to the purposes for which they are stored, and preserved in a form which permits the identification of the data subjects for no longer than is required for the purpose for which those data are stored. The domestic law must also afford adequate guarantees that retained personal data was [sic] efficiently protected from misuse and abuse 51. Applying those principles to Mr Catt, I can well understand that it would be more objectionable if the police were to retain a nominal record collecting together all the information that they currently hold about him. Such dossiers require particular justification, not least because of their potentially chilling effect upon the right to engage in peaceful public protest. Mr Catt may be a regular attender at demonstrations, some of which are organised by a group which resorts to extreme tactics, but he himself has not been involved in criminal activity at those or any other demonstrations, nor is he likely to be in the future. Had the police kept a nominal record about him, therefore, I would have been inclined to agree with Lord Toulson that it could not be justified. 52. However, as I understand it, the nominal record relating to Mr Catt was deleted some time ago. All that remained, until recently, were the incidental references to his presence at certain demonstrations in information reports about those demonstrations and nominal records relating to other people. The same limited information is kept about other participants in the 53. demonstrations, along with the names of witnesses and victims. The police keep such information for three main purposes: to make informed assessments about the risk to public order associated with particular campaigns; to investigate any criminal offences which have been committed; and to study the leadership, organisation, tactics and methods of protest groups which have been persistently associated with violence and their links with other such groups. Among other things, this enables the police to concentrate their resources on those campaigns and demonstrations where disorder can be predicted, while enabling the great majority of demonstrations to take place without an over bearing police presence. Demonstration based reports containing the names of the people taking part, even those who have not committed any criminal offences in the course of the protest, can assist the police with these important aims. They can indeed be said to facilitate rather than impede the right of peaceful protest in a democratic society. There is absolutely no reason to believe that this information will be passed on to others to whom it should not be revealed or used to victimise people like Mr Catt. I therefore agree with Lord Sumption that retaining this information in this form is not a disproportionate interference with his right to respect for his private life. In relation to Ms T, I quite agree that the Prevention of Harassment letter used by the Metropolitan Police was, as Lord Sumption puts it, unnecessarily menacing and accusatorial. For whatever reason, the police had been unable to interview her about the allegation, which on any view was of minor importance, and yet the letter (wrongly) gives the impression that the police had accepted the complainants version of events and that it amounted to harassment. It is not surprising that Ms T was affronted or that she should try and find some way of obliging the police to withdraw it. A complaint to the Information Commissioner might have secured the deletion of the police record of the incident, but it could not have secured the withdrawal of the letter. That, no doubt, is why these proceedings were launched. 54. However, I agree with Lord Toulson that there are often very good reasons for making and keeping records of incidents such as these. It is not just that, if found to have occurred and to have been repeated within a short enough period for the incidents to be connected, it can form part of a course of conduct for the purpose of proving an offence under the Protection from Harassment Act 1997. And it must be recalled that many harassment cases are a great deal more serious than this (if this happened at all). It is also that, particularly in disputes between neighbours and in cases of domestic ill treatment and abuse, the police response to a new complaint will be affected by knowing whether other complaints have been made in the past against the same person. It is well known that, for a variety of reasons, complaints of domestic violence are often not followed through to prosecution and conviction. But it is vital for the police, when responding to any new complaint, to know whether there have been similar complaints in the past. Domestic violence often escalates in seriousness with each new incident, and the police have to be aware of this when considering how to respond. It is not too dramatic to say that lives have been saved as a result. 55. For these reasons, I agree with Lord Toulson that the policy of the Metropolitan Police in relation to these records was not unlawful, provided that it was flexible enough to allow for information to be deleted when retaining it would no longer serve any useful policing purpose, as in fact happened here. I would therefore allow both appeals, in the case of Mr Catt broadly for the reasons given by Lord Sumption and in the case of Ms T for the reasons given by Lord Toulson. The result is that both claims are dismissed. 56. LORD MANCE: 57. 58. 59. I have come to the conclusion that the appeals should be allowed in the cases of both Mr Catt and Ms T. I reach this conclusion in the case of Mr Catt for the reasons which have been set out by Lord Sumption and Lady Hale. I reach it in the case of Ms T primarily for the reasons set out by Lord Toulson and Lady Hale. However, even if one proceeds on an opposite assumption (namely that the polices policy of retention was originally inflexible and was to retain for a standard period whatever the nature of the incident or the value of the material), I would still conclude that the appeal should be allowed for the reasons set out by Lord Sumption. The policy, even if not originally flexible, became so and the material regarding her was in the event only retained for two and a half years, which was not in context disproportionate. LORD TOULSON: 60. I agree that the systematic collection and retention by the police of data about the two respondents impacts on their rights to respect for their private lives protected by article 8, and that it is in accordance with the law within the meaning of article 8.2, for the reasons given by Lord Sumption. The critical issue in each case is that of proportionality. Mr Catt 61. Mr Catts case is about information relating to him which was stored on a database established by the National Public Order Intelligence Unit (NPOIU), a national policing unit set up under the aegis of the Association of Chief of Police Officers, now run by the Metropolitan Police Service. The Commander of the NPOIU, Detective Chief Superintendent Adrian Tudway, explained in a witness statement dated 6 June 2011, that the main function of the NPOIU is to gather, evaluate, analyse, develop and disseminate intelligence in relation to domestic extremism and single issue campaigning where a substantial threat of criminal activities or public disorder arises. He said that the NPOIU carries out regular reviews in order to decide what information should be retained. In particular, every three years it reviews all photographic images on its database. 62. Mr Catts claim was issued on 17 November 2010. A review four months earlier had resulted in a decision to delete Mr Catts photograph from the database. Mr Tudway explained the reasons: Mr Catt was not known to have organised or been involved in any actions resulting in arrests since the photograph was taken (the date of which is unclear); he had no recorded convictions; and he no longer appeared to be involved in the coordination of Smash EDO events or actions. It should be added that there is no evidence before the court that he was ever involved in the coordination of Smash EDO events or actions or ever displayed any propensity for violence. However, the NPOIU retained over 60 written database entries relating to Mr Catts presence at demonstrations dating back for over five years. Most of them related to demonstrations at the offices of EDO, but 13 related to other demonstrations. They included, for example, the recording of his attendance at the TUC Conference in Brighton in September 2006, at a Voices in the Wilderness demonstration at the Labour Party Conference in Bournemouth in September 2007, at a pro Gaza demonstration and march in Brighton in January 2009 and at a demonstration against New Labour organised by a number of trade unions in September 2009. 63. Mr Catt is 91 years old. Because he has been an attender at protest events for many years he is obviously well known to the police. The question is whether it is proportionate for the police to keep details on a database of the mere attendance of an elderly peaceful demonstrator at all these events. 64. Mr Tudway said in his statement that the police often collect information and intelligence at events and incidents including local protest events. Very often, it is not considered necessary to retain such information because no offences have occurred and the event may be a one off. However, where a protest event such as the Smash EDO campaign becomes established, regular and long running, and where on occasion crime and disorder feature, then the need to collect information to make more informed assessments about risks, threats, public safety and the scale and nature of policing operations increases. I have no difficulty in accepting all of that in general terms, but there must be limits, particularly in the case of someone who has never been accused of violence or organising violence and who has been assessed not to be a threat. 65. Mr Tudway said that it is accepted that many of the people at these events do not commit criminal offences, but it is important for police to seek to identify those who are associated with criminal activity (whether as offenders or as witnesses) for the purpose of investigating any instance of criminality, for the purposes of ensuring that both prosecution and defence are provided with names of potential witnesses in the event of a prosecution, and for intelligence purposes to assist the policing of further events. However, that does not explain to my mind why it should be thought necessary to maintain for many years after the event information on someone about whom the police have concluded (as they did in July 2010) that he was not known to have acted violently and did not appear to be involved in the coordination of the relevant events or actions. Nor is it explained why it was thought necessary and proportionate to keep details of Mr Catts attendance at other political protest events. Mr Tudway said that there can be a cross fertilisation of tactics and strategies from one domestic extremist organisation to another. That does not explain why it is thought proportionate to keep, sometimes years after the event, a record of the fact that Mr Catt, who is not suspected of being an organiser or coordinator of Smash EDO, peaceably attended protest events at the Labour Party conference, the TUC conference and so on. I agree with the opinion of the judges of the Court of Appeal that the appellant has not shown on the evidence that the value of the information relating to Mr Catt was sufficient to justify its continued retention. It was suggested that it would place too great a burden on the police to have to review constantly the information retained on individuals whose names appear in their database to see whether there was sufficient cause to keep the information. As the Court of Appeal observed, there was no evidence from the police that this would be over burdensome. On the contrary, the thrust of the evidence was that they do carry out regular reviews. As I have said, a review was carried out a few months before these proceedings were begun. 67. 66. The police obviously had to review their information about Mr Catt in deciding whether to retain his photograph. We know what view they formed. There is no evidence from the police to suggest, and I see no basis to conclude, that there would have been any real burden in deleting their historic records of his attendances at protest events. 68. More significantly, it was submitted on behalf of the appellants that the decision of the Court of Appeal would have a grave impact on the polices ability to combat crime. The purpose of the Bichard Review of police recordkeeping was to enhance its effectiveness as a way of preventing and detecting crime. There is no doubt that when investigating serious organised crime, including narcotics, gang violence, people trafficking and extortion, and conspiracies aimed at the destruction of lawful businesses by violence, intimidation and threats, it is necessary for the police to be able to collate and keep records of the details of their investigations. The records naturally include names of people apparently involved as suspects, witnesses or victims. I do not accept that there need be any risk of that being hampered by the court upholding the decision of the Court of Appeal in the case of Mr Catt. After all, the police accept that they need to have periodic reviews of the information which they have obtained in order to decide whether there is any real purpose to be gained by keeping it. I also accept that the court should be slow to disagree with the evaluation of the potential usefulness of evidence by the police if a clear reason for it has been advanced. But on the facts of this case, I cannot see what value they have identified by keeping indefinitely a record of Mr Catts attendances at these various events, where he has done no more than exercise his democratic right of peaceful protest. 69. One might question why it really matters, if there is no risk of the police making inappropriate disclosure of the information to others. It matters because in modern society the state has very extensive powers of keeping records on its citizens. If a citizens activities are lawful, they should be free from the state keeping a record of them unless, and then only for as long as, such a record really needs to be kept in the public interest. I would therefore dismiss the appeal in the case of Mr Catt. 70. Ms T 71. Ms Ts complaint relates to the retention by the police of a copy of a warning notice under the Protection from Harassment Act 1997 sent to her by the police after the friend of a neighbour had complained that she had used a homophobic insult towards him (a claim which she denies), and a corresponding entry about the matter in police records (a CRIS report). 72. Ms Ts complaint in her application for judicial review was that the notice had been issued at all. She sought a declaration that it had been unlawfully issued and a mandatory order requiring the police to withdraw the notice and to remove information about it from their records. The detailed grounds of judicial review made only brief reference to the proportionality of the continued retention of the information. 73. Her claim was dismissed by Eady J [2012] EWHC 1115 (Admin), [2012] 1 WLR 2978. As Lord Sumption has recorded, it is the standard practice of the appellant to retain a copy of the notice for seven years and the CRIS entry for 12 years. Eady J said in his judgment, at para 99, that it seemed surprising to him that such information needed to be retained for such a length of time. He observed that if the sole purpose were to lay the ground for establishing a course of conduct under the 1997 Act, only a much shorter period could be justified, but he recognised that a longer period of retention might well be appropriate for other purposes, such as assisting in resolving later allegations. He added that it was largely a matter of expert judgment with which the court should be slow to interfere, and that it was better to have a transparent and clearly expressed policy than to have repeated ad hoc applications for judicial review. He noted also, at para 102, that it was the appellants case that the seven year period was not fixed rigidly and that he was prepared to entertain requests for earlier deletion. 74. By the time that the case reached the Court of Appeal, two and a half years after the event, the entries relating to Ms T had been expunged from the police records on the grounds that there have been no ongoing concerns regarding risk and there are no reports of any further incidents. Rather than regarding that fact as supporting what had been said by the police to Eady J about the policy not being inflexible, the Court of Appeal regarded this as making it only too clear that the continued retention of the information would have been unnecessary, disproportionate and unjustifiable (para 61). That seems to me, with respect, to be an example of hindsight. I doubt whether the courts reaction would have been the same if in the meantime the police had received similar complaints either from the original complainant or from somebody else. 75. The Court of Appeal allowed Ms Ts appeal and made a declaration in the following terms: The respondents decision to retain the Warning Notice on file for a minimum period of seven years, and to retain details of the underlying allegation for a minimum of 12 years, was unlawful and in breach of the appellants right to respect for her private life, contrary to section 6 of, and article 8 of Schedule 1 to, the Human Rights Act 1998. 76. In my view the Court of Appeal erred in granting that declaration. By the time Ms Ts claim came before Eady J the police had made it clear that their policy was not inflexible, as later events have confirmed. I am not persuaded that the policy, with that flexibility, was unlawful. The Protection from Harassment Act covers a wide spectrum of offensive behaviour which may occur in a variety of circumstances. It has been useful particularly, but not exclusively, in the context of domestic abuse and problems between neighbours. The response of the police to complaints about abusive conduct may well be affected by knowing whether similar earlier complaints have been made against the same person, either by the same or by other complainants. In those circumstances I do not consider it to be unlawful for the police to adopt a standard practice of retaining a record of such complaints for several years, but with a readiness to be flexible in the application of the practice. 77. For those reasons I agree that the appeal in the case of Ms T should be allowed. 49. The real issue in this case is whether keeping the information about these two people is necessary in a democratic society in the sense in which that phrase is now understood: is the means used, and the interference with privacy which it involves, a proportionate way of achieving those legitimate aims? In particular, is it proportionate to keep the information which the police have collected about Mr Catt and Ms T, in the form in which it was kept, and for the length of time for which it was kept? These are not easy judgments to make. If society can trust the police to behave properly, and not therefore to misuse the information which they have, there is much to be said for allowing the police to keep any information which they reasonably believe may be useful in preventing or detecting crime in the future. Safeguards are needed against the misuse of the information they have rather than against simply having it. |
Approved premises (APs) used to be known as probation hostels and bail hostels. Living there may be made a condition of release on licence for certain medium, high or very high risk prisoners. They are now all single sex establishments. There are 94 APs for men, scattered about England and Wales, with several in London. There are only six APs for women, in Bedford, Birmingham, Leeds, Liverpool, Preston and Reading, and none in London or in Wales. This means that women are far more likely than men to be placed in an AP which is some distance from their homes and communities. The issue in this appeal is whether the current distribution of APs constitutes unlawful sex discrimination against women. This issue arises in the context of a long standing concern that the prison system is largely designed by men for men and that women have been marginalised within it (The Corston Report, A Report by Baroness Jean Corston of a Review of Women with Particular Vulnerabilities in the Criminal Justice System, Home Office, 2007, para 4). This is scarcely surprising, as women constitute only 5% of the prison population and the system is struggling to cope with the ever increasing demands made upon it. Many voices have been raised in support of Baroness Corstons call for a radical change in the way we treat women throughout the criminal justice system, among them the Howard League for Penal Reform, who have intervened in this appeal to emphasise the particular difficulties which women face in the criminal justice system, including the problems of re settlement with which we are concerned. Those concerns are well understood. But the issue for this court is not whether the criminal justice system should be making better provision for women. The issue is whether the provision that it does make is, in one particular respect, unlawfully discriminatory. It is quite possible that the answer to be given to the first question is yes, while the answer to be given to the second question is no. The facts The appellant is now in her fifties. She has lived in London for almost the whole of her adult life and has no significant ties with Sunderland, where she spent her childhood, or anywhere else. She has two children in their twenties and two young grandchildren. In August 2004 she was sentenced to life imprisonment for murder, with a tariff of 11 years and three months. She was imprisoned first in HMP Holloway, where her family were able to visit; then in HMP Send near Woking, where they did not visit; and then in Askham Grange open prison near York in 2013. She has been assessed as presenting a medium risk of harm. Her tariff expired in November 2015, nearly two years after these proceedings were begun. She has since been released on licence. As a condition of that release, she was required permanently to live in Approved Premises in Bedford, not to leave to live elsewhere even for one night, without the prior approval of her supervising officer, and thereafter to reside as directed by that officer. These judicial review proceedings were launched in January 2013, because the appellant wanted to be released to the London area, albeit not to Haringey where she had lived before her sentence, so that she could be near her family, and she feared that she would be required to live in an AP far from there. She sought declarations that (a) the lack of provision for a womens AP in London is discriminatory contrary to the Equality Act 2010 and/or articles 8 and 14 of the European Convention on Human Rights; and that (b) the Secretary of State had acted in breach of the public sector equality duty in section 149 of the Equality Act by failing to have due regard, in relation to the provision of APs in London, to the need to eliminate discrimination against women, and advance equality of opportunity for them. Cranston J dismissed her discrimination claim, principally because comparing men prisoners with women prisoners was not comparing like with like. But he did declare that the Secretary of State had failed to discharge the public sector equality duty: [2013] EWHC 4077 (Admin). As he explained, at para 65: What is required is that the Secretary of State address possible impacts, assessing whether there is a disadvantage, how significant it is, and what steps might be taken to mitigate it. In the context of advancing equality of opportunity one aspect of the duty that means taking the opportunity to see whether more might be done for women, having regard to their particular circumstances. Nothing even approaching this has been done. The Secretary of State has not challenged that finding, although we have no evidence of what has since been done to give effect to it. The appellant did challenge the finding that there was no discrimination, either direct or indirect, but failed in the Court of Appeal: [2015] EWCA Civ 328. At that stage, she had still not been released and it was regarded as unlikely that, if released, she would be required to live in an AP. On any view, therefore, she had not then personally suffered from the discrimination of which complaint was made, which was that the configuration of APs meant that it was inevitably harder to place women close to home than men. Since then, of course, she has been released and required to live in an AP in Bedford. So if there is discrimination, she has been the victim of it. We are told by her counsel that she was required to live there for over nine months, was unable to get travel warrants to look for accommodation in London, and is now living in rented accommodation near Bedford. Thus the placement in the Bedford AP has had further consequences for her and perpetuated the separation from her family. She has now brought a discrimination claim in the county court, but this has been stayed until the outcome of these proceedings is known. Approved premises Approved premises are premises which have been approved by the Secretary of State under the Offender Management Act 2007, among other things for, or in connection with, the supervision or rehabilitation of persons convicted of offences (section 13(1)(b)). Under section 2 of that Act, the Secretary of State is responsible for ensuring that sufficient provision is made throughout England and Wales for probation purposes. These are defined in section 1(1)(c) to include the supervision and rehabilitation of persons charged with or convicted of offences. Under section 1(2)(b) to (d), this includes, in particular, assisting in the rehabilitation of offenders being held in prison, supervising persons released from prison on licence and providing accommodation in APs. Under the current Offender Management Act 2007 (Approved Premises) Regulations 2014 (SI 2014/1198), regulation 6(1)(a)(iii), among the general duties of providers of APs is a requirement that at least two members of staff are present on the premises at all times (the same was required by the predecessor Regulations (SI 2008/1263), regulation 7(1)(a)(iii)). Assuming three eight hour shifts in a day, this means that each AP must have a minimum of six staff no matter how many people are housed there. According to Probation Circular 37/2005, The Role and Purposes of Approved Premises, APs are a criminal justice facility where offenders reside for the purposes of assessment, supervision and management, in the interests of protecting the public, reducing re offending and promoting rehabilitation. Their core purpose is the provision of enhanced supervision as a contribution to the management of offenders who pose a significant risk to the public. They cater for male and female prisoners who are assessed as very high or high risk, but in order to increase take up APs also cater for female medium risk offenders such as the appellant. Although APs also cater for people on bail or serving a community sentence, the majority of residents are there because of the conditions of their release on licence from prison. They have to abide by a curfew and a code of conduct and any breach of the conditions of their licence can result in recall to prison. The six APs for women have a total capacity of 112 places. This is sufficient to meet demand. They have an annual occupancy rate of 81% compared with 94% in the 94 APs for men. There is a presumption that offenders should be placed in their home probation area, although this can be displaced if there are good reasons for placing them in a different area. However, the limited number and geographical distribution of the womens APs mean that women are far more likely than men to be placed in an AP outside their home area and, indeed, many miles away from their homes and families. In March 2008 there was published the report of a joint inspection of APs by the chief inspectors of probation, prisons and constabulary, Probation hostels: Control, Help and Change? Because of local opposition to new hostels, places had been taken from the womens hostels estate to provide more places for men. This was an understandable, but not acceptable, strategy, nor, in the inspectors view was it compatible with equalities legislation (para 8.1.1). As they explained: The number and location of hostels for women perpetuated the discrimination experienced by women in prison in that a higher proportion than men were forced to stay a long way from home. For women, in particular, enforced separation from their families and support networks compounded the problems associated with their offending, eg relationships and mental health. (para 8.1.3) The research [Sheehan, McIvor and Trotter, What Works with Women Offenders, 2007] found that women in prison tended to be the primary carers of children and were often single parents. It estimated that over two thirds of women prisoners were mothers. Only a small proportion of male prisoners had primary care of children. The main element of discrimination against female prisoners and by extension against female hostel residents was the distance between their family and community and where they were located during the custodial and licensed supervision elements of their sentences. (para 8.1.6) Given the location of the [then] seven hostels, it followed that many potential residents would face several hours of travel to visit their children. Travel was expensive, unlikely to be direct, given the geography, and slow. In addition, as most hostel residents had lost their own accommodation, regaining suitable accommodation for themselves and their children in a different part of the country could seem or actually be insurmountable. (para 8.1.7) The report quoted part of the argument from The Corston Report: Equality does not mean treating everyone the same. The new gender equality duty means that men and women should be treated with equivalent respect, according to need. Equality must embrace not just fairness but also inclusivity. This will result in different services and policies for men and women. Our findings supported this approach. (para 8.3.4.) Apart from the closure of the few remaining mixed gender hostels, which soon happened, the report recommended: Adequate and appropriate provision for female offenders meeting the national target profile for hostel accommodation is established within each probation region in the short term and plans drawn up by NOMS [The National Offender Management Service] to ensure reasonable access from all major centres of population by 2011. (p 46) The only immediate response to this report, and to the Corston Report, was Probation Circular 16/2008, Expanded use of female approved premises. This promised a survey of the need for AP places, which would pay particular attention to the need for APs for female offenders. In the meantime, greater use of the current female estate was encouraged, for a wider range of women offenders, including those who presented only a medium risk of harm. Apart from this, nothing else changed between then and the bringing of these proceedings. In 2013, the House of Commons Justice Committee published its report, Women offenders: after the Corston Report Session 2012 13, HC 92. This began with the comment that: Now, six years after her report, we found that it is well recognised that women face very different hurdles from men in their journey towards a law abiding life, and that responding appropriately and effectively to the problems that women bring into the criminal justice system requires a distinct approach. (p 3) Discussing APs, they observed: Sometimes being required to live away from a home area can provide the break with a set of circumstances which, if a woman were to return to them, would be likely to perpetuate the problems that caused her to offend in the first place. Having only six approved premises for women limits the number of women who can benefit from their constructive regimes and support. More women could benefit from safe, secure and supervised accommodation. Approved premises have the expertise and experience of working with female offenders across the full risk of harm continuum and we consider that the approved premises estate could usefully be expanded to manage more women safely and cost effectively in the community. We would like to see the review consider how existing approved premises regimes could safely be adapted for a broader range of women, and how more creative use of a greater number of approved premises could be funded. (para 196) This was all part of their preference for a gradual reconfiguration of the female custodial estate, with a significant increase in the use of residential alternatives to custody and the reduction of the numbers of women sentenced to short periods in custody (para 197). In their summary, they commented: There is little evidence that the equality duty, and its forerunner the gender equality duty, have had the desired impact on systematically encouraging local mainstream commissioners to provide services tackling the underlying causes of womens offending, or on consistently informing broader policy initiatives with the Ministry of Justice and the National Offender Management Service. Both struggle to reflect fully the distinct needs of female offenders. We urge NOMS to consider gender as a matter of course, rather than seeking to reduce any detrimental impact on women of their general approach after the event. Cranston J did, of course, find that the Secretary of State was in breach of the equality duty. The issue for us is whether the provision of APs for women is unlawful sex discrimination. Direct and indirect discrimination Section 13(1) of the Equality Act 2010 defines direct discrimination as follows: A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others. By section 4, sex is a protected characteristic. Section 19(1) and (2) defines indirect discrimination as follows: (1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of Bs. (2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of Bs if (a) A applies, or would apply, it to persons with whom B does not share the characteristic, (b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it, (c) (d) A cannot show it to be a proportionate means of achieving a legitimate aim. it puts, or would put, B at that disadvantage, and By subsection (3), sex is among the relevant protected characteristics for this purpose. By section 23(1), on a comparison of cases for the purposes of sections 13 and 19, there must be no material difference between the circumstances relating to each case. Public function Not all conduct which falls within those definitions of discrimination is unlawful. Relevant here is section 29 of the Equality Act 2010. By section 29(1) and (2), a person concerned with the provision of services to the public, or a section of the public, whether or not for payment, must not discriminate by not providing the service, or as to the terms on which it is provided, or by terminating it, or by subjecting a person to whom the service is provided to any detriment. By section 31(3), this applies to the provision of a service in the exercise of a public function; by section 31(4), a public function is a function of a public nature for the purpose of the Human Rights Act 1998. The provision of APs under the Offender Management Act is clearly a function of this nature. However, APs are commissioned rather than directly provided by the Secretary of State. But section 29(6) provides that: (6) A person must not, in the exercise of a public function that is not the provision of a service to the public, do anything that constitutes discrimination, harassment or victimisation. While what would otherwise amount to indirect discrimination may be justified if the discriminator can show that the provision, criterion or practice [the PCP] is a proportionate means of achieving a legitimate aim, direct discrimination is only justifiable in certain limited and defined circumstances. One of these is set out in paragraph 26 of Schedule 3 (which is given effect by section 31(10)). This relates to the provision of separate services for men and women: (1) A person does not contravene section 29, so far as relating to sex discrimination, by providing separate services for persons of each sex if a joint service for persons of both sexes would be (a) less effective, and (b) achieving a legitimate aim. the limited provision is a proportionate means of (2) A person does not contravene section 29, so far as relating to sex discrimination, by providing separate services differently for persons of each sex if a joint service for persons of both sexes would be (a) less effective, (b) the extent to which the service is required by one sex makes it not reasonably practicable to provide the service otherwise than as a separate service provided differently for each sex, and (c) achieving a legitimate aim. the limited provision is a proportionate means of (3) This paragraph applies to a person exercising a public function in relation to the provision of a service as it applies to the person providing the service. It was not necessary for the courts below to make a finding on this exception, because they both found that there was no discrimination, direct or indirect, which might require justification. On its face it is capable of applying to both direct and indirect discrimination, although, as we shall see, it is difficult to see how it could arise in a case of indirect discrimination. Is there direct discrimination here? The appellants case on direct discrimination is a simple one. Being required to live in an AP a long way away from home is a detriment. A woman is much more likely to suffer this detriment than is a man, because of the geographical distribution of the small number of APs available for women. This is treating her less favourably than a man because of her sex. Ms Rose QC, on behalf of the appellant, argues that this case is on all fours with the well known case of R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] 1 AC 1155. Birmingham City Council maintained a system of selection for secondary school places but, for historical reasons, it had fewer places at selective schools for girls than for boys. This meant that the pass mark for girls in the entrance examinations was higher than for boys. This was treating the girls less favourably than the boys because of their sex. The Council had not deliberately set out to discriminate against girls; it was a historical accident. But whatever may have been the intention or motive of the council, nevertheless it is because of their sex that the girls in question receive less favourable treatment than the boys and so are subject to discrimination under the [Sex Discrimination Act 1975] (per Lord Goff at p 1194). The House of Lords also rejected an argument that the failure to provide enough selective school places for girls was not an act or deliberate omission which constituted sex discrimination under section 23 of the 1975 Act: It is unlawful for a local education authority, in carrying out [certain] of its functions under the Education Acts 1944 to 1981 . , to do any act which constitutes sex discrimination. Ms Rose points to the similarity of wording in that section and in section 29(6) of the 2010 Act (para 23 above). The provision, or lack of provision, of places in APs is therefore treatment for the purposes of the 2010 Act (as indeed both courts below held). She also points out that the Birmingham case, like this, was a challenge to the system brought by way of judicial review, rather than a complaint of discrimination against an individual. The outcome was a declaration that the arrangements made by Birmingham City Council for the provision of selective secondary education were unlawful pursuant to section 23 of the 1975 Act. A similar declaration is sought here. Mr Chamberlain QC, for the Secretary of State, raises a new argument before this Court. Not all women suffer the detriment complained of. Some are placed reasonably close to home. Therefore, there cannot be direct discrimination, because that requires exact correspondence between the disadvantaged class and the protected characteristic, as held by this Court in Patmalniece v Secretary of State for Work and Pensions (AIRE Centre intervening) [2011] UKSC 11, [2011] 1 WLR 783, and discussed at some length in Preddy v Bull (Liberty intervening) [2013] UKSC 73, [2013] 1 WLR 3741. However, as Ms Rose correctly points out, the exact correspondence test is only relevant where the actual criterion used by the alleged discriminator is not a protected characteristic but something else. In Patmalniece it was not having the right to reside in the United Kingdom; in Preddy v Bull, it was not being married. The question is whether some other criterion is in reality a proxy for the protected characteristic. The best known example is James v Eastleigh Borough Council [1990] 2 AC 751, where people who had reached the state retirement age were allowed free entry to the councils swimming pool. The differential state retirement ages for men and women meant that a 61 year old woman got in free whereas her 61 year old husband did not. This was held to be direct discrimination on grounds of sex. In this case, there is no doubt what the criterion is. It is sex, which is itself a protected characteristic. Furthermore, it cannot be a requirement of direct discrimination that all the people who share a particular protected characteristic must suffer the less favourable treatment complained of. It is not necessary to show, for example, that an employer always discriminates against women: it is enough to show that he did so in this case. In the Birmingham case, some of the girls achieved a high enough pass mark to gain a place at a selective school. What all the girls suffered from was the risk that if they did not get a high enough mark, they would not get a place just as, in the recent case of Essop v Home Office (Border Agency) [2017] UKSC 27; [2017] 1 WLR 1343, all the BME candidates suffered from the greater risk of failing the core skills assessment required for promotion, but of course some of them passed it. In the Birmingham case, some of the girls did of course achieve a high enough mark to get a place. But there were some who achieved a mark which would have been high enough had they been boys but was not high enough because they were girls. That is direct discrimination on grounds of sex. I can see no valid distinction between the Birmingham case and this one. In this case, all the women who would be required to live in an AP when released on licence suffered the much greater risk than the men that they would be sent to an AP far from their homes and families. The fact that some of them would not suffer this detriment does not mean that those who do suffer it have not been discriminated against. It was argued in the courts below that there was a material difference between the circumstances of the male and female offenders so that their cases were not comparable for the purpose of section 23 (para 22 above). Cranston J accepted that comparing the women prisoners with the men prisoners was not comparing like with like (para 54). The women had different characteristics from the men, fewer being of high or very high risk, and the criteria for admitting them to APs were different. However, in the Court of Appeal, Elias LJ rejected this argument. Those differences were not material to the present issue, which was accommodating them close to home (para 44). I agree. The question of comparing like with like must always be treated with great care men and women are different from one another in many ways, but that does not mean that the relevant circumstances cannot be the same for the purpose of deciding whether one has been treated less favourably than the other. Usually, those circumstances will be something other than the personal characteristics of the men and women concerned, something extrinsic rather than intrinsic to them. In this case, the material circumstances are that they are offenders being released on licence on condition that they live in an AP. Those circumstances are the same for men and women. But the risk of being placed far from home is much greater for the women than for the men. Of course, the reasons for this are not any deliberate desire to treat the women less favourably than the men. They are a combination of two things. The first is the much smaller number of women offenders for whom the system has to cater. That by itself would not lead to the problem were it not for the second. This is the policy decision that all APs should be single sex. If they were all mixed sex, then men and women would have exactly the same chance of being placed close to home. If there were some mixed sex APs, the geographical spread would be much better and the corresponding risk for the women would be much lower. There used to be some mixed sex APs, but the Joint Inspection Report (above para 12) recommended that all APs should be single sex. This was because of the particular vulnerability of the women required to live in an AP on release. Their chances of successful reintegration into the community were thought much higher if they were protected from the risks associated with mixed sex premises. Paragraph 26 of Schedule 3 This brings us, therefore, to paragraph 26 of Schedule 3 to the 2010 Act (para 24 above). The history of the United States of America and of the Republic of South Africa, to take the two most obvious examples, has taught us to treat with great suspicion the claim that, if the races are segregated, separate but equal facilities can be provided for both, quite apart from the affront to dignity in the assumption that the races have to be kept separate. There have been periods in our own history where segregation of the sexes has led to separate facilities which were very far from equal. Paragraph 26 recognises that there may be good reasons for providing separate facilities for men and women. As Ms Rose points out, paragraph 26 proceeds on the assumption that, without it, the provision of single sex services would be unlawful discrimination. The question, therefore, is whether in this case the discriminatory effect of providing only single sex establishments can be justified. Ms Rose characterises paragraph 26(1) as providing for separate but equal facilities for men and women. This permits the provision of separate services for persons of each sex, provided that a joint service for both sexes would be less effective and the limited provision is a proportionate means of achieving a legitimate aim. She characterises paragraph 26(2) as referring to separate and different services. It permits providing separate services differently for persons of each sex, provided that a joint service for both services would be less effective, that the extent to which the service is required by one sex makes it not reasonably practicable to provide the service otherwise than as a separate service provided differently for each sex, and that the limited provision is a proportionate means of achieving a legitimate aim. She argues that limited must here mean limited by sex. I agree, because there is nothing else that the limited can be referring back to, other than providing separate services for each sex, whether equally or differently. Although the wording of paragraph 26(1) and (2) is aimed at the people actually providing the service in question, paragraph 26(3) applies the paragraph to a person exercising a public function in relation to the provision of a service as it applies to the person providing the service. It is difficult to see how the commissioning (and regulation) of APs under the Offender Management Act is not the exercise of a public function in relation to the provision of those APs. As Elias LJ observed the words relate to are broad and would in principle cover all administrative decisions which are inextricably linked with the policy of creating sufficient APs to meet the needs of both sexes separately (para 48). As he had already concluded that there was no discrimination and therefore no need for justification, Elias LJ considered paragraph 26 only briefly. He considered that paragraph 26(1) applied and so it was unnecessary to decide whether paragraph 26(2) applied (para 49). Ms Rose argues that the provision of APs is not separate but equal because of the limited number and distribution of APs for women compared with those for men. The applicable exception is in paragraph 26(2), dealing with separate but different services. Once again, I agree with her, because the services are different in this important respect. They may very well be different in other respects too, because the needs of women offenders are recognised to be different from the needs of male offenders, but that is by the way. In any event, it does not matter which sub paragraph is applicable here, because the issue is the same whichever it is. Ms Rose accepts that a joint service for persons of both sexes would be less effective. Expecting women offenders, with their many vulnerabilities, to share premises with male offenders who by definition present a high or very high risk of harm is not likely to be an effective way of helping them with the transition to an independent and law abiding life in the outside world. Ms Rose also accepts that paragraph 26(2)(b) is fulfilled the much lesser extent to which women require the service makes it not reasonably practicable to provide it otherwise than as a separate service provided differently. It would not be reasonably practicable to provide 94 APs for the 112 places for women required. This must be correct. The minimum staffing costs, for example, are the same no matter how many residents there are. The crucial question, therefore, is whether the limited provision is a proportionate means of achieving a legitimate aim. In discussing justification, Cranston J focussed principally on the problem of cost. The cost of building or converting a building into an AP was between 1.5 and 2.2m. No matter how small, the annual running cost of an AP was said to be in the region of 500,000 to 750,000 per annum. There was also likely to be community opposition to establishing new APs. Female APs were under used, so that women who needed them would readily find a place. The average stay was only 80 days on average. So the current provision was proportionate (para 60). Elias LJ did not think that the only objective was saving cost in a time of austerity. It was also to ensure that men and women were in similarly appointed establishments, because there was a real risk of discrimination claims if they were not. Given the limited disadvantage, because of the short average stay, the finding of justification was in principle sustainable (para 64). Saving cost is, of course, a legitimate objective of public policy. But, as the Court of Justice of the European Union emphasised in OBrien v Ministry of Justice [2012] ICR 955, budgetary considerations cannot justify discrimination (para 66). In other words, if a benefit is to be limited in order to save costs, it must be limited in a non discriminatory way. There was no evidence and no finding that the aim was to ensure that men and women were accommodated in similarly appointed premises. Given that the Act permits different provision to be made if their needs are different, this would not by itself be a sound basis for the discrimination. Despite her criticisms of the aims identified by the respondent and the courts below, Ms Rose accepts that in principle the different provision made for men and women might be justified. Her complaint is that the Ministry of Justice has never properly addressed its collective mind to the problem of providing sufficient and suitable places in APs for women which achieve, so far as practicable, the policy of placing them as close to home as possible. There are other options which could have been considered, including: replacing one or more of the current, relatively large womens APs with a larger number of smaller units, more widely spread; closing one or more of the existing womens APs and replacing them with APs closer to the areas where large numbers of serious women offenders have their homes and families; redesignating one of the mens APs in London for women and one of the womens APs for men to make up the loss of male places; or considering alternative forms of accommodation for women released on licence. Cranston Js finding that the Secretary of State was in breach of the public sector equality duty also means that the Ministry is not in a position to show that the discrimination involved in the different provision made for men and for women is a proportionate means of fulfilling a legitimate aim. It may or may not be. But it is for the respondent to show that the discrimination is justified. Given that the Ministry has not addressed the possible impacts upon women, assessed whether there is a disadvantage, how significant it is and what might be done to mitigate it or to meet the particular circumstances of women offenders, it cannot show that the present distribution of APs for women is a proportionate means of achieving a legitimate aim. Indirect discrimination Ms Rose accepts that it is difficult to analyse this case in terms of indirect discrimination. The whole point of indirect discrimination is that a PCP is applied equally to, in this case, men and women, whereas the complaint here is of unequal provision. Shoe horning the complaint into indirect discrimination by identifying the PCP as the requirement to live in an AP on release on licence does not really work, because what has to be justified is the PCP, and such a PCP is readily justifiable by the aims of protecting the public, reducing reoffending and assisting the offenders rehabilitation. In my view, no such shoe horning is required. Conduct cannot at one and the same time be both direct and indirect discrimination. The finding that this is direct discrimination, albeit potentially justifiable, rules out a finding of indirect discrimination. Relief There is still the issue of relief. Even if he had found that this was a case of discrimination, Elias LJ would not have made a declaration (para 65). This is a discretionary remedy and in this case would do no more than tell the Secretary of State that he (now she) had to comply with the public sector equality duty, which Cranston J had already done. If it were clear that the current state of affairs could not be justified, then there would be merit in declaring it to be unlawful. But it was rightly conceded that it was capable of justification, and so this could not be done. Ms Rose now seeks a different declaration from that sought in the claim form, to the effect that the provision of approved premises discriminates unlawfully and has not been justified. That is a simple statement which reflects the findings I have made. I would be prepared to grant a declaration that: The provision of Approved Premises in England and Wales by the Secretary of State pursuant to section 2 of the Offender Management Act 2007 constitutes direct discrimination against women contrary to section 13(1) of the Equality Act 2010 which is unlawful unless justified under paragraph 26 of Schedule 3 to the 2010 Act. No such justification has yet been shown by the Secretary of State. This makes it clear that an individual woman who is less favourably treated as a result of the provision of APs may bring a sex discrimination claim in the county court, but that it will be open to the Secretary of State to resist the claim (assuming it to be made out on the facts) on the ground that the provision is justified under paragraph 26. To that extent, I would allow this appeal. |
The question in this appeal is what is the true construction of the expression property which is for the time being in use or intended for use for commercial purposes in section 13(4) of the State Immunity Act 1978 (the Act). The facts On 9 September 1988 the appellant (SerVaas), which is a company incorporated in Indiana, entered into an agreement (the Agreement) with the Iraqi Ministry of Industry (the Ministry) for the supply of equipment, machinery and related services required for the commissioning of a state owned copper and brass processing factory in Iraq. On 2 August 1990 Iraq invaded Kuwait and on 4 August 1990 the assets of Rafidain Bank (Rafidain) in the United Kingdom were frozen in accordance with the United Nations (UN) sanctions regime established under UN Security Council Resolution 661. On 13 August 1990 SerVaas terminated the Agreement and on 25 January 1991 it commenced proceedings in the Paris Commercial Court against the Ministry in order to recover money due to it under the Agreement. On 21 February 1991 provisional liquidators (the Provisional Liquidators) were appointed in respect of Rafidain on a winding up petition presented by the Bank of England. On 16 April 1991 the Paris Commercial Court gave judgment in default in favour of SerVaas in the sum of US$14,152,800 (the Judgment) in respect of money due under the Agreement. On 10 July 1991 the Judgment was recognised in the Netherlands and shortly thereafter SerVaas recovered US$966,515 by partial enforcement of the Judgment in the Netherlands against Iraqs assets. On 1 October 1991 the judgment was recognised in Germany and on 2 April 1992 Mummery J ordered that the provisional liquidation be limited to those assets of Rafidain situated in England and Wales. On 4 June 1996 the Bank of Englands petition was adjourned generally. In July 2002 SerVaas received US$6,736,285 from the UN Claims Commission by way of compensation for losses caused by Iraq as a result of the invasion of Kuwait. In May 2003 the regime of Saddam Hussein in Iraq fell. On 22 May 2003 the Security Council passed Resolution 1483 which established the Development Fund for Iraq (DFI). On 28 July 2003 Lewison J made an order permitting the Provisional Liquidators to collect the assets of Rafidains London Branch and to agree claims against Rafidain. On 21 November 2004 Iraq made a debt cancellation agreement with government creditors comprising the Paris Club. In December 2004 Iraq began a process of debt restructuring with its commercial creditors and the creditors of other specified Iraqi entities, including Rafidain, under the auspices of the Iraq Debt Reconciliation Office (the IDRO Scheme). On 26 July 2005 Iraq announced an offer to repurchase claims from the commercial creditors of specified Iraqi debtors, including Rafidain, where claims arose before 6 August 1990. In May 2006 Iraq issued an invitation to tender claims for cash purchase and for exchange. Thereafter Iraq took assignments of certain debts owed to Rafidains creditors by Rafidain in accordance with the IDRO Scheme. As was its right, SerVaas did not register an interest in and has chosen not to participate in the IDRO Scheme. On 3 April 2008 Henderson J sanctioned a scheme of arrangement for the distribution of assets held by the Provisional Liquidators to Rafidains creditors (the Scheme). By 18 August 2009 Iraq had submitted claims in the Scheme which were admitted in the sum of US$253.8 million (the Admitted Claims). The original commercial debts constituting the Admitted Claims were acquired by Iraq by way of assignment from existing creditors of Rafidain. On 4 November 2009 SerVaas obtained an order registering the Judgment in England and Wales against the Ministry and Iraq under the Civil Jurisdiction and Judgments Act 1982 (the Registration Order). It was served on Iraq on 2 May 2010 and became enforceable against the Ministry and Iraq in England and Wales on 2 September 2010. On 11 October 2010 Iraqs US lawyers responded to a request from the Scheme Administrators by stating that the dividend payment on the Admitted Claims should be paid to the account in the name of the DFI with the Federal Reserve Bank in New York. As at 18 November 2010, the debt due in respect of the Judgment is said to have amounted to US$34,481,200.49, inclusive of interest and allowable costs. The proceedings In the meantime on 7 October 2010 Mann J granted an application by SerVaas lifting the stay on proceedings against Rafidain and enjoining Rafidain, the Provisional Liquidators and the Scheme Administrators from making any payment to Iraq under the Scheme in respect of the Admitted Claims or recognising or giving effect to any assignment or transfer of the Admitted Claims to a third party which would have the effect of reducing the amount payable to Iraq to an amount less than the Judgment debt. On 13 October 2010 SerVaas issued an application for a Third Party Debt Order (the TPDO Application) against Rafidain in relation to the debt payable to Iraq by Rafidain by way of dividend under the Scheme, seeking an order that Rafidain pay to SerVaas such part of the monies otherwise payable to Iraq as was necessary to satisfy the judgment. That injunction has been variously continued until now. In the meantime on 11 November 2010 Iraq issued an application to discharge the injunction on the ground that monies due to Iraq by Rafidain were immune from execution by virtue of section 13(2)(b) of the Act and/or article 9(1) of the Iraq (United Nations Sanctions) Order 2003 (SI 2003/1519) (the 2003 Order). On 30 November 2010 the Charg dAffaires and Head of Mission of the Embassy of Iraq in London signed a certificate (the Certificate) in these terms: 1. The Admitted Scheme Claims of Iraq under the Scheme [of arrangement in respect of Rafidain] have never been used, are not in use, and are not intended for use, by or on behalf of the State of Iraq for any commercial purpose. 2. Any assets or distributions received in respect of any Admitted Scheme Claim of Iraq under the Scheme are not intended for use by or on behalf of the State of Iraq for any commercial purpose. 3. The State of Iraq has directed the Scheme Administrators, and intends to continue to so direct the Scheme Administrators, to transfer any assets or distributions in respect of any Admitted Scheme Claim of Iraq under the Scheme to the Development Fund for Iraq. Following a hearing on 3 December 2010, Arnold J dismissed the TPDO Application on 14 December 2010 holding that the Admitted Claims were immune from execution by reason of section 13(2)(b) and (4) of the Act because they were not property which was for the time being in use or intended for use for commercial purposes within the meaning of section 13(4). Iraq's submission that the provisions of the 2003 Order were engaged was dismissed. Arnold J granted both sides permission to appeal. On 18 May 2011 the Court of Appeal heard SerVaas appeal on the section 13(2)(b) point, reserved judgment against Arnold J's decision and adjourned generally Iraq's appeal on the 2003 Order point with liberty to restore. On 3 November 2011, by a majority (Stanley Burnton and Hooper LJJ, Rix LJ dissenting), the Court of Appeal dismissed SerVaas' appeal and refused permission to appeal to this Court, which subsequently granted permission. The only party other than SerVaas to have taken an active part in the proceedings to date has been Iraq. The issues The issues in this appeal are not concerned with a states immunity from suit, which is governed by section 3 of the Act, but (as stated in the Statement of Facts and Issues) are solely concerned with the scope of its immunity from execution of a judgment given against it, which is governed by section 13(2)(b) and 13(4). Section 13(2)(b) provides, so far as relevant: (2) Subject to subsection (4) below (b) the property of a State shall not be subject to any process for the enforcement of a judgment or arbitration award or, in an action in rem, for its arrest detention or sale. Section 13(4) provides, so far as relevant: (4) Subsection (2)(b) above does not prevent the issue of any process in respect of property which is for the time being in use or intended for use for commercial purposes; Section 17, which, like section 13, is in Part I of the Act, provides so far as relevant that in Part I of the Act: commercial purposes means purposes of such transactions or activities as are mentioned in section 3(3) above; Section 3(3) defines commercial transaction as meaning: (a) any contract for the supply of goods or services; (b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and (c) any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a State enters or in which it engages otherwise than in the exercise of sovereign authority. Section 13(5) provides: (5) The head of a State's diplomatic mission in the United Kingdom, or the person for the time being performing his functions, shall be deemed to have authority to give on behalf of the State any such consent as is mentioned in subsection (3) above and, for the purposes of subsection (4) above, his certificate to the effect that any property is not in use or intended for use by or on behalf of the State for commercial purposes shall be accepted as sufficient evidence of that fact unless the contrary is proved. It is common ground: (a) that the monies payable under the Scheme to Iraq are a debt and a chose in action and as such that they are property within the meaning of section 13(2)(b) of the Act; (b) that Iraq's stated intention is to transfer the proceeds of the Admitted Claims to the DFI; (c) that, by virtue of section 13(5), the Certificate creates a rebuttable presumption that the Admitted Claims are not in use or intended for use for commercial purposes; (d) that the onus lies on SerVaas to show a real prospect that it can rebut that presumption; and (e) that the debts were intended for use for sovereign and not commercial purposes. These proceedings are summary proceedings, so that, as identified in the Statement of Facts and Issues, the particular issue to be resolved in the appeal is whether there is any real prospect of SerVaas rebutting the presumption created by the Certificate that Iraq's right to receive payment of dividends from the Scheme in respect of the Admitted Claims as at 13 October 2010 was property which was not for the time being in use for commercial purposes within the meaning of section 13(4) of the Act. The questions for decision are thus whether (a) the Admitted Claims were in use for the purpose of a transaction or activity in which Iraq engaged otherwise than in the exercise of its sovereign authority for the purpose of section 3(3)(c) of the Act; or (b) the Admitted Claims were (to the extent that they were acquired by Iraq in exchange for bonds) in use for the purpose of a loan or other transaction for the provision of finance or of any other financial obligation for the purpose of section 3(3)(b) of the Act. Discussion It is not in dispute that the judgment which SerVaas seeks to enforce arises from the Agreement, that it is a commercial contract and that Iraq is liable for the debts of the Ministry. Nor is it in dispute that, although incorporated in Iraq and state controlled, Rafidain conducted business as a commercial bank. It was not and is not Iraqs central bank. Moreover the Admitted Claims are all claims arising from commercial transactions between Rafidain and the third parties involved and are not claims arising from commercial transactions between Rafidain and Iraq. They are simply debts previously owed by Rafidain to their commercial creditors which have now been transferred to Iraq. Rafidain, although placed in liquidation in England in 1991, is not in liquidation elsewhere and continues to trade outside the jurisdiction of the English court. The Scheme is a mechanism for distributing the assets of Rafidains London branch to its creditors. The Admitted Claims in respect of which dividends are, subject to the TPDO application, payable to Iraq total US$253.8 million. But for the intervention by SerVaas, the US$253.8 million would have been transferred to the account of DFI in New York within a matter of days of that intervention in accordance with the instruction of 11 October 2010 referred to above. The dividend rate under the Scheme is 56 per cent, giving rise to a total dividend payable to Iraq of US$142.1 million. In essence the case for SerVaas is that the nature of the transaction which gave rise to Rafidains liability was entirely commercial. The Admitted Claims and the right to a dividend contribution are properly described as in use, in order either to obtain payment or to complete the underlying commercial transactions giving rise to the claim or alternatively as part of the transaction pursuant to which Iraq acquired the Admitted Claims, the nature of which was not a sovereign act. There is an issue between the parties as to whether, as SerVaas say, Iraq bought the debts in order to make a profit and as part of a commercial venture or whether, as Iraq says, they were bought in the exercise of sovereign authority as part of a huge restructuring of debts incurred in the Saddam Hussein era. Arnold J did not resolve that issue. His conclusions were concisely summarised thus in para 29: In my judgment SerVaas has no real prospect of successfully rebutting the presumption created by the Certificate for the reasons given by counsel for Iraq. In my view SerVaass argument wrongly conflates the transactions by which Iraq acquired the debts that are the subject of the Admitted Claims with the intended use of those assets. Iraq is not presently using those assets, but intends to pay the dividends on them to the DFI. That property is not being used to provide finance to Iraq, and it is immaterial that that property was acquired by means of bonds in the cases where the consideration took the form of bonds. Nor is the property being used or intended to be used for transactions otherwise than in the exercise of sovereign authority. Iraq has decided to transfer the distributions to the DFI in the exercise of its sovereign authority, albeit constrained in this respect by Resolution 1483, for the purposes set out in the resolution. I therefore conclude that Iraqs Admitted Claims are entitled to immunity from execution by virtue of section 13(2)(b) of the 1978 Act. The majority of the Court of Appeal held that Arnold J was correct to hold that the origin of the debts was irrelevant. As Stanley Burnton LJ put it at para 32, the fact that the property, here a debt, arises from a commercial transaction does not inform the question whether that property was, at the relevant time, used for a commercial purpose. As I read his judgment, Stanley Burnton LJ did not express a view on the question whether the origin of the debts was commercial but held that, at the relevant time, the debts were not being used at all and that it followed that SerVaas could not discharge the burden of showing that they were in use for commercial purposes. At para 39 he expressly approved the conclusions reached by Arnold J in para 29 of his judgment quoted above. Hooper LJ agreed with Stanley Burnton LJ but went further. He said at para 60 that in his view the evidence pointed overwhelmingly against the conclusion that Iraq bought the debts in order to make a profit. The debts, he said, were bought by Iraq, in the exercise of its sovereign authority, as part of a huge restructuring of debts incurred in the Saddam Hussein era. As appears below, it is not necessary to resolve this question in order to determine this appeal. Rix LJ dissented on the ground that the property in question, namely the Admitted Claims giving rise to a dividend (not the dividend itself), was (as he put it at para 83) very arguably for the time being in use for commercial purposes, so that the issue should be sent for trial. As I see it, the central question in this appeal is whether the nature of the origin of the debts is relevant to the question whether the property in question was in use for commercial purposes. In my opinion it is not. This conclusion is based upon the language of section 13(4). It is also informed by the decision of the House of Lords in Alcom Ltd v Republic of Columbia [1984] AC 580 (Alcom). In addition we were referred to three decisions at first instance and, in particular, to a number of decisions of various courts of appeals in the United States and to a decision of the Court of Appeal in Hong Kong. As to the language of section 13(4), I would accept Mr Howard QCs submission on behalf of Iraq that the expression in use for commercial purposes should be given its ordinary and natural meaning having regard to its context. I would further accept his submission that it would not be an ordinary use of language to say that a debt arising from a transaction is in use for that transaction. Parliament did not intend a retrospective analysis of all the circumstances which gave rise to property, but an assessment of the use to which the state had chosen to put the property. The language of section 13(4) is to be contrasted with other parts of the Act. It is, for example, to be contrasted with section 3(1), which refers to proceedings relating to a commercial transaction, and section 10, which refers to claims in connection with a ship. In enacting section 13(4), Parliament could have referred to property that related to a commercial transaction, or arose in connection with a commercial transaction as being susceptible to enforcement. It chose not to do so, which suggests that it intended a difference in meaning. Property will only be subject to enforcement where it can be established that it is currently in use or intended for use for a commercial transaction. It is not sufficient that the property relates to or is connected with a commercial transaction. I would accept Mr Howards submission that this is consistent with the different treatment of the two categories of immunity in the Act. I turn to the authorities. In Alcom the House of Lords held that money in a bank account used to meet the expenditure incurred in the day to day running of Colombias diplomatic mission was not within the exception. Lord Diplock (with whom the other members of the House agreed) said this at pages 602F 603D and 603H 604E: The crucial question of construction for your Lordships is whether a debt which has these legal characteristics falls within the description contained in section 13(4) of property which is for the time being in use or intended for use for commercial purposes. To speak of a debt as being used or intended for use for any purposes by the creditor to whom the debt is owed involves employing ordinary English words in what is not their natural sense, even if the phrase commercial purposes is given the ordinary meaning of jure gestionis in contrast to jure imperii that is generally attributed to it in the context of rights to sovereign immunity in public international law; though it might be permissible to apply the phrase intelligibly to the credit balance in a bank account that was earmarked by the state for exclusive use for transactions into which it entered jure gestionis. What is clear beyond all question is that if the expression commercial purposes in section 13(4) bore what would be its ordinary and natural meaning in the context in which it there appears, a debt representing the balance standing to the credit of a diplomatic mission in a current bank account used for meeting the day to day expenses of running the mission would fall outside the subsection. Commercial purposes, however, is given by section 17(1) the extended meaning which takes one back to the comprehensive definition of commercial transaction in section 3(3). Paragraph (a) of this tripartite definition refers to any contract for the supply of goods or services, without making any exception for contracts in either of these two classes that are entered into for purposes of enabling a foreign state to do things in the exercise of its sovereign authority either in the United Kingdom or elsewhere. This is to be contrasted with the other paragraph of the definition that is relevant to the instant case, paragraph (c), which on the face of it would be comprehensive enough to include all transactions into which a state might enter, were it not that it does specifically preserve immunity from adjudicative jurisdiction for transactions or activities into which a state enters or in which it engages in the exercise of sovereign authority, other than those transactions that are specifically referred to either in paragraph (a) or in paragraph (b), with the latter of which the instant appeal is not concerned. My Lords, the decisive question for your Lordships is whether in the context of the other provisions of the Act to which I have referred, and against the background of its subject matter, public international law, the words property which is for the time being in use or intended for use for commercial purposes, appearing as an exception to a general immunity to the enforcement jurisdiction of United Kingdom courts accorded by section 13(2) to the property of a foreign state, are apt to describe the debt represented by the balance standing to the credit of a current account kept with a commercial banker for the purpose of meeting the expenditure incurred in the day to day running of the diplomatic mission of a foreign state. Such expenditure will, no doubt, include some moneys due under contracts for the supply of goods or services to the mission, to meet which the mission will draw upon its current bank account; but the account will also be drawn upon to meet many other items of expenditure which fall outside even the extended definition of commercial purposes for which section 17(1) and section 3(3) provide. The debt owed by the bank to the foreign sovereign state and represented by the credit balance in the current account kept by the diplomatic mission of that state as a possible subject matter of the enforcement jurisdiction of the court is, however, one and indivisible; it is not susceptible of anticipatory dissection into the various uses to which moneys drawn upon it might have been put in the future if it had not been subjected to attachment by garnishee proceedings. Unless it can be shown by the judgment creditor who is seeking to attach the credit balance by garnishee proceedings that the bank account was earmarked by the foreign state solely (save for de minimis exceptions) for being drawn upon to settle liabilities incurred in commercial transactions, as for example by issuing documentary credits in payment of the price of goods sold to the state, it cannot, in my view, be sensibly brought within the crucial words of the exception for which section 13(4) provides. It seemed to me that the whole of that passage merited quoting. However, the critical point for present purposes is the proposition that the judgment creditor must show that the bank account was earmarked by the state solely for being drawn down upon to settle liabilities incurred in commercial transactions. The essential distinction is between the origin of the funds on the one hand and the use of them on the other. As Stanley Burnton LJ said in the instant case at para 34, it was not suggested by Lord Diplock in Alcom that if the moneys in the bank account resulted from commercial transactions, that might be relevant to the question whether the account was used or intended for use for commercial purposes. We were referred to three English decisions at first instance. They were AIC Ltd v Federal Government of Nigeria [2003] EWHC 1357 (QB) (Stanley Burnton J), AIG Capital Partners Inc v Republic of Kazakhstan [2005] EWHC 2239 (Comm), [2006] 1 WLR 1420 (Aikens J) and Orascom Telecom Holding SAE v Republic of Chad [2008] EWHC 1841 (Comm) (Burton J). They all focus on present or future use. For example, at para 92(2) of the AIG case Aikens J focused on whether the debts were put to use for the purposes of a commercial transaction within the meaning of section 3(3) of the Act. I note in passing that in the AIC case Stanley Burnton J noted at para 56, after referring to Alcom, that evidence of recent use of an account wholly for commercial purposes over a significant period of time may lead to the conclusion that the account is used or intended for use wholly for commercial purposes; but the older the use in evidence, the weaker the inference that may be drawn as to the use or intended use of the account. The focus is throughout on actual use. In para 58 he noted that there was evidence that the relevant bank account had been dormant and said that, if an account was dormant for at least 18 months, it cannot be said to be presently used for any relevant purpose, and that the previous use was weak evidence of a present intention as to its use. It was an example of a case, as he concluded here, where the evidence was insufficient to disprove the statement in the Certificate. It was suggested on behalf of SerVaas that there is a relevant distinction for present purposes between the current use of a debt and the current use of a bank account. For my part, I would not accept that there is such a distinction. In each case the question is the same, namely whether the relevant property is in use or is intended for use for commercial purposes. The American cases draw the same distinction between the source of the property and its use. The immunity of states from execution in the United States is governed by the Foreign Sovereign Immunities Act 1976 28 USC 1602 1611 (the FSIA), which was a leading precursor of the Act. 1610(a) of the FSIA provides that, where other specific conditions are satisfied, courts in the United States may execute against property in the United States used for a commercial activity in the United States. There are a number of decisions of courts of appeals in different US states on the true construction of that provision. The leading case is perhaps Connecticut Bank of Commerce v Republic of Congo, 309 F 3d 240 (US Court of Appeals, 5th Cir, Texas, 2002). Connecticut Bank had acquired the rights to a valid London judgment against the Congo for defaulting on a loan agreement. It obtained a default judgment in New York in relation to the London judgment debt. The Bank then sought to attach various debts owed by a group of Texas oil companies to the Congo. The debts constituted, inter alia, royalty obligations by the oil companies for activities connected with the exploration for and the sale of the Congos oil. The court held that the debts owed by the oil companies were not propertyused for a commercial activity within the meaning of 1610(a). The majority opinion in the 5th Circuit Court of Appeals was given by Judge Garza. He said (at p 251, paras 19 22): What matters under the statute is what the property is used for, not how it was generated or produced. If property in the United States is used for a commercial purpose here, that property is subject to attachment and execution even if it was purchased with tax revenues or some other noncommercial source of government income. Conversely, even if a foreign states property has been generated by commercial activity in the United States, that property is not thereby subject to execution or attachment if it is not used for a commercial activity within our borders. The district court (and the litigants) have focused on the question of whether the Congos joint venture with the garnishees, which gave rise to the royalty and tax obligations that the Bank want to garnish, was a commercial activity in the United States. This was the wrong question to consider. What matters under the statute is not how the Congo made its money, but how it spends it. The amenability of these royalties and taxes to garnishment depends on what they are used for, not on how they were raised. Judge Garza added (at p 254, paras 36 and 37 39): The phrase used for in 1610(a) is not a mere syntactical infelicity that permits courts to look beyond the use of property, and instead try to find any kind of nexus or connection to a commercial activity in the United States. The statute means what it says: property of a foreign sovereignmay be executed against only if it is used for a commercial activity. That the property is revenue from or otherwise generated by commercial activity in the United States does not thereby render the property amenable to execution. To use property for a commercial activity, within the ordinary meaning of use, would be to put the property in the service of the commercial activity, to carry out the activity by means of the property. Here, the royalty obligations in question represent the revenue, the income, from an allegedly commercial activity. In ordinary usage, we would not say that the revenue from a transaction is used for that transaction. Finally, Judge Garza referred to the Act (at p 256, para 42). He noted the distinction in the Act between the jurisdictional immunity in section 3(1), which provides that a state is not immune as respects proceedings relating to a commercial transaction and section 13(4), which, as he put it, makes explicit that the mere relationship to a commercial activity does not suffice to permit execution, the property must for the time being be in use or intended for use for a commercial purpose. He concluded that the Act parallels the FSIA on the footing that: it allows jurisdiction based on mere relationship to a commercial activity, but very clearly permits execution only depending on the use of the property. The distinction can clearly be seen from the different view of Judge Dennis, who dissented on this part of the case. He said (at p 264): Because the Texas oil companies' obligation to pay royalties to the Congo were necessary and integral to, and therefore used for, the joint venture commercial activity conducted, in substantial part in the United States, by the Congo and the other parties to the joint venture, those royalty obligations fell within the exceptions to immunity from execution provided for by FSIA 1610(a)(1). At page 254 (paras 37 39) Judge Garza, for the majority, rejected that sentence as a non sequitur for this reason: The phrase used for on its face denotes something different and more specific than the phrases integral to or necessary to. It also denotes something distinct (and narrower) than the other phrases the Bank uses in its petition, such as related to or contemplated by. The Connecticut Bank case has been followed in a number of cases in the United States. In Af Cap Inc v Republic of Congo 475 F3d 1080 (US Court of Appeals 9th Circuit, California 2007) the Court of Appeals rejected a submission that the court should determine whether property was used for commercial activity by examining the entire underlying activity that generated the property in question. In doing so it adopted the reasoning in the Connecticut Bank case, contrasting the language used for with the language related to or connected with in other parts of the FSIA. A differently constituted 9th Circuit Court of Appeals also adopted the same reasoning in 2007 in Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v Cubic Defense Systems Inc 495 F3d 1024, 2007. The case had similarities with the instant case. The Court said at pp 1036 1037 (para 6): To satisfy 1610(a), MOD must have used the Cubic judgment for a commercial activity in the United States, and this it has not done. We have recently stated that property is used for a commercial activity in the United States' when it is put into action, put into service, availed or employed for a commercial activity, not in connection with a commercial activity or in relation to a commercial activity. Af Cap Inc, 475 F3d at 1091 (emphasis in original). Cautioning that FSIA does not contemplate a strained analysis of the words 'used for' and commercial activity, we instructed courts to consider[ ] the use of the property in question in a straightforward manner. The Ministry has not used the Cubic judgment as security on a loan, as payment for goods, or in any other commercial activity. Instead, Iran intends to send the proceeds back to Iran for assimilation into MOD's general budget. Because repatriation into a ministry's budget does not constitute commercial activity, we hold that the Cubic judgment is not subject to attachment under 1610(a). See also EM Ltd v Republic of Argentina 473 F3d 463 (2nd Circuit, 2007) at p 484 (para 5), where NML was also a claimant. Those decisions are strong persuasive authority and, given the close relationship between the language in section 13(4) of the Act and 1610(a) of the FSIA, seem to me to support the meaning of the expression property which is for the time being in use or intended for use for commercial purposes in section 13(4) identified in para 17 above. Similar support is to be found in the decision of the majority on this point in the Court of Appeal in Hong Kong in FG Hemisphere Associates LLC v Democratic Republic of Congo [2010] HKCA 19. See in particular per Yuen JA at para 277 and Stock VP at para 179, where they held that at common law, applying the restrictive principle of immunity from execution, the question was whether the property was to be put to use for a private or commercial purpose. Although an appeal to the Court of Final Appeal succeeded on the basis that the Congo was entitled to absolute immunity, the reasoning of the majority of the Court of Appeal was not challenged and remains persuasive authority in cases where the restrictive principle of immunity from execution apples. On the facts of the instant case SerVaas cannot show that the Admitted Claims were property in use for a commercial purpose. It does not say that Iraq intended or intends to draw them down for commercial purposes. On the contrary, it accepts that they were intended to be used for sovereign purposes. By section 13(5) of the Act, the burden is on SerVaas to prove that the Certificate that the property is not in use for commercial purposes is not correct. It cannot do so unless it can show that it is entitled to rely upon the source of the Admitted Claims and can show that the source is commercial and not sovereign. For the reasons I have given, I would hold that the source of the Admitted Claims is irrelevant. It follows that it is not necessary to express a view upon the question whether the source is sovereign or commercial. In short, SerVaas cannot show that the debt is or was earmarked (or in use) for being drawn down upon in order to satisfy commercial liabilities. In para 75 Rix LJ said this: . it is difficult to see that the property in question, the admitted claim, has no current use. It is in use in order to secure the scheme dividend. Of course, the dividend, when secured, might be put to any of the uses to which money funds might be put, either by being expended or by being invested. For the present, however, until the dividend is paid, the claims obvious use and purpose, I would have thought, was to be the means by which the claims owner, Iraq, seeks to secure its value by way of a dividend in the scheme of arrangement. That is what the commercial debt was bought for in the first place, and, until the scheme of arrangement (or, in its absence, a liquidation) has been brought to fruition, the owner holds the debt for the purpose of seeking payment of its claim. For these purposes, Iraq is just like the holder of any commercial debt. As purchaser of the debt, it merely stands in the shoes of the merchants and other commercial parties who were the original owners of the debt in question. If those parties were still holders of the debt, it would not be said that they held it for no current purpose. It seems to me to be at least highly arguable that Iraq is in the same position. On this basis, the linchpin of Iraqs argument fails. For my part, I would not accept that analysis. It elides the historical origins of the Admitted Claims with their current and future use. The determinative feature, in my view, is the absence of any current or future commercial activity on the part of the state of Iraq. It is common ground that any dividends received from the administrators of Rafidain Bank will be paid to and used by the DFI, which is manifestly not a commercial purpose. The Admitted Claims are simply the means to the end of the dividends. They are nothing more than a legal mechanism by which Iraqs entitlement to receive dividend payments is secured and given effect to. In these circumstances, it is artificial and highly technical to seek to distinguish the Admitted Claims from the dividends that they secure. Neither is connected to, or destined for use in, any mercantile or profit making activity by Iraq. It follows that neither can sensibly be described as for the time being in use or intended for use for commercial purposes. It was suggested on behalf of SerVaas that, even if it cannot succeed in relation to the entirety of the Admitted Claims, in so far as the Claims were acquired with bonds, they were in use for a commercial transaction within section 3(3)(b) of the Act, namely a transaction for the provision of finance. The Court of Appeal unanimously rejected this part of SerVaas submissions. As Rix LJ put it at para 81, it was mere background. Assuming the expression in use or intended for use in section 13(4) is given the meaning discussed above, I cannot see any basis for reaching a different conclusion in respect of the Admitted Claims acquired with bonds. CONCLUSION For these reasons, which are essentially those given by Arnold J and Stanley Burnton LJ, I would dismiss the appeal. |
The question in this case is whether the appellant falls within the scope of section 193 of the Housing Act 1996 as amended, which applies, by virtue of subsection (1), where the local housing authority are satisfied that an applicant is homeless, eligible for assistance and has a priority need, and are not satisfied that he became homeless intentionally. In such a case, section 193(2) requires the authority to secure that accommodation is available for occupation by the applicant. In the present case, there is no doubt that the appellant is homeless, eligible for assistance and has a priority need. The question is whether the authority were entitled to be satisfied that she became homeless intentionally. The appellant surrendered her tenancy of a bedsitting room in a hostel in Leyton on 25 October 2011, as she was unhappy about smells in the hostel. She moved into temporary accommodation in Kings Cross. That arrangement came to an end during November 2011, when she was asked to leave because the house was over crowded. On 24 November 2011 she applied to the respondent authority for accommodation as a homeless person under the 1996 Act. She was provided with interim accommodation in Ilford, where she remained until 23 December 2011. She was then moved to interim accommodation in Leytonstone, where she still remains until after the decisions which are challenged. On 15 February 2012 she had a baby daughter. If she had still been living in the hostel in Leyton, she would then have had to leave it, as only single persons were permitted to reside there. On 1 August 2012 the authority decided that they were satisfied that she was homeless, eligible for assistance and had a priority need, but were also satisfied that she became homeless intentionally. On 31 January 2013, a decision to the same effect was made by a review officer on a review under section 202 of the 1996 Act. The basis of the decision was that the applicant had surrendered her tenancy of the room in the hostel in October 2011 and in consequence had ceased to occupy accommodation which was available for her occupation, and which it would have been reasonable for her to continue to occupy until she gave birth. Her contention that it would not have been reasonable for her to continue to occupy the accommodation because of an unpleasant smell was rejected. Her contention that she would have had to leave the hostel in any event when she gave birth was regarded as irrelevant. There was no finding as to the date on which the appellant became homeless. The issue raised in the appeal is, in substance, whether the review officer was entitled to be satisfied that the appellant became homeless intentionally, on the basis that she deliberately gave up the accommodation in the hostel, given that she would have been homeless in any event by the time her application was considered. In that regard, it is contended that the birth of the baby broke the chain of causation between the appellants leaving the hostel and her state of homelessness when the application was considered. In relation to that issue, the court is invited to depart, if necessary, from the decision of the House of Lords in Din v Wandsworth London Borough Council [1983] 1 AC 657 under the Housing (Homeless Persons) Act 1977. The homelessness legislation and its construction It may be helpful to begin by summarising how the legislation in relation to homelessness, and its construction by the courts, have evolved, so that the decision in Din can be placed in its historical context. The following summary, so far as concerned with the legislation, is largely borrowed from the speech of Baroness Hale of Richmond in Birmingham City Council v Ali [2009] UKHL 36; [2009] 1 WLR 1506 and the judgment of Lord Hodge in R (N) v Lewisham London Borough Council [2014] UKSC 62; [2014] 3 WLR 1548. Following the Second World War, Part III of the National Assistance Act 1948 placed local authorities under a duty to provide temporary accommodation to persons who were in urgent need of it. The 1977 Act replaced the provisions of the 1948 Act with a regime which also provided longer term accommodation for the homeless. Important aspects of that regime survive in the 1996 Act. In particular, the 1977 Act introduced the concept of priority need (section 2), the obligation of the authority to provide temporary accommodation while they make inquiries as to whether the applicant is homeless and in priority need and whether he or she became homeless intentionally (section 3), and the duties, depending on the results of that investigation, to provide advice and appropriate assistance, to provide temporary accommodation for a period to give a reasonable opportunity to secure other accommodation, or to secure that accommodation becomes available for occupation (section 4). The 1977 Act was consolidated into wider housing legislation in Part III of the Housing Act 1985. As I shall explain, that in turn was amended by the Housing and Planning Act 1986, so as to harmonise the definitions of homelessness and intentional homelessness. The 1985 Act, as amended, was repealed by the 1996 Act, which in Part VII provides the current statutory regime for dealing with homelessness. In particular, when an applicant applies for accommodation or assistance in obtaining accommodation (section 183), the local housing authority carry out inquiries to satisfy themselves whether he or she is eligible for assistance and, if so, what if any duty is owed (section 184). There is an interim duty to accommodate under section 188. If, following the section 184 inquiry, the local housing authority are satisfied that the applicant is homeless, eligible for assistance but homeless intentionally, section 190 applies: see section 190(1). The authoritys duty, if the applicant has a priority need, is to secure that accommodation is available for a period to give a reasonable opportunity of securing accommodation for occupation, and to provide advice and assistance in attempts to secure accommodation: section 190(2). If not satisfied that the applicant has a priority need, the authority's duty is confined to the provision of advice and assistance: section 190(3). If the authority are satisfied that the applicant is homeless and eligible for assistance, not satisfied that he or she is intentionally homeless, but also not satisfied that he or she has a priority need, the duty is again to provide advice and assistance: section 192. If, on the other hand, the authority are satisfied that the applicant is homeless, eligible for assistance and has a priority need and are not satisfied that he or she became homeless intentionally, section 193 applies: see section 193(1). The authority are then under a duty to secure that accommodation is available for occupation by the applicant: section 193(2.). The question in the present case is whether the appellant falls within the scope of section 190(1) or section 193(1). The 1977 Act, Part III of the 1985 Act, and Part VII of the 1996 Act, have all given rise to numerous difficulties of interpretation. In particular, the meaning attributed to some of the fundamental concepts employed, such as homeless and accommodation, has evolved over time as the result of judicial decisions and legislative amendment. To summarise matters which I shall later discuss in greater detail, the case of Din, in 1981, concerned the definition of becoming homeless intentionally, in section 17(1) of the 1977 Act. That definition required the authority to consider whether an applicant for assistance under the Act had ceased to occupy accommodation which was available for his occupation, and which it would have been reasonable for him to continue to occupy, in consequence of his own deliberate act or failure to act. The House of Lords decided by a majority that the questions whether the accommodation was available, and whether it would have been reasonable to continue to occupy it, were to be considered as at the time when the applicant ceased to occupy it. It followed that, if the definition was satisfied as at that time, it was irrelevant to that question to consider whether, if the applicant had not ceased to occupy the accommodation, it would have ceased to be available for his occupation by the time of the authoritys inquiry. I can say at once that, in relation to those matters, the decision appears to me to have been correct and to remain good law. That does not however resolve the issue in the present case, as I shall explain. Importantly for present purposes, all the members of the House also considered that there must be a continuing causal connection between the deliberate conduct referred to in section 17(1) and the applicants homelessness at the time of the inquiry. It will be necessary to return to the relevant passages in the speeches. In relation to the nature of the causal link, Lord Lowry described the connection in terms of continuing homelessness. On his approach, homelessness was a condition which necessarily continued unless and until non temporary or settled accommodation was obtained. That approach was however disapproved by the House of Lords in the case of R v Brent London Borough Council, Ex p Awua [1996] AC 55, decided under the 1985 Act. Applying the definition of homeless, a person could cease to be homeless even if he or she was not in settled accommodation. It was confirmed that the necessary connection between the deliberate conduct required by the definition of becoming homeless intentionally and the applicants homelessness at the time of the inquiry was causal. The current homelessness had to have been caused by the applicants earlier intentional conduct. A causal connection would not exist where there had been an intervening period in settled accommodation, but the House of Lords reserved their opinion as to whether that was the only method by which the causal connection could be broken. As I shall explain, in later cases in the High Court and the Court of Appeal a variety of other circumstances have been held to have broken the causal connection. One of the questions arising in the present appeal is whether that is indeed possible. Four other aspects of the evolution of the legislation require to be borne in mind when considering authorities decided under the earlier legislation, such as Din. First, under the 1977 Act, a person was homeless if he had no accommodation which he and his family were entitled to occupy, by virtue of some interest, court order, express or implied licence or statutory right to occupy: section 1(1). There was no reference in the definition of homelessness to whether or not it was reasonable for him to continue to occupy the accommodation to which he was entitled. Thus in R v Hillingdon London Borough Council, Ex p Puhlhofer [1986] AC 484, the House of Lords decided that a family were not homeless within the meaning of the 1977 Act, however intolerable their living conditions were. There was no requirement that their accommodation be appropriate or reasonable, as long as it could properly be described as accommodation and was available for them to occupy. Parliament reacted to the Puhlhofer decision by inserting new provisions into the Housing Act 1985, Part III of which had replaced the 1977 Act. Most importantly for present purposes, it was provided that a person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy: section 58(2A) of the 1985 Act, as inserted by section 14(2) of the 1986 Act. Equivalent provision is now made by section 175(3) of the 1996 Act. As was observed in Awua at p 67, this produced symmetry between the concepts of homelessness and becoming homeless intentionally. Secondly, in deciding whether it would have been reasonable for the applicant to continue to occupy accommodation, for the purpose of applying the definition of becoming homeless intentionally, the 1977 Act did not require the authority to take any particular matters into account, other than to have regard to guidance given by the Secretary of State (section 12). They were also permitted to have regard to the general circumstances prevailing in relation to housing in the district (section 17(4)). In Din, it was accepted that the authority were entitled to conclude that it would have been reasonable for the appellants to have continued to occupy the accommodation in question until the landlord obtained an order for possession, notwithstanding that the appellants could not afford the accommodation and had mounting arrears of rent and rates. That concession was effectively endorsed by the majority of the House of Lords. Under the 1996 Act, however, section 177(3) enables subordinate legislation to be made, specifying matters to be taken into account in determining whether it would have been reasonable for a person to continue to occupy accommodation. Such legislation now specifies that account is to be taken of whether or not the accommodation is affordable for that person: Homelessness (Suitability of Accommodation) Order 1996 (SI 1996/3204). Guidance issued by the Secretary of State also now makes it clear that the question whether an order for possession has been obtained should not be regarded as critical, where (put shortly) the landlord has given notice and there would be no defence to an application for a possession order: Department for Communities and Local Government, Homelessness Code of Guidance for Local Authorities (2006), para 8.32. Thirdly, in Birmingham City Council v Ali the House of Lords considered the meaning of the requirement introduced after Puhlhofer, and now set out in section 175(3) of the 1996 Act (the definition of homelessness), that a person is not to be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy: a form of words which also appears (subject to a change of tense) in the definition of becoming homeless intentionally in section 191(1). The question arose in the Birmingham case whether what had to be considered was the reasonableness of continuing to occupy the accommodation for another night, or for the foreseeable future, or indefinitely. The House of Lords held that both sections 175(3) and 191(1) looked to the future as well as to the present (para 36). A person was homeless if he had accommodation which it was not reasonable for him to continue to occupy for as long as he would have to occupy it if the local authority did not intervene (para 37). There would be cases where an applicant occupied accommodation which it would not be reasonable for him to continue to occupy on a long term basis, as he would have to do if the authority did not accept him as homeless, but which it would not be unreasonable to expect him to continue to occupy for a short period while the authority investigated his application and rights, and even thereafter while they looked for accommodation to satisfy their duty under section 193 (para 42). Fourthly, the 1996 Act introduced, in section 202, the right to request a review of the authoritys decision. This is a full review of the merits of the application, rather than a consideration of whether the original decision was flawed: Mohammed v Hammersmith and Fulham London Borough Council [2001] UKHL 57; [2002] 1 AC 547, para 26. The review is conducted on the basis of the circumstances existing at the date of the review: Mohammed, para 25; Banks v Kingston upon Thames Royal London Borough Council [2008] EWCA Civ 1443; [2009] PTSR 1354, para 71. With that overview of the legislation in mind, it is now necessary to consider in greater detail the provisions of the 1996 Act which are central to the appeal. The 1996 Act Section 193(1) provides: This section applies where the local housing authority are satisfied that an applicant is homeless, eligible for assistance and has a priority need, and are not satisfied that he became homeless intentionally. In terms of that provision, the authority have to be satisfied of three matters: that the applicant is homeless, that he is eligible for assistance, and that he has a priority need. They must also be not satisfied of one further matter: that the applicant became homeless intentionally. Homelessness is defined by section 175, which provides: (1) A person is homeless if he has no accommodation available for his occupation, in the United Kingdom or elsewhere, which he (a) is entitled to occupy by virtue of an interest in it or by virtue of an order of a court, (b) has an express or implied licence to occupy, or (c) occupies as a residence by virtue of any enactment or rule of law giving him the right to remain in occupation or restricting the right of another person to recover possession. (2) A person is also homeless if he has accommodation but (a) he cannot secure entry to it, or (b) it consists of a moveable structure, vehicle or vessel designed or adapted for human habitation and there is no place where he is entitled or permitted both to place it and to reside in it. (3) A person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy. (4) A person is threatened with homelessness if it is likely that he will become homeless within 28 days. As I have explained, continue to occupy, in section 175(3), means continue to occupy for as long as he would have to occupy it if the local authority did not intervene: Birmingham City Council v Ali. Becoming homeless intentionally is defined by section 191(1): (1) A person becomes homeless intentionally if he deliberately does or fails to do anything in consequence of which he ceases to occupy accommodation which is available for his occupation and which it would have been reasonable for him to continue to occupy. (2) For the purposes of subsection (1) an act or omission in good faith on the part of a person who was unaware of any relevant fact shall not be treated as deliberate. (3) A person shall be treated as becoming homeless intentionally if (a) he enters into an arrangement under which he is required to cease to occupy accommodation which it would have been reasonable for him to continue to occupy, and (b) the purpose of the arrangement is to enable him to become entitled to assistance under this Part, and there is no other good reason why he is homeless. Given the symmetry between section 175 and section 191, it can be inferred that the words continue to occupy are intended to be interpreted so as to enable the provisions to operate harmoniously together. They cannot however be interpreted in an identical manner in both contexts. As Lady Hale explained in the Birmingham case at paras 37 40, there can be circumstances in which a person is homeless, within the meaning of section 175, because it would not be reasonable for him to continue to occupy his current accommodation, but in which it may nevertheless be reasonable for him to stay where he is while the authority consider his application and look for more suitable accommodation. The question under section 191(1) is therefore whether it would have been reasonable for the person to continue to occupy the accommodation for as long as he would occupy it while the authority considered his application and, if appropriate, looked for more suitable accommodation. As I have explained, the effect of the requirement in section 193(1), and its statutory predecessors, that the authority must not be satisfied that the applicant became homeless intentionally has caused difficulties of interpretation, linked to difficulties in construing the meaning of homelessness. The purpose of the requirement is however not difficult to discern. As was explained by Lord Lowry in Din (at p 679), and as counsel for the appellant emphasised in the present case, it is designed to prevent queue jumping by persons who, by intentionally rendering themselves homeless, would (in the absence of such a provision) obtain a priority in the provision of housing to which they would not otherwise be entitled. Consistently with that rationale, it cannot be intended that an applicant is to be disqualified for accommodation if he has ever, at any time in his life, become intentionally homeless. For example, an elderly man who becomes homeless when his care home is closed cannot be intended to be denied assistance merely because, 60 years earlier, he was evicted from his student digs for holding rowdy parties. As counsel for the appellant submitted, the homelessness with which the words became homeless intentionally are concerned must be the homelessness which the authority have found to exist: is homeless and became homeless must refer to the same current state of being homeless. It is therefore in relation to the current state of being homeless that the question has to be answered, did the applicant become homeless intentionally? On the other hand, section 193(1) cannot be concerned only with the reason for the loss of accommodation which the applicant occupied immediately before he became homeless. If that were its effect, the legal consequences of becoming homeless intentionally could readily be avoided by obtaining temporary accommodation, so that the applicant ceased for a time to be homeless, and then waiting to be evicted from it, so bringing about a state of homelessness consequent on the involuntary loss of that accommodation. The aim of the provisions relating to intentional homelessness would then be circumvented. Section 193(1) must therefore be understood as being concerned with the question whether the applicants current homelessness has been caused by intentional conduct on his part, in consequence of which he ceased to occupy accommodation which was available for his occupation and which it would have been reasonable for him to continue to occupy: either the accommodation which he was occupying immediately before he became homeless, or previous accommodation. Whether the applicant became homeless intentionally thus depends in the first place on the application of the definition of becoming homeless intentionally in section 191(1): in short, on whether he deliberately did or failed to do anything in consequence of which he ceased to occupy accommodation meeting the requirements of that provision. If that question is answered in the affirmative, the further question then arises under section 193(1) whether the applicants current homelessness was caused by that intentional conduct. Dyson v Kerrier District Council These two distinct causal questions were identified by Brightman LJ, delivering the judgment of the Court of Appeal, in Dyson v Kerrier District Council [1980] 1 WLR 1205, a decision which has been repeatedly endorsed by the House of Lords. Referring to the predecessor provision of section 191(1) of the 1996 Act, namely section 17(1) of the 1977 Act, he said at pp 1214 1215: This subsection is dealing with cause and effect. The subsection states the effect first. The specified effect is the state of being homeless. The subsection specifies that effect and then describes a particular cause which, if it exists, requires the effect to be treated as intentional. The subsection therefore means a person becomes homeless intentionally if he deliberately has done or failed to do anything in consequence of which he has ceased to occupy accommodation which was available for his occupation and which it would have been reasonable for him to continue to occupy. (original emphasis) So understood, two separate questions arise concerning causation. One arises, under what is now section 191(1) of the 1996 Act, in respect of what Brightman LJ described as the cause: the persons ceasing to occupy accommodation which he could reasonably have continued to occupy must be the consequence of his deliberate act or omission. The second arises, under what is now section 193(1), in respect of what Brightman LJ described as the effect: the homelessness which the authority have found to exist must be the consequence of that intentional conduct. In other words, section 193(1) is to be construed as meaning: This section applies where the local housing authority are satisfied that an applicant is homeless, eligible for assistance and has a priority need, and are not satisfied that [he is homeless because] he became homeless intentionally. The second causal question has to be understood as being implicit if absurd consequences are to be avoided. The elderly man in my example, who is homeless after his care home closes, is undoubtedly someone who, in his student days, did something in consequence of which he ceased to occupy accommodation which was available for his occupation and which it would have been reasonable for him to continue to occupy. The causal question arising under section 191(1) must therefore be answered in the affirmative. But, if that were the only causal question which arose, the legislation would have absurd results. Absurdity is avoided by asking the second question, which arises under section 193(1): the authority are satisfied that he is homeless following the closure of the home, but cannot be satisfied that he became homeless intentionally, since his homelessness was not caused by his holding rowdy parties in his student digs. He would have been homeless following the closure of the home in any event. On the other hand, in my example of the person who intentionally gave up his accommodation and moved into temporary accommodation and waited to be evicted, both questions would be answered in the affirmative. He deliberately did something in consequence of which he ceased to occupy accommodation which was available for his occupation and which it would have been reasonable for him to continue to occupy. The causal test under section 191(1) is therefore satisfied, even though he did not at that stage become homeless. When he did become homeless, following his eviction from the temporary accommodation, he could properly be said under section 193(1) to have become homeless intentionally, since the effective cause of his homelessness was his previous intentional conduct, but for which he would not be homeless. That conduct was a but for cause of his homelessness, and no unconnected event had intervened to break the causal connection. These points are illustrated by the decision in Dyson v Kerrier District Council. The case was one where the applicant had surrendered the tenancy of her flat in Huntingdon in October 1978 after taking a temporary let of a cottage in Cornwall. Following the expiry of the let in March 1979, she was evicted from the cottage in May of that year. The contention that she was unintentionally homeless, having been evicted from the cottage, was acknowledged to be a formidable argument on the literal wording of the statute. As was pointed out in Awua, however, such a construction would enable people to jump housing queues by making themselves intentionally homeless at one remove. That result was avoided by giving the legislation a purposive construction and asking whether the applicants current state of homelessness had been caused by conduct falling within the scope of what is now section 191(1). Brightman LJ stated (p 1215): The district council were entitled to reach the conclusion that the plaintiff became homeless on May 25, 1979 [the date of her eviction], intentionally because she deliberately had done something (surrendered the Huntingdon tenancy) in consequence of which she ceased to occupy accommodation (the Huntingdon flat) which was available for her occupation and which it would have been reasonable for her to continue to occupy; and that, therefore, if she had not done that deliberate act she would not have become homeless on May 25. It is to be noted that the court applied a but for test of causation: if she had not done that deliberate act she would not have become homeless. Din v Wandsworth London Borough Council A different type of situation was considered by the House of Lords in the case of Din v Wandsworth London Borough Council. The appellants in that case fell into arrears of rent and rates as a consequence of the failure of their business, and left their flat in Wandsworth in August 1979 after a distress warrant for non payment of rates was served on them. They obtained temporary accommodation in Upminster, where they lived for four months before being required to leave. When they left the Wandsworth flat, they were not at that time threatened with eviction. They would however have been evicted by December 1979, when they left the Upminster accommodation and applied for accommodation under the 1977 Act. In considering the speeches in the House of Lords, it is relevant to note that, in a number of respects, the case was not approached in the way in which it would now be approached under the 1996 Act. First, the appellants did not dispute that the authority were entitled to find that it would have been reasonable for them to continue to occupy the Wandsworth flat, notwithstanding that they could not afford it. That concession presumably reflected the prevailing understanding at that time of the law then in force, although there are later decisions to the contrary effect, including R v Hillingdon London Borough Council, Ex p Tinn (1988) 20 HLR 205 and R v Camden London Borough Council, Ex p Aranda (1998) 30 HLR 76. As I have explained, subordinate legislation made under section 177(3) of the 1996 Act now provides (read short) that in determining whether it would have been reasonable for a person to continue to occupy accommodation, account is to be taken of whether or not the accommodation is affordable for that person. The likelihood of eviction within a few months would now be a further factor to be taken into account in considering whether it was reasonable for the appellants to continue to occupy the flat, following the Birmingham case; but that matter might well have been viewed differently prior to the amendments to the legislation which were made following Puhlhofer. Secondly, the case was argued on the basis that there was an unbroken period of homelessness beginning when the appellants left the Wandsworth flat, since the accommodation in Upminster was intended from the outset to be temporary. That was not a correct understanding of the law, as became particularly apparent after Awua. As Lord Bridge of Harwich pointed out in Din at p 684, the appellants had at least an express or implied licence to occupy the Upminster accommodation, and therefore were not homeless as defined in section 1 of the 1977 Act. In Lord Bridges words, the appeal was therefore decided on a basis accepted as common ground which involved an erroneous conclusion of law from undisputed facts (p 684). The argument presented on behalf of the appellants, as reported, did not adopt the two stage approach to causation which the Court of Appeal had applied in Dyson. Instead, it focused on the definition of becoming homeless intentionally in section 17(1) of the 1977 Act. Following the approach adopted by Donaldson LJ in his dissenting judgment in the Court of Appeal (unreported), 23 June 1981; Court of Appeal (Civil Division) Transcript No 372 of 1981, it was argued that the necessity for a causal connection between leaving the Wandsworth flat and the appellants state of being homeless was implicit in the requirement under section 17(1) that it must have been reasonable to continue to occupy the flat. Continue to occupy, it was argued, meant continue to occupy and still to occupy. That construction of the words continue to occupy cannot, however, be reconciled with the terms of the provision. The majority of the House of Lords approached the case on the basis of the arguments advanced. Lord Wilberforce construed the relevant provisions of the 1977 Act as being concerned with the cause of the homelessness which was conceded to have arisen at the time when the appellants left their accommodation in Wandsworth and continued thereafter: If one takes the words of the statute, the council has to be satisfied that the applicants became homeless intentionally (section 17). Under section 4(2)(b) their duty is limited to advice and assistance if they are satisfied . that [they] became homeless . intentionally. The time factors here are clearly indicated: at the time of decision (the present), the local authority must look at the time (the past) when the applicants became homeless, and consider whether their action then was intentional in the statutory sense. If this was the right approach there could only be one answer: when the Dins left 56, Trinity Road [the Wandsworth accommodation] their action was intentional within section 17, and the council was entitled to find that it would have been reasonable for them to continue to occupy 56, Trinity Road. (pp 666 667: original emphasis) Lord Wilberforce gave a number of reasons at pp 667 668 for rejecting the appellants construction of section 17(1). The first reason reflected the wording of the provision: To achieve the result desired by the appellants it is either necessary to distort the meaning of in consequence of which he ceases to occupy (section 17(1)) or to read in a number of words. These are difficult to devise. Donaldson LJ suggests adding at the end of section 17(1) and still to occupy: the appellants, as an alternative to the date of his application. Both are radical and awkward reconstructions of the section. The second reason was that such an interpretation of the words continue to occupy was not called for by any purposive approach. The third reason was the following: The appellants interpretation adds greatly to the difficulties of the local authoritys task in administering this Act. It requires the authority, as well as investigating the original and actual cause of homelessness, to inquire into hypotheses what would have happened if the appellants had not moved, hypotheses involving uncertain attitudes of landlords, rating authorities, the applicants themselves, and even intervening physical events. The latter observations were a response to the mistaken argument that section 17(1) required the authority to determine not merely whether the applicants ceasing to occupy the accommodation was the consequence of his intentional action, but in addition whether he would otherwise have continued to occupy that accommodation until the time of the authoritys decision. They were not concerned with causal issues properly arising under the legislation. Lord Wilberforce accepted at p 667 that the authority had to investigate the actual cause of homelessness, and endorsed the decision in Dyson as an illustration of a causal connection. Establishing such a connection involves asking in the first place, in Brightman LJs words, whether, if the applicant had not done that deliberate act, she would not have become homeless. That might be described as inquiring into a hypothesis, but is inherent in the nature of an inquiry into causation. It cannot therefore have been Lord Wilberforces intention to bar such an inquiry. It would also be necessary to consider whether the chain of causation connecting the intentional action to the applicants homelessness had been broken by an intervening event, in circumstances where that was a live issue. That approach is consistent not only with an ordinary understanding of causation but also with the rationale of the concept of intentional homelessness, namely to prevent a person from obtaining a priority in the provision of accommodation to which he would not otherwise be entitled. In that regard, Lord Wilberforce accepted that the connection would be broken if the applicant obtained settled accommodation during the intervening period. Lord Fraser of Tullybelton gave a concurring speech, in which he made clear his acceptance of the need for a continuing causal connection between the deliberate conduct resulting in the applicants ceasing to occupy accommodation which it would have been reasonable for him to continue to occupy, on the one hand, and his homelessness at the time of the inquiry, on the other hand. Addressing the argument that, even if the Dins had not left the Wandsworth flat when they did, they would in any event have been evicted by the date of the authoritys inquiry, he stated: Be it so. The fact remains that the appellant's homelessness in December 1979 was a consequence of his deliberate act of moving out on August 28. I accept that for section 17(1) to be applicable there must be a continuing causal connection between the deliberate act in consequence of which homelessness resulted and the homelessness existing at the date of the inquiry. Such a causal connection exists in this case, and that being so it is immaterial to inquire whether he might in other circumstances have been homeless then for other reasons. (emphasis supplied) Given his conclusion on the facts, Lord Fraser must have considered that a causal connection between deliberate conduct falling within section 17(1) of the 1977 Act and the current state of homelessness was not affected by circumstances which might have occurred but did not in fact occur. On the other hand, Lord Fraser evidently accepted that a causal connection could be interrupted by an event which actually occurred. It is important to bear in mind Lord Frasers acceptance of the need for a continuing causal connection when considering an earlier passage in his speech: It is . irrelevant for an applicant who is homeless at the date of his application, and who became homeless intentionally, to show that he would have been homeless by that date in any event. The material question is why he became homeless, not why he is homeless at the date of the inquiry. If he actually became homeless deliberately, the fact that he might, or would, have been homeless for other reasons at the date of the inquiry is irrelevant.(p 671) This passage envisages a state of homelessness continuing between the time when the applicant became homeless intentionally and the date of the inquiry. In order for the passage to be read consistently with the passage cited previously, it must also envisage a situation where nothing has occurred to break the continuing causal connection between the initial cause of homelessness and the homelessness existing at the date of the inquiry. Granted those premises, what is said is uncontroversial. Lord Lowry, in a further concurring speech, also accepted at p 676 the need for a causal nexus between the intentional action and the homelessness subsisting at the time of the inquiry. He gave the example of the cessation of a period of homelessness following a deliberate act falling within section 17(1) and the later inception of another period of homelessness, following a period in non temporary (or settled) accommodation. As he made clear at p 678, he considered section 17(1) to be concerned with occupation other than temporary occupation: in his view, a person continues to be homeless while he enjoys temporary occupation. That aspect of his reasoning is however inconsistent with the later decision of the House of Lords in Awua. Lord Russell of Killowen, in a dissenting speech, explained at p 673 the significance of the decision in Dyson: a case which, as he observed, was the opposite of the Dins case: If in the past he has become homeless intentionally and but for that he would not now be homeless (as in the Dyson case [1980] 1 WLR 1205) well and good: that is why he is homeless now. But if on the facts as established in the present case he would be homeless now in any event, the past circumstances in which the homelessness originated appear to me to be no longer of any relevance: the past actions of the applicant are spent. (pp 673 674) Lord Bridge, in his dissenting speech, identified the two different causal questions which arise in the application of the legislation. Referring to the question of whether the applicant became homeless intentionally, he stated: Thus, on the true construction of sections 3 and 4 and in the application of section 17(1), the third question the housing authority must ask and answer may be expanded into the following form: Is the applicant's present homelessness the result of a deliberate act or omission on his part in consequence of which he ceased to occupy accommodation which was available for his occupation and which it would have been reasonable for him to continue to occupy? (p 681) As Lord Bridge explained, this construction does not require any words to be read into the legislation: Section 17 is simply concerned to define what is meant by becoming homeless intentionally. But in construing the phrases whether he became homeless intentionally and that he became homeless intentionally in the context in which they are found in sections 3 and 4, it would be absurd to hold that the housing authority are at liberty to rely on any past act or omission on the part of the applicant which satisfies the section 17 formula but which is not causally related to the applicant's present state of homelessness. (p 681) Later authorities on causation There are a number of later authorities which indicate how the law relating to causation in this context has developed since Din: how, in particular, courts have applied the principle that there must be a continuing causal connection between the deliberate act in consequence of which the applicant ceased to occupy accommodation which it would have been reasonable for him to continue to occupy, and the homelessness existing at the date of the inquiry. The more recent authorities also illustrate a range of circumstances in which it has been accepted that the causal nexus might be broken. One group of cases, of only indirect relevance in the present context, concerns the causal connection, under section 191(1) of the 1996 Act and its predecessors, between the applicants deliberate act or omission and the cessation of occupancy of accommodation. An example is the case of R v Hammersmith and Fulham London Borough Council, Ex p P (1989) 22 HLR 21, where the applicants had fled Belfast after being ordered to leave by the IRA, on pain of death, as a result of their anti social behaviour. The court held that the authority were entitled to conclude that the applicants were intentionally homeless, since the threat by the IRA was a consequence of the applicants conduct, not a novus actus interveniens breaking the chain of causation between their conduct and their homelessness. Other cases, of more direct relevance in the present context, have concerned the causal connection between the current state of being homeless and the deliberate act or failure to act in consequence of which there was a prior cessation of occupancy of settled accommodation. First, the case of R v Basingstoke and Deane Borough Council, Ex p Bassett (1983) 10 HLR 125 concerned an applicant who had given up the tenancy of a house in Basingstoke when she and her husband decided to emigrate to Canada. They moved to Canada, but their application to stay permanently was refused, and they had to return to England, where they lived in temporary accommodation in Bramley. The marriage then broke down as a result of the husbands behaviour, and the applicant left the Bramley accommodation and applied for accommodation as a homeless person. Taylor J, relying on Lord Frasers acceptance in Din of the need for a continuing causal connection, held that the applicant had not become homeless intentionally. Her homelessness was not due to her having given up the secure accommodation in Basingstoke and moved into unsettled accommodation: it was due to the break up of her marriage. Some clarification of the nature of the necessary causal connection was provided by the House of Lords in R v Brent London Borough Council, Ex p Awua, in a speech delivered by Lord Hoffmann with which the other members of the House agreed. The principal point decided was that temporary accommodation was nonetheless accommodation within the meaning of the legislation, so that a person who was entitled to occupy temporary accommodation was not homeless. In the Dyson case, therefore, Miss Dyson became homeless, as Brightman LJ recognised, when her temporary accommodation in the cottage in Cornwall ended, not when she surrendered the tenancy of her flat in Huntingdon. The case had been correctly decided on the basis that her deliberately leaving the flat was the cause of her subsequent homelessness in Cornwall. In the case of Din, Lord Lowry had been in error in considering that homelessness persisted until it was interrupted by obtaining a settled residence. The other members of the House had analysed the case in terms of causation. What persisted until the causal connection was broken was the intentionality, not the homelessness. Lord Hoffmann accepted that the causal connection would be broken by the occupation of a settled residence, as opposed to what was known from the outset to be only temporary accommodation, but expressly reserved his opinion as to whether that was the only method by which the causal connection could be broken. Another situation in which the causal connection might be broken had been accepted in Bassett. Another was accepted in the case of R v Harrow London Borough Council, Ex p Fahia. The case concerned an applicant who was found to have deliberately procured her own eviction from accommodation in Harrow of which she was the tenant. She was then provided by the authority with temporary accommodation in a guest house, where she remained for over a year. Her housing benefit was then reduced by half, on the basis that her rent was too high. The landlord then told her that she would be evicted. At first instance, Mr Roger Toulson QC, sitting as a Deputy Judge, held that the authority had erred in failing to consider whether the causal connection between the applicants deliberately procuring her eviction from her accommodation in Harrow, and her homelessness on being evicted from the guest house, had been broken by the reduction in her benefit: (1996) 29 HLR 94. In his view, a good example of the causal connection being interrupted, other than by a period in settled accommodation, would be if the applicants accommodation in the guest house had been burned down; or if, in Dyson's case, the let of the cottage had been brought prematurely to an end by the cottage being destroyed by fire. As the judge observed, Dysons case had been decided as it was because, when the let came to an end, the fact that Miss Dyson was thereafter homeless was caused by her initial conduct. If, on the other hand, somebody went into a property for a three month period but lost it after 14 days because the premises were burnt down, then in the judges view, applying the ordinary common sense test of causation, one would say that the cause of the homelessness was the fire. The judge considered Ex p Bassett to be another illustration of the same principle. That decision was upheld by the Court of Appeal: (1997) 29 HLR 974. Roch LJ, with whose judgment Aldous and Leggatt LJJ agreed, stated at pp 980 981 his agreement with the judge that the causal connection could be broken by events other than the acquisition of a settled residence, and that Bassett's case was an example of such a situation. On a further appeal to the House of Lords, the point was conceded: [1998] 1 WLR 1396, 1401. Another example is the case of R v Camden London Borough Council, Ex p Aranda (1997) 30 HLR 76. The applicant and her husband surrendered their tenancy of a house in Camden and moved to Colombia, where they obtained accommodation. On arrival in Colombia, the applicant was deserted by her husband. With no prospect of employment in Colombia, and no entitlement to social security benefits, she returned to Camden and applied for housing. It was held by the Court of Appeal that the causal connection between her deliberately giving up the accommodation in Camden, and her homelessness after leaving the accommodation in Colombia, had been broken by her husbands desertion. A further example is the case of R v Hackney London Borough Council, Ex p Ajayi (1997) 30 HLR 473. The applicant in that case left settled accommodation in Nigeria to come to the United Kingdom, where she lived in overcrowded short term accommodation. She was given notice to leave after she became pregnant. She challenged the authoritys decision that she had become homeless intentionally as a result of having left the accommodation in Nigeria, and argued that the true cause of her homelessness was her pregnancy. Having reviewed the authorities, Dyson J stated at p 478 that the fundamental question was whether there was a continuous chain of causation between the loss of the last settled accommodation and the present state of homelessness. He added at p 479: In some cases, the cause closest in point of time will be regarded as the effective cause. A good example of this might well be the case discussed in Ex p Fahia (1996) 29 HLR 94, 102, of the premises occupied on a short letting which are burnt down, thereby rendering the occupant homeless. In the particular circumstances of the case, the authority had been entitled, in the judges view, to decide that the effective cause of the applicants homelessness was her action in leaving Nigeria. A final example is the case of Stewart v Lambeth London Borough Council [2002] EWCA Civ 753; [2002] HLR 747. The applicant ceased to occupy his council flat when he was convicted of a drugs offence and sentenced to imprisonment. While in prison, he was evicted from the flat for non payment of rent. He had arranged with his sister that the rent should continue to be paid while he was in prison, but she failed to implement the arrangement. It was held that the causal chain connecting his deliberate conduct in committing the offence to his homelessness on release from prison had not been broken. It was accepted that the position might have been different if the arrangement had been implemented for a time but had then broken down. The cases of Bassett, Fahia and Aranda are capable of being explained, as Lord Carnwath suggests, on the basis that the immediate cause of the applicants homelessness in each case was an event unconnected to the temporary nature of that accommodation. That aspect of the cases is not however sufficient in itself to provide a satisfactory explanation of the decisions. If, for example, an applicant deliberately gives up a secure tenancy, and takes on a short lease of temporary accommodation following which she is likely to be homeless, as in the case of Dyson, why should it necessarily be decisive whether her occupation of that accommodation comes to an end on the expiry of the lease, on the one hand, or one day earlier, as the result of marital breakdown, on the other hand? The importance of the marital breakdown, so far as the purposes of the legislation are concerned, is not that it resulted in a slightly earlier cessation of occupation of temporary accommodation than would otherwise have been the case. It is important because it is an involuntary cause of homelessness which may be regarded in certain circumstances as interrupting the causal connection between the applicants current homelessness and her earlier conduct, for example in surrendering a secure tenancy. One situation where that is so is where, applying the words of Brightman LJ in the case of Dyson which were cited in para 30 above, it cannot reasonably be said of the applicant that if she had not done that deliberate act she would not have become homeless. Giving the legislation a purposive application, she has not therefore jumped the queue as a result of her earlier decision to surrender the tenancy. That might be the position, for example, in a case where a marriage broke down at some point after the couple had left secure accommodation, if it appeared that the marriage would probably have broken down, and the applicant would have been rendered homeless, in any event. The ordinary requirement that the cause of an event should be a sine qua non of that event would not then be satisfied. Another situation where deliberate conduct in giving up earlier accommodation may not be regarded as the cause of current homelessness is where homelessness would probably not have occurred in the absence of some other, more proximate, cause, which arose independently of the earlier conduct: where, as it is sometimes put, there is a novus actus interveniens. That is again consistent with the purpose of the provisions concerning intentional homelessness, which is to prevent queue jumping, not to deter people from moving out of secure accommodation. As counsel for the appellant submitted, that purpose does not require the adverse treatment of those who move out of secure accommodation and are subsequently rendered homeless by an event which is unconnected to their own earlier conduct, and in the absence of which homelessness would probably not have occurred. That was the position in Fahia, where the applicant had given up secure accommodation, but her subsequent eviction from temporary accommodation was the result of a reduction in housing benefit. It was true, in relation to her giving up the secure accommodation, that if she had not done that deliberate act she would not have become homeless. Nevertheless, she could have remained indefinitely in the temporary accommodation if her housing benefit had not been cut: an event which was unconnected to her earlier conduct. Her giving up the secure accommodation was therefore properly regarded as a background circumstance, rather than as the cause of her homelessness. The cases of Bassett and Aranda can also be explained on that basis. In the case of Stewart, on the other hand, the proximate cause of the applicants homelessness the non payment of rent when he was in prison was connected to the conduct which brought about his imprisonment. In Ajayi, the precariousness of the applicants accommodation after she left Nigeria appears to have been sufficient to maintain a connection between that conduct and her later homelessness. Conclusions As I have explained, the case of Din concerned a relatively narrow issue, namely the interpretation of the definition of becoming homeless intentionally, in section 17(1) of the 1977 Act. The House of Lords decision that the elements of that definition were to be considered as at the time when the applicant ceased to occupy accommodation meeting the requirements of the definition appears to me to have been correct. The decision as to the tempus inspiciendum remains good law in relation to the corresponding definition in section 191(1) of the 1996 Act. It also remains true that, if the definition is satisfied as at that point in time, it is immaterial under section 191(1) to consider subsequent hypothetical events. It is however necessary to note that, following the amendment of the legislation after Puhlhofer, and the interpretation of the amended legislation in Birmingham City Council v Ali, the length of time for which the accommodation would be available may be relevant to the question whether it would have been reasonable, at the time when the applicant ceased to occupy it, for him to have continued to occupy it. It is also necessary to note that, following Awua, the applicant need not become homeless upon ceasing to occupy the accommodation with which the definition in section 191(1) is concerned. The conclusion in Din that there must be a continuing causal connection between the deliberate act satisfying the definition now contained in section 191(1) and the homelessness existing at the date of the inquiry, also remains good law. The question is whether that homelessness has been caused by conduct meeting the requirements of section 191(1), so that the applicant is to be regarded as having become homeless intentionally for the purposes of sections 190(1) and 193(1). As counsel for the appellant submitted in the present case, the legislation is concerned with the applicants homelessness at the time of the authoritys inquiry, and therefore with the intentionality of that state of homelessness. As counsel submitted, any consideration of intentional homelessness arises after it has been decided that a person is homeless, and looks backwards to determine the operative cause of that homelessness. That approach is consistent with the object of the provisions concerning intentional homelessness, namely to prevent queue jumping by persons who, by intentionally rendering themselves homeless, would (in the absence of such a provision) obtain a priority in the provision of housing to which they would not otherwise be entitled. It would not be consistent with that purpose to deny applicants a priority which had not been affected by their intentional conduct. Din was an early case in the history of the law on this subject. The decision on the facts reflected the concessions made and the state of the law at that time. As I have explained, a case on similar facts would not now be approached in the same way. Nevertheless, Din provided a foundation for the further development of the law. Later case law has provided examples of a variety of events which might be capable of interrupting the causal connection between the deliberate act in consequence of which homelessness resulted, and the homelessness existing at the date of the inquiry: marital breakdown (Bassett; Aranda), a cut in housing benefit (Fahia), and the breakdown of an arrangement for the payment of rent (Stewart). These examples all concern actual, not hypothetical, events. These decisions are consistent with what was said about causation in Din, leaving out of account the aspect of Lord Lowrys reasoning which was disapproved in Awua. As counsel for the appellant submitted, the decision whether an applicant is intentionally homeless depends on the cause of the homelessness existing at the date of the decision. That has to be determined having regard to all relevant circumstances and bearing in mind the purposes of the legislation. As I have indicated, a later event constituting an involuntary cause of homelessness can be regarded as superseding the applicants earlier deliberate conduct, where in view of the later event it cannot reasonably be said that, but for the applicants deliberate conduct, he or she would not have become homeless. Where, however, the deliberate conduct remains a but for cause of the homelessness, and the question is whether the chain of causation should nevertheless be regarded as having been interrupted by some other event, the question will be whether the proximate cause of the homelessness is an event which is unconnected to the applicants own earlier conduct, and in the absence of which homelessness would probably not have occurred. The present case In the review decision letter, the writer began by identifying the appellants last settled accommodation, which he found was the room in the hostel. He considered whether the accommodation remained available for her occupation when she gave it up, and found that it did. He found that it would have been reasonable for her to continue to occupy it, notwithstanding her complaint about smells. In response to representations by the appellants solicitors that the appellant could not have remained in the hostel after having her baby, the writer added that, although the appellant was pregnant and the accommodation was for single people, all that meant was that it would have been reasonable for her to occupy it until she gave birth. He stated his conclusion by answering four questions: (1) Did the applicant deliberately do something or fail to do something? (2) Did the applicant cease to occupy the accommodation at [the hostel] in consequence of his (sic) deliberate act? (3) Was the accommodation at [the hostel] available for the applicant to occupy? (4) Was it reasonable for the applicant to continue to occupy the accommodation? These questions addressed the definition of becoming homeless intentionally in section 191(1) of the 1996 Act. The review officers finding that it would have been reasonable for the appellant to continue to occupy the accommodation until she gave birth was presumably made on the footing that she could have sought assistance from the authority in the meantime, and remained in the hostel while suitable arrangements were made to accommodate her and her baby. It is not apparent whether consideration was given to the question whether the authority could have considered an application and found suitable accommodation within the four months or so before the baby was due. That has not however been made a ground of challenge: on the contrary, it was conceded that the review officer was right to accept that the accommodation was reasonable for the appellant to continue to occupy until she gave birth. The decision was nevertheless deficient in the respect identified by those acting on behalf of the appellant, in that no consideration was given to the question whether the cause of her current state of homelessness was her surrender of her tenancy of the room in the hostel. If that question had been asked, it appears to me that only one answer to it was reasonably possible on the undisputed facts. As I have explained, the causal connection between an applicants current homelessness and her earlier conduct will be interrupted by a subsequent event where in the light of that event, applying the words of Brightman LJ in the case of Dyson, it cannot reasonably be said of the applicant that if she had not done that deliberate act she would not have become homeless. That is the position in the present case. The consequence of the appellants giving birth to her baby is that it cannot be said, in relation to her earlier conduct in leaving the hostel, that if she had not done that deliberate act she would not have become homeless. Nor can it be said that the policy underlying the provisions as to intentional homelessness, namely to prevent queue jumping, was applicable to her case. The birth of the baby meant that the appellant would be homeless, at the time when her case was considered, whether or not she had left the hostel when and for the reasons that she did. She had not therefore jumped the queue as a result of her earlier decision to surrender the tenancy. For these reasons I would allow the appeal. LORD NEUBERGER: At the conclusion of the oral argument, I was of the opinion that this appeal should be dismissed, because it seemed to me that we could only allow the appeal if we effectively departed from (in effect overruled) the decision of the House of Lords in Din (Taj) v Wandsworth London Borough Council [1983] 1 AC 657. I am now persuaded by Lord Reeds analysis that this appeal can and should be allowed for the reasons which he gives, which do not involve departing from Din, albeit that I would accept that we are distinguishing it on a fairly fine basis. The Boroughs case, which was accepted in both courts below, is based on the following propositions. (i) the appellant became homeless by vacating the flat in October 2011; (ii) she thereby became homeless intentionally, as found by the reviewing officer in the review letter of 31 January 2013; (iii) she should continue to be treated as having become intentionally homeless in October 2011; and (iv) she should only cease being so treated once she has been provided with permanent accommodation. As the courts below observed, this line of argument appears to be consistent with the majority view expressed by Lord Wilberforce, Lord Fraser and Lord Lowry in Din (Taj) v Wandsworth London Borough Council [1983] 1 AC 657. Din was a case concerned with the predecessor of Part VII of the 1996 Act, the Housing (Homeless Persons) Act 1977. However, section 17(1) of the 1977 Act was effectively identical to section 191(1) of the 1996 Act; and sections 4(3) and 4(5) of the 1977 Act were respectively very similar to sections 190(1) and 193(1) of the 1996 Act, and contained the same centrally important words satisfied that he became homeless intentionally. In those circumstances, I would agree with Lord Carnwath that, if this appeal could not be allowed without departing from Din, it should be dismissed. It has not been suggested that the decision of the majority in Din was arrived at per incuriam, and, although it might appear to some people to have been a somewhat harsh outcome, which may (and I mean may) not have been reached by this court today, that does not provide sufficiently strong grounds for departing from the decision. First, we should be very slow before departing from an earlier decision of this court or the House of Lords. In Fitzleet Estates Ltd v Cherry (Inspector of Taxes) [1977] 1 WLR 1345, the House of Lords had to consider a contention that it should depart from one of its earlier decisions, which had been reached some eleven years earlier by a majority of three to two. Lord Wilberforce (with whom Lord Salmon and Lord Keith agreed) said this at p 1349C F My Lords, in my firm opinion, the Practice Statement of 1966 was never intended to allow and should not be considered to allow such a course. Nothing could be more undesirable, in fact, than to permit litigants, after a decision has been given by this House with all appearance of finality, to return to this House in the hope that a differently constituted committee might be persuaded to take the view which its predecessors rejected. True that the earlier decision was by majority: I say nothing as to its correctness or as to the validity of the reasoning by which it was supported. That there were two eminently possible views is shown by the support for each by at any rate two members of the House. But doubtful issues have to be resolved and the law knows no better way of resolving them than by the considered majority opinion of the ultimate tribunal. It requires much more than doubts as to the correctness of such opinion to justify departing from it. Viscount Dilhorne took the same view at p 1350E H, saying that, even if he had thought the 1965 decision was wrong, I would not have departed from it, stressing the importance of the use of precedent as providing a degree of certainty and the orderly development of legal rules and the risk of differently constituted committees boxing and coxing (not his expression). Lord Edmund Davies also agreed, pointing out at p 1352A that the appellant simply submitted that [the 1965 decision] was wrong when delivered and that nothing has since happened to make right today what was wrong in 1965, and made it clear that this was not nearly enough to justify departing from the 1965 decision. Secondly, as Lord Hodge said in a very recent judgment in this court, with which Lord Clarke, Lord Wilson and Lord Toulson agreed, R (on the applications of ZH and CN) v London Borough of Newham and London Borough of Lewisham [2014] UKSC 62, [2014] 3 WLR 1548, para 53: [W]here Parliament re enacts a statutory provision which has been the subject of authoritative judicial interpretation, the court will readily infer that Parliament intended the re enacted provision to bear the meaning that case law had already established: Barras v Aberdeen Sea Trawling and Fishing Co Ltd [1933] AC 402, Viscount Buckmaster at pp 411 412. Lord Carnwath seems to have taken the same view at paras 83 88 and 95 97, and Lady Hale referred to Barras without disapproval at para 167, although I was somewhat less enthusiastic about it see at paras 143 148. As Mr Arden pointed out, the principle is also supported by Lord Lloyd speaking for the judicial committee in Lowsley v Forbes [1999] 1 AC 329, 340F G. Turning to the facts of this case, it must, of course, be accepted that the initial cause of the appellants homelessness was her deliberate act of vacating the flat at Lea Bridge House. If the issue had been whether the appellants homelessness at the date she vacated Lea Bridge House had been voluntary and deliberate, then that would be the end of the matter: no subsequent event, such as the birth of her daughter, could change the fact that it was. However, as the issue is whether the appellants homelessness as at the date of the review, 31 January 2013, was caused by her own deliberate act, the issue is, or at least is capable of being, more subtle. Once the appellant gave birth to her daughter, there could be said to have been a severing of what Lord Fraser of Tullybelton (who was in the majority in Din) characterised as a continuing causal connection between [her] deliberate act in consequence of which homelessness resulted and the homelessness existing at the date of the inquiry see Din at p 672. That is because, by the date of the relevant inquiry in this case, namely 31 January 2013, the applicant would have had to vacate the flat at Lea Bridge House, and therefore would have been homeless anyway, because she had given birth to a daughter eleven months earlier, and her tenancy of that flat limited the number of occupants to one person. In other words, even if the appellant had not voluntarily vacated the Lea Bridge House flat when she did, she would have been made homeless by 31 January 2013. A new event had intervened, so that it can no longer be said that, but for the appellant vacating voluntarily, she would have been in occupation of the Lea Bridge House flat in January 2013: she would not. This approach is consistent with the policy behind Part VII of the 1996 Act, as explained by Lord Lowry in Din at p 679. That is because it would mean that an applicant who had initially become deliberately homeless would be treated as deliberately homeless, and therefore as not entitled to jump the homelessness queue, until such time as she could show that, in the light of a subsequent specific event or series of events, she would on the balance of probabilities have become involuntarily homeless anyway. At that point she would no longer be treated as being deliberately homeless. If she were to be treated thereafter as being deliberately homeless, that would involve penalising her. Accordingly, I consider that the interpretation favoured by Lord Reed complies with the wording of the relevant provisions of, and with the purpose of, Part VII of the 1996 Act. With rather more hesitation, I also agree that his analysis and conclusion do not involve departing from the reasoning of the majority in Din. In this case, there is an undeniable later event which would have caused the applicant to become homeless anyway, namely the birth of her daughter, whereas in Din there was no such later causative event, merely a possibility that one might well have occurred. That is a rather narrow ground for distinguishing the earlier decision in Din, but I consider that it is justifiable in the circumstances. I have already mentioned that this conclusion is consistent with the policy of Part VII of the 1996 Act. In addition, as is stated in para 62 above, the decision in Din was reached at a relatively early stage of the homelessness law, and in the light of subsequent developments (including the more recent cases cited by Lord Reed and the fact that much of Lord Lowrys reasoning in Din was disapproved in R v Brent London Borough Council, Ex p Awua [1996] AC 55), it does not seem inappropriate to constrict the application of the decision. Thus, it is clear that a subsequent event such as permanent rehousing occurring after the deliberate homelessness can break the chain of causation, and it would seem inconsistent if an event such as what happened in this case did not have the same effect. That point is reinforced by the cases discussed in paras 47 54 above, which provide good examples of other circumstances which can break or restart the chain of causation in this field. Quite apart from all this, allowing this appeal on the ground explained by Lord Reed would, as already explained, be consistent with the correct test expressed in Din by Lord Fraser, who was one of the majority. Accordingly, while I understand, and have considerable sympathy with, Lord Carnwaths view to the contrary, I am in agreement with Lord Reed. LORD CARNWATH: (dissenting) For more than 30 years the majority decision in Din v Wandsworth LBC [1983] 1 AC 657 has been accepted as authority at the highest level for the proposition that under the homeless persons legislation (in the words of the headnote): in deciding whether the (applicants) became homeless intentionally, the housing authority had to look to the time of their action in leaving the accommodation they occupied and a subsequent hypothetical cause of homelessness did not supersede the actual cause represented by their action That result was thought by the majority to follow from the wording of the relevant provisions, under which the scope of the authoritys duty turned on an inquiry whether the applicant is homeless but whether he became homeless intentionally (section 4). As Lord Wilberforce said: The time factors here are clearly indicated: at the time of decision (the present), the local authority must look at the time (the past) when the applicants became homeless, and consider whether their action then was intentional in the statutory sense . (p 666H; see also p 671E per Lord Fraser, to like effect) The emphasis on actual rather than hypothetical causes of homeless was most clearly stated by Lord Fraser it is . irrelevant for an applicant who is homeless at the date of his application, and who became homeless intentionally, to show that he would have been homeless by that date in any event. The material question is why he became homeless, not why he is homeless at the date of the inquiry. If he actually became homeless deliberately, the fact that he might, or would, have been homeless for other reasons at the date of the inquiry is irrelevant. (p 671G) The same approach was reflected in Lord Wilberforces concern that the alternative would pose problems for authorities, who would be required as well as investigating the original and actual cause of homelessness, to inquire into hypotheses what would have happened if the appellants had not moved (p 667F) It was reflected also in the way in which Lord Lowry, having accepted that the act of becoming intentionally homeless must be causally linked to the homelessness at the time of the application to the authority, characterised the appellants argument, which he rejected Their argument necessarily disregards this aspect of causation and concentrates on something else: what would have been the position if the deliberate act which caused the relevant homelessness had not occurred. They then say that the real cause of their homelessness is not the act which caused it but something which did not cause it, namely the fact that they would have been homeless unintentionally by December if they had not already become homeless intentionally in August. (p 676D E) The contrary approach of the minority was put succinctly by Lord Russell: if on the facts as established in the present case he would be homeless now in any event, the past circumstances in which the homelessness originated appear to me to be no longer of any relevance: the past actions of the applicant are spent. (p 674A). The majoritys approach may have seemed harsh at the time. As applied to the facts of the case (involving mounting arrears of rent), it has been overtaken by statutory provisions. In Din the appellant had conceded that he could not challenge the authoritys decision that it would have been reasonable for him to continue to occupy the accommodation in question, notwithstanding his keenness to avoid mounting debts, although Lord Fraser noted that the position might have been different in a part of the country under less housing pressure (p 671A B). This problem has been addressed, not by substituting hypothetical for actual causes in the principal provision, but by defining the matters to be taken into account in deciding whether continued occupation is reasonable. As Lord Reed points out (para 15), subordinate legislation under section 177(3), introduced in 1996 provides that in determining that issue account is to be taken of the applicants financial resources and the cost of the accommodation. In the words of the Code of Guidance: one factor that must be considered in all cases is affordability (para 8.29). The one area of possible disagreement between the members of the majority in Din was on a matter not essential to their decision, that is the interpretation of the decision in Dyson v Kerrier District Council [1980] 1 WLR 1205. This concerned the correct approach to homelessness resulting from an intentional move from settled accommodation (in Huntingdon) followed by a limited period in temporary accommodation in a winter let in Cornwall. The Court of Appeal had held that there was a sufficient causal link between the original decision and the subsequent homelessness to satisfy the statutory test. In Din Lord Wilberforce thought the case was rightly decided: There (as here) the applicant intentionally surrendered available accommodation in order to go to precarious accommodation (a winter letting) from which she was ejected and so became homeless. It was held (in my opinion, rightly) that she had become homeless in consequence of her intentional surrender. This does not in any way support an argument that a subsequent hypothetical cause should be considered to supersede an earlier actual cause. It merely decides that a disqualification for priority by reason of an intentional surrender is not displaced by obtaining temporary accommodation. As pointed out by Ackner LJ in the Court of Appeal, it can be displaced by obtaining settled accommodation. Lord Fraser agreed because on the facts of that case the original cause of her homelessness was still in operation at and after the time when she had to leave the winter let. Lord Lowry alone expressed doubts about the correctness of the reasoning in Dyson. He said: It could well be that the plaintiff, having become homeless intentionally when she left the Huntingdon flat, was continuously homeless during the temporary winter letting and therefore rightly lost her priority. That is a result which I would understand and accept. But that was not the basis of decision in Dyson . That limited area of difference was resolved in 1995 by the House of Lords in R v Brent London Borough Council, Ex p Awua [1996] AC 215. Lord Hoffmann acknowledged that in finding the necessary causal link the Court of Appeal in Dyson had stretched the literal wording, to avoid a construction which would enable people to jump housing queues by making themselves homeless at one remove. In answer to the question what constitutes the causal link?, he cited with approval Lord Wilberforces explanation that the disqualification on the grounds of intentional homelessness was not displaced by obtaining temporary accommodation: The distinction between a settled residence and temporary accommodation is thus being used to identify what will break the causal link between departure from accommodation which it would have been reasonable to continue to occupy and homelessness separated from that departure by a period or periods of accommodation elsewhere. This jurisprudence is well established (it was approved by this House in Dins case) and nothing I have said is intended to cast any doubt upon it, although I would wish to reserve the question of whether the occupation of a settled residence is the sole and exclusive method by which the causal link can be broken. He rejected Lord Lowrys suggestion that Mrs Dyson had become homeless when she left the settled accommodation and remained so during the temporary let: of course Dysons case implies no such thing. It decides only that her homelessness after eviction from the cottage in Cornwall is intentional because it was caused by her decision to leave the flat in Huntingdon. Some support for a contrary view can be found in the speech of Lord Lowry in Dins case but this opinion was not shared by the other members of the House, who analysed the case solely in terms of causation. What persists until the causal link is broken is the intentionality, not the homelessness. Nothing in Awua casts any doubt on the principle, established by the majority in Din, that the definition of intentional homelessness is not concerned with hypothetical causes. The law on these issues has thus been settled for some 20 years or more. Although these cases were decided under the previous legislation, in terms of the wording of the relevant provisions of the 1996 Act, nothing has changed. Section 190(1) includes precisely the same contrast of tenses as was found in section 4 of the 1977 Act, and was regarded as determinative in Din. It applies where the authority are satisfied that the applicant is homeless, but became homeless intentionally. To my mind this is a clear indication that Parliament intended the same approach to apply as under its predecessor. Lord Reed has undertaken his own re analysis of Din in a way which had not suggested by the parties before us, nor (to my knowledge) by anyone else in the three decades since it was decided. While he makes some interesting points, I find it hard with respect to accept that such a re analysis is desirable or necessary. Lord Reed observes that these provisions have given rise to numerous difficulties of interpretation (para 8). That may have been so in the past, but it seems all the more reason for leaving well alone an aspect of the law which was regarded as settled in the highest court at a relatively early stage. As already noted, the limited difference between Lord Lowry and the other members of the majority on that issue was settled 20 years ago in Awua. The reasoning of the review officer in the present case seems to me a perfectly orthodox reflection of the majority approach in Din as endorsed in Awua. Miss Bretherton for the appellant has adopted a rather different approach. She has not sought to re interpret the majority decision in Din, but she submits that developments in both the statutory framework and in the case law mean that the decision need no longer be treated as binding, or if necessary, justify overruling it. As I understand her submissions, the principal developments on which she relies are: i) The 1996 Act involved a major restructuring of the law, not simply a consolidation, so that previous case law, though persuasive was no longer formally binding. ii) More particularly, the review procedure, introduced by section 202 of the 1996 Act, provides for a full merits review of the application on the basis of the facts at the date of the review. The reviewing officer, in the words of Lord Slynn (Mohammed v Hammersmith and Fulham London Borough Council [2002] 1 AC 547 para 26) is not simply considering whether the initial decision was right on the material before it at the date it was made. He may have regard to information relevant to the period before the first decision but only obtained thereafter and to matters occurring after the initial decision. iii) More recent cases have shown, as anticipated by Lord Hoffmann, that the causal link following an act of intentional homelessness may be broken by an occurrence other than the acquisition of settled accommodation, provided that it is unconnected with the temporary nature of the intervening accommodation, for example the breakdown of a marriage (R v Basingstoke and Deane Borough Council, Ex p Bassett (1983) 10 HLR 125), or a reduction in housing benefit (Ex p Fahia (1996) 29 HLR 94). The same thinking should apply to the birth of the child in the present case, which would have led to the loss of the accommodation in any event. I will take these points in turn. For the reasons already given when commenting on Lord Reeds judgment, I do not consider that the 1996 Act was intended to alter in any way the concept of intentional homelessness, or gives any reason for departing from or questioning Din particularly having regard to its then recent reaffirmation in Awua. It is true that the new review procedure allows consideration of new evidence, on those issues where the inquiry is directed to the present (such as local connection as in Mohamed). However, that has no relevance in my view to the issue of intentionality, which remains specifically related to the past. On Miss Brethertons last point, I do not see that her client can gain any help from cases such as Bassett and Fahia. As she says, the effect of these, if correct, appears to be to create an exception to the Dyson approach where the intervening accommodation comes to an end due to a change of circumstances for reasons not directly linked to its temporary nature, such as a breakdown of marriage which leads to exclusion from the temporary home. Another example, suggested by Toulson J in Fahia is where the temporary accommodation is destroyed by fire. The key to these cases is that the new event is the direct cause of the eventual homelessness, and is treated as its operative cause, thus breaking the chain of causation from the (intentional) loss of the previous settled accommodation. Neither the logic of the exception, nor its precise limits are entirely clear. In R v Hackney London Borough Council, Ex p Ajayi (1997) 30 HLR 473, Dyson J upheld the authoritys refusal to treat the operative cause of homelessness as the applicants pregnancy, which was the immediate cause of her eventual homelessness. He gave no clear explanation for the difference, other than that the issue was one for the authority to answer in a practical common sense way having regard to all relevant circumstances (p 479). Those cases, whatever their precise rationale, do not support a departure from the Din principle that the focus is on actual not hypothetical causes. Nor do they help the present claimant. The birth of her child might have been, but was not, the actual cause of her loss of either the original or the temporary accommodation. In conclusion, while I have much sympathy with the appellants arguments, I do not think we can properly accede to them. I would therefore have dismissed the appeal. |
The law as to the duty of disclosure is now reasonably well settled. The Lord Advocate accepts that article 6(1) of the European Convention on Human Rights requires that the Crown disclose to the defence any material of which it is aware which would tend either to materially weaken the Crown case or materially strengthen the case for the defence: McLeod v HM Advocate (no. 2) 1998 JC 67, 79F G, 80E F; Holland v HM Advocate [2005] UKPC D1, 2005 1 SC (PC) 3, para 64; Sinclair v HM Advocate [2005] UKPC D2, 2005 1 SC (PC) 28, paras 28, 33; McDonald v HM Advocate [2008] UKPC 46, 2008 SLT 993, para 50; Allison v HM Advocate [2010] UKSC 6, para 25. It follows, applying this principle, that all police statements as a class must be disclosed to the accused: HM Advocate v Murtagh [2009] UKPC 36, 2009 SLT 1060 para 17. The appellant, Paul McInnes, went to trial in December 2001 and was convicted before it had become the practice of the Crown Office to make police statements available to the defence. Statements made to the police by a Crown witness named Brian Pearce, including statements which he made after attending two identification parades, were not disclosed. In the light of what was decided in the cases of Holland and Sinclair the Scottish Criminal Cases Review Commission decided to refer this case to the High Court of Justiciary under section 194B of the Criminal Procedure (Scotland) Act 1995. The appellant then lodged grounds of appeal in which he submitted that his conviction amounted to a miscarriage of justice. One of his grounds of appeal was that there had been a misdirection by the trial judge, but it was not insisted upon at the hearing of the appeal. The other, which was insisted upon, was directed to the issue of disclosure. A minute was also lodged in which it was contended that the reference gave rise to a devolution issue, in that there had been a failure by the Crown to disclose information that would have been of material assistance to the defence. The appeal court held that the failure to disclose Pearces police statements did not give rise to the appellant being denied a fair trial or, in so far as the question might be different, mean that there had been a miscarriage of justice: [2008] HCJAC 53, 2009 JC 6, para 22. For the appellant it had been submitted that the proper question was not whether disclosure of the police statements would have made a difference to the outcome of the trial but whether it might have made a difference: para 15. The appeal court rejected this argument. The test which it applied was whether there was a real risk of prejudice: para 20. The appellant applied for leave to appeal against the determination of the devolution issue to the Judicial Committee of the Privy Council. The question which he sought to raise was whether the appeal court had applied the correct test. On 29 January 2009 the appeal court granted leave to appeal. On 1 October 2009 the devolution jurisdiction of the Judicial Committee was transferred to this Court by section 40 of and Schedule 9 to the Constitutional Reform Act 2005. At first sight it might appear that the question whether the High Court of Justiciary applied the correct test when disposing of an appeal does not give rise to a devolution issue at all. Devolution issues as defined in para 1 of Schedule 6 to the Scotland Act 1998 mean questions about the legislative competence of the Scottish Parliament and the exercise or non exercise of functions by members of the Scottish Executive. They do not extend to things that are done or not done by the courts. As I said in Robertson v Higson [2006] UKPC D2, 2006 SC(PC) 22, para 5, however, it can be taken to be well settled that it is open to the Supreme Court to determine under para 13 of Schedule 6 to the Scotland Act 1998 not only the devolution issue itself but also questions which are preliminary to and consequential upon the determination of that issue: see also Mills v HM Advocate [2002] UKPC D2, 2003 SC (PC) 1, para 34. The question of remedy forms part of the devolution issue. So too does the test that is to be applied in determining whether the appellant is entitled to that remedy. In some cases these questions will give rise to no special features of Scots criminal law or practice. In others, as in this case, the reverse will be true. That does not mean that it is not open to this Court to determine the question. But we must be careful to bear in mind the fact that the High Court of Justiciary is the court of last resort in all criminal matters in Scotland, and that when we are dealing with questions of this kind it is the law of Scotland that must be applied: see Montgomery v HM Advocate [2000] UKPC D2, 2001 SC (PC) 1, pp 12, 13; Robertson v Higson, paras 5, 6. In Spiers v Ruddy [2007] UKPC D2, 2009 SC (PC) 1, para 16 Lord Bingham of Cornhill referred to the need for reticence, given the Boards restricted role in deciding devolution issues. It is not for this Court to comment on the test that is applied in fresh evidence appeals which do not raise a devolution issue. Its task is to identify the test where the complaint is of non disclosure in violation of the article 6(1) right to a fair trial. It is for this purpose, if I may respectfully say so, that Lord Browns helpful references to the position in English law fall to be read. To set the question before this court into its proper context I must now describe the facts of the case in more detail. The statements The appellant, with two others, was convicted after trial in the High Court of Justiciary at Glasgow of assaulting Brian James Sweeney to his severe injury, permanent impairment and the danger of his life and of his attempted murder. He was sentenced to eight years imprisonment. The incident that gave rise to his conviction took place outside a hotel in Duntocher, Dunbartonshire. A fight broke out on the dance floor and stewards ejected various persons, including the appellant, his two co accused and the complainer, from the premises. As soon as he was outside the hotel the complainer was struck on the head and brought to the ground, where he was set upon by a number of individuals. The crucial issue at the trial was the identity of those individuals. The complainer had no recollection of the events which led to the assault upon him. The case against the appellant rested on the evidence of two stewards, Craig McKernan and Brian Pearce. The argument for the appellant was directed solely to the non disclosure of police statements relevant to Pearces evidence. Pearce gave a statement to the police within a few hours of the incident. In that statement he identified one of the co accused as an assailant. He also described another man by his appearance and clothing, neither of which fitted the appellant. In a further statement later that same day he said that he saw one of the group kick the complainer on the head. He gave a description of that person in which he said, among other things, that he was wearing a black leather jacket, jeans and a T shirt. He made further statements to the police after viewing two identification parades. It is those statements that lie at the heart of this appeal. At a relatively early stage in the police inquiry after the incident attention had focused upon, among others, a man named Gary Esdale. Pearce was asked to attend an identification parade on 17 January 2001, where Esdale was placed at position four. Pearce was unable to identify positively any person on that parade as having been involved in the incident. But when he was asked whether any of those present resembled any such person he replied four or six. He said that the basis for the resemblance was the shape of his face. The person at position six was a stand in. In a statement which he then gave to the police Pearce said: I identified the men standing at positions four and six as being similar to the persons to whom I referred to [sic] in my earlier statement to the police. Numbers 4 and 6 looked very familiar and I would say that one of them was the guy that kicked Mr Sweeney on the face that night that resulted in him being knocked to the ground. I am unsure of this identification. Pearce having been precognosced, suspicion then centred upon the appellant. On 2 August 2001 he was put on an identification parade. He was placed at position three. Pearce, having viewed the parade, was again unable positively to identify anyone. When he was asked if there was anyone who resembled anyone who had been involved in the incident, he said number three. He said that this was because of his facial features. He was again interviewed by the police after this parade. In the statement that he gave on this occasion he said: I identified the person at position number three as similar to the person I described to the police in my statement. This person had the same facial features as I described in my original police statement. I cannot be sure if it was the same person as on the night who [sic] I have partially indentified. No proceedings were taken against Esdale. After the appellant and his co accused had been indicted the appellants solicitor, in preparation for his defence, attended the offices of the procurator fiscal. In accordance with the then practice, Crown precognitions were read out to him in a way which allowed him to take a detailed note of what the witnesses were expected to say at the trial. The note which the solicitor took of what Pearce was expected to say included this passage: He later attended an identification parade for Paul McInnes and he indicated that he was similar to the man in the leather jacket. He appeared to him to be familiar. Facially he was different because he had a goatee beard which the person at the dancing had not had, he was therefore unsure about this identification at that time but indicated that without the beard he was certainly more like to one in the leather jacket than the person he identified at the Gary Easedale [sic] parade. The proceedings in the courts below At the trial Pearce identified all three accused as persons who were inside the hotel on the night of the incident. He identified the appellant as the person whom he had seen delivering the kick to the complainers head which caused him to fall to the ground. In the course of his evidence in chief he was asked to explain his reference to the facial features of the person he said that he recognised when he viewed the identification parade on 2 August 2001. He gave this explanation: It was because I told to the police at the time he never had a goatee beard but on the line up he had a goatee beard and I couldnt identify him positively and I told that to the police. In his submission to the appeal court the appellants solicitor advocate, Mr Carroll, emphasised that counsel conducting the appellants defence had not had available to him the various statements that Pearce had given to the police. He drew attention to inconsistencies in these statements. On exiting the Esdale parade, which the appellant did not attend, Pearce said that one of the persons on that parade was the guy who had kicked the complainer on the face. In his exit statement after viewing the parade which the appellant did attend he did not refer to the appellant as doing anything, nor did he withdraw the identification that he had made at the Esdale parade. The explanation that he later gave for his uncertainty at the appellants parade, attributing this to the goatee beard, was not given in his exit statement. Mr Carroll said that, if he had had these statements, counsel would have been able to put to Pearce the precise words that had been recorded in these statements. This would have enabled him to undermine Pearces more confident identification at the trial of the appellant as the person who had administered the kick on the head. The appellants solicitor advocate accepted that the issue was whether, the police statements not having been made available to the defence prior to or at the trial, the appellant had been denied a fair trial. In developing that submission however he said that the proper question was not whether disclosure of those statements would have made a difference to the outcome of the trial but whether it could have made a difference. He based this part of his argument on the following passage from Lord Rodger of Earlsferrys judgment in Holland v HM Advocate, para 82: Information about the outstanding charges might therefore have played a useful part in the defence effort to undermine the credibility of the Crowns principal witness on charge 2. At least, that possibility cannot be excluded. One cannot tell, for sure, what the effect of such cross examination would have been. But applying the test suggested by Lord Justice General Clyde in Hogg v Clark 1959 JC 7, 10, I cannot say that the fact that counsel was unable to cross examine in this way might not possibly have affected the jurys (majority) verdict on charge 2 and hence their verdict on charge 3. The appeal court, as I have said, did not accept this argument. Delivering the opinion of the court, the Lord Justice General (Hamilton) said in para 20 that the critical issue was whether the principle of equality of arms had been breached, and that it would be if access to the statement in question would have been of material assistance to the defence or, viewing the matter realistically, the denial of access might have prejudiced the defence. Whether that was so would be a matter for assessment by the appeal court in the circumstances of each case. It was not entitled in effect to avoid that task by adopting a test which depended simply on whether the denial of access might not possibly have affected the outcome. The Lord Justice General then added these words at the end of that paragraph: Lord Rodgers test has been used (or abused) in argument in this jurisdiction to suggest that the threshold for reversing the verdict of a jury in non disclosure and analogous cases is low. This may be a misreading of Lord Rodgers words. In the context of determining whether there has been a miscarriage of justice (or, we venture to think, an unfair trial) a robust test is required. The test of a real risk of prejudice to the defence was, rightly in our view, adopted in Kelly v HM Advocate [2005] HCJAC 126, 2006 SCCR 9. In Kelly v HM Advocate, where a statement to the police by the complainer was not made available to the defence, counsel for the appellant based his submission on the test that had been suggested in Hogg v Clark, which he said had been approved by Lord Rodger in Holland v HM Advocate, at para 82. Delivering the opinion of the court in Kelly, Lady Cosgrove did not adopt that approach. She rejected the submission that non disclosure of the statement might have made a difference to the outcome, saying that it did not give rise to any real risk of prejudice to the appellant: para 33. She said that in all the circumstances the court was of the opinion that the appellant was not denied a fair trial, and that as a consequence there was no miscarriage of justice: para 35. The issue before this court The Crown maintained in the appeal court that it had performed its duty of disclosure by reading to the appellants solicitor the terms of Pearces precognition in circumstances where the solicitor had been able to take, and had taken, full and accurate notes. The appeal court rejected that argument on the ground that the Crown was obliged to disclose all police statements of witnesses who were to be led at the trial, and it has not been renewed in this court. The Crown now accepts that there was a failure in the duty of disclosure. So this point is no longer in issue. The question for this court, given that there was a failure in the duty of disclosure, is what the correct test is for the determination of the appeal. It does not extend to the question whether the test, once it has been identified, was applied correctly. This is because section 124(2) of the Criminal Procedure (Scotland) Act 1995, as amended by the Scotland Act 1998 (Consequential Modifications) (No 1) Order 1999 (SI 1999/1042), provides that every interlocutor and sentence pronounced under Part VIII of the Act, which deals with solemn appeals, shall be final and conclusive and not subject to review in any court whatsoever except for the purposes of an appeal under para 13 (a) of Schedule 6 to the Scotland Act 1998. The application of the test to the facts of the case was a matter that lay exclusively within the jurisdiction of the appeal court. But, as the appeal court itself recognised when it gave leave in this case, the question as to what the correct test is forms part of the devolution issue. It is properly the subject of an appeal under para 13(a) of Schedule 6 and is open to review by the Supreme Court. The test Two questions arise in a case of this kind to which a test must be applied. The tests in each case are different, and they must be considered and applied separately. The first question is whether the material which has been withheld from the defence was material which ought to have been disclosed. The test here is whether the material might have materially weakened the Crown case or materially strengthened the case for the defence: HM Advocate v Murtagh, para 11. The Lord Advocates failure to disclose material that satisfies this test is incompatible with the accuseds article 6 Convention rights. In the case of police statements, the position is clear. Applying the materiality test, all police statements of any witnesses on the Crown list must be disclosed to the defence before the trial: McDonald v HM Advocate, para 51. The second question is directed to the consequences of the violation. This is the question that arises at the stage of an appeal when consideration is given to the appropriate remedy: see Spiers v Ruddy 2009 SC (PC) 1. In that case it was the reasonable time guarantee that was in issue, but I think that the ratio of that case applies generally. As Lord Bingham of Cornhill put it in para 17, the Lord Advocate does not act incompatibly with a persons Convention right by continuing to prosecute after the breach has occurred. A trial is not to be taken to have been unfair just because of the non disclosure. The significance and consequences of the non disclosure must be assessed. The question at the stage of an appeal is whether, given that there was a failure to disclose and having regard to what actually happened at the trial, the trial was nevertheless fair and, as Lady Cosgrove said in Kelly v HM Advocate, para 35, as a consequence there was no miscarriage of justice: see section 106(3) of the Criminal Procedure (Scotland) Act 1995. The test that should be applied is whether, taking all the circumstances of the trial into account, there is a real possibility that the jury would have arrived at a different verdict. It has been suggested that Lord Rodgers observations in Holland v HM Advocate, para 82, indicate that it is for the Crown to show that the non disclosure could not possibly have affected the jurys verdict: Holland v HM Advocate 2005 SCCR 417, commentary by Sir Gerald Gordon, para. 5. If so, the effect would be to set a relatively low threshold. In my opinion, however, his observations must be read in their proper context. In para 43 Lord Rodger said that the ultimate question was whether the trial as a whole was fair. He then dealt with the Crowns obligation of disclosure in para 64, where he referred to the accepted test as to whether the information was material. Having done this, he returned to the issue of fairness. In para 77 he said: It is now necessary to consider whether, taken as a whole, the appellants trial was fair in terms of article 6(1). Having examined the significance of the Crowns failures in paras 78 85, he said that he had arrived at the conclusion that the failures to disclose and the Advocate Deputes reliance on dock identifications were incompatible with the Convention right since, taken together, they had resulted in an unfair trial. The sentence in Holland v HM Advocate, para 82 on which Mr Carroll relies (quoted in para 14, above) was directed to the use that might have been made of the outstanding charges to undermine the appellants credibility. The issue with which he was dealing here was the materiality of that information. This was a necessary step in the assessment of the question whether there had been a fair trial. The words might not possibly have affected the jurys (majority) verdict are used. But Lord Rodger does not say that this is the test to be applied in determining whether the trial as a whole was fair. In any event, I do not think that it would be the correct way of describing it. Commenting on what Lord Rodger said in para 82, the Lord Justice General said in the passage which I have quoted from para 20 of his opinion (see para 16, above) that it would be a misreading of Lord Rodgers words to conclude that the threshold for reversing the verdict of the jury in non disclosure and analogous cases is low. I would endorse this assessment. The threshold which must be crossed is the same as that which applies in any case where it is maintained that, because there was a violation of article 6(1) that affected the way the trial was conducted, there has been a miscarriage of justice. I also agree that, in a case of that kind, the question whether there has been a miscarriage of justice and the question whether the trial was unfair run together. It is axiomatic that the accused will have suffered a miscarriage of justice if his trial was unfair. The statutory ground for setting aside the jurys verdict under section 106(3) of the 1995 Act enables the appeal court to provide an effective remedy to the appellant for the breach of his Convention right. This is done when the appeal court makes its own assessment as to whether the trial as a whole was fair. It will allow the appeal on the ground that there was a miscarriage of justice if it concludes that it was not. The Lord Justice General then said at the end of para 20 that a robust test was required. The test which he identified was whether there was a real risk of prejudice to the defence. These remarks, I would respectfully suggest, need some explanation. They invite questions as to how robust the test must be and how the real risk is to be identified. They need to be taken just one step further to indicate more precisely the test that should be applied. The question which lies at the heart of it is one of fairness. The question which the appeal court must ask itself is whether after taking full account of all the circumstances of the trial, including the non disclosure in breach of the appellants Convention right, the jurys verdict should be allowed to stand. That question will be answered in the negative if there was a real possibility of a different outcome if the jury might reasonably have come to a different view on the issue to which it directed its verdict if the withheld material had been disclosed to the defence. Conclusion Although I have suggested that the description of the test which the Lord Justice General gave at the end of para 20 was incomplete, it is clear from the discussion that follows that the test that the appeal court actually applied was the correct one. As I have already observed, it is not for this court to say whether the test was applied correctly. But it is open to it to examine the reasons given by the appeal court for concluding that there had not been a miscarriage of justice to see whether they show that it applied the correct test. Having considered what the Lord Justice General said in paras 21 22, I am entirely satisfied on this point. There was a thorough examination of all the relevant issues, and the conclusion that the appeal court came to was one which a court, applying the correct test, could be expected to have come to. I would dismiss the appeal. I agree that the appeal should be dismissed. I make only two brief LORD RODGER observations. It is now settled that the Crown must disclose certain classes of material, including the police statements of witnesses on the Crown list. In this case, as Lord Hope has explained, the Crown failed to disclose certain statements which their witness, Pearce, made to the police. There was therefore an infringement of the appellants article 6(1) Convention rights. Sometimes, it is possible to say that certain material does actually weaken the Crown case. For example, where identity is an issue, the Crown case is weakened by the failure of the principal eyewitness, when viewing an identity parade, to pick out the accused as one of those involved in an assault. So, evidence of that failure would have to be disclosed. But the obligation to disclose is not so limited. As Lord Macfadyen held in Maan v HM Advocate 2001 SLT 408, 416, at para 27, in a passage adopted in the Privy Council in Holland v HM Advocate 2005 1 SC (PC) 3, 24, at para 72, the accuseds right is to have disclosed to him material necessary for the proper preparation as well as the proper presentation of his defence. And, quite often, even the accuseds advisers will not know whether material will actually prove useful until they see it. Nevertheless, as Lord Brown indicates at para 39 of his judgment, police statements of Crown witnesses must be disclosed because there is always the possibility that, in the hands of the defence, they may materially weaken the Crown case or materially strengthen the defence case. The same approach is appropriate when the Crown have to decide whether to disclose a particular piece of material. It must be disclosed to the accuseds representatives if, in their hands, it might materially weaken the Crown case or materially strengthen the defence case. How, if at all, they actually use the material when preparing or presenting the defence is, of course, entirely a matter for them. I accordingly agree with Lord Browns observations in para 39 of his judgment and with Lord Hopes observations to similar effect in Allison v HM Advocate. The significance of any infringement of an accuseds article 6(1) Convention rights will depend on the circumstances. As has been said on many occasions, not every infringement of a particular right will mean that the accuseds trial as a whole has been unfair. Obviously, for example, failure to disclose a police statement of a Crown witness who is not called to give evidence will usually have no effect on the fairness of the trial. And, even in a case like the present where the witness, Pearce, gave evidence, an appellate court will have to assess how the failure by the Crown to disclose various statements which he made to the police actually affected the trial. Of course, an appellant can always argue that, if his advocate had been armed with the statements, it is possible that he could have persuaded the jury to come to a different conclusion. But the law deals in real, not in merely fanciful, possibilities. So, in cases like the present, an appellate court will only hold that a trial has been unfair and quash the jurys verdict as a miscarriage of justice if there is a real possibility that, if the statements had been disclosed, a jury might reasonably have come to a different verdict. Mutatis mutandis, this is the same as the test in Stirland v DPP [1944] AC 315, 321, which has often been applied by the appeal court. with what Lord Brown says in para 35 of his. I therefore agree with what Lord Hope says in para 24 of his judgment and LORD WALKER Hope and Lord Rodger in their judgments, with which I agree. I agree that this appeal should be dismissed for the reasons given by Lord LORD BROWN The central question raised in this devolution appeal is whether the appeal court applied the right test in deciding that the Crowns failure to disclose a particular prosecution witnesss statement to the police did not result in a miscarriage of justice. Lord Hope has set out the relevant facts of the case and none of these need I repeat. Lord Hope also most helpfully explains, first, that it is the law of Scotland that must be applied in this case and, secondly, the limits of a devolution appeal to this court, namely that we should decide whether the court below adopted the correct legal test but not whether (assuming it did) it then applied that test correctly on the facts. I also share what I understand to be Lord Hopes view that there will have been a miscarriage of justice if, but only if, the trial as a whole was unfair and, in turn, that it is only if the trial as a whole was unfair that the Crown can properly be held to have acted in breach of article 6 of the Convention so as to require that the appellants conviction be set aside. The question, therefore, is whether the non disclosure of Pearces statement made the appellants trial unfair. What, then, in the context of an undisclosed statement, makes a trial unfair? This, ultimately, is the determinative question in the case. I would answer it as follows. The trial will be adjudged unfair if, but only if, the appeal court concludes that the non disclosure gave rise to a real risk of prejudice to the defence. This in turn depends upon whether the appeal court regards the non disclosure as having denied the defence the real possibility of securing a different outcome. In short, in a case such as this, the appeal should be allowed if the court decides that, had defence counsel been in a position to make use of the undisclosed statement, the jury might reasonably have come to a different conclusion, otherwise not. It is that which must decide whether the jurys verdict should be allowed to stand. I understand Lord Hopes approach in para 22 to be entirely consistent with this formulation. This, I apprehend, would be the position in English law (both as to the test to be applied in England as to whether the conviction under appeal is unsafe and as to the decision being one for the appeal court itself) and I can see no good reason why it should be any different under Scottish law. In Bain v The Queen 72 JCL 34, BC ([2007] UKPC 33) (cited at para 7 51 of Archbold 2009) Lord Bingham of Cornhill, giving the opinion of the Privy Council, put the matter thus (at para 103): A substantial miscarriage of justice will actually occur if fresh, admissible and apparently credible evidence is admitted which the jury convicting a defendant had no opportunity to consider but which might have led it, acting reasonably, to reach a different verdict if it had had the opportunity to consider it. True, that was a case of fresh evidence rather than an undisclosed statement but, as a member of that Board, I did not regard the opinion there as inconsistent with an earlier opinion I myself had given in Dial and Dottin v The State [2005] UKPC 4, para 31, in the context of fresh evidence which showed the main prosecution witness to have lied during his evidence at trial: In the Boards view the law is now clearly established and can be simply stated as follows. Where fresh evidence is adduced on a criminal appeal it is for the Court of Appeal, assuming always that it accepts it, to evaluate its importance in the context of the remainder of the evidence in the case. If the Court concludes that the fresh evidence raises no reasonable doubt as to the guilt of the accused it will dismiss the appeal. The primary question is for the Court itself and is not what effect the fresh evidence would have had on the mind of the jury. That said, if the Court regards the case as a difficult one, it may find it helpful to test its view by asking whether the evidence, if given at the trial, might reasonably have affected the decision of the trial jury to convict (Pendleton at p83, para 19 [R v Pendleton [2002 1 WLR 72]). The guiding principle nevertheless remains that stated by Viscount Dilhorne in Stafford (at p906 [Stafford v Director of Public Prosecutions 1974 AC 878]) and affirmed by the House in Pendleton: While . the Court of Appeal and this House may find it a convenient approach to consider what a jury might have done if they had heard the fresh evidence, the ultimate responsibility rests with them and them alone for deciding the question [whether or not the verdict is unsafe]. That being the correct approach, is there any reason for concluding that the Lord Justice General adopted some different (and, from the appellants point of view, less favourable) test in the present case? In my judgment there is not. The test he adopted was that of a real risk of prejudice to the defence. True, he did not spell out that what is meant by this is that the defence was denied the real possibility of securing a different outcome. But really that was implicit in his rejection of the argument that the question to be asked was merely whether the non disclosure might not possibly have affected the outcome. There is a critical difference between asking whether disclosure might not possibly have led the jury to acquit and whether that was a real possibility. The difference is between what is merely conceivable and what is realistic. The Lord Justice General rejected the former test as too low, rightly preferring the latter as robust. The judgment cannot be seriously criticised for speaking of a robust test, a test immediately then explained as the test of a real risk of prejudice to the defence. Nor is the Lord Justice General to be criticised for his subsequent comment that questioning based on the undisclosed statement here would hardly have constituted a coup de grce a throwaway expression from which it cannot possibly (still less realistically) be inferred that the appeal court was approaching the case on the footing that nothing short of this would suffice. The one other matter I want to touch on is disclosure. The devolution case law now establishes that all police statements are disclosable, on the basis that, as a class, they are to be regarded as material which either materially weakens the Crown case or materially strengthens the case for the defence (para 11 of Lord Hopes judgment in HM Advocate v Murtagh [2009] UKPC 36). As, however, Lord Hope points out at para 18, it by no means follows that, because the statement should have been disclosed on this basis, a failure to disclose it involves a breach of the accuseds article 6 Convention right to a fair trial. Statements as a class are routinely disclosable because there is always the possibility that they may prove to be harmful to the Crown or helpful to the defence. In the event of non disclosure, however, the trial is only to be regarded as unfair if in fact disclosure might have harmed the Crown or helped the defence to such an extent that in retrospect the defence can be shown to have lost a real possibility of acquittal. To say that Pearces statement here should have been disclosed because it materially weakened the Crowns case is not to say that realistically its disclosure would in fact have significantly weakened the Crowns case. Indeed, in retrospect it might have been better to formulate the test for disclosability in terms of material which might materially weaken the Crowns case or might materially strengthen the case of the defence. Certainly, a finding of materiality relative to the disclosability of a document is not to be confused with a finding that it would actually have been of value to the defence nor regarded as pre empting the defendants need on appeal to establish that, but for the non disclosure, he would have had a realistic prospect of acquittal. I too would dismiss this appeal. LORD KERR For the reasons given by Lord Hope and Lord Brown, with which I am in full agreement, I too would dismiss the appeal. |
On 5 October 2010, the appellant, Stuart Whiston, was sentenced to 18 months in prison for robbery. He was entitled to automatic release on licence after serving half his sentence, ie on 5 July 2011. However, on 21 February 2011, he was released on licence under a so called home detention curfew pursuant to section 246 of the Criminal Justice Act 2003. On 7 April 2011, the Secretary of State decided to revoke the licence under section 255 of the 2003 Act, because the appellants whereabouts could no longer be monitored in the community, and he was recalled to prison. The decision of the Secretary of State was not subject to any statutory judicial control or review. The question raised on this appeal is whether a person released from prison on a home detention curfew, and then recalled to prison under section 255 of the 2003 Act, has rights pursuant to article 5(4) of the European Convention of Human Rights. More broadly, the appeal raises the issue of how far it is open to a person who is still serving a sentence imposed by a court to invoke article 5(4). The relevant domestic law All the statutory provisions relevant to this appeal are in the 2003 Act, but, as has been regrettably familiar in the field of criminal law, the provisions have been successively amended or added to by subsequent legislation. As these amendments and additions do not affect the analysis of the arguments or the outcome, I shall describe the provisions in their current form, namely as amended most recently by the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Where a person has been convicted and given a determinate prison sentence of twelve months or more (a sentence period), section 244(1) provides that, subject to certain specified exceptions, once he has served half his sentence, it is the duty of the Secretary of State to release him on licence. Section 244(3) defines the first half of the sentence period as the requisite custodial period, at the end of which he is thus entitled to be released on licence. A prisoner may also be released on licence during the requisite custodial period under section 246(1), which, so far as is relevant, is in the following terms: Subject to subsections (2) to (4), the Secretary of State may release on licence under this section a fixed term prisoner at any time during the period of 135 days ending with the day on which the prisoner will have served the requisite custodial period. Subsection (2) limits this power in relation to short sentences, and subsection (4) excludes the operation of subsection (1) in certain other cases, including cases where (aa) the sentence is for four years or more and (g) the prisoner has been released on licence under this section at any time and has been recalled to prison under section 255(1)(a). Section 250(4) states that any licence (a) must include the standard conditions, which are stated to be such conditions as may be prescribed, and (b) may include (i) any condition authorised by certain other statutes, and (ii) such other conditions of a kind prescribed by the Secretary of State as [he] may for the time being specify in the licence. Section 250(5) provides that a licence granted under section 246 must be subject to a curfew condition in accordance with section 253, which is in the following terms: (1). [A] curfew condition is a condition which (a) requires the released person to remain, for periods for the time being specified in the condition, at a place for the time being so specified . and (b) includes requirements for securing the electronic monitoring of his whereabouts during the periods for the time being so specified. (2) The curfew condition may specify different places or different periods for different days, but may not specify periods which amount to less than 9 hours in any one day . (3) The curfew condition is to remain in force until the date when the released person would (but for his release) fall to be released on licence under section 244. Thus, a curfew condition cannot operate beyond the end of the requisite custodial period, the point at which the prisoner would in any event be entitled to be released. The place specified in a persons licence is normally his home, and for that reason a licence under section 246 is often known as home detention curfew. By virtue of section 249, a licence, whether under section 244 or 246, remains in place until the end of the sentence period, unless the licence is revoked and the person subject to the licence (the licensee) recalled. The Secretary of State has the power to revoke a licence and recall a licensee back to prison pursuant to two different statutory provisions. First, section 254(1) of the 2003 Act gives the Secretary of State a general power to revoke any licence and to recall the licensee to prison. Where the power of revocation is exercised under section 254(1), the licensee is entitled pursuant to section 254(2) to be told the reasons for his recall and to make representations to the Secretary of State, who can cancel the revocation of the licence under section 254(2A). Sections 255A 255C contain provisions which apply when a licence is revoked under section 254(1) and the revocation is not cancelled. In general terms, in such an event, the Secretary of State may release the former licensee, if satisfied that he will not present a risk of serious harm to the public, and, if she is not so satisfied, she must refer the case to the Parole Board for a binding ruling within that period if the prisoner makes representations. If there is no such release, the Secretary of State must refer the question of the former licensees release to the Parole Board within 28 days of his return to custody see sections 255B(4) and 255C(4). Secondly, section 255(1) confers a specific power on the Secretary of State to revoke a section 246 licence or home detention curfew, and it provides as follows: (1) If it appears to the Secretary of State, as regards a person released on licence under section 246 (a) that he has failed to comply with any condition included in his licence, or (b) that his whereabouts can no longer be electronically monitored at the place for the time being specified in the curfew condition included in his licence, the Secretary of State may, if the curfew condition is still in force, revoke the licence and recall the person to prison under this section. Thus, the power of recall under section 255 can only be exercised whilst the curfew condition is in force ie until the end of the requisite custodial period, when the licensee would have been entitled to be let out on licence as of right. (Thereafter, the licence can only be revoked under section 254). Further, section 255(2) provides for a licensee to be given the reasons for his recall and the opportunity to make representations to the Secretary of State, who can cancel the revocation pursuant to section 255(3). However, unlike the position in relation to the section 254 power of recall, there is no provision for review by the Parole Board of the exercise of the Secretary of States section 255 power of recall. Accordingly a prisoner can be recalled under section 255 even if he has fully complied with the conditions of the licence. The procedural safeguards are that the recalled prisoner must be given reasons for the recall and be able to make representations about them. So the statutory position in relation to determinate sentences is, in outline, as follows: a) All prisoners are entitled to release on licence after serving b) half their sentence; If recalled, a prisoner is either entitled to re release after 28 days or to referral to the Parole Board, whose decision on re release is binding; c) There may be discretionary release, sanctioned by the Secretary of State, for the limited period of up to 135 days before the prisoner becomes entitled to release at the half way mark in his sentence. d) This discretionary release is also on licence but the licence must additionally incorporate Home Detention Curfew terms. e) During the period of the discretionary release, the prisoner may be recalled not only for breach of licence or demonstrated risk to the public but also because the Home Detention Curfew system cannot be made to work in his case. He must be given the reasons and is permitted to make representations to the Secretary of State. f) Such recall within the limited period of up to 135 days is not subject to Parole Board or court review, but g) So soon as the half way stage in his sentence is reached, the automatic Home Detention Curfew terms fall away and the rules set out at (a) and (b) apply. There are quite separate rules for prisoners serving indeterminate terms, where the criteria for release on licence, recall or re release on licence are largely geared to current risk to the public; in such cases all decisions are referable to the Parole Board whose ruling is binding. Article 5(4) of the Convention The short point raised in this appeal is whether a recall to prison under section 255, without a right of review by the Parole Board or any other judicial body, is consistent with article 5(4) of the Convention. Article 5(1)(a) of the Convention provides as follows: Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: (a) the lawful detention of a person after conviction by a competent court . Article 5(4) states: Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. As Elias LJ observed below in para 12, there is a close relationship between these two provisions. Article 5(1)(a) recognises the right to liberty, and provides that a person should not lose his liberty save by being lawfully detained following a conviction by a tribunal which is judicial in character. Article 5(4) confers an associated right on a detained person to challenge the lawfulness of his detention before a tribunal which is judicial in character, and to have effect given to the decision of that tribunal. The parties respective cases The case for each party is simple. The appellant contends that, as a result of the licence granted on 21 February 2011, he regained his liberty, and the subsequent revocation of the licence and his consequent recall to prison on 7 April 2011 therefore constituted a deprivation of his liberty which infringed article 5(4), because, having been effected under section 255 pursuant to a decision of the Secretary of State, its lawfulness was not decided speedily, or indeed at all, by a court. The Secretary of State, on the other hand, argues that, at least where, as in this case, the sentence in question is determinate, in any case where a prisoner, who has been released on licence, is recalled to prison during the currency of his sentence period, or at any rate during the requisite custodial period, the requirements of article 5(4) are satisfied by the original sentence lawfully passed by the court by which he was originally imprisoned. Somewhat counter intuitively, the appellant relies on domestic authority, and in particular on the decision of the House of Lords in R (Smith and West) v Parole Board [2005] 1 WLR 350 (West), whereas the Secretary of State relies on the jurisprudence of the Strasbourg court. In my opinion, it is right to start by considering the Strasbourg case law, and then turn to the domestic decisions. The Strasbourg jurisprudence on article 5(4) para 76, the Strasbourg court said this: In De Wilde, Ooms and Versyp v Belgium (No 1) (1971) 1 EHRR 373, [T]he purpose of article 5(4) is to assure to persons who are arrested and detained the right to a judicial supervision of the lawfulness of the measure to which they are thereby subjected . Where the decision depriving a person of his liberty is one taken by an administrative body, there is no doubt that article 5(4) obliges the Contracting States to make available to the person detained a right of recourse to a court; but there is nothing to indicate that the same applies when the decision is made by a court at the close of judicial proceedings. In the latter case the supervision required by article 5(4) is incorporated in the decision; this is so, for example, where a sentence of imprisonment is pronounced after conviction by a competent court . It may therefore be concluded that article 5(4) is observed if the arrest or detention is ordered by a court within the meaning of [article 5(4)]. This reasoning was distinguished by the court in X v United Kingdom (1982) 4 EHRR 188, para 51 in relation to indeterminate sentences, where the court held that, while this observation applied to an ordinary, determinate, sentence, it does not purport to deal with an ensuing period of detention in which new issues affecting the lawfulness of the detention might subsequently arise. In Van Droogenbroeck v Belgium (1982) 4 EHRR 443, para 47, the court pointed out that an indeterminate sentence involved placing recidivists and habitual offenders at the Governments disposal, which required the Minister of Justice to direct his mind to the need to deprive or continue to deprive the person concerned of his liberty. In such a case, article 5(4) was engaged, and it required judicial review, at reasonable intervals, of the justification for the deprivation of liberty The effect of the reasoning in De Wilde is demonstrated by two admissibility decisions of the Strasbourg court. In Ganusauskas v Lithuania (Application No 47922/99, 7 September 1999), the applicant, who had been sentenced to six years in prison for obtaining property by deception, complained about the fact that the District Court permitted the prosecutor to appeal out of time against a decision to release him conditionally after he had served half his sentence as a model prisoner (a decision which the District Court then reversed). The Third Section rejected as inadmissible his contention that his rights under articles 5(1), 5(4) and 6 had been infringed. Relying on De Wilde, the court said that article 5(4) only applies to proceedings in which the lawfulness of detention is challenged, and added that [t]he necessary supervision of the lawfulness of the detention after conviction by a competent court, as in the present case, is incorporated at the outset in the applicants original trial and the appeal procedures against the conviction and sentence. In Brown v United Kingdom (Application No 986/04, 26 October 2004), the applicant, who had been sentenced to eight years in prison for supplying heroin, was released on licence after serving two thirds of his sentence. He was then recalled on the grounds of changing his residence without approval and posing a risk to others. His representations to the Parole Board were rejected, as was his subsequent attempt to seek judicial review. His application, based on the contention that his rights under articles 5(1), 5(4), 6 and 8 had thereby been infringed, was rejected as inadmissible by the Fourth Section, which said this so far as article 5(4) is concerned: [W]here an applicant is convicted and sentenced by a competent court to a determinate term of imprisonment for the purposes of punishment, the review of the lawfulness of detention is incorporated in the trial and appeal procedures. No new issues of lawfulness concerning the basis of the present applicants detention arose on recall and no right to a fresh review of the lawfulness of his detention arose for the purposes of article 5(4) of the Convention. Mr Southey QC, for the appellant, argued that, in each of these two cases, the applicants reliance on article 5(4) could have been rejected on the ground that he had had the opportunity to challenge his recall to prison (in opposition to the prosecutors appeal to the District Court in Ganusauskas, and to the Parole Board and, arguably, through his application for judicial review, in Brown). That may well be right, but it does not in any way undermine the fact that, in each case, the court rejected the article 5(4) complaint on the ground that the article did not apply at all in circumstances where the recall to prison occurred during the period of a determinate sentence imposed for the purposes of punishment. I would add that the reference to punishment cannot have been intended to mean solely for punishment: determinate prison sentences are imposed for a mixture of reasons, each of which should, at least normally, be treated as applicable to the whole of the sentence period. Domestic jurisprudence on article 5(4) In R (Giles) v Parole Board [2004] 1 AC 1, the House of Lords held that article 5(4) was not infringed in a case where the appellant had been sentenced (under statutory provisions which have now been superseded) to a determinate but increased term to recognise the risk to the public which he represented. He had served what would have been the unincreased period but remained in prison. Relying on the reasoning in De Wilde and Van Droogenbroeck, it was held that, because the protective period had been imposed as part of the original sentence and was not subject to any control by the executive, but could be reviewed by the parole board, a judicial body, it did not infringe article 5(4). In his opinion (with which the other members of the committee agreed), at para 40, Lord Hope described the effect of the Strasbourg jurisprudence (which he analysed in the thirteen preceding paragraphs) as being that: [A] distinction is drawn between detention for a period whose length is embodied in the sentence of the court on the one hand and the transfer of decisions about the prisoner's release or re detention to the executive. The first requirement that must be satisfied is that according to article 5(1) the detention must be lawful. That is to Lord Hope expanded on the effect of this distinction at para 51, in these say, it must be in accordance with domestic law and not arbitrary. The review under article 5(4) must then be wide enough to bear on the conditions which are essential for a determination of this issue. Where the decision about the length of the period of detention is made by a court at the close of judicial proceedings, the requirements of article 5(1) are satisfied and the supervision required by article 5(4) is incorporated in the decision itself. That is the principle which was established in De Wilde, Ooms and Versyp. But where the responsibility for decisions about the length of the period of detention is passed by the court to the executive, the lawfulness of the detention requires a process which enables the basis for it to be reviewed judicially at reasonable intervals. terms: Where the prisoner has been lawfully detained within the meaning of article 5(1)(a) following the imposition of a determinate sentence after his conviction by a competent court, the review which article 5(4) requires is incorporated in the original sentence passed by the sentencing court. Once the appeal process has been exhausted there is no right to have the lawfulness of the detention under that sentence reviewed by another court. The principle which underlies these propositions is that detention in accordance with a lawful sentence passed after conviction by a competent court cannot be described as arbitrary. The cases where the basic rule has been departed from are cases where decisions as to the length of the detention have passed from the court to the executive and there is a risk that the factors which informed the original decision will change with the passage of time. In those cases the review which article 5(4) requires cannot be said to be incorporated in the original decision by the court. A further review in judicial proceedings is needed at reasonable intervals if the detention is not to be at risk of becoming arbitrary. Lord Hutton (with whom the other members of the committee also agreed) expressed the same view after analysing the Strasbourg jurisprudence in paras 65 79. In West [2005] 1 WLR 350, the two appellants were licensees who had been recalled to prison for alleged breaches of their respective licences, which had been granted under what was effectively the statutory predecessor of section 244(1). Thus, they had each served a sufficient proportion of their respective sentences to be entitled to be released on licence. In each case, the Parole Board had decided not to recommend re release, having refused to grant an oral hearing to consider the contention that the revocation of the licence was unjustified and that the licensee should be re released. The primary decision of the House of Lords was that the Parole Board had a common law duty to act fairly, both substantively and procedurally, when considering whether the revocation of a licence was justified, and that this would normally require an oral hearing where questions of fact were in issue see per Lord Bingham at paras 28 35. However, as Mr Southey rightly says, the House of Lords did consider the applicability of article 5. In para 36, Lord Bingham held that article 5(1) did not apply as the sentence of the trial court satisfies article 5(1) not only in relation to the initial term served by the prisoner but also in relation to revocation and recall. In para 37, he turned to article 5(4), and appears simply to have assumed that it applied to the proceedings before the Parole Board, and went on to hold that the requirements of the article were satisfied by its statutory power, provided it is conducted in a manner that meets the requirement of procedural fairness already discussed. In para 37, Lord Bingham does not appear to have considered the effect of Ganusauskas or Brown, although he specifically cited and relied on them in para 36 in relation to article 5(1) and indeed in relation to article 6 in paras 40 and 42. Lord Hope agreed with Lord Bingham and while he also referred in para 81 to Ganusauskas and Brown in connection with article 6, he similarly appears to have assumed, at paras 72 75, that article 5(4) applied without considering whether that was consistent with those admissibility decisions or indeed with what he had said in Giles (which was cited in argument but not relied on in the judgments see [2005] 1 WLR 350, 351 352). Lord Walker and Lord Carswell simply agreed with Lord Bingham. Lord Slynn, who dissented in part, described his initial view as being that there are not two formal orders for detention as that recall from conditional release was itself empowered by the initial sentence of the court, but said that he had been persuaded by Mr Fitzgerald that this is too restrictive an approach paras 54 55. He justified this conclusion by reference to the decision of the Strasbourg court in Weeks v United Kingdom (1987) 10 EHRR 293, para 40. In R (Black) v Secretary of State for Justice [2009] 1 AC 949, the House of Lords considered a case where the respondent, who, after having been sentenced to 24 years in prison, had become eligible to be considered for discretionary release on licence. Under the statutory scheme then in force, he was eligible for discretionary release on licence after serving half his determinate sentence, but became entitled to it only after serving two thirds. Although the Parole Board recommended that he be released, the Secretary of State decided that the risk of re offending was too great. By a majority of four to one, the House rejected the respondents contention that his rights under article 5(4) were infringed. In the course of their reasoning, the Law Lords had to grapple with the argument that the decision in West in relation to article 5(4) was inconsistent with the reasoning of the Strasbourg court in Ganusauskas and Brown, as explained by Lord Hope in Giles. Lord Rodger, with whom Baroness Hale agreed, said that he agreed with Lord Brown, but explain[ed] shortly how [he saw] the position in the light of t[the English and Strasbourg] cases para 37. Relying on the constant jurisprudence of the European Court of Human Rights conveniently summarised by Lord Hope in Giles at para 40, he held that the answer to the question whether article 5(4) gives a long term prisoner, with a determinate sentence , the right to take legal proceedings at the halfway stage of his sentence, to determine the lawfulness of his continued detention was No paras 45 46. Lord Carswell referred to Lord Hopes observations in Giles, and then contrasted cases such as Van Droogenbroeck, where the executive authority possessed a discretion over the time when the prisoner would be released, which was not fixed at the outset by any judicial decision, with cases such as Ganusauskas and Brown, where the lawfulness of the detention was incorporated at the outset in the applicants original trial and the appeal procedures against conviction and sentence para 57. Lord Brown, with whom Baroness Hale agreed, considered the Strasbourg jurisprudence at paras 66 71, explaining at paras 66 67 that, so far as article 5 was concerned, the Strasbourg court has consistently appeared to treat determinate sentences quite differently from indeterminate sentences. He then considered the domestic decisions, including Giles and West, at paras 71 77. He next turned to his [c]onsiderations and conclusions, which he set out in paras 78 84. He stated at para 81 that [t]here is nothing intrinsically objectionable (certainly in Convention terms) in allowing the executive, subject to judicial review, to take the parole decision. He then said that the fact that, by statute, the UK had chosen to give the Parole Board a role in the process, and statutory directions as to how to approach that role, and has chosen to fix precisely the period within a determinate sentence during which the prisoner is to be considered for parole [did not] mean that article 5(4) is necessarily thereby engaged so that the boards decision must be final paras 82 83. He explained this in para 83, where he said that [t]he administrative implementation of determinate sentences does not engage article 5(4); the decision when to release a prisoner subject to an indeterminate sentence does. However, in the course of his discussion of the domestic cases, Lord Brown did refer to the apparent conflict between Ganusauskas and Brown on the one hand and West on the other, in para 74, where he said this: Inescapably it follows from West that contrary to the view expressed in the Strasbourg courts admissibility decision in Brown, a prisoners recall for breach of his licence conditions does raise, new issues affecting the lawfulness of the detention such as to engage article 5(4). And that seems to me clearly correct: it would not be lawful to recall a prisoner unless he had breached his licence conditions and there could well be an issue as to this. I wonder, indeed, if the European Court would have decided Brown as they did had it followed, rather than preceded, the House's decision in West. Be that as it may, recall cases certainly so far as domestic law goes, are to be treated as akin both to lifer cases in the post tariff period and to the Van Droogenbroeck type of case where, upon the expiry of the sentence, a prisoner is subjected to an executive power of preventive detention. Lord Phillips, who dissented, effectively relied on the reasoning in West, on the basis that: This decision is in direct conflict with the reasoning of the Strasbourg court in Brown v United Kingdom. Lord Brown considers that its effect should be confined to the decision whether to release a prisoner after recall. I can see no reason for so confining it; the reasoning is applicable to any decision whether to release a prisoner on licence. (para 28) Discussion If one limits oneself to the decisions of the Strasbourg court to which I have referred, and the reasoning in Giles quoted above, the law appears to me to be clear. Where a person is lawfully sentenced to a determinate term of imprisonment by a competent court, there is (at least in the absence of unusual circumstances) no question of his being able to challenge his loss of liberty during that term on the ground that it infringes article 5(4). This is because, for the duration of the sentence period, the lawfulness of his detention has been decided by a court, namely the court which sentenced him to the term of imprisonment. That does not appear to me to be a surprising result. Once a person has been lawfully sentenced by a competent court for a determinate term, he has been deprived of his liberty in a way permitted by article 5(1)(a) for the sentence term, and one can see how it follows that there can be no need for the lawfulness of his detention during the sentence period to be decided speedily by a court, as it has already been decided by the sentencing court. If that is the law, it would follow that Mr Whistons appeal in this case must fail. On this approach, article 5(4) could not normally be invoked in a case where domestic discretionary early release provisions are operated by the executive in relation to those serving determinative terms. I accept that, in the absence of the clear Strasbourg jurisprudence, there would be an argument for saying that article 5(4) should apply in such cases. However, as already observed, the notion that the article is not engaged because of the original sentence appears entirely principled, and the consequence that a person under such a regime has to rely on his domestic remedies, at least unless other Convention rights are engaged, seems to me to be not unreasonable in practice. However, the issue is complicated by the decision of the House of Lords that article 5(4) was engaged in West, because, if the legal analysis just summarised were correct, article 5(4) would not have been engaged in West. I am bound to say that the decision in West appears to me to be unsatisfactory in relation to article 5(4) and, it should be emphasised, only in relation to article 5(4). First, although the relevant Strasbourg cases were cited in the judgments they were not followed on this point, and, save in the opinion of Lord Slynn, there was no explanation why not. Secondly, although Giles was referred to in argument, it was not cited in any opinion, and therefore no consideration appears to have been given to the observations of Lord Hope quoted above. Thirdly, at least in the four majority judgments it was not so much decided that article 5(4) was engaged; rather, it seems to have been simply assumed. Fourthly, in the fifth judgment, Lord Slynns explanation as to why he departed from his initial view that article 5(4) was not engaged was, with respect, plainly unsatisfactory, as the Strasbourg decision he relied on, Weeks, was a case involving an indeterminate sentence. When one turns to Black, the position can be said to be yet murkier. In their opinions, Lord Rodger (although he agreed with Lord Brown) and Lord Carswell steered clear of West, and simply treated the law on article 5(4) to be as stated by Lord Hope in Giles, para 40 (and, in the case of Lord Carswell, by the Strasbourg court in Van Droogenbroeck, Ganusauskas, and Brown). Lord Brown and Lord Phillips both considered that, so far as article 5(4) was concerned, West was inconsistent the Strasbourg jurisprudence. Lord Phillips (dissenting in the result) preferred to follow West, whereas Lord Brown in an obiter observation, preferred to limit the scope of West. The question, then, is what we should do about this unsatisfactory state of affairs. Mr Southey argues that we should follow Lord Browns approach in his obiter dictum in Black at para 73, and to conclude that article 5(4) applies in this case because Mr Whiston is seeking to be released after recall. Ms Lieven QC, for the Secretary of State, argues that we should follow the Strasbourg jurisprudence, as explained and applied in Giles, and hold that Mr Whiston cannot invoke article 5(4), as, so long as his sentence period was running, it had been satisfied by the sentence which was imposed at his trial. I have reached the clear conclusion, in agreement with the Court of Appeal, that we should reach the conclusion advocated by Ms Lieven. As already explained, it clearly appears to be the conclusion which the Strasbourg court would reach. The fact that Ganusauskas and Brown were admissibility decisions strengthens their force rather than weakens it: in each case, the court considered the applicants argument on article 5(4) to be so weak, for the reasons it gave, that it was not even worth proceeding to a decision. I have some difficulty with the notion, implied by Lord Brown in para 74 of Black, that a court in this country should hold that the reach of article 5(4) is, as it were, longer than the Strasbourg court has held. Assuming (as may well be right, and will no doubt have to be considered in a future case) that a United Kingdom court could, in principle, decide that article 5(4) applied in Mr Whistons case in the face of clear Strasbourg jurisprudence that it would not, I am quite unconvinced that it would be appropriate to do so. Unless and until I am persuaded otherwise on the facts of a particular case, it seems to me that the common law should be perfectly well able to afford appropriate protection to the rights of people in the position of Mr Whiston without recourse to the Convention. The decision in West demonstrates that the common law affords protection in such circumstances, and Lord Browns actual conclusion in Black underlines the very limited nature of any exception which he had in mind in his obiter observations. It would be wrong not to confront squarely the decision in West on article 5(4) and Lord Browns obiter dictum in Black, para 74. As Elias LJ said at [2014] QB 306, para 1, there is a growing number of cases which have bedevilled the appellate courts on the question whether and when decisions affecting prison detention engage article 5(4). As he added, [p]roblems arise because of the combination of general and imprecise Strasbourg principles and the complexity of English sentencing practices. I believe that this makes it particularly important that we grasp the nettle and hold that (i) the decision in West was per incuriam so far as it involved holding (or assuming) that article 5(4) was engaged, and (ii) the obiter dictum of Lord Brown in Black, para 74 is wrong in so far as it suggests that the law of the UK in relation to article 5(4) differs from the Strasbourg jurisprudence as summarised by Lord Hope in Giles, paras 40 and 51. So far as West is concerned, I have already identified certain problems in para 41 above. Furthermore, and importantly, it is not as if the actual decision in West thereby stands in any way impugned. As the headnote records, at [2005] 1 WLR 350 351, the conclusion reached by the House of Lords was primarily based on the appellants common law rights, as is reflected in Lord Binghams opinion, which devotes nine paragraphs to the common law and one to article 5(4). I suspect that the reason that the appellants Convention rights were considered was that one of the appellants had not relied on the common law in the Court of Appeal (see para 33). Properly analysed, all five opinions in Black support the view that West was per incuriam to the extent I have suggested. Lord Phillips and Lord Brown both expressly said it is inconsistent with the Strasbourg jurisprudence, and Lord Rodger and Lady Hale agreed with Lord Brown. Lord Rodger (with whom Lady Hale also agreed) and Lord Carswell each made it clear that they regarded the law as accurately set by Lord Hope in Giles, which is inconsistent with West so far as the applicability of article 5(4) is concerned. As to Lord Browns observation in Black at para 74, apart from being no more than an obiter dictum, it is inconsistent with the analyses of Lord Rodger and Lord Carswell in the same case. I must also confess that, in agreement with Lord Phillips, it seems rather hard to reconcile the reasoning which led Lord Brown to dismissing the appeal with his observations in para 74. It is true that Lord Rodger and Baroness Hale agreed with Lord Brown, but I do not think it would be right to take such a general agreement as approving every sentence in Lord Browns opinion, at least in so far as a sentence is not part of his [c]onsiderations and conclusions. Quite apart from that, it does not appear to have been argued in Black that it was wrongly held or assumed in West that article 5(4) was engaged, and therefore it is unsurprising that, in so far as they considered West, the opinions in Black proceeded on the basis that it was rightly decided. Indeed, the inconsistencies and uncertainties on this issue engendered by the opinions in Black appear to me to support the view that West was wrong in so far as it held or assumed that article 5(4) was engaged. Having had the benefit of reading Lady Hales judgment, I would add that it may be that the Strasbourg court would want to reconsider their jurisprudence, but, at the moment, it appears to me that it has the effect discussed above. Conclusion For these reasons, which reflect the reasons expressed in the very clear judgment of Elias LJ in the Court of Appeal, I would dismiss this appeal. LADY HALE I agree that this appeal should be dismissed but I wish to sound a note of caution about some of the reasoning which has led Lord Neuberger to reach that conclusion. In my view, the present law draws a principled distinction between those determinate prisoners who have reached the point in their sentence at which they are entitled to be released on licence and those who have not. If the former are recalled from their licence, and their representations to the Secretary of State fall on deaf ears, they are entitled to have their case referred to the Parole Board. The latter, whose release on licence was discretionary, are not. In Brown v United Kingdom (unreported, Application No 986/04, 26 October 2004) the Strasbourg court pointed out that there was a crucial distinction between prisoners serving a determinate sentence of imprisonment and those serving a life sentence. Once the latter had served the punishment part of their sentences, the reason for detaining them was not to punish them for their original offence but because they posed a continuing risk to the public. Hence article 5(4) required that their continued imprisonment had be subject to periodic judicial scrutiny. A determinate sentence, on the other hand, had been imposed by a court as punishment for the offence and that justification continued for its duration. The lawfulness of his detention does not depend, in Convention law terms, on whether or not he ceases to be at risk of re offending (page 5). The court went on to say that The fact that the applicant before the end of the sentence may expect to be released on licence does not affect this analysis (page 5). However, the position in our law is rather stronger than an expectation of release on licence. The prisoner is legally entitled to be released at a certain point in his sentence. This is irrespective of the risk that those responsible for his imprisonment may consider that he poses to the public. In a very real sense, therefore, the sentence imposed by the court as punishment for the offence is half the actual term pronounced by the judge (and indeed the judge has to explain this to him when imposing it). I appreciate, of course, that the judge imposes the sentence which he or she thinks correct, without regard to the right to early release. The whole of the sentence is intended as punishment. Once released at the nine month point, the prisoner remains liable to recall for the remainder of the term. However, the reasons for his recall could then be subject to scrutiny by the Parole Board, which will focus upon whether or not he poses a risk of re offending or otherwise endangering the public. Thus it can be said that, once a prisoner has passed the point of mandatory release on licence, the basis for any later recall and detention is the risk of reoffending rather than the original order of the court, and article 5(4) applies. Drawing this distinction is in fact consistent with the results of the domestic authorities. In R (Giles) v Parole Board [2004] 1 AC 1, Mr Giles had been sentenced to term of imprisonment totalling seven years which was longer than commensurate with the offences he had committed. He was entitled to be considered for parole after he had served half of this and to be granted parole after he had served two thirds. His complaint related to the absence of automatic reviews once he had served whatever period the judge had thought commensurate with the gravity of his offending (which the judge was not required to and did not specify). The issue was whether a determinate sentence which was partly punitive and partly preventative was in the same category as an indeterminate sentence and thus incompatible with article 5(4) unless (at least after the commensurate part had been served) there was a review before a judicial body with power to order release. The issue was not whether a prisoner who had been released, still less a prisoner with the right to be released, had the same rights as an indeterminate prisoner if recalled. Furthermore, it is difficult to characterise the position after a prisoner has reached the point of mandatory release as simply the administration of the sentence which has been imposed by the court. Parliament has decided that the prisoner is entitled to release and the criteria for recall and re release are quite different from those which led the judge to impose the original sentence. In R (West) v Parole Board [2005] 1 WLR 350, Mr West and Mr Smith were recalled after their mandatory release. As with the more recent case of R (Osborn) v Parole Board [2013] UKSC 61, [2013] 3 WLR 1020, the case was concerned with the procedures to be adopted by the Parole Board when considering whether they should be re released, and specifically whether the prisoner should be given an oral hearing. Although the opinions concentrate upon the common law requirements of fairness, I do not find it at all surprising that Lord Bingham appears to have taken it for granted that article 5(4) applied. Lord Slynn required to be convinced of that, but was persuaded by the analogy with the recall of a prisoner serving an indeterminate sentence. In Weeks v United Kingdom (1988) 10 EHRR 293, the Strasbourg court had held that article 5(4) applied. While I entirely accept that there is no analogy between a determinate and an indeterminate sentence, so as to require a review while the prisoner is still in prison, the analogy between the recall of a determinate sentence prisoner who was entitled to be released and the recall of an indeterminate sentence prisoner is much closer. In R (Black) v Secretary of State for Justice [2009] UKHL 1, [2009] 1 AC 949, Mr Black had not yet reached the point in his sentence when he was entitled to be released on licence. He was arguing that article 5(4) applied once he became eligible for discretionary release, so that it was a violation of his rights for the Secretary of State to reject the Parole Boards recommendation that he be released. So his too was not a case of recall after mandatory release. Once again, I do not find it surprising that Lord Brown considered that West was correctly decided; he was well aware of the difference between discretionary and mandatory release, but did not think that the opinions in West drew any distinction between them (para 73). I now think that this was a distinction which ought to have been given greater prominence and that it is a good reason for holding that their Lordships in West were correct in taking the view that article 5(4) applied. The only case which is not consistent with this analysis is Strasbourgs admissibility decision in Brown. Lord Neuberger is, of course, correct to say that the decision was based on the fundamental distinction between determinate and indeterminate sentences; but the court appears not to have considered whether there might be a distinction between recall after mandatory and discretionary release; further, the case had been considered by the Parole Board, which had the power to order his release, although this was before West, and so there had not been an oral hearing. Ganusauskas v Lithuania (unreported, Application No 47922/99, 7 September 1999), in contrast, not only appears to be a case of a proposed discretionary early release, but also one which was considered by a court. In this case, Mr Whiston was still serving the period of imprisonment which resulted from the sentence imposed upon him by the court: it is called the requisite custodial period. He was not yet entitled to release. Discretionary release subject a home detention curfew enforced by electronic monitoring may or may not be regarded as a continued deprivation of liberty, depending upon the length of the curfew, but it is very close to it. The prisoner may be recalled for the purely practical reason that it is not possible to monitor him at his address, which is nothing to do with whether he still constitutes a risk. It is the original sentence which means that he is still a prisoner. Hence it seems to me that our domestic law, which gives the Parole Board the power to decide upon the continued detention of a prisoner recalled after mandatory release on licence, but not after release on home detention curfew, draws a principled distinction. It is a distinction which is certainly consistent with the principles contained in article 5(1) and (4) of the European Convention. It is for that reason that, although agreeing with the ratio of the decision in this case, I would prefer it not to be taken further than the situation with which this case is concerned. I comfort myself that the views to the contrary expressed in Lord Neubergers judgment are, strictly speaking, obiter dicta. |
The liability of employers for deaths caused by mesothelioma has pre occupied courts and legislators over recent years. The present appeals concern claims to pass the burden of this liability on to insurers, made either by employers or in the case of insolvent employers by the personal representatives of former employees using the mechanism of the Third Party (Rights against Insurers) Act 1930. The appeals concern employers liability insurance. This is in contrast with Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 where public liability insurance was in issue. Employers liability focuses necessarily upon the relevant employment relationships and activities. Public liability relates to any of the insureds relationships and to activities affecting the world at large. Another feature of employers liability is that, under the Employers Liability (Compulsory Insurance) Act 1969 (the ELCIA), it has since 1 January 1972 been compulsory for every employer other than local authorities carrying on any business in Great Britain to insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain The appeals arise because the relevant insurers maintain that the employers liability insurances which they issued respond (or, better, could only have responded) to mesothelioma which developed (or, possibly, manifested itself) as a disease during the relevant insurance periods all long past. In contrast, the relevant employers and personal representatives maintain that the insurances respond to mesothelioma which develops and manifests itself later; all that is required, they say, is exposure of the victim during the insurance period to asbestos in circumstances where the law attributes responsibility for the mesothelioma to such exposure. These alternative bases of response (or triggers of liability) have been loosely described as an occurrence (or manifestation) basis and an exposure (or causation) basis. It is in issue whether the ELCIA, after it came into force, mandated any particular basis of response. A secondary issue, arising if the insurances only respond on an occurrence basis, is whether the aetiology of mesothelioma justifies a conclusion that there was during the relevant insurance period an occurrence sufficient to trigger liability under the insurances. Burton J, [2008] EWHC 2692 (QB), concluded that the relevant insurances all responded on an exposure basis. The Court of Appeal, [2010] EWCA Civ 1096, by a majority (Rix and Stanley Burnton LJJ), upheld the judge in relation to some of the insurances (particularly those covering disease contracted during the relevant insurance period); but they concluded that others (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. Smith LJ would have upheld the judges judgment in its entirety. The full judgments in both courts repay study. They have been of great assistance to this court and make it possible to go directly to the heart of the issues. Mesothelioma is a hideous disease that is inevitably fatal. In most cases, indeed possibly in all cases, it is caused by the inhalation of asbestos fibres: Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229, para 1, per Lord Phillips. It is a cancer of the pleura, which are thin linings around the lungs and on the inside of the rib cage. It is usually undetectable until shortly before death. Its unusual features include what Burton J in this case at para 30 described as the unknowability and indescribability of its precise pathogenesis. In particular, it is impossible to know whether any particular inhalation of asbestos (at least any occurring more than ten or so years prior to diagnosability) played any or no part in such development. Because of this unusual feature, the law has developed a special rule. The special rule was the product of judicial innovation in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and in Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572. It was modified by statutory intervention in the form of the Compensation Act 2006, section 3. Leaving aside exposures occurring within the ten or so years prior to diagnosability, the rule can now be stated as being that when a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a "material increase in risk" of the victim contracting the disease will be held to be jointly and severally liable in respect of the disease. Burton Js findings in the present case justify certain further propositions, mostly also corresponding with the summary in Lord Phillips judgment in Sienkiewicz (para 19): (i) A significant proportion of those who contract mesothelioma have no record of occupational exposure to asbestos. The likelihood is that (vi) in their case the disease results from inhalation of asbestos dust that is in the environment. There is, however, a possibility that some cases of mesothelioma are "idiopathic", i.e. attributable to an unknown cause other than asbestos. (ii) The more fibres that are inhaled, the greater the risk of contracting mesothelioma. (iii) There is usually a very long period between the exposure to asbestos and the development of the first malignant cell. Typically this can be at least 30 years. (iv) For a lengthy period (perhaps another five years) after the development of the first malignant cell, there remains a possibility of dormancy and reversal, but at a point (Burton J thought a further five years or so before the disease manifested itself, and was thus diagnosable) a process of angiogenesis will occur. This involves the development by malignant cells of their own independent blood supply, so assuring their continuing growth. (v) The mechanism by which asbestos fibres cause mesothelioma is still not fully understood. It is believed that a cell has to go through 6 or 7 genetic mutations before it becomes malignant, and asbestos fibres may have causative effect on each of these. It is also possible that asbestos fibres have a causative effect by inhibiting the activity of natural killer cells that would otherwise destroy a mutating cell before it reaches the stage of becoming malignant. Mesothelioma currently claims about 3000 lives a year in the United Kingdom. This speaks to the common use of asbestos materials up to the 1960s and 1970s. In Annex I to his judgment Rix LJ set out the insuring clauses of the various forms of policy wording in use from time to time. Subject to re ordering to reflect the development of the language, Annex A to this judgment includes the same and some further wording. It can be seen that the Excess policies and the first two MMI policies promise to indemnify the insured employer against liability if at any time during the period of insurance (or of any renewal) any employee shall sustain under the earlier policies personal injury by accident or disease or under the later policies [any] bodily injury or disease in the case of the first Excess policy while engaged in the service of the Employer or in other cases arising out of and in the course of [his] employment by the insured employer. In the case of the Independent policy, the insurer, under the recital, promised to indemnify the employer during the period of insurance or of any renewal. The insuring clause itself contains no express limitation to any period. It promises indemnity against all sums for which the employer shall be liable for damages for such injury or disease if any employee shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule. The third MMI policy and the BAI policies were in more developed form. The former promises indemnity in respect of legal liability for sums payable as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any employee when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The latter promised indemnity against all sums which the Insured may become liable to pay to any Employee . in respect of any claim for injury sustained or disease contracted by such Employee during the period of insurance or any renewal. The insurers party to the present appeals have at all times represented only a small part of the employers liability insurance market. By far the larger part of the market consists of companies who until the late 1960s (when competition rules intervened) operated a tariff system which bound them to adopt a specified policy form and specified rates. Until 1948 tariff insurance was focused on Workmens Compensation Act claims, but in 1948 legislative changes (in particular the abolition by the Law Reform (Personal Injuries) Act 1948 of the doctrine of common employment) made a common law claim for future accruing causes of action much more attractive. It may well have been in anticipation of these changes that the tariff companies introduced a new form of policy in May 1948, still in widespread use today, providing indemnity if any employee shall sustain any personal injury by accident or disease caused during the period of insurance. Under this tariff wording, sustain looks to the occurrence of an accident or development of a disease at any time, while caused makes clear that the trigger to cover is that the accident or disease has been caused during the insurance period. The present insurers were non tariff companies, and have always been free to set their own wordings. From dates after the insurances the subject of this appeal, three of the insurers in fact ceased to use the wordings set out in Annex A, and themselves moved expressly to causation based wordings Excess in about 1976, Independent in the mid 1980s, and BAI in 1983. As a matter of insurance practice, however, until the decision in Bolton in 2006, all these wordings, whether tariff or non tariff and whether using the language caused, sustain or sustained or contracted, paid out on long tail claims (including the mesothelioma claims which became increasingly frequent in the 1980s) by reference to the date(s) of exposure. Where successive employers with different insurers had exposed a particular employee victim to asbestos, liability was in practice apportioned between the employers, and so insurers, broadly according to the extent of exposure for which each employer was responsible. The rival cases Insurers submit that all the wordings in Annex A require the injury or disease to occur during the period of insurance or of any renewal. In the alternative, if the use of the word contracted in the third MMI policy and the BAI policies or the different formulation of the Independent policy leads to any different conclusion in any of such cases, they submit that this leaves unaffected the clear meaning of the Excess and first two MMI policy wordings. The employers and interested employees contend that all these policies are to be understood as operating on an exposure or causation basis. The implications of these alternative interpretations are clear. On insurers primary contention, the policies set out in Annex A would not respond to current mesothelioma claims. It is unlikely that most of them would have responded to many, if any, mesothelioma claims, since it was only in the 1980s that such claims began to emerge to any great extent. Policies written on a causation basis since the dates indicated in paragraph 10 above would also not respond to current mesothelioma claims. Insurers response is that any insurance must be read according to its terms. Until 1 January 1972, when the ELCIA came into force, it was not obligatory for employers to have any form of employers liability insurance. Further, viewed on an occurrence or manifestation basis, the policies would pick up long tail claims arising from exposure occurring at any time in the past. In this connection, it is to be noted that various long tail diseases were well recognised perils from the era of Workmens Compensation legislation before 1948. Instances were scrotal cancer, pneumoconiosis and more specifically (from the time of Merewether and Prices 1930 Report on Effects of Asbestos Dust on the Lungs and Dust Suppression in the Asbestos Industry) asbestosis. All these would only develop over and could manifest themselves after considerable periods of years. Following upon the 1930 report, The Asbestos Industry Regulations 1931 (SI 1931/1140) were introduced to regulate factories handling and processing raw fibre, and in 1969 The Asbestos Regulations 1969 (SI 1969/690) extended this regulation more widely it appears in the light of an appreciation that mesothelioma could result from exposure to small quantities of asbestos dust (see In re T & N Ltd (No 3) [2006] EWHC 1447 (Ch), [2007] 1 All ER 851, para 118). The Court of Appeals conclusions The force of insurers case rests in the use of the word sustain, whether in connection with the phrase personal injury by accident or disease or bodily injury or disease or in the conjunction injury or disease . sustained or contracted or injury sustained or disease contracted. Rix and Stanley Burnton LJJ concluded that the word sustain looked prima facie at the experience of the suffering employee rather than its cause (paras 232 and 343). Insurances responding to injury or disease sustained during the insurance period would not, on this basis, cover mesothelioma sustained long afterwards. Rix LJ had some compunction about the result because of what he (though not Stanley Burnton LJ) felt was a tension with the commercial purpose of employers liability insurance in the extraordinary context of mesothelioma (para 235). Rix LJ would have liked to hold that mesothelioma sufferers sustained sufficient injury on exposure to asbestos to trigger the insurances in force at the date of such exposure, but felt bound by Bolton to conclude the contrary (paras 277 289). However, Rix LJ, though not Stanley Burnton LJ, considered that the particular wording of the Independent insurances did not explicitly require the injury or disease to be sustained during the insurance period, and could be read as covering the sustaining of injury at any time arising out of and in the course of employment during the insurance period (paras 300 and 350). Rix and Stanley Burnton LJJ differed as to the significance of the ELCIA extension provisions included in the Independent wording, the third MMI wording and the second BAI wording, as quoted in Annex A. Rix LJ thought that the ELCIA required employers to insure on a causation basis (paras 184 and 186) although, since he also expressed the view that an insurance arranged and maintained on a sustained basis could comply with the ELCIA, he may perhaps only have meant required in practice. At all events, he held that the ELCIA extension provisions covered liability incurred to the personal representatives of employees on a causation basis, while enabling insurers to recoup themselves so far as possible from the relevant employers in respect of liability they would not otherwise have had to meet (paras 292, 300 and 302). Stanley Burnton LJ did not agree that the ELCIA required causation wording (para 342), but considered that it required insurance to be taken out and maintained in respect of ex employees, or at least those who were or had been employed at any time after the coming into force of ELCIA (para 342; and see Rix LJs comments at paras 305 307). Rix, Smith and Stanley Burnton LJJ were all agreed that, where provision was made for disease contracted, this could and should be construed as introducing cover on a causation basis, even if or though wording such as injury (or disease) sustained could only respond on an occurrence basis. Analysis Annex A sets out the insuring clauses. Insurers case is, as I have said, rooted most strongly in the word sustain, particularly when it is used by itself, rather than in conjunction with a more ambivalent alternative in the phrase sustained or contracted. The natural meaning of the word sustain, taken in isolation and as defined in the Shorter Oxford English Dictionary from an appropriate date (1965, 3rd ed), is, with respect to injury, undergo, experience, have to submit to, or, possibly, to have inflicted upon one, suffer the infliction of. But the insurance cover granted (and no doubt required) extended expressly beyond injury by accident to embrace disease. This was achieved by less natural conjunctions, such as sustain [any] personal injury by accident or disease or sustain [any] bodily injury or disease. Conscious perhaps that the verb sustain does not fit naturally with the concept of disease, some companies (MMI in its third wording and BAI in its first and second wordings) introduced the different verb contracted in the formulations sustained or contracted or injury sustained or disease contracted. This use of contracted with respect to disease is considerably more natural, but is clearly open to an interpretation that it looks back to the initiating or causative factor of the disease, and (whatever the answer on that point) highlights a question whether any substantial difference exists in this connection between such wordings and other wordings referring more awkwardly to the sustaining of personal injury by disease or the sustaining simply of disease. To resolve these questions it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more broadly. As Lord Mustill observed in Charter Reinsurance Co Ltd v Fagan [1977] AC 313, 384, all such words must be set in the landscape of the instrument as a whole and, at p 381, any instinctive response to their meaning must be verified by studying the other terms of the contract, placed in the context of the factual and commercial background of the transaction. The present case has given rise to considerable argument about what constitutes and is admissible as part of the commercial background to the insurances, which may shape their meaning. But in my opinion, considerable insight into the scope, purpose and proper interpretation of each of these insurances is to be gained from a study of its language, read in its entirety. So, for the moment, I concentrate on the assistance to be gained in that connection. A first point, made very clearly below by Rix LJ (para 263), is that the wordings on their face require the course of employment to be contemporaneous with the sustaining of injury. This leaves open what is meant either by sustaining or by injury. Rix LJ thought that the Independent wording could be understood differently in effect, as if it had expressly read: If any person who is under a contract of service or apprenticeship with the Insured shall at any time sustain bodily injury or disease arising out of and in the course of his employment by the Insured during the policy period in connection with the Contract specified or type of work described in the Schedule . That interpretation assumes that sustain in this context equates with the occurrence, rather than causation, of the injury or disease, and only arises for consideration if that assumption is correct. A second point is that the insurance wordings demonstrate a close link between the actual employment undertaken during each insurance period and the premium agreed to be payable for the risks undertaken by insurers in respect of that period. Premium is linked expressly to actual wages, salaries and earnings during the insurance period under the Excess policies, the first MMI wording and the BAI policies. The second and third MMI wordings contemplate that premium may be linked to wages, salaries and earnings, and, to the extent that any inference regarding the general nature and scope of cover under these standard wordings can be drawn from such a link, it must be capable of being drawn whether or not premium was actually so linked in any particular case. As to the Contractors Combined Policy issued by the Independent, it is a probable inference that the estimates which were provided and were to be updated will have included, in respect of the employers liability cover in section 1, wages, salaries and other earnings paid. Finally, the Independent cover is linked to the actual contract or work which the employer is undertaking during the insurance period. These links are in my view significant. True, premium may sometimes be calculated on a rough and ready basis. Minor discrepancies between the premium calculation and the risk may be understandable: see e.g. Ellerbeck Collieries, Ld v Cornhill Insurance Co [1932] 1 KB 401, 418, per Greer LJ (who pointed out that any such discrepancy there was more apparent than real, since workmen not earning wages because off work would not actually be at risk of any fresh accident, even though they would remain susceptible to certification for disablement). Here the position is quite different. Great care is taken in all the policies to tie premium to the actual employment undertaken during the insurance period, and in the case of the Excess, Independent and MMI policies to tie cover to a business, contract or activities described in the schedule. The natural expectation is that premium is measured by reference to actual employment or work during the insurance period because it is the risks attaching to such employment or work which are being undertaken by insurers. At the very least, the drawing of this link makes improbable the contention advanced by some of the insurers that the present insurances were apt to pick up liabilities emerging during the insurance period which could be attributable to employment and activities undertaken and negligent conduct committed at times long past. The number of employees, their employment activities and the risks involved at those times could be very different. The significance which attaches to the employment current during the insurance period is underlined by legal and practitioner texts. As long ago as 1912, MacGillivray on Insurance (1st ed), pp 966 wrote: The nature and scope of the employers business must be clearly defined in the insurance policy, and workmen employed outside the scope of the assureds business as described in the policy will not be covered In the section on Employers Liability Insurance in Stone & Coxs Accident, Fire and Marine Year Book (1957), pp 688 689, the authors stressed the importance of identifying any special hazards, such as signs of careless management or lack of control or careless workmen, and observed: The surveying of Employers Liability risks has probably become more general than formerly. Apart from the question of the possibilities of accident, there is now the serious question of disability due to disease and in particular the disease known as pneumoconiosis. In 1974 MMI produced a Guide to Insurance Officers in Local Government, which it said that it would like to see on the desk of every insurance officer for ready reference at any time; this, after noting that employers liability was almost invariably dealt with by a separate policy and that its importance had been increased by the ELCIA, went on: "7. Premiums are usually based on wages and salaries this is not only a convenient yardstick but is logical since loss of earnings usually represents a substantial part of claims. Rates of premiums vary according to the nature of the work of the labour force, and the claims experience. 8. A feature of employers liability claims is the length of time which often elapses between the date of the accident and the final settlement, and the cost of servicing claims tends to be high. Injury caused at work during the period of insurance even though it may not be diagnosed till years afterwards can be a liability under the policy." I note in parenthesis that 1974 was the year in which MMI changed from a pure sustain form of wording to a form covering bodily injury or disease suffered, when sustained or contracted during the currency of the policy. Yet there is no suggestion in the Guide of any change in substance. It is in this light improbable that the present insurances can or should be read as offering cover in respect of ancient, as opposed to current, employment and activities. But there is a third point. If insurances in the present form only address risks arising from employment during the insurance period, then, on insurers case, there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to injury or disease in another later period. If the employment relationship spans both insurance periods and the employer remains insured with the same insurers in both periods, there may be no problem. The employee is employed at all relevant times and the insurance may be viewed as a single continuing contract. The policy wordings set out in Annex A, with their references to insurance during the period of insurance or during any subsequent renewal period, would support the latter view. But, even in the days of more stable long term employment and insurance relationships, employees could and would move employment or retire, or employers would cease business, or change insurers. On the basis that the insurances only cover risks arising from employment during the insurance period, there would be no cover unless the liability arose from and in the course of and involved injury or disease during the currency of the same employment and the same insurance (including any renewal). Fourthly, on insurers case, employers would as a result be vulnerable to any decision by insurers not to renew; and such a decision might arise from the simple performance by employers of their common law duty to disclose past negligence to insurers upon any renewal. Employers who discovered or came to appreciate that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease (e.g. by exposing their employees to asbestos) would have such a duty. Insurers could then, on their own case, simply refuse any renewal or further cover. Employers could then have to disclose that refusal also to any further insurers to whom they made a proposal for cover. One response made by insurers to such problems is that they would not arise in the large bulk of cases. That is no doubt true. Most employers liability cases involve short tail claims: typically, an accident involving injury. It is not surprising if the language of the insurances fits more easily with situations in which cause and effect coincide in time. But, by the same token, this does not mean that the underlying risk being assumed was in either partys mind limited to circumstances in which a cause gave rise to an effect during one and the same insurance period. Rix LJ, in accepting that cover depended upon injury being sustained in the sense of experienced during the insurance period, was influenced by the thought that this was not an absurd or meaningless interpretation. The insurance could operate entirely successfully in some 99% of cases (para 235). In the light of this Courts recent decision in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, para 30, this, in my view, gives too little weight to the implications of the rival interpretations and to the principle that where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense. The 1% of cases in which there might be no cover could not be regarded as insignificant. Well before 1948, there was general awareness of the existence of long tail diseases which would only develop and manifest themselves after considerable periods of years (see para 12 above; and see also Cartledge v E Jopling & Sons Ltd [1963] AC 758). The connection between asbestos exposure and mesothelioma became generally known in the mid 1960s, following the publication in 1965 of Newhouse and Thompsons report on Mesothelioma of pleura and peritoneum following exposure to asbestos in the London area and a Sunday Times article. Yet on insurers case, the present insurances would not cover any situation where, after the termination of employment or the expiry of an insurance, injury or disease developed from an employers breach of duty to a relevant employee during an insurance period. A fifth point concerns the way in which the policies deal with the issue of extra territorial scope. The first Excess wording stands apart from the others in its treatment of that issue. Cover only exists in respect of any employee in the employers service who shall sustain any personal injury by accident or disease while engaged in the service of the employer in Great Britain, Northern Ireland, the Isle of Man or Channel Islands, in work forming part of the process in the employers business. As soon as one postulates a delay in time between the causation and experiencing of a disease, it becomes apparent that this wording could operate to very curious effect if sustain looks to the latter rather than the former. A disease (e.g. a cancer) experienced during employment could be covered although caused by pre employment exposure, while a disease caused by employment would not be covered if only experienced while working abroad. The natural inference to draw from the references to being engaged in the employers service and in work forming part of the employers business process is that it was envisaged that the accident or disease would and should arise out of such service and work, rather than merely occur during it. That points to an underlying focus on causation, even if the assumption was that in the majority of cases causation and experiencing of any injury by accident or disease would coincide. As to the other policies, at the very least, the way they deal with territorial issues throws doubt on any proposition that their wordings are so carefully or well chosen that a court should be careful to stick literally to whatever might be perceived as their natural meaning. They address territorial scope by specific exclusions, but the cover and the exclusions use different language. Thus, although the second and third Excess wordings cover liability to employees who sustain personal injury by accident or disease, the territorial exclusion is in respect only of accidents occurring outside Great Britain, etc, leaving it unclear how disease, whether caused or developing outside Great Britain, should be dealt with. The Independent wording also covers liability to employees who sustain bodily injury or disease, while the territorial exclusion is for injury, illness, loss or damage caused elsewhere than in Great Britain, etc. While the contrast in language is capable of lending some support to a view that sustain looks to experiencing, rather than to causation, an alternative possibility is that the two words were understood as having the same effect and that the cover was understood as focused on causation. The language of this exclusion thus cuts both ways, as Rix LJ recognised (para 297). A similar position applies to the contrast between injury or disease sustained and injury or disease caused outside Great Britain, etc. under the first two MMI wordings. Under the third wording, the language of the cover and the exclusion have been deliberately matched. Under the BAI wordings, however, there is an incongruity between cover for injury sustained or disease contracted and the exclusion in respect of liability for accidents . arising outside the United Kingdom. Again, this leaves the position in respect of disease unclear, and the difference between injury sustained and accidents arising can be read either as deliberate or as suggesting that no significance was attached to the difference or that the real concern was with causation. The history and Workmens Compensation Acts Much attention was, both below and before the Supreme Court, paid to the development of employees rights to compensation in respect of personal injury and disease, at common law and under the scheme of the Workmens Compensation Acts (WCAs). The WCAs were in force from 1897 until replaced in 1948 under the National Insurance (Industrial Injuries) Act 1946. The history and a number of the decisions under the WCAs were examined by Rix LJ in paras 126 to 165 of his judgment. He concluded that such an examination yields in the present context not a lot. To a considerable extent, I agree and I shall not repeat the whole exercise, but identify some potentially relevant aspects. Etymologically, some of the language presently in issue can be traced back to statutory language found in the Employers Liability Act 1880 and the WCA 1897. The 1880 Act modified the common law doctrine of common employment, by entitling employees to recover common law compensation for injury caused by specified matters for which employers were responsible, provided that they gave notice, within six weeks of sustaining the injury of its cause and the date at which it was sustained. The 1897 Act, applying to personal injury by accident arising out of and in the course of employment, also required notice to be given of the accident as soon as it occurred, stating the cause of the injury and the date at which it was sustained. These Acts therefore distinguished the causation and the sustaining of an injury, but not in any presently relevant context. Further, any reference to sustaining disappeared from the Workmens Compensation scheme in the 1906 Act, which amended the scheme to require a notice stating the cause of the injury and the date at which the accident happened. The 1906 WCA also expressly extended the scheme to cover certain diseases specified in section 8. In that context, it provided that, where a workman was certified as disabled or suspended from employment or died due to a disease and the disease is due to the nature of any employment in which the workman was employed at any time within the twelve months previous the date of the disablement or suspension, whether under one or more employers, then he or his dependants shall be entitled to compensation under this Act as if the disease or such suspension . were a personal injury by accident arising out of and in the course of that employment . Section 8(a) provided: The disablement or suspension shall be treated as the happening of the accident. Under section 8(c), the compensation was recoverable from the employer last employing the employee within the previous twelve months, providing the employee furnished that employer with particulars of all his other employers in the employment to the nature of which the disease was due. It was not necessary to prove that the disease actually arose from the last employment, merely to prove that the relevant employment gave rise to a risk of such a disease: Blatchford v Staddon and Founds [1927] AC 461. The 1906 Act may be regarded in this respect as involving an early statutory instance of the kind of liability recognised in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572. However, failing such particulars, the last employer could excuse himself upon proving that the disease was not contracted whilst the workman was in his employment (section 8(c)(i)). The last employer might also join any other employer (within the last twelve months) and it was provided that upon proof that the disease was in fact contracted whilst the workman was in the employment of that other employer, that other employer shall be the employer from whom the compensation is to be recoverable (section 8(c)(ii)). Finally, section 8(c)(iii) provided that: if the disease is of such a nature as to be contracted by a gradual process, any other employer within the last twelve months was liable to make such contributions as might be agreed or determined by arbitration under the Act. Under this scheme, therefore, compensation for disease was initially based upon the nature of the employment and its potential for causing, rather than upon proof that it caused, such a disease. The paternal benevolence of the Legislature (as Visc Sumner put it in Blatchford: p 469) is well known, and if the price of that benevolence is paid by the last employer, who thus has to bear others burdens, that is nothing new in this kind of legislation. However, the last relevant employer could seek, in specified circumstances, to avoid or to pass on to another employer responsibility by proof that the disease was not actually contracted in his employment. Alternatively, in the case of a disease of such a nature as to be contracted by a gradual process, all relevant employers within the last twelve months would be liable to contribute. The scheme was, as I see it, concerned with either the risk of or actual causation, and in its use of the word contracted it appears to me to have been directing attention to the causation, rather than the mere experiencing or manifestation, of disease. The WCA scheme was the subject of further amendment by the 1925 Act. Section 43 superseded section 8 of the 1906 Act as regards scheduled diseases, while section 47 made specific provision for the introduction of a parallel scheme covering silicosis. Effect was given to this by inter alia the Metal Grinding Industries (Silicosis) Scheme which came into force in July 1927, making provision for obtaining compensation from the last employer within the previous three years, and giving such employer rights to look to other such employers within the last five years. An insurance covering employers liability in this connection was considered in Smith & Son v Eagle Star (1933) 47 Ll. L.R. 88, (1934) 48 Ll. L.R. 67. Mr Hill had been employed in processes giving rise to silicosis for some 20 years. For the last two of these years, from 31 March 1928 to 16 June 1930, he worked for Smith & Son. From 30 June 1927 to 17 June 1930, Smith & Son had an insurance against WCA liability in respect of any personal injury or disease which at any time during the continuance of this policy shall be sustained or contracted by any workmen . The policy was expressly extended to cover any liability in connection with any claim made by employees in respect of silicosis, and the decision of the Court of Appeal rested on this ground. But Scrutton LJ also examined the main policy language, and in particular what was meant by contracted. He noted that there has been a good deal of discussion in the Courts about a disease which is gradually contracted commencing at some stage and through the process going on increasing the disease until at last it results in total disablement (p 70), and concluded that the word was not to be read as first contracted, but in the sense of influenced or increased until it ultimately comes to total disablement. This, although not directly focusing on the first development of a disease from some earlier cause, suggests a flexible view of the word contracted, directed once again to the employments responsible for causing the disease. Confirmation that this was Scrutton LJs view can be found in the earlier case of Ellerbeck Collieries Ltd v Cornhill Insurance Co [1932] 1 KB 401. Two workmen who had been in the colliery companys service for many years were on respectively 11 and 12 March 1929 (dates they were actually off work) certified as suffering from miners nystagmus. The Cornhill had on 8 March 1929 issued the colliery company with a three month provisional cover note insuring in terms matching the wording of the insuring clause in the first Excess wording (i.e. against liability in respect of any employee who shall sustain any personal injury by accident or disease while engaged in the service of the employer). Failing a satisfactory survey, the cover note actually expired on 18 March 1929. The first point decided was whether the employees had sustained personal injury by accident or disease during the period of validity of the cover note (8 to 18 March 1929). It was held that they did. The judgments in the Court of Appeal are of interest for a number of reasons. First, both Scrutton LJ (p 408) and Greer LJ (p 417) approached the question of construction on the basis that the policy was intended to protect the employers against their liability to their workmen under the WCAs. Scrutton LJ added that it seems to me that the policy was intended to cover the liability of the employers for the results of industrial diseases caused by the employment (p 409). His description of the policy, covering in terms any employee sustaining personal injury by accident or disease in service, as intended to cover liability . for the results of diseases caused by the employment fits precisely with the analysis which I consider correct (paragraphs 18 28 above). Second, Scrutton LJ went on to refer to the difficulties in saying when an industrial disease, such as miners nystagmus or lead poisoning, begins, and in these circumstances the difficulty for an employee to pick the proper employer to sue. He described the way in which Parliament, by what became section 43 of the WCA 1925, had addressed such difficulties by providing a conventional and artificial means for enabling the workman to get compensation, leaving the various employers to fight out their proportion of the liability between themselves (p 409). He said that the last employer, liable under the WCA scheme, then claims on the insurance company on the ground that he is liable to make compensation for an injury by disease, and the date of the injury or disablement is by statute and certificate fixed as happening between the dates for which he is provisionally covered (p 411). On this basis, and in the light of the House of Lords decision in Blatchford, Scrutton LJ concluded that he was bound to hold that an accident has happened within the period of the provisional cover against the consequences of which the insurance company is bound to indemnify the employer (p 413). In short, the conventional and artificial provisions of the WCA defined what constituted an accident and when personal injury by accident or disease was sustained for the purposes of the insurance. Greer LJ, more shortly, adopted the same approach (p 418). Only Slesser LJ (p 421) expressed a reservation about the possibility that the artificial deeming provisions of section 43(a) of the WCA 1925 might only apply as between employee and employer, and that it might have been necessary to consider separately the date of the sustaining of injury as between the employer and the insurer, had there been any admissible evidence that the two employees had actually contracted the scheduled disease before the granting of the statutory medical certificate. Commercial purpose and practice Much general evidence was directed or elicited before Burton J in relation to the commercial purpose of the present insurances, and to practice relating to their operation in the years before the present issue arose. It was argued that there was, prior to the decision in Bolton, a universal usage of the insurance industry to pay out mesothelioma or similar claims under [employers liability] policies by reference to the date of inhalation/exposure whatever the wording, or an estoppel by convention to like effect. Burton J rejected the argument (paras 180 to 201, esp. para 201), for the reasons that, first, there was no evidence relating to years earlier than the 1980s which could be put down to any kind of arguable usage, second, any usage was not certain, not least because of the multiplicity of approaches to or bases for it and, third, it was not binding. It was not incorporated into the insurance contracts. No issue of estoppel by convention was pursued to the Court of Appeal (Rix LJ, para 24, and Stanley Burnton LJ, paras 332 and 335) and the issue of a universal custom was only pursued by Zurich Insurance Company (Rix LJ, para 24). By a multiplicity of approaches to or bases for insurers practice, Burton J was referring to evidence that insurers followed the practice they did in some cases because they believed that their contracts were to be interpreted on a causation/exposure basis, in others because they believed that the aetiology of diseases such as mesothelioma was such that injury was in fact sustained (in the sense of experienced) at the date of inhalation, while yet others may have failed to realise that their historically relevant wordings had been on a different basis to the causation wordings to which they had since switched or may have failed to address their minds to any relevant issue at all in relation to an insured who was usually a longstanding repeat client. Rix LJ (para 228) contented himself with agreeing with Burton Js reasoning on this aspect, while Stanley Burnton LJ noted and agreed in particular with Burton Js second reason, relating to the believed aetiology of mesothelioma (para 335). Smith LJ, on the other hand, treated the commonly held understanding that diseases such as mesothelioma involved injury at the date of inhalation as part of the factual matrix of all the insurance contracts (paras 322 323), and considered against that background that no difference in meaning should be held to exist between policies using sustained and causation wording, until the time when the two sides of the insurance industry should be considered to have appreciated that some diseases, including mesothelioma, do not occur until many years after exposure to the causative agent (para 327). She put that as around the time of the decision in Bolton, after which parties using a sustained wording must be taken to have meant only to cover injuries actually occurring during the policy period (para 327). The argument of a binding usage was not pursued before the Supreme Court, rightly so for the reasons given by the judge and the majority in the Court of Appeal. Equally, there has been no suggestion of estoppel by convention, along the lines recognised as possible in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, para 47. However, on the issues of policy interpretation, Mr Stuart Smith QC for Zurich Insurance, maintained before the Supreme Court an argument that there was a consensus based on market practice, whereby, for one reason or another, such policies would respond to long tail diseases by reference to the date of exposure, and that this could constitute relevant background to their construction. Assuming that, short of a binding usage or estoppel by convention, a practice, if known to or shared by the relevant parties, could in some circumstances be relevant background (see e.g. Reardon Smith Line Ltd v Yngvar Hansen Tangen [1976] 1 WLR 989), still, in my opinion the argument fails in the present case. It fails in particular in the light of the judges findings, even in relation to policies made in and after the 1980s. A practice based on a mistaken understanding, by only some insurers, that the policies operated on a causation basis cannot be relevant background to the interpretation of every policy; on the judges findings other insurers do not appear to have understood that the policies operated on that basis. A practice based on a mistaken understanding by others in the market as to when long tail diseases could be said to have been experienced or to involve injury is likewise an unpromising start for construing all policies; if the understanding were good, it would mean that such diseases fell within the policies, even though the policy cover was restricted to injury or disease experienced during the policy period. The understanding would not therefore carry any imperative to read a sustained wording as meaning caused. Before the Supreme Court, both employers and employees continued to rely upon the evidence given at trial regarding the general purpose of employers liability insurance as part of the background to the interpretation of the present insurances. Rix LJ (paras 223 to 235) gave it some weight as such, but Stanley Burnton LJ thought that there was little if any assistance to be gained by reference to the commercial purpose of EL insurance, as this was simply to provide the cover defined in the policy (para 333). The Supreme Court was provided with a useful summary of the considerable volume of evidence relied upon in this connection. It consisted in general of answers given by insurers, two at least of them with experience going back to the 1940s. They were asked (frequently in response to leading though not inadmissible on that score questions in cross examination) about their or others views, understandings or perceptions as to the purpose of the policies, and the way in which these would or should respond, in relation to injuries arising from exposure in the course of activities during the policy period. In my judgment, Stanley Burnton LJ was right to reject such evidence as inadmissible. The parties cannot be asked what they meant by their contract, and, failing any binding usage, it is equally inadmissible to ask other persons operating in the market to give general evidence as to what they would have understood the parties to have meant by the words used in the context in which they were used. The evidence does not seem to have amounted to more than that. However, I do not agree with Stanley Burnton LJs suggestion that no useful conclusions can be drawn about the commercial purpose of the policies, save that it was to provide the defined cover. In my opinion, relevant conclusions about the general nature and purpose of the individual policies can be drawn in this case, just as they could in the case of the different (and wordier) instrument in issue in In re Sigma Finance Corporation [2009] UKSC 2, [2012] 1 All ER 571 (see especially paras 10, 12 and 37). They can be drawn from an overall consideration of the individual insurance wordings, and particularly from the features which tie cover to the employees and activities during the relevant policy period and the five points considered in paragraphs 18 to 28 above. Further, if the policies are on any view apt to cover employers liability for long tail diseases which initiate during, but only manifest themselves years after, the original policy period, one may look with scepticism at an interpretation which distinguishes this situation from other situations where a long tail disease is caused but does not strictly begin during the policy period, and only manifests itself years later. This is particularly so if a conclusion that the latter diseases fell outside the policy cover meant that they would or might well not fall within any subsequent employers liability policy. ELCIA 1969 Section 1 of the ELCIA provides: 1. (1) Except as otherwise provided by this Act, every employer carrying on any business in Great Britain shall insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain (3) For the purposes of this Act (a) approved policy means a policy of insurance not subject to any conditions or exceptions prohibited for those purposes by regulations. 4. (1) Provision may be made by regulations for securing that certificates of insurance in such form and containing such particulars as may be prescribed by the regulations, are issued by insurers to employers entering into contracts of insurance in accordance with the requirements of this Act . (2) . the employer shall during the currency of the insurance and such further period (if any) as may be provided by regulations (a) comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees; . The only conditions or exceptions ever prohibited were certain exemptions from liability. Under section 3, the ELCIA did not however apply to local authority employers, such as most of MMIs insureds. Under section 4, provision might be made for certificates of insurance to be issued to employers, and in that event the employer was, obliged during the currency of the insurance and such further period (if any) as may be provided by regulations to comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees. In reaching his conclusions on the ELCIA (para 16 above), Rix LJ engaged in an impressive analysis, to which I would refer (paras 166 to 186). The only doubt this leaves is how, if the ELCIA requires a causation wording, an employer could properly insure on a wording which only covered injury sustained in the sense of experienced (see para 186 and paragraph 16 above). The scope of the ELCIA is, as Rix LJ indicated, open to three alternative analyses: that it requires cover in respect of (i) all future liability incurred during the insurance period, whenever the negligence or injury, or (ii) liability for all future injury or disease sustained (in the sense of experienced) by employees during the insurance period, whenever the negligence, or (iii) liability for all negligence or breach of statutory duty during the insurance period giving rise to liability as in (ii). The retrospectivity of cover involved in (i) and (ii) is unlikely to have been intended. The only one of the three possibilities not involving a degree of retrospectivity is (iii). A duty on every employer to insure, and maintain, insurance is consistent with a requirement to have the insurance in place during, though to maintain it after, the relevant insurance period. The provision, contemplated by section 4, for copies of insurance certificates to be issued by insurers and to be displayed by any employer for the information of his employees during the currency of the insurance and such further period as may be provided by regulations indicates, first, a desire to assure employees of their insurance protection during the relevant insurance period, and, secondly, an awareness that this assurance might need to remain in place after such insurance period; it is therefore suggestive of (iii), rather than (i) or (ii). As Rix LJ observed, it is only cover in accordance with (iii) that can give an employee the assurance that any injury or disease suffered as an employee and arising out of and in the course of [his] employment will be covered by insurance, the benefit of which would, if necessary, be available to him at the time under the Third Party (Rights against Insurers) Act 1930. An obligation to have a policy in force only at or by the time when injury is actually experienced would leave employees or ex employees at the mercy of compliance with the statute by their employers or ex employers at uncertain future dates. It would also leave such employees or ex employees at the mercy of employers who, for whatever reason, ceased to carry on business either in Great Britain or (for example due to insolvency) at all. Further, if injury or disease suffered or contracted bears the same meaning as insurers suggest that injury or disease sustained or contracted bears, then an employee, who had the misfortune to succumb to a disease abroad caused by his employment or previous employment in Great Britain, would not be covered (unless regulations intervened to ensure that he was). Stanley Burnton LJ thought that any issue as to the nature of the insurance required under ELCIA was resolved by its use of the word sustained, rather than caused. He went on to conclude that the ELCIA covered any injury sustained (in the sense of experienced) during a period of insurance, by anyone who was then or had at any previous time been an employee. However, that latter conclusion introduces a retrospectivity into the scope of the ELCIA, which, as already indicated, I think unlikely to have been intended. The statute could have used the tariff wording of causation instead of sustained. But in the statutory language the word sustained is not coupled with a phrase such as during the period of the insurance. Even if sustained means experienced in the context of the statute, the statute may require insurance on what is effectively a causation basis; the words sustained by his employees may well mean sustained at any future time by his current employees. The key to the meaning of the statutory language seems to me the combination of the phrases arising out of and in the course of their employment in Great Britain and not including injury or disease suffered or contracted outside Great Britain. Together, and for reasons given in the last two paragraphs, they indicate a statutory requirement to insure in respect of activities during the course of employment in Great Britain which may in the future give rise in or out of Great Britain to liability to the employees involved in such activities. In my judgment, therefore, the conclusion which gives proper effect to the protective purpose of the legislation is that the ELCIA requires insurance on a causation basis. The ELCIA extension provision to the Independent and second BAI wordings (see Annex A), as well as a similar extension provision to the MMI policy intended for insureds who were not local authorities, achieved this result expressly in relation to policies written subsequent to the coming into force of the ELCIA, at least for the purpose of ensuring that employees claims were covered by insurance. Any other subsequent insurances not containing that extension provision should, if possible, be read as providing the relevant employers cover required by statute. This is a powerful tool in the interpretation of such insurances. Bolton M.B.C. v Municipal Mutual Insurance Ltd The Court of Appeal in the present case was bound by its previous decision in Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 on public liability policies. The majority regarded that case as, in effect, determining the meaning which must be put on the word sustained in the present employers liability policies: see paras 284, per Rix LJ, and 339, per Stanley Burnton LJ, who however also found the logic of Longmore LJs judgment convincing in relation to the latter type of policies. Smith LJ on the other hand considered that public liability and employers liability insurances gave rise to different considerations (para 328). In my opinion, that is right. Employers liability policies are subject to particular terms and considerations, analysed above (particularly in paragraphs 18 28 and, in the case of policies effected after the coming into effect of the ELCIA, paragraphs 41 46). These considerations are not or certainly not necessarily applicable to public liability insurances. The present case was concerned with employers liability not public liability insurances, and it may well be that not all the relevant facts relating to the latter are before us. We certainly have not heard full argument on the proper conclusions which may be drawn regarding the basis of liability or trigger generally applicable under the latter. In these circumstances, I would proceed on the basis that we are not bound by Bolton, that this does not involve any view about the correctness or otherwise of Bolton, but only that it is unnecessary to consider what the position generally may be under public liability policies. Assuming that, in relation to public liability insurance, the position generally is as stated in Bolton, that does not alter the conclusions which I reach. It merely means, in their light, that public liability insurance generally and the present employers liability policies operate on different bases, because of their different backgrounds, terms and purposes. Contracted There is no difficulty about treating the word contracted as looking to the causation or initiation of a disease, rather than to its development or manifestation. In relation to the two BAI wordings and the third MMI wording, this interpretation obtains strong support from the general nature and purpose of the relevant policies, derived from their immediate context and terms and analysed in paragraphs 18 to 28 and 41 above. To the limited extent that the WCA background may assist to inform the meaning of later policies, it can be seen overall as a legislative scheme which was concerned with either the risk of or actual causation (para 32 above). Even if, in the phrase sustained or contracted or injury sustained or disease contracted, the word sustained is to be understood as meaning experienced, that would reflect no more than the fact that the cause and effect of an injury commonly coincide; I would still unhesitatingly conclude, as did the Court of Appeal, that the word contracted used in conjunction with disease looks to the initiating or causative factor of the disease. Sustained The majority of the Court of Appeal considered that it was impossible to view policies with pure sustained wordings as operating by reference to the initiating or causative factor of a disease. They did so primarily by reference to the wording of the insuring clauses. In my view, as indicated in paragraphs 18 19 above, a broader approach is necessary. The general nature and purpose of these policies can be derived from their immediate context and terms, analysed in paragraphs 18 to 28 and 41 above. It is true, as Rix LJ said, that phrases such as injury sustained by an employee or an employee who shall sustain injury, in either case by accident or disease, appear to address the impact of the accident or disease on the employee. But the underlying focus of the insurance cover is on the employees and activities current during the insurance period. The cover would be potentially incomplete, and employers would be potentially exposed to uninsured risks, were sustained to be understood as meaning developed or manifested. This is so, even before the ELCIA came into force. Any policies written subsequent to the coming into force of the ELCIA either afford cover consistent with the Acts requirements by virtue of an ELCIA extension provision, or, to the extent that this is not the case, should be construed, if at all possible, as meeting employers obligations under that Act. In my view, such obligations included taking out insurance in respect of negligence during the insurance period affecting an employee in a manner giving rise to bodily injury or disease then or at any subsequent time. On this basis, I consider that, although the word sustained may initially appear to refer to the development or manifestation of such an injury or disease as it impacts employees, the only approach, consistent with the nature and underlying purpose of these insurances both before and after the ELCIA, is one which looks to the initiation or causation of the accident or disease which injured the employee. The disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself subsequently. Disease sustained, read as meaning experienced or incurred Rix LJ was attracted by the submission that, even if sustaining disease meant experiencing or incurring it during the period of the insurance, long tail diseases could be said to have been sustained during the period of insurance in this sense. He asked rhetorically whether an employee who had inhaled asbestos had not sustained an injury in the form of an assault of the fibres, as a result of which he was worse off through having dangerous fibres in his lungs (para 280). He noted that, although there was at most trivial injury or damage, and nothing that could create actionable damage, nevertheless, when mesothelioma develops, it is the risk of mesothelioma created by the exposure which is the damage (see . Barker ) and it is the exposure, and the risk of mesothelioma, that is the damage (para 281). He only felt bound to reject this analysis (para 284) because of the Court of Appeals previous decision in Bolton. It may be that in the case of some long tail diseases, the victim can be said to have incurred or caught them at the same time as the initial ingestion or scratch giving rise to them. But it is clear that this is not the position with inhalation of asbestos in relation to either asbestosis or mesothelioma. No cause of action arises from exposure or inhalation alone: Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281. Further, for reasons which I develop in paragraphs 64 65 below, the exposure and risk are not by themselves damage in any sense known to the law. Damage is only incurred when mesothelioma develops. Only when it develops does the victim incur damage which is legally relevant, and even then this is not because any physical link necessarily exists or can be proved between the mesothelioma and the original exposure. The rule in Fairchild and Barker imposes liability for the mesothelioma upon persons who have exposed the victim to asbestos, and so created a risk of mesothelioma. But it is not a rule which, even as between employers and employees, deems the latter to have suffered injury or disease at the time of any exposure. And, even if it were viewed simply as a rule imposing retrospective liability on employers for exposing their employees to the risk of mesothelioma, the insurance policies do not insure risks of physical injury or disease, but only actual injury or disease. The application of the insurances in respect of mesothelioma At the outset of these appeals, the application of the insurances in respect of mesothelioma suffered by employees exposed to asbestos during their employment by an insured employer did not appear controversial. This changed after a question from Lord Phillips on day 4 of the hearing, followed by a later written note. All the same, the transcript pages containing any argument on the point numbered only 40 out of a total of some 1140. So far as Mr Edelman made any submissions on this point, in his written case or orally, they were to this effect: if the correct analysis of the Houses decision in Fairchild be that an employer who exposes an employee to asbestos is deemed to have caused that employees mesothelioma, then employers liability insurances held by the employer on a causation basis should respond; but, if the policies do not respond on a causation basis, there is no justification for treating the employee as having suffered injury or a disease during their currency, because employers cannot prove that any particular inhalation caused any injury. This led to some discussion, particularly with counsel for employers and employees, of the points which I have already addressed in paragraphs 50 52 above. The point now expressed forcefully by Lord Phillips in his judgment is that exposure to the risk of mesothelioma is the correct analysis of the Fairchild principle, at least as subsequently interpreted, and that such exposure can satisfy neither the concept of injury nor the concept of causation for the purposes of the policies. If that is right, then the present insurance claims must all fail. Indeed, the great bulk of insurance claims settled by other insurers (e.g. former tariff insurers) or by the present insurers under the causation policies they have issued in more recent years (paragraph 10 above) should presumably also have failed. The only exception may be the case of an employee exposed to asbestos in only one employment by an employer holding insurance throughout with only one insurer. In such a case it might (perhaps) be said that, whichever particular inhalation(s) may have been responsible for the employees mesothelioma, it (or they) must have been insured. Even then, the logic of the Supreme Courts reasoning in Fairchild and Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229 might lead to the conclusion that causation was still unprovable in the light of the possibilities of environmental or idiopathic causation of mesothelioma. Rules regarding causation are created by the courts for the purpose of determining when liability arises in particular contexts. Normally, they reflect a common sense understanding of what is ordinarily understood when we speak of a cause in a particular context. In their leading work on Causation in the law (Clarendon Press, 2nd ed 1985) Professor H. L. A. Hart and Tony Honor examined both this understanding and its relationship to legal decision making. Generally, but not always, a cause must involve an act or omission that was at least a sine qua non of the injury in respect of which responsibility attaches (the but for test). But sometimes two separate acts or omissions may each independently have been sufficient to give rise to that injury (as when A and B simultaneously, but independently shoot C dead), and then we may as a matter of legal policy accept a weaker causal relationship for the imposition of responsibility: see p lxv in the preface to and p 123 of the 2nd edition. Other cases where causal requirements have been relaxed include Bonnington Castings Ltd v Wardlaw [1956] AC 613; there, materially contributing to part of an accumulation of dust which cumulatively led to pneumoconiosis gave rise to liability for the whole disease (although it has been suggested that some apportionment might now be possible in fact and law). Another relevant authority is McGhee v National Coal Board [1973] 1 WLR 1; there, liability for dermatitis was held to exist because the defendant had materially contributed to part of the claimants exposure to dirt, any part of which might, independently of any other, have given rise to the abrasion leading to the claimants dermatitis. It was recognised that this involved liability based on materially contributing to the risk of the injury. Lord Reid at p.4G H described the result as reached taking a broader view of causation, and Lord Wilberforce at p 5G viewed it as involving a conclusion as to the causal connection that had to exist between the default and the disease complained of. The contrary view (viz, that proof of risk was insufficient without proof that the risk caused or materially contributed to the disease) had a logic which Lord Wilberforce acknowledged, but rejected for policy and evidential reasons set out at p.6C F. In Fairchild, McGhee was seen as a precursor of the decision there reached. Putting aside the possibility of an idiopathic or environmental cause, a Fairchild type situation exists when (a) there are two separate potential causes exposing the claimant to the same risk, one involving an act or omission by the defendant, (b) either one of which causes would have been sufficient to give rise to the injury, and (c) one of which did so, but (d) neither of which can as a matter of probability be shown to have done so. Taking into account the later decisions in Barker v Corus and Sienkiewicz, the Fairchild principle extends to any case where there has been an act or omission exposing a person to asbestos, which exposure may have caused the mesothelioma, but which cannot be shown as a matter of probability to have done so. On that basis, the House held in Barker v Corus that each or any persons liability should only be proportionate to the extent that he had exposed another to the risk of mesothelioma. Parliament by the Compensation Act 2006 reversed that conclusion and made each such person liable in respect of the whole of the damage caused by the mesothelioma. Lord Phillips in his judgment addresses the basis of Fairchild in the light of Barker v Corus, the 2006 Act and Sienkiewicz. He accepts that, if Fairchild is now correctly to be understood as a special rule deeming employers who have exposed an employee to asbestos to have caused any subsequently suffered mesothelioma, then the insurance policies should apply (para 109). But he concludes that Fairchild must be understood as creating liability not for the disease, but for the creation of the risk of causing the disease. It follows in his view that employers and employees gain no assistance from the special rule in asserting that mesothelioma suffered by any person was caused or initiated in any particular policy period. On this basis, even though the insurances respond to injuries caused or initiated during their periods, the employers and employees fail for want of proof. It is not fruitful to repeat the exercise undertaken in Barker v Corus of examining in detail the significance of the speeches in Fairchild. The House was not agreed about this in Barker, but the majority speeches of Lords Hoffmann, Scott and Walker were at pains to reject any analysis of Fairchild as proceeding upon a fiction that each exposure had caused or materially contributed to the disease: see paras 31, 61 and 104; they each also referred to the liability created by Fairchild as being not for causing the disease, but for materially increasing the risk of the mesothelioma which was in fact suffered: paras 31, 36 and 40, 53, 61 and 113. Lord Rodger (dissenting) perceived the majority to be misinterpreting Fairchild by failing to acknowledge that it was based on an equation of materially increasing risk with materially contributing to causation, an equation which he thought had been accepted as sufficient causation in Bonnington Castings Ltd v Wardlaw [1956] AC 613 and McGhee v National Coal Board [1973] 1 WLR 1. It is on the apparently bright line distinction said to have been drawn by the majority in Barker between materially contributing to increasing the risk of, and causing, a disease that Lord Phillips now founds his judgment in these appeals. The Compensation Act 2006 applies where a person who has exposed someone to asbestos is liable in tort in connection with damage caused to the latter by mesothelioma whether by reason of having materially increased a risk or for any other reason (section 3(1)(d)). It makes the former person liable in respect of the whole of the damage (section 3(2)(a)). On its face, the Act assumes rather than creates the liability, and only alters the measure of recovery. That was the view expressed in Sienkiewicz by Lords Phillips, Rodger and Brown (paras 70, 131 and 183). However, on further analysis, the distinction identified in paragraphs 58 59 above proves more elusive. Even in Barker itself, Lord Walker described exposing the employee to the risk of mesothelioma as being equated with causing his injury and the result as an explicit variation of the ordinary requirement as to causation (para 104), and spoke of the rule as one by which exposure to the risk of injury is equated with legal responsibility for that injury (para 109). However, it is conceivable that he meant that the ordinary requirement of causation of the disease was entirely replaced by another liability creating rule. It is in the later authority of Sienkiewicz that the difficulty of drawing any clear cut distinction between creating a risk and causation of the disease becomes most apparent. Lord Phillips there stated that the rule in its current form was that the person responsible for the exposure and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease (para 1). Later, he said that the law was presently contained in Fairchild and Barker which had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances (para 70). That was the analysis of Fairchild advanced by Lord Rodger in Barker v Corus (paras 73 and 83) but rejected there by the majority. Lord Brown in Sienkiewicz spoke of a more relaxed approach to causation (para 178) and flexibility in the approach to causation (para 187). I referred to Fairchild and Barker as involving a special rule of causation (para 188), and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims (para 196) and to adjustments in the burden of proof (paras 198 and 200). Lord Rodger was, on the other hand, loyal to the majority view in Barker by referring to liability as based on materially increas[ing] the risk (para 113), and Lord Dyson was cautious in speaking of materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Lord Phillips has in para 123 set out a passage from an extra judicial commentary written by Lord Hoffmann in Perspectives on Causation (2011), p 8. In it, Lord Hoffmann describes the two ways in which the changes introduced by Fairchild and Barker could be characterised, one as changing the causal requirements for an action for damages for mesothelioma ; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent; the other as creat[ing], exceptionally, a cause of action for the increased risk of mesothelioma, rather than for the disease itself. Lord Hoffmann notes that the House in Barker (Lord Rodger dissenting) adopted the second explanation of what had happened in Fairchild. But in the next sentence, not quoted by Lord Phillips, Lord Hoffmann went on: Parliament almost immediately reversed this decision by a statute giving effect to the first explanation, which had been advocated by Lord Rodger in his dissenting speech. Lord Hoffmanns extra judicial (or judicial) words cannot by themselves alter the true effect of a statute, but his comments do again show that the suggested distinction is more fluid than might at first appear. It is relevant to look more closely at what Barker decides. In Barker, Lord Hoffmann spoke of Fairchild as applying an exceptional and less demanding test for the necessary causal link between the defendants conduct and the damage (para 1) and of the requirement of a sufficient causal link between the defendants conduct and the claimants injury (para 17). In his note in Perspectives on Causation, he picked up this language with references to the causal requirements of the relevant rule and to the issues in cases of mesothelioma and analogous situations as involving the causal requirements for an action for damages for mesothelioma. Lady Hale in Barker also viewed the common law rules governing the measure of recovery as closely linked to the common laws approach to causation, and said that there was no reason in principle why the former rules should not be modified as the latter approach is courageously developed to meet new situations (para 122). In paras 123 and 124, she made clear that in her view the issue in Barker could be seen as arising from the expanded perceptions or developed concept of causation which the law had accepted. These citations all suggest that it is both possible and appropriate to characterise the position achieved by the common law after Barker v Corus as one concerned with the issue of the causal requirements or causal link, as between the defendants conduct and the disease, which the common law requires in order for there to be an action for mesothelioma. But analysis of the rule arrived at after Fairchild and Barker justifies further propositions. Despite the apparent clarity of the suggested distinction between liability for a risk and for a disease, no cause of action at all exists unless and until mesothelioma actually develops. Neither the exposure to asbestos nor the risk that this may one day lead to mesothelioma or some other disease is by itself an injury giving rise to any cause of action: see Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281; the House there decided that not even the emergence of pleural plaques marking the past exposure to asbestos constituted injury for the purpose of giving a cause of action. In order to fall within the principle in Fairchild and Barker, the development of mesothelioma is a pre condition: see Barker, per Lord Hoffmann (para 48) and Lord Scott (para 53). Lady Hale went further, stressing that she in fact agreed with Lord Rodgers view that the damage which is the gist of these actions is the mesothelioma and its physical and financial consequences. It is not the risk of contracting mesothelioma (para 120). In reality, it is impossible, or at least inaccurate, to speak of the cause of action recognised in Fairchild and Barker as being simply for the risk created by exposing someone to asbestos. If it were simply for that risk, then the risk would be the injury; damages would be recoverable for every exposure, without proof by the claimant of any (other) injury at all. That is emphatically not the law: see Rothwell and the statements in Barker itself, cited above. The cause of action exists because the defendant has previously exposed the victim to asbestos, because that exposure may have led to the mesothelioma, not because it did, and because mesothelioma has been suffered by the victim. As to the exposure, all that can be said (leaving aside the remote possibility that mesothelioma may develop idiopathically) is that some exposure to asbestos by someone, something or some event led to the mesothelioma. In the present state of scientific knowledge and understanding, there is nothing that enables one to know or suggest that the risk to which the defendant exposed the victim actually materialised. What materialised was at most a risk of the same kind to which someone, who may or may not have been the defendant, or something or some event had exposed the victim. The actual development of mesothelioma is an essential element of the cause of action. In ordinary language, the cause of action is for or in respect of the mesothelioma, and in ordinary language a defendant who exposes a victim of mesothelioma to asbestos is, under the rule in Fairchild and Barker, held responsible for and in respect of both that exposure and the mesothelioma. This legal responsibility may be described in various ways. For reasons already indicated, it is over simple to describe it as being for the risk. Another way is to view a defendant responsible under the rule as an insurer, but that too is hardly a natural description of a liability which is firmly based on traditional conceptions of tort liability as rooted in fault. A third way is to view it as responsibility for the mesothelioma, based on a weak or broad view of the causal requirements or causal link appropriate in the particular context to ground liability for the mesothelioma. This third way is entirely natural. It was adopted by Lords Reid and Wilberforce in McGhee, by Lord Hoffmann, Lady Hale and (possibly) Lord Walker in Barker and by Lord Hoffmann in his extra judicial commentary. It seems to have received the perhaps instinctive endorsement of a number of members of this Court, including myself, in Sienkiewicz. Ultimately, there is no magic about concepts such as causation or causal requirements, wherever they appear. They have the meanings assigned to them and understood in ordinary usage in their context. A logician might disagree with a reference to causation or a causal link in a particular context, but that is not the test of meaning: see Lord Wilberforces words in McGhee, p 6C F (cited in para 56 above). The present appeals concern the meanings we assign to the concept of causation, first in the context of considering employers liability to their employees and then in considering the scope of employers insurance cover with respect to such liability. It is instructive in this connection to look more closely at the Compensation Act 2006. Section 3(3) states that section 3(2) does not prevent (a) one responsible person from claiming a contribution from another, or (b) a finding of contributory negligence. Section 3(4) goes on to provide that [I]n determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible . Section 3(3) necessarily relates to the legal bases for claiming contribution or asserting contributory negligence, which are to be found in, respectively, the Civil Liability (Contribution) Act 1978 and the Law Reform (Contributory Negligence) Act 1945. The 1978 Act addresses the situation where two or more persons are liable in respect of the same damage (section 1(1)), while section 2(1) provides for contribution in such situations to be such as may be found by the court to be just and equitable having regard to the extent of that persons responsibility for the damage in question. Although under section 3(4) of the 2006 Act, the court must have regard to the relative lengths of the exposure for which each was responsible, the same damage which is a pre condition to the application of the 1978 Act must be the mesothelioma. It cannot be the risk created by the person by or from whom contribution is sought, because each person and exposure creates a separate risk, and no one person or exposure creates the total risk resulting from all exposures. The 2006 Act, by its reference to the 1978 Act, thus assumes that every person, who has exposed to asbestos a victim who later experiences mesothelioma, incurs responsibility for the mesothelioma. That language again fits an analysis whereby the rule in Fairchild and Barker identifies the appropriate weak or broad causal link between the exposure and the mesothelioma. A similar position applies under the 1945 Act. Under section 1(1), that Act applies [w]here any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons. In that event, the damages recoverable are to be reduced to such extent as the court thinks just and equitable having regard to the claimants share in the responsibility for the damage. The application of this section, as contemplated by the 2006 Act, is only possible on the basis that a mesothelioma sufferer may be said to have suffered the mesothelioma partly as the result . of the fault of anyone who has exposed him to asbestos. In other words, the rule in Fairchild and Barker must have been viewed by the drafters in my opinion entirely understandably as establishing a causal link, between the exposure and the mesothelioma, sufficient for it to be said that the mesothelioma was the result of each (and every) exposure. A similar view is also implicit in the provisions of the Act drafted on the basis that insurers who would commonly of course be employers liability insurers would be among the persons by or for whose benefit or against whom contribution would be sought in cases of multiple responsible persons: see section 3(7)(b) and (10)(a) of the 2006 Act. Those provisions necessarily assume that employers liability insurances, written generally on a causation basis, would respond to Fairchild/Barker type liability incurred by employers. Ultimately, the present appeals raise the questions how the present employers liability insurance policies respond as a matter of construction in circumstances within the rule in Fairchild and Barker. Where two contracts are linked, the law will try to read them consistently with each other. This is so with language in a bill of lading, incorporated from a charterparty: The Njegos [1936] P 90. A similar approach applies to language in a reinsurance incorporated from the insurance: Forsikringsaktieselskapet Vesta v Butcher [1989] AC 852 and Groupama Navigation et Transports v Catatumbo CA Seguros [2000] 2 Lloyds Reports 350, even though there is no guarantee that a reinsurance will in every possible circumstance that may develop pick up every liability that may be held to exist under an insurance: see Wasa International Insurance Co Ltd v Lexington Insurance Co [2009] UKHC 40, [2010] 1 AC 180. The intention under the present insurances must be taken to have been that they would respond to whatever liability the insured employers might be held to incur within the scope of the risks insured and within the period in respect of which they were insured. Thus, as Scrutton and Greer LJJ accepted in the Ellerbeck Collieries case (paragraph 34 above), an employers liability insurance could have been expected to respond to the conventional and artificial definition in the WCAs as to what constituted an accident and when personal injury by accident or disease was sustained for the purposes of employers liability to employees. Furthermore, if the common law during or even after the currency of an insurance develops in a manner which increases employers liability, compared with previous perceptions as to what the common law was, that is a risk which the insurers must accept, within the limits of the relevant insurance and insurance period. Eady J correctly identified this in Phillips v Syndicate 992 Gunner [2003] EWHC 1084 (QB), [2004] Lloyds Insurance and Reinsurance Reports 426, 429 (left). The declaratory theory does not presume the existence of an ideal system of the common law, which the judges from time to time reveal in their decisions. But it does mean that, when judges state what the law is, their decisions do . have a retrospective effect in the sense that the law as stated will, generally speaking, be applicable not only to the case coming before [them] but, as part of the common law, to other comparable cases which come before the courts, whenever the events which are the subject of those cases: Kleinwort Benson Ltd v Lincoln CC [1999] 2 AC 349, 378G H, per Lord Goff. The declaratory theory is a pragmatic tool, essential when cases can only come before the court some time, perhaps some years after the relevant events occurred, and when the law [must] be applied equally to all, and yet be capable of organic change (p 379A). A similar principle must, generally speaking, apply in relation to a statute such as the Compensation Act 2006, which changes or corrects the common law to what Parliament perceives to be a more appropriate result for the purposes of all future cases coming before the courts, whenever the events giving rise to them. In the case of that Act, the result was one which the courts might as a matter of common law well have themselves accepted (and which indeed Lord Rodger in his powerful dissent in Barker v Corus believed that the common law had accepted) in Fairchild. Concluding, as I have done, that the present insurances covered employers liability for injuries or diseases caused during the relevant insurance periods, the question is whether they cover employers liability for mesothelioma arising under the rule in Fairchild and Barker from having exposed employees to asbestos during such periods. It is not in dispute that, if the rule is characterised as a rule of deemed causation, then the policies must respond. A parallel example, so familiar that it is easy to overlook, is the vicarious liability to an employee, A, which rests on any employer, B, who has not himself been negligent but must answer vicariously for the negligence of another employee, C. We have no hesitation in saying that the employer B has in such a case caused the injury or disease suffered by A. But this is so in reality only because a rule of law requires us to equate the acts or omissions of C with those of B. The argument, accepted by Lord Phillips, is that the rule in Fairchild and Barker is not one of deemed causation of or, therefore, liability for the disease, but one of liability for the risk created by the exposure. For reasons which I have set out, I regard this distinction as too simple. The liability arises only because of the incurring of the disease and is for the disease. A condition of such liability is that the employer (negligently) exposed the victim to asbestos. The insurance policies, read as operating on a causation basis, are aimed at covering liability generated by employers activities during their insurance periods: see paragraphs 18 28 and 41 above; unless liability for mesothelioma flowing from negligent exposure during an insurance period is covered by the policies, this aspect of employers activities will not in practice be covered at all. In my view, these considerations justify a conclusion that, for the purposes of the insurances, liability for mesothelioma following upon exposure to asbestos created during an insurance period involves a sufficient weak or broad causal link for the disease to be regarded as caused within the insurance period. It would, I think, have been anomalous and unjust if the law by deeming there to have been causation of the disease could have created policy liability (which is common ground), but the law by insisting that the liability in respect of mesothelioma was for the risk of causation achieved a quite different result. As I have sought to show, it is not in any event accurate to treat the liability as being either solely or strictly for the risk. The risk is no more than an element or condition necessary to establish liability for the mesothelioma. The reality, reinforced by provisions in the 2006 Act, is that the employer is being held responsible for the mesothelioma. For this purpose, the law accepts a weak or broad causal link. The link is to exposure which may but cannot be shown on the ordinary balance of probabilities to have played a role in the actual occurrence of the disease. But for the purposes of the policies the negligent exposure of an employee to asbestos can properly be described as having a sufficient causal link or being sufficiently causally connected with subsequently arising mesothelioma for the policies to respond. The concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the rule in Fairchild and Barker. Viewing the point slightly more broadly, if (as I have concluded) the fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them, then the liability for mesothelioma imposed by the rule in my opinion fulfils precisely the conditions under which these policies should and do respond. Conclusion I would therefore dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. ANNEX A The policy wordings (dates are approximate) (1) Excess First Wording (late 1940s): Whereas . (hereinafter called The Employer) carrying on the business of . has made a proposal . this Policy witnesseth that in consideration of the payment of . as premium to the Company on the estimated total amount, as set forth in the Schedule hereto, of the wages, salaries, and other earnings of Employees, a description of whom is set forth in the said Schedule (which premium is subject to adjustment as hereinafter provided) the Company agrees to indemnify the Employer in the manner following, namely That if at any time during the period commencing on theday of19 , and ending on theday of19 (both days inclusive) and for such further period or periods as may be mutually agreed upon, any employee in the Employer's immediate service shall sustain any personal injury by accident or disease while engaged in the service of the Employer in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands, in work forming part of or process in the business above mentioned, and in case the Employer shall be liable to damages for such injury, either under or by virtue of the Common Law, the Fatal Accidents Acts 1846 to 1908, or the Law Reform (Miscellaneous Provisions) Act 1934, the Company will indemnify the Employer The Schedule required a description of the insured companys employees and their estimated total wages, salary and other earnings. Condition 1 of the policy further provided that: the Employer shall truly record in a wages book the name of every employee and the amount of wages, salary and other earnings paid to him. Second Wording (late 1950s to 1960s): Whereas the Employer . carrying on the business described in the . Schedule has made . a written proposal and declaration, containing particulars and statements which it is hereby agreed are the basis of this Contract . and has paid the premium mentioned in the Schedule, which premium is subject to adjustment as hereinafter provided, this Policy witnesseth that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in work forming part of the process in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease The policy provided that the Company should not be liable under it in respect of accidents occurring elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. The policy provided that premiums were to be regulated by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with a wages book being kept open to inspection for that purpose and the employer supplying the correct amounts within one month of the expiry of each insurance period. Condition 1 and the Schedule were in similar form to those in the first wording. Third Wording (1970 to 1976) After a recital in the same form as the second wording, this wording provided: that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease Under the third wording, there was the same territorial limitation as under the second wording in relation to accidents occurring elsewhere than in Great Britain, etc. Premiums were also regulated by reference to wages, salaries, etc. and condition 1 and the Schedule were in the same terms as in the second wording. (2) Independent Sole wording in Issue (1972 to 1987): This was a Contractors Combined Policy, covering Employers Liability (section 1), Public Liability (section 2) and Loss of or Damage to Contract Works (section 3). It provided: NOW THIS POLICY WITNESSETH that during the Period of Insurance or during any subsequent period for which the Company may accept payment for the continuance of this Policy and subject to the terms, exceptions and conditions contained herein and or endorsed hereon, the Company will indemnify the Insured as hereinafter specified. SECTION 1 EMPLOYERS' LIABILITY If any person who is under a contract of service or apprenticeship with the Insured shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule the Company will indemnify the Insured against all sums for which the Insured shall be liable at law for damages for such injury or disease The Policy provided that the Company was not to be liable for injury, illness, loss or damage caused elsewhere than in Great Britain, the Isle of Man or the Channel Islands. As a result of the ELCIA 1969 making insurance in respect of employers liability compulsory, the Independent wording also contained the further provision (the ELCIA extension provision): "AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY The indemnity granted by section 1 of this Policy is deemed to be in accordance with the provisions of any law relating to compulsory insurance of liability to employees in Great Britain. It is agreed the Insured shall repay to the Company all sums paid by the Company which the Company would not have been liable to pay but for the provisions of such law. " The policy Schedule contains spaces for entry of first, annual and minimum premium, as well as of the name of the Principal for whom the insured is undertaking work, the details of the contract or type of work covered by the policy and its situation. Condition 7 provides that the premium is based on estimates provided by the Insured, for record keeping, for the supply of updated information as required by the Company within one month of the expiry of each insurance period and for adjustment of the premium on that basis. (3) MMI First Wording (1949 to 1958) the Company hereby agrees that if at any time during the period of insurance specified in the schedule or thereafter during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified in the said schedule, or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any personal injury by accident or disease arising out of and in the course of his employment by the Insured in their activities described in the schedule and if the Insured shall be liable to pay damages for such injury or disease then, subject to the terms and conditions contained herein or endorsed hereon, the Company shall indemnify the Insured against all sums for which the Insured shall be so liable The policy was expressed not to apply to or include liability in respect of injury or disease caused elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. Condition 5 regulated premiums by reference to wages, salaries, etc, and made provision for a wages book and adjustment to like effect to the Excess second wording. The policy Schedule provided for the classification of staff and employees according to departments and job description, with corresponding figures for estimated total remuneration. Second Wording (1958 to 1974) the Company hereby agrees that if at any time during the First Period of Insurance specified in the said Schedule or during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified as the Renewal Premium in the said Schedule or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any bodily injury or disease arising out of and in the course of his employment by the Insured in the Insured's activities described in the said Schedule and if the Insured shall be liable to pay damages for such injury or disease or for death resulting from such injury or disease then, subject to the terms, exceptions and conditions contained herein or endorsed hereon or set out in the Schedule to this Policythe Company will indemnity the Insured against all sums for which the Insured shall be so liable. Like the first wording, this wording contained a territorial exclusion of liability in respect of injury or disease caused elsewhere than in Great Britain, etc. The policy Schedule provided for the entry of the Estimates (if any) on which the premium is calculated, including in particular any such estimate of wages, salaries, etc. paid to staff, and cross referred to condition 7, which provided that, if the premium had been based on any estimates, an accurate record should be kept (of actual amounts), the insured should provide insurers with such particulars and information as might be required within one month of the expiry of the policy period and the premium adjusted accordingly. Third Wording (1974 to 1992) The Company agrees to indemnify the Insured in respect of all sums without limit as to amount which the Insured shall be legally liable to pay as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any person under a contract of service or apprenticeship with the Insured when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The policy Schedule contemplated a premium adjustable in accordance with condition 5, which in turn provided (in like manner to condition 7 of the second wording) for the adjustment of any premium so calculated by reference to actual amounts at the end of the policy period. (4) BAI First Wording (1953 to 1974) . the Company willindemnify the Insured against all sums of money which the Insured may become liable to pay to any Employee engaged in the direct service of the insured or any dependent of such Employee in respect of any claim for injury sustained or disease contracted by such Employee betweenandboth inclusive The policy carried the note: This policy does not cover the insureds liability for accidents to workmen arising outside the United Kingdom. Conditions 1 and 2 made elaborate provision for the regulation of premiums by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with pay sheets and books of account being kept open to inspection for that purpose and the employer making a return, and the premium being adjusted, subject to a minimum, at the end of each insurance period. Second Wording (1974 to 1983) the Company willindemnify the Insured against all sums of money which the Insured may become legally liable to pay in respect of any claim for injury sustained or disease contracted by any person engaged in and upon the service of the Insured and being in the Insured's direct employment under a Contract of Service or Apprenticeship between theday ofand theday ofboth inclusive This wording also excluded insurers from liability in respect of accidents to employees arising outside the United Kingdom. Like the Independent and third MMI wordings, the BAI second wording also included the ELCIA extension provision. Conditions 1 and 2 provided for the regulation and adjustment of premiums by reference to actual wages, salaries, etc. during each insurance period, in like terms to conditions 1 and 2 in the first wording. (5) Zurich The Municipal First Select wording (1993 to 1998) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury sustained during the Period of Insurance by any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The Municipal Second Select wording (1998 ) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury caused during the Period of Insurance to any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The tariff wording (1948 ) if any person under a contract of service or apprenticeship with the Insured shall sustain any personal injury by accident or disease caused during the period of insurance and arising out of and in the course of his employment by the Insured in the business above mentioned and if the Insured shall be liable to pay damages for such injury or disease the Association shall indemnify the Insured against all sums for which the Insured shall be so liable. LORD CLARKE Like other members of the Court, I agree with Lord Mance on the construction issue. Thus I agree that, for the purposes of the EL policies, mesothelioma is sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the asbestos fibre or fibres which cause the disease. I do not wish to add to Lord Mances reasoning on the construction issue. I do however wish to add some words of my own on the causation issue which sharply divides Lord Phillips and Lord Mance. I wish to say shortly why I prefer the conclusion of Lord Mance to that of Lord Phillips. As I see it, the effect of Fairchild, Barker and Sienkiewicz may be summarised in this way. An employer who, in breach of duty, has exposed an employee to asbestos is liable in damages if the employee subsequently suffers the disease. The employees cause of action is not that he was exposed to the risk of mesothelioma. He has no claim unless he in fact suffers the disease. It is the disease which represents the damage which completes the cause of action and it is only then that his cause of action accrues and the relevant time limit begins to run. It is axiomatic that, in order to succeed in tort, the employee must show a sufficient causal link between the breach of duty, namely the exposure to asbestos, and the disease which represents the damage, namely mesothelioma. The effect of the majority opinion in Barker is that, where there are two or more employers who have exposed the claimant to the risk of mesothelioma, they are not jointly and severally liable to the claimant for the whole of the consequences of the disease but only severally liable for an aliquot part. That decision was reversed by the Compensation Act 2006, so that such employers are jointly and severally liable for the whole of the consequences. The question in this appeal is whether the employers liability insurers are liable to indemnify the employers in respect of that liability. It would in my opinion be a remarkable result if they were not. Lord Phillips notes at para 109 that Mr Edelman QC accepted that, if the correct analysis of the special rule, which (using Lord Phillips definitions) was the result of the combined effect of the special approach in Fairchild and Barker and the Compensation Act 2006, was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust, the insurers would be liable. Lord Phillips accepts that that concession was correctly made. I agree, for the reasons he gives at paras 109 to 114. The question is therefore whether the correct analysis of the special rule is indeed that the employers were deemed to have caused the mesothelioma. I accept that in such a case the employee cannot show on the balance of probabilities that the employers negligence caused the disease. The effect of Fairchild and Sienkiewicz was however that the employer is liable where the exposure contributed to the risk that the employee would suffer the disease and where the employee in fact suffers the disease. That is not in dispute. Lord Phillips says at para 124 that the majority in Barker drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease. He quotes para 2 of Lord Hoffmanns speech as follows: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Phillips further notes that at para 125 Lord Hoffmann advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. See also the passages to like effect referred to by Lord Mance at para 61. I accept that Lord Hoffmann and others did indeed advance that view of Fairchild but it is I think important to note that it was in the context of the question whether, in a case of two or more employers, each was severally liable for a proportion of the consequences of the mesothelioma or whether each was jointly and severally liable for the whole. Lord Hoffmann cannot have intended to hold, without more, that the basis of liability was the wrongful creation of the risk or chance of causing the disease because there would be no liability at all but for the subsequent existence of the mesothelioma. It seems to me that, whether the majority in Barker were correct or not, there is no escape from the conclusion that, in all these cases, where it is not possible to show that the particular employer caused the claimant to suffer mesothelioma, the underlying question is who should be held responsible for causing the mesothelioma which in fact struck down the employee. None of the cases is authority for the proposition that causation is irrelevant. On the contrary, the quest is for the employer who can fairly be held liable for the consequences of the disease and therefore for the employer who can fairly be said to have caused the disease. The courts have embarked on similar quests over the years. Lord Mance has given a number of examples. As Lord Mance shows at para 56, they include Bonnington and McGhee, where Lord Reid was prepared to take a broad view of causation and Lord Wilberforce rejected a traditional approach for policy or evidential reasons. In my opinion the reasoning in Sienkiewicz is of some significance in this context. Lord Mance has given the relevant references in para 61. Thus, as Lord Mance observes, at para 61 Lord Phillips said that Fairchild and Barker had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances. Lord Mance further refers to Lord Brown speaking of a more relaxed approach to causation and flexibility in the approach to causation at paras 178 and 187. Lord Mance had himself referred to Fairchild and Barker as involving a special rule of causation at para 188, and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims at para 196 and to adjustments in the burden of proof at paras 198 and 200. Again, as Lord Mance observes at para 61 above, Lord Dyson referred (at para 207) to materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Both Mr Beloff QC and Mr Stuart Smith QC addressed these issues in their oral submissions. They both in effect submitted that the effect of Fairchild, Barker and Sienkiewicz was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust. They both recognised that the ordinary rule of causation could not apply and that some element of policy or doctrine was required in order to explain Fairchild. Mr Stuart Smith submitted that the effect of Fairchild was that each material exposure to asbestos dust is doctrinally held responsible for the mesothelioma. Mr Beloffs submission was to much the same effect. He relied upon a dictum of Lord Walker in Barker at para 109: A rule of law by which exposure to risk of injury is equated with legal responsibility for that injury entails the possibility that an employer may be held liable for an injury which was not in fact caused by that exposure (though in the present state of medical science, that fact can be neither proved nor disproved). The injury is of course the mesothelioma, which is necessary to complete the cause of action. On that basis it seems to me that Lord Walkers statement that the risk of injury is equated with legal responsibility for the injury is in effect to say that, by creating the risk of mesothelioma in the future, the employer is deemed to have caused the mesothelioma, if it should develop in the future. It appears to me that these conclusions are supported by Lord Mances analysis of section 3 of the Compensation 2006 at paras 67 and 68, with which I agree and to which I do not wish to add anything. Given Mr Edelmans concession that, if that is correct, the employers are liable under the policies (and this Courts acceptance of it) I would hold that the causation point does not assist the insurers. I would only add this. It appears to me that, once it is held that, on these facts, the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies. Rather as in AXA, the whole purpose of the policies was to insure the employers against liability to their employees. That purpose would be frustrated if the insurers submissions on this point were accepted. I agree with Lord Mance, for the reasons he gives at paras 69 73 that these policies respond to these claims. For these reasons, I too would dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD DYSON I too agree with Lord Mance on the construction issue. As to the causation issue, I agree with the reasoning of Lord Mance and Lord Clarke. Accordingly, I would dismiss the appeals by insurers in so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD PHILLIPS Introduction So called long tail industrial diseases have raised peculiar difficulties in the field of tort. These diseases result from the effect on the body of exposure to noxious substances. The effect can be long, drawn out and mysterious, in as much as medical science has not yet identified the precise mechanism, or chain of causation, by which the noxious substance causes the disease. Mesothelioma is a long tail disease in which the problems raised have been particularly acute. The problems arise in the application of principles of law that do not ordinarily give rise to difficulty. An employer will be liable in damages if by an act or omission that is negligent or in breach of statutory duty he causes physical harm to an employee. In the vast majority of cases there will be no difficulty in identifying the moment at which the negligence or breach of duty causes the physical harm, for the harm will take the form of an obvious injury. This is not the position in respect of mesothelioma. Asbestos dust, inhaled into the lungs, is the agency that causes mesothelioma, but as long as forty or fifty years may elapse before the effects on the body of dust inhaled culminate in symptoms of mesothelioma. Once the symptoms are felt, the disease will develop swiftly to bring about an inevitable and extremely unpleasant death. Where a victim of mesothelioma was exposed to asbestos dust over a period of years it is impossible, even with hindsight, to determine on balance of probabilities whether dust inhaled in a particular year caused or contributed to the development of the mesothelioma. It follows that, where the victim worked for a series of employers, each of whom exposed him to asbestos dust, it is impossible to prove on balance of probability that any particular employer caused or contributed to the victims mesothelioma. This means that the normal principles of the law of tort provide no remedy to the employee or his dependants. The manifest injustice of this position led the House of Lords in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572 to create what I shall describe as a special approach to causation in respect of mesothelioma, whose effect was immediately varied by Parliament by section 3 of the Compensation Act 2006. I shall describe the composite result achieved by the House of Lords and Parliament as the special rule. I shall examine the nature of this special rule in due course. Its effect was, however, to place each employer in the same position as that employer would have been under at common law if it were proved, on balance of probability, that its negligence or breach of duty in exposing the employee to asbestos dust had contributed to causing the employees mesothelioma. These developments of the law of tort have formed the backdrop to the issue that has occupied almost all of the eight days that this Court has devoted to this appeal. I shall call this issue the construction issue. The construction issue relates to the true construction of a number of policies of insurance against employers liabilities (EL policies) with similar, but not identical, provisions as to the cover provided. The EL policies provided cover by reference to specific periods usually of a year. The central issue relates to the event or events that, on true construction of each policy, had to occur within the period of the policy in order to render the insurer liable to indemnify the employer in respect of liability for causing an employees mesothelioma. The policies provided cover in respect of diseases sustained or contracted during the period of the policy. The meaning of each of those words, in its context, lies at the heart of the construction issue. It does not seem that the construction issue initially received a great deal of consideration. Insurers treated the policies as if they covered an employer whose breach of duty within the period of the policy had contributed to causing the disease and regarded this requirement as satisfied if the employer was held liable because he had exposed the employee to asbestos dust during that period. Where more than one insurer was liable on this basis, they apportioned liability according to the period of exposure covered by each. The attitude of four of the five insurers party to this appeal changed as a result of the decision of the Court of Appeal in Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50; [2006] 1 WLR 1492. Those insurers are MMI, Excess, BAI and Independent, each of which is in run off. I shall describe them collectively as the insurers. Their opponents I shall describe collectively as the employers, although they embrace solvent employers, individuals claiming under the Third Party (Rights against Insurers) Act 1930, and Zurich, which has a community of interest with these. Bolton concerned the scope of cover of a public liability policy (PL policy) in relation to liability for causing mesothelioma. The policy provided cover in respect of an injury that occurs during the currency of the policy. The argument proceeded on the premise that the chain of causation of mesothelioma, once it was diagnosed, could be traced back to the initial inhalation of asbestos dust. The issue was whether the mesothelioma could properly be said to have occurred at the time of the initial inhalation. The Court of Appeal held that it could not. The injury only occurred, at earliest, at the stage of development of the disease at which malignancy occurred. This was, on the evidence, ten years, give or take a year, from the date on which it became possible to diagnose the existence of the tumour but very many years after the initial inhalation of asbestos dust. This decision led the insurers to take the point that a similar approach should be taken to the interpretation of the cover afforded by the EL policies. Mesothelioma was not, on true construction of the policies, sustained or contracted at the time of the initial inhalation of asbestos dust. It was only sustained or contracted at the much later stage when, as a consequence of the process initiated by asbestos dust, an actionable injury in the form of malignancy, developed. Before Burton J, the Court of Appeal and this Court the construction issue has been argued at great length and in great detail. I agree, as do the other members of the Court, with the conclusions reached by Lord Mance on the construction issue. These conclusions have application not merely to mesothelioma but to employers liabilities in relation to other long tail industrial diseases such as asbestosis and pneumoconiosis. For the purpose of EL policies, these diseases are sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the noxious substance that causes, or contributes to the cause or the extent of, the disease. Throughout the hearing of this appeal there has lurked a second issue. It has not been the subject of argument below, nor does it feature in the agreed Statement of Facts and Issues. This is, perhaps, because it relates to a point that does not arise out of Bolton. It has always been there for the taking, but insurers have not hitherto chosen to raise it, perhaps because its consequences are unattractive. It arises out of a problem that is similar to that which led the House of Lords to formulate the special approach in Fairchild and Barker. It is not possible for an employer to prove that an employees mesothelioma was, in fact, caused in whole or in part by any particular period of exposure to asbestos dust. Thus the employer cannot prove, on balance of probability, that the mesothelioma for which he has been held liable under the special rule was, in fact, initiated in any particular policy year. How, then, can he prove that his liability falls within the scope of the cover, even if the policy bears the construction contended for by the employers and upheld by this Court? How can he prove that his liability arises out of disease sustained or contracted within the policy period, giving these words the same meaning as initiated? I shall call this issue the causation issue. The causation issue and the judgments below Although the causation issue was not raised in argument below, it was dealt with, at least implicitly, in the judgments of both courts. Burton J at first instance, and Rix and Stanley Burnton LJJ in the Court of Appeal proceeded on the basis that, in the case of a mesothelioma victim, exposing the victim to asbestos dust could be treated as equivalent to causing his disease. This approach was based on the special rule. Thus Burton J at paras 42 to 58 summarised, without significant comment, what he described as the special mesothelioma jurisprudence as it was at the time of his judgment. This included Fairchild, Barker and the 2006 Compensation Act. He thereafter proceeded on the basis that exposing a mesothelioma victim to asbestos dust could be treated as having been equivalent to causing the victim to contract the disease. Thus, when summarising his conclusions at para 243 he said: I conclude, in relation to the policies in issue before me, that they respond, just as would policies with caused wording, to claims against insurers where employers are liable on the basis of inhalation by employees during the policy period. They respond, consistently with other EL policies, in respect of mesothelioma claims, on an exposure basis. For the purposes of these policies, injury is sustained when it is caused and disease is contracted when it is caused, and the policies fall to be so construed. Rix LJ drew a distinction between the meaning of contracted and sustained. Contracted referred to the time of the diseases causal origins para 245. He felt constrained by Bolton, however, to hold that no injury was sustained until the disease reached the malignant stage. Implicit in his judgment was the premise that exposure to asbestos dust during the period of the policy could be treated as the causal origin of the disease see for example his comments at para 244. A difficult passage in his judgment at paras 280 283, when considering the meaning of injury, suggests that this premise was founded on the special rule. Thus he was able to conclude that the disease was contracted at the time that the victim was exposed to asbestos dust albeit that injury was not sustained at that point. In a short judgment Stanley Burnton LJ adopted similar reasoning. He stated, at para 338: We are agreed that in any year in which there was substantial exposure to asbestos, mesothelioma was caused by that exposure during that year. The fact that the disease did not develop for some years does not break the chain of causation. Submissions on the causation issue The causation issue was not raised by the insurers as a discrete issue. It none the less surfaced in a passage of the written case for Excess that was addressing the employers case that personal injury by disease was sustained at the moment of inhalation of asbestos dust that triggered the process of sustaining personal injury by disease. One of the arguments advanced by Excess in answer to this submission read as follows: Medically and empirically, one cannot be said to have suffered an injury on a particular day because it cannot be known in (say) a 10 year occupational exposure period on which of the 3652 days the fatal dose was inhaled (and it may be on more than one). It is likely that any ingestion on a particular day was irrelevant to the development of the final condition. There has been a tendency on the part of the claimants to treat inhalation as a single event from which an unbroken line can be drawn to malignancy. It is not. Inhalation (and hence on this theory) injury may occur over several thousands of days. Each day does not bring injury. Any particular day cannot therefore be selected as injury day. To overcome problems of medical causation in a personal injury action against an employer, the House of Lords extended the McGhee principle to mesothelioma in Fairchild. However this was a rule of causation and not definition. There is no such rule in insurance policies which defines what amounts to an injury. The Supreme Court in Sienkiewicz stressed the limits of the Fairchild exception in no uncertain terms, and it is submitted that it would be quite wrong for it now to invade the law of contract. A liability policy responds only to indemnify against a liability (i.e. actionable injury). There is no such liability on inhalation. Injury occurs when the claimant has a personal injury by disease. Thus Excess took the point that the special rule could not properly be invoked to establish that, on true construction of the contracts of insurance, injury was sustained upon inhalation of asbestos dust. This passage appeared after a submission at para 209 that it was only possible to equate the inhalation of a culpable quantity of asbestos dust with sustaining personal injury by disease by, inter alia, creating a special rule governing the response of EL policies in respect of mesothelioma, and possibly other long tail diseases. This proved to be what counsel for the employers sought to do when invited by the Court to address the causation issue. They did so in short oral submissions that cannot, when taken together, have occupied more than half an hour of the eight day hearing. The relevant submissions made by Mr Beloff QC for Akzo and AMEC and the Local Authorities are reported at pp 120 122 of the transcript for 15 December 2011. He started by observing that we had to cut the Gordian knot. He suggested that we should do so by equating creation of a risk with causing bodily injury. This he submitted was permissible because the object of the policy was to provide cover to an employer who, in breach of duty to employees, caused them compensatable damage. Were this approach not adopted, it would be impossible to show that any of a number of insurers providing cover over a period of years was liable. The law should rebel against such a result. In support of this submission Mr Beloff cited a statement by Lord Walker of Gestingthorpe in Barker at para 109 suggesting that the special approach to mesothelioma equated the exposure to the risk of injury with legal liability for the injury. Mr Stuart Smith QC for Zurich dealt with the causation issue at rather greater length in a passage reported at pp 126 to 131 of the same transcript. He started by accepting that it was impossible to know when the metabolic changes that led to the development of mesothelioma in fact occurred. Fairchild dealt with this problem by creating a doctrinal rule under which each significant exposure to asbestos dust was held to be responsible for the mesothelioma. Thus doctrinally the process of developing mesothelioma started upon inhalation. This doctrinal framework for the application of the law of tort was that within which policies of insurance against tortious liability had to operate. Mr Stuart Smith agreed with this summary of his argument advanced by Lord Mance: If the law of tort treats someone, an employee, as having sustained a personal injury and treats the employer as liable to pay damages for such personal injury, then the policy answers. These submissions on behalf of the employers raise the following questions: i) Will the policies respond to fictional or doctrinal events that are deemed to have occurred under the special rule? If so: ii) Does the special rule deem that events have occurred to which the policies should respond? If not: iii) Can this Court properly reformulate the special rule in such a way as to require the policies to respond? Will the policies respond to fictional or doctrinal events? On the premise that he failed on the construction issue, Mr Edelman accepted that, if the correct analysis of the special rule was that the employers were deemed to have caused the mesothelioma by exposing the victims to asbestos dust, then the policies should properly respond. Because of the view that I take of the next two questions I do not need to decide whether the concession was properly made. I have, however, concluded that it was. The policies exist to provide protection against employers liability in tort. If the law of tort, whether laid down by the courts or by Parliament, resorts to legal or doctrinal fictions, it seems logical that the policies should respond as if the fictions were facts. A purposive approach to construction of the policies would lead to this result. Two examples illustrate this approach. Ellerbeck Collieries Ltd v Cornhill Insurance Co Ltd [1932] 1 KB 401 involved a policy of insurance against liability under the Workmens Compensation Act 1925. The terms of the policy entitled the employer to indemnity if at any time during the currency of the insurance any employee sustained any personal injury by accident or disease. The 1925 Act imposed a fictitious test for identifying when an industrial disease was sustained, namely the date on which a certifying surgeon issued a certificate that the employee was suffering from the disease. On the strength of a certificate issued within the currency of a policy of insurance an employer was held liable to two workmen who had, in fact, sustained the relevant disease before the period of the insurance began. The Court of Appeal held that this liability fell within the cover of the policy. The argument for applying the fictional date was a strong one because, as Greer LJ observed at p 417, the policy was intended to cover the employers liability under the Act. The parallel between Ellerbeck and the present case would have been stronger had the relevant policies been taken out after the special rule had been created. In Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] AC 281 the House of Lords held that pleural plaques caused by exposure to asbestos dust did not constitute actionable injury because they produced no adverse physical effects. The Scottish Parliament responded to this decision by introducing the Damages (Asbestos related Conditions) (Scotland) Act 2009 (the Scottish Act). That Act provides by section 1 that asbestos related pleural plaques constitute a personal injury which is not negligible and that accordingly they constitute actionable harm for the purpose of an action for damages for personal injury. In AXA General Insurance Ltd v HM Advocate [2011] UKSC 46, [2011] 3 WLR 871 the Supreme Court rejected a challenge by insurers to the lawfulness of this Act. The Scottish Act effected a limited alteration to the common law in decreeing that asymptomatic pleural plaques constituted non negligible personal injury and thus actionable damage. Lord Mance at para 88 suggested that the main target of the legislation was employers insurers. He went on at para 89 to consider whether the Act would, in fact, alter the meaning to be given to bodily injury under a policy of insurance: A Scottish Act will not on the face of it change the legal effect of an English insurance contract, even in Scotland. However, depending upon the particular policy language, the scope of the concept of bodily injury under a worldwide policy may respond to different conceptions of bodily injury in different parts of the world. Here, the question would be whether it would respond to a development or change, such as that introduced retrospectively by the 2009 Act, in the conception of bodily injury. I say no more about the answer, which may be elicited in another context or suit. While Lord Mance left open the effect of the Scottish Act on the construction of policies of liability insurance, Lord Brown was in no doubt that the effect of the Scottish Act was to subject insurers to liabilities to which they would not have been subject prior to that Act. He referred at para 80 to the undoubted, and deliberate, impact of the legislation upon pending claims. Earlier, at para 77, he drew an analogy with the effect of the decision in Fairchild on EL insurers liability: Had the House of Lords in Rothwell decided that asymptomatic pleural plaques of themselves constitute a non negligible personal injury and thus actionable damage decided in other words that in this particular context the common law should develop in this admittedly novel way the appellants would doubtless have deplored the decision but they could certainly not have questioned its legitimacy. No doubt they would have resented the fact that, as a consequence of the decision, they would unexpectedly have had to pay out on claims resulting from the employees exposure to asbestos upwards of 20 years (quite likely up to 40 years) previously. But they could no more have advanced an [article 1, Protocol 1] challenge to this development of the law than they could have challenged the House of Lords decision some four years earlier in Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32 to adopt a less stringent than the usual but for test for establishing the necessary causal connection between an employers negligence and a claimants condition in, most notably, mesothelioma cases. Employers (and their liability insurers) necessarily take the risk of the common law developing in ways which may adversely affect them with regard to personal injury claims. In this passage Lord Brown assumed that the effect of Fairchild was to bring employers liabilities in respect of mesothelioma within the scope of the cover afforded by EL policies. I am about to consider whether he was correct in this. I agree, however, with the general principle expressed in the last sentence of the extract from his judgment that I have just cited. It is for this reason that I would give an affirmative answer to the first of the three questions posed at para 108 above. I turn to the second. What is the special rule? The employers submissions on the causation issue proceed on the premise that the special rule deems exposure to asbestos dust of an employee who is subsequently diagnosed with mesothelioma to have been a cause of the mesothelioma. I have reached the conclusion that that premise is unsound. In Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 I summarised the special rule as follows at para 1: When a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease. This is certainly the effect of the special rule, but in order to discover the juridical basis of the rule it is necessary first to identify the basis of the special approach adopted by the House of Lords in Fairchild and Barker and then to consider the effect of section 3 of the Compensation Act, which adapted the special approach into the special rule. The special approach In Sienkiewicz, at para 70, I stated that Fairchild and Barker developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances, which include ignorance of how causation in fact occurs. As I shall show, this was not an accurate summary of the special approach adopted in those cases. In Fairchild the House of Lords confronted the position where a mesothelioma victim had worked consecutively for a number of employers, each of which had exposed him to asbestos dust. One or more of these had caused his mesothelioma, but because of the limits of medical knowledge it was not possible, on balance of probability, to identify which. In these circumstances their Lordships adopted a special approach that enabled them to find that each of the employers was jointly and severally liable for the mesothelioma. In doing so they purported to be following a similar approach adopted by the House of Lords in McGhee v National Coal Board [1973] 1 WLR 1. They were not, however, all agreed as to the basis of that approach. Lord Hutton, at para 109, held that it was based on the drawing of a factual or legal inference leading to the conclusion that the breach of duty [in exposing the employee to asbestos dust] was a cause of the disease. The majority of the House did not agree. Lord Bingham said, at para 35: I prefer to recognise that the ordinary approach to proof of causation is varied than to resort to the drawing of legal inferences inconsistent with the proven facts. Lord Nicholls of Birkenhead said, at para 42: So long as it was not insignificant, each employer's wrongful exposure of its employee to asbestos dust, and, hence, to the risk of contracting mesothelioma, should be regarded by the law as a sufficient degree of causal connection. This is sufficient to justify requiring the employer to assume responsibility for causing or materially contributing to the onset of the mesothelioma when, in the present state of medical knowledge, no more exact causal connection is ever capable of being established." Lord Hoffmann at para 65 rejected the suggestion that the House in McGhee held that materially increasing the risk of the disease should be treated as equivalent to material contributing to the injury. He concluded: I would respectfully prefer not to resort to legal fictions and to say that the House treated a material increase in risk as sufficient in the circumstances to satisfy the causal requirements for liability. Lord Rodger of Earlsferry did not agree. His reasoning was close to that of Lord Hutton. He held, at para 168: Following the approach in McGhee I accordingly hold that, by proving that the defendants individually materially increased the risk that the men would develop mesothelioma due to inhaling asbestos fibres, the claimants are taken in law to have proved that the defendants materially contributed to their illness. What then happened has been summarised by Lord Hoffmann in Perspectives on Causation (2011) at p 8: There are two ways in which one could characterise this change in the substantive law of negligence. One is to say that the causal requirements for an action for damages for mesothelioma have been changed; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent. The other is to say that the House created, exceptionally, a cause of action for the increased risk of mesothelioma rather than for the disease itself. In the former case, satisfying the new causal requirement would entitle the claimant to sue for the whole injury caused by contracting the disease. In the latter case, he would be able to sue only for the loss caused by the risk of his contracting the disease having been increased. That would be a proportion of the injury caused by the disease, depending on the extent to which the risk had also been created by other causes. In Barker v Corus the House of Lords (Lord Rodger of Earlsferry dissenting) adopted the second explanation of what had happened in Fairchild. I believe that this summary of the position is essentially correct. The majority in Barker were persuaded that justice would best be served if the special approach adopted in Fairchild were applied in such a way as to render each defendant who had wrongfully exposed the claimant to asbestos dust severally liable for that proportion of the mesothelioma that represented the proportion of the wrongful exposure attributable to that defendant. This was achieved by holding that the liability of each defendant resulted from adding to the risk that the employee would contract mesothelioma. It did not result from an implication that each defendant had actually contributed to the cause of the disease. At the start of his speech at para 2 Lord Hoffmann drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Hoffmann went on to adopt the latter analysis as the basis of liability in Fairchild. At para 31 he held that the majority in Fairchild had not proceeded upon the fiction that a defendant who had created a material risk of mesothelioma was deemed to have caused or materially contributed to the contraction of the disease. The creation of a material risk of mesothelioma was sufficient for liability. At para 35 he advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. Liability for the mesothelioma that developed should be apportioned according to the contribution that each defendant made to the risk that mesothelioma would be contracted. Lord Scott of Foscote and Lord Walker of Gestingthorpe expressly agreed with both Lord Hoffmanns conclusion that liability for the mesothelioma fell to be apportioned and with his reasons for so concluding. Lord Scott held at para 53 that it was essential to keep firmly in mind that liability in Fairchild was not imposed on any of the defendant employers on the ground that the employers breach of contract had caused the mesothelioma. That causative link had not been proved against any of them. It was imposed because each, by its breach of duty, had materially contributed to the risk that the employee would contract mesothelioma. At para 61 he emphasised that the Fairchild principle was not based on the fiction that each defendant had actually caused the eventual outcome. It was based on subjecting the victim to a material risk. Lord Walker, having stated that he was in full agreement with Lord Hoffmanns reasons went on at para 104 to make a statement that was inconsistent with them, this being to the same effect as the statement relied on by Mr Beloff see para 106 above. Lord Walker stated that the decision in Fairchild equated exposing the victim to the risk of injury with causing his injury. This was the same mistake as I made in Sienkiewicz see para 117 above. Had this been the case, each defendant would have been jointly and severally liable for the injury. Lord Walker went on to say, however, that the result in Fairchild was achieved, not by some fiction, but as an explicit variation of the ordinary requirement as to causation. At para 113 he stated that Fairchild was decided by the majority, not on the fictional basis that the defendants should be treated as having caused the victims damage, but on the factual basis that they had wrongfully exposed him to the risk of damage. Lady Hale did not adopt Lord Hoffmanns thesis that the creation of risk constituted the damage for which each defendant was liable. In general, however, she agreed with the majority. She held that in Fairchild, for the first time in our legal history defendants were made liable for damage even though they might not have caused it at all. It was not said that the defendants had caused or materially contributed to the harm. All that could be said was that each had contributed to the risk of harm. In these circumstances it was sensible and fair to apportion liability for the harm in proportion to the contribution that each had made to the risk of harm. Lord Rodger of Earlsferry vigorously dissented from the reasoning of the majority and from the result in so far as it apportioned liability. He observed at para 71 that the majority were not so much reinterpreting as rewriting the key decisions in McGhee and Fairchild. At para 85 he stated that the new analysis that the House was adopting would tend to maximise the inconsistencies in the law. I have some sympathy with the observations of Lord Rodger. It would, I think, have been possible for the House in Barker to have defined the special approach in Fairchild as one that treated contribution to risk as contribution to the causation of damage. The important fact is, however, that the majority did not do so. They were at pains to emphasise that the special approach was not based on the fiction that the defendants had contributed to causing the mesothelioma. Liability for a proportion of the mesothelioma resulted from contribution to the risk that mesothelioma would be caused and reflected the possibility that a defendant might have caused or contributed to the cause of the disease. This was no obiter expression of opinion. It formed the basis of the substantive decision that liability was severable and not joint. The special rule The special approach rendered each employer who had wrongfully exposed a mesothelioma victim to asbestos dust liable for a proportion of the mesothelioma without creating any inference or legal fiction that the employer in question had actually contributed to causing the disease. Section 3 of the Compensation Act altered the position by imposing joint and several liability on those who were only severally liable under the special approach. Did the special rule that resulted involve a different basis of liability to that which formed the basis of the special approach? This question is considered by Jonathan Morgan in his interesting Chapter 4 of Perspectives on Causation headed Causation, Politics and Law: The English and Scottish Asbestos Saga. At p 79 he poses the following question: Has Parliament, by implication, therefore also reversed Lord Hoffmanns principled reinterpretation of Fairchild? Is the nature of Fairchild liability now after all for causing mesothelioma and not increasing risk? Mr Morgan gives a negative answer to this question, expressing the view that Barker has altered the jurisprudential basis of the Fairchild liability irrevocably. I agree that section 3 of the Compensation Act did not alter the jurisprudential basis of the special approach laid down by the House of Lords in Fairchild and Barker. All that it did was to alter the effect of the special approach by making each defendant jointly and severally liable for the whole of the injury sustained. Section 3(1) provides that the section applies where (c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure [for which the defendant was responsible]or another exposure which caused the victim to become ill, and (d) the responsible person is liable in tort(whether by reason of having materially increased a risk or for any other reason). It is not possible to read section 3 as imposing a different basis of liability to that identified by the majority in Barker. The consequence of the special rule Having regard to its jurisprudential basis I cannot see how the employers can found upon the special rule as identifying the policy year or years in which a victims mesothelioma is initiated. The position is that it is impossible to prove on balance of probability when mesothelioma is initiated, or contracted, or sustained, giving each of those words the same meaning. The special rule does not fill the gap for it raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. Should this Court redefine the special rule in order to engage the EL policies? The special approach of the majority in Barker had the object of ensuring that employers who had wrongfully subjected their employees to asbestos dust should bear what the majority considered to be a fair share of responsibility for their wrongdoing. It does not seem likely that the majority gave consideration to the implications for the responsibility of EL insurers of the manner in which this object was achieved. Should this Court now redefine the special rule with the object of enabling claims to be brought under the EL policies? This would, I think, involve holding that the majority in Barker erred in their analysis and that the true basis of the special approach in Fairchild was that contribution to risk should be deemed to be contribution to causation. I would give a firm No to this question. The adoption of the special approach in Fairchild has provoked considerable criticism, both judicial and academic. An example of the former is to be found in the judgment of Lord Brown in Sienkiewicz. An example of the latter is Mr Morgans closely reasoned Chapter 4 of Perspectives on Causation. But the object of the special approach in Fairchild and Barker was at least to ensure that those who had breached the duties that they owed to their employees did not escape liability because of scientific uncertainty. It would be judicial law making of a different dimension to create a legal fiction as to the policy years in which cases of mesothelioma were initiated in order to render liable insurers who could not otherwise be shown to be liable. The Secretary of State has intervened in this appeal and has submitted that, should the claims of employees or their dependants not be met by insurers, they are likely to be a burden on the public purse. It is open to question whether this is a proper consideration, even when considering whether the special rule should be redefined for what are essentially reasons of policy. In any event it seems to me that the position is somewhat more complex than the Secretary of State suggests. The burden of claims in respect of mesothelioma on a scale that was never anticipated is reducing both employers and insurers to insolvency. If this Court were to redefine the special rule so as to impose liability for mesothelioma claims on EL insurers where it could not otherwise be made out, this would in many cases be at the expense of others with claims on the same insurers founded on facts and not legal fictions. The liabilities in respect of mesothelioma will increase the overall shortfall on the part of insurers and this is also likely to have implications for the public purse. So far as I am concerned, however, these considerations have little relevance. Even if there were a compelling case for contending that a means should be found to render EL insurers liable, my reaction would be that this was a matter for Parliament not the courts. It would be wrong in principle for this Court to depart from the reasoning of the majority in Barker for the sole purpose of imposing liability on EL insurers. |
These proceedings raise, for the first time in the courts of the United Kingdom, the question how the concepts of sufficiency and infringement are to be applied to a patent relating to a specified medical use of a known pharmaceutical compound. An important objective of modern pharmaceutical research is the discovery of new medical uses for known molecules. This commonly involves expensive research programmes, which will not be rewarded and will therefore not happen unless patent protection is available. Patent protection for second use medical patents is, however, difficult to accommodate within the traditional scheme of patent law. Traditionally, there were two legal obstacles. First, both the product and the process by which it was prepared were known from the original patent and therefore failed the test of novelty. Secondly, its use for a new therapeutic purpose was not itself patentable because article 52(4) of the European Patent Convention (the EPC) and section 4(2) of the UK Patents Act 1977 prevented the grant of patents for a method of treatment of the human or animal body. As is now well known, in 1984 the Swiss Federal Intellectual Property Office issued a statement of practice that it would be prepared to grant patents for second use medical patents in the following form: the use of compound X in the manufacture of a medicament for the treatment of indication Y: [1984] OJ EPO 581. Hence the expression Swiss form patents for patents granted in this form. The Enlarged Board of Appeal of the European Patent Office adopted this approach shortly afterwards in EISAI/Second Medical Indication G 05/83 [1979 85] EPOR B241. It ruled, at para 23, that it was legitimate in principle to allow claims directed to the use of a substance or composition for the manufacture of a medicament for a specified new and inventive therapeutic application, even in a case in which the process of manufacture as such does not differ from known processes using the same active ingredient. Swiss form patents were not product patents, but purpose limited process patents. They surmounted both obstacles because the invention is identified as neither a product nor a method of treatment but a manufacturing process for a novel purpose. This development responded to a real problem, namely the difficulty of obtaining patent protection for second uses that may have been truly inventive and involved costly research. But it has given rise to formidable analytical problems as a result of the need to apply to Swiss form patents a statutory scheme which was not designed to accommodate them. For this reason they were regarded with suspicion as intellectually impure by patent lawyers in the United Kingdom. In John Wyeth and Brother Ltds Application [1985] RPC 545, they were adopted with express misgivings by the Patents Court in the interests of uniformity among states party to the EPC. But in spite of the misgivings, they have achieved a secure place in United Kingdom patent law, and neither party to this appeal challenges them in principle. Some of the difficulties associated with them were resolved when the EPC was revised in November 2000 to provide for (among other things) the grant of purpose limited product patents: see article 54(5) of the revised Convention. Corresponding changes were made to the Patents Act 1977 by the Patents Act 2004. Once these changes came into effect, in 2011, Swiss form patents ceased to be issued by the European Patent Office. EPC 2000 patents give rise to difficulties of their own, some of which are very similar. But this appeal is not concerned with them. The patent in suit Warner Lambert is a company in the Pfizer Group. It is the proprietor of European Patent No 0641330 for Isobutylgaba for the treatment of seizure disorders, notably epilepsy. Pregabalin is a derivative of Isobutylgaba, which is also referred to by its chemical name (S) 3 (aminomethyl) 5 methylhexanoic acid. It is marketed by Warner Lambert under the brand name Lyrica. Patent No 0641330 expired in the United Kingdom on 17 May 2013. The present appeal concerns a second European Patent, EP(UK) No 0934061, entitled Isobutylgaba and its derivatives for the treatment of pain, with a priority date of 24 July 1996 (the Patent). The claims of the Patent are all purpose limited. Those which are principally relevant are Claims 1, 2 and 3, which are in the following terms: 1. Use of (S) 3 (aminomethyl) 5 methylhexanoic acid or a pharmaceutically acceptable salt thereof for the preparation of a pharmaceutical composition for treating pain. 2. Use according to Claim 1 wherein the pain is inflammatory pain. 3. Use according to Claim 1 wherein the pain is neuropathic pain. It is common ground that the skilled person to whom the Patent is deemed to be addressed is a team consisting of a neuroscientist and a clinician specialising in the treatment of pain. To explain what the skilled team would understand by the terms used in the claims, it is necessary to say something about what was known at the priority date about the physiology of pain. The second edition of Classification of Chronic Pain Syndromes and Definitions of Pain Terms, published in 1994 by the International Association for the Study of Pain, defined pain very broadly. It is an unpleasant sensory and emotional experience associated with actual or potential tissue damage or described in terms of such damage. At the priority date, pain was classified into a number of different types. The distinctions between them were neither absolute nor consistently understood. But it was generally recognised that pain fell into two broad categories: nociceptive and neuropathic pain. Nociceptive pain is produced by noxious external stimuli such as heat, extreme cold, intense mechanical pressure or chemicals. These stimuli stimulate fibres known as nociceptors, which transmit impulses via the spinal cord to the brain, where they are perceived as pain. Nociceptive pain has a bio protective function. It alerts the brain to the presence of noxious stimuli so that appropriate avoidance measures can be taken. This type of pain resolves with treatment of the underlying cause. Inflammatory pain is a type of nociceptive pain. The bodys response to an injury involves the release of chemical mediators which increase the sensitivity of nociceptors causing pain both at the site of the injury or in the surrounding area. Like other nociceptive pain, inflammatory pain resolves with the treatment of the underlying cause. In 1996, well known and efficacious treatments were available for treating inflammatory pain. They included analgesics (eg paracetamol), non steroidal anti inflammatory drugs (eg aspirin, ibuprofen) and opioids of various strengths. Neuropathic pain, unlike nociceptive/inflammatory pain, is pathological. It has no bio protective function. It is caused by damage to the nervous system itself. Neuropathic pain was defined in the second edition of the IASPs Classification of Chronic Pain as pain initiated or caused by a primary lesion or dysfunction of the nervous system. The nervous system comprises the central nervous system, ie the brain and spinal cord, and the peripheral nervous system, ie the nerves outside those structures. Critical to the issues in these proceedings is the distinction between peripheral neuropathic pain, which arises from damage or dysfunction of the peripheral nervous system; and central neuropathic pain, which is rarer and arises from damage or dysfunction of the central nervous system, for example as a result of a stroke, multiple sclerosis or spinal cord injury. The symptoms of neuropathic pain (of either kind) are more severe than those of nociceptive/inflammatory pain. They include perceptions of burning, shooting pain and electric shock pain. Moreover, unlike nociceptive/inflammatory pain, neuropathic pain is persistent, sometimes for years or for life. It was in 1996, and still is, notoriously difficult to treat neuropathic pain. In particular, treatments which were efficacious against nociceptive/inflammatory pain, such as non steroidal anti inflammatory drugs, were not regarded as effective for the treatment of neuropathic pain. Finally, it is necessary to mention allodynia and hyperalgesia, two terms which feature prominently in the evidence. Both are symptoms of pain. Allodynia is pain experienced in response to a stimulus that would not normally be expected to cause pain. Hyperalgesia is an increased response to a thermal or mechanical stimulus that one would normally expect to be painful, but less so. It may be primary hyperalgesia (occurring at the site of an injury) or secondary hyperalgesia (occurring in the area surrounding the site of the injury). Lyrica received a marketing authorisation in the European Union for the treatment of peripheral neuropathic pain and epilepsy in July 2004 and for the treatment of central neuropathic pain in September 2006. It is also authorised for the treatment of generalised anxiety disorder (or GAD). Lyrica is one of four first line treatments recommended by NICE for neuropathic pain. It is one of the Pfizer Groups most successful drugs in the United Kingdom. The present proceedings Generics (UK) Ltd (trading as Mylan) and Actavis Group PTC EHF are pharmaceutical companies that are mainly engaged in marketing generic pharmaceutical products. Actavis markets a generic pregabalin product under the brand name Lecaent, which was launched in February 2015. Caduceus Pharma Ltd hold the marketing authorisation for Lecaent in the European Union. For convenience I will refer to Actavis and Caduceus together as Actavis. Lecaent is marketed under a skinny label, ie for the treatment of some indications only. The Summary of Product Characteristics prepared for the purpose of obtaining marketing authorisation and the Patient Information Leaflet included in the packet state that the conditions for which Lecaent is indicated are epilepsy and GAD, for which patent protection has expired. In these proceedings, Mylan and Actavis claimed the revocation of the Patent on the ground of lack of inventive step and insufficiency, and Warner Lambert claimed against Actavis for infringement of Claims 1 and 3. The judge, Arnold J [2015] EWHC 2548 (Pat), rejected the arguments based on lack of inventive step, and these are no longer in issue. But he held that Claim 1 (pain) and Claim 3 (neuropathic pain) were invalid. In summary, this was because he found that there was sufficient disclosure in the specification to support the claim that pregabalin was efficacious in the treatment of inflammatory pain and peripheral neuropathic pain, but not central neuropathic pain. Since the judge construed Claim 1 as extending to all pain and Claim 3 as extending to all neuropathic pain, including central neuropathic pain, both claims failed for insufficiency. It followed that Claim 4 (cancer pain), Claim 6 (phantom limb pain) and Claim 14 (fibromyalgia), all of which in the judges view either were or could involve central neuropathic pain, failed on the same ground. Claim 13 (idiopathic pain, ie pain of unknown origin) failed on a more fundamental ground: there was nothing whatever in the specification which appeared to support it. The result of the judges decision was to remove patent protection for the manufacture of pregabalin for the treatment of neuropathic pain, save for those subsidiary claims directed solely to peripheral neuropathic pain. The judge rejected as an abuse of process an application after judgment to amend the patent by narrowing the claims in terms which would arguably have made them valid. The Court of Appeal (Floyd, Kitchin and Patten LJJ) [2016] EWCA Civ 1006 upheld the judges findings, except that they considered that fibromyalgia was not neuropathic pain but an idiopathic pain. Since they agreed that the claim relating to idiopathic pain was invalid, this made no difference to the outcome. The Court of Appeal upheld his decision on abuse of process. It followed that infringement did not arise, neither of the claims said to have been infringed being valid. The judge and the Court of Appeal differed on the test for infringement in a case where the monopoly conferred by the patent was confined to manufacture for a particular use. The judge held that if Claims 1 and 3 had been valid, they would not have been infringed. The Court of Appeal held that he had applied the wrong test, and declined to decide the point in the absence of the findings of fact which, on their preferred test, would have been required. On the present appeals, Warner Lambert contend that all the claims of the Patent were valid, although they have made no effort to justify Claim 1 (pain), Claim 13 (idiopathic pain) or Claim 14 (fibromyalgia). Their real object is to establish the validity of their claims in relation to neuropathic pain or, if they cannot achieve that, then at least those claims which relate to peripheral neuropathic pain, which is by far the commonest type. Actavis and Mylan for their part cross appeal in support of their case that none of the claims in relation to neuropathic pain are valid. The only claims whose validity they accept are those which are limited to inflammatory pain, for which there is currently no marketing authorisation. In these circumstances, the issues in the present appeal fall under four heads: (1) The construction of the claims, and in particular Claim 3 (neuropathic pain). (2) The sufficiency of the disclosure in the specification. (3) Amendment and abuse of process. (4) The test for infringement of a patent for a manufacturing for a limited use. For reasons which will become apparent, on the view which this court takes of the law, not all of these issues arise in the circumstances of this case. However all of them raise unresolved questions of considerable general importance, which have been fully argued not only by the parties, but by the Secretary of State and other interveners potentially affected by statements of principle in the courts below. It is therefore proposed to deal with all of them. Since we are not all agreed on every point, it may assist if I summarise the conclusions of the court at the outset: (1) The court unanimously affirms the view of both courts below that Claim 1 extends to all pain and Claim 3 to all neuropathic pain, whether peripheral or central. It unanimously affirms Arnold Js decision rejecting Warner Lamberts application to amend the patent so as to limit the scope of these claims. (2) The court holds by a majority (Lord Sumption, Lord Reed and Lord Briggs), that the disclosure in the specification supports the claims so far as they extend to inflammatory pain but not to any kind of neuropathic pain. It follows that Claims 1 and 3 fail for insufficiency, and that Warner Lamberts appeal must be dismissed and Actaviss and Mylans cross appeal allowed. (3) I hold, together with Lord Reed, Lord Hodge and Lord Briggs, that if Claims 1 and 3 had been valid, they would not have been infringed. We differ, however, as to the reasons. I consider, together with Lord Reed, that the intention of the alleged infringer is irrelevant and that the sole criterion of infringement is whether the product as it emerges from the manufacturing process, including any labelling or accompanying leaflet, is presented as suitable for the uses which enjoy patent protection. The judge found (paras 443 447) that Lecaent was sold with patient information leaflets to the effect that it was for the treatment of seizure disorders and GAD. Lord Mance agrees that the test depends on the objective appearance and characteristics of the product as it is prepared, presented and put on the market, but leaves open the possibility (i) that in rare cases the context may make it obvious that these are not to be taken at face value, and (ii) that there may be circumstances in which the generic manufacturer should positively exclude use for the patent protected purpose. Lord Hodge and Lord Briggs prefer the view of Arnold J that the test is whether the alleged infringer subjectively intended to target the patent protected market. Arnold J found (para 661) that they did not. This paragraph has been approved by the authors of all the other judgments. Construction and amendment Claim 3 claims use of [pregabalin] for the preparation of a pharmaceutical composition for treating neuropathic pain. The question is whether neuropathic pain in its context means all neuropathic pain, including central neuropathic pain (as Actavis and Mylan contend), or only peripheral neuropathic pain (as Warner Lambert say). I will call these the broad and narrow constructions respectively. Both the judge and the Court of Appeal decided without, it seems, much difficulty, in favour of the broad construction. I agree with them. In my opinion they were plainly right about this. Lord Briggs has dealt fully with the reasons, in terms with which I agree, and I shall not lengthen this judgment by repeating them. I also agree, for the reasons which he gives, that the judge was right to reject Warner Lamberts attempt to amend the patent so as to confine Claim 3 to peripheral neuropathic pain. For reasons which will become apparent in the following section, the amendment would not have saved Claim 3 even if it had been allowed. Sufficiency and plausibility Elementary as it is, it is worth reminding oneself at the outset of the juridical basis on which patents are granted, sometimes called the patent bargain. The inventor obtains a monopoly in return for disclosing the invention and dedicating it to the public for use after the monopoly has expired. The point was succinctly made by Lord Mansfield in Liardet v Johnson (1778), quoted in Hulme, On the History of Patent Law, (1902) 18 LQR 280, 285: The condition of giving encouragement is this: that you must specify upon record your invention in such a way as shall teach an artist, when your term is out, to make it and to make it as well by your directions: for then at the end of the term, the public shall have benefit of it. The inventor has the benefit during the term, and the public have the benefit after . The principle remains the foundation of modern patent law, and is recognised in the case law of both the United Kingdom and the European Patent Office. In EXXON/Fuel Oils (T 409/91) [1994] OJ EPO 653, at paras 3.3 and 3.4, the EPO Technical Board of Appeal observed that it was the general legal principle that the extent of the patent monopoly, as defined by the claims should correspond to the technical contribution to the article in order for it to be supported, or justified. This means that the definitions in the claims should essentially correspond to the scope of the invention as disclosed in the description. Although the requirements of articles 83 and 84 are directed to different parts of the patent application, since article 83 relates to the disclosure of the invention, whilst article 84 deals with the definition of the invention by the claims, the underlying purpose of the requirement of support by the description, insofar as its substantive aspect is concerned, and of the requirement of sufficient disclosure is the same, namely to ensure that the patent monopoly should be justified by the actual technical contribution to the article The principal conditions of validity, novelty, inventive step, industrial application and sufficiency are all, in one way or another, directed to satisfying the principle thus expressed. Sufficiency is a condition of validity relating not to the underlying science but to its disclosure in the patent. Section 14 of the Patents Act 1977 provides: (3) The specification of an application shall disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the article (5) The claim or claims shall (a) define the matter for which the applicant seeks protection; (b) be clear and concise; (c) be supported by the description; and relate to one invention or to a group of inventions (d) which are so linked as to form a single inventive concept. These provisions correspond to EPC articles 83 and 84, which read: 83. The European patent application shall disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the article 84. The claims shall define the matter for which protection is sought. They shall be clear and concise and be supported by the description. Section 72(1) of the Act, which corresponds to EPC article 138, mirrors section 14(3). It provides for the revocation of the patent, inter alia on the ground that the specification of the patent does not disclose the (c) invention clearly enough and completely enough for it to be performed by a person skilled in the article Lord Mance has expressed the view that sufficiency is a rule of judge made law. It would I think be more exact to say that it is a statutory rule, which is fundamental to the public interest that justifies the issue of the patent. The contribution of judges has been to work out principles on which it can be applied to Swiss form patents. Section 14 of the Patents Act and the corresponding provisions of the EPC assume that an invention will be sufficiently disclosed if the specification enables it to be performed. In the case of a patent for a new product or process, that assumption is almost always correct. The skilled person will discover that it works by replicating it in accordance with the specification. But the assumption is not correct in the case of a second use patent. The invention is not the compound or the process of its manufacture. The skilled person already knows how to make the product from the prior art disclosed in the original patent. The invention consists in the new purpose for which the product is to be manufactured. If sections 14(3) and 72(1)(c) are read literally and as an exhaustive statement of the requirement of sufficiency, all that needs to be disclosed is the new purpose, which is enough to enable it to be administered to a patient suffering from the relevant condition. The skilled person does not need to know how or why the invention works in order to replicate it. The result would be that the knowledge which made the identification of the new purpose inventive need not be disclosed at all. The main problem about this result is that it would enable a patent to be obtained on a wholly speculative basis. Without some disclosure of how or why the known product can be expected to work in the new application, it would be possible to patent the manufacture of known compounds for the purpose of treating every conceivably relevant condition without having invented anything at all, in the hope that trial and error might in due course show that the product was efficacious in treating at least some of them. For that reason, both Arnold J and the Court of Appeal concluded that it was not enough simply to refer to a known compound and assert that it was efficacious for treating a specified condition. The patentee must disclose some reason for regarding this assertion as plausible. In their view, this requirement was not exacting. The Court of Appeal (para 46) put the point as follows: The EPO and domestic cases do, however, indicate that the requirement of plausibility is a low, threshold test. It is designed to prohibit speculative claiming, which would otherwise allow the armchair inventor a monopoly over a field of endeavour to which he has made no contribution. It is not designed to prohibit patents for good faith predictions which have some, albeit manifestly incomplete, basis. Such claims may turn out to be insufficient nonetheless if the prediction turns out to be untrue. A patent which accurately predicts that an invention will work is, however, not likely to be revoked on the ground that the prediction was based on the slimmest of evidence. Thus, the claims will easily be seen not to be speculative where the inventor provides a reasonably credible theory as to why the invention will or might work. The same is true where the data in the specification is such that the reader is encouraged to try the invention. Warner Lamberts primary case is that even this undemanding test is an impermissible addition to the text of the Patents Act and the European Patent Convention, and that the sole criterion of sufficiency is that the invention can be performed by the skilled person. Alternatively, they accept that some such test is necessary in order to exclude purely speculative claims, and to that extent they are prepared to add something to the literal language of sections 14(3) and 72(1)(c) of the Patents Act and EPC articles 83 and 138(1)(b). But they take issue with the courts below on two points. First, the courts below held that the patentee must show that his prediction of therapeutic efficacy was plausible in relation to everything falling within the scope of any claim if that claim was to be valid. Secondly, they held that the patentee may not demonstrate the plausibility of his prediction to the required standard by reference only to later published data. Mr Mitcheson QC, who appeared for Warner Lambert, disputed both propositions. The Court of Appeals reference to armchair inventors suggests that what they meant by speculative claiming was claiming by persons who had done nothing new or inventive at all but had simply sought to patent abstract possibilities. That may well be a particular risk in the case of patents for new uses of known compounds, especially when they are commercially successful in their existing use. In reality, however, speculative claiming of this kind is simply one of a number of ways in which a patentee may attempt to claim a monopoly more extensive than anything which is justified by his contribution to the article Other ways in which this can happen include claiming a monopoly wider than the disclosure in the patent can support. An over broad claim will not necessarily be speculative. The inventor may really have invented something corresponding to the full breadth of the claim. Research may subsequently demonstrate this. But the claim will still exceed his contribution to the art if that contribution is not sufficiently disclosed in the patent. The concept of plausibility originates in the case law of the EPO as a response to over broad claims, in particular claims to whole classes of chemical compounds supported by a description which fails to show which compounds can be expected to work. The Technical Board of Appeal treats the condition of sufficiency under EPC article 83 as satisfied if it is possible to work the invention across the scope of the claim from the information in the specification, interpreted in the light of common general knowledge at the priority date. It addresses the broader question whether the disclosed contribution to the art is commensurate with the monopoly claimed under EPC article 56, in the context of inventive step. In that context, its case law requires the formulation of a problem which the claims of the patent could be said to solve: see T 939/92 AGREVO/Triazole sulphonamides [1996] EPOR 171. It imports a requirement that the patent should disclose not just what the invention is and how to replicate it, but some reason for expecting that it will work. Plausibility was the standard to which the patentee was expected to demonstrate this. Thus in JOHNS HOPKINS UNIVERSITY SCHOOL OF MEDICINE/Growth differentiation factor 9 (T 1329/04) [2006] EPOR 8, the hypothetical problem calling for solution was whether a claimed polynucleotide was a member of the TGF beta superfamily. The only evidence to support the contention that it was, consisted of material published after the priority date. The patent was held invalid for want of an inventive step. The Board observed at para 12: The definition of an invention as being a contribution to the art, ie as solving a technical problem and not merely putting forward one, requires that it is at least made plausible by the disclosure in the application that its teaching solves indeed the problem it purports to solve. Therefore, even if supplementary post published evidence may in the proper circumstances also be taken into consideration, it may not serve as the sole basis to establish that the application solves indeed the problem it purports to solve. See also the Boards observations to the same effect in BRISTOL MYERS SQUIBB/Dasatinib (T 0488/16) (1 February 2017, unpublished), at para 4.9. English law diverges from this approach, although the divergence is more a question of labels than of substance. It distinguishes between so called classical insufficiency (where the skilled person is unable to perform the invention from the information disclosed in the specification) and so called Biogen insufficiency (where the claim is said to be too broad, because it exceeds the disclosed contribution to the art). It deals with both under section 14(3), the statutory analogue of EPC article 83. The expression Biogen insufficiency is derived from the decision of the House of Lords in Biogen Inc v Medeva Plc [1997] RPC 1. The patent in suit in that case claimed a class of products, namely a molecule defined partly by the way that it had been made (by recombinant DNA). The trial judge and the EPO Technical Board of Appeal had found that the disclosure was sufficient to enable the invention to be performed across the whole scope of the claim, and the Appellate Committee proceeded on the basis that that was so. But the specification described only one method of making the molecule by recombinant DNA, whereas other methods were possible which owed nothing to the matters disclosed. The patent therefore claimed more than the inventors contribution to the art warranted. The House of Lords imported into section 14(3) of the Act a concept similar to the former requirement of fair basis in section 32(1)(i) of the Patents Act 1949 (that any claim of the complete specification is not fairly based on the matter disclosed in the specification). It held that if the claim extended beyond the technical contribution to the art disclosed in the patent, it failed for insufficiency independently of any objection based on want of an inventive step and notwithstanding that the skilled person could perform the invention across the whole scope of the claim. Lord Hoffmann, delivering the leading speech, said at p 50: But the fact that the skilled man following the teaching of Biogen 1 would have been able to make HBcAg and HBsAg in bacterial cells, or indeed in any cells, does not conclude the matter. I think that in concentrating upon the question of whether Professor Murrays invention could, so to speak, deliver the goods across the full width of the patent or priority document, the courts and the EPO allowed their attention to be diverted from what seems to me in this particular case the critical issue. It is not whether the claimed invention could deliver the goods, but whether the claims cover other ways in which they might be delivered: ways which owe nothing to the teaching of the patent or any principle which it disclosed. He went on to make the same point in the context of the objection of insufficiency. Adopting the statement of principle cited above from EXXON/Fuel oils, he pointed out, at p 54, that the purpose of requiring sufficiency of disclosure could not be limited to enabling the public to work the invention after the patent had expired: Section 72(1)(c) of the 1977 is not only intended to ensure that the public can work the invention after expiration of the monopoly. It is also intended to give the court in revocation proceedings a jurisdiction which mirrors that of the Patent Office under section 14(3) or the EPO under article 83 of the EPC, namely, to hold a patent invalid on the substantive ground that, as the EPO said in Exxon/Fuel Oils (T 409/91) [1994] OJ EPO 653, para 3.3, the extent of the monopoly claimed exceeds the technical contribution to the art made by the invention as described in the specification. Lord Hoffmann was not, in these observations, addressing the question of second use patents. But such patents raise a similar problem. If it is enough to disclose how to make a known compound and for what conditions, the patentee has acquired a monopoly without adding anything to the sum of knowledge. He will have satisfied the condition of sufficiency but without satisfying its purpose. The answer to this anomaly in the case of Swiss form patents was supplied by a series of decisions in which the EPO Technical Board of Appeal held that there was to be implied into a purpose limited claim an assertion of efficacy for the designated purpose, and that this was an intrinsic technical feature of the claim. This proposition was originally established in purpose limited patents for non medical uses. In two decisions published on the same date in 1989, G2/88 MOBIL/Friction reducing additive [1990] OJ EPO 93, at para 9, and G 6/88 BAYER/Plant Growth Regulating Agent [1990] OJ EPO 114, at para 7 the Board drew attention to the Protocol on the Interpretation of EPC article 69, which required a patent to be interpreted as defining a position which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties. From this they concluded that with such a claim, where a particular technical effect which underlies such use is described in the patent, having regard to the Protocol, the proper interpretation of the claim will require that a functional feature should be implied into the claim, as a technical feature; for example, that the compound actually achieves the particular effect. The principle was first applied to patents for new medical uses in T 158/96 PFIZER/Obsessive compulsive disorder (28 Oct 1998, unpublished), at para 3.1. In Prendergasts Applications [2000] RPC 446, 448 Neuberger J arrived independently at the same conclusion. It followed that the specification must include some basis for supposing that the claim to therapeutic efficacy was true: In relation to a Swiss type application, it appears to me that, in the absence of any practical evidence of the idea working (that is the idea of using a well established drug for the treatment of a condition for which it has not so far been used), the absence of any evidence of the idea working involves the absence of a description. [W]hether or not there is a description or an adequate description, for the purposes of section 14(5)(c) of the 1977 Act, must be judged by reference to the nature of the application. There is obvious force in the contention that, where you have a claim for the use of a known active ingredient in the preparation of a medicament for the treatment of a particular condition, the specification must provide, by way of description, enough material to enable the relevantly skilled man to say this medicament does treat the condition alleged, and that pure assertion is insufficient. The implications of this approach for sufficiency were considered by the EPO Technical Board of Appeal in SALK INSTITUTE FOR BIOLOGICAL STUDIES/AP I complex (T 609/02) (27 October 2004, unpublished). At para 9, the Board observed: Where a therapeutic application is claimed in the form allowed by the Enlarged Board of Appeal in its decision G 5/83 (OJ EPO 1985, 64), ie in the form of the use of a substance or composition for the manufacture of a medicament for a defined therapeutic application, attaining the claimed therapeutic effect is a functional technical feature of the claim (see G 2/88 and G 6/88, OJ EPO 1993, 93 and 114, Headnote III. And point 9 of the reasons, for non medical applications, see also T 158/96 of 28 October 1998, point 3.1 of the reasons). As a consequence, under article 83 EPC, unless this is already known to the skilled person at the priority date, the application must disclose the suitability of the product to be manufactured for the claimed therapeutic application. The Board went on to mitigate this principle so as to reflect the fact that in the case of purpose limited medical patents definitive evidence of therapeutic effect would not be available until clinical trials had been carried out. Since these would have to be disclosed, it was practically inevitable that the patent application would have to be made before any trials. This implied that sufficiency could be demonstrated by the disclosure of material supporting the claimed therapeutic effect which was less than definitive: The patent system takes account of the intrinsic difficulties for a compound to be officially certified as a drug by not requiring an absolute proof that the compound is approved as a drug before it may be claimed as such. The Boards of Appeal have accepted that for a sufficient disclosure of a therapeutic application, it is not always necessary that results of applying the claimed composition in clinical trials, or at least to animals are reported. Yet, this does not mean that a simple verbal statement in a patent specification that compound X may be used to treat disease Y is enough to ensure sufficiency of disclosure in relation to a claim to a pharmaceutical. It is required that the patent provides some information in the form of, for example, experimental tests, to the avail that the claimed compound has a direct effect on a metabolic mechanism specifically involved in the disease, this mechanism being either known from the prior art or demonstrated in the patent per se. Showing a pharmaceutical effect in vitro may be sufficient if for the skilled person this observed effect directly and unambiguously reflects such a therapeutic application (T 241/95, OJ EPO 2001, 103, point 4.1.2 of the reasons, see also T 158/96 of 28 October 1998, point 3.5.2 of the reasons) or, as decision T 158/96 also put it, if there is a clear and accepted established relationship between the shown physiological activities and the disease (loc cit). After discussing the potential value of in vitro tests for this purpose, the Board observed, at para 10: This means that the skilled person is made aware of the structure of the active ingredient proposed for the pharmaceutical composition as well as, in technical terms, of a definite link between the ingredient and the mechanism allegedly involved in the disease state. The presence of a cause/effect relationship is, thus, made plausible. It was somewhat tentatively suggested to us by Mr Mitcheson that this principle did not justify the application of a plausibility test beyond the application stage, or authorise its use as a ground for revocation. But the correspondence between EPC articles 83 and 138 makes this kind of argument difficult to accept. Mr Mitchesons main submission under this head was a different one. This was that the subsequent case law of the EPO indicates that the SALK principle applies only where the therapeutic effect suggested in the patent is inherently implausible. The argument is that it is necessary for the patentee to disclose reasons for regarding the claimed therapeutic effect as plausible only when the skilled person reading the patent would be sceptical about it in the absence of such disclosure. This submission is consistent with some turns of phrase in the cases. But it would have been a strange thing for the Technical Board of Appeal to have meant. It would be inconsistent with the reason why plausibility of the claimed therapeutic effect is required, namely to support the implied claim to therapeutic efficacy and to justify the monopoly by reference to the patentees contribution to the article If Warner Lamberts argument were sound, it would mean that if nothing was known either for or against the claimed therapeutic effect, no disclosure need be made in support of it. The leading case relied on in the jurisprudence of the EPO is T 0578/06 IPSEN/Pancreatic cells (29 June 2011, unpublished). This concerned a compound for extending the functional life of pancreatic islet cells. The patent comprised no experimental data supporting the drugs claimed therapeutic effect, but it did contain a technical explanation of its effect and an experimental methodology by which this could be verified: see para 11. The Board was concerned with the circumstances in which the specification could be sufficient without experimental data. It held, at paras 14 15: 14. The Boards of Appeal have indeed dealt with cases where, in the context of the assessment of inventive step, there could only be an invention if the application made it at least plausible that its teaching did indeed solve the problem it purported to solve and in which to establish plausibility the disclosure of experimental results in a patent application, or, under certain circumstances, by post published evidence, was considered necessary (see decision T 716/08 of 19 August 2010, points 14 to 16 for a summary of the case law). 15. The board re emphasises in this context however that this case law considers the establishment of plausibility only relevant when examining inventive step if the case at hand allows the substantiation of doubts about the suitability of the claimed invention to solve the technical problem addressed and when it is thus far from straightforward that the claimed invention solves the formulated problem. This decision is authority for the proposition that plausibility can be demonstrated in the specification without experimental evidence, if there is no substantiated doubt about the theoretical case made for the efficacy of the invention. This is the only relevant proposition for which it is authority. As the Board observed in INTERVET/Infectious salmon anaemia virus vaccine (T 0716/08) (19 August 2010, unpublished), para 15, (the case cited in the passage quoted above from IPSEN), common general knowledge at the priority date may be used to interpret the teaching in an application or a patent, but there must be something in the patent to interpret. This is no more than the Board had said in SALK itself. These principles may be illustrated by the decisions of the Board in T 1437/07 ALLERGAN/ Botulinum toxin for treating smooth muscle spasm (26 October 2009, unpublished), and T 950/13 BRISTOL MYERS SQUIBB/Dasatinib in the treatment of chronic myelogenous leukaemia (3 February 2017, unpublished). In ALLERGAN, it is unclear from the report what technical information was disclosed in support of the claim to therapeutic efficacy, except that it did not include any experimental data. The recital of the arguments shows that the sole ground on which the disclosure was said to be insufficient was that the absence of experimental data was alone enough to make the claim to therapeutic efficacy not credible. The Board dealt with this objection as follows: 38. The respondents argue that it was not credible that the therapeutic effect could be achieved because the treatment disclosed in Example 9 had not actually been carried out. 38.1 However, article 83 EPC stipulates that an invention must be disclosed in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art (emphasis added by the board). Thus, article 83 EPC does not stipulate that a claimed invention must have actually been carried out by the applicant or the inventor. Moreover, according to rule 42(1)(e) EPC, even the presence of an example is not mandatory. Therefore, just because a patent discloses an effect which has not in reality been achieved, there is no reason in the absence of convincing evidence that the effect cannot be achieved for the board to doubt that the effect can be achieved. Thus, the respondents argument does not convince the board. The decision, like the decision in IPSEN, is authority for the proposition that experimental data are not essential to sufficiency unless it is being positively alleged with convincing supporting evidence that the invention does not work. In that event it may be necessary for the patentee to point to experimental data to rebut the allegation. But this does not mean that the specification is sufficient if there is neither experimental data nor any other reason to deduce from the specification that the claim to therapeutic efficacy is plausible. The decision is not authority for saying that the objector has the onus of showing that it is implausible. Sufficiency turns on what the patentee has disclosed. It must always be necessary for the patentee to demonstrate that he has included in the specification something that makes the claim to therapeutic efficacy plausible. Otherwise a mere assertion of efficacy would be enough. The same point was made by the Board of Appeal in BRISTOL MYERS SQUIBB. The compound the subject of the patent was dasatinib for the treatment of chronic myelogenous leukaemia. The patent taught that dasatinib worked by inhibiting certain protein tyrosine kinases associated with chronic myelogenous leukaemia. No experimental data were disclosed in the specification. At para 3.6, the Board observed: The disclosure of experimental results in the application is not always required to establish sufficiency, in particular if the application discloses a plausible technical concept and there are no substantiated doubts that the claimed concept can be put into practice. The objection was that there were substantial doubts about the products efficacy for the designated purpose in the absence of either (i) experimental data, or (ii) a coherent theory which could explain such an effect, ie what the Board called a plausible technical concept. The Board of Appeal upheld the patent because it disagreed on point (ii). It thought that there was a coherent theory. This was because it was common general knowledge in the art that the inhibition of certain kinases associated with chronic myelogenous leukaemia was an effective way to treat that condition. Dasatinib had significant functional and chemical affinities with another kinase inhibitor known to be effective. This was more than a mere assertion of efficacy. The patent disclosed a coherent theory to support it in the light of common general knowledge. All of these judgments deal with highly fact specific issues arising from objections or potential objections on the ground of insufficiency. When reading them, it is important not to miss the wood for the trees. The fundamental principle which they illustrate is that the patentee cannot claim a monopoly of a new use for an existing compound unless he not only makes but discloses a contribution to the article None of them casts doubt on the proposition that the disclosure in the patent must demonstrate in the light of the common general knowledge at the priority date that the claimed therapeutic effect is plausible. On the contrary, they affirm it: see ALLERGAN at paras 26, 37, and BRISTOL at para 3.2. The Court of Appeals statement of the effect of the plausibility test has already been quoted (para 20 above). They considered that the threshold was not only low, but that the test could be satisfied by a prediction based on the slimmest of evidence or one based on material which was manifestly incomplete. Consistently with that approach, they considered (paras 40, 130) that the Boards observations in SALK laid down no general principle. I respectfully disagree. The principle is that the specification must disclose some reason for supposing that the implied assertion of efficacy in the claim is true. Plausibility is not a distinct condition of validity with a life of its own, but a standard against which that must be demonstrated. Its adoption is a mitigation of the principle in favour of patentability. It reflects the practical difficulty of demonstrating therapeutic efficacy to any higher standard at the stage when the patent application must in practice be made. The test is relatively undemanding. But it cannot be deprived of all meaning or reduced, as Floyd LJs statement does, to little more than a test of good faith. Indeed, if the threshold were as low as he suggests, it would be unlikely to serve even the limited purpose that he assigns to it of barring speculative or armchair claims. Plausibility is not a term of art, and its content is inevitably influenced by the legal context. In the present context, the following points should be made. First, the proposition that a product is efficacious for the treatment of a given condition must be plausible. Second, it is not made plausible by a bare assertion to that effect, and the disclosure of a mere possibility that it will work is no better than a bare assertion. As Lord Hoffmann observed in Conor Medsystems Inc v Angiotech Pharmaceuticals Inc [2008] RPC 28, para 28, it is hard to see how the notion that something is worth trying or might have some effect can be described as an invention in respect of which anyone would be entitled to a monopoly. But, third, the claimed therapeutic effect may well be rendered plausible by a specification showing that something was worth trying for a reason, ie not just because there was an abstract possibility that it would work but because reasonable scientific grounds were disclosed for expecting that it might well work. The disclosure of those grounds marks the difference between a speculation and a contribution to the article This is in substance what the Technical Board of Appeal has held in the context of article 56, when addressing the sufficiency of disclosure made in support of claims extending beyond the teaching of the patent. In my opinion, there is no reason to apply a lower standard of plausibility when the sufficiency of disclosure arises in the context of EPC articles 83 and 84 and their analogues in section 14 of the Patents Act. In both contexts, the test has the same purpose. Fourth, although the disclosure need not definitively prove the assertion that the product works for the designated purpose, there must be something that would cause the skilled person to think that there was a reasonable prospect that the assertion would prove to be true. Fifth, that reasonable prospect must be based on what the TBA in SALK (para 9) called a direct effect on a metabolic mechanism specifically involved in the disease, this mechanism being either known from the prior art or demonstrated in the patent per se. Sixth, in SALK, this point was made in the context of experimental data. But the effect on the disease process need not necessarily be demonstrated by experimental data. It can be demonstrated by a priori reasoning. For example, and it is no more than an example, the specification may point to some property of the product which would lead the skilled person to expect that it might well produce the claimed therapeutic effect; or to some unifying principle that relates the product or the proposed use to something else which would suggest as much to the skilled person. Seventh, sufficiency is a characteristic of the disclosure, and these matters must appear from the patent. The disclosure may be supplemented or explained by the common general knowledge of the skilled person. But it is not enough that the patentee can prove that the product can reasonably be expected to work in the designated use, if the skilled person would not derive this from the teaching of the patent. principles which I have considered, they can be addressed quite briefly. I turn to Warner Lamberts alternative arguments. In the light of the general The first argument is that whatever standard of plausibility is applied, the Court of Appeal were wrong to say that it had to be demonstrated across the whole scope of the claim. In my opinion, they were not wrong. As I have said, plausibility is not a distinct condition of validity, but one element in the test of sufficiency. As such, its application is governed by the same principles which apply to sufficiency generally. In a case such as this, where the claim is said to exceed the disclosed contribution to the art, it is of the essence that the specification must justify the full extent of the claim to the requisite standard. Where a feature of the claim is an assertion of therapeutic efficacy for a given condition, a monopoly is being claimed for the process of manufacturing the compound for the treatment of that condition. This does not mean that it must work for all patients suffering from that condition, or work on every occasion when it is applied by way of treatment. But it does mean that where the condition identified embraces a number of different pathologies, and the claim is construed as asserting the efficacy of the product for each of them, the assertion must be plausible in relation to them all. It must, as Kitchin LJ put it in Regeneron Pharmaceuticals Inc v Genentech Inc [2013] RPC 28, para 100 be possible to make a reasonable prediction the invention will work with substantially everything falling within the scope of the claim or, put another way, the assertion that the invention will work across the scope of the claim must be plausible or credible. Warner Lamberts second argument is that the courts below were wrong to reject later published data as relevant. This submission also is contrary to the legal basis of this particular head of insufficiency. We know that pregabalin works for the treatment of both peripheral and central neuropathic pain, because like any other medicament on the market, it underwent demanding clinical trials after the priority date, the results of which were made public. On that basis it received marketing authorisation for all neuropathic pain. This is always the case for a commercially valuable medicament, and no other kind will be worth litigating about. The question is not whether it works but whether the contribution to the art consisting in the discovery that it can be expected to work has been sufficiently disclosed in the patent. The inherent difficulty of demonstrating this before clinical trials is taken into account in the modest standard (ie plausibility) which is applied to test it. This point was made by the EPO Technical Board of Appeal in SALK, at para 8: Sufficiency of disclosure must be satisfied at the effective date of the patent, ie on the basis of the information in the patent application together with the common general knowledge then available to the skilled person. Acknowledging sufficiency of disclosure on the basis of relevant technical information produced only after this date would lead to granting a patent for a technical teaching which was achieved, and, thus, for an invention which was made, at a date later than the effective date of the patent. The general principle that the extent of monopoly conferred by a patent should correspond to, and be justified by, the technical contribution to the art, has to be kept in mind. This does not mean that subsequent data is never admissible in a dispute about sufficiency, but the purpose for which it is admitted is strictly limited. Where the asserted therapeutic effect is plausible in the light of the disclosure in the patent, subsequent data may sometimes be admissible either to confirm that or else to refute a challengers contention that it does not actually work: see, for example, ASTRAZENECA/Omeprazole Na (T 1677/11) (27 November 2012, unpublished), MERCK, SHARP & DOHME/Pharmaceutical nanoparticulate composition of a Tachykinin receptor antagonist (T 0210/11) (17 July 2014, unpublished). But it cannot be a substitute for sufficient disclosure in the specification. As the EPO Technical Board of Appeal observed in JOHNS HOPKINS UNIVERSITY SCHOOL OF MEDICINE/Growth differentiation factor 9 (T 1329/04) [2006] EPOR 8 at para 12, (cited above), it cannot be a substitute for sufficient disclosure in the specification. Application to the present case to the judgment of Arnold J. The empirical data disclosed in the patent in support of the claim to therapeutic efficacy consisted of references to a number of pre clinical animal models used to test drugs for various kinds of pain. The following facts about these models are either agreed or found by the judge: In what follows, unless otherwise stated, references to paragraph numbers are 1. The most significant model was the rat paw formalin test. This involves the injection of a noxious agent (formalin) into a rats paw. The rat is monitored for the next hour and the amount of time that it spends licking or biting the paw is recorded. There are two phases. The first phase, which lasts about ten minutes, models the acute nociceptive pain caused by the injection itself. The second phase, which lasts about 45 minutes, models inflammatory pain. Nonsteroidal anti inflammatory drugs were not effective for neuropathic pain, but were known to be efficacious in the second phase. The Patent specification accordingly recorded that the test results showed that pregabalin was effective in treating inflammatory pain. At the trial Warner Lambert contended that nonetheless it was common general knowledge that the second phase could also be predictive of efficacy in treating neuropathic pain. The judge found, at para 235, that the evidence did not establish this. 2. The carrageenin test also models inflammatory pain. Carrageenin, an inflammatory agent, is injected into the sole of a rats paw and tests are carried out to determine the extent of thermal or mechanical hyperalgesia. The Patent specification recorded that test results showed that pregabalin was effective in treating inflammatory pain. There is nothing in the literature to suggest that the carrageenin test could be used to predict efficacy for neuropathic pain, either on its own or in conjunction with the rat paw formalin test. 3. The post operative pain model tests for pain responses following surgery. The rats paws plantaris muscle is incised under anaesthetic. After 24 hours the rat is assessed for mechanical hyperalgesia and tactile allodynia. Both are referred to in the Patent as nociceptive responses. Nothing in the literature suggests that this model can be used to predict efficacy for neuropathic pain, either on its own or in conjunction with the rat paw formalin test. 4. The specification also refers to two well known models for peripheral neuropathy, the Bennett model and the Kim and Chung model. However, no data are presented from either model. It follows that the experimental data in the specification was predictive of efficacy for the treatment of inflammatory pain. But the specification does not claim that the experimental data presented makes it plausible that pregabalin is effective for the treatment of any kind of neuropathic pain. In these circumstances, the specification supported Claim 3 only if it would have suggested to the skilled person that there was some unifying principle which made it plausible that pregabalin would also work with neuropathic pain. The judge had already found, at para 161, in the context of the challenge for obviousness, that the skilled person would not have considered that there was any reasonable basis for thinking that an anticonvulsant like pregabalin, known to be effective for the treatment of epilepsy, would for that reason alone be effective for treating neuropathic pain. Warner Lambert identified the relevant unifying principle as central sensitisation, a phenomenon discovered by Professor Clifford Woolf, one of their expert witnesses at trial, and published by him in 1983. Central sensitisation was a well known concept at the priority date. It refers to the sensitisation of neurons in the dorsal horn to peripheral painful stimuli. For present purposes it is unnecessary to describe the detailed physiological processes involved. Essentially, pain signals originating in injury at the periphery are transmitted to the spine and intensified, resulting in allodynia and secondary hyperalgesia. The experts were agreed that central sensitisation is common to inflammatory pain and peripheral neuropathic pain but was not known to be causative of either (para 191). Moreover, there is no necessary correlation between allodynia and secondary hyperalgesia on the one hand and either central sensitisation or neuropathic pain on the other. The judge found (para 205) that allodynia and secondary hyperalgesia were present in a large majority of patients suffering from neuropathic pain, but there was a significant minority of cases in which they were not present. Moreover, although allodynia and secondary hyperalgesia involved central augmentation, in some cases this would be central sensitisation, in others not. Central sensitisation is not the only mechanism of central augmentation (para 61). A significant part of the evidence at trial was concerned with the role of central sensitisation in the second phase of the rat paw formalin test. This, as I have pointed out, models inflammatory pain. The judge found (para 235) that it was not known to be predictive of efficacy for neuropathic pain. The evidence established that central sensitisation played a role in the pain experienced in the second phase. But the judge found that it was not generally understood to be a dominant role (paras 211, 213 214). By this I understand him to have meant (since this was the issue between the experts) that it amplified but did not cause the pain experienced in the second phase. Against this background, the judge dealt first with central neuropathic pain. He rejected the suggestion that central sensitisation could serve as a unifying principle embracing it. This was because although central sensitisation was understood to contribute to inflammatory pain and peripheral neuropathic pain, both of which originate in the peripheral nervous system, it cannot contribute to central neuropathic pain, which has nothing to do with damage to the peripheral nerves (paras 193, 348). There was an issue at trial about the correct classification of fibromyalgia and phantom limb pain. They were said to be exceptions to this proposition. But the judge (para 194) was not satisfied that this was common general knowledge. These findings are fatal to the argument that central sensitisation can serve as a unifying principle embracing central neuropathic pain. The judges reasons for rejecting that argument seem to me to be unanswerable. The judge refused to allow Warner Lambert to argue by way of alternative that the presence of hyperalgesia or allodynia itself served as a unifying principle embracing central neuropathic pain, because it had not been pleaded, advanced in evidence or put to the relevant witnesses. But in any event he considered (para 349) that the evidence did not support it, mainly because it was difficult to reconcile with the fact that nonsteroidal anti inflammatory drugs were known to be effective for the treatment of inflammatory pain but not neuropathic pain. Turning to peripheral neuropathic pain, which is the subject of Actavis and Mylans cross appeal, the judge evidently found this to be a difficult issue. He considered the evidence to be finely balanced, but concluded on balance (para 351) that the specification enabled a plausible prediction to be made that pregabalin would be effective for treating peripheral neuropathic pain. His reasoning was as follows: In addition to the general points made above, Warner Lamberts case suffers from the problem that it has not been established that it was common general knowledge that the rat paw formalin test was predictive of efficacy for neuropathic pain. Moreover, as discussed above, Professor Woolf accepted that the carrageenin and post operative pain models did not assist in this regard. Nevertheless, I have concluded on balance that, given that plausibility is a relatively low threshold, the data contained in the specification, when read with the common general knowledge, just make it plausible that pregabalin would be effective to treat peripheral neuropathic pain. This is because the common general knowledge as to (i) the involvement of central sensitisation (at least as an amplifying mechanism) in both inflammatory pain and peripheral neuropathic pain and (ii) the role played by central sensitisation in the rat paw formalin test would have suggested to the skilled team that it was possible that a drug which was effective for inflammatory pain, in particular as modelled by the second phase of the formalin test, would also be effective in peripheral neuropathic pain, although this would not necessarily be the case. This conclusion is supported by the evidence not only of Professor Woolf, but also of Dr Scadding and Professor Wood in cross examination. Dr Scadding said that, when he read the Patent, he thought that it could be the case that pregabalin would be effective for (peripheral) neuropathic pain, although a demonstration of that was missing. Professor Wood more or less accepted that it was a credible suggestion, although he made it clear that he would want to test it experimentally. An appellate court should not normally interfere with conclusions of a trial judge which depend on his evaluation of a substantial body of expert evidence: see Biogen Inc v Medeva Plc [1997] RPC 1, 50 (Lord Hoffmann). I consider, however, that Actavis and Mylan are entitled to succeed on their cross appeal, not because there was anything wrong with the judges findings, but because those findings do not support his conclusion that the specification makes it plausible to predict that pregabalin will be efficacious for treating neuropathic pain. The question, it must be remembered, is not whether it is plausible but whether the specification discloses something that would make it so in the eyes of the skilled person. The starting point was pointed out by the judge himself (para 255) in the context of the challenge based on obviousness. Because the only evidence of therapeutic efficacy presented in the specification is the results of the four animal models, the skilled person would understand that the patentee was relying on these as being predictive of efficacy. Those results were, however, predictive only of efficacy for inflammatory pain. The specification does not in terms claim more than this. No data are presented for the two recognised models of neuropathic pain, the Bennett model and the Kim and Chung model. There is no mention of central sensitisation, or indeed of any unifying principle that might embrace any condition other than inflammatory pain. This is an unpromising basis for a submission that there is a unifying principle which enables any kind of conclusion about efficacy for neuropathic pain to be derived from results of the animal models. The judges analysis of the implications for peripheral neuropathic pain of the data presented in the specification was based entirely on the common general knowledge that central sensitisation was involved in both inflammatory and peripheral neuropathic pain. The judge concluded from this that it was possible that a drug which the specification showed to be effective for the first would also be effective for the second, although this would not necessarily be the case. In my opinion this is a logical non sequitur. The reason for seeking a unifying principle embracing neuropathic as well as inflammatory pain is that the unifying principle may suggest a common cause or metabolic mechanism embracing both, whose operation may be affected by the drug. That might in turn suggest that a drug which was effective for one condition might also be effective for the other. The involvement of central sensitisation in both inflammatory and peripheral neuropathic pain does not prove or even suggest that they have a common cause. Indeed, it is clear that they do not. The involvement of central sensitisation in both inflammatory and peripheral neuropathic pain does suggest that there may be a common metabolic mechanism at work, at least in intensifying the pain. But neither the specification nor the common general knowledge of the art supplies any reason for supposing that pregabalin affects the operation of that mechanism or even that it might well do. In particular, there is nothing to suggest, even as a hypothesis, that pregabalin works with peripheral neuropathic pain by blocking central sensitisation. The information presented in the specification about the rat paw formalin test does not assist on this point. The rat paw formalin test, as I have said, models inflammatory pain. It shows a diminution of pain in the second phase, associated with the administration of pregabalin. But in the absence of anything in the specification about the effect of pregabalin on the mechanism of pain, there is no reason to suppose that the diminution of pain is associated with its effect on central sensitisation as opposed to its effect on any other agent of inflammatory pain. The judge had found (paras 211, 214) that central sensitisation was not the dominant factor in the second phase of the test. If, notwithstanding the involvement of central sensitisation in both inflammatory and neuropathic pain, the rat paw formalin model is not predictive of efficacy for neuropathic pain, I find it difficult to see how the model can assist in making such a prediction plausible. The judge was obviously conscious of the logical inconsistency, and believed that he had found a way of resolving it. With respect, I do not think that he had. More generally, it cannot in my view be enough to justify a monopoly that it is possible a priori that a drug which was effective for inflammatory pain would also be effective for neuropathic pain, in the absence of any reason to suppose that the possibility had some scientific basis or that it was more than speculative. Everything is possible that is not impossible, but not impossible is very far from being an acceptable test for sufficiency. Plausibility may be easy to demonstrate, but it calls for more than that. Floyd LJ said (para 133) that he was fortified in his conclusions by a further consideration, which the judge had not relied on, namely that it was established through the evidence that the skilled team would be encouraged by the data in the patent to carry out simple tests (which are themselves identified in the patent) to confirm the suitability of pregabalin for peripheral neuropathic pain. I would have thought, on the basis of that evidence (as I think the judge did) that the specification had thereby made a contribution to the art which would justify a claim to peripheral neuropathic pain. The simple tests that Floyd LJ was referring to were the Bennett and the Kim and Chung tests for peripheral neuropathic pain; and the evidence that he had in mind was that of Dr Scadding, the expert clinician called by Actavis and Mylan: see paras 119 120 and 127. Dr Scadding had accepted that the skilled person would be encouraged by the data in the patent to ask the neuroscientist to test pregabalin for neuropathic pain. Professor Wood, the expert neuroscientist called by Actavis and Mylan who would notionally have been asked to carry out these tests, gave more guarded answers when he was asked to deal with the point in cross examination: Day 2, pp 265 269. His evidence, in summary, was that there were no data whatever about neuropathic pain in the patent, but that he would be encouraged by the broad terms of the claims to try many tests, including the Bennett and the Kim and Chung tests. There were, he said, many different pain mechanisms that can give apparently similar symptoms, for which there were different models, and it would be necessary to test for all of them. Some were difficult to test for. It was put to him that even the Bennett and the Kim and Chung tests would not provide definitive proof of efficacy, because it was a step by step process. His final answers on this point fairly reflect the tenor of his evidence, so far as one can judge from the transcript: A. So one would just carry out an analysis of all these different models, to see where the drug had better utility than present medication. The data in the patent would give you sufficient motivation to carry out further tests and step by step you would reach the stage where you have demonstrated that pregabalin was effective for the treatment of pain? A. It would certainly inspire you to analyse its activity in a broad range of pain models. Of course, this would be useful for the clinician attempting to exploit the drug in treating various different types of human pain. Animal models are not ideal, but they are always a useful pointer for the clinician. Q. A useful starting point? A. Absolutely. I am conscious of the danger of an appellate court analysing extracts from a transcript of evidence on complex and inter related technical questions, where so much depends on the impression that the witnesss evidence as a whole has made on the trial judge. But in the absence of any discussion of this point by the judge, I feel unable to attach the same importance to it as Floyd LJ did. There is, however, a more fundamental objection to it, which is well brought out by the evidence which I have cited from Professor Wood. In classical insufficiency cases, where the question is whether the disclosure in the patent enables the skilled person to perform the invention, the skilled person may be assumed to supplement the disclosure by carrying out simple tests. In cases like this one, where the invention is novel but the objection of insufficiency is that the claim exceeds the disclosed contribution to the art, the role of hypothetical simple tests is necessarily more limited. As the EPO Technical Board of Appeal observed in JOHNS HOPKINS, at para 12, the specification can be said to contribute to the art if it solves a problem, but not if it merely poses one. Or as Lord Hoffmann observed in a passage that I have already quoted, the notion that something is worth trying cannot be enough without more to justify a monopoly. The specification in the present case says nothing about neuropathic pain of any kind. It says nothing about central sensitisation, which is said to provide a link between neuropathic and inflammatory pain. The mere fact that the skilled team, faced with an apparent discrepancy between the breadth of the claims and the absence of supporting data in the specification, would be encouraged to fill the gap by carrying out tests of its own, serves only to confirm the absence of any disclosed contribution to the article I conclude that Claim 3 of the patent and the other claims relating to neuropathic pain were invalid for insufficiency. The disclosure did not contribute any knowledge of the art capable of justifying a claim to a monopoly of the manufacture of pregabalin for the treatment of neuropathic pain of any kind. Decisions in other jurisdictions Mr Mitcheson reminded us more than once in the course of his submissions that if we were to hold Claim 3 insufficient we would be the only court to do so in the various jurisdictions party to the EPC. In issuing the Patent, the EPO had rejected the suggestion that it might be insufficient, albeit without giving detailed reasons. Warner Lambert also rely on decisions of the courts of France, Germany and Sweden, all of which have subsequently upheld Claim 3 as sufficient. This is more than a forensic point. If courts in other jurisdictions have upheld Claim 3, that may serve as a reality check against my own, less favourable conclusions. Other things being equal, it would be unfortunate if different jurisdictions party to the EPC arrived at different conclusions concerning the same patent. However, other things are rarely equal, and the force of this point depends entirely on how far the factual and technical evidence before the foreign court was the same as the material before Arnold J, and how far their domestic statutes were comparable. In France, the Tribunal de Grande Instance of Paris published its judgment on 8 July 2016. They appear to have had before them transcripts of at least part of the evidence given to Arnold J. They held that the Patent was sufficient because the occurrence of allodynia and hyperalgesia provided a unifying principle embracing both neuropathic and nociceptive pain. There are difficulties about this theory, as Arnold J pointed out (para 349), but for present purposes it is enough to say that this was the alternative argument which he refused to allow Warner Lambert to run, a ruling which was not challenged before us. In Germany, the Federal Patent Court ruled on 24 January 2017 that the Patent was invalid for lack of inventive step. It dealt only briefly with the objection of insufficiency, holding that it was probable that the disclosure was sufficient to enable the invention to be carried out. The court does not appear to have grappled with what in England would be called Biogen insufficiency. This judgment is also under appeal. In Sweden, the Stockholm District Court, sitting as a Patent Court, gave judgment on 12 August 2016. This decision is final. The District Court came closer than those of France and Germany to grappling with the issues before us, but it received expert evidence which was not before Arnold J. The court applied the classic sufficiency test, asking whether the claim was plausible across the whole scope of the claim. It considered that the mere mention of Bennett and the Kim and Chung test made the assertion of efficacy for treating neuropathic pain plausible, but it did not distinguish for this purpose between central and peripheral neuropathic pain. The Court of Appeal in the present case disagreed, on the ground that these were tests for peripheral neuropathic pain which could not justify a claim to efficacy for all neuropathic pain. I also disagree, both for that reason and for the wider reasons which I have already given. After the argument was completed, we were supplied with the recent decision of the Full Court of the Federal Court of Australia on 23 February 2018. Australia is not, of course party to the European Patent Convention, and the court expressed reservations about applying the case law of the EPO Technical Board of Appeal or decisions under the United Kingdom Patents Act 1977 in an Australian statutory context. The court analysed the question solely in terms of classical insufficiency. It was therefore concerned only with the question whether the invention could be performed by the skilled man on the basis of the disclosure in the patent. None of these decisions cause me to doubt the conclusions that I have reached as a matter of English law, in the light of the evidence given and the facts found in these proceedings. Infringement: general Patent infringement is a statutory tort. Section 60 of the Patents Act 1977 (so far as is relevant) provides as follows: 60.(1) Subject to the provisions of this section, a person infringes a patent for an invention if, but only if, while the patent is in force, he does any of the following things in the United Kingdom in relation to the invention without the consent of the proprietor of the patent, that is to say (a) where the invention is a product, he makes, disposes of, offers to dispose of, uses or imports the product or keeps it whether for disposal or otherwise; (b) where the invention is a process, he uses the process or he offers it for use in the United Kingdom when he knows, or it is obvious to a reasonable person in the circumstances, that its use there without the consent of the proprietor would be an infringement of the patent; (c) where the invention is a process, he disposes of, offers to dispose of, uses or imports any product obtained directly by means of that process or keeps any such product whether for disposal or otherwise. (2) Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom. Some general points should be made at the outset about section 60 of the Patents Act. First, although liability for infringement is often said to be strict, section 60 of the Patents Act distinguishes between those heads of infringement which require proof of a mental element and those which do not. In short, under section 60(1)(a) and (c), there is no mental element. Liability, as Lord Hoffmann observed in Merrell Dow Pharmaceuticals Inc v HN Norton & Co Ltd [1996] RPC 76, 92, is absolute. It depends upon whether the act in question falls within the claims and pays no attention to the alleged infringers state of mind. On the other hand, an allegation of infringement under section 60(1)(b) (at any rate by offering the process for use in the United Kingdom), or an allegation of indirect infringement under section 60(2), on the other hand, requires proof of knowledge. In both cases, the knowledge required is encapsulated in the phrase when he knows, or it is obvious to a reasonable person in the circumstances . Secondly, section 60 uses a consistent conceptual approach to the relationship between the words product, process and invention. Invention is a class with only two members, product and process, and the invention in question is the subject matter of one or more claims in the patent. Thus, for the purposes of section 60, phrases about using the process, product or invention, or working the invention or putting the invention into effect need to be understood and applied by reference to the claim (or claims) in the patent alleged to be infringed. Direct infringement: section 60(1)(c) It is common ground that Swiss form claims are purpose limited process claims. Claim 3 of the patent in suit is not a product claim, because the product is not novel. It is a process claim because it protects the process of preparation (or manufacture) of a medicament containing pregabalin. It is purpose limited because it only protects that process so far as it is undertaken for treating neuropathic pain. The monopoly claimed is a monopoly of preparation or manufacture of the product for the designated purpose. It is not a monopoly of the subsequent use of the product for that purpose. This is the basis on which Claim 3 is consistent with the prohibition of patents for methods of treatment or diagnosis. It follows that Warner Lamberts allegation of direct infringement is and must be based on section 60(1)(c). Section 60(1)(c) is concerned with cases where a product is obtained directly by means of the patented process. Infringement occurs whenever a person disposes of that product, offers to dispose of it, uses or imports it, or keeps it, whether for disposal or otherwise. The infringer may be, but need not be, the same as the person who makes the product. The section also applies to anyone in the downstream generic market, including wholesalers and pharmacists. Liability is strict. Provided only that the product has been obtained directly by means of the process, it extends to subsequent dealings with all and every such product irrespective of knowledge. The current regime in the United Kingdom for the prescribing and dispensing of medicines is described in admirable detail by the judge, but the following summary will suffice. Unless there is good reason to do otherwise, doctors usually prescribe generically, by reference to the international non proprietary name of the drug (the INN), rather than by brand or proprietary name. Thus, doctors would usually prescribe pregabalin rather than either Lyrica or Lecaent, regardless of whether they were treating a condition for which the original patent had expired, such as epilepsy, or a condition such as neuropathic pain for which patent protection still subsisted. Doctors do not usually include on their prescriptions any description of the condition (or indication) being treated. Pharmacists are free to respond to generic prescriptions by dispensing either a branded or a generic product. Generic products are usually much cheaper than the branded product and, for that and other reasons, pharmacists have an incentive to dispense generic products where possible. They usually do so without knowing the indication for which the drug has been prescribed. Many prescriptions are collected by someone other than the patient. Patients may not know precisely the indication to which the prescription relates, in particular if they are using several drugs to address a combination of indications. It is usually impracticable for the busy pharmacist to contact the busy doctor to find out the indication for which pregabalin was prescribed. The result is that the pharmacist will not know whether the prescription addresses an indication which is patent protected. The manufacturer and the supplier of generic pregabalin is even further removed from any actual knowledge of the use for which his product is being prescribed. He knows only what can be inferred from published statistics about the market for different uses of pregabalin, and his own share of that market. Because doctors commonly prescribe generically and the pharmacist generally does not usually know what indication is being treated, the use of skinny labels specifying the purpose of the generic product cannot reliably prevent the pharmacist from dispensing the generic product for a patent protected use. Dispensing pharmacists know that Lyrica and Lecaent are identical, and the same dosage regime can be used for all indications for which pregabalin has received marketing authorisation. In March 2015, shortly after Lecaent came onto the market, the judge gave directions as a result of which the NHS in England, Wales and Northern Ireland (but not apparently in Scotland) issued guidance to doctors to prescribe Lyrica rather than pregabalin for neuropathic pain, and to pharmacists to dispense Lyrica in response to a prescription for generic pregabalin if told that the prescription was for the treatment of pain. It is by no means clear that it will always be appropriate to meet problems arising in relation to second medical use patents by guidance of this kind. Mr Silverleaf QC for the Secretary of State told us on instructions that the established conventions about prescribing generically had evolved for good reason, and could not lightly be discarded. In particular the use of INNs rather than proprietary names in prescription records served as clear and valuable guidance to other practitioners taking over the care of patients from the prescribing doctor. There was some evidence before the judge at the trial that his guidance had been effective in limiting the scale of the problem. What is, however, clear is that whatever steps are taken to limit the leakage of generic pregabalin into the patent protected market, it is foreseeable that some generic pregabalin will be supplied in good faith by pharmacists to meet prescriptions which are intended by the prescribing doctors for the treatment of neuropathic pain. At the hearing before us, the parties were agreed that there was a mental element in infringement under section 60(1)(c). This was not because of the terms of the section itself, which provides for strict liability. It was said to be because a mental element was intrinsic to the claim said to have been infringed. The preparation of the compound must be for the treatment of the designated condition. This cannot mean suitable for that purpose, for a claim thus framed would lack novelty: the product was just as suitable for the newly discovered purpose before the priority date, even if this was not generally known. Therefore, it was said, it must mean that the manufacturer must make the product with the intention that it be used for that purpose, if the product is to fall within the confines of section 60(1)(c). The difference between the parties concerned the test of intention. Actaviss case was that the test of the manufacturers intention was subjective. The manufacturer must make the product with intent to target the patent protected market. Arnold J accepted that submission. Warner Lamberts primary case was that the test of the manufacturers intention was objective, and that a manufacturer must be taken to intend the foreseeable consequences of his actions. It was therefore enough to support a case of infringement of Claim 3 under section 60(1)(c) that it was foreseeable to the manufacturer that a more than de minimis amount of it would in due course be used for the treatment of neuropathic pain. The Court of Appeal broadly accepted Warner Lamberts submission subject to two qualifications. First, the downstream use for treating pain had to be intentional rather than accidental. By this they meant only that patients would receive the drug for treating their pain, rather than for example for treating epilepsy, with a coincidentally beneficial effect upon pain from which they happened also to suffer. The second qualification was more important. Floyd LJ held that the requisite mental element could be negatived if the manufacturer had taken all reasonable steps to prevent the downstream use of his drug for treating pain. At para 208 Floyd LJ said this: The intention will be negatived where the manufacturer has taken all reasonable steps within his power to prevent the consequences occurring. In such circumstances his true objective is a lawful one, and one would be entitled to say that the foreseen consequences were not intended, but were an unintended incident of his otherwise lawful activity. In his judgments on the application for an interim injunction [2015] EWCA Civ 556 (at paras 74 92) and the substantive appeal (paras 190 191), Floyd LJ considered another possibility, which he called (not entirely accurately) the only packaging will do approach. This approach, which he associated with the case law of the German courts, treats the question whether a product was manufactured for a designated purpose as depending only on whether there was some outward manifestation of that purpose in the manufacture itself, including any information about its purpose contained in the accompanying label or patient information leaflet. He rejected it because he considered that it gave insufficient protection to the patentee. Before us, Warner Lambert maintained their primary case, but adopted the Court of Appeals qualified version of it as a fall back. The Secretary of State, and other interveners with a stake in the market for treating the non patented use, supported Actavis case. No one adopted the only packaging will do approach. But after the hearing, the parties addressed it in writing, at the invitation of the court. Actavis adopted it by way of alternative to their primary case that the test required proof of subjective targeting. Warner Lambert and the Secretary of State maintained their respective original positions. It is clearly correct that this issue depends not on the meaning of section 60(1)(c) of the Patents Act but on the construction of the relevant claims in the patent. The question is what, as a matter of construction, does it mean to claim in a patent the use of pregabalin for the preparation of a medicament for treating neuropathic pain. In my view, most of the difficulty in answering this question arises from the view of both courts below that Claim 3 (and any other purpose limited claim in Swiss form) includes a mental element, namely the intention of the manufacturer, as part of the definition of the monopoly. This view is perhaps invited by the common use of the phrase purpose limited to describe a claim in Swiss form. The expression is convenient, but it elides a number of different concepts, not all of which involve a mental element. I think that a test for infringement which depended on intention, whether objective or subjective, would be contrary to principle and productive of arbitrary and absurd results. It is first necessary to say something about the distinction between subjective and objective intention, which is legally fundamental. Subjective intention is a state of mind, ascertained as a matter of fact. A person may subjectively intend X if, for whatever reason, he deliberately does an act which is liable to bring X about, desiring it to happen. The degree of probability of X occurring may be relevant to the question whether it should be inferred as a fact that such a desire existed, but that is a question of proof and not of principle. Objective intention by comparison is not so much a matter of fact as an artificial construct for attributing legal responsibility. A person is taken to intend the ordinary and natural consequences of his acts. He objectively intends those consequences if they were foreseeable to a reasonable person, whether or not they were actually foreseen by him. Policy considerations may determine the degree of probability with which the consequence must be foreseeable if legal responsibility is to be attributed on that basis. The first point to be made applies to any test of infringement based on intention, whether subjective or objective. A Swiss form patent protects the process of manufacture of a product for the treatment of the designated condition. The hypothesis is that some of a generic manufacturers output will be prescribed or dispensed for the treatment of the patent protected indication and that the manufacturer intends this, subjectively or objectively. But it is not suggested that different parts of his output can be appropriated at the manufacturing stage to distinct therapeutic uses. If the manufacturers intention is the touchstone, then the only intention that can realistically be attributed to him is that his output will be applied to the treatment of neuropathic pain as well as seizure disorders. If that intention is proved, the entire output will be tainted, including that part of it which is in fact prescribed and dispensed for the treatment of seizure disorders for which patent protection has expired. It will all have been prepared with the relevant intention on the part of the manufacturer. It follows that a distributor supplying or a pharmacist dispensing generic pregabalin will be dealing in a product obtained by means of a patented process within the meaning of section 60(1)(c) of the Act, and I deal first with the hypothesis that the test is subjective intention. will incur liability for infringement even if it has been prescribed for epilepsy rather than pain, because of the manufacturers intention that it should be used for either or both. The interventions in the present appeal show that pharmacists are well aware of this risk. Their only safe course will be to refuse to deal with the generic product at all. This will in turn impact on generic manufacturers. They will be dissuaded from producing generic drugs even for treating the original indication which is no longer entitled to patent protection. First, a patent is a public document. It is autonomous, in the sense that it is supposed to define exhaustively what the product or process is which is the subject of the legal monopoly. For the scope of the monopoly to be dependent on some extraneous fact not ascertainable from the patent but dependent on the state of mind of the manufacturer, is an extraordinary concept. It is not easy to see how it could be said to comply with the requirement of section 14(5)(a) of the Act that the claim in the patent application should define the matter for which the applicant seeks protection. The same is true of the corresponding provision of EPC article 84. It is fair to say that a person can infringe a patent under section 60(1)(c) by handling a product obtained by the patented process, although it is not apparent from the product that it was obtained by the patented process. But that cannot be a reason for piling Pelion upon Ossa by holding that the patent need not even exhaustively define what the process is. Secondly, if subjective intention is relevant, then liability under section 60(1)(c) extends to a person who infringes a purpose limited patent by virtue not of his own intentions but of the intention of someone else, namely the generic manufacturer. I know of no other legal context in which the wrongfulness of an act can depend on the state of mind of someone other than the actor, to which the actor is not necessarily privy. Thirdly, subjective intention implies choice. This is in particular true of the form of intention proposed by Actavis as relevant, namely targeting the patent protected market. What the manufacturer of the generic product must intend is its use for the patent protected purpose by prescribing physicians and dispensing pharmacists. Their practices are outside his control. He cannot meaningfully be said to choose that they will prescribe or dispense pregabalin for the treatment of pain merely by manufacturing it. A hope that they will do so is not the same as an intention. Fourthly, the practical problems of applying a test based on subjective intention are striking. Suppose that the generic manufacturer makes pregabalin intending it to be used for (inter alia) the treatment of pain, but that objective is not achieved? Does the mere intention taint the entire production run, even if it is all used for conditions such as epilepsy for which patent protection has expired? Suppose that the manufacturer makes more of the product than he believes can be sold for the treatment of seizure disorders or takes active steps to encourage its use for the treatment of pain. Is the liability of the importer, wholesaler or pharmacist to depend on whether the manufacturer resolved to take those steps at the time of manufacture or afterwards? No rational scheme of law could depend on such considerations as these. And all of this of course assumes that the manufacturers state of mind can be proved. In the great majority of cases it would have to be inferred from his overt acts. In practice, the most that one can usually say is that use for the patent protected purpose is an objectively foreseeable consequence of the manufacture of the product for distribution and sale. I turn therefore to Warner Lamberts hypothesis that that is the test. The foreseeability test has the merit of being objective, but there is in my view little else to commend it. Foreseeability is, as I have pointed out, a device for attributing legal responsibility to the person who should have foreseen the objectionable consequences of his acts, whether or not he actually did so. Its use as the basis for attributing legal responsibility to someone else seems to me to be entirely arbitrary. There are other difficulties about it. Since it is common ground that some more than de minimis leakage of generic pregabalin into the market for treating neuropathic pain is foreseeable whatever reasonable steps are taken, the simple foreseeability test means that all stocks of generic pregabalin will have been manufactured by use of the patented process regardless of the manufacturers subjective intention. Consequently, any subsequent dealing with those stocks by importers, distributors or pharmacists will constitute infringements under section 60(1)(c). The result would be to give the patentee a de facto extension of the expired patent for the original use until the expiry of the patent for the new one. Warner Lambert recognised that this was likely to be an unacceptable result, and submitted that it could be mitigated by a flexible approach to remedies. Injunctions could be refused, they suggested, and financial recovery limited by confining the patentee to an account of the infringers profits, based upon an assessment of the proportion of generic pregabalin dealt with by any infringer which is actually used for the treatment of pain. These concessions to reality may have been forensically necessary, but in my view they are no more satisfactory than the unqualified foreseeability test. First, they assume that dealers in generic pregabalin going about a lawful business of supplying it for its non patented use are infringers. But they are entitled to conduct their trade lawfully, as no doubt most would wish to. The courts cannot properly adopt a solution that makes that impossible. Secondly, while the court may be able to withhold an injunction as a matter of discretion, damages are not a discretionary remedy. The patentee has, in principle, a right to elect between damages and an account of profits. They are alternative remedies, but the choice is not the courts. Thirdly, an election by the patentee for damages would expose the infringer to liability for the loss of the patentees profit margin on lost sales of the branded product. That will generally be much higher than the profit margin on the generic product, since it has to cover the patentees research costs. Warner Lamberts alternative case is that the foreseeability test should be applied subject to the qualification proposed by the Court of Appeal, namely that the infringer had taken all reasonable steps to prevent leakage of generic pregabalin into the market for the patented use. The problem about this is while there are steps available to a manufacturer to limit the scale of the leakage of generic pregabalin into the market for the patent protected use, there are no reasonable steps which will eliminate it entirely. Although the Court of Appeal described the taking of steps by the manufacturer as sufficient to negative intention to manufacture pregabalin for the patent protected purpose, it will not in fact negative it if the test of intention is foreseeability. This is because the manufacturer will be taken to intend the foreseeable leakage notwithstanding the steps taken to reduce its scale. In reality, what the Court of Appeal has proposed is not a way of negativing intention. It is a non statutory defence to infringement. Such a defence may or may not be desirable. But Parliament has not provided for one, and it is not the function of the courts to invent non statutory defences to statutory torts. Least of all is it their function to invent a non statutory defence to a statutory tort of strict liability, which is subject to limited express statutory defences none of which applies. It is right to add that the Court of Appeals compromise is likely to be legally uncertain and practically unworkable. How are distributors or pharmacists to know what steps have been taken by the manufacturer to prevent leakage, or whether they will be regarded by the court as reasonable? Warner Lambert do not suggest that the reasonable steps required of the generic manufacturer will be limited to skinny labelling or some other precaution visible to users of the generic product. The claims fall to be interpreted, in accordance with the Protocol on the interpretation of article 69 EPC, on a basis which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties. What is fair or reasonable for these purposes falls to be considered in the light of the central objectives of this area of law. It is possible to identify four such objectives. They are: 1. To provide reasonable protection to the second medical use patentee, so as to reward and to incentivise the complex and expensive processes of research and testing necessary to bring these valuable uses to the market. That protection needs, as far as is consistent with competing policy objectives, to protect the patentee against the invasion of his monopoly by competitors. 2. To allow the public the benefit of the product for its original therapeutic use, unconstrained by any patent rights once the patent covering that use has expired. As Sir Donald Nicholls VC famously observed in Merrell Dow Pharmaceuticals Inc v H N Norton & Co Ltd [1995] RPC 233, 238, patents exist today to reward and thereby encourage inventors; they are not intended to make it possible to take out of public use processes or products already made available to the public. The patentee has had the reward of his invention for the original use and should not obtain, by a side wind, an effective continuing monopoly in relation to the original use after the expiry of the patent protection for it. 3. To provide reasonable legal certainty for those engaged in the manufacture, marketing and prescribing of the generic drug for the non patented use, that their conduct is lawful. This policy objective is expressly recognised by the Protocol and, without it, the second objective is unlikely to be achievable. 4. To protect the autonomy of clinical judgments. The prohibition in EPC article 52(4) (now article 53(c)) and section 4(2) of the Patents Act) of patents for methods of treatment or diagnosis has been described by the EPO Technical Board of Appeal as securing that medical and veterinary practitioners are free to use their skills and knowledge of the best available treatments to achieve the utmost benefit for their patients uninhibited by any worry that some treatment might be covered by a patent: G 0001/07 MEDI PHYSICS/Treatment by surgery [2010] EPOR 25 at para 3.3.6. The foreseeability test, in either its qualified or unqualified form, would achieve objective 1 but frustrate objectives 2, 3 and 4. The subjective targeting test would probably achieve a reasonable balance between objectives 1 and 2, but it would not serve objectives 3 and 4. I conclude that the intention of the manufacturer, whether subjective or objective, is irrelevant to the question of infringement. In my opinion, in a purpose limited process claim, the badge of purpose is the physical characteristics of the product as it emerges from the relevant process, including its formulation and dosage, packaging and labelling and the patient information leaflet which in EU (and other) countries will identify the conditions for whose treatment the product is intended. I shall call this, for want of a better phrase, the outward presentation test. I adopt it for the following reasons. First, it provides an objective test, which is not dependent on proof of the internal cogitations of the manufacturer. The patient information leaflet is not just a public statement of the use for which the product is made, but one which is directly addressed to the potential user, ie to those persons whose acts are potentially within section 60(1)(c), namely importers, distributors, pharmacists and patients. Accordingly, it avoids the unacceptable anomalies associated with a test based on the manufacturers subjective intention. Secondly, as the EPO has recognised (see para 26 above), in a purpose limited claim, the designated purpose is an inherent characteristic of the invention. The outward presentation test is consistent with this notion. A test based on intention is not. This is because the manufacturers state of mind in exploiting the process is not a characteristic of the invention. It is a characteristic of the inventor, coming into being after (usually long after) the invention has been made and the patent granted. Likewise, the market conditions which may make some consequence of manufacture objectively foreseeable are not a characteristic of the invention. They arise from subsequent facts. Third, the outward presentation test properly reflects the critical feature of Swiss form patents, namely that the patent is for the process of manufacture, not for the subsequent use that may be made of the product. The physical presentation of the product is generally part of the process of manufacture. Subsequent activities of the manufacturer in marketing the product are not. Fourth, it provides legal certainty, in particular for those downstream of the manufacturer who deal in the product. Fifth, and critically, it strikes a fair balance between the public interest in rewarding the invention by allowing the patentee to exploit his monopoly and the public interest in the free use of the invention for therapeutic uses which do not have, or no longer have, patent protection. In my opinion, it satisfies all four policy objectives governing the interpretation of patent claims which I summarised at para 82 above. Finally, the outward presentation test derives some support from the case law of the EPO Technical Board of Appeal. The Board does not of course deal with infringement claims, but it has construed purpose limited claims as referring to the purpose identified by reference to the characteristics of the product. In T 1673/11 GENZYME/Treatment of Pompes disease [2016] EPOR 33, the patent claimed use of human acid alpha glucosidase in the manufacture of a medicament for the treatment of infantile Pompes disease. In opposition proceedings, the Board (para 9.1) defined the scope of the claim as limited to the manufactured medicament which contains as an active substance human acid alpha glucosidase in the 100 110 kD form and which is packaged and/or provided with instructions for use in the treatment of infantile Pompes disease. (Emphasis added) Outward presentation is a rough paraphrase of the German sinnfllige Herrichtung which is the major part of the test of infringement applied to purpose limited patent claims by the German courts: see Antivirusmittel (Case X ZR 51/86) (Bundesgerichthof, 16 June 1987), (1987) GRUR 794, at para 18; Chronische Hepatitis C Behandlung/Ribavirin I (Case 4a O 145/12) (Landgericht Dsseldorf, 24 February 2004); Chronische Hepatitis C Behandlung/Ribavirin II (Case 4a O 145/12) (Landgericht Dsseldorf, 14 March 2013); Cistus Incanus (Case I 2 U 53/11) (Oberlandesgericht Dsseldorf, 31 January 2013). This is why Floyd LJ associated what he called the only packaging will do test with German law. It is, however, important to guard against the over ready transfer of concepts from one legal system to another, in which the legal context may be different. For the purpose of determining infringement, German law does not distinguish between product and process claims in the clear cut way that the United Kingdom Patents Act does. In either case, the monopoly claimed may be treated as extending to the use made of the product after its manufacture: Patentgesetz, section 9 and Dexmedetomidin (Case I 2 U 30/17) (Oberlandesgericht Dsseldorf, 1 March 2018), (BeckRS 2018, 2410, at paras 41 43). Moreover, many of the anomalies considered above are avoided in German law by the limitation of monetary remedies for infringement to cases of deliberate or negligent infringement, although negligence will readily be assumed: Patentgesetz, section 139(2). This background explains why the German courts, while applying an objective test, have been prepared on appropriate facts to find infringement of purpose limited claims on a wider basis than the mere presentation of the product: see strogenblocker (Case I 2 W 6/17) (Oberlandesgericht Dsseldorf, 5 May 2017) at para 39, and Dexmedetomidin (Case I 2 U 30/17) (Oberlandesgericht Dsseldorf, 1 March 2018) at para 44. However, whether or not it is soundly based on German law, Floyd LJs objection to the only packaging will do test deserves to be considered on its merits. His main point was that once it was accepted (as it was, by both parties before him) that there was a mental element in a purpose limited claim, there was no reason to limit the evidence of the manufacturers intention to the physical presentation of the product. As he pointed out (para 191), packaging may be a means of demonstrating the necessary mental element, whatever that is, but it cannot possibly be the only means of doing so. I accept that there is force in this point, which is one reason why I reject the importation of a mental element in the claim. It falls away if the mental element is discarded. More pertinent is Floyd LJs objection that an outward presentation test gives insufficient protection to the patentee. One can imagine circumstances in which the labelling and the patient information leaflet of a generic manufacturer might be regarded as a charade. He might, for example, manufacture pregabalin with the intention of supplying an unexceptionable label and patient information leaflet but then encouraging dealers and pharmacists to supply it for the treatment of pain. To the extent that this is a realistic scenario, the outward presentation test may be imperfect. But I cannot regard the existence of such imperfections as decisive, for two reasons. In the first place, the patentees interest, although important, is not the only consideration. As I have pointed out by reference to the Protocol on the interpretation of EPC article 69, the interpretation of a claim requires the court to take account both the reasonable protection to which the patentee is entitled and the need for legal certainty for third parties. Broader policy objectives, including the public interest in the free exploitation of a product for a patent expired use, are also relevant. This may involve, as it does in this case, a compromise between opposing and incommensurate factors. It may be thought anomalous that the manufacturer of the generic product should be free of liability if he markets it for a patent protected use provided that he labels it as being for a non protected use. But to my mind it is a far greater anomaly that in a charade case the generic manufacturers intention exposes to liability not just himself but any pharmacist who handles his product even if he scrupulously supplies it only for a non protected use. Secondly, the imperfect nature of the protection conferred by an outward presentation test arises, as it seems to me, from a limitation inherent in a Swiss form patent. A persons exposure to liability for infringement depends on the purpose for which the patent protected product was manufactured. The patentees protection is therefore necessarily incomplete. A test which treated the claim as extending to the promotion of the product after its manufacture appears on the face of it to ignore this limitation. There is no perfect solution to this problem in the absence of a general defence of good faith available to third parties, such as exists in Germany in the case of claims to monetary remedies. But we are not in a position to add such a defence to the UK Patents Act. I consider that the outward presentation test is less imperfect than any other. The evidence does not enable us to say how serious the problem identified by Floyd LJ really is. The legislation was not drafted with purpose limited products in mind, and if it proves to be serious it must be for the legislature to address it. Indirect infringement: section 60(2) Warner Lamberts alternative case of infringement, based on section 60(2) can be shortly dealt with. Section 60(2) is concerned with indirect infringement, ie with cases where a person incurs liability for infringement by knowingly supplying to a primary infringer the means of putting the invention into effect. There is a mental element in indirect infringement, for knowledge is expressly required. But it is unnecessary on this appeal to explore what that entails. Lecaent is manufactured by Balkanpharma in Bulgaria to the order of Actavis, which then imports and markets it in the United Kingdom. This case has proceeded at all levels on the basis that Actavis can be treated as if they were the manufacturer. The infringement case under section 60(2) is that, in supplying Lecaent in the United Kingdom, Actavis are knowingly supply[ing] in the United Kingdom a person with means, relating to an essential element of the invention, for putting the invention into effect. The argument is that the invention is the use of pregabalin to treat neuropathic pain, and that it is put into effect when a pharmacist dispenses a pack of Lecaent against a prescription written by a doctor for neuropathic pain. Therefore by supplying Lecaent (directly or indirectly) to pharmacists Actavis supply them with the means for putting the invention into effect. The short answer to this is that the invention protected by Claim 3 is the manufacture of pregabalin for the designated use, and not the subsequent use of the product for treating patients. This is what the Court of Appeal decided, correctly in my view, in Menashe Business Mercantile Ltd v William Hill Organisation Ltd [2003] 1 WLR 1462: see para 24 (Aldous LJ). It was the ground on which the judge struck out the indirect infringement claim on the interlocutory application of Actavis. It was re instated by the Court of Appeal as arguable. At trial, Arnold J held that the argument was bad. In the Court of Appeal, Floyd LJ adhered to his earlier view. He accepted that Menashe was authority for the proposition that the invention in section 60(2) was the process identified in the relevant claim. But he considered that the preparation referred to in the claims might still not be put fully into effect until the pharmacist had dispensed the medicament and affixed a sticker with the patients name on it. He warned against the danger of translating section 60(2) into infringement limited to acts upstream of manufacture. In my view Arnold J was right about this. The whole purpose of the Swiss form for purpose limited medical use claims is to avoid the problem of lack of novelty associated with product claims and the statutory provision which makes a method of treatment unpatentable. It is well understood that the degree of protection available from a Swiss form claim may be more limited than that available from standard product claims. These essential features of purpose limited patents are fatal to any attempt to construe Claim 3 as extending to steps taken by the pharmacist. Disposal For these reasons, I would dismiss Warner Lamberts appeal and allow the cross appeal of Actavis and Mylan on insufficiency. LORD BRIGGS: Overview I am grateful to Lord Sumption for his introduction to this difficult appeal. In bare outline, and adopting his classification of the issues, I consider that the Court of Appeal was correct on the issues as to construction, amendment and abuse of process, for reasons which I shall shortly give. I agree with Lord Sumptions reasons for concluding that both the judge and the Court of Appeal were wrong on the issue of sufficiency. But I have reached a different conclusion from his on the issue about infringement. We both agree that the Court of Appeals test for infringement was wrong, as is the test proposed by the appellants. For the reasons given below I have concluded that the judge and the respondents in their primary case were broadly right, on the test for infringement of a patent for a purpose limited process claim. Construction Claim 3 claims use of [pregabalin] for the preparation of a pharmaceutical composition for treating neuropathic pain. The question is whether neuropathic pain in its context means all neuropathic pain, including central neuropathic pain (as Actavis and Mylan contend), or only peripheral neuropathic pain (as Warner Lambert say). I will call these the broad and narrow constructions respectively. Both the judge and the Court of Appeal decided without, it seems, much difficulty, in favour of the broad construction. I agree with them. There is no issue about the basic principles of construction. Section 125(1) of the Patents Act 1977 provides that the claim must be: interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent or application for a patent shall be determined accordingly. Section 125(3) provides that: the Protocol on the Interpretation of article 69 of the European Patent Convention (which article contains a provision corresponding to subsection (1) above) shall, as for the time being in force, apply for the purposes of subsection (1) above as it applies for the purposes of that article. The Protocol provides: Article 69 should not be interpreted as meaning that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Nor should it be taken to mean that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and the drawings by a person skilled in the art, the patent proprietor has contemplated. On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties. The Claims must be construed in their context in the patent as a whole, including its summary and detailed description and the teaching which it discloses. A course must be steered between the Scylla of slavish literalism and the Charybdis of pure purposiveness, a task which recent English cases about construction generally suggest requires a constant hand on the tiller. The object is to interpret them as they would be understood by a person skilled in the art, with all the common general knowledge available to such a person as at the priority date. The only substantial difference between the parties about the principles of construction arose from Lord Pannick QCs submission on behalf of Warner Lambert that patents should be construed on the principle of validating construction. In other words, where possible, a construction should be preferred which results in the relevant claim be treated as valid (ut res magis valeat quam pereat). The principle is well established as applied to the construction of contracts and subordinate legislation. But there is some English authority for its application to patents. In Parkinson v Simon (1895) 12 RPC 403, which was decided long before the Protocol was adopted, Lord Davey observed, at p 411. if the language of a claim be ambiguous, and if it be fairly capable of two constructions, the court would be disposed to adopt that construction which would uphold the patent, and not that which would render it invalid. More recently, the same point was made by Neuberger J in Kirin Amgen Inc v Roche Diagnostics GMBH [2002] RPC 1, para 286. There is also substantial support for it in other common law jurisdictions. It was adopted by the Supreme Court of the United States in Turrill v Michigan Southern Railroad Co (1863) 68 US (1 Wall) 491 and Klein v Russell (1873) 86 US (19 Wall) 433. And more recently by the Full Court of the Federal Court of Australia in H Lundbeck A/S v Alphapham pty Ltd (2009) 177 FCR 151. Emmett J observed in that case, at para 52: A specification must be given a purposive rather than a purely literal construction and must be construed in a practical common sense manner, avoiding a too technical or narrow construction in favour of a construction under which the invention will work, as against one according to which it may not work. In Letourneau v Clearbrook Iron Works Ltd (2005) FC 1229 in the Federal Court of Canada there are dicta to much the same effect, at para 38. Nonetheless, in my opinion, validating construction will not usually have a significant place in modern patent law. The main problems about it were well stated by Sedley LJ (with whom Aldous LJ agreed) in Smithkline Beecham plcs Patent [2003] RPC 49, at para 103. Because the law has historically been suspicious of monopolies for well known reasons of public policy, there is no useful analogy between a patent and a deed or a written contract. The latter two will have been drafted for a purpose which, assuming it not to be illegal or contrary to public policy, the law will do what it properly can to uphold. A patent, by publicising an invention, makes it the patentees sole property for 20 years, so that the patentees immediate interests are in opposition to those of the rest of the world. It is in societys longer term interests that, by setting the two things in balance, genuine innovation should be protected and rewarded without stifling further invention. Lord Daveys approach, and any analogue of it, would reward opaque drafting as objectionably as the infringers defence in cases like Edison Phonograph seeks out opacity where, on a fair minded reading, there is none. The Convention and Protocol place such exercises off limits in a way which, it seems to me, our law well understands and which sits comfortably with the wording and intent of section 125(1). Lord Daveys statement in Parkinson v Simon was a thing of its time. Validating construction was developed as a principle of interpretation during the 19th century as a counter weight to strict grammatical construction at a time when the latter was otherwise the dominant rule. Its importance in modern times has been greatly diminished by the emergence of purposive construction, as applied to contracts and legislation as well as to patents: see Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, HL(E). Validating construction is now often mentioned as if it were but one aspect of that modern approach. It is also right to remember that until 1919 the courts power to amend a patent was extremely limited and that it did not assume its present wide form until 1977. In Lord Daveys time and for many years thereafter, it was natural to apply to patents the same principle of validating construction which applied to contracts and delegated legislation, neither of which could be saved except by striking out severable provisions (the so called blue pencil test). The principles of construction embodied in the European Patent Convention will not necessarily correspond to those applied in the law of the United States and other common law countries. The Protocol strikes a careful balance between the conflicting interests involved: between literal and purposive construction, between maintaining competition and rewarding invention, and between fair protection for the proprietor and reasonable legal certainty for potential competitors. The latter consideration is reinforced by the express requirements of clarity and definition in section 14(5)(a) and (b) of the Patents Act 1977 and the corresponding provisions of EPC article 84. A presumption in favour of validity would cut across the legal policies underlying patent protection in all of these respects. These considerations apply to all patents, but they are perhaps particularly important in relation to second medical use patents. There is a positive public interest in the active ingredient becoming available to be used freely for the original use after the patent for that use has expired, because that is the quid pro quo for the prior 20 years monopoly granted to the patentee. It follows that there is a particular need for legal certainty in fixing the dividing line between the original use and the new one. There are therefore sound reasons of policy for requiring clarity in the claims of patents of this kind. None of this means that claims are to be construed with a predisposition to find fault, or the description read with a mind that is not willing to learn. But it does require that an issue as to the construction of a claim should be addressed, as far as possible, by deciding what it really does mean, rather than by too easily accepting that there is ambiguity, and resolving it by inventing a meaning which saves the claim from invalidity. construction on the following main grounds: I turn to the meaning of Claim 3. Warner Lambert argues for the narrow 1. There was no settled usage among those skilled in the art at the priority date as between the broad and the narrow meaning, so that its meaning in the context of the Patent has to be derived from its detailed contents. 2. The specification, particularly in paragraphs 3 and 6, points to the narrower construction, both as a matter of definition and because it cites examples of peripheral neuropathic pain only, making no mention of the main examples of central neuropathic pain, so that the phrase neuropathic pain in Claim 3 should be construed eiusdem generis. 3. In the event that (1) and (2) leave the meaning ambiguous, the validating principle should be applied, in favour of the narrow construction. Ground (1) is correct up to a point. It is common ground that the skilled team would at the relevant time have known of the definition of neuropathic pain by the International Association for the Study of Pain (IASP) in its publication The Classification of Chronic Pain as including both peripheral and central neuropathic pain. The note to the definition (Peripheral neuropathic pain occurs when the lesion or dysfunction affects the peripheral nervous system. Central pain may be retained as the term when the lesion or dysfunction affects the central nervous system.) shows that the distinction between the two was well understood. This is not inconsistent with the evidence given by some but not all of the experts that a skilled team might use the phrase neuropathic pain in a broader or narrower sense, depending upon the context. Given the distinction between the two kinds of neuropathic pain, and the need for precision in the drafting of the Claims, the use in Claim 3 of the global expression is significant. Ground (2) calls for a careful examination of paragraphs 3 and 6 of the description against the background of the full list of claims. Paragraphs 3 and 6 of the description are in the following terms: The instant invention is a method of using a [0003] compound identified below in the treatment of pain, especially for treatment of chronic pain disorders. Such disorders include, but are not limited to, inflammatory pain, postoperative pain, osteoarthritis pain associated with metastatic cancer, trigeminal neuralgia, acute herpetic and postherpetic neuralgia, diabetic neuropathy, causalgia, brachial plexus avulsion, occipital neuralgia, reflex sympathetic dystrophy, fibromyalgia, gout, phantom limb pain, burn pain, and other forms of neuralgic, neuropathic, and idiopathic pain syndromes. [0006] The instant invention is a method of using (S) 3 aminomethyl 5 methylhexanoic acid or a pharmaceutically acceptable salt thereof as an analgesic in the treatment of pain as listed above. Pain such as inflammatory pain, neuropathic pain, cancer pain, postoperative pain, and idiopathic pain which is pain of unknown so origin, for example, phantom limb pain are included especially. Neuropathic pain is caused by injury or infection of peripheral sensory nerves. It includes, but is not limited to pain from peripheral nerve trauma, herpes virus infection, diabetes mellitus, causalgia, plexus avulsion, neuroma, limb amputation, and vasculitis. Neuropathic pain is also caused from chronic alcoholism, human by nerve damage immunodeficiency virus infection, hypothyroidism, uraemia, or vitamin deficiencies. Neuropathic pain includes, but is not limited to pain caused by nerve injury such as, for example, the pain diabetics suffer from. The full list of claims is as follows: 1. Use of (S) 3 (aminomethyl) 5 methylhexanoic acid or a pharmaceutically acceptable salt thereof for the preparation of a pharmaceutical composition for treating pain. 2. Use according to Claim 1 wherein the pain is inflammatory pain. 3. Use according to Claim 1 wherein the pain is neuropathic pain. 4. Use according to Claim 1 wherein the pain is cancer pain. 5. Use according to Claim 1 wherein the pain is postoperative pain. 6. Use according to Claim 1 wherein the pain is phantom limb pain. 7. Use according to Claim 1 wherein the pain is burn pain. 8. Use according to Claim 1 wherein the pain is gout pain. 9. Use according to Claim 1 wherein the pain is osteoarthritic pain. 10. Use according to Claim 1 wherein the pain is trigeminal neuralgia pain. 11. Use according to Claim 1 wherein the pain is acute herpetic and postherpetic pain. 12. Use according to Claim 1 wherein the pain is causalgia pain. 13. Use according to Claim 1 wherein the pain is idiopathic pain. 14. Use according to Claim 1, wherein the pain is fibromyalgia pain. Warner Lambert argues that the third sentence of paragraph 6 of the description is a definition of neuropathic pain as peripheral pain, because it identifies the peripheral sensory nerves as the location of its cause. They say that such of the long list of particular types of pain in paragraphs 3 and 6 as can be fitted within neuropathic pain are all examples of peripheral neuropathic pain. They point out that the two best known types of central neuropathic pain, namely stroke and multiple sclerosis, are not mentioned anywhere in the description or the claims. These points are also correct, up to a point. However, I do not accept that the third sentence of paragraph 6 of the description is a general definition of neuropathic pain for the purposes of the remainder of the patent, or that paragraphs 3 and 6 as a whole implicitly limit the invention to peripheral neuropathic pain. My reasons are as follows: 1. The starting point is paragraph 3 of the description, which contains the summary of the invention. The list of conditions to be found there is expressly described as non exclusive (include, but are not limited to). Paragraph 6 of the specification is an expansion of paragraph 3. It is headed Detailed Description and describes an invention for the treatment of pain, as listed above. 2. Although the third sentence of paragraph 6 would support the narrow definition if read on its own, it is in fact one of three descriptions of the causes of neuropathic pain in paragraph 6. Its function is simply to introduce the next sentence which contains illustrative examples of peripheral neuropathic pain. The second place where neuropathic pain is described includes vitamin deficiencies, which can cause both central and peripheral neuropathic pain. The third is deliberately expressed in non exclusive terms (includes, but is not limited to). It is correct that there is no express reference to pain from strokes or multiple sclerosis, but these are by no means the only types of central neuropathic pain. 3. Claim 3 appears in a list of claims which begin at the broadest level of generality and then descends by stages to the more particular. Claim 1 covers all pain, without exception. Claims 2 and 3 then divide pain into two classes of pain which cover substantially the whole field except for idiopathic pain, the subject matter of Claim 13. Thus Claim 2 covers all kinds of inflammatory pain while Claim 3 covers all kinds of neuropathic pain. All the remaining claims, apart from Claim 13, relate to more narrowly defined types of pain which fall within either of Claim 2 or Claim 3. 4. The descriptions in paragraphs 3 and 6 of the specification have to be read as addressing all the claims, rather than focussing on particular claims by way of narrowing their scope. They repeatedly use words of inclusion rather than exclusion. Bearing in mind that the skilled team would have been aware that a well known published classification of neuropathic pain was a broad one which included both central and peripheral elements, they would not be prompted by the language of paragraphs 3 and 6 to look for some sign that neuropathic pain was being used in a narrower sense than it appears to have in the hierarchy of the Claims. 5. Paragraphs 3 and 6 are in my view an example of torrential drafting designed to make the widest possible assertions of the utility of pregabalin for pain relief, ahead of a set of claims deliberately designed to go first for the broadest classes of use monopoly, (Claims 1 to 3), with more narrowly drawn fall back claims (Claim 4 and following) if the broad classes should prove invalid. Turning to Warner Lamberts Ground 3, even if the validating principle has some limited role to play in construing a patent, I would not have regarded Claim 3 as an occasion for applying it, because Claim 3 is not in my view ambiguous. Ambiguity is the necessary condition for applying an interpretative presumption of this kind. The principle does not authorise the construction of the patent so as to create an ambiguity which can then be resolved in favour of validity. In the result, I arrive at the same conclusion as the courts below, even if their emphasis on particular points may not be identical to mine. The judge may have been wrong, as the Court of Appeal said he was, to describe fibromyalgia and phantom limb pain as types of central neuropathic pain, but this does not undermine the central thrust of his analysis of the construction of Claim 3. Amendment and abuse of process Arnold J handed down his trial judgment on 10 September 2015. Warner Lambert responded to their failure on sufficiency in relation to central neuropathic pain by applying on 1 October 2015 to amend Claim 3 by adding to the end the words caused by injury or infection of peripheral sensory nerves. Following previous Court of Appeal guidance that applications to amend a patent should be decided by analogy with the principles applicable to the amendment of pleadings, the judge refused the application. He concluded that it would give rise to issues (of clarity, added matter and sufficiency) requiring a further trial, that this could have been avoided by an application to amend (if necessary in conditional terms) before or even during the trial. He thought that it was an abuse of process to leave the application until after the handing down of judgment. The Court of Appeal agreed. Warner Lambert challenge this decision before us on three main grounds. First, they submitted that the assimilation of the principles governing the amendment of a patent to those governing the amendment of pleadings wrongly denied the patentee the benefit of the right to amend conferred by section 75 of the Act and article 138(3) of the EPC. Secondly, it is said that Claim 3 had been found to be partially valid, so that an amendment should have been allowed as of course, to bring it into line with the judges decision on validity. Thirdly, it is submitted that the judges decision, even applying English procedural jurisprudence concerning the amendment of pleadings, involved a disproportionate penalty, because any prejudice to Actavis and Mylan of having to participate in a second trial could be addressed by an appropriate order for costs. Given our majority conclusion that the patent is insufficient for want of support in the specification for the efficacy of pregabalin for treating any neuropathic pain, it will be apparent that the proposed amendment will not save Claim 3. However, the matter having been argued, I think it right to deal with it. Warner Lamberts first ground raises an important question of law. If they are right, it would be necessary to overrule a number of decisions of the Court of Appeal. There was originally no power in England to amend a patent. A discretionary power of the court to allow amendment of a patent by way of disclaimer in an action for infringement or proceeding for revocation was first introduced by section 21 of the Patents and Designs Act 1907. The power was subsequently extended by the Patents and Designs Act 1919 to include amendment by way of correction or explanation. The power thus conferred was continued by the Patents Act 1949. Meanwhile the EPC, in its original form, introduced a provision for amendment, in article 138(2): (2) If the grounds for revocation only affect the European patent in part, revocation shall be pronounced in the form of a corresponding limitation of the said patent. If the national law so allows, the limitation may be effected in the form of an amendment to the claims, the description or the drawings. Its language reflected the fact that, at that time (in 1973) some contracting states did, but others did not, provide for amendment of patents. Section 75(1) of the Patents Act 1977, responding to the EPC and its ratification by the United Kingdom, continued a discretionary power of amendment in the following terms: In any proceedings before the court or the comptroller in which the validity of a patent is put in issue the court or, as the case may be, the comptroller may, subject to section 76 below, allow the proprietor of the patent to amend the specification of the patent in such manner, and subject to such terms as to advertising the proposed amendment and as to costs, expenses or otherwise, as the court or comptroller thinks fit. The EPC 2000 modernised the convention provision for amendment by adding article 138(2) and (3) as follows: (2) If the grounds for revocation affect the European patent only in part, the patent shall be limited by a corresponding amendment of the claims and revoked in part. (3) In proceedings before the competent court or authority relating to the validity of the European patent, the proprietor of the patent shall have the right to limit the patent by amending the claims. The patent as thus limited shall form the basis for the proceedings. Section 75 of the Patents Act 1977 was then amended by the Patents Act 2004 by the introduction of a new subsection (5): (5) In considering whether or not to allow an amendment proposed under this section, the court or the comptroller shall have regard to any relevant principles applicable under the European Patent Convention. The main change wrought by the EPC 2000 was that amendment was no longer subject to the presence or absence of the necessary power in national law. The amended Convention provided for a Europe wide right to amend. The question is whether that change was intended not merely to require all contracting states to have a power of amendment, or went one stage further, elevating what had previously been a discretionary power in the national court into a right enjoyed by patentees, unqualified by any discretion afforded to national courts by their own law. To that question the Court of Appeal has thus far provided a clear answer. In Nikken Kosakusho Works v Pioneer Trading Co [2005] EWCA Civ 906, [2006] FSR 4, it drew a sharp distinction between (a) pre trial patent amendments, (b) post trial patent amendments to delete claims which had been found invalid, and (c) post trial patent amendments designed to set up a new claim which had not been adjudicated upon at trial. If a type (c) amendment would provoke a validity challenge which required a further trial then, generally, both the principle in Henderson v Henderson (1843) 3 Hare 100 and the Overriding Objective in the Civil Procedure Rules would militate against giving permission to amend, if the new claim could have been put forward by amendment in time for the first trial. In Nokia GmbH v IPCom GmbH & Co KG [2011] EWCA Civ 6; [2011] FSR 15, the Court of Appeal took the opportunity to consider whether either Johnson v Gore Wood & Co [2002] 2 AC 1 or article 138(3) of the EPC (as amended in 2000) required the principles laid down in the Nikken case (the Nikken principles) to be reconsidered. Jacob LJ held, at paras 108 109 that there was nothing in Johnson v Gore Wood inconsistent with the Nikken principles. Although the test was one of abuse of process and the onus on the person alleging abuse, vexing a defendant with two trials about the same patent by means of a post trial amendment was prima facie abusive, if the amendment could have been made in time for all issues about the patent to be adjudicated upon at a single trial. As for article 138(3), the creation of a right to amend was simply designed to ensure that all contracting states provided for amendment of patents. It was not designed to override the national law of each state about the timing, grant or refusal of amendments, and certainly not to legitimise what would otherwise be the abuse of a contracting states process: see paras 127 129. Nikken and Nokia were followed and applied both by the judge and by the Court of Appeal in the present case. Faced with submissions that several European states took a more relaxed view about amendment after a trial at first instance, Arnold J said this [2015] EWHC 3370 (Pat); [2016] RPC 16, para 23: Secondly, and more fundamentally, any assessment of abuse of process must depend upon the procedural rules applicable in the relevant jurisdiction, which will reflect the procedural philosophy applicable in that jurisdiction. But the EPC Contracting States differ not merely in their procedural rules, but also in their procedural philosophies. Thus there are different conceptions of procedural economy. The traditional English conception is that it requires the first instance court to adjudicate upon all essential points in dispute, certainly all points that require findings of fact or evaluation. In that way, if there is an appeal, the Court of Appeal is in a position to deal with any issues of law that may then arise and dispose of the case without either a re hearing or remitting it to the first instance court. By contrast, there are many civil law jurisdictions where the view is taken that the correct approach to procedural economy is for the first instance court only to decide the issues which are sufficient to enable that court to dispose of the case, and to leave other issues undecided. In the following two paragraphs he made similar observations about differing procedural philosophies at the appellate level. An approach which treats procedural issues about amendment in national patent proceedings as turning upon national procedural law and philosophy is not just an English eccentricity. In High Point SARL v KPN BV (15 September 2017) 16/00878 ECLl:NL:HR:2017:2363 the Hoge Raad of the Netherlands held, at [4.1.6 4.1.7] that EPC article 138(3) was designed only to ensure that all contracting states made sure that their national laws made provision for amendment of patents, with no objective to achieve greater harmonisation than that. Procedural requirements for that purpose remained a matter for the national law of each state. Cross reference to passages in the Advocate Generals Opinion cited by the court show that in reaching that conclusion it had in mind the application of the abuse principle by the judge in this very case, following Nokia. It is of course open to this court to adopt a different position on this question than either the series of decisions in the Court of Appeal, or the views of the Supreme Court of the Netherlands. But I can see no good reason why we should do. First, no authority to the contrary, here or elsewhere in Europe, was cited to us. Secondly, I find the analysis of Arnold J of the reasons why different contracting states should have different procedural rules and principles about amendment, cited above, to be compelling. Thirdly, nothing in the language of article 138 suggests that the Court of Appeal and the Supreme Court of the Netherlands have got its purpose and effect wrong. Finally, matters of procedure are pre eminently a matter for the Court of Appeal, and this court is slow to interfere in a consistent development of procedural principle by that court unless persuaded that it is clearly wrong. I can deal briefly with the second ground, namely that this was an amendment to a partly valid patent. That is literally true, even given our conclusions on insufficiency, since the claims relating to different types of inflammatory pain have survived. But it misses the point of the Nikken principles. They distinguish between (i) amendments merely to delete claims and related material which have been found to be invalid, and (ii) amendments designed to make good a claim not thus far advanced in the amended form. The proposed amendment of Claim 3 is not to excise parts found to be invalid. The whole of Claim 3 was held invalid. Furthermore it is common ground that it would require a further trial to test the validity of the amended Claim 3. The submission that the refusal was disproportionate, even applying the Nikken principles and Johnson v Gore Wood, was based on the assumption (shared by the judge) that a further trial need not take longer than two days, that the cost of this would be modest compared with the value of the amended Claim 3, that an order for costs would deal with any prejudice to Actavis and Mylan, and that the amendment, even if late, was a response to a late raising by Actavis and Mylan, shortly before trial, of an invalidity argument based upon the absence of sufficiency in a claim for central neuropathic pain. These are essentially case management points, and all of them were deployed before the judge and the Court of Appeal. Both courts reached the same conclusion in rejecting them. Both courts consisted of judges experienced in the trial of patent cases, three of whom had, in turn, been the judge in charge of the specialist Patents Court. In those circumstances this court would interfere only if the courts below had erred in law, left significant matters out of account, taken into account irrelevant matters, or gone clearly wrong. The submissions made to this court came nowhere near surmounting those steep hurdles. It is plain, as the judge held, that the occasion to consider whether to make an amendment to Claim 3 (which could have been conditional on that claim being found otherwise invalid) occurred at the very latest when Actavis and Mylan raised their plausibility case about central neuropathic pain shortly before trial. Instead Warner Lambert chose to run a case for a narrow construction of Claim 3, to meet exactly the same potential problem. There was ample material upon which the judge and the Court of Appeal could properly have concluded that the attempt to make a post trial amendment was an abuse of process, and no basis upon which this court could properly interfere, harsh though the consequences might have been if the cross appeal had failed. Infringement Infringement was originally alleged in relation to Claims 1 and 3. There has been no attempt to challenge the finding of invalidity in relation to Claim 1. The consistent decisions of the courts below, with which this court agrees, that Claim 3 is invalid and cannot be saved by amendment, mean that the issues about infringement are therefore of no consequence in relation to the Patent. Nonetheless they have been fully and fiercely argued at all levels, and a significant disagreement about the tests for infringement of second medical use patents has divided the courts below. The Secretary of State for Health has intervened in writing and by counsel, and there have been no less than nine written interventions by other stakeholders, large and small, for all of which I wish to express the courts gratitude. The submissions of the parties and the interveners raise an important and difficult question of law, likely to be applicable to all Swiss form patents. The answer may have consequences for all purpose limited claims, but that will have to be decided in future cases, as they arise. Although Swiss form claims are now a closed class (because they have been replaced for the future by purpose limited product claims under article 54(5) of the EPC 2000) there are sufficient still in force for the issues as to infringement to have potentially wide ranging consequences. I therefore propose to deal with the infringement issues in full, on the assumption (contrary to what we have concluded) that Claim 3 is valid in relation to all forms of neuropathic pain. Infringement of a patent is, in the UK, a statutory tort. Both the scope of the tort (ie the conduct of the defendant sufficient to constitute him an infringer) and the nature and extent of the remedies available to the patentee against the infringer are aspects of the national law of each contracting state. Nonetheless the question whether there has been an infringement may, and does in this case, depend critically upon the construction of the relevant claims in the patent, for which purpose Section 125(3) of the Act incorporates reference to the Protocol, as already described in the Construction section of this judgment. The need to strike a fair balance between the need to incentivise and reward inventors on the one hand and the need to provide legal certainty for third parties, to enable them to pursue lawful competition on the other, gives rise to particular difficulties in relation to alleged infringement of Swiss form second medical use patents, to such an extent that the parties were substantially agreed that there is no ideal solution. The choice lies between defining infringement so widely that manufacturers will be dissuaded from producing generic drugs even to fulfil the original (no longer patented) use, and defining it so narrowly that patentees are inadequately protected from the invasion of their newly patented second use by generic manufacturers. Warner Lambert contends for a wide definition which it says can be tempered by the court taking a restrained approach to remedies. Actavis say that any inadequacies for patentees in what they submit is the correct narrower definition are the necessary consequence of the judicial fudge which has enabled Swiss form claims to thrive at all, and must be endured if the generic market for the original use, which is itself an important public good, is not to be killed off altogether. Actavis assert that the modern replacement EPC 2000 patents for second medical use will cure most of the problems associated with the Swiss form in the longer term. Whether that is right remains to be seen. The starting point is (again) the express terms of Claim 3: use of [pregabalin] for the preparation of a pharmaceutical composition for treating neuropathic pain. It is now common ground, at least between the parties, that this is a purpose limited process claim. It is a process claim because it protects the process of manufacture of a medicament containing pregabalin. It is purpose limited because it only protects that process if it is undertaken for the purpose of treating neuropathic pain. The purpose limitation lies at the heart of the claim, because the use of pregabalin in the manufacture of a medicament lacked novelty at the priority date. It is the discovery that pregabalin based medicaments treat neuropathic pain which was alleged to be (and must for this analysis be assumed to be) the relevant contribution to the article It was also common ground until the end of the hearing in this court that a purpose limitation of this kind necessarily imports some kind of mental element, actual or imputed. It was assumed that doing something for a particular purpose inevitably does. The question whether the manufacturer is an infringer begins by asking for what purpose is he using pregabalin for the preparation of a medicament. In outline, the rival contenders for the requisite mental element on the part of the manufacturer were foreseeability and intention. Warner Lambert and the Court of Appeal favoured foreseeability. Actavis and the judge favoured intention. More recently, and in response to a request from the court for further written submissions, Actavis has suggested, in the alternative, that the search for a mental element should be abandoned, in favour of a test of purpose which depends entirely upon the physical characteristics of the product as it emerged from the manufacturing process, including any information about its purpose contained in the accompanying label or patient information leaflet, an approach described by Floyd LJ in the Court of Appeal as only packaging will do. As will appear, it derives from the jurisprudence of the German courts, where it is labelled sinnfllige Herrichtung, usually translated into English patent jargon as manifest making up. But these are little more than headings for more detailed concepts. Before unwrapping them, it is necessary first to lay out both the context and the statutory definition of infringement. The context consists of the current regime within the UK for the prescribing and dispensing of medicines. It is described in admirable detail by the judge, and I am content to adopt, without repeating, Lord Sumptions summary of it. The end result is that the use of labelling on a generic form of pregabalin stating that it is not for the prevention of pain will not in fact prevent it being dispensed for that purpose, because the pharmacist does not generally know what is the condition for which pregabalin has been prescribed, and the generic manufacturer can be in no better position. Furthermore, as Lord Sumption explains, recent NHS guidance does not constitute a satisfactory long term precedent for resolving the problem, even though it may have been of real assistance in this case. The statutory tort of patent infringement is defined by section 60 of the Patents Act 1977 (so far as is relevant) as follows: 60.(1) Subject to the provisions of this section, a person infringes a patent for an invention if, but only if, while the patent is in force, he does any of the following things in the United Kingdom in relation to the invention without the consent of the proprietor of the patent, that is to say (a) where the invention is a product, he makes, disposes of, offers to dispose of, uses or imports the product or keeps it whether for disposal or otherwise; (b) where the invention is a process, he uses the process or he offers it for use in the United Kingdom when he knows, or it is obvious to a reasonable person in the circumstances, that its use there without the consent of the proprietor would be an infringement of the patent; (c) where the invention is a process, he disposes of, offers to dispose of, uses or imports any product obtained directly by means of that process or keeps any such product whether for disposal or otherwise. (2) Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom. Warner Lambert pursues its infringement case under section 60(1)(c) and, separately, under section 60(2). Each needs to be addressed separately but, at the outset, it is convenient to make some observations about section 60, viewed as a whole. First, although liability for infringement is generally said to be strict, the section makes a clear distinction between those parts of the multi headed definition of infringement which do, and which do not, require proof of a mental element. In short, the definitions in section 60(1)(a) and (c) do not, but section 60(1)(b) does, at least in relation to offer of the process for use in the UK, and 60(2) does as well. In both the latter definitions the knowledge requirement is the same, encapsulated in the phrase when he knows, or it is obvious to a reasonable person in the circumstances . Secondly, section 60 appears to use a consistent conceptual approach to the relationship between the words product, process and invention. It is clear from section 60, read as a whole, that invention is a class with only two members, product and process, and that the invention is the subject matter of one or more claims in the patent. Phrases about using the process, product or invention, or working the invention or putting the invention into effect need to be understood and applied by reference to the claim (or claims) in the patent alleged to be infringed. Thus, while it may be appropriate in other circumstances to refer to the invention, or to putting the invention into effect, in wider or narrower terms than as set out above, it is not appropriate to do so in the context of section 60. Turning to section 60(1)(c), this focuses upon a product obtained directly by means of the patented process. Infringement then occurs, as in section 60(1)(a), whenever a person disposes of that product, offers to dispose of it, uses or imports it, or keeps it, whether for disposal or otherwise. Under section 60(1)(c) the infringer may be, but need not be, the same as the person who makes the product. Liability for the prohibited conduct is strict, provided only that the product has been obtained directly by means of the process, and it then extends to dealings with all and every such product. By contrast with section 60(1)(a), the infringement liability for making the product obtained from the patented process is not addressed by section 60(1)(c). That liability must arise, if at all, from section 60(1)(b), which includes a necessary mental element, when using the process to make the product. But what if the patented process is, according to the relevant claim, one which itself involves a mental element? In the language of section 60(1)(c) a product will not be obtained directly by means of that process if the required mental element is inapplicable to the manufacturer, all the more so if, as with Swiss form claims, it is the manufacture or preparation of the medicament that is sought to be protected. It would appear to follow that if A keeps or disposes of a product manufactured by B without B having the requisite mental element, then A will not infringe even if his intention is to use or dispose of the product with a view to its being used for the purpose identified in the claim. Similarly, A in the above example will not escape liability for infringement if B manufactured the product for the purpose identified in the claim, however innocent A may be of Bs state of mind, and regardless of the use to which A puts the product. This is precisely because section 60(1)(c) imposes strict liability, and is therefore blind to As state of mind. It was not suggested that any of the exceptions in section 60(5)ff could be prayed in aid by A. In short, the question whether dealings with the product after its manufacture give rise to infringement depends entirely on whether the product itself was tainted at the time of manufacture by having been obtained by a process (and therefore in this context for a purpose) within the claim. It may well be doubted whether section 60(1)(c) can have been formulated with purpose limited process claims in mind. It appears to place an unrealistic burden on those wishing to deal in good faith with the relevant product downstream of the manufacturer, such as importers, distributors and dispensing pharmacists, because it may be impossible for the dealer to form any reliable view about the manufacturers state of mind. Furthermore the dealer will not escape liability by distributing or dispensing the product only for indications outside the claim, such as for indications for which earlier patent protection has expired. Their only safe course, as emphasised by many of the intervening stakeholders, will be to refuse to deal with the generic product at all. Section 60(2) does not distinguish between product and process inventions. It applies equally to both. But recognition that the invention is something circumscribed by the scope of the claim means that the critical phrase putting the invention into effect is likewise constrained. If, as here, the claim is to protect the process of manufacture, then the invention is fully put into effect once the process of manufacture is complete. The claim cannot include dispensing pursuant to a prescription or treating, as part of the process, because those activities cannot be patented. In short, Swiss form claims have been deliberately formulated so as to be limited to manufacture, to avoid falling foul of that restriction. The conduct prohibited by section 60(2) is supplying or offering to supply something to someone not entitled to work the invention. I think it plain that, in relation to process claims which are limited to manufacture, section 60(2) is concerned with activity upstream of manufacture, whereas section 60(1)(c) is concerned with conduct downstream of manufacture. These may conveniently be labelled respectively as supplying the means and dealing in the product, provided that those phrases are used for convenience rather than by way of definition. Manufacture itself is caught only by section 60(1)(b), by the phrase uses the process. It is convenient to address Warner Lamberts case under section 60(2) first, because I think that it is susceptible to the relatively easy answer which Lord Sumption provides at the end of his judgment, with which I fully agree. In particular it does not depend upon the answer to the very difficult question about the requisite mental element in a purpose limited process claim. I can therefore return to the issues about mental element which arise from the infringement case under section 60(1)(c). I have explained my view that this has nothing to do with the question whether section 60(1)(c) itself imposes a mental element as a requirement for infringement liability. It plainly does not. The real question is: what, if any, mental element is built into this purpose limited process claim? That is a question of construction of the claim, not a question about UK patent infringement law. I have summarised the rival contentions of intention, foreseeability and (now) no mental element at all, but it is necessary to describe them, and their potential consequences, in more detail. Warner Lambert originally submitted that it was enough to bring manufacture of a drug containing pregabalin within Claim 3 if it was foreseeable to the manufacturer that a more than de minimis amount of it would in due course be used for the treatment of neuropathic pain. The Court of Appeal broadly accepted this submission, subject to two qualifications. First, the downstream use for treating pain had to be intentional rather than accidental. By this it meant only that patients would receive the drug for treating their pain, rather than for example for treating epilepsy, with a coincidentally beneficial effect upon pain from which they happened also to suffer. The second qualification is more important. Floyd LJ held that the requisite mental element could be negatived if the manufacturer had taken all reasonable steps to prevent the downstream use of his drug for treating pain. I refer to pain because the Court of Appeal was proceeding on the hypothetical assumption that both Claims 1 and 3 were valid. At para 208 he said this, at para 44: The intention will be negatived where the manufacturer has taken all reasonable steps within his power to prevent the consequences occurring. In such circumstances his true objective is a lawful one, and one would be entitled to say that the foreseen consequences were not intended, but were an unintended incident of his otherwise lawful activity. Before this court Warner Lambert adhered to their pure foreseeability submission, using the Court of Appeals more nuanced approach as a fall back. On their primary case the taking of reasonable steps might be relevant to remedies but, if leakage of Actavis generic product into the market for relieving neuropathic pain was still foreseeable after the taking of all reasonable steps to prevent it, infringement would still be the consequence. Actavis submission was that the requisite mental element is intention, by which they mean that it must be shown that the manufacturer was targeting the drug for use in treating pain. The Secretary of State, and many of the other interveners with a stake in the market for treating the non patented use, supported Actavis case, pointing out that Warner Lamberts case would cast the net so widely and unpredictably for dealers in, including dispensers of, generic forms of pregabalin that they would be deterred from having anything to do with it, even for the non patented indications. In written submissions responsive to the courts request following the hearing Warner Lambert and the Secretary of State maintained their previous positions, both rejecting the abandonment of any mental element as conceptually wrong, and because it loaded the policy balance unjustly against the Swiss form patentee. Actavis added a no mental element alternative to its original position, without expressing a clear preference for either, on the basis that both intention and manifest making up reflected the requirement to identify the purpose limitation equally well. The parties drew from three main sources in advancing their competing cases. The first was English authority on the meaning of intention in the law of tort. The second was European authority on Swiss form patents. The third was policy considerations. The English common law of tort uses the concept of intention in a spectrum of different ways, depending upon context. Fish & Fish v Sea Shepherd UK [2015] AC 1229 was a case about the liability of joint tortfeasors. This court held that there had to be demonstrated a common design by the persons alleged to be liable to do, or to secure the doing of, the acts which constituted the tort. Dissenting, but not on this point, Lord Sumption said this, at para 44: Intent in the law of tort is commonly relevant as a control mechanism limiting the ambit of a persons obligation to safeguard the rights of others, where this would constrict his freedom to engage in activities which are otherwise lawful. The economic torts are a classic illustration of this. The cases on joint torts have had to grapple with the same problem, and intent performs the same role. What the authorities, taken as a whole, demonstrate is that the additional element which is required to establish liability, over and above mere knowledge that an otherwise lawful act will assist the tort, is a shared intention that it should do so. In OBG Ltd v Allan [2008] AC 1, a case about the economic torts of procuring a breach of contract and causing loss by unlawful means, Lord Hoffmann said this, about the first of those torts, at paras 42 43: 42. The next question is what counts as an intention to procure a breach of contract. It is necessary for this purpose to distinguish between ends, means and consequences. If someone knowingly causes a breach of contract, it does not normally matter that it is the means by which he intends to achieve some further end or even that he would rather have been able to achieve that end without causing a breach. Mr Gye would very likely have preferred to be able to obtain Miss Wagners services without her having to break her contract. But that did not matter. Again, people seldom knowingly cause loss by unlawful means out of simple disinterested malice. It is usually to achieve the further end of securing an economic advantage to themselves. As I said earlier, the Dunlop employees who took off the tyres in GWK Ltd v Dunlop Rubber Co Ltd 42 TLR 376 intended to advance the interests of the Dunlop company. 43. On the other hand, if the breach of contract is neither an end in itself nor a means to an end, but merely a foreseeable consequence, then in my opinion it cannot for this purpose be said to have been intended. That, I think, is what judges and writers mean when they say that the claimant must have been targeted or aimed at. Later, at para 62, he applied the same test to the second of those torts. By contrast, in Bourgoin SA v Ministry of Agriculture, Fisheries and Food [1986] QB 716; [1985] 3 WLR 1027, Oliver LJ said, at 777H: If an act is done deliberately and with knowledge of its consequences, I do not think that the actor can sensibly say that he did not intend the consequences or that the act was not aimed at the person who, it is known, will suffer them. That was a case about breach of statutory duty and misfeasance in public office. Oliver LJs dictum was approved by the House of Lords in Three Rivers District Council v Governor and Company of the Bank of England [2003] 2 AC 1, which was also a case about misfeasance in public office. I do not derive from this source any compelling guidance for the identification by way of construction of the mental element in a purpose limited process claim, for the following reasons. First, the search is not here for the requisite element in a tort at all. The tort of infringement created by section 60(1)(c) does not require any mental element. Rather the search is for the mental element, if any, by which what would otherwise be an invalid process claim is limited by the requirement that the manufacture be for a purpose. It defines the scope of the monopoly claimed, not (separately at least), the state of mind of the infringer. Secondly, all the various and different types of intention set out by the English authorities are context dependent. They apply in different ways to different torts. Even if this had been a search for the mental element required of an infringer (otherwise than because of the limited scope of the claim) the English authorities give no guidance about where patent infringement lies on the spectrum which they describe. The Court of Appeal conducted its own review of the relevant European authorities about infringement of Swiss form patents, first during the interim appeal in May 2015 and again during the appeal from the trial judgment, in October 2016. Floyd LJ concluded, correctly in my view, that they provide no clear or settled answer to the problem. But they do tend to show that a broad foreseeability test of the kind proposed by Warner Lambert has not found favour. In summary, the German courts have concluded that the patentee will only be able to show that an alleged infringers process is for the patented use if there is some outward manifestation of that purpose in the presentation of the manufactured product, for example in its packaging: see the decision of the German Federal Court of Justice in Carvedilol II (Case X ZR 236/01) (decision of 19 December 2006); the decision of the Landgericht Dusseldorf in Chronic Hepatitis C Treatment (Case 4a O 145/12) (decision of 14 March 2013); the decision of the Oberlandesgericht Dusseldorf in Cistus (Case I 2 U 53/11) (decision of 31 January 2013); and the decision of the Landgericht Hamburg in Warner Lambert Co LLC v Aliud Pharma GmbH (Case 327 O 140/15) (decision of 2 April 2015). Floyd LJ called it the only packaging will do approach. He noted that the recent decision of the EPO in T 1673/11 GENZYME/Treatment of Pompes disease [2016] EPOR 33 appeared to follow the German lead. The underlying rationale of those decisions appears to be that the purpose designated by a Swiss form patent was an inherent property of the product which emerged from the manufacturing process, rather than something to be found in the mind set of the manufacturer. In recent written submissions Warner Lambert point out that the latest decisions of the German courts have modified this rigorous focus upon the packaging by admitting proof of infringement by reference to foreseeability, for example in strogenblocker (Case I 2 W 6/17) (5 May 2017), para 39, and Dexmedetomidin (Case I 2 U 30/17) (1 March 2018), (BeckRS 2018, 2410, paras 42 44). The Spanish courts have taken a slightly more generous approach to patentees, looking for some authorisation or encouragement by the manufacturer directed at strengthening the use of the product for the patented indication: see the decision of the Madrid Court of Appeal in Wyeth v Arafarma Group SA (Case C 539/07) (16 April 2008). In France, Floyd LJ detected a still more flexible approach in the preliminary decision of the Tribunal de Grande Instance dated 26 October 2015 in Warner Lambert Co LLC v SAS Sandoz (Case 15/58725), Vice Presiding Judge Marie Christine Courboulay, whereby the court was prepared to take fully into account steps taken by the defendant generic manufacturer to discourage the use of its product for the patented indication. That was a case about this very Patent. The report of the full merits hearing in the same case, in August 2016 (Case 16/57469) dismissing the infringement claim, was made available to this court. I do not think that it really addresses the question as to the mental element built into the purpose limitation of the claims in this Patent, as a question of construction of the claim. In a helpful appendix to its printed case, Warner Lambert note that the courts of the Netherlands have tended successively to follow the differing leads given by Arnold J and then by the Court of Appeal in this case. They do not therefore provide significant independent guidance. I have not carried out my own intense review of the European authorities on this point, because counsel did not suggest that either the summary of them, or the conclusion that they provided no clear answer, as set out by Floyd LJ, was wrong. There appears to be a spectrum of differing approaches to the question of the relevant mental element built into a purpose limitation in a process claim. It may well be that the courts in different contracting states will reach solutions which differ because the particular aspects of their national law on infringement, and the structure of their relevant markets, mean that striking a fair balance between protection of patentees and legal certainty for the lawful activities of third parties produces a different result in each jurisdiction. That may be unfortunate, since the construction of claims in a European patent ought to be consistent across all contracting states, but there is nothing which this court can do about it, save to proceed with due regard to the decisions of those states courts. We were pressed by counsel for Warner Lambert with dicta about knowledge and intention in the joint judgment of Jacob and Etherton LJJ in Grimme Landmaschinenfabrik GmbH & Co KG v Scott [2010] EWCA Civ 1110; [2011] FSR 7, at paras 112 114. That was an infringement claim under section 60(2), which has its own built in knowledge requirement. The patent in issue was for a product rather than a process, and was neither medical nor in Swiss form. It therefore provides no assistance in the present context. Policy considerations formed a, if not the, main plank in the submissions both of the parties and of the interveners. I have already summarised the main battle lines above. Policy is, to an extent, a perfectly legitimate factor to be taken into account on what is, for the reasons explained, essentially a question of construction of the purpose limitation in Claim 3. Policy considerations inevitably underlie the striking of the balance required by the Protocol. In my view, the central policy objectives are: 1. Providing reasonable protection to the second medical use patentee, both to reward and to incentivise the complex and expensive processes of research and testing necessary to bring these valuable uses to fruition. That protection needs, as far as is consistent with competing policy objectives, to protect the patentee against the invasion of his monopoly by competitors. 2. Protecting the public against the loss of the patent free use of the relevant drug for treating the indications for which it was originally developed. This means that the patentee for the new use should not obtain, by a side wind, an effective continuing monopoly in relation to the old use, after the expiry of the patent protection for it. This policy objective preserves for the public the enjoyment of the quid pro quo for the grant of the now expired monopoly for the original use, in the form of very much cheaper generic forms of the drug becoming available for those uses. 3. Providing reasonable legal certainty for those engaged in the manufacture, marketing and prescribing of the generic drug for the non patented use, that their conduct is lawful. This policy objective is expressly recognised by the Protocol and, without it, the second objective is unlikely to be achievable. I am satisfied by the evidence, and by the submissions of the parties and the interveners, that the simple foreseeability test primarily contended for by Warner Lambert would prioritise the first policy objective at an unacceptable cost to the achievement of the second objective. This is because, it being common ground that some more than de minimis leakage of generic pregabalin into the market for treating neuropathic pain is foreseeable regardless of the taking of all reasonable steps within the generic manufacturers power to prevent it, all stocks of their generic forms of pregabalin will have been manufactured by use of the patented process, such that any subsequent dealing with those stocks will constitute infringement under section 60(1)(c). For as long as doctors prescribe pregabalin for pain generically, without specifying that the relief of pain is the purpose of the prescription, pharmacists will always risk dispensing a generic form of pregabalin for pain, unless they confine themselves to dispensing Lyrica to meet all pregabalin prescriptions. That is why some leakage is foreseeable. The result is that pharmacists would have to desist from dispensing generic pregabalin at all, if they wish to avoid infringement. This is not merely because of the risk of dispensing the generic product for pain, but, as I have explained above, because all dealings in a generic product (including prescription) will be an infringement under section 60(1)(c), even if the pharmacist knows that the prescription is for treating a non patented indication. If foreseeability is the test, then all generic pregabalin will be tainted product from the point of manufacture, such that any dealing with it will be an infringement. A fair balance between competing policy objectives is not struck by preferring the complete achievement of one by a construction which completely prevents the achievement of the others. Accordingly I consider that policy considerations are strongly opposed to Warner Lamberts main case. In partial recognition of this difficulty counsel for Warner Lambert submitted that the adverse effect of a simple foreseeability test could be mitigated by a flexible approach of the court towards remedies. Injunctions could be refused, and patentees confined to an account of the infringers profits, based upon an assessment of the proportion of generic pregabalin dealt with by any infringer which is actually used for the treatment of pain. I consider that there are a number of insuperable objections to this approach. First, it tacitly assumes that dealers in generic pregabalin going about a lawful business of seeking to supply the market for its non patented use are infringers. The prospect that they would be subjected only to a modest financial sanction is simply no answer to a person who wishes to conduct a lawful trade or profession. Nor would it provide any protection at all from the cost, stress and uncertainty of the litigation of infringement claims. Secondly, while the court may be able to withhold an injunction as a matter of discretion, the patentee has, in principle, a right to elect between damages and an account of profits. They are not alternative discretionary remedies, between which the court is free to choose. Thirdly, an election by the patentee for damages would expose the infringer to the patentees much larger lost profit margin per pack than the profit typically made by a manufacturer of, or dealer in, a generic product. Fourthly, the patentees loss of profit would not be limited to sales lost for the treatment of pain, but to sales lost for all treatment because, as I have explained, sales or dispensing of tainted generic product for non patented treatment would also be acts of infringement. The result therefore is that policy considerations firmly militate against Warner Lamberts primary case. Warner Lamberts secondary case, namely foreseeability tempered by negativing intent by the taking of all reasonable steps, is the compromise solution preferred by the Court of Appeal. While it may go some way towards avoiding the destruction of the second policy objective, at acceptable cost to the achievement of the first, it also faces serious objections, both in principle and practice. First, if the basic test for the requisite mental element is foreseeability, it is simply not the case that the taking of all reasonable steps by the generic manufacturer to prevent leakage into the market for the patented use will necessarily make that leakage unforeseeable. It does not appear to do so at present. Leakage does appear to have been substantially reduced during the period before the trial, but this appears to have been attributable mainly to steps taken by the NHS, at the behest of the court on the application of Warner Lambert, to encourage doctors and pharmacists to prescribe and dispense Lyrica rather than a generic alternative for pain. Although the Court of Appeal described the taking of steps by the manufacturer as sufficient to negative intention to manufacture pregabalin for the patented purpose, in the context of foreseeability it sounds more like the erection of a non statutory defence to infringement. However desirable, that is not the function of the court in the context of a statutory tort. The main practical objection to this apparent compromise between policy objectives 1 and 2 is that it is achieved, if at all, at the expense of objective 3, namely legal certainty for dealers in, and dispensers of, generic pregabalin. How are they to know what steps have been taken by the manufacturer to prevent leakage, or whether the steps taken will eventually be regarded by the court as reasonable? Warner Lambert do not suggest that the reasonable steps requirement will be satisfied merely by skinny labelling, or limited to things visible to all users of the generic package. As noted above, if the mental element test for the purpose limitation gives rise to serious legal uncertainty among dealers and dispensers of the generic drug as to whether the product is or is not tainted by having been manufactured within the scope of the claim in the patent, they will be likely to decline to use the generic drug at all, in order to avoid the risk of infringement. I have considered whether the difficulties in finding an appropriate solution to the infringement issue ought to be regarded as flowing from the parties original concession (now withdrawn by Actavis) that the purpose limitation in this Patent (and in any Swiss form claim) necessarily involves some kind of mental element. The German approach, of treating the purpose of the manufacture of a product as inherent in the physical characteristics of the product, and decisively determined by the form of its presentation in fully manufactured form, well serves the policy objective of providing legal certainty for the market, and mitigates the rigour of the strict liability imposed in the UK upon dealers by section 60(1)(c). Its weakness, on an assumption that a mental element is required, is that it cannot realistically be the only way of proving infringement, namely the manufacture of the product for the patented use. The latest German cases, as described above, appear to acknowledge that weakness by introducing an alternative basis for proving infringement, based upon the mental element of foreseeability. Following the hearing we considered whether an alternative approach would be to abandon the search for an appropriate mental element altogether. It would treat the identification of the purpose for which the product was manufactured as conclusively determined by a review of the fully manufactured product, including its packaging, labelling and enclosed patient instructions, upon the conceptual basis that the relevant purpose was an aspect of the physical characteristics of the product emerging from the manufacturing process. It would place the downstream dealer in a generic product (importer, distributer or pharmacist) in as good a position as the court to determine whether the product was tainted by an illegitimate purpose in its manufacture, and therefore to be avoided for fear of liability under section 60(1)(c). It would maximise legal certainty, and the use of the generic products for the non patented indications. It would have the powerful advantage of avoiding the unusual (perhaps even unique) legal result of penalising a class of users as infringers by reference only to the state of mind of other persons (the manufacturers) of which that class could not reliably be aware. We were of course conscious of the fact that this solution was not proposed either by the parties or by any of the interveners, and that we could not properly adopt it without calling for further submissions, in particular from Warner Lambert, because it would deprive Swiss form patentees even of the protection afforded by their ability to prove the requisite intent on the part of the manufacturer by evidence other than that constituted by the appearance and content of the fully manufactured product. In the event no party other than Actavis favoured that solution, and even they regarded it only as an alternative to their primary case, based upon intention. The Secretary of State considered that it did not strike the appropriate policy balance. I have, not without some reluctance, come to the conclusion that this is not an available alternative. My reasons follow. First and foremost, I think that the original concession that the purpose limitation in a Swiss form claim necessarily involves a mental element of some kind on the part of the manufacturer was rightly made. When we speak of someone making something for a particular use, and conclude as we must that for means something more than suitable for, it must point to something in the mind of the manufacturer. Even if the manufacturer is a corporation using a factory entirely staffed by robots, if the manufacturing process is only protected by the patent if it is carried out for a particular purpose, the requirement to identify a mental element on the part of the manufacturer is simply inescapable. The court is well versed in identifying the governing mind of a corporation and, when the need arises, will no doubt be able to do the same for robots. By contrast I do not think that treating the purpose for which something is manufactured as inherent in the physical characteristics of the resulting product, truly reflects the role which the purpose limitation plays in defining the monopoly created by a Swiss form patent. The fact is that, in its essentials, the Pregabalin based medicament sought to be protected by the Patent has exactly the same physical characteristics as Pregabalin based medicaments used to treat epilepsy and GAD. That is not to say that the form in which the product of a manufacturing process is presented to the market will not often, or indeed usually, be decisive evidence, one way or the other, of the manufacturers intended purpose, leaving aside the occasional cases where other evidence may prove that the presentation is in fact a charade. Subjective intent is routinely proved by objective evidence of conduct. Secondly, I do not consider it safe to conclude that the apparent German lead in this direction can simply be followed in this different jurisdiction. I agree with Lord Sumptions analysis of the way in which German law differs from UK law in making a less significant distinction between purpose and product claims. I have not been able to agree with Lord Mances analysis, which seems to me to follow the German lead in treating the purpose as limiting the product, by focusing solely on the way it is packaged and marketed, while at the same time acknowledging that, in English law, the patent protects the process. I agree that it does, but the purpose limits the process which is protected. We know nothing about the particular features of the German systems for prescribing and dispensing medicines, about its regime for patent infringement, or about the market conditions within which a fair balance has to be struck. The fact that German, French, Spanish and Dutch courts have all taken different approaches to this issue strongly suggests that differing legal, market and structural factors within each jurisdiction have been influential, and perhaps even decisive, but we have no sufficient knowledge of those factors, save within the UK. Thirdly, it is striking that neither Actavis nor those interveners with an interest in maximising generic use for non patented purposes together with legal certainty have put forward this more rigorous solution to their difficulties at any stage in this litigation, until prompted by this court to consider whether to do so, after the hearing. This may be simply because they all acknowledged that some mental element is implicit in a purpose limitation, or because they recognised that it would not strike a fair balance between their interests and those of patentees. Fourthly, I think that this solution would not indeed strike a fair balance. The Court of Appeal regarded the only packaging will do solution as plainly affording inadequate protection for patentees. At para 191 Floyd LJ said: These matters arise as a matter of interpretation of the word for. The parties are agreed that the word imports a mental element. Packaging may be a means of demonstrating the necessary mental element, whatever that is, but it cannot possibly be the only means of doing so. There is force in this objection. A generic manufacturer might well demonstrate the requisite purpose by flooding the market for pregabalin beyond the sector of it which treats the non patented indication, or by covertly encouraging dealers and pharmacists to use it for the treatment of pain, regardless of what appears on the label. Or a smoking gun internal document might reveal that the manufacturers packaging for the non patented use was just a charade, because its corporate purpose was indeed to profit by its distribution and use for the patented indications. All these forms of evidence might prove the requisite intent, even if the packaging did not. Finally, the principal driver towards this alternative is the concern that section 60(1)(c), in conjunction with Swiss form patents, imposes draconian strict liability on dealers in generic products, without giving them the ability to find out whether the manufacturer has an intention that taints its products in their hands. It is tempting to try to fashion an answer to this difficulty by creating some sort of bona fide purchaser defence for dealers in the generic drug, downstream of the manufacturer, so that they could avoid liability for infringement under section 60(1)(c) unless they were on notice of the true (infringing) purpose of the manufacturer, in cases where it was not revealed by the packaging. It would fill a lacuna in legislation which cannot have been drafted with purpose limited product claims in mind. But that would be another illegitimate attempt to create a non statutory defence to a statutory tort. Nonetheless the sense of injustice engendered by that acknowledgment of the potential for unfairness of UK legislation about infringement ought not to lead to straining the essential meaning of a purpose limitation beyond its proper limits, by what is really a legal fiction that it involves no mental element of any kind. The so called subjective intent test favoured by Actavis would I think accommodate all forensic means whereby a purpose of the generic manufacturer to serve (and profit from) the market for neuropathic pain could be proved, including but not limited to the packaging on the product. Anything from which the court could properly find that the manufacturer had such a purpose could be relied upon, including targeted disclosure, during litigation, of documentary records of the manufacturers decision making processes. I call it a so called subjective test because a persons intention is as much a matter of fact as the state of his digestion, and this is true of corporate persons as much as of individuals. It may be proved objectively by words, conduct and even inactivity, and the court is well versed in treating a decision not to enquire about something suspected as probative of blind eye knowledge. I acknowledge that this solution is a compromise like any other. It certainly falls short of providing complete protection to patentees from the invasion of their monopoly. It appears that it would not cause the complete destruction of the generic market for pregabalin for the treatment of the non patented indications, although exposure of pharmacists to strict liability where the manufacturer is proved to have had the requisite intent may still discourage some pharmacists from using the generic product. The departure from the German only packaging will do solution by permitting any means of proof of the manufacturers purpose (but well short of mere foreseeability) will provide less than perfect legal certainty for those who deal in and dispense the generic versions of pregabalin. Nonetheless, as I have said, the packaging, labelling and patient instruction leaflets will in most cases be the best evidence of the manufacturers intention. But the Proviso requires only the striking of a fair balance. It was submitted for Actavis that to the extent that their proposed test for the mental element fell short of providing full protection to patentees, this should be regarded as a necessary consequence of the judicial fudge constituted by the recognition of Swiss form patents in the first place. There is something in this point, but it does not absolve the court from seeking a construction of the purpose limitation which strikes as fair a balance as possible. Nor do policy considerations mean that the court can do otherwise than choose between available meanings of the claim as a matter of construction. The claim cannot just be re written. But I consider that a test for the manufacturers purpose based upon determining his intent, in the manner described above, is well within the ambit of legitimate construction. That is the construction which I consider to be correct. Conclusion I would therefore dismiss the appeal, and allow the cross appeal. LORD HODGE: I agree with Lord Sumption and Lord Briggs on the construction of Claim 3 for the reasons which they give. I also agree with them that Arnold J was entitled to refuse to allow Warner Lambert to amend that claim after he had handed down his trial judgment on 10 September 2015, again for the reasons they give. I therefore would dismiss Warner Lamberts appeal. There are only two matters on which I wish to add any comment. The first is the test for insufficiency in the context of Swiss form patents, and in particular the meaning of the plausibility test which has been developed to take account of the inability of the applicant for such a patent to establish the claimed therapeutic effect of the medicament by clinical trials before applying for the patent. The second relates to the test for direct infringement under section 60(1)(c) of the Patents Act 1977. Sufficiency: the plausibility test The general principle that the extent of a patent monopoly defined by the claims should correspond to, and be justified by, the applicants technical contribution to the art underpins the requirement of sufficiency of disclosure. It justifies the existence of the boundary between an educated and educating prediction of efficacy for the designated therapeutic purpose on the one hand and mere speculation on the other, which is addressed by the plausibility test which the EPO Technical Board of Appeal (the Board) has developed in a series of decisions. But the general principle tells one little about where the plausibility test draws that boundary. It is necessary to look to those decisions to discover that boundary. There are four principal decisions of the Board SALK (27 October 2004), ALLERGAN (26 October 2009), IPSEN (29 June 2011) and BRISTOL MYERS SQUIBB (3 February 2017) which assist in this exercise. I agree with Lord Sumption (paras 33 34) that those decisions do not place an onus on an objector to show that the implied assertion of therapeutic efficacy is implausible. I also agree with his view (paras 35 37) (a) that the patentee must disclose in its patent, when read in the light of the common general knowledge, the contribution to the art which justifies his monopoly and, to that end, (b) that the specification must disclose some scientific reason for thinking that the medicament might well have the claimed therapeutic effect. Where I differ from Lord Sumption is that, in agreement with Lord Mance, who has analysed the three cases of ALLERGAN, IPSEN and BRISTOL MYERS SQUIBB, I do not interpret those principles as requiring the patentee to demonstrate within its patent a prima facie case of therapeutic efficacy. In my view the recent decisions of the Board (a) require that the therapeutic effect of the medication appears plausible from the data in the patent interpreted in the light of the common general knowledge, (b) do not require that the patent discloses experimental evidence to demonstrate that plausibility unless there is an allegation, supported by sufficient evidence, that the invention does not work, but (c) allow the plausibility to be reinforced by considering evidence which post dates the patent (although later published data are not admissible if they alone render the therapeutic effect plausible), (d) take account of the ease with which the therapeutic effect can be ascertained using straightforward tests which are known in the prior art, and (e) where the data in the specification have made the claimed therapeutic effect plausible, place a burden on an objector to substantiate doubt that the desired effect can be achieved. Adopting the lower standard of plausibility which the recent decisions support, I am inclined to think that Arnold J, who heard and analysed the expert evidence on this matter, including that of Professor Woolf, Dr Scadding and Professor Wood, did not err in his evaluation of that evidence when he concluded that Warner Lambert had done just enough to satisfy the plausibility test in relation to peripheral neuropathic pain. The result of the rat paw formalin test demonstrated that pregabalin reduced inflammatory pain at phase 2. There was expert evidence which treated as credible the suggestion that the efficacy of pregabalin in reducing pain which that test revealed would not be confined to inflammatory pain and that the medication would also be effective in relation to peripheral neuropathic pain. As Arnold J stated (para 351), it was common general knowledge that central sensitisation was involved (at least as an amplifying mechanism) both in relation to inflammatory pain and in relation to peripheral neuropathic pain and that it played a role in the rat paw formalin test. The patent had not demonstrated that pregabalin had an effect on central sensitisation and a prima facie case had not been made out. But the plausibility test does not require that standard. The patents contribution to the art, which Arnold J found, was not only the demonstration that pregabalin reduced inflammatory pain but also, because of the involvement of central sensitisation which was common general knowledge, a credible assertion that the drug would also reduce peripheral neuropathic pain. In my view it was not necessary, in order to overcome the relatively low hurdle of plausibility, for the patent to demonstrate by experiment or by scientific theory, that pregabalin blocked or reduced central sensitisation. In agreement with Lord Mance, I do not see the example which the Board gave in para 9 of SALK, which Lord Sumption quotes at para 29 and founds on in his fifth point in para 37, as establishing a sine qua non of plausibility. I would add that the patent also identified the Bennett and Kim tests, which were straightforward tests and were available to the reader of the patent to test the claims that pregabalin was effective to treat peripheral neuropathic pain. The teaching could be tested without undue burden. Subsequent tests established the efficacy of pregabalin in treating pain, including peripheral neuropathic pain. That later evidence is, as I have said, not admissible if there were no data from which one could make predictions about the efficacy of the medication in relation to peripheral neuropathic pain: T 1329/04 JOHNS HOPKINS UNIVERSITY SCHOOL OF MEDICINE/Growth differentiation factor [2006] EPOR 8, para 12. But the plausibility test allows the court to have regard to such later evidence to make good the prediction if there is some basis for the prediction in the patent. Floyd LJ in the leading judgment in the Court of Appeal (para 133) treated the outcome of these tests as fortifying the judges conclusion that the patent had contained a plausible prediction. I agree. I would therefore have dismissed the cross appeal and have upheld Claims 10, 11 and 12. Infringement I agree that Warner Lambert have no claim under section 60(2) of the Patents Act 1977 for the reasons which both Lord Sumption and Lord Briggs give. The difficulty in finding a satisfactory answer to the interpretation of Claim 3 in the context of an infringement claim under section 60(1)(c) is the result of the shoe horning of the judge made law, namely the Swiss form claims, into a statutory scheme in section 60 of the Patents Act which was not framed with such purpose limited process claims in mind. The problems so caused are particularly acute in relation to prescribed medicaments as section 60(1)(c) imposes strict liability on suppliers and pharmacists who may have no reliable knowledge of the intention of the generic manufacturer and who operate in a context in which doctors, for sound therapeutic reasons, normally prescribe drugs generically but also do not usually specify the medical condition or conditions which the medicament is intended to treat. I agree that the test of foreseeability which Warner Lambert promote and the qualified version of foreseeability which the Court of Appeal favoured should not be adopted for the reasons which both Lord Sumption and Lord Briggs advance. The disagreement between Lord Sumption and Lord Briggs is whether, as Lord Sumption advocates, to adopt an approach, which has (at least until recently) found favour in the German courts, confining evidence of the purpose of an alleged infringing manufacturers process to the outward manifestation of that purpose on the product itself, including its packaging, labelling or in an accompanying patient information leaflet, or, as Lord Briggs suggests, to assess that manufacturers actual intention in producing the medicament by taking account also of other manifestations of that manufacturers purpose. The approach of the German courts has the serious disadvantage of giving inadequate protection to the patentee of the Swiss form patent against a generic manufacturer who uses skinny labels and patient information as a charade behind which it exploits the second use market. The approach which Lord Briggs favours may expose dealers in the generic product and dispensing pharmacists to strict liability for infringement as a result of matters over which they may have neither knowledge nor control. Both approaches are far from perfect. I confess to having been strongly attracted by the tidiness and consistency with the principles of tort law which Lord Sumptions approach involves. That approach also reduces the risk that suppliers and pharmacists will decline to deal in generic products after a patent has expired if there is a second medical use patent. But in my view Lord Briggs approach creates a fairer balance between the central policy objectives which he sets out in para 160 of his judgment. Principally for that reason but also for the other reasons which he advances, I agree with Lord Briggs judgment on this matter. If, on this approach, section 60(1)(c) were to cause serious problems to operators in the downstream market for generic products or to pharmacists, which in turn cause them to refuse to handle such generic products, it will be for the legislature to address those problems. LORD MANCE: I have read with benefit the judgments that have been prepared by Lord Sumption and Lord Briggs. Construction I would myself have been tempted by Warner Lamberts case that, on a true construction of the patent, Claim 3 should be understood as limited to peripheral neuropathic pain. I would have been impressed by the statement in para 6 of the description that Neuropathic pain is caused by injury or infection of peripheral sensory nerves, by the instances given which are of peripheral neuropathic pain and by the absence of any reference to any obvious instances of central neuropathic pain, such as pain from strokes and multiple sclerosis. I would also question whether the point made in para 104(3) of Lord Briggs judgment is entirely sound. Claim 2 (use for inflammatory pain) and Claim 3 (use for neuropathic pain) are not sub divisions covering the whole territory of Claim 1 (use for treating pain), since Claim 2 is itself commonly (but not I think necessarily) associated with an unmentioned category viz nociceptive pain. However, interpretation involves ascertaining the meaning of the claims as they would be understood by a person skilled in the art, in accordance with the principles set out in paras 92 to 98 of Lord Briggs judgment, with which I am in agreement. The points made by Lord Briggs in para 104(4) and (5) of his judgment also have some force. All my colleagues are persuaded that the skilled person would understand Claim 3 as extending to central as well as peripheral neuropathic pain. Their reasonable opinion carries weight. I am not in the circumstances prepared to press my reservations to a conclusion that they are wrong. Amendment and disposition of appeal I also agree with Lord Sumption and Lord Briggs, for the reasons they give, that Arnold J was, in the circumstances of this case, entitled to refuse to allow Warner Lambert to amend Claim 3 after he had handed down judgment. It follows that I agree that Warner Lamberts appeal fails. Sufficiency or plausibility and its application Where I do feel it necessary to disagree with the approach taken in Lord Sumptions judgment is in relation to the concept or test of sufficiency adopted in paras 26 to 37 in reaching it. This is a point of general importance. Swiss form claims for the manufacture of a known compound for a novel use are a construct of courts, which was aimed at meeting a commercial need, but was not envisaged by the language of the European Patent Convention (before its 2000 amendment came into force) or of the United Kingdom statutory scheme. Sufficiency or plausibility, in the sense presently relevant, is a court invented pre condition to validity. It has been constructed by courts, principally to attach some limit to the Swiss form claims for manufacture of compounds for uses which could otherwise be presented on a purely speculative basis. In the circumstances, there is every reason why the pre condition should be narrowly understood, and should represent a low threshold to overcome. In my view, Lord Sumptions analysis imposes too high a threshold, and imposes a burden on a patentee which the case law of the Board of Appeal of the European Patent Office does not justify. I prefer the approach advocated by Mr Mitcheson, but rejected by Lord Sumption in para 30 of his judgment. The case law of the Board of Appeal of the European Patent Office also seems to me to establish a reasonably clear position, which cannot be dismissed as some turns of phrase (para 30 of Lord Sumptions judgment). Taking the cases discussed in paras 31 to 34 of Lord Sumptions judgment: 1. T 1437/07 ALLERGAN (26/10/09): The relevant paragraphs in the judgment read: 38. The respondents argue that it was not credible that the therapeutic effect could be achieved because the treatment disclosed in Example 9 had not actually been carried out. 38.1 However, article 83 EPC stipulates that an invention must be disclosed in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art (emphasis added by the board). Thus, article 83 EPC does not stipulate that a claimed invention must have actually been carried out by the applicant or the inventor. Moreover, according to rule 42(1)(e) EPC, even the presence of an example is not mandatory. Therefore, just because a patent discloses an effect which has not in reality been achieved, there is no reason in the absence of convincing evidence that the effect cannot be achieved for the board to doubt that the effect can be achieved. Thus, the respondents argument does not convince the board. Again, it is notable that the Board of Appeal was prepared to proceed on the basis that a claimed effect was sufficiently disclosed in the absence of convincing evidence that it could not be achieved. 2. T 0578/06 IPSEN (29/6/11): Lord Sumption, after quoting paras 14 and 15 of the judgment in IPSEN, concludes: This decision is authority for the proposition that plausibility can be demonstrated in the specification without experimental evidence, if there is no substantiated doubt about the theoretical case made for the efficacy of the invention. This is the only relevant proposition for which it is authority. That is not in my opinion a correct paraphrase of paras 14 and 15 in, or supported by a full reading of, IPSEN. In para 15 the board took pains to re emphasise that the case law considers the establishment of plausibility only relevant when examining inventive step if the case at hand allows the substantiation of doubts about the suitability of the claimed invention to solve the technical problem addressed and when it is thus far from straightforward that the claimed invention solves the formulated problem. Para 13 in IPSEN is also relevant: The board notes that the EPC requires no experimental proof for patentability and considers that the disclosure of experimental data or results in the application as filed and/or post published evidence is not always required to establish that the claimed subject matter solves the objective technical problem. This is in particular true in the absence of any formulated substantiated doubt as is the case here. Paras 20 to 23 of the judgment in IPSEN underline this, by making clear that the onus is on the objector to demonstrate that there are doubts. 3. T 950/13 BRISTOL MYERS SQUIBB (3/2/17): (a) This is the most recent of all decisions, and particularly significant for that reason and because it examines the scope of T 609/02 SALK INSTITUTE FOR BIOLOGICAL STUDIES, relied upon in paras 28 to 29 of Lord Sumptions judgment. Again, in my opinion, the draft undervalues its significance. The principal claims in BRISTOL MYERS SQUIBB related to a compound of a formula for dasatinib or a salt thereof for the manufacture of a medicament for the oral treatment of cancer, wherein the cancer is chronic myelogenous leukaemia (CML) (Claim 1) or for use in the oral treatment of cancer, wherein the cancer is [CML] (Claim 4). Lord Sumption in para 34 explains BRISTOL MYERS SQUIBB as a case where Dasatinib had significant functional and chemical affinities with another kinase inhibitor [viz imatinib] known to be effective. 4. However, the objection was that the functional affinity was no more than an assertion that dasatinib functioned in the same way as imatinib. See in particular the patentees case on Sufficiency of disclosure set out in paragraph IX and the opponents case set out in paragraph X. Ultimately, it appears that, although this was true, the possibility that dasatinib would function in the same way as imatinib and the ease with which this could be ascertained using methods known in the state of the art, supported by post published documents combined to make Claims 1 and 4 plausible. A further claim that dasatinib went further than imatinib, and operated as an inhibitor in imatinib resistant situations was however insufficiently plausible. 5. The Board of Appeal approached BRISTOL MYERS SQUIBB on the basis that it was commonly known in the art that the single causative abnormality in CML was the BRC ABL oncogene, the protein of which was a tyrosine kinase responsible for the malignant transformation, that CML could be treated by inhibiting the BRC ABL kinase and that imatinib did this and had been approved for the treatment of CML (paras 3.4 and 3.5). The application contained no experimental evidence for dasatinibs BRC ABL inhibitory activity, but the disclosure of experimental results in the application is not always required to establish sufficiency, in particular if the application discloses a plausible technical concept and there are no substantiated doubts that the claimed concept can be put into practice. (para 3.6) 6. The application certainly drew an analogy between imatinib and dasatinib (para 3.6), but the Board of Appeals reasoning shows that the furthest the application went in this regard was to point out that there was evidence that dasatinib inhibited certain protein tyrosine kinases (PTKs) other than the BRC ABL kinase, that it was not uncommon for a protein kinase inhibitor to inhibit more than one [PTK] and that this can be explained by the fact that in all [PTKs] the ATP binding site and the transfer domains are to a certain extent similar (para 3.8). The Board of Appeal placed weight on the fact that assays and methods of testing to establish the activity of dasatinib as an inhibitor of PTKs, including BRC ABL were known in the art (para 3.8). The teaching that dasatinib was suitable for the treatment of CML was not rendered implausible by the fact that it may not have been obvious in view of the prior art (para 3.8). Further, at para 3.10.4, in these circumstances: post published documents may be used as evidence that the invention was indeed reproducible without undue burden. 7. The Board of Appeal drew a careful distinction between the position in BRISTOL MYERS SQUIBB and the position in the earlier case of SALK. It pointed out (para 3.9.1) that the Board of Appeal in SALK, at para 11, had summarised the situation as one where the claimed subject matter covers limitless and untried downstream developments in relation to yet to be demonstrated molecular mechanisms. In the boards judgment, it amounts to no more than an invitation to set up further research programs for which no guidance is forthcoming. In contrast, the Board said, the position in BRISTOL MYERS SQUIBB was that a structurally well defined compound and a plausible concept for its suitability in the treatment of CML has been disclosed. Similarly, in rejecting the opponents case that the skilled person was left to guess whether dasatinib exhibited any PTK inhibitory activity, let alone against BCR ABL kinase, the Board pointed out, at para 3.10.2, that this disregards that the present application clearly teaches that dasatinib is suitable in the treatment of CML, which is tantamount to dasatinib being a BRC ABL kinase inhibitor. Hence, . the skilled person was not left to guess, which of the various PTKs was inhibited by dasatinib. Accordingly, no further research programme was necessary in order to carry out the invention. The allegedly observed failure of some compounds according to formula I to inhibit the protein kinase Lck or the poor or reduced oral absorption properties of other compounds falling within the scope of formula I is irrelevant in this context. Equally irrelevant is the low activity of dasatinib on certain other PTKs such as HER1 or HER2 kinase. The [opponents] arguments may have been relevant, if the application had been limited to the general disclosure relied on by the [opponent], ie the provision of an extremely broadly defined group of compounds for the treatment of a plethora of diseases or disorders based on the inhibition of different types of PTKs with no further guidance at all as to which compounds inhibits [sic] which PTK. However, as set out above this is presently not the case. 8. In summary, being told that there was a functional analogy between dasatinib and imatinib in that they both inhibited BRC ABL kinase was sufficient information for the skilled reader to consider dasatinibs suitability in the treatment of CML to be a plausible teaching. For these reasons, I consider that it puts the test too high to suggest that the specification must disclose some reason for supposing that the implied assertion of efficacy in the claim is true (Lord Sumptions judgment, para 36). That amounts on its face to, or certainly risks being read as, a requirement that the plausibility of the claim must appear to be established prima facie through scientifically cogent reasoning or experimental evidence set out in the specification. Admittedly, Lord Sumption goes on in para 36 to suggest that the test is relatively undemanding. But he continues in para 37 to say that it is sufficient if the specification would cause the skilled person to think that there was a reasonable prospect that the assertion would prove to be true, and then that [the] reasonable prospect must be based on what the [Board of Appeal] in SALK (para 9) called a direct effect on a metabolic mechanism specifically involved in the disease, this mechanism being either known from the prior art or demonstrated in the patent per se. It also explains that, in so far as no experimental data is produced, it can be: demonstrated by a priori reasoning. For example, , the specification may point to some property of the product which would lead the skilled person to expect that it might well produce the claimed therapeutic effect; or to some unifying principle that relates the product or the proposed use to something else which would suggest as much to the skilled person. Despite the use of phrases such as reasonable prospect and might well produce, there is a real risk that the test as described by Lord Sumption would amount to, or be understood as, involving a requirement to establish a prima facie case on the material contained in the specification. In my opinion, the authorities analysed above do not put the standard so high. They certainly reject speculative or wide ranging unsubstantiated claims. But they accept as sufficient a tailored claim which appears scientifically possible, even though it cannot be said to be even prima facie established, without for example testing or assays according to the state of the article Only if a person skilled in the art would have significant doubts about the workability of the invention would it, in such a case, fail for insufficiency of disclosure. I therefore consider that Lord Sumptions judgment puts the test of sufficiency of disclosure too high. I agree with the way in which Lord Hodge puts the position in para 181 of his judgment. I am also persuaded that, applying the correct test, Arnold J cannot be said to have erred in concluding there was enough material just [to] make it plausible that pregabalin would be effective to treat peripheral neuropathic pain (para 351). My reasons correspond with those given more fully by Lord Hodge in paras 182 to 184 of his judgment, which I have had the benefit of reading since writing a first draft of my own. Infringement I turn finally to infringement. I need add nothing to what Lord Sumption and Lord Briggs have said on indirect infringement under section 60(2) of the Patents Act 1977. They are agreed that the prescription, dispensing or use of generic pregabalin to treat neuropathic pain does not put into effect the patented invention, or involve any supply to doctors, pharmacists or others of the means of putting it into effect. The patented invention is, under English law, the process completed by manufacture of the composition for the patent protected use. Any subsequent use is not itself patented. On the subject of direct infringement under section 60(1)(c), the other members of the court are however equally divided. Lord Sumption, with whom Lord Reed agrees, is on the one side and Lord Briggs and Lord Hodge are on the other. I am the swing voice, and it is with some unwillingness that I pronounce on the issue at all. All our remarks on it will be obiter, and it is often better to leave a truly contentious and difficult issue to a case where it matters. I also confess that my own view has swung between the two sides. Nevertheless, I will, in the circumstances, express my present conclusions. The issue has been fully argued, and it may at least diminish, though I fear not exclude, the prospect of further litigation if some indication is given to resolve the split of views exposed in this court. The issue remains relevant to old style Swiss patent cases though it will not arise in the same form, and we will not be addressing the position, under article 54(5) of the European Patent Convention. Patentability under article 54(5) is of a product (a substance or composition) for any specific use, whereas English law regards patentability under a Swiss form patent as attaching to a process, namely the process of manufacture of a product for a specific purpose. Both sides agree that the issue whether infringement of a Swiss form patent involves any and if so what mental element depends on the construction of such a patent. Claim 3, which it is in this connection relevant to consider, relates to: use of [pregabalin] for the preparation of a pharmaceutical composition for treating neuropathic pain. The second word for must under such a claim relate to one of two different subjects. First, it may attach to the process consisting of the use of pregabalin for the preparation of the composition or product. Alternatively, it may attach to the pharmaceutical composition or product, as prepared, presented and put on the market. Whichever approach is taken, some relevance will attach to how the pharmaceutical composition is presented and put on the market. But, if one reads the claim in the first way, it is natural to enquire into the subjective intention of the manufacturer in preparing the composition. If one reads it in the second, it is natural to focus on objective appearances or characteristics, and in particular on the way in which the composition is prepared, presented and marketed. In deciding what protection a Swiss form patent offers and what will constitute infringement, it is appropriate to consider the implications of each interpretation, against the background of the legislative aim of striking a fair balance between the opposing desiderata of incentivising and rewarding inventors and enabling manufacturers to compete lawfully and pharmacists and end users to carry on their affairs without incurring unbargained for liabilities against which they cannot sensibly protect themselves. The risk that anyone will actually pursue any liability claim against any particular pharmacist and/or end user may be slight in any individual case. But, if liability exists, some may well be pursued, to demonstrate the risks of dealing in generic goods, and all will be affected by the resulting deterrent effect. In any event, one would not as a matter of principle expect the law to involve uncovenanted and unavoidable liabilities. Each way of reading the claim identified in para 201 gives rise to questions. What is meant by subjective intention? And what circumstances would fall to be considered, in order to ascertain how a product is prepared, presented and marketed? As to subjective intention, Lord Sumption and Lord Briggs agree that mere foreseeability that some generic pregabalin would be used for treating neuropathic pain could not suffice to render the maker of the composition an infringer. A Swiss form patent entitles the maker to prepare the composition for the new purpose identified in it. The subsequent use of the composition involves persons outside the makers control. Lord Sumption and Lord Briggs also agree in rejecting the Court of Appeals solution of adding a qualification, so that foreseeability would suffice, if a generic manufacturer failed to take reasonable steps to prevent intentional use of the generic pregabalin by downstream prescribers or users for the treatment of neuropathic pain. I have nothing to add to their agreement on these points. So, if subjective intention is the test, it must be found in something more positive than foreseeability, that is in some form of design or desire on the part of the manufacturer. It seems unsatisfactory that patent infringement should depend on investigation of a subjective intention, internal to the manufacturer. That would also leave open the possibility of entirely blameless pharmacists and end users being liable under section 60(1)(c) for, say, disposal or use of generic pregabalin made by a manufacturer, whose subjective intentions the pharmacist and user would have had no means of gauging. It is true that section 60(1)(c) of the Patents Act 1977 has inherent in it the possibility of unwitting liability of a third party for disposing of, offering to dispose of, or using or importing a product made by a manufacturer by an infringing process. But the thinking behind section 60(1)(c) was certainly not focused on the later invented Swiss form patent. Rather it was, one supposes, assumed that the process by which a product was made would generally be obvious or easily ascertainable. In the case of a Swiss form patent, it would be far from obvious or easily ascertainable whether there had been infringement, if the test were whether manufacture (use for the preparation) of the composition had taken place by the manufacturer with the subjective intention that the composition be used for the specific purpose identified in the claim (ie here, for treating neuropathic pain). Further, if subjective intention were the test, what would this mean? Suppose that a manufacturer were deliberately to make more pregabalin than could be required for patent free uses, there would be no means of saying whether any particular batch would be used for patented or for patent free use. Would this mean that all manufactured batches infringed? So it would seem. These and other consequences are discussed by Lord Sumption and, I understand, recognised by Lord Briggs (see his para 171). They are to my mind powerful reasons for rejecting subjective intention as the test in any form. What then of a test focused on the way in which the pharmaceutical composition is prepared, presented and marketed? This must include in particular its packaging and the instructions given for its use, since the actual pharmaceutical composition is by definition identical to that produced by the patented process which it is said to infringe. Again, it is necessary to consider what such a test would mean. Here, some guidance is, in my view, available from German authority, identified by Lord Sumption in para 85 and by Lord Briggs in para 149. The German authority must be read with the understanding that a Swiss form patent is under German law regarded as protecting a purpose limited product, not (as under English law) a purpose limited process. Accordingly, the protection is treated as arising under section 9(1) of the German Patentgesetz, the German equivalent of section 60(1)(a) of the Patents Act 1977 (rather than under section 60(1)(c)): see Pemetrexed (Case No X ZR 29/15) (14 June 2016) in the Bundesgerichtshof (BGH), para 84, strogenblocker (Case I 2/W 6/17) in the Dsseldorf Oberlandesgericht (OLG), para 38 and Dexmedetomidin (Case I 2 U 30/17) (Dsseldorf OLG) (1 March 2018), (BeckRS 2018, 2410, paras 41 to 43). Swiss form patents are therefore treated in Germany on the same basis as the ordinary patents of a product for a specific use (where such patents are otherwise permissible) which were considered in Antivirusmittel (Case X ZR 51/86) (16 June 1987) (BGH): see the reference made to Antivirusmittel in the Swiss form patent case of Chronic Hepatitis C Treatment (Case 4a O 145/12) (14 March 2013) (Dsseldorf OLG), paras 51 to 54. Since the German analysis treats a Swiss form patent as protecting a product, rather than a process, it follows that third parties disposing of or using a generic product for the patented use are potentially exposed to liability under article 9(1) of the Patentgesetz: see also Chapter A, para 342 of Khnen, Handbuch der Patentverletzung, 10th ed (2017), a work extensively cited in Dexmedetomidin. However, under article 139(2) of the German Patentgesetz, damages for patent infringement are only available against a person who has deliberately or negligently committed the infringement. German law could not therefore expose a doctor, pharmacist or end user to potential liability to damages in the way that section 60(1)(c) of the English Act would on Warner Lamberts case. (Such a person could however still be injuncted against further infringement under article 139(1) of the German Patentgesetz.) If the protection sought by a Swiss form claim is treated, as English law treats it, as arising under section 60(1)(c), but is, at the same time, seen as operating in the second way identified in para 201 above (ie as attaching to the pharmaceutical composition as prepared, presented and marketed), then, despite the differences identified above, the German approach appears to me capable of illuminating what it would mean. Essentially, a Swiss form claim would, under English law, still be understood as protecting a process, but the scope of the protection would depend not on the subjective intention with which the process was undertaken, but on the objective characteristics of the resulting composition or product, judged by reference to the way in which it was packaged and marketed. The German authorities originally took a narrow view of what that could embrace, speaking in Chronic Hepatitis C Treatment, Cistus (Case I 2 U 53/11) (31 January 2103) (Dsseldorf OLG) and Warner Lambert Co LLC v Aliud Pharma GmbH (Case 327 O 140/15) (2 April 2015) (Hamburg OLG) of sinnfllige Herrichtung, ie manifest outward presentation. This approach was echoed by the Technical Board of Appeal in GENZYME/Treatment of Pompes disease [2016] EPOR 33, where the Board distinguished purpose limited product claims from Swiss form process claims, treating the latter (contrary to the view taken by the German courts) as falling within article 64(2) of the European Patent Convention (which equates with section 60(1)(c) of the Patents Act 1977). The distinction it drew was that the former offered protection whenever the patented product was used for the patented purpose, whereas the latter offered protection only in respect of a product which was produced by the patented process and was, in the instant case, packaged and/or provided with instructions for use in the treatment of infantile Pompes disease (para 9.1). In drawing this general distinction, the Board of Appeal was not however concerned with the precise limitations of the requirement under a Swiss form claim that, to achieve protection, the product produced by the process should be for the patented use. As Lord Sumption and Lord Briggs point out, the more recent German authorities, strogenblocker and Dexmedetomidin, take a broader view of the protection generated by a Swiss form patent. They do not focus on the external presentation (including the instructions for its use) of the allegedly infringing product, but rather on its inherent suitability for the patented use. However, they underline an additional requirement of any infringement, viz that the distributor needs to take advantage of circumstances which in a similar way to an active obvious preparation ensure that the purpose related therapeutic use of the preparation offered or sold actually takes place. and The latter requires a sufficient and not just occasional use according to the patent in suit, as well as the suppliers respective knowledge, or at least its bad faith ignorance thereof: See strogenblocker para 39 and Dexmedetomidin (BeckRS 2018, 2410, para 44). The example given in the latter case is use in practice of the generic product for the patent protected indication to a considerable extent in most cases due to a corresponding prescription by a doctor, in circumstances of which its supplier is or should have been aware, and which it still exploits for itself by supplying its distributors: para 44. The limitation relating to knowledge, bad faith taking advantage or exploitation, introduced in para 39 of strogenblocker and para 44 of Dexmedetomidin, appears as a pre condition to any infringement, rather than as a reflection of the general limitation of damages claims provided by article 139(2) of the Patentgesetz, to which I have referred in para 209 above. In my view, the preferable starting point under English law is to view a Swiss form claim in the second way identified in para 201 above. In other words, it protects the process of manufacturing a composition or product, which, as prepared, presented and put on the market, can be said objectively to be for the patent protected use. A process leading to a composition or product, which does not make clear that its permitted use is limited will infringe. In the light of submissions received from counsel on this judgment as circulated in draft in the usual way before issue, I prefer however to leave open whether there might be some circumstances in which a generic manufacturer could or should be expected to go further, by a notice positively excluding the patent protected use. All I would say in relation to the present case is that (i) although the parties appear, now, to differ on whether this would be either permissible or permitted, this is only the result of a very belated objection by Warner Lambert to a note filed by Actavis at the courts request as long ago as 23 February 2018 and (ii) at trial and in the admittedly slightly different context of the steps that Actavis should reasonably have taken to avoid being treated as intending to infringe, Warner Lambert did not even pursue any suggestion that such steps should have included the attachment of a notice recording, for example, that the generic product was not authorised, and was not to be used, for the treatment of neuropathic pain: see Arnold Js judgment, paras 526 527 and 586 589. That is a very unpromising basis for any suggestion by Warner Lambert that such a notice could or should have been given on the facts of this case, in order to avoid a conclusion that the generic product Lecaent was for the patent protected use of countering neuropathic pain. The delicate and difficult question is how far surrounding circumstances or general knowledge may be relevant, if in their light it is obvious or easily ascertainable that the process results in a product which, despite packaging and instructions making clear that it is for the non patent protected use, is destined for such use. For reasons already given, neither foreseeability nor subjective intention can be accepted as appropriate tests of liability. The recent German authorities do not appear to give any direct answer to the question what a manufacturer is supposed to do, if it acquires the awareness of a practice of the sort mentioned in para 212 above. Dexmedetomidin (BeckRS 2018, 2410, para 44) says that it will be justified to hold it liable if it still exploits this practice for itself by supplying its distributors. If that means that it must stop manufacturing and supplying any generic product, it involves an extreme solution which is too favourable to the patent holder, since it excludes competition by the generic product even in patent free areas of use. Another possibility is to read the German authorities as implying tacitly that the generic manufacturer should take (presumably, reasonable) steps to ensure that pharmacists and end users do not use the generic product for patented use. That would equate with the Court of Appeals approach in this case, which constructs a pre condition to legitimate manufacture and trade for which no basis, in my view, exists. There is however a further possibility, which appears to have the support of paras 351 and 353 of Khnens work already cited, namely that, since a generic manufacturer has no contractual relationship with and cannot give directions to a third party such as a doctor prescribing drugs, the most that can be expected of such a manufacturer is that it makes clear on the product that it is not for the patent protected use. It would seem to me also appropriate under English law to hold a generic manufacturer responsible in similar circumstances, if it was not made clear, in one way or another, that the product resulting from its manufacturing process was for the non patent protected use. However, although the context was again somewhat different, I note here the rejection by Arnold J, in paras 443 447 of his judgment, of Warner Lamberts submission that Actavis must be taken to have foreseen the use of Lecaent for the treatment of neuropathic pain because of the inclusion of warnings as to adverse effects if it was so used or because of blue box wording to the effect that it might be prescribed to treat other conditions not listed in the leaflet. Because context is all in the law, I also think that we should be careful about committing ourselves in obiter remarks in relation to other extreme cases not now before us. It may be going too far in favour of generic manufacturers to suggest as an absolute rule that a generic product, prepared, presented and put on the market, must always be viewed in isolation by reference only to its own packaging and instructions, and without regard to the realities or of the market for which it is prepared and into which it is being released. Take a situation where the circumstances make it obvious that a product, ostensibly limited in its permitted use by its packaging and instructions, was in fact destined for wider use; suppose that the manufacturer were to point out in separate studies, reports or advertisements that the composition resulting from its manufacturing process was pharmaceutically identical with that made by a manufacturer operating under a Swiss form patent; or suppose a generic manufacturer were to produce and supply quantities of the pharmaceutical composition for a distributor in a context which only made sense if they were destined for the patent protected use. Even then, the question could arise whether it was sufficient that this was obvious as between the generic manufacturer and its buyer or whether it would also have to be obvious more generally, and in particular to persons dealing in or using the composition down the chain in view of their potential exposure in the event of any infringement by the manufacturer. The wide and unqualified grasp of section 60(1)(c) (see para 205 above) might leave third parties with some exposure in a remote situation such as I am currently postulating. I prefer to say no more, and to leave open, the position in this type of remote situation. Normally, a generic manufacturer, and it follows others such as doctors, pharmacists and end users, should be protected from infringement of a Swiss form patent if the manufacturer ensures that the generic product resulting from its manufacturing process is produced, prepared and marketed with a clear limitation to patent free uses. As Khnen observes, a generic manufacturer cannot control the activities of doctors, pharmacists and end users, with which it is in no contractual relationship. The protection afforded by a Swiss form patent, analysed as protecting a process in the way that English law analyses it, is valuable, but necessarily limited. |
The disciplinary panels of bodies which regulate professional conduct conventionally have power to suspend a professionals right to practise for a specified period. They do so by directing that the entry of his (or her) name on the professional register be suspended for the specified period. Usually that power is accompanied by a power (but occasionally by a duty) of a panel to conduct a later review of the suspension in order to determine whether to direct its continuation beyond the specified period or to make some other direction. This appeal concerns the ambit of the inquiry which, in the case of one of these disciplinary panels, should be undertaken in the course of a review. In 2002 Mr Khan was registered as a pharmacist. He practised in Glasgow. In 2012 the General Pharmaceutical Council (the council), by its registrar, referred to its Fitness to Practise Committee (the committee) an allegation that his fitness to practise as a pharmacist was impaired by reason of criminal convictions which had been recorded against him. On 27 June 2013 the committee found that the impairment of his fitness to practise was established. When it turned to identify the sanction which would properly reflect the gravity of the misconduct for which he had been convicted, the committee rejected the option of suspending his right to practise. Instead it directed that his entry in the register of pharmacists be altogether removed. On 10 July 2014 the Extra Division of the Inner House, Court of Session, allowed his appeal against the direction for removal. The court (comprising Lord Eassie, Lord Drummond Young and Lord Wheatley) quashed the direction and remitted the case to the committee for it to determine the appropriate sanction in the light of its Opinion, which was delivered by Lord Drummond Young. In the course of its Opinion the Extra Division noted that: the committee had exercised its power under article 54(2)(c) of the (a) Pharmacy Order 2010, SI 2010 No 231, (the Order), which has effect in Scotland as well as in England and Wales, to direct that the entry in the Register of the person concerned be removed; (b) article 57(2)(a) of the Order would disable Mr Khan from applying for the restoration of his entry in the register before the expiry of five years from the date of its removal; (c) the power under article 54(2)(d) of the Order to suspend a persons entry in the register was limited to suspension for such period not exceeding 12 months as may be specified in the direction; and (d) the committee had concluded (and, so the court impliedly held, had reasonably concluded) that suspension of Mr Khans entry for no longer than 12 months would be insufficient to mark the gravity of his misconduct. At that point, however, the Extra Division observed that, in considering and rejecting the option of suspending Mr Khans entry in the register, the committee had made no mention of its power under article 54(3)(a)(ii) of the Order to conduct a review following a direction for suspension and thereupon to direct that the suspension of the entry be extended for such further period not exceeding 12 months as may be specified in the direction, starting from the time when the period of suspension would otherwise expire. A review can be conducted at any time but will ordinarily take place towards the end of the period of suspension; and it is usual for a committee which imposes a period of suspension to direct that a review should take place. In relation to the power to conduct a later review, the Extra Division then proceeded to make statements of law which precipitate the councils appeal to this court. It held that: (a) there was a middle way between suspension for 12 months, which the committee had considered to be insufficient, and removal, which, as it had acknowledged, perhaps appeared harsh; (b) those two choices therefore represented a false dichotomy; (c) in the light of the power to conduct a later review, and indeed to conduct even later reviews, it had been reasonably incidental to the original committees power of suspension for 12 months for it to indicate that it considered that the suspension should be extended thereafter, for a further 12 months or longer as the case might be; the later Committee will be obliged to respect the indication and if it (d) although the indication of the original committee would not bind the review committee, it must be assumed that the later Committee will act in a reasonable manner and will respect the decision and findings of the earlier Committee; and (e) departs from it will be expected to give reasons for doing so. So the question raised by the appeal surrounds the ambit of a review hearing following suspension. It asks specifically: can the power of a review committee to direct suspension beyond the year of the original suspension be so exercised as to reflect a conclusion that the gravity of the registrants misconduct demanded a longer period of suspension than that of one year which could not have been exceeded in the direction given by the original committee? To this specific question the council invites the court to answer: no. This courts conclusion will directly inform the ambit of a review following a direction of suspension only when it is conducted under article 54(3)(a) of the Order. But the regulatory systems relating to professions other than that of pharmacy make similar provisions for review following suspension. If the detail of their provisions were to disclose relevant differences from those set out in the Order, this courts judgment would not be applicable to them without adjustment. In the absence of relevant differences, however, todays judgment will carry persuasive authority in relation to them. Recognition of its potentially wider significance has prompted two interventions in the appeal to this court. The first intervener is the General Medical Council (the GMC). Under subsection (2)(b) of section 35D of the Medical Act 1983 the Medical Practitioners Tribunal (as it is now called), upon finding that a practitioners fitness is impaired, may direct that his registration shall be suspended for such period not exceeding 12 months as it may specify; under subsection (4A) the tribunal may attach a direction that a review of the direction of suspension be conducted prior to its expiry; and under subsection (5)(a) the tribunal which conducts the review may direct that the period of suspension be extended, albeit not, save exceptionally, for more than 12 months at a time. The provisions for review of suspension therefore appear similar to those in the Order. The first intervener joins the council in inviting the court to answer the specific question: no. The second intervener is the Health and Care Professions Council, which regulates about 350,000 people in 16 different health and care professions, now including social workers in England. Under article 29(5)(b) of the Health and Social Work Professions Order 2001, SI 2002 No 254, its Conduct and Competence Committee, upon finding that a registrants fitness to practise is impaired, may direct suspension of his registration for a period not exceeding one year; and under article 30(1)(a) and (5) the committee is required to review the direction prior to expiry of the suspension and can then extend it but by no more than a year at a time. Apart from its mandatory nature, the provisions for a review of suspension therefore appear similar to those in the Order. The second intervener describes its approach to the appeal as nuanced. At first it seemed almost elusive. By the end of the hearing, however, its submission became clear, namely that the Extra Divisions analysis of the ambit of the power of a review committee had been essentially correct; and in this submission it was joined by the Advocate to the Court. Mr Khan appears in person albeit with the considerable assistance of Mr Edwards. He seeks to defend the Extra Divisions analysis, which he himself had urged upon it; but, in case the councils appeal were to succeed, he mounts a cross appeal to the effect that in any event the committees direction for his removal from the register was, in the light of the nature of his misconduct to which I will now turn, disproportionate. B: THE MISCONDUCT Mr Khans misconduct related to the breakdown of his marriage, which has since been dissolved. On 20 July 2010 Mr Khan kicked his wife when she was lying in bed; grabbed her hair; punched her in the face; dragged her off the bed; and again struck her in the face. Mr Khan was thereupon charged with having assaulted his wife and placed on bail, conditions of which were that he should neither return to the matrimonial home nor contact her. On 8 March 2011, in breach of the conditions, he returned there and contacted her. On 13 May 2011, having pleaded guilty to the assault, Mr Khan was fined 400, ordered to compensate his wife in the sum of 500 and admonished for the breach of the conditions. On 9 March 2012 Mr Khan returned to the home; found the door locked against him; demanded entry; banged on the door; and shouted and swore at his wife so as to put her in fear. On 30 March 2012 Mr Khans wife left their two children, aged nine and two, at home in the care of her mother and sister while she went out. He arrived with another relation. They tricked the wifes sister into opening the door, whereupon he walked in. He unhooked pictures from the wall; kicked a hole in the wall; kicked a door; kicked over a shoe rack; swore at the sister that he was going to kill her, his wife and the whole family; and, with that other relation, removed the children. The police later went to his home, arrested him, recovered the children and restored them to the care of his wife. On 8 May 2012 Mr Khan pleaded guilty to having behaved threateningly and abusively on 9 and 30 March and, on the latter occasion, to having wilfully or recklessly damaged property belonging to his wife. On 8 June 2012 he was sentenced for these offences to a community payback order, which comprised supervision for 18 months and requirements to complete 180 hours of unpaid work within six months and to attend for six months at a domestic violence programme called Change. C: THE COMMITTEES DETERMINATION Before the committee Mr Khan admitted the misconduct set out above; accepted that it had been wholly inappropriate; apologised for it; and acknowledged that the effect on public confidence of it, and of the criminal convictions referable to it, was such that his fitness to practise was impaired. The committee accepted reports that he had diligently completed the 180 hours of unpaid work and had successfully attended the Change programme, in which, in the course of cognitive behavioural therapy, he had learnt skills which had enabled him to communicate reasonably with his wife. The committee accepted that he had genuinely learnt the error of his past conduct; that his social worker had assessed him as at low risk of re offending; that his misconduct had in no way affected his professional performance; that his clinical skills were not in issue; and that his patients were not at risk. It noted, however, that the period of supervision was still continuing. Under article 54(1) of the Order the committee was required first to decide for itself whether Mr Khans fitness to practise was impaired. In this regard it recited Rule 5 of the General Pharmaceutical Council (Fitness to Practise and Disqualification etc) Rules 2010 (the Rules), which are scheduled to the General Pharmaceutical Council (Fitness to Practise and Disqualification etc Rules) Order of Council 2010, SI 2010 No 1615. Rule 5 required the committee to decide whether, in the light of his conduct, a registrant was fit to practise by having regard to four criteria including, at para (2)(b), whether his conduct had brought the profession of pharmacy into disrepute. The committee decided that Mr Khans conduct had done so; that indeed it would shock the public; and that he had been right to acknowledge that it had impaired his fitness to practise because any other conclusion would undermine public confidence in the profession. The committees determination of the impairment of Mr Khans fitness to practise enabled it to turn, under article 54(2) of the Order, to consider the appropriate sanction. It reminded itself that the purpose was not to punish Mr Khan. It noted the councils submission that nothing less than either suspension or removal of his registration would suffice. The committee observed that: it could not direct suspension for more than 12 months; following a direction for removal there could be no restoration to the (a) (b) register within five years; (c) his conduct; (d) removal; (e) (f) of sanction available to it. suspension for 12 months would be insufficient to mark the gravity of the maintenance of public confidence demanded nothing less than removal might appear harsh; and a harsh direction might in part be a consequence of the limited choice Under article 59 of the Order a direction for removal does not take effect pending any appeal but the committee exercised its power under article 60(2) to direct that Mr Khans entry on the register be suspended forthwith, pending the coming into force of the direction. The direction for removal has been under appeal ever since so Mr Khans interim suspension has also continued ever since, in other words for almost three and a half years. The period of interim suspension would not count towards the period of five years after which Mr Khan could apply for restoration to the register because the latter would begin only on the date of removal. D: THE ALLEGED MIDDLE WAY There is, as Mr Edwards submits, a quantum leap between the original committees power of suspension which can be for no more than one year and its power of removal which must endure for at least five years. The council suggests that the limit on the period of suspension, introduced in 2007 when the power to suspend was itself introduced, in particular reflected concern that a registrant suspended for a period longer than a year would be likely to lose his skills. It also appears that the temporal limit on the registrants ability to apply for restoration to the register following removal, also introduced in 2007, in particular reflected concern about inappropriately early applications for restoration which were regarded as inconsistent with the imposition of the ultimate sanction of removal. The powers of the review committee following the original committees direction for a registrants suspension are fully set out in article 54(3)(a) of the Order. But no indication is there given about the way in which the powers should be exercised; and in that regard only limited assistance can be derived from the Rules. Rule 34(4) requires the representative of the council to inform the review committee of the background to the case and the sanction previously imposed and to direct its attention to any relevant evidence, including transcripts of previous hearings; and paras (4) and (5) permit both parties to adduce evidence in relation to the person concerneds fitness to practise. Para (6), however, provides that, following a direction for suspension, the review committee must receive further evidence although the subject of it is not identified. It certainly seems that the reference to the registrants fitness to practise relates to his fitness at the time of the review hearing. Greater assistance is, however, to be collected from the Indicative Sanctions Guidance which the Fitness to Practise Committee approved on 13 May 2011 and which was intended to explain its approach to decision making. Although the guidance has now been replaced by other guidance, entitled Good decision making: fitness to practise hearings and sanctions guidance and published by the council in July 2015, it is the earlier guidance which applies to Mr Khans case. reviews of suspension. It stated: In para 17 of the Indicative Sanctions Guidance the committee addressed In some cases it may be self evident that following a short period of suspension, there will be no value in a review hearing. In most cases however, where a period of suspension is imposed the Committee will need to be reassured that the registrant is fit to resume practice either unrestricted or with conditions or further conditions. The Committee will also need to satisfy itself that the registrant has fully appreciated the seriousness of the relevant breach(es), has not committed any further breaches of the Councils Standards of conduct, ethics and performance, has maintained his or her skills and knowledge up to date and that the public will not be placed at risk by resumption of practice or by the imposition of conditional registration. The current guidance is in similar terms. The guidance therefore makes clear that the focus of a review is upon the current fitness of the registrant to resume practice, judged in the light of what he has, or has not, achieved since the date of the suspension. The review committee will note the particular concerns articulated by the original committee and seek to discern what steps, if any, the registrant has taken to allay them during the period of his suspension. The original committee will have found that his fitness to practise was impaired. The review committee asks: does his fitness to practise remain impaired? It is worthwhile to look across at the recent work of the three UK Law Commissions in this area. In April 2014 they published a report entitled Regulation of Health Care Professionals, Regulation of Social Care Professionals in England, Law Com No 345, Scot Law Com No 237, NILC 18 (2014), Cm 8839, together with a draft Bill. Their work was born of public concern that professional regulation in the health care sector across the UK, and in the social care work sector in England, had grown piece meal over more than a century and had become inconsistent, incoherent and cumbersome. Their remit was to review the rules which governed nine regulatory bodies, including the council, the GMC and the Health and Care Professions Council; and, following extensive consultation, their recommendation was to confine the regulatory functions of the nine bodies within a single legal framework, set out in the draft Bill. In January 2015 the government published a response to the report, in which it accepted most of the Commissions recommendations and expressed a commitment to introduce legislation in due course. What is of interest for present purposes is that in para 9.123 of their report the Commissions suggest that greater consistency is appropriate in the conduct of review hearings and that, in their draft Bill, they propose the following: 161 Review of suspension orders: disposals by fitness to practise panel (1) (2) If the panel determines that the registered professionals (3) fitness to practise is no longer impaired, the panel (a) must revoke the suspension order (4) If the panel determines that the registered professionals (5) fitness to practise is impaired, the panel may dispose of the case as described in any of the following subsections So the proposal of the Commissions is that the review committee should ask whether the registrants fitness to practise is no longer impaired or is impaired. In other words it should address changes relevant to his impairment which have or have not occurred since the date of the original committees direction. It is also noteworthy that in the fifth report of the Shipman Inquiry, 9 December 2004, Cm 6394, Dame Janet Smith, Chairman, when referring to reviews under section 35D(5) of the Medical Act 1983, stated at para 27.267: Review hearings are extremely important. They are the teeth behind the sanctions other than erasure and should focus the doctors mind on the need to undertake any necessary remediation. The Extra Divisions conception is that a review committee has a role in determining the sanction appropriate to the circumstances by reference to which the original committee found that the registrants fitness to practise was impaired; that, in particular where the original committee has directed suspension for one year, the review committee can look back at those circumstances and determine whether, although one year was the maximum period of suspension open to the original committee, its direction was insufficient to mark their gravity; that, while that determination falls to be made by the review committee, it should afford great respect to any indication by the original committee that its direction was indeed insufficient to mark their gravity; and that, if determining that the direction was insufficient, the review committee should exercise its power of extension under article 54(3)(a)(ii) of the Order. The Extra Divisions conception is alien to the generally accepted conception of a review as a vehicle for monitoring the steps taken by the registrant towards securing professional rehabilitation. Indeed there is authority, unfortunately not cited to the Extra Division, which expressly holds that the conception which it favoured is misplaced. It is Taylor v General Medical Council [1990] 2 AC 539. Before the Judicial Committee of the Privy Council was an appeal by a medical practitioner against a direction by (as it was then called) the Professional Conduct Committee of the GMC to extend for a second time the period of one year which had been specified in its original direction for suspension. The doctor, who had previously received a suspended sentence of imprisonment for making false statements in order to enable persons to obtain passports, had been found guilty of serious professional misconduct in having irresponsibly issued prescriptions for methadone to about 70 patients. Upon directing suspension for one year, the committee had intimated the need for a later review, at which the period was extended for a year and the same intimation was given. The doctors appeal was brought against the direction made at the second review, which was for extension for one further but final year. The submission of counsel for the GMC, set out at pp 540 and 542, was that the committee must have considered that three years was the proper period of suspension in view of the doctors serious misconduct; that its initial direction for suspension could not have been for more than a year; and that it had not been wrong for the two years to be added at the two successive reviews. By a judgment delivered by Lord Bridge of Harwich, the committee allowed the doctors appeal. It held at p 545: It can never be a proper ground for the exercise of the power to extend the period of suspension that the period originally directed was insufficient to reflect the gravity of the original offence or offences. And it concluded at p 547: the only explanation for the committees decision to direct a third such period was that they regarded the original decision to direct suspension instead of erasure as having been too lenient the direction was wrong in principle. The decision in the Taylor case has never been questioned save now, unwittingly, by the Extra Division. Take, for example, the case of Obukofe v General Medical Council [2014] EWHC 408 (Admin). A medical practitioner appealed against the direction of (as it was then called) a Fitness to Practise Panel of the GMC to extend for one year the period, also of one year, for which he had originally been suspended from practice. He had received suspended sentences of imprisonment following convictions for sexual assault on two junior members of staff at the hospital where he had worked. Popplewell J dismissed his appeal. One of the grounds of appeal was that the direction for extension violated the principle of double jeopardy. The judge said: 48. This is to misunderstand the nature and effect of a suspension which is subject to review 49. The imposition of a further sanction by way of an extension of the period of suspension depends upon an assessment of his fitness to practise at that later stage. No question of double jeopardy arises. In summary, the Extra Division was too ingenious. There was no middle way. It was wrong to remit the case to the committee for disposal on that basis. But Mr Khan had argued in the alternative that, irrespective of whether that basis for remission existed, the direction of his removal from the register was disproportionate. He now cross appeals against the Extra Divisions implicit rejection of that alternative argument. E: THE CROSS APPEAL An appellate court must approach a challenge to the sanction imposed by a professional disciplinary committee with diffidence. In a case such as the present, the committees concern is for the damage already done or likely to be done to the reputation of the profession and it is best qualified to judge the measures required to address it: Marinovich v General Medical Council [2002] UKPC 36, para 28. Mr Khan is, however, entitled to point out that (a) the exercise of appellate powers to quash a committees direction or to substitute a different direction is somewhat less inhibited than previously: Ghosh v General Medical Council [2001] UKPC 29, [2001] 1 WLR 1915, para 34; (b) on an appeal against the sanction of removal, the question is whether it was appropriate and necessary in the public interest or was excessive and disproportionate: the Ghosh case, again para 34; and (c) a court can more readily depart from the committees assessment of the effect on public confidence of misconduct which does not relate to professional performance than in a case in which the misconduct relates to it: Dad v General Dental Council [2000] 1 WLR 1538, pp 1542 1543. Mr Khan was guilty of three incidents of domestic violence, of which the first and third were particularly serious. In the third he even involved the children of the family. His conduct betrayed a gross loss of control and his purpose was, directly and indirectly, to hurt his wife. Mitigation on his behalf in the Sheriff Court would have been hard to articulate. Inevitably the convictions attracted at first a significant fine and later a substantial community penalty. There, however, lay the punishment. The focus for the committee was different: its task, not easy, was to judge the effect of the conduct on public confidence in the profession and to identify a sanction proportionate to its judgement. Mr Khans conduct did not relate to his professional performance. No patient had been, or was likely to be, put at risk. The committee fairly recited several further features of the case which militated against the removal of his registration, such as his genuine acknowledgement of fault and the positive reports of his response to the requirements of the community payback order, as set out in para 19 above. Rule 31(14)(a) required the committee to have regard to the Indicative Sanctions Guidance when determining sanction. It duly referred to para 14 of the guidance, entitled Cases where removal from the Register may be appropriate, and it picked out two of the cases there described, albeit in arrestingly general terms, namely Behaviour is fundamentally incompatible with registration and Public confidence in the profession demands no lesser sanction. But the committee might also usefully have referred to para 8 of the guidance, entitled Mitigating Features General and, had it done so, it would have picked out (a) no prior disciplinary history; (b) genuine insight into misconduct; (c) open admissions at an early stage; (d) no actual or potential harm to patients or the public; (e) genuine expression of remorse to committee; and (f) steps taken to prevent recurrence. The committee itself acknowledged that its direction for removal might appear harsh. It was indeed harsh. It was unnecessary. It was disproportionate. The sanction proportionate to the disrepute into which Mr Khans conduct had brought, or was likely to bring, the profession of pharmacy was suspension of his registration, which, at the time of the committees determination, should no doubt have been for a period of a year. F: CONCLUSION instead of the committees direction for his removal from the register, (a) the councils appeal should be allowed; (b) the Extra Divisions interlocutor should be recalled; (c) Mr Khans cross appeal should also be allowed; (d) a direction for his suspension from it should be substituted; (e) in the light of the length of his interim suspension since the date of the committees direction, the period of his suspension should be four months; (f) attached to the direction for his suspension for four months should be a direction for a review committee to conduct a review prior to its expiry; and (g) the review committee should be invited to have regard in particular to any report upon him by his supervisor following the expiry of his period of supervision; to any evidence relating to the risk that he has lost necessary skills since the date of the committees determination and therefore to any efforts on his part to retain them; and, generally, to any relevant occurrence since that date. It was for the above reasons that, at the end of the hearing, Lord Neuberger, the President of the court, announced its unanimous conclusion, which was that |
Ewa Michalak began employment as a doctor with the Mid Yorkshire Hospitals NHS Trust in April 2002. She remained in that employment until she was dismissed in July 2008. Following her dismissal, Dr Michalak brought an unfair dismissal claim against the Trust in the Employment Tribunal. The tribunal found that her dismissal had been unfair and contaminated by sex and race discrimination and victimisation. Dr Michalak received a compensation award and a public apology from the Trust. Before the tribunal had issued its determination, and, on foot of Dr Michalaks dismissal, the Trust had reported her to the General Medical Council (the GMC) in relation to her conduct, so that the question of whether she should continue to be registered as a medical practitioner could be considered. The Trust later accepted that there had not been proper grounds on which to refer her to the GMC. She remains registered as a medical practitioner, therefore. In the meantime, however, the GMC had begun fitness to practise proceedings against Dr Michalak under Part V of the Medical Act 1983. She claims that the GMC discriminated against her in the way in which it pursued those proceedings. She also alleges that the discrimination extended to the GMCs failure to investigate complaints that she had made against other doctors employed by the Trust. Dr Michalak presented a claim to the Employment Tribunal in relation to these complaints in August 2013. The respondents named on the application form were the GMC, Niall Dickson, its chief executive, and Simon Haywood, an investigation officer of the GMC. They are the current appellants, although for all intents and purposes, the effective appellant is the GMC. It is agreed that the second and third appellants cases do not require separate consideration. The appellants applied to have Dr Michalaks complaint to the tribunal struck out on the basis that the tribunal did not have jurisdiction to hear the claims. The complaints of discrimination and breach of contract against the GMC relating to the period before 1 October 2010 were struck out. The tribunal decided that it did have jurisdiction in relation to complaints regarding unlawful sex, race and disability discrimination after that date but not in relation to breach of contract. So far as the complaints against the second and third appellants were concerned, the complaint was confined to one of unlawful discrimination and the tribunal considered that it had jurisdiction to entertain this complaint. The appellants appealed, arguing that section 120(7) of the Equality Act 2010 precluded jurisdiction, since judicial review afforded an appeal for the acts complained of. The Employment Appeal Tribunal (Langstaff P) agreed and allowed the appeal. An appeal against that decision was successful before the Court of Appeal (Moore Bick, Kitchin and Ryder LLJ) [2016] ICR 628. It held that the Employment Tribunal had jurisdiction to deal with Dr Michalaks complaints and remitted the case to the tribunal for further case management. The appeal to this court raises a single issue. It is whether the availability of judicial review proceedings in respect of decisions or actions of the first appellant excludes the jurisdiction of the Employment Tribunal by virtue of section 120(7) of the Equality Act. Section 120(7) Under section 120(1)(a) of the Equality Act, an employment tribunal has jurisdiction to determine a complaint relating to a persons work. But section 120(7) provides that subsection (1)(a) does not apply to a contravention of section 53 in so far as the act complained of may, by virtue of an enactment, be subject to an appeal or proceedings in the nature of an appeal. Section 53 deals with discrimination by qualifications bodies. Section 54 defines qualifications bodies. In its material parts, it provides: (2) A qualifications body is an authority or body which can confer a relevant qualification. (3) A relevant qualification is an authorisation, qualification, recognition, registration, enrolment, approval or certification which is needed for, or facilitates engagement in, a particular trade or profession. (5) A reference to conferring a relevant qualification includes a reference to renewing or extending the conferment of a relevant qualification. All parties accept, therefore, that the GMC is plainly a qualifications body. It is an independent organisation which regulates the profession of doctors within the United Kingdom under the Medical Act 1983. Its main objective, under section 1(1A) of that Act, is to protect, promote and maintain the health and safety of the public. The GMC maintains the register of doctors and is responsible for certain undergraduate and postgraduate medical education, and for the training and revalidation of doctors. Under Part V of the Medical Act and the General Medical Council (Fitness to Practise) Rules 2004, the GMC has power to investigate complaints against doctors. Under the fitness to practise jurisdiction, the GMC receives and considers complaints about medical practitioners. Where it is decided that the complaints warrant an inquiry, the GMC prepares the evidence and the drafting of allegations. Any hearing that follows is conducted by the Medical Practitioners Tribunal Service. It is described as a part of the GMC but is independent of it. A decision to erase a medical practitioners name from the register or to suspend, or to impose conditions on his or her registration may be appealed to the High Court under sections 38 and 40 of the Medical Act. The High Court may allow the appeal and quash the original decision; it may also substitute a new decision for the original decision; or remit the matter for re hearing. The Medical Act also provides for various other types of appeal against fitness to practise decisions. To take an example, section 41A(10) states that the relevant court has the power to terminate an interim order of suspension, and section 41A(14) states that relevant court has the same meaning as in section 40(5). Section 40(5) contains the definition of the relevant court as the High Court. In effect, therefore, an appeal against the making of an interim order of suspension lies to the High Court. But neither this nor any of the other possible statutory avenues of appeal is relevant to the respondents position. Her complaints do not relate to any action by the GMC as to her registration. Her series of claims of discrimination on the part of the GMC relate to the manner in which it pursued its fitness to practise application and its failure to investigate her complaints against other doctors in the trust where she had been employed. No statutory appeal is available to her to pursue those complaints. It is accepted, however, that she could seek judicial review of the decisions that are said to constitute the various acts of discrimination. The essential issue in the case, therefore, is whether the availability of judicial review animates the exemption contained in section 120(7). This in turn depends on whether that remedy can properly be described as a proceeding in the nature of the appeal and whether it is available to the respondent by virtue of an enactment. It is important to note that both these conditions must be satisfied before section 120(7) comes into play. Both issues will have to be examined separately but, first, one must look at the context in which they require to be decided and that is provided principally by the Equality Act itself. The Equality Act The purpose of the Equality Act 2010, as explained in the Explanatory Memorandum (para 10), is to harmonise discrimination law, and to strengthen the law to support progress on equality. The Act repealed and replaced existing equality legislation, including the Equal Pay Act 1970, the Sex Discrimination Act 1975, the Race Relations Act 1976 and the Disability Discrimination Act 1995. In these various items of legislation, Parliament provided for discrimination claims in the work, employment and occupation contexts to be dealt with by a specialist tribunal, first called the Industrial Tribunal and now known as the Employment Tribunal. The establishment of these specialist tribunals reflected the growing awareness of the importance which should be attached to equal treatment rights in the field of employment, not least because those rights are protected under European Union law see, for instance, article 16 of the Framework Equality Directive (2000/78/EC) which required member states to take measures to ensure that any laws, regulations and administrative provisions contrary to the principle of equal treatment were abolished. Not only was the Employment Tribunal designed to be a specialised forum for the resolution of disputes between employee and employer, it was given a comprehensive range of remedies which could be deployed to meet the variety of difficulties that might be encountered in the employment setting. Thus, for instance, the tribunal may make a declaration as to the rights of the complainant and the respondent in relation to the matters that arise in the proceedings before it (section 124(2)(a)); it may order a respondent employer to pay compensation to a complainant employee (section 124(2)(b)); and it may make a recommendation (section 124(2)(c)). If a recommendation is not followed, the tribunal has power (under section 124(7)) to increase the award of compensation, or, if an award has not been already made, to make one. These considerations provide the backdrop to the proper interpretation of section 120(7). Part of the context, of course, is that appeals from decisions by qualification bodies other than to the Employment Tribunal are frequently available. It would obviously be undesirable that a parallel procedure in the Employment Tribunal should exist alongside such an appeal route or for there to be a proliferation of satellite litigation incurring unnecessary cost and delay. Where a statutory appeal is available, employment tribunals should be robust in striking out proceedings before them which are launched instead of those for which specific provision has been made. Employment tribunals should also be prepared to examine critically, at an early stage, whether statutory appeals are available. Parliament plainly intended that section 120(7) would exclude jurisdiction for certain challenges against decisions of qualification bodies. The rationale for doing so is plain. Where Parliament has provided for an alternative route of challenge to a decision, either by appeal or through an appeal like procedure, it makes sense for the appeal procedure to be confined to that statutory route. This avoids the risk of expensive and time consuming satellite proceedings and provides convenience for appellant and respondent alike. That rationale can only hold, however, where the alternative route of appeal or review is capable of providing an equivalent means of redress. Quite apart from the range of remedies available to it, the Employment Tribunal, as a forum for dealing with complaints by employees concerning their employment, has distinct advantages for complainants. It is a specialist tribunal with expertise in hearing discrimination claims across a range of sectors; it is designed to be accessible to litigants in person; and it is generally a cost free jurisdiction (Rule 74 of the Employment Tribunal Rules of Procedure). Proceedings in the nature of an appeal In its conventional connotation, an appeal (if it is not qualified by any words of restriction) is a procedure which entails a review of an original decision in all its aspects. Thus, an appeal body or court may examine the basis on which the original decision was made, assess the merits of the conclusions of the body or court from which the appeal was taken and, if it disagrees with those conclusions, substitute its own. Judicial review, by contrast, is, par excellence, a proceeding in which the legality of or the procedure by which a decision was reached is challenged. It is, of course, true that in the human rights field, the proportionality of a decision may call for examination in a judicial review proceeding. And there have been suggestions that proportionality should join the pantheon of grounds for challenge in the domestic, non human rights field see, for instance, Kennedy v Charity Commission (Secretary of State for Justice intervening) [2014] UKSC 20; [2015] AC 455, paras 51 and 54; and Pham v Secretary of State for the Home Department (Open Society Justice Initiative intervening) [2015] UKSC 19; [2015] 1 WLR 1591, paras 96, 113 and 115; and Keyu v Secretary of State for Foreign and Commonwealth Affairs [2015] UKSC 69; [2016] AC 1355, paras 133, 143 and 274 276. But an inquiry into the proportionality of a decision should not be confused with a full merits review. As was said in Keyu at para 272: a review based on proportionality is not one in which the reviewer substitutes his or her opinion for that of the decision maker. At its heart, proportionality review requires of the person or agency that seeks to defend a decision that they show that it was proportionate to meet the aim that it professes to achieve. It does not demand that the decision maker bring the reviewer to the point of conviction that theirs was the right decision in any absolute sense. Judicial review, even on the basis of proportionality, cannot partake of the nature of an appeal, in my view. A complaint of discrimination illustrates the point well. The task of any tribunal, charged with examining whether discrimination took place, must be to conduct an open ended inquiry into that issue. Whether discrimination is in fact found to have occurred must depend on the judgment of the body conducting that inquiry. It cannot be answered by studying the reasons the alleged discriminator acted in the way that she or he did and deciding whether that lay within the range of reasonable responses which a person or body in the position of the alleged discriminator might have had. The latter approach is the classic judicial review investigation. On a successful judicial review, the High Court merely either declares the decision to be unlawful or quashes it. It does not substitute its own decision for that of the decision maker. In that sense, a claim for judicial review does not allow the decision of the GMC to be reversed. It would be anomalous for an appeal or proceedings in the nature of an appeal to operate under those constraints. An appeal in a discrimination case must confront directly the question whether discrimination has taken place, not whether the GMC had taken a decision which was legally open to it. The genesis of the view that judicial review was in the nature of an appeal lies in the obiter dictum observations of His Honour Judge McMullen QC in Tariquez Zaman v General Medical Council (UKEAT/0292/06/DM). In that case, the issue was whether section 54(2) of the Race Relations Act 1976 (which was in similar terms to section 120(7) of the Equality Act) precluded the Employment Tribunal from entertaining the complainants claim. Judge McMullens conclusion on the issue was obiter because the claimant had voluntarily relinquished his registration. There was therefore no action by the GMC on which Dr Zaman could found his claim. At para 31 of his judgment, Judge McMullen dealt with the argument that judicial review was in the nature of an appeal in these terms: judicial review is aptly described as proceedings in the nature of an appeal. Judges in the administrative court are familiar with dealing with cases under the Medical Act in the form of appeals proper; thus, they constitute the obvious destination intended by Parliament for disputes of this nature, once a decision had been made at first instance. So, if I were required to make a decision, I would uphold the submission that section 54(2) ousts the jurisdiction of the ET because, in this case, proceedings can be brought by way of judicial review. Judge McMullen had relied on the decision of the Court of Appeal in the case of Khan v General Medical Council [1996] ICR 1032. In that case, the appellants application for full registration as a qualified medical practitioner had been refused by the GMC after a five year maximum period of limited registration. His application for full registration in accordance with section 25 of the Medical Act 1983 was refused by the GMC. He then applied to the Review Board for Overseas Qualified Practitioners for a review pursuant to section 29 of the Act. That application failed, as did a second application and request for review. The appellant then made a complaint to an industrial tribunal that he had been indirectly discriminated against on the ground of his race within the meaning of section 1(1)(b) of the Race Relations Act 1976, contrary to section 12(1) of the Act. On a preliminary issue the industrial tribunal found that the right under section 29 of the Medical Act 1983 to apply for a review of the decision of the General Medical Council was a proceeding, in the nature of an appeal for the purposes of section 54(2) of the Race Relations Act 1976 and the appellants right to present a claim under section 54(1) was therefore excluded. The appellants appeal to the Court of Appeal was, unsurprisingly, dismissed. It was clear that his application to the Review Board constituted a proceeding in the nature of an appeal. The question of whether judicial review, as opposed to review by a differently constituted body, would qualify as a proceeding in the nature of an appeal, was not germane to the issue in Khan. In Zaman, however, Judge McMullen found a passage from the judgment of Hoffmann LJ to be particularly instructive. At 1042, Hoffmann LJ had observed: It is a short question of construction which, in my judgment, admits of an easy answer, namely, Yes. Section 29 of the Act of 1983 allows the decision of the General Medical Council to be reversed by a differently constituted set of persons. For present purposes, I think that this is the essence of what is meant by proceedings in the nature of an appeal. I note that in Wootton v Central Land Board [1957] 1 WLR 424 Lord Evershed MR had to consider whether an application to the Lands Tribunal by a party who was dissatisfied with the determination of a land value by the Central Land Board was in the nature of an appeal. He maintained that it was. He said that it might fairly be described as an appeal to another body having the right either of affirming the development value or altering it. In saying that the decision could be reversed by a differently constituted set of persons, Hoffmann LJ did not have in mind a judicial review challenge, in my opinion. It was because the Review Board could, by the recommendation that they made to the President of the GMC, effectively reverse the decision of the GMC, that he considered that a review was in the nature of an appeal. The review by the Board was open ended and the decision that they were entitled to reach was unconstrained and not inhibited by the circumstance that the GMC had reached a particular decision. Hoffmann LJ did refer to judicial review later in his judgment. At p 1043, dealing with an argument that claimants such as Dr Khan were not able to pursue claims for race or sex discrimination if they were not permitted to make complaints to an industrial tribunal, he said this: For my part, I do not see why [an application for review under section 29] should not be regarded as an effective remedy against sex or race discrimination in the kind of case with which section 12(1) of the Race Relations Act 1976 deals. That concerns qualifications for professions and trades. Parliament appears to have thought that, although the industrial tribunal is often called a specialist tribunal and has undoubted expertise in matters of sex and racial discrimination, its advantages in providing an effective remedy were outweighed by the even greater specialisation in a particular field or trade or professional qualification of statutory tribunals such as the review board, since the review board undoubtedly has a duty to give effect to the provisions of section 12 of the Act of 1976: see per Taylor LJ in R v Department of Health, Ex p Gandhi [1991] ICR 805, 814. This seems to me a perfectly legitimate view for Parliament to have taken. Furthermore, section 54(2) makes it clear that decisions of the review board would themselves be open to judicial review on the ground that the board failed to have proper regard to the provisions of the Race Relations Act 1976. In my view, it cannot be said that the Medical Act 1983 does not provide the effective remedy required by Community law. It is important to understand that Hoffmann LJ was not referring here to judicial review as a possible candidate for inclusion in the category of a proceeding in the nature of an appeal. His remarks in this passage were made in the context of an argument that, in order to have an effective remedy, a claimant had to be allowed to present a complaint to the industrial tribunal. He was merely pointing out that the availability of the review procedure, especially when considered with the opportunity to apply for judicial review of that review provided an adequate remedy. More importantly, this passage emphasises the breadth of the review procedure. As Hoffmann LJ pointed out, the review board was bound to have proper regard to the provisions of the Race Relations Act. It could only do so by conducting a scrupulous inquiry as to whether the discrimination alleged had in fact taken place in other words, a full blown inquiry into the allegations of discrimination was required. I do not consider, therefore, that the decision in Khan supports the proposition that section 54(2) ousted the jurisdiction of the Employment Tribunal because proceedings could have been brought by way of judicial review. Judge McMullen returned to this theme in his later decision in Jooste v General Medical Council [2012] EQLR 1048. In that case Dr Jooste claimed that the acts of an Interim Orders Panel of the GMC suspending his registration were discriminatory under the Equality Act. Judge McMullen, sitting in the Employment Appeal Tribunal, upheld the decision of the Employment Tribunal, that it had no jurisdiction to hear the claimants complaints against the GMC as the remedy available in judicial review was an alternative statutory remedy under section 120(7). At para 44 of his judgment he said that an appeal simply is the opportunity to have a decision considered again by a different body of people with power to overturn it. For the reasons given earlier, I cannot agree with that statement. An appeal is different from a review of the legal entitlement to make a decision; it involves an examination of what decision should be taken in the dispute between the parties. The Court of Appeal in the present case concluded that Jooste had been wrongly decided. I agree. By virtue of an enactment The GMC accepts that when the provisions which preceded section 120(7) were originally enacted they did not exclude decisions subject to challenge by way of the prerogative writs. That is because judicial review originated as a common law procedure and not by virtue of any enactment. The appellant argues, however, that judicial review proceedings became proceedings by virtue of an enactment on the coming into force of the Senior Courts Act 1981. Section 31(1) of that Act provides: (1) An application to the High Court for one or more of the following forms of relief, namely a mandatory, prohibiting or quashing order; a declaration or injunction under subsection (2); (a) (b) or (c) an injunction under section 30 restraining a person not entitled to do so from acting in an office to which that section applies, shall be made in accordance with rules of court by a procedure to be known as an application for judicial review. The appellants case misconstrues both section 31(1) of the Senior Courts Act and section 120(7) of the Equality Act 2010. It rests on a misunderstanding of the nature of judicial review. Judicial review is not a procedure which arises by virtue of any statutory source. Its origins lie in the common law. As Laws LJ said in R (Beeson) v Dorset County Council [2002] EWCA Civ 1812: The basis of judicial review rests in the free standing principle that every action of a public body must be justified by law, and at common law the High Court is the arbiter of all claimed justifications. (at para 17) [emphasis added] See also the observations of Lady Hale in R (Cart) v The Upper Tribunal [2011] UKSC 28; [2012] 1 AC 663, para 37: the scope of judicial review is an artefact of the common law whose object is to maintain the rule of law that is to ensure that, within the bounds of practical possibility, decisions are taken in accordance with the law, and in particular the law which Parliament has enacted, and not otherwise. Section 31 of the Senior Courts Act did not establish judicial review as a procedure, but rather regulated it. The remedies remain the same as those under the prerogative writs. All that section 31 does is to require that applications for judicial review be brought by way of a new procedure under the rules of court. The point was put succinctly and clearly in terms with which I fully agree by Moore Bick LJ at para 53 of his judgment in the Court of Appeal in the present case, where he said: the words by virtue of an enactment in section 120(7) are directed to cases in which specific provision is made in legislation for an appeal, or proceedings in the nature of an appeal, in relation to decisions of a particular body, as, for example, in Khan v General Medical Council [1996] ICR 1032. They are not intended to refer to the general right to seek judicial review merely because, since 1981, that happens to have been put on a statutory footing. Another way of looking at the question is to consider what the effect would be of the repeal of the 1981 Act. I suggest that the High Courts jurisdiction would remain, even if the procedure by which it would have to be brought might require to be provided for in any amending legislation. Section 120(7) is part of a carefully constructed statutory scheme. It is the most recent incarnation of similarly worded provisions in legislation such as is mentioned in para 14 above. Before 1981, there could have been no question of judicial review coming within any of the predecessor provisions. Given the importance of judicial review, it is to be assumed that Parliament would have had the procedure in mind when it formulated the phrase now contained in section 120(7). Had it, in 1981 or in 2010, intended to remove all decisions by qualification bodies whose decisions were susceptible to judicial review from the jurisdiction of the Employment Tribunal, one would surely expect that to be provided for expressly. Conclusions In my view, judicial review in the context of the present case is not in the nature of an appeal. Nor is it a remedy provided by reason of an enactment. I would dismiss the appeal. LORD MANCE: reasons he gives. My only additional observations are these: I agree with Lord Kerr that the appeal should be dismissed broadly for the i) I would not circumscribe the development of judicial review or its ability to cater, in appropriate circumstances, for close examination of a claim on its merits: see eg the authorities which Lord Kerr cites in para 20; ii) judicial review may, in appropriate circumstances, lead the court to a conclusion that there exists only one possible outcome of a relevant legislative or executive decision making process: see eg In re G (Adoption: Unmarried Couple) [2008] UKHL 38; [2009] AC 173, para 144; iii) conventional appellate review is itself not infrequently circumscribed by considerations of respect for the original or first instance decision maker: see eg the discussion in Assicurazioni Generali SpA v Arab Insurance Group (Practice Note) [2002] EWCA Civ 1642; [2003] 1 WLR 577; see also Datec Electronic Holdings Ltd v United Parcels Services Ltd [2007] UKHL 23; [2007] 1 WLR 1325. Here, however, the Employment Tribunal offers the natural and obvious means of recourse in respect of the respondents surviving complaints. There is no need in this context to strain the ordinary usage or understanding of the concept of appeal to embrace judicial review. In parenthesis, it is unsurprising to find that, where the Medical Act 1983 does allow an appeal, it does so expressly: section 40. Finally, the history, which Lord Kerr recounts under the rubric By virtue of an enactment in paras 31 to 35, points very strongly against judicial review having become, suddenly but silently in 1981, a relevant appeal for the purposes of the similarly worded predecessor provisions to section 120(7) of the Equality Act 2010. |
The appellant (NML) is a Cayman Island Company. It is an affiliate of a New York based hedge fund of a type sometimes described as a vulture fund. Vulture funds feed on the debts of sovereign states that are in acute financial difficulty by purchasing sovereign debt at a discount to face value and then seeking to enforce it. This appeal relates to bonds issued by the Republic of Argentina in respect of which, together with all its other debt, Argentina declared a moratorium in December 2001. Between June 2001 and September 2003 affiliates of NML purchased, at a little over half their face value, bonds with a principal value of US$ 172,153,000 (the bonds). On 11 May 2006, NML, as beneficial owner, obtained summary judgment on the bonds for a total, including interest, of US$ 284,184,632.30, in a Federal Court in New York. NML brought a common law action on that judgment in this jurisdiction, and succeeded before Blair J in the Commercial Court. That judgment was reversed by the Court of Appeal, which held that Argentina is protected by state immunity. The question raised by this appeal is whether that finding was correct. The bonds and the New York Judgment The bonds were issued by Argentina in February and July 2000 pursuant to a Fiscal Agency Agreement between Argentina and Bankers Trust Company. The terms applicable to the bonds were contained in the Agreement and the bonds themselves, both of which were expressly governed by the law of New York. In November 2003, having declared events of default under the Fiscal Agency Agreement, relying on the moratorium and Argentinas subsequent failure to pay interest on the bonds, NML commenced proceedings against Argentina in the United States District Court, Southern District of New York, to recover principal and interest due under the bonds. Jurisdiction was founded on an express submission to New York jurisdiction in the Fiscal Agency Agreement. Argentina appeared and defended the proceedings. Judge Thomas P Griesa granted NMLs motion for summary judgment. Argentina does not, in these proceedings, challenge that judgment. The proceedings in this jurisdiction In order to serve a foreign sovereign state it is necessary to obtain the permission of the court to serve the claim form out of the jurisdiction. On 14 March 2008 NML applied ex parte for this permission. The witness statement supporting this application, and the draft particulars of claim exhibited to it, alleged two reasons why Argentina was not entitled to state immunity. The first was that under clause 22 of the Fiscal Agency Agreement Argentina had waived, and agreed not to plead, any claim that it might have to state immunity. The second was that NMLs claim was founded on the Fiscal Agency Agreement and the bonds, and consequently constituted proceedings relating to a commercial transaction for the purposes of the State Immunity Act 1978 (the 1978 Act). On 2 April 2008, David Steel J granted NML permission to serve Argentina out of the jurisdiction, and service was duly effected. On 5 September 2008 Argentina applied under CPR 11(1) to set the order for service aside on the ground that Argentina enjoyed state immunity from the jurisdiction of the English courts. At the hearing of this application before Blair J NML conceded that it could rely, at first instance, on neither of the grounds for alleging that Argentina did not enjoy immunity that had been advanced in support of the application to serve out. Instead NML sought to rely first on the provisions of section 31 of the Civil Jurisdiction and Judgments Act 1982 (the 1982 Act) and secondly on alternative provisions as to waiver and jurisdiction in the bonds themselves. I shall follow the example of Aikens LJ in annexing in Appendix 1 the relevant provisions of section 31, in Appendix 2 Article 20 of the European Convention on State Immunity (ECSI), to which I shall refer in due course, and in Appendix 3 the relevant terms of the bonds. Argentina contended that it was not open to NML to invoke alternative grounds for contending that immunity did not apply when these had not been relied on in the original ex parte application. NMLs proper course was to make a fresh application for permission to serve Argentina out of the jurisdiction. Blair J rejected this procedural objection and found in favour of NML on both the new substantive points [2009] EWHC 110 (Comm); [2009] QB 579. The Court of Appeal reversed Blair J on all three issues [2010] EWCA Civ 41; [2011] 1 QB 8. Aikens LJ gave the only reasoned judgment, with which Mummery and Elias LJJ agreed. The issues The following issues are raised by this appeal: (1) Whether the present proceedings for the recognition and enforcement of the New York courts judgment are proceedings relating to a commercial transaction within the meaning of section 3 of the State Immunity Act 1978. (As I shall explain, this issue was not open to NML in the courts below). (2) Whether Argentina is prevented from claiming state immunity in respect of the present proceedings by Section 31 of the Civil Jurisdiction and Judgments Act 1982. (3) Whether the bonds contain a submission to the jurisdiction of the English court in respect of these proceedings within the meaning of section 2 of the State Immunity Act 1978. (4) Whether NML was entitled to raise at the inter partes hearing the two new points not previously relied on in the ex parte application for permission to serve Argentina out of the jurisdiction. (5) Whether, having regard to the answers to the above questions, Argentina is entitled to claim state immunity in respect of these proceedings. The resolution of the first two issues turns on statutory interpretation. This must be carried out in the context of simultaneous developments in the law of sovereign immunity and of the recognition of foreign judgments. State immunity At the beginning of the 20th century state immunity was a doctrine of customary international law, applied in England as part of the common law. Under this doctrine a state enjoyed absolute immunity from suit in the court of another state. The property of the state was also immune from execution. Because a state could not be sued, there was no procedural provision in this jurisdiction for service of process on a foreign state. The Court of Appeal had, however, occasion to consider the law of state immunity when proceedings in rem were served on a mail packet owned by Belgium which had been involved in a collision in the case of The Parlement Belge (1880) LR 5 PD 197. The Court held that the vessel, being the property of a foreign sovereign state, was immune from legal process. Giving the judgment of the court Brett LJ explained the reason for this immunity, at pp 207 208 and 220: From all these authorities it seems to us, although other reasons have sometimes been suggested, that the real principle on which the exemption of every sovereign from the jurisdiction of every court has been deduced is that the exercise of such jurisdiction would be incompatible with his regal dignity that is to say, with his absolute independence of every superior authority. By a similar examination of authorities we come to the conclusion, although other grounds have sometimes been suggested, that the immunity of an ambassador from the jurisdiction of the courts of the country to which he is accredited is based upon his being the representative of the independent sovereign or state which sends him, and which sends him upon the faith of his being admitted to be clothed with the same independence of and superiority to all adverse jurisdiction as the sovereign authority whom he represents would be. It has been held that an ambassador cannot be personally sued, although he has traded; and in both cases because such a suit would be inconsistent with the independence and equality of the state which he represents. If the remedy sought by an action in rem against public property is, as we think it is, an indirect mode of exercising the authority of the court against the owner of the property, then the attempt to exercise such an authority is an attempt inconsistent with the independence and equality of the state which is represented by such an owner. The property cannot upon the hypothesis be denied to be public property; the case is within the terms of the rule; it is within the spirit of the rule; therefore, we are of opinion that the mere fact of the ship being used subordinately and partially for trading purposes does not take away the general immunity. In Mighell v Sultan of Johore [1894] 1 QB 149 leave to effect substituted service on the Sultan of Johore in an action in personam was set aside on the ground that he enjoyed sovereign immunity. To an argument that he had waived this immunity, the court held that the only way that a sovereign could waive immunity was by submitting to jurisdiction in the face of the court as, for example, by appearance to a writ. If the sovereign ignored the issue of the writ, the court was under a duty of its own motion to recognise his immunity from suit. In Compania Naviera Vascongado v Steamship Cristina [1938] AC 485 the House of Lords confirmed that a state owned ship that was used for public purposes could not be made the subject of proceedings in rem. Lord Atkin started his judgment with the following definition of state immunity, at p 490: The foundation for the application to set aside the writ and arrest of the ship is to be found in two propositions of international law engrafted into our domestic law which seem to me to be well established and to be beyond dispute. The first is that the courts of a country will not implead a foreign sovereign, that is, they will not by their process make him against his will a party to legal proceedings whether the proceedings involve process against his person or seek to recover from him specific property or damages. The second is that they will not by their process, whether the sovereign is a party to the proceedings or not, seize or detain property which is his or of which he is in possession or control. There has been some difference in the practice of nations as to possible limitations of this second principle as to whether it extends to property only used for the commercial purposes of the sovereign or to personal private property. In this country it is in my opinion well settled that it applies to both. Three members of the House questioned, however, whether state immunity would protect a vessel that was used for the purposes of commercial trade. This reflected a growing recognition around the world of the restrictive doctrine of state immunity under which immunity related to governmental acts in the exercise of sovereign authority (acta jure imperii) but not to commercial activities carried on by the state (acta jure gestionis). The absolute doctrine of state immunity could pose a disincentive to contracting with a state and some states attempted to avoid this disadvantage by including in contracts an agreement not to assert state immunity. The English courts held, however, that such a purported waiver was ineffective. Immunity could only be lost by a submission to the jurisdiction when it was invoked, and not earlier see Duff Development Co v Kelantan Government [1924] AC 797 and Kahan v Pakistan Federation [1951] 2 KB 1003. In Rahimtoola v Nizam of Hyderabad [1958] AC 379, 422 Lord Denning expressed, obiter, the view that judicial immunity should not apply to commercial transactions, but the other members of the House expressly dissociated themselves from this view, because the point had not been argued. It was not until nearly I shall deal with the intervention of Parliament in the form of the 1978 and twenty years later that Lord Denning MR was able to carry the rest of the Court of Appeal with him in applying the restrictive doctrine of state immunity in Trendtex Trading Corporation v Central Bank of Nigeria [1977] QB 529. This decision was approved by the House of Lords in I Congreso del Partido [1983] 1 AC 244. 1982 Acts when I deal specifically with the first two issues. Enforcement of foreign judgments Prior to the 1982 Act the common law provided two alternative remedies to a plaintiff who had obtained a judgment against a debtor in a foreign jurisdiction. He could bring a claim on the judgment or he could bring a claim on the cause of action in respect of which he had obtained the judgment. The former did not merge in the latter. In order to establish jurisdiction to sue on the judgment the plaintiff had to serve a writ in personam in accordance with the normal procedure. The existence of a foreign judgment was not a ground upon which permission could be obtained to serve a writ out of the jurisdiction. The plaintiff had to establish that a number of conditions were satisfied in order to claim successfully on the foreign judgment. In particular, he had to establish that the foreign court had had jurisdiction over the defendant in accordance with the English rules of private international law and the judgment had to be final and conclusive on the merits. Part II of the Administration of Justice Act 1920 (the 1920 Act) provides an alternative means of enforcing, in the United Kingdom, the judgment of a superior court in another part of His Majestys dominions. Section 9 of that Act provides that, subject to the conditions there specified, the High Court may, if in all the circumstances of the case they think it is just and convenient that the judgment should be enforced in the United Kingdom order the judgment to be registered. The conditions include a requirement that the foreign court should have had jurisdiction and preclude registration where the judgment is in respect of a cause of action which for reasons of public policy or for some other similar reason could not have been entertained by the registering court. These conditions plainly preclude the registration of a judgment against a defendant who, under English law, is subject to state immunity. Prior to 1978 there is no record, so far as I am aware, of any plaintiff having attempted to register such a judgment. The Foreign Judgments (Reciprocal Enforcement) Act 1933 was passed to make provision for the enforcement in the United Kingdom of judgments given in foreign countries that accord reciprocal treatment to judgments given in the United Kingdom. Section 2 of this Act provides for registration of such judgments on specified conditions, subject to the right of the judgment debtor to apply to have the judgment set aside. The section provides that for the purposes of execution a registered judgment is to be treated as if it were a judgment of the registering court. Section 4 makes provision for an application to set aside a registered judgment. The section includes a provision that the judgment shall be set aside if the registering court is satisfied that the foreign court had no jurisdiction in the circumstances of the case. The section further provides by subsection (3)(c) that the foreign court shall not be deemed to have had jurisdiction if the judgment debtor, being a defendant in the original proceedings, was a person who under the rules of public international law was entitled to immunity from the jurisdiction of the courts of the country of the original court and did not submit to the jurisdiction of that court. This last provision is significant in the present context in that it implicitly provides for the registration of a judgment against a state, a state entity or an individual who was subject to state immunity in the foreign country if there has been a submission to the foreign jurisdiction. The 1933 Act contains no provision, however, that permits enforcement of such a judgment against property owned by a state. Furthermore section 2(1)(b) of the Act precludes recognition of a judgment that cannot be enforced by execution in the country of the original court, and section 4(1)(a)(v) requires the registration of a judgment to be set aside if enforcement would be contrary to the public policy of the registering court. So long as the absolute doctrine of state immunity prevailed in the United Kingdom it is hard to envisage registration of a foreign judgment against a judgment debtor who had been entitled to state immunity, but who had submitted to the foreign jurisdiction, except perhaps a diplomat in respect of whom his state had waived diplomatic immunity. There does not seem to be any recorded instance of such a case. Issue 1: are the present proceedings proceedings relating to a commercial transaction within the meaning of the State Immunity Act 1978? The 1978 Act had its origin in the need to give effect to the ECSI, but as the Bill passed through Parliament the scope of the legislation was widened so as to make provisions in relation to state immunity having effect on all states, and not just those party to the Convention. Fox on The Law of State Immunity 2nd ed (2008), at p 241 and following, describes the genesis of the Act. Section 3(1) of the 1978 Act provides: A State is not immune as respects proceedings relating to (a) a commercial transaction entered into by the state. Section 3(3)(b) defines commercial transaction as including any loan or other transaction for the provision of finance. In view of this definition it is not surprising that it is common ground that the action in respect of which NML obtained judgment in New York was a proceeding relating to a commercial transaction within the meaning of section 3(1)(a). Permission to effect service on Argentina out of the jurisdiction was obtained from David Steel J on the basis of an averment that the common law action that was to be brought in England on the New York judgment was also a proceeding relating to a commercial transaction. However before Blair J and the Court of Appeal NML conceded that this averment was not open to them short of the Supreme Court. This was because of two reasoned decisions, one in the High Court and one in the Court of Appeal which, albeit that the latter was obiter, constrained NML to accept that, for the purposes of section 3(1)(a), the action that NML was seeking to bring was a proceeding relating to the New York judgment and not to the transaction to which that judgment related. Before this Court Mr Sumption QC has challenged these authorities. Issue 1 turns on the question of whether they were rightly decided. The first of these cases is AIC Ltd v Federal Government of Nigeria [2003] EWHC 1357 (QB). AIC registered under the 1920 Act a judgment that they had obtained in Nigeria against the Nigerian Government in relation to what AIC alleged to be a commercial transaction. The Nigerian Government applied to have the registration set aside on the ground that registration was an adjudicative act and that Nigeria was protected by state immunity by reason of section 1 of the 1978 Act. AIC argued that their application to register the judgment was a proceeding relating to a commercial transaction within section 3(1)(a). Stanley Burnton J rejected this submission. His reasoning appears in the following short passage in para 24 of his judgment In my judgment, the proceedings resulting from an application to register a judgment under the 1920 Act relate not to the transaction or transactions underlying the original judgment but to that judgment. The issues in such proceedings are concerned essentially with the question whether the original judgment was regular or not. Stanley Burnton J held that this conclusion was supported by two matters. The first was that section 9 of the 1978 Act excludes immunity as respects proceedings which relate to [an] arbitration where the state has entered into a written arbitration agreement. As most arbitrations relate to commercial transactions, section 9 would be unnecessary if a claim in respect of an arbitration constituted a proceeding relating to the commercial transaction to which the arbitration related, for that would fall within 3(1)(a). The second matter was that it would be illogical to exempt from immunity the enforcement of a judgment in relation to a commercial transaction, but not the enforcement of a judgment in relation to any of the other matters in respect of which the 1978 Act provided exceptions to immunity under sections 3 to 11 of the Act. Stanley Burnton J remarked at para 30 that it was unsurprising that the defendants were immune from proceedings for the registration of the Nigerian judgment: the underlying principle of the State Immunity Act is that a state is not immune from the jurisdiction of the courts of the United Kingdom if it enters into commercial transactions or undertakes certain activities having some connection with this jurisdiction. Purely domestic activities of a foreign state are not the subject of any exception to immunity. Sections 3(1)(b), 4, 5, 6, 7, 8 and 11 all contain territorial qualifications to the exceptions to immunity to which they relate. Section 3(1)(a) does not include any such qualification, but even there the claimant wishing to bring proceedings must establish a basis for jurisdiction under CPR Part 6.20, normally under paragraphs (5) or (6), relating to contractual claims. Stanley Burnton J went on to observe that Lord Denning MR when advancing the restrictive doctrine of state immunity in Rahimtoola v Nizam of Hyderabad [1958] AC 379, 422, in Thai Europe Tapioca Service Ltd v Government of Pakistan, Directorate of Agricultural Supplies [1975] 1 WLR 1485, 1491 and in Trendtex Trading v Bank of Nigeria [1977] 1 QB 529, 558 had emphasised the significance not merely of the fact that the proceedings related to a commercial transaction, but that the transaction was connected with the United Kingdom. A similar issue to that considered by Stanley Burnton J arose in Svenska Petroleum Exploration AB v Government of the Republic of Lithuania (No 2) [2005] EWHC 2437 (Comm); [2006] 1 Lloyds Rep 181. There the relevant issue was whether a claim to enforce an arbitration award constituted proceedings relating to the transaction that gave rise to the award for the purposes of section 3(1)(a). Gloster J followed Stanley Burnton Js reasoning in holding that it did not. Her decision on the point was obiter, but it received reasoned approval, also obiter, when the case reached the Court of Appeal [2006] EWCA Civ 1529; [2007] QB 886. The court held at para 137: In our view the expression relating to is capable of bearing a broader or narrower meaning as the context requires. Section 3 is one of a group of sections dealing with the courts' adjudicative jurisdiction and it is natural, therefore, to interpret the phrase in that context as being directed to the subject matter of the proceedings themselves rather than the source of the legal relationship which has given rise to them. To construe section 3 in this way does not give rise to any conflict with section 9, which is concerned with arbitration as the parties' chosen means of resolving disputes rather than with the underlying transaction. In our view AIC Ltd v Federal Government of Nigeria was correctly decided and Gloster J was right to follow it in the present case. I agree with the Court of Appeal that the expression relating to is capable of bearing a broader or narrower meaning as the context requires. I disagree, however, with their conclusion as to the relevant context. Sections 1 to 11 of the 1978 Act are a comprehensive statement of the scope of state immunity under the law of the United Kingdom. Section 3(1)(a) makes it plain that the United Kingdom applies the restrictive doctrine of state immunity. The context in which the question of the meaning of relating to has arisen in this case is the issue of whether Argentina is or is not protected by state immunity against the proceedings that NML seek to bring. The object of bringing these proceedings is to enforce the New York judgment. Argentina has not suggested that (subject to the issue of immunity) these proceedings did not fall within CPR 6.20(9), which provides for service out of the jurisdiction if a claim is made to enforce any judgment or arbitral award. The only issue is whether Argentina is immune from the claim. Whether a state is immune from such a claim should, under the restrictive doctrine of state immunity, depend upon the nature of the underlying transaction that has given rise to the claim, not upon the nature of the process by which the claimant is seeking to enforce the claim. When considering whether a state is entitled to immunity in respect of a claim to enforce a foreign judgment the question does the claim constitute proceedings relating to a commercial transaction? can only be given a meaning that is sensible if relating to is given a broad, rather than a narrow, meaning. The proceedings relate both to the foreign judgment and to the transaction underlying that judgment, but in the context of restrictive state immunity it only makes sense to focus on the latter. The argument to the contrary accepted by Stanley Burnton J in AIC proceeds as follows. There is a distinction between the adjudicative and the executionary stages of these proceedings. First NML has to establish liability in this jurisdiction and then proceed to attempt to levy execution. The question is whether Argentina enjoys immunity from the adjudicative stage. That stage involves the conversion of the New York judgment into an English judgment. The proceedings to effect this conversion do not turn on the nature of the underlying transaction, but on whether the judgment in respect of that transaction was regularly obtained. Thus those proceedings do not relate to the underlying transaction. The fallacy in this argument is that the issue raised in the present proceedings is not the regularity of the New York judgment but whether Argentina is immune to an action on that judgment. Mr Howard QC put the matter more accurately at para 15 of his written case: It is important to bear in mind that the issue in these proceedings is not whether the English court had jurisdiction to entertain proceedings on the bonds. It is common ground that it did not. Rather, the issue is whether the present proceedings for the recognition and enforcement of the New York judgment are proceedings relating to that judgment, or are, instead, proceedings relating to a commercial transaction entered into by Argentina within the meaning of section 3(1)(a) on the grounds that the New York proceedings on which the New York judgment was based were proceedings relating to a commercial transaction entered into by Argentina (ie relating to the bonds). The issue that Mr Howard identifies has to be answered in order to determine whether, under English law, Argentina enjoys state immunity in relation to these proceedings. That question ought to be answered in the light of the restrictive doctrine of state immunity under international law. There is no principle of international law under which state A is immune from proceedings brought in state B in order to enforce a judgment given against it by the courts of state C, where state A did not enjoy immunity in respect of the proceedings that gave rise to that judgment. Under international law the question of whether Argentina enjoys immunity in these proceedings depends upon whether Argentinas liability arises out of acta jure imperii or acta jure gestionis. This involves consideration of the nature of the underlying transaction that gave rise to the New York judgment. The fact that NML is seeking to enforce that judgment in this jurisdiction by means of an action on the judgment does not bear on the question of immunity. This leads to the conclusion that the context in which the issue of the meaning of the words relating to arises in this case requires one to look behind the New York judgment at the underlying transaction. I must deal with the matters that Stanley Burnton J considered supported the narrower interpretation of relating to in AIC Ltd v Federal Government of Nigeria. The first is that section 9 would not be needed if section 3(1)(a) applies to proceedings to enforce an arbitration award. It is true, if relating to is given the wider meaning, that the circumstances covered by section 9 of the 1978 Act will often overlap with the circumstances covered by section 3(1)(a), but this will not In order to deal with the second matter to which Stanley Burnton J referred, always be the case. Not all arbitrations relate to commercial transactions. Furthermore, as Mr Sumption pointed out, section 9 relates not only to proceedings to enforce an award, but to all proceedings relating to an arbitration to which a state is party, and establishes jurisdiction of the English court in relation to all such proceedings. it is necessary to quote the point that he made in his own words at para 26: Furthermore, if Parliament had intended the State Immunity Act to include an exception from immunity relating to the registration of foreign judgments, it would have been illogical to limit it to commercial transactions entered into by the state (which is the consequence of AICs contentions), with no provision for the registration of foreign judgments where the exception to immunity before the original court was the equivalent of one of the other exceptions to immunity in that Act. In argument this point was, I believe, misunderstood. It was assumed that Stanley Burnton J was suggesting that if a foreign judgment relating to a commercial transaction were enforceable here, so logically should a foreign judgment dealing with one of the other matters specifically exempted from immunity under the 1978 Act. Thus, for instance, if in New York a judgment were given against Argentina in respect of personal injury caused to the claimant in the United Kingdom, one would expect that judgment to be enforceable here see section 5 of the 1978 Act. Mr Sumptions answer was that the judgment would in fact be enforceable here. An action on the New York judgment would be an action in respect of the personal injury caused in the United Kingdom. I believe that we all misunderstood Stanley Burnton Js point. It was not that it would be logical to be able to enforce here a New York judgment dealing with a personal injury caused in the United Kingdom, but a New York judgment where there was an exemption from immunity equivalent to that provided by section 5 ie a New York judgment in respect of a personal injury caused in New York. As to that point, I agree with Stanley Burnton J. It was illogical that the 1978 Act did not make provision for the enforcement in this country of such a judgment. This was because the draftsman of the 1978 Act did not deal generally with foreign judgments. That omission was made good by section 31 of the 1982 Act, as I shall show. The other matter that impressed Stanley Burnton J was the desirability of giving section 3(1)(a) an interpretation which would have the effect of requiring a link between the defendant states commercial transaction and the United Kingdom jurisdiction. He drew attention to the existence of such a link in the other exemptions to state immunity in the 1978 Act and to dicta of Lord Denning. It is true that the need for such a link receives support from dicta of Lord Denning in the judgments prior to 1978 in which he sought to introduce the restrictive doctrine of state immunity into English law. Thus in Thai Europe Tapioca Service v Government of Pakistan he said, [1975] 1 WLR 1485, 1491 1492: a foreign sovereign has no immunity when it enters into a commercial transaction with a trader here and a dispute arises which is properly within the territorial jurisdiction of our courtsBy this I do not mean merely that it can be brought within the rule for service out of the jurisdiction under RSC Ord, 11, r 1. I mean that the dispute should be concerned with property actually situate within the jurisdiction of our courts or with commercial transactions having a most close connection with England, such that, by the presence of parties or the nature of the dispute, it is more properly cognisable here than elsewhere. Fox on The Law of State Immunity at p 269 describes the academic criticism of what was alleged to be confusion by Lord Denning of the doctrine of state immunity with principles of extra territorial jurisdiction. When Parliament enacted the 1978 Act the exemption from immunity under section 3(1)(a) in respect of proceedings relating to a commercial transaction entered into by the state was not qualified by any requirement for a link between the transaction and the United Kingdom. This was not accidental. The United Kingdom ratified the ECSI on the same day that the 1978 Act came into force, and the Act was designed to give effect to the Convention. The original Bill followed closely the structure of the ECSI. Its scope was, however, significantly enlarged by amendment. The ECSI only applies as between contracting states. The 1978 Act was expanded so as to apply to all states. The ECSI does not give effect to the restrictive doctrine of sovereign immunity. Article 24 provides, however, that any state may declare that its courts shall be entitled to entertain proceedings against another Contracting State to the extent that its courts are entitled to entertain proceedings against States not party to the present Convention. Such declaration shall be without prejudice to the immunity from jurisdiction which foreign States enjoy in respect of acts performed in the exercise of sovereign authority (acta jure imperii). The United Kingdom made such a declaration at the time of ratification of the Convention. In Kuwait Airways Corporation v Iraqi Airways Corporation [1995] 1 WLR 1147, 1158 Lord Goff, with whom the rest of the Committee agreed, observed that the declaration: must have been intended to recognise the inapplicability in English law of the principle of sovereign immunity in cases in which the sovereign was not acting jure imperii, as had by then been recognised both in The Philippine Admiral [1977] AC 373 and in the Trendtex case [1977] QB 529, though the authoritative statement of the law by Lord Wilberforce in I Congreso del Partido [1983] 1 AC 244, 262, was not then available. At all events, the consequential exception included in section 3 of the Act of 1978 related to commercial transactions, though in section 3(3) the expression commercial transactions is very broadly defined. I can see no justification for giving section 3(1)(a) a narrow interpretation on the basis that it is desirable to restrict the circumstances in which it operates to those where the commercial transaction has a link with the United Kingdom. The restrictive doctrine of sovereign immunity does not restrict the exemption from immunity to commercial transactions that are in some way linked to the jurisdiction of the forum. For these reasons I have concluded that Stanley Burnton Js decision on this point in AIC and the Court of Appeals approval of it in Svenska was erroneous. By reason of section 3(1)(a) of the 1978 Act Argentina is not immune from the proceedings that NML have commenced in this jurisdiction. My conclusion accords with the decisions on the identical points of the Quebec Court of Appeal and the Supreme Court of Canada in Kuwait Airways Corporation v Republic of Iraq [2009] QCCA 728; [2010] SCC 40, [2010] 2 SCR 571. Mr Howard relied upon the approaches taken in Holland v Lampen Wolfe [2001] 1 WLR 1573, 1587, per Lord Millett, in Australian Competition and Consumer Commission v P T Garuda Indonesia Ltd (2010) 269 ALR 98, paras 105 137 and Bouzari et al v Attorney General of Canada et al (Bouzari v Iran (Islamic Republic)) [2004] 243 DLR (4th) 406, para 51. None of these cases concerned, however, the meaning of relating to in the context of an action on a foreign judgment. Such an action is sui generis and I did not find the authorities in question of assistance. For these reasons I differ from the Court of Appeal on the answer to the first issue. My conclusion is that the present proceedings are proceedings relating to a commercial transaction within the meaning of section 3 of the 1978 Act. The conclusion that I have reached resolves an issue that may not have occurred to the draftsman of the 1978 Act or to Parliament when enacting it. While section 9 of the Act makes express provision for arbitration awards, the Act makes no mention of proceedings in relation to foreign judgments against states, other than Part II, which deals with judgments against the United Kingdom in the courts of other states party to the ECSI; there have been, in fact, only 8 ratifications of that Convention. Prior to 1978 there had been no attempts to enforce in the United Kingdom foreign judgments against states. As I have explained the 1920 and the 1933 Acts gave little scope for registering foreign judgments against states and there is no recorded instance of an attempt to do this before 1978. In 1978 the Rules of Court made no provision for impleading a foreign sovereign, no doubt reflecting the previous absolute doctrine of state immunity. Section 12(1) of the 1978 Act made provision for service on a state and section 12(7) made it plain that such service required permission, which could only be granted in accordance with the rules of court governing service out of the jurisdiction. There was no provision in 1978 for service out of the jurisdiction of a claim to enforce a judgment. In these circumstances it is perhaps not surprising that the Act made no express provision in relation to proceedings to enforce foreign judgments, other than judgments against the United Kingdom covered by the ECSI. My decision on the first issue may make the other three issues academic, but they were fully argued and I propose to deal with them, not least because other members of the Court may not agree with me on the first issue. Issue 2: Is Argentina prevented from claiming state immunity in respect of the present proceedings by section 31 of the Civil Jurisdiction and Judgments Act 1982? The primary object of the 1982 Act was to give effect to the Brussels Convention of 1968. This Convention made provision for the reciprocal recognition and enforcement of judgments. The application of section 31 was not, however, restricted to the states who were parties to that Convention. The following are the most significant provisions of that section: (1) A judgment given by a court of an overseas country against a state other than the United Kingdom or the state to which that court belongs shall be recognised and enforced in the United Kingdom if and only if (a) it would be so recognised and enforced if it had not been given against a state; and (b) that court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to 11 of the State Immunity Act 1978. (4) Sections 12, 13 and 14(3) and (4) of the State Immunity Act 1978 (service of process and procedural privileges) shall apply to proceedings for the recognition or enforcement in the United Kingdom of a judgment given by the court of an overseas country (whether or not that judgment is within subsection (1) of this section) as they apply to other proceedings. It is NMLs case that section 31 provides comprehensively for the recognition and enforcement of the foreign judgments to which it applies. If this is correct the first issue ceases to be of relevance but for the possible impact of the fourth issue. My conclusion in relation to the first issue is, however, entirely in harmony with NMLs case on the second issue. Blair J found in favour of NML on this issue, but his decision was reversed by the Court of Appeal. If NMLs interpretation of section 31 is correct, it effected an addition to the categories of exemption from state immunity set out in the 1978 Act. Aikens LJ could not accept that an extension would have been effected in this way, without any express amendment to the 1978 Act. He interpreted section 31 as imposing an additional requirement to exemption from immunity where an action was brought to enforce a foreign judgment. The claimant would first have to show that section 31 of the 1982 Act was satisfied and then that the proceedings fell within one of the exemptions from immunity set out in sections 2 to 11 of the 1978 Act. I do not believe that Aikens LJs analysis is correct. Section 31 provides for recognition of a foreign judgment against a state where there exists a connection between the subject matter of that judgment and the forum state that is equivalent to one that would give rise to an exception to immunity in this jurisdiction. Thus, so far as foreign judgments are concerned, section 31 both reflects and, in part, replaces the exemptions from immunity contained in the 1978 Act. The words if, and only if in section 31 are important. Let me revert to the example that I gave in para 32 above. Section 31 provides for the recognition and enforcement of a New York judgment against a state in respect of a personal injury caused in New York. Conversely it would not permit recognition of a New York judgment against a state in respect of a personal injury caused by the state in the United Kingdom unless, as in reality would be likely to be the case, there was an alternative basis for recognition that satisfied section 31, such as submission to New York jurisdiction by the foreign state. In short, far from providing an additional hurdle that the claimant has to cross before enforcing a foreign judgment against a state, section 31 provides an alternative scheme for restricting state immunity in the case of foreign judgments. If Aikens LJ were correct, section 31 would be largely nugatory. Even though, according to the British view of state immunity, the state against which the foreign judgment was given would have had no entitlement to immunity, this country would be prevented from recognising or enforcing the foreign judgment unless the case also fell within one of the exceptions in the 1978 Act. If I am right on the first issue, one exception which would in practice be capable of application would be section 3(1)(a). None of the other exceptions would be likely to be capable of application, with the exception of section 2. Both the wording of section 31(1) and the scheme to which it gives effect appear to me to be clear. State immunity cannot be raised as a bar to the recognition and enforcement of a foreign judgment if, under the principles of international law recognised in this jurisdiction, the state against whom the judgment was given was not entitled to immunity in respect of the claim. There is, however, one complication. The complication is as to the effect of section 31(4) of the 1982 Act. The first problem that I have is reconciling the words in parenthesis in the subsection whether or not that judgment is within section 31(1) with the provision in section 31(1) that a foreign judgment shall be enforced if, and only if the requirements of the subsection are satisfied. The second is as to how to make sense of the provisions of section 14(3) in the context of proceedings to enforce a foreign judgment. Mr Howard QC for Argentina submitted that, with the aid of the application of a wet towel to the head, it was possible to determine that the provisions of section 14(3) were only consistent with Argentinas case on the construction of section 31(1). This argument was considered by Aikens LJ at paras 80 to 86 of his judgment. He concluded that the reference in section 31(4) of the 1982 Act to section 14(3), and so to 14(2) of the 1978 Act tends to support Argentinas case on the construction of section 31. I agree with this conclusion. It is not easy to reconcile the reference in section 14(3) to the submission by a separate entity to the jurisdiction in respect of proceedings in the case of which it is entitled to immunity with a scheme where any relevant submission to jurisdiction will be in a foreign forum. Sections 14(2) and 14(3) are part of a particularly complex part of the 1978 Act. It is not easy to make sense of all their provisions in the context of the 1978 Act itself, let alone section 31 of the 1982 Act. Their general object is, however, clear, which is to provide the same protection for a separate entity acting in the exercise of sovereign authority as is accorded to a state, including the protection against enforcement in section 13. I do not consider that it would be right to abandon an interpretation of section 31 which I find clear and compelling in order to attempt to give a coherent role to section 14(3) of the 1978 Act, as applied by section 31(4) of the later Act. Section 31(4) made section 12 of the 1978 Act applicable to proceedings for the recognition or enforcement of a foreign judgment and thereby made such proceedings subject to the rules of court governing service out of the jurisdiction. These rules were significantly amended in consequence of the passing of the 1982 Act by Rules of the Supreme Court (Amendment No 2) 1983 (SI 1983/1181). In particular the following new provision was introduced into RSC, Ord 11, r (1)(1): service of a writ out of the jurisdiction is permissible with the leave of the court if in the action begun by the writ (m) the claim is brought to enforce any judgment or arbitral award. It thus became possible to obtain leave to serve out of the jurisdiction proceedings in respect of an action on a foreign judgment in circumstances where this was not governed by any Convention. No question appears to have been raised as to the fact that this opened the door to enforcement proceedings in this country of overseas judgments given against states. For these reasons, in agreement with Blair J at para 26 of his judgment, and disagreement with Aikens LJ, I conclude that the effect of section 31 of the 1982 Act, together with the addition to RSC, Order 11 was accurately summarised by Dicey, Morris & Collins, The Conflict of Laws, 14th ed (2006), vol 1, para 14 095, as follows: The effect of [section 31] is that a foreign judgment against a state, other than the United Kingdom or the state to which the court which pronounced the judgment belongs, is to be recognised and enforced in the United Kingdom if [the judgment] would be so recognised and enforced if it had not been given against a state and the foreign court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to 11 of the [1978 Act]. A foreign judgment against a state will be capable of enforcement in England if both of the following conditions are fulfilled: first, that the foreign court would have had jurisdiction if it had applied the United Kingdom rules on sovereign immunity set out in sections 2 to 11 of the [1978 Act], the effect of which is that a state is not immune (inter alia) where it submits to the jurisdiction or where the proceedings relate to a commercial transaction; second, that under United Kingdom law the state is not immune from the processes of execution. Section 31(4) of the 1982 Act gives to judgments against foreign states the benefit of (inter alia) the immunities from execution contained in sections 13 and 14(3), (4) of the 1978 Act; their effect is that there can be no execution against sovereign property without the written consent of the foreign state unless the property is in use or intended for use for commercial purposes. Issue 3: Do the Bonds contain a submission to the jurisdiction of the English court in respect of these proceedings within the meaning of section 2 of the 1978 Act? Section 2(2) of the 1978 Act varied the law of what was capable of amounting to a submission by a state to the jurisdiction of the English court, as I have described it at paras 9 and 11 above, in that it provided that a state could submit to the jurisdiction by a written agreement prior to any dispute arising. The issue on this appeal is simply whether, on the true construction of the relevant provisions of the bonds, Argentina submitted to the jurisdiction of the English court. The bonds were governed by New York law and that law applies a narrow construction in favour of the state to the construction of a term which is alleged to waive state immunity. The relevant provisions of the bonds are set out in appendix 3 in two paragraphs. Blair J at paras 32 to 38 of his judgment concluded that the first paragraph contained a submission to the jurisdiction of the English court. Before Aikens LJ, NML relied on the second paragraph as supporting the conclusion that Blair J had drawn from the first. They were, however, unsuccessful, for Aikens LJ ruled that, even when the two paragraphs were read together, they did not constitute a submission to the jurisdiction of the English court. There was and is a degree of common ground. It is accepted that the judgment of the New York court is a related judgment, that is a judgment in related proceedings. The issue in relation to the provisions of the first paragraph is whether the following provision constitutes a submission to the jurisdiction of the English court: the related judgment shall be conclusive and binding upon [Argentina] and may be enforced in any specified court or in any other courts to the jurisdiction of which the republic is or may be subject (the other courts) by a suit upon such judgment Blair J considered at para 38 that this provision constituted a submission to the jurisdiction of the English court inasmuch as Argentina unambiguously agreed that a final judgment on the bonds in New York should be enforceable against Argentina in other courts in which it might be amenable to a suit on the judgment. Aikens LJ did not agree. He held at para 101 that the agreement that the New York judgment could be enforced in any courts to the jurisdiction of which Argentina is or may be subject by a suit upon such judgment was neither a waiver of jurisdiction nor a submission to the jurisdiction of the English court. I do not follow this reasoning. It seems to rob the provision of all effect. Blair J held that this agreement was more than a mere waiver, and I agree. If a state waives immunity it does no more than place itself on the same footing as any other person. A waiver of immunity does not confer jurisdiction where, in the case of another defendant, it would not exist. If, however, state immunity is the only bar to jurisdiction, an agreement to waive immunity is tantamount to a submission to the jurisdiction. In this case Argentina agreed that the New York judgment could be enforced by a suit upon the judgment in any court to the jurisdiction of which, absent immunity, Argentina would be subject. It was both an agreement to waive immunity and an express agreement that the New York judgment could be sued on in any country that, state immunity apart, would have jurisdiction. England is such a country, by reason of what, at the material time, was CPR 6.20(9). The provision in the first paragraph constituted a submission to the jurisdiction of the English courts. If consideration of the first paragraph alone left any doubt that the terms of the bonds included a submission to this jurisdiction, this would be dispelled by the second paragraph. Omitting immaterial words, this reads: To the extent that the republic shall be entitled, in any jurisdiction in which any other court is located in which any suit, action or proceeding may at any time be brought solely for the purpose of enforcing or executing any related judgment, to any immunity from suit, from the jurisdiction of any such court from execution of a judgment or from any other legal or judicial process or remedy, and to the extent that in any such jurisdiction there shall be attributed such an immunity, the republic has irrevocably agreed not to claim and has irrevocably waived such immunity to the fullest extent permitted by the laws of such jurisdiction solely for the purpose of enabling a holder of securities of this series to enforce or execute a related judgment. The words may at any time be brought which I have emphasised once again constitute Argentinas agreement that the waiver of immunity applies in respect of any country where, immunity apart, there is jurisdiction to bring a suit for the purposes of enforcing a judgment on the bonds. England is such a jurisdiction. Thus the second paragraph constitutes an independent submission to English jurisdiction. Both jointly and severally the two paragraphs amount to an agreement on the part of Argentina to submit to the jurisdiction of the English (no doubt among other) courts. This conclusion does not involve a departure from the narrow approach to construction required by the law of New York. It gives the provisions as to immunity in the bonds the only meaning that they can sensibly bear. Neither Aikens LJ nor Mr Howard suggested any alternative meaning for the words. The reality is that Argentina agreed that the bonds should bear words that provided for the widest possible submission to jurisdiction for the purposes of enforcement, short of conferring jurisdiction on any country whose domestic laws would not, absent any question of immunity, permit an action to enforce a New York judgment. No doubt those responsible were anxious to make the bonds as attractive as possible. Aikens LJ held at para 103 that because, in the present proceedings, NML had to bring an action in this jurisdiction to obtain recognition of the New York judgment, the proceedings here were not brought solely for the purpose of enforcing or executing any related judgment. This was to confuse the means with the ends. Obtaining recognition of the New York judgment is no more than an essential stepping stone to attempting to enforce it. No suggestion has been made that there is any other purpose in bringing these proceedings. For this reason I would reverse the decision of the Court of Appeal on the third issue also. Issue 4: Were NML entitled to raise at the inter partes hearing the two new points not relied on in the ex parte application to serve Argentina out of the jurisdiction? This issue has been described as the gateway issue. It involves consideration of the effect of what I shall describe as the rule in Parker v Schuller (1901) 17 TLR 299. A claimant has always been required by rules of court to include in the application for permission to serve proceedings out of the jurisdiction a statement of the ground for doing so. This requirement is currently to be found in CPR 6.37 (1)(a), which expressly requires an application for permission to serve a claim form out of the jurisdiction to set out which of the grounds for service out (now contained in paragraph 3.1 of Practice Direction B) is relied on. CPR 6.37 (3) provides: The court will not give permission unless satisfied that England and Wales is the proper place in which to bring the claim. In Parker v Schuller the plaintiffs obtained leave to serve a writ out of the jurisdiction under Order 11, r 1(e) of the RSC on the ground that the claim was for breach of a contract within the jurisdiction. The breach alleged was of a CIF contract, and the allegation was that the contract was broken by reason of a failure to deliver in Liverpool the goods that were the subject of the contract. Leave was given ex parte and upheld inter partes. In the Court of Appeal the plaintiffs conceded that the way that their claim had been advanced had been misconceived in that a CIF contract involves an obligation to deliver documents, not the goods to which the documents relate. The plaintiffs sought to persuade the Court of Appeal to uphold the leave given to serve out on the basis of substituting for the original claim a claim for failure to deliver the relevant documents in Liverpool. The Court of Appeal refused to permit this. At p 300 A L Smith MR is reported as saying: It was not until the case came into this Court that the plaintiff set up another cause of action. That could not be allowed. Romer LJ added: an application for leave to issue a writ for service out of the jurisdiction ought to be made with great care and looked at strictly. If a material representation upon which the leave was obtained in the first instance turned out to be unfounded, the plaintiff ought not to be allowed, when an application was made by the defendant to discharge the order for the issue of the writ and the service, to set up another and a distinct cause of action which was not before the judge upon the original application. It should be noted that in this case the plaintiffs sought to rely upon different facts and not merely upon a different cause of action. Parker v Schuller was soon lost from sight until it was applied with obvious reluctance by Sir Nicolas Browne Wilkinson V C in Re Jogia (A Bankrupt) [1988] 1 WLR 484. Since then it has been referred to or applied in a significant number of decisions at first instance or in the Court of Appeal. The most significant of these, for it expanded the scope of the original decision, was Metall und Rohstoff A G v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391. The facts of that case are complex, but it suffices to record the response, at p 436, of Slade LJ, giving the judgment of the court, to one of the submissions of counsel for the plaintiffs: One of Mr Wallers responses to this contention has been to refer us to the general observations made by Lord Denning MR in In re Vandervells Trusts (No 2) [1974] Ch 269, 231, as to the modern practice concerning pleadings: It is sufficient for the pleader to state the material facts. He need not state the legal result. If, for convenience, he does so, he is not bound by, or limited to, what he has stated. We respectfully agree with this statement as a general proposition. However, it was not made in the context of a pleading intended to be served out of the jurisdiction, to which we think rather different considerations apply. In our judgment, if the draftsman of a pleading intended to be served out of the jurisdiction under Ord 11, r 1(1)(f) (or indeed under any other sub paragraph) can be reasonably understood as presenting a particular head of claim on one specific legal basis only, the plaintiff cannot thereafter, for the purpose of justifying his application under Ord 11, r 1(1)(f), be permitted to contend that that head of claim can also be justified on another legal basis (unless, perhaps, the alternative basis has been specifically referred to in his affidavit evidence, which it was not in the present case). With this possible exception, if he specifically states in his pleading the legal result of what he has pleaded, he is in our judgment limited to what he had pleaded, for the purpose of an Order 11 application. To permit him to take a different course would be to encourage circumvention of the Order 11 procedure, which is designed to ensure that both the court is fully and clearly apprised as to the nature of the legal claim with which it is invited to deal on the ex parte application, and the defendant is likewise apprised as to the nature of the claim which he has to meet, if and when he seeks to discharge an order for service out of the jurisdiction. No rule of court requires a claimant, when seeking to serve a state out of the jurisdiction, to make clear, in the application for permission, the basis upon which it is alleged that the state does not enjoy immunity from suit. The Practice Note at CPR para 6.37.24, repeating what at the material time was 6.21.24, states that the claimant must show distinctly (a) why the prospective defendant is not absolutely immune from suit. It is Argentinas case that if the grounds relied upon in the application for permission for contending that the defendant state is not immune from suit prove to be unfounded, the rule in Parker v Schuller precludes the subsequent grant of permission to the claimant to rely on alternative valid grounds. Blair J did not accept this submission. He held that it involved an extension of the rule in Parker v Schuller, which he declined to make. He held at para 48 that where permission to serve out is given on the basis of a mistaken legal analysis of the absence of state immunity, but on a correct legal analysis the state is not in fact immune from the jurisdiction, the court has a discretion whether or not to set aside the order giving permission to serve out. He exercised that discretion in favour of NML because this involved no prejudice to Argentina, and to require NML to start proceedings afresh would be pointless and involve a waste of costs para 49. Aikens LJ reversed this decision. He held at para 61: the order of Steel J was made upon an incorrect basis of the court having jurisdiction in respect of the proposed claim against Argentina. Logically therefore, that order has to be set aside for want of jurisdiction, just as it must when a claimant has relied on an incorrect cause of action or an incorrect ground for permission to serve out of the jurisdiction. There can be no question of exercising a discretion to correct the error (in the absence of a new application on a different basis) because the lack of jurisdiction is fatal. He added at para 66 if NML incorrectly identified the basis on which it asserted that Argentina was subject to the adjudicative jurisdiction of the English court, then the basis for the exercise of the jurisdiction was incorrect. It is not a mere procedural error, because it goes to the very basis for invoking the jurisdiction against a sovereign state. It is, qualitatively speaking, in the same position as a failure to identify the correct cause of action or the correct ground for obtaining permission to serve out of the jurisdiction. Strictly, Aikens LJs decision involves an extension of the rule in Parker v Schuller, inasmuch as the requirement to identify the reason why a state is not immune when seeking permission to serve out is not found in the rules, but only in a Practice Note. But I think that Aikens LJ was correct to find that there was no difference in principle between the two situations. Mr Sumption sought to persuade the Court to distinguish Parker v Schuller, but at the same time he invited this Court to hold that there is no longer any justification for following that decision, if indeed there ever was. I believe that Mr Sumption is correct. Procedural rules should be the servant not the master of the rule of law. Lord Woolf, by his Reports on Access to Justice, brought about a sea change in the attitude of the court to such rules. This included the adoption of the overriding objective with which the new CPR begins. CPR 1.1 states that the overriding objective of the Rules is to enable the court to deal with cases justly, and that this involves saving expense and ensuring that cases are dealt with expeditiously. Where an application is made to amend a pleading the normal approach is to grant permission where to do so will cause no prejudice to the other party that cannot be dealt with by an appropriate order for costs. This accords with the overriding objective. Where all that a refusal of permission will achieve is additional cost and delay, the case for permitting the amendment is even stronger. I can see no reason in principle why similar considerations should not apply where an application is made for permission to serve process out of the jurisdiction. It is, of course, highly desirable that care should be taken before serving process on a person who is not within the jurisdiction. But if this is done on a false basis in circumstances where there is a valid basis for subjecting him to the jurisdiction, it is not obvious why it should be mandatory for the claimant to be required to start all over again rather than that the court should have a discretion as to the order that will best serve the overriding objective. Before Parker v Schuller there had been a relevant decision of a powerful Court of Appeal, of which A L Smith LJ was a member, which was not referred to and does not seem to have been cited in the later case. In Holland v Leslie [1894] 2 QB 450 leave to serve out of the jurisdiction had been granted in relation to a bill of exchange which had been erroneously described in the statement of claim indorsed on the writ. The Court of Appeal upheld an order giving leave to amend the writ. In doing so Lord Esher MR said this at p 451: Leave was given for the issue of the writ so indorsed, and service of notice of it out of the jurisdiction; such notice was duly served upon the defendant abroad; and the defendant has in due course appeared in this country. It is argued that, under these circumstances, the writ cannot be amended. Why not? The rules with regard to amendments appear in terms to apply to such a case. It is contended, nevertheless that there cannot be an amendment, because the writ was for service, and has been served, out of the jurisdiction. But the defendant has now appeared in this country; and I can see no reason why an amendment such as this should not be made, just as in the case of a writ served within the jurisdiction. We were pressed with the possibility that, if such a writ could be amended, it might be amended so as to introduce a cause of action in respect of which leave could not have been originally given for service out of the jurisdiction. That is not the present case. When that case arises, there may be good reason for refusing to allow the amendment. The other two members of the Court agreed. It is not easy to reconcile the approach in this decision with Parker v Schuller. Certainly it is good reason to confine the latter decision to its particular facts. There are a number of authorities which follow the approach of Lord Esher in suggesting that there is, in principle, no objection to amending a pleading which has been served out of the jurisdiction unless the effect will be to add a claim in respect of which leave could not, or would not, have been given to serve out: Waterhouse v Reid [1938] 1 KB 743, 747, 749; Beck v Value Capital Ltd (No 2) [1975] 1 WLR 6,15; Bastone & Firminger Ltd v Nasima Enterprises (Nigeria) Ltd [1996] CLC 1902, 1907; Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749. Masri v Consolidated Contractors International (UK) Ltd (No 3) [2008] EWCA Civ 625; [2009] QB 503, para 74. While most of these cases involved proceedings which had progressed beyond the initial leave stage, I can see no reason for adopting a less generous approach to amendment at the earlier stage. While amending to add a cause of action is not the same as amending to substitute one, in either case the amendment involves subjecting the overseas party to a claim other than the one that he entered an appearance to meet, and similar principles should apply in each case. For all these reasons I would hold that the rule in Parker v Schuller should no longer be applied. The same approach should be taken to an application to amend a pleading that has been served out of the jurisdiction as is adopted to any other application to amend a pleading. If this conclusion is not shared by the majority, I would confine the rule in Parker v Schuller and not extend it to cover the different facts of the present case. There is no question here of relying on a different cause of action to that in respect of which leave was obtained to serve out. Nor is there any question of relying on facts that were not before David Steel J when he gave permission to serve Argentina out of the jurisdiction. Nor is there any failure to comply with a rule of court. It follows that I consider that the application to rely on alternative reasons why Argentina has no immunity was one to be determined by Blair J in the exercise of his discretion. There are no valid grounds for challenging his decision. It has not been suggested that Argentina will be any better off if NML is required to start proceedings afresh. To require them to do so would be a waste of time and money. Argentina agreed when the bonds were issued to a wide ranging waiver of immunity and submission to jurisdiction. The court had an independent obligation to satisfy itself that Argentina is not entitled to immunity. It had before it all the relevant material. Any initial mistake on the part of NML in identifying the correct reason why Argentina enjoys no immunity should not preclude NML from proceeding with its action. For these reasons, I would reverse the Court of Appeal on the fourth issue also. Issue 5: Is Argentina entitled to claim state immunity in respect of these proceedings? My answer is no. I would allow this appeal. LORD MANCE Lord Phillips has set out the facts and, in para 7 identified the five issues to which they give rise. I agree with his judgment on the second and third issues; that is, the effect of section 31 of the Civil Jurisdiction and Judgments Act 1978 and whether the bonds contain a submission to the English jurisdiction. I also agree that NML was entitled to raise these two new issues, not having relied upon them on the ex parte application for permission to serve the Republic of Argentina out of the jurisdiction. For reasons which Lord Collins has given, I do not think that the rule in Parker v Schuller (1901) 17 TLR 299 should be treated as extending to the present case, but I also agree that it should, in any event, no longer be followed. In the result, I also agree with Lord Phillips answer to the fifth issue, namely that the Republic is not entitled to claim state immunity in the present proceedings to enforce against it the judgment obtained in New York proceedings. But I do so by a different route to his primary route. This is because I am unable to agree with Lord Phillips on the first issue: the scope of section 3 of the State Immunity Act 1978. This represents his preferred basis for his answer to the fifth issue. I do not consider that the drafters of that Act or Parliament contemplated that section 3(1)(a) of the 1978 Act had in mind that it would or should apply to a foreign judgment against a foreign state. I understand Lord Phillips effectively to accept that (para 42), but, nonetheless, he and Lord Clarke treat the words as wide enough to cover such a judgment. I do not consider this to be justified. The pursuit of a cause of action without the benefit of a foreign judgment is one thing; a suit based on a foreign judgment given in respect of a cause of action is another. In the present case, the only issue arising happens to be the issue of state immunity with which the Supreme Court is concerned. But a claim on a cause of action commonly gives rise to quite different issues from those which arise from a claim based on a judgment given in respect of a cause of action. A claim on a cause of action normally involves establishing the facts constituting the cause of action. A suit based on a foreign judgment normally precludes re investigation of the facts and law thereby decided. But it not infrequently directs attention to quite different matters, such as the foreign courts competence in English eyes to give the judgment, public policy, fraud or the observance of natural justice in the obtaining of the judgment. These are matters discussed in rules 42 to 45 of Dicey, Morris & Collins, The Conflict of Laws 14th ed (2009) vol 1. A recent example of their potential relevance is, in a Privy Council context, AK Investment CJSC v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, paras 48 and 109 to 121. The exceptions from immunity provided by sections 2 to 11 of the 1978 Act focus on specific conduct (submission) in the domestic UK proceedings or on specific transactions, contexts or interests in relation to which causes of action may arise. The recognition and enforcement of foreign judgments has long been recognised as a special area of private international law. Careful statutory attention was given to it in the Administration of Judgments Act 1920 (judgments of courts from other parts of Her Majestys dominions) and the Foreign Judgments (Reciprocal Enforcement) Act 1933 (judgments from certain other countries) in terms which (as Lord Phillips points out in paras 16 to 18) respect the existence of state immunity, as well as in Part II of the 1978 Act itself (judgments against the United Kingdom in other states party to the European Convention on State Immunity, now Regulation EC44/2001) in terms specifically addressing state immunity. In this context, it stretches language beyond the admissible to read proceedings relating to a commercial transaction as covering proceedings relating to a judgment which itself relates to a commercial transaction. The improbability of so extended a construction is underlined by the extreme care that the drafters of the Act took to define in s.3, in the widest terms, the concept of commercial transactions. I do not however agree with the view (expressed by Stanley Burnton J in AIC Ltd v The Federal Government of Nigeria [2003] EWHC 1357 (QB), paras 30 32) that the improbability can be supported on the basis of an implied limitation of section 3(1)(a) of the 1978 Act to commercial transactions with a domestic nexus. That view ignores the clear contrast between the wording of section 3(1)(a) and (b). If there were any doubt about the point (which there is not), it would be dispelled by the Parliamentary history. In the original bill, clause 3(1), the precursor to section 3(1)(a), was territorially limited to commercial activity by a State through an office, agency or establishment maintained by it for that purpose in the United Kingdom. Following strong criticism of this limitation by Lords Wilberforce and Denning (Hansard HL Deb 17 January 1978 vol 388 cc51 78), the Lord Chancellor moved an amendment inserting a clause in the form which became section 3(1), making expressly clear that this was to ensure that No qualifications, no jurisdictional links with the United Kingdom are to be required under sub clause (a) as distinct from sub clause (b): Hansard HL Deb 16 March 1978 vol 389 cc1491 540. Even before the enactment of section 34 of the Civil Jurisdiction and Judgments Act 1982, it is extremely doubtful whether the principle that a cause of action did not merge in a foreign judgment survived in English law: Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] 1 AC 853, 966 per Lord Wilberforce. This, to my mind, also makes unconvincing a reading of proceedings relating to (a) a commercial transaction which covers proceedings to enforce a judgment based on a cause of action arising from a commercial transaction. Where a state has agreed in writing to submit a dispute to arbitration, section 9 of the 1978 Act provides that the state is not immune as respects proceedings in United Kingdom courts which relate to the arbitration. This subsection addresses the consequences of submission, and leaves it to the court to determine whether such has occurred. The subsection also covers ancillary or interlocutory applications relating to arbitration, and is not limited to arbitration relating to commercial transactions. But very many arbitrations are commercial; and a major purpose of section 9 must on any view have been to lift state immunity in respect of the enforcement of arbitration awards against states, including foreign arbitration awards since the subsection is in general terms (see further on this last point para 90 below). Section 9 thus reversed the effect of the House of Lords reasoning in Duff Development Co Ltd v Government of Kelantan [1924] AC 797 on the concept of submission as understood in Kahan v Federation of Pakistan [1951] 2 KB 1003, although section 13(2) to (4) restricts the issue of process against state property (principally, to property for the time being in or intended for use for commercial purposes). I would endorse on these aspects what is said in paragraphs 117 to 122 of the judgment of the Court of Appeal handed down by Moore Bick LJ in Svenska Petroleum Exploration AB v Government of the Republic of Lithuania (No 2) [2007] QB 886. In case there were any room for doubt, paras 119 and 120 set out extracts from Hansard (HL Debs16 March 1978 vol 389 cc1516 1517 and 28 June 1978 c316), where the Lord Chancellor confirmed expressly the intention to remove state immunity in respect of the enforcement of arbitration awards. On NMLs case, there is, as a result, an unlikely dichotomy between the express treatment of arbitration in Part I of the 1978 Act and the suggested tacit, but nonetheless (if achieved) very important, removal of state immunity in respect of judgments relating to commercial transactions. At the time of the 1978 Act, the rules of court provided no basis for obtaining leave to serve out of the jurisdiction in respect of a claim to enforce any judgment or arbitral award. Such a basis was only introduced, as what was then RSC O.11 r.1(1)(m), from 1 January 1984. Section 12(7) of the 1978 Act maintained the need for leave to serve out of the jurisdiction where required by the rules of court. The lifting by section 9 of the 1978 Act of state immunity in respect of arbitration awards had obvious relevance in a case, like Duff Development Co Ltd v Government of Kelantan itself, where a foreign state had by an English arbitration agreement undertaken to submit to the English jurisdiction in respect of an application to enforce any award as a judgment. Indeed, as appears from the original bill and from the passages in Hansard quoted in the Svenska Petroleum Exploration case at paras 119 and 120, the clause in the original bill which became section 9 in the 1978 Act was confined to arbitration in or according to the law of the United Kingdom, and this phrase was only deleted in the House of Commons. In relation to foreign judgments there was, however, no equivalent problem to that raised by the Duff Development and Kahan cases, and the absence when the 1978 Act was passed of any basis for obtaining leave to serve out in respect of a foreign judgment or award also points, I think, against a construction stretching the wording of section 3(1) to cover suits to enforce such judgments. It is true that the 1978 Act adopted the restrictive theory of state immunity, but the question before the Supreme Court now is: how far and in respect of what transactions. It is true that it is now well recognised that no principle of international law renders state A immune from proceedings brought in state B to enforce a judgment given against it in state C. But the question is how far the drafters of the 1978 Act appreciated or covered the full possibilities allowed by international law, or, putting the same point in a different way, how far these were only covered a little later by section 31 of the 1982 Act. As Lord Phillips records at para 12, English common law was at the time itself in development and not finally settled, on the point that states were not immune in respect of commercial transactions, until the House of Lords decision in I Congreso del Partido [1983] AC 244, some years after the 1978 Act. The question whether a claim to enforce a judgment constitute[s] proceedings relating to a commercial transaction simply does not arise, unless one assumes that the wording of section 3(1)(a) of the 1978 Act covers proceedings on judgments. But that is the very issue which is before the Supreme Court. On NMLs case, which Lord Phillips favours, Parliament by section 3(1) of the 1978 Act achieved a partial and oddly imbalanced lifting of state immunity in respect of foreign judgments against foreign states. First, it omitted to introduce any analogue of a most obvious situation in which a foreign judgment might be rendered against a state. Under section 2, a state is not immune as respects proceedings in respect of which it has submitted to United Kingdom courts; but nothing in the 1978 Act lifts state immunity in the United Kingdom in respect of a foreign judgment on the basis of its submission in proceedings abroad. Secondly, the Act either fails to lift immunity or, if it lifts immunity at all, does so in a partial and illogical way, in situations paralleling those covered by sections 4 to 11 of the Act. To this, Mr Sumption QC responds on behalf of NML that, if relating to a commercial transaction can be read widely enough to cover relating to a foreign judgment relating to a commercial transaction, then phrases in other sub sections such as in respect of death or personal injury (section 5(a)) can be read widely enough to mean in respect of a foreign judgment in respect of death or personal injury caused by an act or omission in the United Kingdom. However, as Mr Mark Howard QC points out on behalf of the Republic, even if this persistent stretching of words were to be accepted, it does not remove the anomalies which flow from NMLs case. It does not, in particular, address the cases of a foreign judgment against a state where the contract of employment was not made in the United Kingdom or the work was not wholly or to be performed here (cf section 4); or in respect of death or personal injury or damage or loss of tangible property caused by an act or omission not occurring in the United Kingdom (cf section 5); or relating to immovable property not in the United Kingdom (cf section 6); or relating to any patent not registered in the United Kingdom (cf section 7); or relating to membership of any body corporate not incorporated or constituted under United Kingdom law (cf section 8). Lord Phillips acknowledges the illogicality (para 34). The territorial limits involved in these sections are understandable in proceedings actually relating to such contexts or interests. But they make no real sense as a basis for distinguishing between foreign judgments in respect of which state immunity is and is not said to exist. On NMLs analysis, section 3 of the 1978 Act therefore gave a very partial and haphazard mandate for enforcement of foreign judgments, while section 31 of the 1982 Act was necessary, though only necessary, to restore the comprehensive harmony which in that respect the 1978 Act had singularly failed to achieve. There is however no trace of that in the 1982 Act itself. On the contrary, section 31(1)(b) refers to sections 2 to 11 of the 1978 Act without discrimination and evidently without recognising that (on NMLs analysis) the legislator must, by reason of the words if and only if, have been replacing a partial scheme of enforcement of foreign judgments under the 1978 Act with a new scheme provided by section 31(1) of the 1982 Act. Further, section 31(1) makes clear that the scheme it introduces is to apply to judgments by a foreign court against a state other than the United Kingdom or the state to which that court belongs. Mr Sumption submits that this would, in consequence of the words if and only if, supersede section 3(1) as regards judgments against the state to which that court belongs. If that were so, then the 1982 Act would for some unexplained reason be cutting down what is, on Mr Sumptions case, the width of section 3(1). But I do not think that Mr Sumptions submission is correct. All that the words if and only if achieve is the exclusion of judgments against the state to which that court belongs from the scheme of section 31. They do not overrule or affect any provision of section 3(1) which, on NMLs case, already covered such judgments. The patchwork provision of the two statutes, which arises on NMLs case, and which Lord Phillips and Lord Clarke are minded to accept, becomes even less probable as a matter of imputed Parliamentary intention. I see no basis for giving the phrase relating to in section 3(1)(a) what is described as an updated meaning. What constitutes a family or cruel or inhuman treatment or a true and fair view (to take three well known examples) may vary, and has varied, with social or professional attitudes from time to time. But a connecting factor like relating to is most unlikely to have this elasticity, and it is implausible to suggest that Parliament intended that its meaning or application in or under section 3(1)(a) could, over time, expand to remove immunity in respect of judgments. This would amount to altering the scope of the Act in a way not falling within the principles originally envisaged, contrary to the rule stated in Bennion on Statutory Interpretation (5th ed) section 288, para (6). Further, even if (contrary to my view) any expansion were theoretically possible, no legal, social or other developments have been identified justifying it in this case. On the contrary: the enactment of section 31(1) of the 1982 Act argues strongly against any such expansion of the ambit of relating to in section 3(1)(a) of the 1978 Act; and the only effect of expanding the scope of section 3(1)(a) would be partially to create an overlap with that section and/or the illogical patch work effect referred to in preceding paragraphs. It is for these reasons that I am unable to follow Lord Phillips and Lord Clarkes answer to the first issue. In my view, section 31 is the means by which the United Kingdom legislator achieved, for the first time, a comprehensive and coherent treatment of the issue of state immunity in respect of foreign judgments, and it enables the enforcement of the New York judgment in this case. But the bonds also contain a comprehensive submission to the English jurisdiction in respect of the enforcement of the New York judgment, and this leads to the same result. I would, on this basis, therefore allow the appeal. LORD COLLINS (with whom Lord Walker agrees) I agree with Lord Phillips that the appeal should be allowed, but, in agreement with Lord Mance, I would rest my conclusion on section 31 of the 1982 Act and on Argentinas submission and waiver of immunity, and not on section 3 of the 1978 Act. Although I agree with Lord Phillips observations on the so called rule in Parker v Schuller (1901) 17 TLR 299, in my judgment the point does not, and did not, arise in these proceedings because there has never been a rule (as distinct from good practice) that the grounds for absence of immunity must be set out once and for all at the stage when an application for permission to serve the foreign State is made; and there is no analogy between the rules for applications for service out of the jurisdiction in general and good practice in relation to service on foreign States. Introduction The first widespread defaults on sovereign debt occurred in the early 19th century. The newly independent former Spanish American colonies besieged London for loans in the years 1822 1825 and the proceeds were quickly expended on armaments, or otherwise wastefully dissipated, with little regard to the quite different purposes for which, in many instances, the loan had been ostensibly raised: see Borchard, State Insolvency and Foreign Bondholders, Vol 1 (1951), pp xx xxi, quoting Wynne (1935) 42 J Can. Bankers Assn 472. The Province of Buenos Aires defaulted in 1827 on loans raised for it by Baring Brothers: see Ferns, Britain and Argentina in the Nineteenth Century (1960), pp 141 et seq; Marichal, A Century of Debt Crises in Latin America (1989), p 59. National courts of the debtor state and of the creditors were unable to secure the rights of unpaid bondholders. In Twycross v Dreyfus (1877) LR 5 Ch D 605, a case concerning Peruvian bonds, Sir George Jessel MR said (at 616): [T]he municipal law of this country does not enable the tribunals of this country to exercise any jurisdiction over foreign governments as such. Nor, so far as I am aware, is there any international tribunal which exercises any such jurisdiction. The result, therefore, is that these so called bonds amount to nothing more than engagements of honour, binding, so far as engagements of honour can bind, the government which issues them, but are not contracts enforceable before the ordinary tribunals of any foreign government without the consent of the government of that country. By the beginning of the 20th century only a few countries (including Belgium and Italy) had adopted a restrictive theory of sovereign immunity, but only with regard to jurisdiction, and not to execution: see Borchard, Diplomatic Protection of Citizens Abroad (1915), p 307. The only remedy for countries whose citizens were affected by sovereign default was force, and in response to the blockade of Venezuelan ports by the United States, Italy, Germany and Britain, the Minister of Foreign Affairs of Argentina, Dr Drago, enunciated in 1902 what became known as the Drago doctrine, namely that the public debt [of an American nation] cannot occasion armed intervention by a European power: Hackworth, Digest of International Law, vol 5 (1927), p 625. Venezuelan bond claims were subsequently submitted to mixed claims commissions: Borchard, op cit, pp 322 325. But law and practice was revolutionised in the second half of the 20th century by the widespread (but by no means uniform) adoption of the restrictive theory of sovereign immunity, and the modern law now depends on the application of the restrictive theory of immunity and on the almost invariable use in international loan agreements and bond issues since the 1970s of clauses providing for submission to national jurisdiction and waivers of immunity. NML is one of several bondholders who have obtained judgments in the New York Federal District Court against Argentina on the bonds: see also Lightwater Corp v Republic of Argentina, 2003 WL 1878420 (SDNY 2003); NW Global Strategy v Republic of Argentina, 2011 WL 1237538 (SDNY 2011). The idea behind vulture funds is not new. Borchard State Insolvency and Foreign Bondholders, Vol 1 (1951), pp.xx xxi, quotes Wynne, op cit, in relation to the early South American defaults: Meanwhile, however, the bonds had largely passed out of the hands of the original purchasers into the possession of speculators who bought them up at next to nothing and, in due time, reaped a handsome profit. So also in the famous Greek bond cases in England in the 1960s and 1970s, the bondholders were speculators who had bought cheaply bonds issued by the Greek Government in the 1920s and unpaid since 1941: see eg National Bank of Greece SA v Westminster Bank Executor and Trustee Co (Channel Islands) Ltd [1971] AC 945; UGS Finance Ltd v National Mortgage Bank of Greece [1964] 1 Lloyds Rep 446. So called vulture funds have given rise to at least two problems. First, the ability of investors to acquire defaulted debt can be abused: see, eg, the Barcelona Traction case (Belgium v Spain), 1970 ICJ Rep 3; Highberry Ltd v Colt Telecom Group plc (No 1) [2002] EWHC 2503 (Ch), [2003] 1 BCLC 290; (No 2) [2002] EWHC 2815 (Ch), [2003] BPIR 324. Second, particular attention has focussed on the ability of vulture funds to thwart loan re structuring by highly indebted poor countries: see Lumina, Report to the UN Human Rights Council on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social, and cultural rights, April 29, 2010 (A/HRC/14/21); Donegal International Ltd v Republic of Zambia [2007] EWHC 197 (Comm), [2007] 1 Lloyds Rep 397; and the Debt Relief (Developing Countries) Act 2010. Argentina declared a sovereign debt moratorium in December 2001 and has restructured much of its debt through debt exchange, but that has no effect on these proceedings because (a) there is no international insolvency regime for States; and (b) the bonds are governed by New York law and are unaffected by any Argentine moratorium. Issue 1: proceedings relating to a commercial transaction and the State Immunity Act 1978, section 3 The proceedings in the present appeal are proceedings at common law for the enforcement of the New York judgment. None of the statutory methods of enforcement is available for judgments rendered in the United States. On this part of the appeal the only relevant question is whether the proceedings in England at common law on the New York judgment are proceedings relating to a commercial transaction entered into by the State, where commercial transaction includes any loan or other transaction for the provision of finance: section 3(1)(a); section 3(3)(b). Whether the New York proceedings were themselves proceedings relating to a commercial transaction is not the relevant question. The question on this issue is whether the expression relating to is to be given the meaning ascribed to it (in proceedings different from the present ones) by Stanley Burnton J in AIC Ltd v Federal Government of Nigeria [2003] EWHC 1357 (QB) (registration of a Nigerian judgment under the Administration of Justice Act 1920) and by Gloster J and the Court of Appeal in Svenska Petroleum Exploration AB v Government of the Republic of Lithuania (No 2) [2005] EWHC 2437 (Comm), [2006] 1 Lloyds Rep 181, [2006] EWCA Civ 1529; [2007] QB 886 (enforcement of Danish arbitral award under Arbitration Act 1996, section 101). The question, to what do the proceedings for enforcement of the New York judgment relate, can be given a narrow or a wide answer. The narrow meaning would result in a conclusion that they relate to the enforceability of the New York judgment, which would involve such matters (not likely to be the subject of dispute in a case such as the present one) as whether the New York court had in personam jurisdiction (here there was a clear submission to the jurisdiction of the New York courts) or whether enforcement could be resisted on any of the traditional grounds (such as want of natural justice, fraud, or public policy), none of which has any arguable application. The wider meaning would give effect to the practical reality that the proceedings relate to liability under the bonds, the issue of which was plainly a commercial transaction for the purposes of section 3. My conclusion that the narrower meaning is the one which must be ascribed to Parliament rests on considerations somewhat different from the reasons articulated by Stanley Burnton J in AIC. I do not consider that a potential overlap with the arbitration provision in section 9 supports a narrow interpretation of section 3. The overlap would not be complete, and it would be artificial and over technical to use the potential overlap to cut down the scope of section 3. Nor do I consider that the narrow construction is supported by an argument that section 3(1)(a) should be interpreted so as to require a link with the territorial jurisdiction of the United Kingdom. No such link is required in the 1978 Act in relation to the head of commercial transactions covered by section 3(3)(b). Both the Quebec Court of Appeal and the Supreme Court of Canada in Kuwait Airways Corporation v Republic of Iraq [2009] QCCA 728; revd [2010] SCC 40, [2010] 2 SCR 571, although reaching different conclusions on the facts, decided that, in an action to enforce an English judgment, the question whether the proceedings in Canada relate[d] to any commercial activity of the foreign state (State Immunity Act RSC 1985, c 18, section 5) depended on the nature of the underlying proceedings in England. But neither judgment articulates the reasons for that conclusion, and they are therefore unhelpful on this appeal. What is not likely to be in doubt is that at the time the 1978 Act was enacted it would not have been envisaged that section 3 would have applied to the enforcement at common law of a foreign judgment against a foreign State based on a commercial transaction. That was because until RSC Order 11, r 1(1)(m) (now CPR PD6B, para 3.1(10)) was enacted in 1982 (and came into force on January 1, 1984) a defendant outside the jurisdiction could not be served in an action on a foreign judgment even if there were assets within the jurisdiction to satisfy the judgment (and consequently no freezing injunction could be made in relation to those assets: Perry v Zissis [1977] 1 Lloyds Rep 607). Nor is it likely that section 31 of the Civil Jurisdiction and Judgments Act 1982 would have been enacted in the form that it was enacted if Parliament had thought that the 1978 Act already applied to a class of foreign judgments. I accept that neither of those points is conclusive as to the meaning of section 3. There is no impediment in public international law to the institution of proceedings to enforce a foreign judgment based on commercial transactions. It is now possible to serve a foreign sovereign out of the jurisdiction in such proceedings, and the 1978 Act could be construed in the light of present circumstances: Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27, 49; Yemshaw v Hounslow London Borough Council (Secretary of State for Communities and Local Government intervening) [2011] UKSC 3, [2011] 1 WLR 433, paras 5 27. But for section 31 of the 1982 Act, and the almost invariable employment of wide express waivers of immunity, it might have been desirable as a matter of policy to give section 3 the wider meaning. There would, however, be no principled basis on which to found such a conclusion. The proceedings in England relate to the New York judgment and not to the debt obligations on which the New York proceedings were based. Issue 2: section 31 of the Civil Jurisdiction and Judgments Act 1982 This is a very short point. If the Court of Appeal was right to accept Argentinas argument, the section has such limited effect that it would not have been worth enacting, and certainly would not have justified the attention that it was given in the Parliamentary process: see Fox (2009) 125 LQR 544, at 547 548 for some of the history. The natural meaning of section 31(1) is that it requires recognition and enforcement of a foreign judgment against a foreign State (other than the United Kingdom or the State in which the foreign proceedings were brought) if (a) the normal conditions for recognition and enforcement of judgments are fulfilled, and (b) mutatis mutandis the foreign State would not have been immune if the foreign proceedings had been brought in the United Kingdom. That meaning is the one which text writers have propounded since the section was enacted: Collins, Civil Jurisdiction and Judgments Act 1982 (1983), p 140; Dicey & Morris, Conflict of Laws 11th ed (1987), pp 454 455 (now Dicey, Morris & Collins, 14th ed (2006), para 14 095); Cheshire, North & Fawcett, Private International Law, 14th ed (2008), pp 588 589. It is true that there are some drafting infelicities, including the reference to such matters in section 31(1)(b), and the words in parentheses in section 31(4), but they give no support to the Court of Appeals surprising conclusion that, in the absence of an express amendment to the 1978 Act, section 31 does not affect the law of immunity, and therefore has no discernible purpose. Issue 3: submission As late as 1957 Delaume, Jurisdiction of Courts and International Loans (1957) 6 Am J Comp L 189, 203, said there was no consensus of opinion as to whether contractual waivers of immunities are valid and binding upon a foreign sovereign or as to what acts are necessary to constitute such a waiver. In 1965 the Restatement Second, Foreign Relations Law of the United States, section 70(1) stated that a foreign State might waive its immunity by agreement with a private party, including an agreement made before the institution of proceedings. The Reporters Note accepted that there had been no judicial decision to this effect, but that it was believed that United States courts would apply a waiver rule. As indicated above (para 103), it was only in the 1970s that it became almost invariable practice for syndicated bank loans to States and international bonds issued by States to contain wide submissions to the jurisdiction of national courts and express waivers of immunity. The position in English law prior to the enactment of the 1978 Act was that it was thought that a prior contractual submission to the jurisdiction of the court was ineffective to amount to a waiver of immunity and that nothing less than an appearance in the face of the court would suffice: Duff Development Co v Government of Kelantan [1924] AC 797 and Kahan v Federation of Pakistan [1951] 2 KB 200, relying on Mighell v Sultan of Johore [1894] 1 QB 149, 159, 160. In Mighell v Sultan of Johore [1894] 1 QB 149 the argument for the unfortunate Miss Mighell was that the Sultan had waived his immunity by coming to England as Albert Baker and making contracts as a private individual. That argument was rejected. Submission had to be when the Court is about or is being asked to exercise jurisdiction over him and not any previous time (Lord Esher MR at 159); the only mode in which a sovereign can submit to the jurisdiction is by a submission in the face of the court, as, for example, by appearance to a writ (Lopes LJ at 161); or unless upon being sued he actively elects to waive his privilege and to submit to the jurisdiction (Kay LJ at 164). In Duff Development Co Ltd v Government of Kelantan [1924] AC 797 the question was whether the Government had waived immunity in relation to an application to the court to enforce an arbitration award by agreeing to the arbitration clause in the deed of concession and by applying to the court to set aside the award. The effect of the decision was that a submission to arbitration was not a submission to enforcement. Only Viscount Cave and Lord Sumner relied on the approach in Mighell. Cf Lord Dunedin at 821. In Kahan v Federation of Pakistan [1951] 2 KB 1003, in a contract for the supply of Sherman tanks Pakistan agreed to submit for the purposes of this agreement to the jurisdiction of the English courts and agreed a method of service within the jurisdiction. Relying on three of the speeches in Duff Development and the decision in Mighell, the Court of Appeal held that there was no submission in the absence of an undertaking given to the court at the time when the other party asked the court to exercise jurisdiction over it. As Dr F A Mann said, the proposition that a waiver or submission had to be declared in the face of the court was a peculiar (and unjustifiable) rule of English law: (1991) 107 LQR 362, at 364. In a classic article (Cohn, Waiver of Immunity (1958) 34 BYIL 260) Dr E J Cohn showed that from the 19th century civil law countries had accepted that sovereign immunity could be waived by a contractual provision, and that the speeches in Duff Development on the point were obiter (and did not constitute a majority) and that both Duff Development and Kahan v Federation of Pakistan had overlooked the fact that submission in the face of the court was not the only form of valid submission since the introduction in 1920 in RSC Ord 11, r 2A (reversing the effect of British Wagon Co Ltd v Gray [1896] 1 QB 35) of a rule that the English court would have jurisdiction to entertain an action where there was a contractual submission. In particular, in Duff Development Lord Sumner had overlooked the fact that British Wagon Co v Gray was no longer good law. The principle enunciated in Kahan v Federation of Pakistan was reversed by section 2(2) of the 1978 Act, which provided that a State could submit to the jurisdiction by a prior written agreement. This is consistent with international practice: United States Foreign Sovereign Immunities Act 1976, section 1605(a)(1) (State not immune if it has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver . ); European Convention on State Immunity 1972, Art 2(b) (no immunity if it has undertaken to submit to the jurisdiction of [the] court by an express term contained in a contract in writing); UN Convention on Jurisdictional Immunities of States and their Property 2004, Art 7(1)(b) (no immunity if the State has expressly consented to the exercise of jurisdiction by the court with regard to the matter or case in a written contract). The Waiver and Jurisdiction Clause in the bonds provided that a related judgment: shall be conclusive and binding upon [Argentina] and may be enforced in any Specified Court or in any other courts to the jurisdiction of which the Republic is or may be subject (the Other Courts) by a suit upon such judgment. The New York judgment was on any view a related judgment. Argentina agreed that it could be enforced in any other courts to the jurisdiction of which the Republic is or may be subject. This was the clearest possible waiver of immunity because Argentina was or might be subject to the jurisdiction of the English court since the English court had a discretion to exercise jurisdiction in an action on the New York judgment by virtue of CPR 6.20(9) (now CPR PD6B, para 3.1(10)). The waiver is confirmed by the second paragraph of the clause, which provides: To the extent that the Republic shall be entitled, in any jurisdictionin which anyOther Court is located in which any suit, action or proceeding may at any time be brought solely for the purpose of enforcing or executing any Related Judgment, to any immunity from suit, from the jurisdiction of any such courtfrom execution of a judgment or from any other legal or judicial process or remedy, and to the extent that in any such jurisdiction there shall be attributed such an immunity, the Republic has hereby irrevocably agreed not to claim and has irrevocably waived such immunity to the fullest extent permitted by the laws of such jurisdiction solely for the purpose of enabling the Fiscal Agent or a holder of Securities of this Series to enforce or execute a Related Judgment. Again England is a jurisdiction in which an action may be brought to enforce the New York judgment and Argentina agreed not to claim any immunity in that jurisdiction. The contrary conclusion of the Court of Appeal is not readily explicable. Issue 4: The Parker v Schuller point As I have said, in my judgment the point in Parker v Schuller (1901) 17 TLR 299 does not arise. As Lord Walker said in Roberts v Gill & Co [2010] UKSC 22, [2011] 1 AC 240, at [94], the law of procedure and practice has traditionally been regarded as the province of the Court of Appeal rather than the House of Lords (or, now, the Supreme Court), and this court should be especially hesitant to decide points of procedure in appeals in which they do not even arise. The reason why the point does not arise is as follows. The current CPR 6.37(1)(a) provides that an application for permission to serve a claim form out of the jurisdiction must set out which ground in paragraph 3.1 of Practice Direction 6B is relied on. There was substantially the same rule under the RSC, where Order 11, r 4(1) provided that an application for the grant of leave to serve a writ out of the jurisdiction had to be supported by an affidavit stating the grounds on which the application is made. If there is such a rule as the so called rule in Parker v Schuller (1901) 17 TLR 299 it is a rule that the court must decide an application for permission to serve out of the jurisdiction on the basis of the cause or causes of action expressly mentioned in the pleadings and the claimant will not be allowed to rely on an alternative cause of action which he seeks to spell out of the facts pleaded if it has not been mentioned: see now Civil Procedure 2011, vol 1, para 6.37.15.1 (or under the RSC, Supreme Court Practice 1999, para 11/1/10). But there is no analogous rule relating to the exceptions to State immunity. There is simply a note in Civil Procedure, vol 1 (now para 6.37.24, and formerly, eg at Supreme Court Practice 1999, Vol 1, para 11/1/17) indicating that the practitioner should note that an application for permission to serve the foreign State should show distinctly why the prospective defendant is not absolutely immune from suit. This is neither a rule nor a Practice Direction nor has it ever been. There is no analogy between the specific rule for service out of the jurisdiction and the good practice note and therefore no basis for the conclusion of the Court of Appeal that because the basis for absence of immunity was incorrectly identified the English court had no jurisdiction. That is why the point simply does not arise. If it had arisen, I would have agreed with the general approach of Lord Phillips. It is to be noted in particular that in Parker v Schuller itself Romer LJ (at 300) based his decision on the ground very close to that of non disclosure. He said an application for leave to issue a writ for service out of the jurisdiction ought to be made with great care and looked at strictly. If a material representation upon which the leave was obtained in the first instance turned out to be unfounded, the plaintiff ought not to be allowed, when an application was made by the defendant to discharge the order for the issue of the writ and the service, to set up another and a distinct cause of action which was not before the judge on the original application. It was on the representation that the defendants were bound to deliver the goods in England that leave had originally been granted. In cases of non disclosure, the court has a discretion (a) to set aside the order for service and require a fresh application; or (b) to treat the claim form as validly served, and deal with the non disclosure if necessary by a costs order: Macaulay (Tweeds) Ltd v Independent Harris Tweed Producers Ltd [1961] RPC 184; Kuwait Oil Co (KSC) v Idemitsu Tankers KK, The Hida Maru [1981] 2 Lloyds Rep 510. By analogy, where the so called rule in Parker v Schuller (1901) 17 TLR 299 might apply in a case where the ground for service out has been incorrectly identified, the court would also have power to grant permission to serve out on a fresh basis and dispense with re service. LORD CLARKE I agree that the appeal should be allowed for the reasons given by Lord Phillips. I add a short judgment of my own because of the difference of opinion between Lord Phillips and Lord Mance, Lord Collins and Lord Walker on the first issue. As to the fourth issue, I agree with Lord Collins that the point does not arise but, if it does, like him I agree with Lord Phillips observations on the so called rule in Parker v Schuller (1901) 17 TLR 299. The question raised by the first issue is whether these proceedings are proceedings relating to a commercial transaction entered into by the state of Argentina within the meaning of section 3(1)(a) of the State Immunity Act 1978 (the 1978 Act). The Court of Appeal held that they are not. As Lord Phillips observes at para 20, it is common ground that the New York proceedings in which NML obtained judgment against Argentina were such proceedings. The contrary would have been unarguable because they were brought in order to establish Argentinas liability under the bonds described by Lord Phillips. NMLs argument is that, if the New York proceedings related to a commercial transaction, it is but a short step to hold that these proceedings, which were brought in order to enforce a judgment in respect of a liability under the bonds, are also proceedings relating to a commercial transaction. I agree. As ever, all depends upon the context, but it seems to me to follow naturally from the conclusion that the New York proceedings were such proceedings that the same is true of these. Both have the same purpose, namely to enforce Argentinas liabilities under commercial bonds. There is nothing in the language of section 3(1) to lead to any other conclusion. The Court of Appeal reached its conclusion in the light of the decision of Stanley Burnton J in AIC Ltd v Federal Government of Nigeria [2003] EWHC 1357 (QB) and in the light of dicta in the Court of Appeal in Svenska Petroleum Exploration AB v Government of the Republic of Lithuania (No 2) [2006] EWCA Civ 1529, [2007] QB 886. Lord Phillips has set out the relevant parts of the judgments in those cases at paras 21 and 23 and para 25 respectively. In Svenska the judgment of the court was given by Moore Bick LJ. Scott Baker LJ and I were the other two members of the court. I have now reached the conclusion that the decision in AIC and the dicta in para 137 of Svenska (to which I was a party) were wrong, essentially for the reasons given by Lord Phillips at paras 26 to 41 which I adopt without repeating. Lord Mance has reached a different view. He notes in para 84 that in para 42 Lord Phillips recognises that the conclusion that he has reached may not have occurred to the draftsman of the 1978 Act or to Parliament. Lord Mance concludes that Lord Phillips approach and conclusions are not justified. He does so principally by looking at circumstances as they existed at the time the 1978 Act was enacted. However, in my opinion, that is to approach the construction of section 3(1)(a) of the Act too narrowly. It is stated in Bennion on Statutory Interpretation, 5th ed (2008) at section 288 that, unless a contrary intention appears, an enactment is intended to develop in meaning with developing circumstances and should be given what Bennion calls an updating construction to allow for changes since the Act was initially framed. Bennion distinguishes that case, which he calls the usual case, from the comparatively rare case of the Act which is intended to be of unchanging effect. The commentary to section 288 states that the court must, in interpreting an Act, make allowances for the fact that the surrounding legal conditions prevailing on the date of its passing have changed. That approach seems to me to be entirely consistent with that of Lady Hale in Yemshaw v Hounslow London Borough Council (Secretary of State for Communiteis and Local Government intervening) [2011] UKSC 3, [2011] 1 WLR 433, paras 25 to 28, where she was considering whether words such as violence in a statute could be given an updated meaning. She concluded that the question was whether an updated meaning was consistent with the statutory purpose. See also Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27, per Lord Clyde at 49 50, where he said in the context of the meaning of family in the Rent Acts: The judges in Helby vs Rafferty [1979] 1 WLR 13 had difficulty in accepting that a word which had been repeated throughout the successive Rent Acts could change its meaning from time to time. But as a matter of construction I see no grounds for treating the provisions with which we are concerned as being in the relatively rare category of cases where Parliament intended the language to be fixed at the time when the original Act was passed. The rule of contemporary exposition should be applied only in relation to very old statutes (Governors of Campbell College, Belfast v Commissioner Northern Ireland Valuation [1964] 2 All ER 705). The general presumption is that an updating construction is to be applied (Bennion on Statutory Interpretation, 3rd ed p 686). Such an approach was recently adopted by this House in Reg v Ireland [1988] AC 147. In my opinion it is appropriate and consistent with the statutory purpose of the 1978 Act to give it an updated meaning. The question is whether, viewed at the time the question arises, particular proceedings for the enforcement of a particular foreign judgment are proceedings relating to a commercial transaction. At the time the 1978 Act was enacted there was no machinery for seeking permission to serve proceedings out of the jurisdiction in respect of a claim to enforce either an arbitration award or a foreign judgment. It could thus be said with force that at that time it was not contemplated that proceedings could be brought in England on a foreign judgment, at any rate unless the defendant accepted service of them. I note that section 12(6) of the 1978 Act permits a state to accept service of proceedings against it in a particular manner, including no doubt proceedings to enforce a foreign judgment. As Lord Phillips says at para 42, prior to 1978 there had been no attempts to enforce in the United Kingdom judgments against states. However, he adds that section 12(7) makes it plain that service on a sovereign state requires permission, which could only be granted in accordance with the rules of court governing service out of the jurisdiction. In my opinion, Parliament must have recognised that those rules, then RSC Order 11, would be likely to be amended from time to time and, indeed, may well have contemplated that at some future date a rule would be introduced permitting permission to be given allowing service out of the jurisdiction. As Lord Collins explains at para 114, such a rule was introduced with effect from January 1 1984 in RSC Order 11 r 1(1)(m). It subsequently became CPR 6.20(9) and is now CPR 6BPD para 3.1(10), which provides for service of proceedings out of the jurisdiction where a claim is made to enforce any judgment or arbitral award. As I see it, the question is whether such proceedings are proceedings relating to a commercial transaction within section 3(1)(a) in circumstances where such proceedings are contemplated by the present rules of court. I would answer that question in the affirmative. As Lord Phillips has explained, there was during the 20th century a growing recognition round the world of the restrictive doctrine of state immunity under which immunity related to government acts in the exercise of sovereign authority (acta jure imperii) but not to commercial activities carried on by the state (acta jure gestionis). As I see it, the conclusion that these proceedings are proceedings relating to a commercial transaction is no more than a further example of that growing recognition. The question arises in the context of the particular proceedings in this case. As Lord Phillips observes at para 29, the question in these proceedings is whether Argentina enjoys state immunity. I agree with him that, there being no principle of international law under which state A is immune from proceedings brought in state B in order to enforce a judgment given against it by the courts of state C where state A did not enjoy immunity in respect of the proceedings that gave rise to that judgment, under international law the question whether Argentina enjoys immunity in these proceedings depends upon whether its liability arises out of acta jure imperii or acta jure gestionis. That involves a consideration of the nature of the underlying transaction and demonstrates that the proceedings, at any rate on the facts of this case, relate to a commercial transaction. I agree with Lord Collins that the expression relating to in section 3(1)(a) can be given a narrow or wide meaning. I also agree with him that these are proceedings relating to the foreign judgment. The question is whether they are also proceedings relating to a commercial transaction entered into by Argentina. I agree with Lord Collins in para 111 that the wider meaning would give effect to the practical reality that the proceedings relate to liability under the bonds, the issue of which was plainly a commercial transaction for the purposes of section 3. For my part, I see no reason why, in construing the meaning of relating to, the court should not reflect that practical reality. I agree with Lord Collins in para 112 that a potential overlap with the arbitration provision in section 9 does not support a narrow interpretation and that there is no warrant for holding that section 3(1)(a) should be interpreted as requiring a link with the territorial jurisdiction of the United Kingdom. I also agree with him that the absence of reasoning in the Canadian case to which he refers in para 113 makes it of little assistance. In para 114 Lord Collins notes that it was decided in Perry v Zissis [1977] 1 Lloyds Rep 607 that, since a defendant could not be served out of the jurisdiction in an action on a foreign judgment, no freezing injunction could be granted in respect of assets within the jurisdiction. I agree that that was indeed the position at that time. The position would surely be different now that the rules have been changed. Finally I agree with Lord Collins that it is not likely that section 31 of the Civil Jurisdiction and Judgments Act 1982 would have been enacted in the form in which it was if Parliament had thought that the 1978 Act already applied to a class of foreign judgments. However, Lord Collins accepts at para 115 that neither of those points is conclusive as to the meaning of section 3. That is because there is no impediment in international law to the institution of proceedings to enforce a foreign judgment. Lord Collins adds that it is now possible to serve a foreign sovereign out of the jurisdiction and that the 1978 Act could be construed in the light of present circumstances. He cites Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27, 49 and Yemshaw [2011] 1 WLR 433, paras 5 to 27 for that proposition. As stated in para 144 above, I would go further and hold that it should be given an updated meaning. As Lord Clyde said in Fitzpatrick in the passage quoted above, the general presumption is that an updating construction is to be applied. As I see it, once it is concluded that an updating construction should be applied, the wider meaning would give effect to the practical reality that the sole purpose of the proceedings is to enforce Argentinas liability under a commercial transaction and that there is no impediment to such a construction in international law, both policy and principle lead to the conclusion that the wider interpretation is to be preferred. APPENDIX 1 State Immunity Act 1978 Immunity from jurisdiction "1.(1) A State is immune from the jurisdiction of the courts of the United Kingdom except as provided in the following provisions of this Part of this Act. (2)A court shall give effect to the immunity conferred by this section even though the State does not appear in the proceedings in question. Exceptions from immunity 2.(1)A State is not immune as respects proceedings in respect of which it has submitted to the jurisdiction of the courts of the United Kingdom. (2)A State may submit after the dispute giving rise to the proceedings has arisen or by a prior written agreement; but a provision in any agreement that it is to be governed by the law of the United Kingdom is not to be regarded as a submission. (3)A State is deemed to have submitted (a) if it has instituted the proceedings; or (b) subject to subsections (4) and (5) below, if it has intervened or taken any step in the proceedings. (4)Subsection (3)(b) above does not apply to intervention or any step taken for the purpose only of (a) claiming immunity; or (b) asserting an interest in property in circumstances such that the State would have been entitled to immunity if the proceedings had been brought against it. (5)Subsection (3)(b) above does not apply to any step taken by the State in ignorance of facts entitling it to immunity if those facts could not reasonably have been ascertained and immunity is claimed as soon as reasonably practicable. (6)A submission in respect of any proceedings extends to any appeal but not to any counter claim unless it arises out of the same legal relationship or facts as the claim. (7)The head of a State's diplomatic mission in the United Kingdom, or the person for the time being performing his functions, shall be deemed to have authority to submit on behalf of the State in respect of any proceedings; and any person who has entered into a contract on behalf of and with the authority of a State shall be deemed to have authority to submit on its behalf in respect of proceedings arising out of the contract. 3.(1)A State is not immune as respects proceedings relating to (a) a commercial transaction entered into by the State; or (b)an obligation of the State which by virtue of a contract (whether a commercial transaction or not) falls to be performed wholly or partly in the United Kingdom. (2)This section does not apply if the parties to the dispute are States or have otherwise agreed in writing; and subsection (1)(b) above does not apply if the contract (not being a commercial transaction) was made in the territory of the State concerned and the obligation in question is governed by its administrative law. (3)In this section "commercial transaction" means (a)any contract for the supply of goods or services; (b)any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and (c)any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a State enters or in which it engages otherwise than in the exercise of sovereign authority; but neither paragraph of subsection (1) above applies to a contract of employment between a State and an individual. 4.( 1) A State is not immune as respects proceedings relating to a contract of employment between the State and an individual where the contract was made in the United Kingdom or the work to be wholly or partly performed there. (2) Subject to subsections (3) and (4) below, this section does not apply if (a) at the time when the proceedings are brought the individual is a national of the State concerned; or (b) at the time when the contract was made the individual was neither a national of the United Kingdom nor habitually resident there; or (c) the parties to the contract have otherwise agreed in writing. (3) Where the work is for an office, agency or establishment maintained by the State in the United Kingdom for commercial purposes, subsection (2)(a) and (b) above do not exclude the application of this section unless the individual was, at the time when the contract was made, habitually resident in that State. (4) Subsection (2)(c) above does not exclude the application of this section where the law of the United Kingdom requires the proceedings to be brought before a court of the United Kingdom. (5) In subsection (2)(b) above "national of the United Kingdom " means a citizen of the United Kingdom and Colonies, a person who is a British subject by virtue of section 2, 13 or 16 of the British Nationality Act 1948 or by virtue of the British Nationality Act 1965, a British protected person within the meaning of the said Act of 1948 or a citizen of Southern Rhodesia. (6) In this section "proceedings relating to a contract of employment" includes proceedings between the parties to such a contract in respect of any statutory rights or duties to which they are entitled or subject as employer or employee. 5. A State is not immune as respects proceedings in respect (a) death or personal injury; or (b) damage to or loss of tangible property, caused by an act or omission in the United Kingdom. 6. (1) A State is not immune as respects proceedings relating to (a) any interest of the State in, or its possession or use of, immovable property in the United Kingdom; or (b) any obligation of the State arising out of its interest in, or its possession or use of, any such property. (2) A State is not immune as respects proceedings relating to any interest of the State in movable or immovable property, being an interest arising by way of succession, gift or bona vacantia. (3) The fact that a State has or claims an interest in any property shall not preclude any court from exercising in respect of it any jurisdiction relating to the estates of deceased persons or persons of unsound mind or to insolvency, the winding up of companies or the administration of trusts. (4) A court may entertain proceedings against a person other than a State notwithstanding that the proceedings relate to property (a) which is in the possession or control of a State; or (b) in which a State claims an interest, if the State would not have been immune had the proceedings been brought against it or, in a case within paragraph (b) above, if the claim is neither admitted nor supported by prima facie evidence. 7. A State is not immune as respects proceedings relating to (a) any patent, trade mark, design or plant breeders rights belonging to the State and registered or protected in the United Kingdom or for which the State has applied in the United Kingdom; (b) an alleged infringement by the State in the United Kingdom of any patent, trade mark, design, plant breeders' rights or copyright; or (c) the right to use a trade or business name in the United Kingdom. 8.( 1) A State is not immune as respects proceedings relating to its membership of a body corporate, an unincorporated body Membership or a partnership which (a) has members other than States; and (b) is incorporated or constituted under the law of the United Kingdom or is controlled from or has its principal place of business in the United Kingdom, being proceedings arising between the State and the body or its other members or, as the case may be, between the State and the other partners. (2) This section does not apply if provision to the contrary has been made by an agreement in writing between the parties to the dispute or by the constitution or other instrument establishing or regulating the body or partnership in question. 9. (1)Where a State has agreed in writing to submit a dispute which has arisen, or may arise, to arbitration, the State is not immune as respects proceedings in the courts of the United Kingdom which relate to the arbitration. (2)This section has effect subject to any contrary provision in the arbitration agreement and does not apply to any arbitration agreement between States. 10(l) This section applies to (a) Admiralty proceedings ; (b) proceedings on any claim which could be made the subject of Admiralty proceedings. (2) A State is not immune as respects (a) an action in rem against a ship belonging to that State; or (b) an action in personam for enforcing a claim in connection with such a ship, if, at the time when the cause of action arose, the ship was in use or intended for use for commercial purposes. (3) Where an action in rem is brought against a ship belonging to a State for enforcing a claim in connection with another ship belonging to that State, subsection (2)(a) above does not apply as respects the first mentioned ship unless, at the time when the cause of action relating to the other ship arose, both ships were in use or intended for use for commercial purposes. (4) A State is not immune as respects (a) an action in rem against a cargo belonging to that State if both the cargo and the ship carrying it were, at the time when the cause of action arose, in use or intended for use for commercial purposes ; or (b) an action in personam for enforcing a claim in connection with such a cargo if the ship carrying it was then in use or intended for use as aforesaid. (5) In the foregoing provisions references to a ship or cargo belonging to a State include references to a ship or cargo in its possession or control or in which it claims an interest; and, subject to subsection (4) above, subsection (2) above applies to property other than a ship as it applies to a ship. (6) Sections 3 to 5 above do not apply to proceedings of the kind described in subsection (1) above if the State in question is a party to the Brussels Convention and the claim relates to the operation of a ship owned operated by that State, the carriage of cargo or passengers on any such ship or the carriage of cargo owned by that State on any other ship. 11. A State is not immune as respects proceedings relating to its liability for (a) value added tax, any duty of customs or excise or any agricultural levy; or (b) rates in respect of premises occupied by it for commercial purposes. 12. (1)Any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of the State and service shall be deemed to have been effected when the writ or document is received at the Ministry. (2)Any time for entering an appearance (whether prescribed by rules of court or otherwise) shall begin to run two months after the date on which the writ or document is received as aforesaid. (3)A State which appears in proceedings cannot thereafter object that subsection (1) above has not been complied with in the case of those proceedings. (4)No judgment in default of appearance shall be given against a State except on proof that subsection (1) above has been complied with and that the time for entering an appearance as extended by subsection (2) above has expired. (5)A copy of any judgment given against a State in default of appearance shall be transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of that State and any time for applying to have the judgment set aside (whether prescribed by rules of court or otherwise) shall begin to run two months after the date on which the copy of the judgment is received at the Ministry. (6)Subsection (1) above does not prevent the service of a writ or other document in any manner to which the State has agreed and subsections (2) and (4) above do not apply where service is effected in any such manner. (7)This section shall not be construed as applying to proceedings against a State by way of counter claim or to an action in rem; and subsection (1) above shall not be construed as affecting any rules of court whereby leave is required for the service of process outside the jurisdiction. 13. (1)No penalty by way of committal or fine shall be imposed in respect of any failure or refusal by or on behalf of a State to disclose or produce any document or other information for the purposes of proceedings to which it is a party. (2)Subject to subsections (3) and (4) below (a)relief shall not be given against a State by way of injunction or order for specific performance or for the recovery of land or other property; and (b)the property of a State shall not be subject to any process for the enforcement of a judgment or arbitration award or, in an action in rem, for its arrest, detention or sale. (3)Subsection (2) above does not prevent the giving of any relief or the issue of any process with the written consent of the State concerned; and any such consent (which may be contained in a prior agreement) may be expressed so as to apply to a limited extent or generally; but a provision merely submitting to the jurisdiction of the courts is not to be regarded as a consent for the purposes of this subsection. (4)Subsection (2)(b) above does not prevent the issue of any process in respect of property which is for the time being in use or intended for use for commercial purposes; but, in a case not falling within section 10 above, this subsection applies to property of a State party to the European Convention on State Immunity only if (a)the process is for enforcing a judgment which is final within the meaning of section 18(1)(b) below and the State has made a declaration under Article 24 of the Convention; or (b)the process is for enforcing an arbitration award. (5)The head of a State's diplomatic mission in the United Kingdom, or the person for the time being performing his functions, shall be deemed to have authority to give on behalf of the State any such consent as is mentioned in subsection (3) above and, for the purposes of subsection (4) above, his certificate to the effect that any property is not in use or intended for use by or on behalf of the State for commercial purposes shall be accepted as sufficient evidence of that fact unless the contrary is proved. (6)In the application of this section to Scotland (a)the reference to "injunction" shall be construed as a reference to "interdict"; (b)for paragraph (b) of subsection (2) above there shall be substituted the following paragraph "(b) the property of a State shall not be subject to any diligence for enforcing a judgment or order of a court or a decree arbitral or, in an action in rem, to arrestment or sale."; and (c)any reference to "process" shall be construed as a reference to "diligence", any reference to "the issue of any process" as a reference to "the doing of diligence" and the reference in subsection (4)(b) above to "an arbitration award" as a reference to "a decree arbitral". Supplementary provisions 14. (1)The immunities and privileges conferred by this Part of this Act apply to any foreign or commonwealth State other than the United Kingdom; and references to a State include references to (a)the sovereign or other head of that State in his public capacity; (b)the government of that State; and (c)any department of that government, but not to any entity (hereafter referred to as a "separate entity") which is distinct from the executive organs of the government of the State and capable of suing or being sued. (2)A separate entity is immune from the jurisdiction of the courts of the United Kingdom if, and only if (a)the proceedings relate to anything done by it in the exercise of sovereign authority; and (b)the circumstances are such that a State (or, in the case of proceedings to which section 10 above applies, a State which is not a party to the Brussels Convention) would have been so immune. (3)If a separate entity (not being a State's central bank or other monetary authority) submits to the jurisdiction in respect of proceedings in the case of which it is entitled to immunity by virtue of subsection (2) above, subsections (1) to (4) of section 13 above shall apply to it in respect of those proceedings as if references to a State were references to that entity. (4)Property of a State's central bank or other monetary authority shall not be regarded for the purposes of subsection (4) of section 13 above as in use or intended for use for commercial purposes; and where any such bank or authority is a separate entity subsections (1) to (3) of that section shall apply to it as if references to a State were references to the bank or authority. (5)Section 12 above applies to proceedings against the constituent territories of a federal State; and Her Majesty may by Order in Council provide for the other provisions of this Part of this Act to apply to any such constituent territory specified in the Order as they apply to a State. (6)Where the provisions of this Part of this Act do not apply to a constituent territory by virtue of any such Order subsections (2) and (3) above shall apply to it as if it were a separate entity. PART II JUDGMENTS AGAINST UNITED KINGDOM IN CONVENTION STATES . 18.( 1) This section applies to any judgment given against the United Kingdom by a court in another State party to the European Convention on State Immunity, being a judgment (a) given in proceedings in which the United Kingdom was not entitled to immunity by virtue of provisions corresponding to those of sections 2 to 11 above; and (b) which is final, that is to say, which is not or is no longer subject to appeal or, if given in default of appearance, liable to be set aside. (2) Subject to section 19 below, a judgment to which this PAn ill section applies shall be recognised in any court in the United Kingdom as conclusive between the parties thereto in all proceedings founded on the same cause of action and may be relied on by way of defence or counter claim in such proceedings. (3) Subsection (2) above (but not section 19 below) shall have effect also in relation to any settlement entered into by the United Kingdom before a court in another State party to the Convention which under the law of that State is treated as equivalent to a judgment. (4) In this section references to a court in a State party to the Convention include references to a court in any territory in respect of which it is a party. 19.( 1) A court need not give effect to section 18 above in the case of a judgment (a) if to do so would be manifestly contrary to public policy or if any party to the proceedings in which the judgment was given had no adequate opportunity to present his case; or (b) if the judgment was given without provisions corresponding to those of section 12 above having been complied with and the United Kingdom has not entered an appearance or applied to have the judgment set aside. (2) A court need not give effect to section 18 above in the case of a judgment (a) if proceedings between the same parties, based on the same facts and having the same purpose (i) are pending before a court in the United Kingdom and were the first to be instituted; or (ii) are pending before a court in another State party to the Convention, were the first to be instituted and may result in a judgment to which that section will apply; or (b) if the result of the judgment is inconsistent with the result of another judgment given in proceedings between the same parties and (i) the other judgment is by a court in the United Kingdom and either those proceedings were the first to be instituted or the judgment of that court was given before the first mentioned judgment became final within the meaning of subsection (1)(b) of section 18 above; or (ii) the other judgment is by a court in another State party to the Convention and that section has already become applicable to it. (3) Where the judgment was given against the United Kingdom in proceedings in respect of which the United Kingdom was not entitled to immunity by virtue of a provision corresponding to section 6(2) above, a court need not give effect to section 18 above in respect of the judgment if the court that gave the judgment (a) would not have had jurisdiction in the matter if it had applied rules of jurisdiction corresponding to those applicable to such matters in the United Kingdom; or (b) applied a law other than that indicated by the United Kingdom rules of private international law and would have reached a different conclusion if it had applied the law so indicated. (4) In subsection (2) above references to a court in the United Kingdom include references to a court in any dependent territory in respect of which the United Kingdom is a party to the Convention, and references to a court in another State party to the Convention include references to a court in any territory in respect of which it is a party. " Civil Jurisdiction and Judgments Act 1982 ". Provisions relating to recognition and enforcement of judgments 31 Overseas judgments given against states, etc (1)A judgment given by a court of an overseas country against a state other than the United Kingdom or the state to which that court belongs shall be recognised and enforced in the United Kingdom if, and only if (a)it would be so recognised and enforced if it had not been given against a state; and (b)that court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to 11 of the State Immunity Act 1978. (2)References in subsection (1) to a judgment given against a state include references to judgments of any of the following descriptions given in relation to a state (a)judgments against the government, or a department of the government, of the state but not (except as mentioned in paragraph (c)) judgments against an entity which is distinct from the executive organs of government; (b)judgments against the sovereign or head of state in his public capacity; (c)judgments against any such separate entity as is mentioned in paragraph (a) given in proceedings relating to anything done by it in the exercise of the sovereign authority of the state. (3)Nothing in subsection (1) shall affect the recognition or enforcement in the United Kingdom of a judgment to which Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 applies by virtue of section 4 of the Carriage of Goods by Road Act 1965, section 17(4) of the Nuclear Installations Act 1965, section [166(4) of the Merchant Shipping Act 1995], [regulation 8 of the Railways (Convention of International Carriage by Rail) Regulations 2005] (4)Sections 12, 13 and 14(3) and (4) of the State Immunity Act 1978 (service of process and procedural privileges) shall apply to proceedings for the recognition or enforcement in the United Kingdom of a judgment given by a court of an overseas country (whether or not that judgment is within subsection (1) of this section) as they apply to other proceedings. (5)In this section "state", in the case of a federal state, includes any of its constituent territories. 50. In this Act, unless the context otherwise requires . " Contracting State " has the meaning given by section 1(3) ; " the 1968 Convention " has the meaning given by section 1(1), and references to that Convention and to provisions of it are to be construed in accordance with section 1(2) (a) ; " the Conventions " has the meaning given by section 1(1) ; . " overseas country " means any country or territory outside the United Kingdom ; . Civil Procedure Rules 2008 . 6.20(9) In any proceedings to which rule 6.19 does not apply, a claim form may be served out of the jurisdiction with the permission of the court if a claim is made to enforce any judgment or arbitral award. " APPENDIX 2 EUROPEAN CONVENTION on STATE IMMUNITY Chapter III Effect of Judgment "Article 20 1. A Contracting State shall give effect to a judgment given against it by a court of another Contracting State: a. if, in accordance with the provisions of Articles 1 to 13, the State could not claim immunity from jurisdiction; and b. if the judgment cannot or can no longer be set aside if obtained by default, or if it is not or is no longer subject to appeal or any other form of ordinary review or to annulment. 2. Nevertheless, a Contracting State is not obliged to give effect to such a judgment in any case: a. where it would be manifestly contrary to public policy in that State to do so, or where, in the circumstances, either party had no adequate opportunity fairly to present his case; b. where proceedings between the same parties, based on the same facts and having the same purpose: i. are pending before a court of that State and were the first to be instituted; ii. are pending before a court of another Contracting State, were the first to be instituted and may result in a judgment to which the State party to the proceedings must give effect under the terms of this Convention; c. where the result of the judgment is inconsistent with the result of another judgment given between the same parties: i. by a court of the Contracting State, if the proceedings before that court were the first to be instituted or if the other judgment has been given before the judgment satisfied the conditions specified in paragraph 1.b; or ii. by a court of another Contracting State where the other judgment is the first to satisfy the requirements laid down in the present Convention; d. where the provisions of Article 16 have not been observed and the State has not entered an appearance or has not appealed against a judgment by default. 3. In addition, in the cases provided for in Article 10, a Contracting State is not obliged to give effect to the judgment: a. if the courts of the State of the forum would not have been entitled to assume jurisdiction had they applied, mutatis mutandis, the rules of jurisdiction (other than those mentioned in the annex to the present Convention) which operate in the State against which judgment is given; or b. if the court, by applying a law other than that which would have been applied in accordance with the rules of private international law of that State, has reached a result different from that which would have been reached by applying the law determined by those rules. However, a Contracting State may not rely upon the grounds of refusal specified in sub paragraphs a and b above if it is bound by an agreement with the State of the forum on the recognition and enforcement of judgments and the judgment fulfils the requirement of that agreement as regards jurisdiction and, where appropriate, the law applied. " APPENDIX 3 The terms of the bonds " The republic has in the fiscal agency agreement irrevocably submitted to the jurisdiction of any New York state or federal court sitting in the Borough of Manhattan and the courts of the republic of Argentina ('the specified courts') over any suit, action or proceeding against it or its properties, assets or revenues with respect to the securities of this series or the fiscal agency agreement (a 'related proceeding') The republic has in the fiscal agency agreement waived any objection to related proceedings in such courts whether on grounds of venue, residence or domicile or on the ground that the related proceedings have been brought in an inconvenient forum. The republic agrees that a final non appealable judgment in any such related proceeding ('the related judgment') shall be conclusive and binding upon it and may be enforced in any specified court or in any other courts to the jurisdiction of which the republic is or may be subject (the 'other courts') by a suit upon such judgment." "To the extent that the republic or any of its revenues, assets or properties shall be entitled, in any jurisdiction in which any specified court is located, in which any related proceeding may at any time be brought against it or any of its revenues, assets or properties, or in any jurisdiction in which any specified court or other court is located in which any suit, action or proceeding may at any time be brought solely for the purpose of enforcing or executing any related judgment, to any immunity from suit, from the jurisdiction of any such court, from set off, from attachment prior to judgment, from attachment in aid of execution of judgment, from execution of a judgment or from any other legal or judicial process or remedy, and to the extent that in any such jurisdiction there shall be attributed such an immunity, the republic has hereby irrevocably agreed not to claim and has irrevocably waived such immunity to the fullest extent permitted by the laws of such jurisdiction provided further that such agreement and waiver, in so far as it relates to any jurisdiction other than a jurisdiction in which a specified court is located, is given solely for the purpose of enabling the fiscal agent or a holder of securities of this series to enforce or execute a related judgment." . " Lord Collins suggests at para 116 that, but for section 31 and the almost invariable employment of wide express waivers of immunity, it might have been desirable as a matter of policy to give section 3 the wider meaning. He adds that there would, however, be no principled basis for doing so. I respectfully disagree. I do not think that either the enactment of section 31 or the fact that some parties use wide submission and waiver clauses points to a narrow meaning of relating to, whether as a matter of policy or as a matter of principle. In my opinion, viewed as at the time the question has to be decided these proceedings relate both to the New York judgment and to the underlying commercial transaction. ". |
When a local planning authority against the advice of its own professional advisers grants permission for a controversial development, what legal duty, if any, does it have to state the reasons for its decision, and in how much detail? Is such a duty to be found in statutory sources, European or domestic, or in the common law? And what are the legal consequences of a breach of the duty? Those issues are presented by this appeal in a particularly striking form. The context is a proposal for major development to the west of Dover, on two sites referred to as Western Heights and Farthingloe. The latter is within the Kent Downs Area of Outstanding Natural Beauty. Western Heights is a prominent hilltop overlooking Dover, dominated by a series of fortifications dating from the Napoleonic wars, including the so called Drop Redoubt. The site is a scheduled monument. Farthingloe is in a long valley between the A20 and the B2001 to the west of Western Heights, and comprises 155 hectares of agricultural and scrubland. The application The application for planning permission was submitted by the second appellant (CGI) to the local planning authority, the Dover District Council (the Council), on 13 May 2012. The principal elements were: 521 residential units and a 90 apartment retirement village at Farthingloe; 31 residential units and a hotel and conference centre at Western Heights; and conversion of the Drop Redoubt into a visitor centre and museum. A payment of 5m for the improvements to heritage assets, to be funded from the profits of the residential development, was to be secured by a planning agreement. The development was categorised as EIA development for the purpose of the relevant regulations (Town and Country Planning (Environmental Impact Assessment) Regulations 2011 (SI 2011/1824) regulation 2(1)), and was accordingly accompanied by an environmental statement. The proposal attracted strong support and strong opposition. Some saw it as offering a much needed boost to the local economy. Thus, for example, the South East Local Enterprise Partnership commented: The proposals represent a major opportunity for both Dover and the wider tourism and visitor economy of East Kent at a time of major challenges facing the local economy. In the absence of likely public sector funding to act as a catalyst for change it is essential that the private sector is encouraged to move forward with confidence and business can aid recovery. Approval of the application would be timely in demonstrating that Dover is open for business and investment. Refusal would send out all the wrong messages to investors. Others (including the present respondents, CPRE Kent) saw it as a serious and unjustified breach of national policy. Thus the AONB Executive said: The Farthingloe valley in the Kent Downs Area of Outstanding Natural Beauty is an enormous asset to Dover. This dry chalk valley provides a memorable approach to the town, with glimpses of Dover castle, as well as a green setting for both the town and the Western Heights available for all to enjoy. The proposed development of over 500 houses in a particularly prominent area of the valley would irreparably damage this nationally protected landscape. It would cause significant harm to the special character and the natural beauty of the AONB. No meaningful mitigation would be possible. The scheme is wholly contrary to national and local policy and is a major challenge to the Governments purposes for AONB designation. We have found no other housing development nationally on a similar scale which has been approved in an AONB The planning officers report These views along with many others on both sides were faithfully summarised in the officers report to the Planning Committee, circulated on 7 June 2013. The report, under the name of the Head of Regeneration and Development, is a remarkable document. It runs to some 135 pages with appendices. It contains a comprehensive exposition of the various elements of the proposed development, the responses to consultation public and private, and the applicable national and local policies, followed by a detailed appraisal of the relevant issues, and concluding with a recommendation for the grant of permission but in amended form. The principal change recommended by the officers was the exclusion from the development at Farthingloe of a safeguarded area of some 2ha in the south west (in the more prominent sector known as FL B), where officers consider the landscape harm most acute; and the consequent reduction of the number of houses at Farthingloe from 521 to 365. The Councils economic advisers, Smiths Gore, had advised that the reduction would not jeopardise the viability of the scheme or the intended financial contributions (officers report paras 2.216, 2.443, 2.445). One aspect of Smiths Gores advice was to suggest a reduction in the Code for Sustainable Homes (CSH) rating from Code 4 to Code 3, which would not only deliver a viable development but would also achieve a more marketable and higher quality housing scheme this being important to help diversify and improve the Dover housing offer (paras 2.217, 2.443). Among other recommended conditions, it was proposed that the provision of the hotel should be secured by requiring it to be commenced before one of the development phases (para 2.131(iii)). In a section of the report headed NPPF (para 116) review, reference was made to that paragraph of the National Planning Policy Framework (NPPF), which indicates that major development in an AONB should be permitted only in exceptional circumstances and where a public interest can be demonstrated. The officers regarded the level of harm to the AONB as significant, particularly to the south west of sector FL B where built development on the elevated and exposed terrain would seriously compromise the landscape character. They concluded: 2.447 Nevertheless it is your officers opinion that offsetting the landscape harm by the modifications outlined in this report would shift the planning balance in favour of the economic and other national benefits of the application. The local economic issues and specific circumstances of this case are considered to provide a finely balanced exceptional justification for this major AONB development, the benefits of which would be in the public interest. Essential to this conclusion would be seeking all the recommended conditions (changes) and ensuring (by condition / section 106 agreement) the deliverability of all the relevant application benefits. The rationale for the application is as a composite package, and any permission should therefore be framed to ensure the emergence of the proposals in a structured and comprehensive fashion. It was noted that the applicant had not yet been given an opportunity to comment on these proposed changes. If they were supported in principle by the Committee, it was suggested that they might delegate to officers to discuss with the applicant any minor variation of the proposed residential quantum, and the precise boundaries of the safeguarded area, although it was not envisaged that this should lead to any notable change in the recommended approach (para 2.448). On balance their conclusion in this case was that the application would, as a single comprehensive scheme, support rather than work against the overall objectives of sustainable development as defined by the NPPF (para 2.454). In a section headed Conclusion it was stated: the officer position is that the conditions / changes as set out in this report (informed by independent legal and financial viability advice) are well founded and that all are necessary to deliver the right composite package, including the economic benefits, so that an on balance recommendation of approval can reasonably be made. (para 2.457) The report ended with a recommendation for the grant of conditional planning permission (part outline, part full) for the various elements of the proposal, but with a limit of 365 residential units at Farthingloe, and subject to the completion of a planning agreement (under section 106 of the Town and Country Planning Act 1990) to secure the proposed benefits including the hotel and conference centre. The report was shown to the applicants. Their consultants, BNP Paribas, wrote on 11 September, expressing fundamental disagreement with Smiths Gores appraisal of viability. They commented on the proposed reduction to 365 houses: We have re run our appraisals to test the impact of the removal of 156 units, as suggested by Smiths Gore. The result is to turn a positive land value of 5.85m to a negative land value of 3.03m. On the basis of this result, the scheme would not secure funding and could not proceed. For the avoidance of doubt, we do not agree with the planning officers assessment that the benefits provided by the Application scheme could also be provided by the sensitivity analysis mooted by Smiths Gore. Indeed, our view is that such a scheme would not be capable of providing the benefits offered and could not proceed as it would be incapable of providing a competitive return to the landowner and developers, as required by the National Planning Policy Framework. They also disagreed with the suggestion that the proposed changes would make the scheme more marketable. Although the letter was not seen by the members of the committee (other than the chairman), its effect and Smiths Gores response were summarised at the meeting (see below). The Committee meeting The application was considered by the Planning Committee on 13 June 2013. The very full minutes record that the meeting started at 6.00 pm and ended at 9.38 pm, with a short break at 9.00 pm following the main vote for the officers to make amendments to their recommendation. (Also on the agenda was one other minor planning application which was dealt with first.) On the Farthingloe application there were contributions by four members of the public (two for and two against). There was a detailed presentation by the officers of the proposals and the issues, during which reference was made to the issue of viability and the BNP Paribas letter, the effect of which was summarised. The minute continued: The Principal Planner advised the Committee that, having considered the further views of BNP Paribas, Smiths Gore stood by their analysis that a lower density scheme would be viable and would deliver the same monetary benefits as currently on offer. Officers therefore recommended that a lower density scheme should be approved as it was viable, not excessive for the site and would be compliant with the Core Strategy. After the officers presentation, five members were recorded as speaking in favour of the proposal, and one against. Another expressed concern about the security of the proposed payment of 5m. The views of three named supporters were expressed collectively; they saw it as a rare opportunity for regeneration and investment, and a courageous step necessary to give Dovers young people a future; of the proposed amendments they said: , it was felt that the application should not be restricted in the way proposed in the recommendation as this could jeopardise the viability of the scheme, deter other developers and be less effective in delivering the economic benefits. The Committee had to assess whether the advantages outweighed the harm that would be caused to the AONB. When seen from the ground and with effective screening, it was believed that this could be minimised. In these exceptional circumstances it was considered that the advantages did outweigh the harmful impact on the AONB. At the end of the discussion a motion was proposed that the officers recommendation be approved but subject to amendment of the number of houses from 365 to 521 as proposed in the application. The motion was carried (the voting is not recorded). The meeting was adjourned for 25 minutes to enable the officers to re word their recommendation with consequential amendments. A vote was then taken on the amended recommendation, which was approved. On 11 July 2013, in response to requests by (among others) CPRE Kent, the Secretary of State declined to call in the application for his own determination. The section 106 agreement and the grant of permission On 18 December 2014 the application returned to the planning committee with an updated officers report. The introduction to the report made clear that its purpose was, not to revisit the decision to grant permission in the previous year, but to update the committee on the section 106 agreement, and to provide an assessment of planning considerations which have emerged since the resolution to grant planning permission (para 3). The report on the section 106 agreement confirmed that, contrary to the officers recommendation in June 2013, there was no obligation linking the provision of the hotel to the phasing of the residential development: The section 106 is drafted in accordance with the Committee resolution which places no obligation on the applicant to provide the hotel at any point in time and there is no obligation to provide the hotel at any stage during the build out of other development proposed in the application. Rather, the objective of the section 106 is to provide the opportunity for a quality hotel to come forward. (para 35) Although Mr Cameron drew our attention to some aspects of this report, it does not seem to have been relied on in the courts below. Mitting J (para 6) merely noted that the revisions were not material to the issues which arose in the case. The December meeting was not mentioned by the Court of Appeal. I can find nothing in the report or minutes to suggest an intention to revisit the substance of the decision of principle made in June 2013, nor which throws further light on the reasons for that decision. The committee resolved to grant permission subject to the completion of the section 106 agreement. The agreement was executed on 1 April 2015, and planning permission was granted on the same day. The notification of grant is a substantial document, running to more than 50 pages, including a long list of approved documents supporting the application, and detailing 183 conditions. It concludes with a note (for the avoidance of doubt) that the Environmental Statement accompanying the application has been taken into account. But it contains no reference to any obligation to give reasons under the EIA regulations (see below), nor any formal statement of the reasons for the grant. The proceedings The present proceedings for judicial review, on a number of grounds including lack of reasons, were heard by Mitting J at a rolled up hearing in December 2015, and were dismissed by him on 16 December: [2015] EWHC 3808 (Admin). Permission to appeal was granted solely on the issue of reasons. On 16 September 2016 the Court of Appeal (Laws and Simon LJJ) allowed the appeal and quashed the permission: [2016] EWCA Civ 936. Laws LJ noted the controversy at the Bar as to the standard of reasons required (para 18). He pointed to three particular factors as calling for clear reasons in this case: the pressing nature of the AONB policy as expressed in the NPPF para 115 6 (the highest status of protection); the departure from the officers recommendation; and the specific duty imposed by the EIA regulations (paras 21 23). Although he noted the relative thinness of the material available to the committee on the viability issue, he relied principally on the failure of the committee to assess and explain the degree of harm to the AONB, having regard to the strictness of the policy and the strong view of harm taken by the officers (paras 29 30). The only reference to this issue in the minutes spoke of the need to assess whether the advantages outweighed the harm to the AONB, wrongly implying that it was simply a question of striking a balance. Further the reference to minimising the harm by effective screening took no account of the officers view that the change of levels to the east would mean that over time, screening would be largely ineffective. In granting permission to appeal (on 2 March 2017), this court indicated that it would wish to consider generally the sources, nature and extent of a local planning authoritys duty to give reasons for the grant of planning permission. Duties to give reasons statutory sources The Town and Country Planning Act 1990 itself says nothing about the giving of reasons for planning decisions. The 1990 Act requires the decision (inter alia) to be made having regard to the development plan and other material considerations (section 70(2)). The Planning and Compulsory Purchase Act 2004 is more specific in requiring the decision to be made in accordance with the development plan unless material considerations indicate otherwise (section 38(6); see Hopkins Homes Ltd v Secretary of State for Communities and Local Government [2017] 1 WLR 1865, para 7). But it does not in terms require the decision maker to spell out the material circumstances which justify such a departure. The non statutory National Planning Policy Framework (NPPF) (itself treated as a material consideration for these purposes: ibid paras 10 21) provides comprehensive guidance to local planning authorities on the handling of individual planning applications. Paragraph 14 with footnote 9 notes, as an exception to the general presumption in favour of permission, specific policies by which development is restricted; including those relating to protected sites under the Birds and Habitats Directives, Green Belts, Areas of Outstanding Natural Beauty, and National Parks. In practice such policy designations are likely to be reflected also in the statutory development plan, so that section 38(6) will come into play. The statutory rules relating to the giving of reasons are all to be found in subordinate legislation. It is hard to detect a coherent approach in their development. The main categories are: Secretary of State decisions (including those delegated to inspectors) i) a) b) following an inquiry or hearing; on written representations. ii) Decisions by local planning authorities a) Refusing planning permission or imposing conditions; b) Granting permission; c) Officer decisions under delegated powers. iii) Decisions (at any level) on applications for EIA development. Secretary of State and inspector decisions Local objectors have no right to call for a public inquiry into a planning appeal. Section 79(2) provides that before determining an appeal the Secretary of State shall if either the appellant or the local planning authority so wish give them an opportunity of appearing before a person appointed by the Secretary of State. If an inquiry is held the right of other parties to appear is determined by the inquiries procedure rules (see, in respect of Secretary of State decisions, the Town and Country Planning (Inquiries Procedure) (England) Rules 2000 (SI 2000/1624) rule 11). Following an inquiry, the Secretary of State must notify his decision on an application or an appeal and his reasons for it in writing to all persons entitled to appear at the inquiry who did appear, . and any other person who, having appeared at the inquiry, has asked to be notified of the decision (ibid rule 18(1)). Equivalent duties are applied under the separate rules dealing with decisions by inspectors and decisions following hearings. Bridge said of the duty imposed by statute on the Secretary of State: In Save Britains Heritage v Number 1 Poultry Ltd [1991] 1 WLR 153, Lord That they should be required to state their reasons is a salutary safeguard to enable interested parties to know that the decision has been taken on relevant and rational grounds and that any applicable statutory criteria have been observed. It is the analogue in administrative law of the common laws requirement that justice should not only be done, but also be seen to be done. (p 170) There is no corresponding statutory rule applying to decisions following a written representations appeal. However, it is the practice for a fully reasoned decision to be given. It has been accepted (on behalf of the Secretary of State, and by the Administrative Court) that there is an enforceable duty, said to arise either from the principles of procedural fairness or from the legitimate expectation generated by the Secretary of States long established practice (Martin v Secretary of State for Communities and Local Government [2015] EWHC 3435 (Admin) para 51 per Lindblom LJ). Local authority decisions Refusals and conditions It has long been the case that local planning authorities must give reasons for refusing permission or imposing conditions. Historically this appears to have been the corollary of the fact that in those cases there is a statutory right of appeal against the refusal or the conditions. The current order (Town and Country Planning (Development Management Procedure) (England) Order 2015 (SI 2015/595) article 35(1)) provides that the authority in their decision notice must state clearly and precisely their full reasons. Grant of permission Until 2003 there was no statutory duty on local planning authorities to give reasons for the grant of permission as such. There was then a change of thinking, as Sullivan J explained (R (Wall) v Brighton and Hove City Council [2004] EWHC 2582 (Admin), para 52): Over the years the public was first enabled and then encouraged to participate in the decision making process. The fact that, having participated, the public was not entitled to be told what the local planning authoritys reasons were, if planning permission was granted, was increasingly perceived as a justifiable source of grievance, which undermined confidence in the planning system Accordingly, between 2003 and 2013, local planning authorities were required to include in the notice of the decision a summary of their reasons for the grant of permission and a summary of the policies and proposals in the development plan which are relevant to the decision (see Town and Country Planning (General Development Procedure) (England) (Amendment) Order 2003 (SI 2003/2047) article 5; Town and Country Planning (Development Management Procedure) (England) Order 2010 (SI 2010/2184) article 31). This duty was repealed as from 25 June 2013 (Town and Country Planning (Development Management Procedure) (England) (Amendment) Order 2013 (SI 2013/1238) article 7). The Explanatory Memorandum (paras 7.17 20) indicated that this was a response to suggestions that the duty had become burdensome and unnecessary, and having regard to the fact that officer reports typically provide far more detail on the logic and reasoning behind a particular decision than a decision notice, so that the requirement to provide a summary adds little to the transparency or the quality of the decision taking process; and also having regard to the greater level of transparency in the decision taking process, resulting from increased ease of access to information, both on line and through the Freedom of Information Act 2000. Officer decisions Since 2014 there has been a duty on a local authority officer making any decision involving the grant [of] a permission or licence to produce a written record of the decision along with the reasons for the decision, and details of alternative options, if any, considered and rejected (Openness of Local Government Bodies Regulations 2014 (SI 2014/2095) regulation 7(2) (3)). This covers, although it is not limited to, the grant of planning permission. EIA development Special duties arise where an application (as in this case) involves EIA development, at whatever level the decision is taken. EIA development is defined as development listed in Schedule 1 or 2 to the Regulations, in the latter case if the development is likely to have significant effects on the environment by virtue of factors such as its nature, size or location. Decision makers must not grant planning permission unless they have first taken the environmental information into consideration, and they shall state in their decision that they have done so (EIA regulations regulation 3(4)). Environmental information is defined as: the environmental statement, including any further information and any other information, any representations made by anybody required by these Regulations to be invited to make representations, and any representations duly made by any other person about the environmental effects of the development. (regulation 2(1)) Where an EIA application is determined by a local planning authority, the authority must inform the public of the decision and make available for public inspection a statement, containing the content of the decision and any conditions attached (i) to it; the main reasons and considerations on which the (ii) decision is based including, if relevant, information about the participation of the public; (iii) a description, where necessary, of the main measures to avoid, reduce and, if possible, offset the major adverse effects of the development; and information regarding the right to challenge the validity (iv) of the decision and the procedures for doing so. (regulation 24(1)(c)) This regulation is derived from article 9 of the EU Directive on environmental assessment (2011/92/EU) (the EA Directive), which expresses the duty in similar terms. Also relevant by way of background is the Aarhus Convention (Convention on Access to Information, Public Participation in Decision making and Access to Justice in Environmental Matters) to which this country is a party. The preamble to the Convention recognises the right of all people to live in a healthy environment and their duty both individually and in association with others to protect it for the benefit of present and future generations; and the consequent need for effective public participation, access to information, transparency in decision making and access to justice in environmental matters. Article 6, which is mentioned in the preamble to the EA Directive, is headed Public Participation in Decisions on Specific Activities. In addition to certain listed activities and others which may have a significant effect on the environment, it extends to any activities where public participation is provided for under national procedures for environmental impact assessment (article 6(1), annex I para 20). Article 6.9 provides: Each Party shall ensure that, when the decision has been taken by the public authority, the public is promptly informed of the decision in accordance with the appropriate procedures. Each Party shall make accessible to the public the text of the decision along with the reasons and considerations on which the decision is based. Standard of reasons A broad summary of the relevant authorities governing reasons challenges was given by Lord Brown in South Buckinghamshire District Council v Porter (No 2) [2004] 1 WLR 1953, para 36: The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the principal important controversial issues, disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision. In the course of his review of the authorities he had referred with approval to the felicitous observation of Sir Thomas Bingham MR in Clarke Homes Ltd v Secretary of State for the Environment (1993) 66 P & CR 263, 271 272, identifying the central issue in the case as: whether the decision of the Secretary of State leaves room for genuine as opposed to forensic doubt as to what he has decided and why. This is an issue to be resolved as the parties agree on a straightforward down to earth reading of his decision letter without excessive legalism or exegetical sophistication. There has been some debate about whether Lord Browns words are applicable to a decision by a local planning authority, rather than the Secretary of State or an inspector. It is true that the case concerned a statutory challenge to the decision of the Secretary of State on a planning appeal. However, the authorities reviewed by Lord Brown were not confined to such cases. They included, for example, the decision of the House of Lords upholding the short reasons given by Westminster City Council explaining the office policies in its development plan (Westminster City Council v Great Portland Estates plc [1985] AC 661, 671 673). Lord Scarman adopted the guidance of earlier cases at first instance, not limited to planning cases (eg In re Poyser and Mills Arbitration [1964] 2 QB 467, 478), that the reasons must be proper, adequate and intelligible and can be briefly stated (p 673E G). Similarly local planning authorities are able to give relatively short reasons for refusals of planning permission without any suggestion that they are inadequate. In the context of the EIA regulations, Mr Reed QC (for CGI) relied on the fact that under Regulation 24(1)(c)(ii) the duty is limited to the main reasons. He drew an analogy with the former duty of local planning authorities to provide summary reasons for the grant of permission, which was treated as imposing a less onerous standard than that considered in Porter. Thus in R (Siraj) v Kirklees Metropolitan Council [2010] EWCA Civ 1286, Sullivan LJ said summary reasons in that context could not be equated with reasons in a Secretary of States decision letter: a decision letter is intended to be a stand alone document which contains a full explanation of the Secretary of States reasons for allowing or dismissing an appeal. By their very nature a local planning authoritys summary reasons for granting planning permission do not present a full account of the local planning authoritys decision making process. (para 14) Mr Reed sought to apply this thinking to the duty to give the main reasons under the EIA regulations. He referred to R (Cherkley Campaign Ltd) v Mole Valley District Council [2014] EWCA Civ 567, para 70, where counsel was recorded as conceding (apparently without demur from the court) that the duty under the EIA was no higher than the duty to give summary reasons under domestic planning legislation. I am unable to accept the analogy. I do not read the reference in the EIA regulations to the main reasons as materially limiting the ordinary duty in such cases. It is no different in substance from Lord Browns reference in Porter to the need to refer only to the main issues in the dispute. To my mind the guidance in Porter is equally relevant in the EIA context. Lang J in R (Hawksworth Securities plc v Peterborough City Council [2016] EWHC 1870 (Admin) made a more general point about what she saw as the difference between a planning inspector conducting an adversarial procedure, akin to court or tribunal proceedings, contrasted with a local planning authority as an administrative body, determining an individual application: Its reasons ought to state why planning permission was granted, usually by reference to the relevant planning policies. But it is not conducting a formal adjudication in a dispute between the applicant for planning permission and objectors, and so it is not required to give reasons for rejecting the representations made by those who object to the grant of planning permission. (para 87) I am not persuaded that the difference between the two processes bears such significance. In both the decision maker may have to take into account and deal fairly with a wide range of differing views and interests, and reach a reasoned conclusion on them. Where there is a legal requirement to give reasons, what is needed is an adequate explanation of the ultimate decision. The content of that duty should not in principle turn on differences in the procedures by which it is arrived at. Local planning authorities are under an unqualified statutory duty to give reasons for refusing permission. There is no reason in principle why the duty to give reasons for grant of permission should become any more onerous. There is of course the important difference that, as Sullivan J pointed out in Siraj, the decision letter of the Secretary of State or a planning inspector is designed as a stand alone document setting out all the relevant background material and policies, before reaching a reasoned conclusion. In the case of a decision of the local planning authority that function will normally be performed by the planning officers report. If their recommendation is accepted by the members, no further reasons may be needed. Even if it is not accepted, it may normally be enough for the committees statement of reasons to be limited to the points of difference. However the essence of the duty remains the same, as does the issue for the court: that is, in the words of Sir Thomas Bingham MR, whether the information so provided by the authority leaves room for genuine doubt as to what (it) has decided and why. Legal remedies In the case of a decision by the Secretary of State or a planning inspector, the 1990 Act provides for a statutory challenge under section 288, on the grounds that the decision was not within the powers of the Act, or that a relevant requirement (which includes a requirement under the inquiries procedure rules to give notice of the decision and the reasons for it) had not been complied with. In the latter case the court must be satisfied also that the interests of the applicant have been substantially prejudiced by the failure (section 288(5)(b)). I note that in the Save case, Lord Bridge identified a single question: There are in truth not two separate questions: (1) were the reasons adequate? (2) if not, were the interests of the applicant substantially prejudiced thereby? The single indivisible question, in my opinion, which the court must ask itself whenever a planning decision is challenged on the ground of a failure to give reasons is whether the interests of the applicant have been substantially prejudiced by the deficiency of the reasons given. (p 167D E) I am not convinced with respect that it is helpful so to conflate the two parts of the statutory formula. Until one has decided on the nature of the breach of the statutory requirements, it is difficult to determine the nature and extent of any prejudice. However, that passage needs to be read in the context of what follows (p 168), which makes clear that Lord Bridges principal concern was to emphasise, contrary to the apparent implication of the judgment of Woolf LJ in the Court of Appeal, that the burden lay on the applicant to establish both parts of the statutory test. In Save itself, the decision of the House ultimately turned on the adequacy of the reasons for departing from the policy, rather than lack of prejudice. Lord Bridge accepted that an opponent of development, whether the local planning authority or some unofficial body like Save, may be substantially prejudiced by a decision to grant permission in which the planning considerations on which the decision is based, particularly if they relate to planning policy, are not explained sufficiently clearly to indicate what, if any, impact they may have in relation to the decision of future applications. (p 167H) The same point is picked up in Lord Browns summary. Lord Bridge did not, as I understand him, dissent from the view of the Court of Appeal that, had Save been able to establish a material defect of reasoning, the appropriate remedy was to quash the permission. Mr Cameron QC (for the Council) argued that a different approach should apply to a breach of the EIA duty taken on its own. Relying on the decision of the Court of Appeal in R (Richardson) v North Yorkshire County Council [2004] 1 WLR 1920, he argued that in that context a mere declaration of the breach was sufficient. Indeed before Mitting J (para 22) this point was conceded by Mr Westaway for CPRE Kent. Although the point was raised in argument in the Court of Appeal, Laws LJ apparently found it unnecessary to address the issue, perhaps because he saw the EIA duty, not as a free standing duty, but as no more than one of the factors relevant to the obligation to give reasons in this case. In Richardson, notwithstanding a clear failure to provide a statement of reasons as required by regulation 21 of the EIA regulations then in force (Town and Country Planning (Environmental Impact Assessment) (England & Wales) Regulations 1999), the Court of Appeal held that the appropriate remedy was, not to quash the decision itself, but to make a mandatory order for the required statement to be provided. In the leading judgment, Simon Brown LJ (para 33) adopted the reasoning of Richards J (at first instance), who had said: 49. the first and most important point in the present case is that regulation 21(1) looks to the position after the grant of planning permission. It is concerned with making information available to the public as to what has been decided and why it has been decided, rather than laying down requirements for the decision making process itself. It implements the obligation in article 9(1) of the directive to make information available to the public when a decision to grant development consent has been taken (emphasis added). That is to be contrasted with article 2(1) of the Directive, which lays down requirements as to what must be done before the grant of planning permission (which may be granted only after a prior assessment of significant environmental effects). 50. The fact that the requirement focuses on the availability of information for public inspection after the decision has been made, rather than on the decision making process, leads me to the view that a breach of regulation 21(1) ought not to lead necessarily to the quashing of the decision itself. A breach should be capable in principle of being remedied, and the legislative purpose achieved, by a mandatory order requiring the authority to make available a statement at the place, and containing the information, specified in the regulation. With respect to the judges concerned, I would decline to follow that reasoning. I find the distinction drawn between notification of the decision, and of the reasons on which it is based, artificial and unconvincing. In the regulations (as in the Aarhus Convention, which is now expressly referred to in the Directive) the provision of reasons is an intrinsic part of the procedure, essential to ensure effective public participation. I would not necessarily disagree with the courts disposal of the appeal in Richardson. Although the committee had not given its own reasons, it had granted permission in accordance with the recommendation in the officers report, and could be taken to have adopted its reasoning. Simon Brown LJ (para 35) referred with approval to the comment of Sullivan J (R v Mendip District Council, Ex p Fabre (2000) 80 P & CR 500, 511) that in such a case the reasonable inference is that the members did so for the reasons advanced by the officer, unless of course there is some indication to the contrary. It is perhaps also relevant that the court was faced with a somewhat extreme submission (based on observations of Lord Hoffmann in Berkeley v Secretary of State for the Environment [2001] 2 AC 603, 616 617), that in respect of a breach of an EU directive the court had no choice in the matter; it was simply not permitted to regard a breach of the implementing regulations as curable other than by the outright quashing of the development permission granted. (para 38) Not surprisingly the court found that an unattractive proposition. However, it is now clear, following recent judgments of this court, that even in respect of a breach of an EU directive the powers of the court are not so restricted: the court retains a discretion to refuse relief if the applicant has been able in practice to enjoy the rights conferred by European legislation, and there has been no substantial prejudice (per Lord Carnwath, (R (Champion) v North Norfolk District Council & Anor [2015] UKSC 52; [2015] 1 WLR 3710, para 54, following Walton v Scottish Ministers [2012] UKSC 44; [2013] PTSR 51, paras 139, 155). In Champion itself it was held that this test was met: given that the environmental issues were of no particular complexity or novelty; there was only one issue of substance on which each of the statutory agencies had satisfied itself of the effectiveness of the proposed measures; the public had been fully involved; and Mr Champion himself having been given the opportunity to raise any specific points of concern but having been unable to do so (para 60). Duty to give reasons Common law Given the existence of a specific duty under the EIA regulations, and the views I have expressed on its effect, it is strictly unnecessary in the present appeal to decide what common law duty there may be on a local planning authority to give reasons for grant of a planning permission. However, since it has been a matter of some controversy in planning circles, and since we have heard full argument, it is right that we should consider it. Public authorities are under no general common law duty to give reasons for their decisions; but it is well established that fairness may in some circumstances require it, even in a statutory context in which no express duty is imposed (see R v Secretary of State for the Home Department, Ex p Doody [1994] 1 AC 531; R v Higher Education Funding Council, Ex p Institute of Dental Surgery [1994] 1 WLR 242, 263A D; De Smiths Judicial Review 7th ed, para 7 099). Doody concerned the power of the Home Secretary (under the Criminal Justice Act 1967 section 61(1)), in relation to a prisoner under a mandatory life sentence for murder, to fix the minimum period before consideration by the Parole Board for licence, taking account of the penal element as recommended by the trial judge. It was held that such a decision was subject to judicial review, and that the prisoner was entitled to be informed of the judges recommendation and of the reasons for the Home Secretarys decision: To mount an effective attack on the decision, given no more material than the facts of the offence and the length of the penal element, the prisoner has virtually no means of ascertaining whether this is an instance where the decision making process has gone astray. I think it important that there should be an effective means of detecting the kind of error which would entitle the court to intervene, and in practice I regard it as necessary for this purpose that the reasoning of the Home Secretary should be disclosed. If there is any difference between the penal element recommended by the judges and actually imposed by the Home Secretary, this reasoning is bound to include, either explicitly or implicitly, a reason why the Home Secretary has taken a different view (p 565G H per Lord Mustill) It is to be noted that a principal justification for imposing the duty was seen as the need to reveal any such error as would entitle the court to intervene, and so make effective the right to challenge the decision by judicial review. Similarly, in the planning context, the Court of Appeal has held that a local planning authority generally is under no common law duty to give reasons for the grant of planning permission (R v Aylesbury Vale District Council, Ex p Chaplin (1998) 76 P & CR 207, 211 212 per Pill LJ). Although this general principle was reaffirmed recently in Oakley v South Cambridgeshire District Council [2017] 2 P & CR 4, the court held that a duty did arise in the particular circumstances of that case: where the development would have a significant and lasting impact on the local community, and involved a substantial departure from Green Belt and development plan policies, and where the committee had disagreed with its officers recommendations. Of the last point, Elias LJ (giving the leading judgment, with which Patten LJ agreed) said: The significance of that fact is not simply that it will often leave the reasoning obscure. In addition, the fact that the committee is disagreeing with a careful and clear recommendation from a highly experienced officer on a matter of such potential significance to very many people suggests that some explanation is required the dictates of good administration and the need for transparency are particularly strong here, and they reinforce the justification for imposing the common law duty. (para 61) His conclusion was reinforced by reference to the United Kingdoms obligations under the Aarhus Convention (para 62; see to similar effect my own comments on the relevance of the Convention, in Walton v Scottish Ministers [2012] UKSC 44; [2013] PTSR 51, para 100). Sales LJ agreed with the result, but expressed concern that the imposition of such duties might deter otherwise public spirited volunteers from council duties, and might also introduce an unwelcome element of delay into the planning system (para 76). Mr Cameron QC (for the Council) submitted that this decision should be treated with care, against the background of the governments decision in 2013 to abrogate the statutory duty to give reasons for grant of permission, planning law being a creature of statute (see Hopkins Homes Ltd v Secretary of State for Communities and Local Government [2017] 1 WLR 1865, para 20). The factors identified by Elias LJ could arise in many cases, and lead to the common law duty becoming a general rule. He asked us to prefer the view of Lang J (R (Hawksworth Securities plc) v Peterborough City Council [2016] EWHC 1870 (Admin), para 81) that a common law duty to give reasons would arise only exceptionally and that generally, the requirements of fairness will be met by public access to the material available to the decision maker. The present case, he submitted, was not exceptional in that sense, either in principle or on its own facts. In my view Oakley was rightly decided, and consistent with the general law as established by the House of Lords in Doody. Although planning law is a creature of statute, the proper interpretation of the statute is underpinned by general principles, properly referred to as derived from the common law. Doody itself involved such an application of the common law principle of fairness in a statutory context, in which the giving of reasons was seen as essential to allow effective supervision by the courts. Fairness provided the link between the common law duty to give reasons for an administrative decision, and the right of the individual affected to bring proceedings to challenge the legality of that decision. Doody concerned fairness as between the state and an individual citizen. The same principle is relevant also to planning decisions, the legality of which may be of legitimate interest to a much wider range of parties, private and public (see Walton v Scottish Ministers [2012] UKSC 44; [2013] PTSR 51, paras 152 153 per Lord Hope). Here a further common law principle is in play. Lord Bridge saw the statutory duty to give reasons as the analogue of the common law principle that justice should not only be done, but also be seen to be done (see para 25 above). That principle of open justice or transparency extends as much to statutory inquiries and procedures as it does to the courts (see Kennedy v The Charity Commission [2014] UKSC 20; [2015] AC 455, para 47 per Lord Mance, para 127 per Lord Toulson). As applied to the environment it also underpins the Aarhus Convention, and the relevant parts of the EA Directive. In this respect the common law, and European law and practice, march together (compare Kennedy para 46 per Lord Mance). In the application of the principle to planning decisions, I see no reason to distinguish between a Ministerial inquiry, and the less formal, but equally public, decision making process of a local planning authority such as in this case. The existence of a common law duty to disclose the reasons for a decision, supplementing the statutory rules, is not inconsistent with the abrogation in 2013 of the specific duty imposed by the former rules to give reasons for the grant of permission. As the explanatory memorandum made clear, that was not intended to detract from the general principle of transparency (which was affirmed), but was a practical acknowledgement of the different ways in which that objective could normally be attained without adding unnecessarily to the administrative burden. In circumstances where the objective is not achieved by other means, there should be no objection to the common law filling the gap. Thus in Oakley the Court of Appeal were entitled in my view to hold that, in the special circumstances of that case, openness and fairness to objectors required the members reasons to be stated. Such circumstances were found in the widespread public controversy surrounding the proposal, and the departure from development plan and Green Belt policies; combined with the members disagreement with the officers recommendation, which made it impossible to infer the reasons from their report or other material available to the public. The same combination is found in the present case, and, in my view, would if necessary have justified the imposition of a common law duty to provide reasons for the decision. This endorsement of the Court of Appeals approach may be open to the criticism that it leaves some uncertainty about what particular factors are sufficient to trigger the common law duty, and indeed as to the justification for limiting the duty at all (see the perceptive analysis by Dr Joanna Bell: Kent and Oakley: A Re examination of the Common Law Duty to Give Reasons for Grants of Planning Permission and Beyond (2017) 22 Judicial Review 105 113). The answer to the latter must lie in the relationship of the common law and the statutory framework. The court should respect the exercise of Ministerial discretion, in designating certain categories of decision for a formal statement of reasons. But it may also take account of the fact that the present system of rules has developed piecemeal and without any apparent pretence of overall coherence. It is appropriate for the common law to fill the gaps, but to limit that intervention to circumstances where the legal policy reasons are particularly strong. As to the charge of uncertainty, it would be wrong to be over prescriptive, in a judgment on a single case and a single set of policies. However it should not be difficult for councils and their officers to identify cases which call for a formulated statement of reasons, beyond the statutory requirements. Typically they will be cases where, as in Oakley and the present case, permission has been granted in the face of substantial public opposition and against the advice of officers, for projects which involve major departures from the development plan, or from other policies of recognised importance (such as the specific policies identified in the NPPF para 22 above). Such decisions call for public explanation, not just because of their immediate impact; but also because, as Lord Bridge pointed out (para 45 above), they are likely to have lasting relevance for the application of policy in future cases. Finally, with regard to Sales LJs concerns about the burden on members, it is important to recognise that the debate is not about the necessity for a planning authority to make its decision on rational grounds, but about when it is required to disclose the reasons for those decisions, going beyond the documentation that already exists as part of the decision making process. Members are of course entitled to depart from their officers recommendation for good reasons, but their reasons for doing so need to be capable of articulation, and open to public scrutiny. There is nothing novel or unduly burdensome about this. The Lawyers in Local Government Model Council Planning Code and Protocol (2013 update) gives the following useful advice, under the heading Decision making: Do make sure that if you are proposing, seconding or supporting a decision contrary to officer recommendations or the development plan that you clearly identify and understand the planning reasons leading to this conclusion / decision. These reasons must be given prior to the vote and be recorded. Be aware that you may have to justify the resulting decision by giving evidence in the event of any challenge. (their emphasis) The decision in this case The members of the Dover planning committee on 13 June 2013 had an unenviable task. The meeting started at six in the evening, probably for most of them at the end of a hard working day. They were faced with probably the most significant planning application for their area for many years. It was no doubt seen as the culmination of an extended process of formal and informal consultation, triggered by the submission of the application over a year before, and they may have felt under some pressure to reach a conclusion. The officers report, admirable though it was, had arrived on their desks only a few days before the meeting. Not only was it long and detailed in itself, but it introduced into the debate a new element of potentially critical significance (the proposed reduction in the number of houses), on which there was a sharp difference of view between the expert advisers. The Model Council Planning Code and Protocol, already referred to (para 60 above) contains under the same heading the following advice: Do come to your decision only after due consideration of all of the information reasonably required upon which to base a decision. If you feel there is insufficient time to digest new information or that there is simply insufficient information before you, request that further information. If necessary, defer or refuse. This passage not only offers sound practical advice. It also reflects the important legal principle that a decision maker must not only ask himself the right question, but take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly (Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014, 1065B). That obligation, which applies to a planning committee as much as to the Secretary of State, includes the need to allow the time reasonably necessary, not only to obtain the relevant information, but also to understand and take it properly into account. Even if there was pressure for a decision on the principle of the development, it seems unfortunate that the members did not apparently consider deferring detailed discussion of the officers proposed modifications, including the contentious issue of viability. It is difficult to see how the members could have expected to reach a properly considered decision on the material then before them. With hindsight at least, given that the application did not come back to the committee for more than a year, nothing would have been lost. The issue of timing is not directly relevant to the reasons challenge before us, but it is an important part of the background. It is not in dispute that the Council was in breach of a specific requirement under the EIA regulations to make available a statement of the main reasons and considerations on which the decision was based. The only issue is the nature of the remedy. Mr Cameron submits that a declaration is sufficient and that the reasons can be supplied retrospectively. In so far as this submission is specific to the EIA duty, following the decision of the Court of Appeal in Richardson, I cannot accept it for the reasons already given. The report of Oakley does not indicate what order resulted in that case. In the present case, however, I am satisfied that that is not an appropriate or sufficient remedy. Indeed it is notable that in the three years since the permission was issued, no attempt has been made to formulate the reasons so as to make good the admitted breach. This perhaps underlines the difficulty of reconstructing the operative reasons of the committee on the basis simply of what is in the minutes. Mr Cameron relies on the views attributed to the three members who were recorded as supporting the proposal. That was against the background that the officers had recommended approval for a departure from the AONB policies, for reasons they had explained, and which the committee can be taken to have accepted. The only substantial difference was as to whether a reduced dwelling limit should be imposed. That was seen by the committee as turning on whether the risk to the viability of the scheme outweighed the harm to the AONB. That issue, he submits, was fully debated and the majoritys conclusion and reasoning were clearly reflected in the minutes. The restrictions proposed by the officers were not accepted because (in the words there recorded) this could jeopardise the viability of the scheme, deter other developments and be less effective in delivering the economic benefits. This submission rests on the uncertain assumption that the views of the three members quoted were shared by the majority. The required statement under the regulations is of the reasoning of the committee as a whole. Even making that assumption, there are serious gaps. There is no indication of how or why the members felt able, without further investigation, to reject the view of their own advisers that the viability of the scheme need not be threatened, and indeed could be enhanced. It was not enough to rely on the possibility of the scheme being jeopardised, simply on the say so of the applicants advisers without any reference to the expert view to the contrary. Another important issue was the officers insistence on the need for implementation as a single comprehensive scheme to secure the economic benefits, including in particular the hotel and conference centre, and for conditions or planning obligations to achieve that. Given that the members apparently shared their officers view of the importance of those benefits, their omission of any legal mechanism to secure it needed explanation. Furthermore, as Laws LJ pointed out, the economic argument was only one side of the picture. The other was the members view of the harm to the AONB. Assuming that they accepted their officers view as to the seriousness of the potential damage to the AONB, it became critical to understand the basis of their belief that it could be minimised by effective screening. This was of particular significance in the context of the EIA regulations which require the statement to include a description of the main measures to avoid, reduce and, if possible, offset the major adverse effects of the development. If the committee had reason to think that landscaping measures could reduce or offset the harm, they needed to be described. At the very least there needed to be an explanation of how the members reconciled this assertion with the view of their officers that landscaping would be largely ineffective. This point was left without any explanation. These points were not merely incidental, but were fundamental to the officers support for the amended scheme. The committees failure to address such points raises a substantial doubt (in Lord Browns words) as to whether they had properly understood the key issues or reached a rational conclusion on them on relevant grounds. This is a case where the defect in reasons goes to the heart of the justification for the permission, and undermines its validity. The only appropriate remedy is to quash the permission. Conclusion For the reasons indicated above, I would dismiss the appeal and affirm the order of the Court of Appeal. |
In July 1999 Mr Beesley, the second respondent, bought 22 acres of open land in the Green Belt on the outskirts of Northaw, Potters Bar. In October 1999 he applied for and in March 2000 obtained planning permission to construct a hay barn for grazing and haymaking. Upon a further application made in January 2001, this was in October 2001 revoked and in December 2001 replaced by a second planning permission for the same barn, re sited differently. Each planning permission was subject to the condition that The building hereby permitted shall be used only for the storage of hay, straw or other agricultural products and shall not be used for any commercial or non agricultural storage purposes. Between January and July 2002, with the assistance of his builder father in law, Mr Beesley constructed a building which was to all external appearances the permitted barn, with walls in profiled metal sheeting, a roller shutter door, two smaller doors and eight roof lights. Internally it was a dwelling house with full facilities, including garage, entrance hall, study, lounge, living room, toilet, storeroom, gym and three bedrooms, two of them with en suite bathrooms, and connected to mains electricity, water and drainage and a telephone line. On 9 August 2002 Mr Beesley and his wife moved in and there they lived continuously for four years. Welwyn Hatfield Borough Council, the appellant, in whose area the property lies, remained unaware throughout that the building was or was being used as a dwelling house. Mr Beesley was, on the other hand, well aware of the scheme of the Town and Country Planning Act 1990, section 171B of which provides: (1) Where there has been a breach of planning control consisting in the carrying out without planning permission of building, engineering, mining or other operations in, on, over or under land, no enforcement action may be taken after the end of the period of four years beginning with the date on which the operations were substantially completed. (2) Where there has been a breach of planning control consisting in the change of use of any building to use as a single dwellinghouse, no enforcement action may be taken after the end of the period of four years beginning with the date of the breach. (3) In the case of any other breach of planning control, no enforcement action may be taken after the end of the period of ten years beginning with the date of the breach. Section 171A defines a breach of planning control as (a) carrying out development without the required planning permission, or (b) failing to comply with any condition or limitation subject to which planning permission is granted. The significance of the expiry of the periods mentioned in section 171B appears from section 191(3), which provides that for the purposes of the Act: any matter constituting a failure to comply with any condition or limitation subject to which planning permission has been granted is lawful at any time if (a) has then expired; and it does not constitute a contravention of any of the (b) requirements of any enforcement notice or breach of condition notice then in force. Section 191(1) provides: the time for taking enforcement action in respect of the failure any existing use of buildings or other land is lawful; any operations which have been carried out in, on, over or If any person wishes to ascertain whether (a) (b) under land are lawful; or any other matter constituting a failure to comply with any (c) condition or limitation subject to which planning permission has been granted is lawful, he may make an application for the purpose to the local planning authority specifying the land and describing the use, operations or other matter. (2) For the purposes of this Act uses and operations are lawful at any time if (a) no enforcement action may then be taken in respect of them (whether because they did not involve development or require planning permission or because the time for enforcement action has expired or for any other reason); and (b) requirements of any enforcement notice then in force. they do not constitute a contravention of any of the On 15 August 2006, Mr Beesley submitted an application under section 191(1)(a) for a certificate of lawfulness for use of the building as a dwelling house, attaching three statutory declarations and thirteen items of documentation to establish his completion of four years of continuous occupation. The application led to a dispute notable for the turns taken by each sides case. The council denied that the building constructed was a dwelling house, maintained that a ten year period for enforcement applied under section 171B(3) and on 30 August 2007 refused a certificate. Mr Beesley appealed and the matter came before Mr K L Williams, a planning inspector appointed by the second respondent, the Secretary of State. The council, in addition to relying on section 171B(3), challenged Mr Beesleys credibility regarding the length and continuity of his occupation. In so doing, it relied on the fact that, on his own account, he had from the outset, and specifically when he applied for planning permission for a barn, deliberately deceived the council. The inspector noted this, but found nevertheless that use as a dwelling house probably did commence more than four years before the date of the application for a certificate. He observed that, since the intention from the outset was to establish immunity from enforcement under section 171, Mr Beesley would have been unlikely to apply for a certificate until four years had expired. He held that, however the building was classified, it had been in use as a single dwelling house, and he treated this as sufficient to bring section 171B(2) into operation. Under section 195(2) of the Act, he therefore granted a certificate. The council appealed to the High Court, where Collins J on 7 April 2009 over turned the inspectors decision: [2009] EWHC 966 (Admin). He viewed the building as the permitted barn (paras 34 35), but went on to hold that there had never been any intention to use the building other than as a dwelling house, and that this meant that there had not been a change of use within section 171B(2). On further appeal by the Secretary of State and Mr Beesley, the Court of Appeal (Pill, Mummery and Richards LJJ) on 29 January 2010 reversed Collins J: [2010] EWCA Civ 26; [2010] PTSR 1296. It held section 171B(2) to apply on the basis that use as a dwelling house as from 9 August 2002 was a change of use either from the use permitted by the planning permission or from a period of no use which the court identified as occurring between completion of the building and its residential occupation: para 29 per Richards LJ, with whose reasoning the other two members of the court agreed. However, Mummery LJ expressed puzzlement at the total absence of argument from the council, or the Secretary of State, about the effect of Mr Beesleys reprehensible conduct in obtaining planning permission by deception and in failing to implement it (para 43). He added (para 45) that it is very difficult to believe that Parliament could have intended that the certificate procedure in section 191 should be available to someone who has dishonestly undermined the legislation by obtaining a planning permission which would never have been granted if the council had been told the truth. The council now appeals to the Supreme Court. It challenges the Court of Appeals decision that there was a change of use, but it also seeks to raise a new point, picking up Mummery LJs remarks in terms of a principle of public policy. Neither Mr Beesley nor the Secretary of State has objected to this new second point being argued. However, both dispute that public policy can have any role in the relevant statutory scheme, and Mr Beesley seeks to adduce fresh evidence which would, if accepted, qualify the inspectors finding that his intention was from the outset to establish immunity from enforcement. This could, he submits, affect the application of any principle of public policy which may be relevant. The fresh evidence would be to the effect that his intention to construct the barn to live in as a dwelling house was only formed in June 2001, and so after he had submitted both the original and the revised planning application, although before the former was revoked and the latter actually obtained. The first issue section 171B(2) The first issue depends upon an analysis of the scheme of section 171B. The only directly relevant part is subsection (2), because, for whatever reason, Mr Beesley only applied for (and was only given by the inspector) a certificate of lawfulness of existing use under section 191(1)(a). He has not sought to address the possibility that the operation of constructing the building might itself also (and independently) be regarded as having been in breach of planning control within section 171B(1) and section 191(1)(b). This is perhaps not as surprising as might appear, since the council itself treated the building as a barn when refusing a certificate in August 2007, and argued forcefully before the inspector to this effect with a view to establishing a ten year period for enforcement under section 171B(3)). If it was the permitted barn (as Collins J thought), then section 171B(1) would not apply and the only breach was in its use as a dwelling house, contrary to its stated purpose as well as contrary to the planning permission condition (para 1 above). Before the Court of Appeal, the Secretary of State and Mr Beesley challenged the proposition that the building constructed was the permitted barn, relying on the House of Lords reasoning in Sage v Secretary of State for the Environment, Transport and the Regions [2003] UKHL 22; [2003] 1 WLR 983. The Court of Appeal upheld the challenge, concluding that the physical and design features, and the character, purpose and proper classification for planning purposes of the building built were those of a dwelling house, not a barn. Looking at the matter overall, this part of the Court of Appeals analysis appears incontestable. It rests on the approach established as correct by Lord Hobhouses opinion in Sage, para 14, with which all other members of the House agreed. It is unusual to find a house which looks externally like a barn, but appearances can be and were here intended to be deceptive. Tromp loeil can of course also have legitimate purposes, as for example in an eco house constructed with permission to look like a fold in the ground. Aside from its appearance, the present building was in every respect designed and built as a house. This is a case where it would, taking Lord Hopes words in Sage, para 7, be wrong to treat it as having a character which the person who erected it never intended it to have. In another of the many turns in each sides arguments, Mr Booth for Mr Beesley now submits that there is another way in which the first basis of the Court of Appeals decision under section 171B(2) can be upheld. He notes that under section 56 of the 1990 Act: (1) . for the purposes of this Act development of land shall be taken to be initiated (a) if the development consists of the carrying out of operations, at the time when those operations are begun; (b) if the development consists of a change in use, at the time when the new use is instituted; . (2) For the purposes of the provisions of this Part mentioned in subsection (3) development shall be taken to be begun on the earliest date on which any material operation comprised in the development begins to be carried out. (3)The provisions referred to in subsection (2) are sections 85(2), 86(6), 87(4), 89, 91, 92 and 94. (4)In subsection (2) material operation means (a)any work of construction in the course of the erection of a building; (aa)any work of demolition of a building; (b)the digging of a trench which is to contain the foundations, or part of the foundations, of a building; (c)the laying of any underground main or pipe to the foundations, or part of the foundations, of a building or to any such trench as is mentioned in paragraph (b); . Here, he says, the planning permission for a hay barn was initiated as soon as the first trench was dug; and this was as capable of being referable to the permitted hay barn as it was to the intended dwelling house; so he submits that the first basis upon which Richards LJ held that there can be a change of use (see para 7 above) can be supported by this route. Although Mr Booth put his submission in terms of initiation under subsection (1), that subsection, once relevant to compensation, appears to have been long obsolete (Encyclopaedia of Planning Law and Practice, Sweet & Maxwell, para P56.04). But a parallel submission may be made under subsection (2), which defines when development is to be taken to have begun, for the purpose of deciding whether it has been begun within the time required by statute or the permission itself. It is impossible to accept this submission, on whichever subsection it is based. As a preliminary observation, it must be open to doubt whether even the first material operations related to the permitted hay barn. The dwelling house which Mr Beesley was intent on building must from the outset have required construction works for sewage and drainage. But I can leave that aspect aside (which would if relevant have required further factual investigation), as well as any potential issue of law as to whether Mr Beesleys admitted intention from the outset to build a dwelling house is relevant to the question whether he could, in any event, be said to have begun to build the permitted hay barn (compare the authorities discussed in the Encyclopaedia of Planning Law, para P56.10, on which the Supreme Court heard no submissions). Even assuming that it could be shown that the development of a hay barn was begun within section 56(2), this cannot assist on the essential question whether the building as constructed and completed was a barn, so that the only breach was in its use as a dwelling house contrary to its stated purpose and contrary to the planning permission condition (para 1 above). Even if the planning permission were to be treated as having been initiated or begun, it was not implemented in any further or substantial respect; so the building constructed was not a building which could be regarded as having any permitted use. Accordingly, the first basis on which the Court of Appeal held that there may have been a change of use within section 171B(2) is unsustainable. This makes it unnecessary at this point to decide whether change of use under section 171B(2) can consist in a simple departure from permitted use, without any actual prior use. I doubt this, since the word use, in each place where it appears in that subsection is on its face used in a real or material sense, rather than in the legal sense of permitted use. This is also supported by authorities on the concept of development by the making of any material change in the use of any buildings or other land which has appeared in successive Town and Country Planning Acts (section 12 of the 1962 Act, section 22 of the 1971 Act and now section 55 of the 1990 Act). Under these sections it is clear that this form of development focuses on actual use: Hills Town and Country Planning Acts (5th ed) (1967), p. 55; Hartley v Minister of Housing and Local Government [1970] 1 QB 413, discussed in Lord Scarmans leading speech in Pioneer Aggregates (U.K.) Ltd v Secretary of State for the Environment [1985] AC 132, 143B E and White v Secretary of State for the Environment (1989) 58 P & CR 281. In Hills work, it is also expressly stated that a use permitted by a planning permission but never implemented is irrelevant. It was only in section 15(3)(c) of the Town and Country Planning Act 1968 that the predecessor to section 171B(2) first appeared, adopting change of use . to use as a single dwelling house as a specific trigger to the start of a four year period. (Under the Town and Country Planning Act 1947, all development without planning permission attracted a four year period, within which any enforcement notice had to be served.) The natural assumption is that the concept introduced into section 15(3)(a) in 1968 was borrowed in the same sense as that in which it was used in section 12. The express qualification material was probably omitted because of the existence of what is now section 171A(1)(b). I turn to the alternative basis on which the Court of Appeal concluded and the sole basis on which the Secretary of State now argues that there was a change of use. This is that in the short period between completion of the building in July 2002 and its residential occupation on 9 August 2002 the building had no use, so that there was a change of use from no use to use as a dwelling house on and after 9 August 2002. The Court of Appeal did not base this analysis on any authority, and none appears to have been cited to it on this aspect, but cases have been produced before the Supreme Court which are said to assist it. The scheme of section 171B is on its face straightforward. Subsection (1) deals with unauthorised building operations. For reasons already given, subsection (1) applied to the present building. Subsection (2) deals with change of use of a building to use as a single dwelling house. Both subsections involve four year periods, from the date of substantial completion of the operations under subsection (1) and the date of the breach (meaning clearly the date when the change of use first occurred and the four year period began to run) under subsection (2). There is a basic distinction between the types of development dealt with under these two subsections, and it is buttressed by section 336(1) where use in relation to land is defined as not including the use of land for the carrying out of any building or other operations on it. Subsection (2) does not however on its face cover all breaches relating to the use of a building, but only one important category: change of use to use as a dwelling house. Subsection (3), applying in the case of any other breach of planning control, involves, in contrast, a ten year period from the date of breach. Protection from enforcement in respect of a building and its use are thus potentially very different matters. Mr Beesley could have applied for a certificate under subsection (1) in respect of the building as soon as July 2006 was over, but he has not done so. He has focused on the use of the building for four years, in respect of which, he submits, he must now be entitled to protection by reference to roughly, though not precisely, the same four year period. If the right analysis were that there has been no change of use within subsection (2), the only alternative analysis must, he points out, be that use of the building as a dwelling house, which is either impermissible or positively prohibited under the relevant planning permission, can be the subject of an enforcement notice at any time within a ten year period under subsection (3). I agree that that would, on its face, seem surprising. However, it becomes less so, once one appreciates that an exactly parallel situation involving different time periods applies to the construction without permission and the use of a factory or any building other than a single dwelling house. The building attracts a four year period for enforcement under subsection (1), while its use attracts, at any rate in theory, a ten year period for enforcement under subsection (3). I say in theory because there is a potential answer to this apparent anomaly, one which would apply as much to a dwelling house as to any other building. It is that, once a planning authority has allowed the four year period for enforcement against the building to pass, principles of fairness and good governance could, in appropriate circumstances, preclude it from subsequently taking enforcement steps to render the building useless. The Secretary of State and Mr Beesley rely heavily upon what they submit is the purpose behind subsection (2). The Supreme Court was not provided with material shedding direct light on the mischief to which the subsection was directed. However, the normal expectation would be that unauthorised building operations within subsection (1) would be easy to spot and quite often onerous to undo. A shorter period for enforcement steps is understandable. As to subsection (2), single dwelling houses were clearly seen as falling into a category meriting a degree of special treatment. They are after all peoples homes, and a longer period than four years might well cause serious loss and/or hardship in the event of enforcement proceedings long after the event: Arun District Council v First Secretary of State [2006] EWCA Civ 1172; [2007] 1 WLR 523, para 5, per Auld LJ. It is also not difficult to view change of use of an existing building to a single dwelling house as less likely to be harmful to the public interest than other development. In considering the predecessor provisions of the 1968 Act (section 15), Robert Carnwath QC suggested in his February 1989 report Enforcing Planning Control that the logic behind them was not entirely clear, but that special protection was no doubt thought desirable for peoples homes. He went on to say that in the case of operations, now dealt with in subsection (1), the governing considerations presumably were the relative ease of detection, the potential costs involved in reinstating the land, and the need to provide certainty for potential purchasers (Chap 7, para 3.2). The periods of four years retained in respect of both building operations and change of use to use as a dwelling house clearly reflect the legislators view that this would give adequate opportunity for enforcement steps, after the expiry of which the infringer would be entitled to repose and to arrange his affairs on the basis of the status quo. The speculation that a need to provide certainty for purchasers can have motivated the legislator is less obviously sure. At any rate in a case like the present, no purchaser would presumably look at Mr Beesleys house unless and until he is able to produce a certificate of lawfulness. Not surprisingly, subsection (2) has received a generous interpretation. In Arun District Council v First Secretary of State, the Court of Appeal held that, bearing in mind that a breach of planning control covers under section 171A(1) both (a) carrying out development without the required planning permission and (b) failing to comply with any condition or limitation subject to which planning permission is granted, section 171B(2) should be read as providing for a four year period in respect of both types of breach of planning control, for example both unauthorised development in the form of material change of use contrary to section 55(1) and any consequent breach of an express condition in a planning permission. However, as Carnwath LJ noted at para 49, although the type of breach does not in this respect matter, the protection under subsection (2) depends upon there having been a change of use. In Van Dyck v Secretary of State for the Environment [1993] 1 PLR 124, the Court of Appeal concluded that subsection (2) covered the case of a single dwelling house the use of which was changed by its conversion into two separate units or dwelling houses. It is unnecessary to express any view on the decision, but it is relied upon for the Courts general statements to the effect that the broad policy underlying the then equivalent of section 171B(2) (section 172(4)(c) of the Town and Country Planning Act 1990) meant that it was capable of being construed and applied so as to benefit all new separate residences after four years (p.137). But in that case the change of use was undeniable. The Secretary of State and Mr Beesley invite a broad approach to change of use. They submit that there is no real reason why the legislator should have wanted subsection (2) to apply to a case like Van Dyck, but not have wanted to apply it in the present case. The words change of use cannot however be ignored. If the legislator had wanted subsection (2) to cover all situations of unauthorised use, these words could and presumably would have been omitted, and the subsection would have read: Where there has been a breach of planning control consisting in the use of any building as a single dwellinghouse, no enforcement action may be taken after the end of the period of four years beginning with the date of the breach. A likely explanation of the general scheme of section 171B is in these circumstances that, in the legislators mind, new building developments like the present would be dealt with under subsection (1), while changes of use of an existing building to use as a single dwelling house would be dealt with under subsection (2). All other breaches of planning control, including on any view unauthorised use of an authorised new building other than as a dwelling house, would fall within subsection (3). The Court of Appeal, rightly and inevitably, accepted that a change of use to use as a single dwelling house was required before subsection (2) could apply, but found this, on its alternative analysis, in the existence of a period of no use between the end of July 2002 and 9 August 2002, followed by a change to use as a single dwelling house on that date. This analysis is to my mind counter intuitive. It is not, I think, natural to talk of a house built to live in as undergoing, especially in so short a period, two different uses or non use and then use. Second, it raises the question what would be the position if Mr Beesley had moved in as substantial completion of the building occurred. Third, should a dwelling house into which its builder owner intends to move almost immediately be regarded as having or being of no use as a dwelling house? On the second point, no satisfactory answer was to my mind given by the Secretary of State or Mr Beesley. It was suggested that there might during the building operations still be a period of no use, which changed to residential use as and when the building was completed. But subsection (2) is only concerned with change of use of any building, not with the change of use of land and of something which is not yet a building which may occur when the building is completed. It follows that subsection (2) cannot on any view cover all cases of new building. There will be cases where completion of the building and commencement of occupation are simultaneous. House owners sometimes even start to move in before building works are complete. Turning to the third point, it is necessary at the outset to distinguish cases concerned with the different question whether existing use rights have been extinguished. As explained by Lord Scarman in Pioneer Aggregates (U.K.) Ltd v Secretary of State for the Environment [1985] 1 AC 132, 143F 144D, a new development sanctioned by a planning permission may extinguish the existing use rights which the land or a previous building on the land possessed: see e.g. Prosser v Minister of Housing and Local Government (1968) 67 LGR 109; Petticoat Lane Rentals Ltd v Secretary of State for the Environment [1971] 1 WLR 1112, discussed in Newbury District Council v Secretary of State for the Environment [1981] AC 578, pp 598 599 per Viscount Dilhorne, pp 606E H per Lord Fraser, pp 616 617 per Lord Scarman and pp 625A 626F per Lord Lane. The straightforward explanation is that the planning permission, once taken up and implemented, gives rise to a new situation in which the building owner has the advantage of, but is also bound by the limitations of, the rights of use permitted by the planning permission, and no longer has the benefit of any other rights of use which may have existed prior to the new development. This is highlighted in an instructive article, New Planning Units, New Chapters in Planning History and Inconsistent Permissions [2009] 2 JPL 161 by Satnam Choongh and Jeremy Cahill QC. It is true that at one point in the Petticoat Lane case (p 1117D), Widgery LJ said of the new building that it started with a nil use, that is to say, immediately after it was completed it was used for nothing, and thereafter any use to which it is put is a change of use, and if that use is not authorised by the planning permission, it is a use which can be restrained by planning control. But the opinions of Lords Fraser, Scarman and Lane in Newbury and the analysis of Lord Scarman in Pioneer Aggregates show that reasoning based on change of use was not necessary even in the context which Widgery LJ was addressing. It was sufficient that the owner was bound by the terms of the planning permission which he had chosen to implement. By parallel reasoning the implementation of one of two co existent planning permissions can supersede the other inconsistent planning permission: see Pioneer Aggregates, pp 144B 145C per Lord Scarman. Thus, in the present case, the council, while understandably prudent to do so, may not have had to insist on revoking the first planning permission obtained by Mr Beesley before granting the second. Whether existing use rights had been lost was also in issue in Jennings Motors Ltd v Secretary of State for the Environment [1982] QB 541, but there the argument was that the replacement of one building by another new building without planning permission gave rise to a new situation paralleling that which arose in Prosser, Petticoat Lane and Newbury as a result of the implementation of a planning permission. The Court of Appeal proceeded on the basis that the parallel was generally sound, and cited Widgery LJs judgment, including the passage referring to a new building starting with a nil use (see p 553F per Parker LJ, with whom Watkins LJ agreed at p 557H), but it held that the erection of the replacement building had no impact on existing rights of user. The enforcement steps were based on development in the form of an alleged material change in the use of buildings, and the decision itself appears readily explicable on the basis that there had been no such change of use, merely an unauthorised re building which the planning authority was not as such challenging. These cases, although prominent in counsels submissions, concern a very different problem, and in my view offer no real assistance in the present context. In each case the essential question was whether prior rights of user had been lost, not whether the land or building could still be said to be in or of use for any purpose. More to the point are cases on abandonment, which is possible in relation to prior use (Hartley v Minister of Housing and Local Government [1970] 1 WLR 413; Secretary of State for the Environment v Hughes (2000) 80 P & CR 397), though not in relation to rights acquired under a planning permission still capable of being implemented according to its terms (Pioneer Aggregates (U.K.) Ltd v Secretary of State for the Environment [1985] 1 AC 132, 143B E). Even in this context caution is necessary in considering the terminology used in the cases, because references to non use may mean, as in Hartley, no more than non use as a site for selling cars (the token sales of five cars being held de minimis), and not that the site had no use in Hartley it continued throughout to be used as a petrol station. But, as was accepted by the site owner in argument in Hartley (p 417G H), a single use may, if abandoned, mean that a site has nil or no use. In Hughes it was held that residential use of a cottage which had been uninhabited for nearly 30 years and had fallen into a ruinous state had in all the circumstances been abandoned (despite the owners subjective intention to resume residential user). It is difficult to think in such a case of any other use which the cottage could be said to have continued to have. But caution could be necessary even before describing a ruinous cottage or waste land as having or being of no use at all. One might have to consider whether it could be regarded as having a use to the owner as a place to walk or walk to or for its aspect or its value to flora and fauna. The cases on abandonment show that use as a dwelling house should not be judged on a day by day basis, but on a broader and longer term basis. Dwelling houses are frequently left empty for long periods without any question of abandonment or of their not being in or of use. A holiday home visited only yearly remains of and in residential use. Of course, such cases usually fall to be viewed against the background of previous active use. In the present case, the question is whether it is right to describe a dwelling house as having or being of no use as a dwelling house, when it has just been completed and its owner intends to occupy it within days. This too is not a question which can sensibly be answered on a day by day basis. It calls for a broader and longer term view. Support for this is found in Impey v Secretary of State for the Environment (1984) 47 P & CR 157. The question before the Divisional Court there was whether development had occurred in the form of a material change of use of a building from the breeding of dogs to residential use. Donaldson LJ said at pp 160 161: Change of use to residential development can take place before the premises are used in the ordinary and accepted sense of the word, and [counsel] gives by way of example cases where operations are undertaken to convert premises for residential use and they are then put on the market as being available for letting. Nobody is using those premises in the ordinary connotation of the term, because they are empty, but there has plainly, on those facts, been a change of use. The question arises as to how much earlier there can be a change of use. Before the operations have been begun to convert to residential accommodation plainly there has been no change of use, assuming that the premises are not in the ordinary sense of the word being used for residential purposes. It may well be that during the course of the operations the premises will be wholly unusable for residential purposes. It may be that the test is whether they are usable, but it is a question of fact and degree. In a later case, Backer v Secretary of State for the Environment (1984) 47 P & CR 149, Mr David Widdicombe QC, sitting as a deputy judge, expressed doubt about the decision in Impey. He said (p 154) that, but for it, he would have had no hesitation in accepting an argument that physical works of conversion, that is, say building operations, cannot by themselves give rise to a material change of use: some actual use is required. Backer is on any view an odd case, and the deputy judges doubt as to whether any change of use had occurred is understandable, even on the approach in Impey indeed, although he remitted the matter for further consideration, his expressed view was that there had been none. The issue was whether development had taken place before 7 July 1976, in circumstances where all that appears is that the works of conversion were completed, or substantially completed, by July 1976 (p 151). The owners brother was sleeping in the building at nights on a mattress which he moved to and from his van every day, since workmen were working during the day (p 15l). Yet the argument was that it was not necessary to consider his activity, and that the result of the physical works of conversion to a residential unit alone sufficed to constitute a material change of use. On any view, the present case involves an altogether simpler and (apart from the deceit underlying it) more conventional scenario. As a matter of law, I consider that the approach taken by Donaldson LJ was correct and is to be preferred to the doubt expressed in Backer. Too much stress has, I think, been placed on the need for actual use, with its connotations of familiar domestic activities carried on daily. In dealing with a subsection which speaks of change of use of any building to use as a single dwelling house, it is more appropriate to look at the matter in the round and to ask what use the building has or of what use it is. As I have said, I consider it artificial to say that a building has or is of no use at all, or that its use is as anything other than a dwelling house, when its owner has just built it to live in and is about to move in within a few days time (having, one might speculate, probably also spent a good deal of that time planning the move). So far as the impetus to adopt so artificial an analysis derives from the thought that otherwise section 171B(2) will not apply, I consider that result to be, on the contrary, consistent with a proper understanding of the scheme of the section. In summary: unauthorised building operations, like the present, are likely to have been seen as falling to be addressed under subsection (1), rather than subsection (2); the suggested anomaly that enforcement action based on use might then be taken under subsection (3) within as long as ten years is one which the draftsmen failed in any event to address in relation to the use of all buildings other than single dwelling houses, so there is no reason to think that he thought of subsection (2) as covering it in respect of single dwelling houses; any unfairness in either case may, in an appropriate case, be covered by more general public law controls on administrative action by way of planning enforcement; the focus on the established concept of change of use, rather than simply on use, can only have been deliberate; and the Secretary of States and Mr Beesleys analysis either ignores this or, by artificial extension of the concept of change of use to cover the present case, opens an anomalous distinction between cases where an owner moves in before or as his unauthorised dwelling house is completed and cases like the present where a period of days elapses before he actually moves in. The second issue the facts as found by the inspector I would therefore allow the councils appeal on the first issue. This makes it strictly unnecessary to address the second issue, but it is one of general importance and I shall do so. It is necessary to set out in greater detail the factual background as it can be derived from the inspectors findings. First, Mr Beesley intended to deceive the council from the outset, that is (at least) when he made each of his successive planning applications in March 2000 and January 2001; in each application he described the proposed building as a hay barn, said that the application involved no change of use of land, and, in relation to sewage disposal, answered not applicable. Secondly, when building his house, he deliberately refrained from giving the notice under the building regulations, applicable to a house but not an agricultural barn, so committing an offence triable summarily and punishable by a fine. Thirdly, he did not register for council tax or on the electoral register at the building. Fourthly, he gave the council as his address his office, whereas all other correspondence was to and from the house. Fifthly, he lived a low key existence, the house being at the end of a lane or track apparently accessible from the road only by a locked gate. The aim of this conduct was, firstly, to obtain a planning permission which would not have been granted had the application been for a dwelling house, secondly, to conceal the fact that what was being built was and was to be a dwelling house and, thirdly to live in the house without being detected or therefore having enforcement steps taken for the four year periods stated in section 171B(1) and (2), after which a certificate would be sought under section 191. The council now submits that Mr Beesleys deceit should preclude Mr Beesley from obtaining a certificate under section 171B(2), even if (contrary to my view) that subsection were otherwise applicable. Mr Beesleys application to adduce fresh evidence on the new point It is in response to this new submission that Mr Beesley applies to adduce fresh evidence, with a view to showing that he intended to build a genuine hay barn up until June 2001. That is, until after both planning applications and after the Council had written to him on 15 March 2001 informing him that its planning control board had resolved to grant the second planning permission subject to revocation of the first planning permission, and asked for his written consent to that effect. It is unclear when such consent was granted and why there was further delay, since it was only on 16 October 2001 that the first permission was revoked and only on 7 December 2001 that the second permission was granted. Be that as it may, Mr Beesley submits that any argument based on his conduct would look different if both planning permissions were honestly sought. The inspectors report states the factual position as follows: 7 The appellant, Mr Beesley, says that he deliberately deceived the council when he applied for planning permission for a barn. He always intended that the building should be a dwelling. 22. he admits that he has carried out a planned and deliberate deceit over an extended period. I consider this to reduce his credibility as a witness. These passages were solidly based. The pre inquiry statement lodged on Mr Beesleys behalf had stated unequivocally: The appellant has confirmed that the building was never intended or designed for any other use than a dwellinghouse. The appellant and his wife may also give evidence at the inquiry. Mr Beesleys proof of evidence had been to like effect: 2.2 On 7 December 2001 I obtained planning permission for the erection of a hay barn. 2.3 Between January and July 2002, the building was erected. The building was never intended for any use other than as a dwelling house. These statements were in support of Mr Beesleys case that what he had built was a dwelling house, within section 171B(2). Mr Beesley came up to proof. In opposition to his present application, the Council has produced notes of his evidence taken at the inquiry by the Councils principal development control officer (Lisa Hughes) and by a planning consultant called by the Council (Alison Hutchinson). They show that in cross examination Mr Beesley accepted that he knew (a) that, if he had applied for planning permission for a house, he would not have got it, (b) that his applications for a barn were a ruse to mislead [the] local planning authority and, later, (c) that his sole purpose in seeking the planning permissions for a barn and in not paying council tax was to obtain after four years a certificate of lawfulness for his house. The application filed on Mr Beesleys behalf for permission to adduce fresh evidence states: 20. [Mr Beesley] acknowledges that in the course of the planning enquiry he must have intimated to the inspector that, when seeking planning permission from the council, he had already determined to erect a dwelling. So much is evident from the statement of the planning inspector at paragraph 7 of his report. 21. However, it is contended that such indication was given by [him] in error and that when providing his answer to the inspectors question [he] misunderstood what it was that was being asked of him. In a witness statement supporting the present application Mr Beesley states that the land was bought in August 1999 because his future wife was a keen equestrian, and because the horses were our priority we decided that we should build stables, a mange and a barn to which purpose he applied for planning permission on 7 October 1999 for all three and an access track. The application for a barn being agricultural, it had to be re submitted separately on 26 October 1999. The stables and access track were completed by 29 November 2000. Thefts then occurred of a generator and other items on 16 December 2000 and of horse rugs in March 2001. The application for re siting of the barn was made because the original site chosen for the mange was prone to flooding. Mr and Mrs Beesley married in June 2001, and, on their honeymoon, were very concerned about the spate of thefts which left them feeling very vulnerable: 12. It was approximately at this point that we made a decision to build the Barn as a dwelling and to move into it. We spent so much time there as it was and we felt protective of our smallholding (even more so in view of the thefts) and so moving in to it seemed the most sensible thing to do. 13. I knew that, if I asked the council for permission to build a house on the land in lieu of the barn, my application would be refused, and so I said nothing about our decision to build a dwelling and move into it. Planning permission for the (re situated) Barn was granted on 7th December 2001 I was aware that in planning law there is as a catch all rule that provides that, where the local authority does not commence enforcement proceedings within 4 years . , immunity from such enforcement action arises. I freely admit that I knew what I was doing and that I kept deliberately silent about the true use of the premises. In a second witness statement Mr Beesley says that, since the inspector granted him a certificate of lawfulness, there was no need for me, at that time, to correct the assumption that I had deceived the council, that, when the matter came to the High Court, the council: did not there raise any legal argument concerning my alleged deceit. Accordingly, it did not appear to me to be necessary to seek to correct the inaccurate impression I must have given to the Planning Inspector regarding my intention when submitting the planning applications in respect of the Barn. It was simply not an issue that was relevant to the issues at the time, and I took a decision, principally with a view to saving costs, that I would not seek to address the issue of the supposed deceit by way of witness statement and would not participate in the proceedings. That was not a position that I was altogether happy with at the time, but I took a pragmatic approach having regard to the way in which the [councils] case was put. He says that, in the course of preparing for the Court of Appeal proceedings, he specifically raised with his legal team the question whether to put in a statement to correct the inaccurate impression I must have given the Planning Inspector, but I was advised that the question of my intention when submitting the applications were [sic] not relevant to the point at issue. Now, however, that the case against him in the Supreme Court does directly put in issue his conduct, he says, he has no choice but to take steps to correct the inaccurate impression, and is in a sense, relieved to now have the opportunity to explain my side of the story in effect forced upon me. The admission of new evidence on appeal normally depends upon satisfying three conditions identified in the well known case of Ladd v Marshall [1954] 1 WLR 1489, viz: (1) it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and (3) the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible. In the present case, Mr Booth submits that the first condition is either inapplicable or needs to be relaxed, bearing in mind that we are concerned with a finding regarding Mr Beesleys state of mind which went only to credibility before the inspector, and did not influence the outcome before him or in either of the courts below. There is force in this submission, although I note that it is not quite correct to say that Mr Beesleys state of mind can have been regarded as entirely irrelevant by him or his legal team below, since the skeleton argument submitted on his behalf to the Court of Appeal records that Collins J had been concerned in argument about a certificate having been granted in circumstances where he [Mr Beesley] had misled the [council] (in its capacity as a local planning authority and went on to submit that important principles and statutory provisions . should not be stretched in their application simply to ensure a particular outcome in a case where a claimant/appellant is deemed to be less than sympathetic. If Mr Beesley did not mislead the council from the outset in making the planning applications, and there was some unexplained misapprehension to that effect in the inspectors report, this was one occasion on which at least to put that on the record. However, I will proceed on the basis that the first condition is either satisfied or, in this case, inapplicable. I turn to the second condition. At the core of the councils case on public policy is the obtaining of the planning permissions as a result of the deceptive planning applications. If the applications when made were genuine, that could well put a different complexion on Mr Beesleys conduct. Mr Beesleys conduct, though still disgraceful, could then be said to consist predominantly of sins of omission and concealment, rather than of positive deception. This of course could depend upon what if any communications there were between Mr Beesley and the council between June 2001 and 7 December 2001. Further, even if there were none, Mr Beesleys current account could well support a conclusion that he knew full well both that after June 2001 the council would still be relying on his continuing but now inaccurate statements in his second application about the nature and purpose of the proposed building, and that he owed a duty to correct this, but deliberately determined not to do this. Whether and how far Mr Beesleys current account could, therefore, significantly influence a courts evaluation of any issue of public policy is therefore best left open. Unless the third condition is satisfied, it is unnecessary to consider it further. The third condition is that the proposed evidence is apparently credible. To this, I consider that the only answer is a categorical no. First, there is no basis or credibility at all in Mr Beesleys suggestion that he (not the inspector) made some unexplained misunderstanding in his answers in cross examination. The notes show clear and repeated answers, directly in point on the issue of his state of mind and intentions when making the planning applications. Second, precisely the same account was given in the pre inquiry statement put in on Mr Beesleys behalf and in his own witness statement. Mr Beesley has not volunteered any explanation as to how these statements could also be mistaken. Third, it is difficult to believe that, if the inspectors report had, due to some unexplained mistake by Mr Beesley, given a factual account which Mr Beesley (as he says) knew and thought was less favourable to him than the reality, Mr Beesley would have said nothing at any point to record this, even if it was not directly in issue. Fourth, the account now advanced regarding Mr Beesleys state of mind has the ring of implausibility. The land was bought in August 1999. Applications were made in October 1999 to build stables, which were clearly required and in due course built for the horses, but also for a large hay barn. If a large hay barn was intended, there must have been some need or use for such a barn, and, since the application was actively pursued over the next 21 months, this need or use must have continued to exist. The present application was not accompanied by any explanation as to how or why it disappeared in and after June 2002, and none was given after the point arose during oral submissions. I would therefore refuse Mr Beesleys application to adduce the proposed evidence. The second issue merits It follows from the above that the issue whether Mr Beesleys conduct disentitles him on public policy grounds from relying on section 171B or 191(1), assuming it would otherwise apply, falls to be determined on the facts as stated by the inspector. The real gravamen of the councils case is to be found in the deception involved in the obtaining of false planning permissions which Mr Beesley never intended to implement, but which were designed to and did mislead the council into thinking that the building was a genuine hay barn and so into taking no enforcement step for over four years. This was deception in the planning process and directly intended to undermine its regular operation. The other aspects of Mr Beesleys conduct identified in paragraph 31 above were ancillary to the plan of deception. By themselves, these are, I suppose, aspects of conduct not uncommon among those who build or extend houses or convert buildings into houses without planning permission; they do not bear directly on the planning process and I am prepared to assume, for the purposes of this case at all events, that they would not, at least without more, disentitle reliance upon section 171B(1) or (2) or section 191(1)(a) or (b). The council relies upon a principle stated in Halsburys Laws of Englands title Statutes (vol 44(1)), para 1450 in these terms: 1450. Law should serve the public interest. It is the basic principle of legal policy that the law should serve the public interest . Where a literal construction would seriously damage the public interest, and no deserving person would be prejudiced by a strained construction to avoid this, the court will apply such a construction. In pursuance of the principle that the law should serve the public interest, the courts have evolved the important technique known as construction in bonam partem (in good faith). If a statutory benefit is given only if a specified condition is satisfied, it is presumed that Parliament intended the benefit to operate only where the required act is performed in a lawful manner. 1453. Illegality. Unless the contrary intention appears, an enactment by implication . imports the principle of legal policy embodied in the maxim nullus commodum capere potest de injuria sua propria (no one should be allowed to profit from his own wrong). The most obvious application of this principle against wrongful self benefit relates to murder and other unlawful homicide. Bennion on Statutory Interpretation (5th ed) (2007) section 264, also discusses the principle that law should serve the public interest. It comments that all enactments are presumed to be for the public benefit and that [t]his means that the court must always assume that it is in the public interest to give effect to the intention of the legislator, once this is ascertained; and, later, that Construction in bonam partem is related to three specific legal principles. The first is that a person should not benefit from his own wrong. The second principle precludes a person from succeeding if he has to prove an unlawful act to claim the statutory benefit, and the third is that where a grant is in general terms there is always an implied provision that it shall not include anything which is unlawful or immoral. In R v Chief National Insurance Commissioner, Ex p Connor [1981] QB 758, a widows claim for a widows allowance failed, despite her apparently absolute statutory entitlement, because her widowhood derived from the manslaughter of her husband of which she had been convicted. Another famous older example of the obvious application of the same principles is Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147. After her conviction still controversial for poisoning her husband, Florence Maybrick assigned to Mr Cleaver as her administrator an insurance policy taken out by her husband in her favour on his life. Cleavers claim on the policy failed, Fry LJ saying (p 156) that: The principle of public policy invoked is in my opinion rightly asserted. If no action can arise from fraud, it seems impossible to suppose that it can arise from felony or misdemeanour. This principle of public policy, like all such principles, must be applied to all cases to which it can be applied without reference to the particular character of the right asserted or the form of its assertion. In R v South Ribble Borough Council, Ex p Hamilton [2000] EWCA Civ 518; (2001) 33 HLR 9, a statutory provision entitled a person to housing benefit if he had no income above a specified amount, and it had been previously decided that receipt of income support under the separate social security scheme, with its inbuilt rights of adjudication and appeal, bound those administering the housing benefit scheme to treat a person as having income below the specified amount. Mr Hamilton had however obtained income support by false statements. The Court of Appeal held that income support obtained by fraud did not count for the purposes of entitlement to housing benefit. One reason was an express provision in the relevant regulations defining a person on income support as a person lawfully in receipt of income support, but another was the principle that legislation should not be so construed as to enable a man to profit from his own wrong: paras 8 and 26. The cases cited included Lazarus Estates Ltd v Beesley [1956] 1 QB 702, where Lord Denning MR delivered his dictum that Fraud unravels all and R v Barnet London Borough Council, Ex p Shah [1983] 2 AC 309, where Lord Scarman said at p 344A that it was wrong in principle that a man could rely on his own unlawful act to secure an advantage which could have been obtained if he had acted lawfully. This was said in the context of the entitlement to a student award of anyone ordinarily resident for three years in this country, to support Lord Scarmans view that ordinary residence would not include unlawful residence. The Court of Appeal in the South Ribble case also cited R v Secretary of State for the Home Department, Ex p Puttick [1981] QB 767. Astrid Proll, a member of the Baader Meinhof gang and unmarried, absconded while awaiting trial in Germany. She then entered the United Kingdom using a passport which she had bought in the name of Senta Sauerbier, and married Robin Puttick under that name. The German authorities discovered her true identity and location, and applied to extradite her. She responded by an application under section 6 of the British Nationality Act 1948. Section 6 gave an apparently unqualified right to any woman married to a United Kingdom citizen to be registered as a citizen of the United Kingdom. The Divisional Court refused her application. Donaldson LJ said that statutory duties which are in terms absolute may nevertheless be subject to implied limitations based upon principles of public policy accepted by the courts at the time when the Act is passed (p 773G H). Ms Prolls marriage was valid and in itself legal, but the commission of the crime of perjury and forgery formed the foundation of her marriage and disentitled her to rely upon the right which she would otherwise have had to claim registration . (pp 775H 776A, per Donaldson LJ). Forbes J said that the registrar who performed the ceremony was fraudulently misled into believing that he was marrying someone called Sauerbier, a divorced person of whose capacity to contract a second marriage he had satisfied himself, and whose father was called Eric Schulz, a machine engineer (p 777E), and, further, that, when applying to the Home Secretary to be registered as a citizen, Ms Proll (or Mrs Puttick as she was in law) produced, as she had to, the marriage certificate, with its fraudulent entries and forged signature, and had to explain in a covering letter the extent of her criminal activities. Forbes J said that he had therefore no doubt that it was her fraud and forgery which directly obtained for her the entitlement she now seeks to enforce and that she cannot claim that entitlement without relying on her own criminality (p 777F G). In considering whether the above principles and cases can have any present application, the Secretary of State and Mr Booth for Mr Beesley point to Lord Scarmans warning to courts in the Pioneer Aggregates case at pp 140H 141A C that planning control, though based on land law, is the creature of statute, and that planning law is a comprehensive code imposed in the public interest, into which the courts should not import principles or rules derived from private law unless expressly authorised by Parliament or necessary in order to give effect to the legislative purpose. That is a salutary reminder, and it links to Bennions first message quoted in para 46 above. But since the principles discussed in Halsbury and Bennion and in cases already discussed (notably South Ribble and Puttick) involve statutory interpretation, I do not think that the planning legislation can be treated as axiomatically immune from their application. The decision in Puttick was that, although Ms Proll was Mrs Puttick, and satisfied the literal language of section 6, her criminal conduct in the course of the marriage ceremony alone (Donaldson LJs judgment), or at all events that conduct coupled with her inevitable reliance on it when seeking registration (Forbes Js judgment), disentitled her from such registration. In the present case, if (as I am assuming, for the purposes of considering the second issue) Mr Beesley satisfies the literal language of the relevant statutory provisions, sections 171B(2) and 191(1)(a), he only does so because he successfully deceived the council into giving him planning permission to build a hay barn, into thinking that he intended to build and was building such a barn, and into thinking for more than four years that he had done so. When he applied for a certificate of lawfulness under section 191(1)(a), he attached carefully accumulated documentation to substantiate his four year occupation, including a plan showing the location and shape of his house (still marked barn). He thus necessarily disclosed and indeed expressly asserted that the hay barn for which he had obtained planning permission and in which he had been living for over four years was in reality a dwelling house. He did not expressly disclose or have to disclose that he had intended from the outset, when seeking planning permission, to build a dwelling house. In that respect the present case may be said to differ from Puttick, although the over whelming probability that the planning permissions had been deceptive from the outset could not have failed to be apparent. The other respect in which the present case differs from Puttick is that Mr Beesleys conduct in obtaining the planning permissions by deception, perhaps surprisingly, did not involve any identifiable and provable criminal offence under the law as it then stood. It could now do under section 2 of the Fraud Act 2006. One may speculate that Mr Beesley cannot have acted alone in relation to the planning applications, but must have had at least a co conspirator in forming and executing the plan to deceive the council, but the factual basis for a conclusion in this area is certainly outside the scope of the present proceedings. Since the ultimate question is whether it can have been the intention of the legislator that a person conducting himself like Mr Beesley can invoke the benefits of sections 171B and 191(1), I do not consider that there can be any absolute principle that public policy can only bear on the legislators intention in a context where there has been the commission of a crime. The principle described in the passages cited from Halsbury and Bennion is one of public policy. The principle is capable of extending more widely, subject to the caution that is always necessary in dealing with public policy. Some confirmation that the need for an actual crime is not absolute can also be found in another case, R v Registrar General, Ex p Smith [1991] 2 QB 393, where the Court of Appeal held it sufficient to disentitle a prisoner from exercising his on its face absolute right to inspect his birth certificate that there was a current and justified apprehension of a significant risk that he might in the future use the information thereby obtained to commit a serious crime. Whether conduct will on public policy grounds disentitle a person from relying upon an apparently unqualified statutory provision must be considered in context and with regard to any nexus existing between the conduct and the statutory provision. Here, the four year statutory periods must have been conceived as periods during which a planning authority would normally be expected to discover an unlawful building operation or use and after which the general interest in proper planning control should yield and the status quo prevail. Positive and deliberately misleading false statements by an owner successfully preventing discovery take the case outside that rationale. Although the principle was not mentioned in counsels submissions and my conclusions have been reached independently of it, it is not uninteresting also to recall the way in which, before the enactment of section 26 of the Limitation Act 1939 (the predecessor of section 32 of the Limitation Act 1980), the courts held that the apparently general wording of the limitation statutes could not be relied upon in cases where the cause of action had been fraudulently concealed or, later also, was itself based on fraud: Booth v Warrington (1714) 2 ER 111, Gibbs v Gould (1881 82) LR 9 QBD 59, Bulli Coal Mining Co v Osborne [1899] AC 351 and Lynn v Bamber [1930] 2 KB 72. If the owner of an unauthorised house were to bribe or by menaces coerce a planning authority officer into turning a blind eye to unlawful development for four years, it is inconceivable that the building owner could then rely on the four year period, even though the owner would not have to (and surely would not) mention anything but his four year period of occupation in his attempt to bring himself within the literal language of the sections. It is true that the council would then be able to show that a criminal offence had been committed (in the case of a bribe under the Public Bodies Corrupt Practices Act 1889, section 1 and in the case of menaces probably under the Theft Act 1968, section 21, since the purpose of gain includes under section 34(2)(a) keeping what one has). However, if a planning authority were to discover an unauthorised development or use, and the property owner were, in order to avoid enforcement action within the four years, falsely to assure the planning authority that the four years had not expired, and that he intended to remove or cease the development or use before they did, and so succeed in avoiding enforcement action during the four years, I very much doubt whether the owner could thereafter rely upon sections 171B and 191(A), merely because no criminal offence had been committed. Here, Mr Beesleys conduct, although not identifiably criminal, consisted of positive deception in matters integral to the planning process (applying for and obtaining planning permission) and was directly intended to and did undermine the regular operation of that process. Mr Beesley would be profiting directly from this deception if the passing of the normal four year period for enforcement which he brought about by the deception were to entitle him to resist enforcement. The apparently unqualified statutory language cannot in my opinion contemplate or extend to such a case. In seeking to counter such a conclusion, the Secretary of State and Mr Beesley draw attention to Epping Forest District Council v Philcox [2002] Env LR 2, where the grant of a certificate under section 191 was challenged on the grounds that the relevant user (the breaking of motorised road vehicles and storage of parts) had taken place during the relevant period without a waste management licence required under the Environmental Protection Act 1990 and so involved a criminal offence. The Court of Appeal cited inter alia Connor and Puttick, but held that there was no principle that the plain words of a statute which define what is lawful were to be read subject to a proviso that what is criminal cannot be lawful (para 15, per Pill LJ). However, both Chadwick LJ and Buxton LJ stressed that enforcement under the planning legislation and under the legislation regulating waste management were different matters: paras 35 and 46. No benefit would accrue to the operator by granting planning permission, which might be granted or refused for reasons which had nothing to do with waste management; those responsible for regulating waste management would remain free to take whatever enforcement action they decided: para 46. The case did not involve any fraudulent conduct in the planning process, and the failures to procure an environmental licence and obtain planning permission were independent, rather than one causing the other. I do not regard the case as assisting the Secretary of State or Mr Beesleys case. Conclusion For the reasons I have given, I do not consider that sections 171B(2) and 191(1)(a) are applicable to the facts of this case. Had I considered otherwise, I would have concluded that their language could not have been intended to cover the exceptional facts of this case, where there was positive deception in the making and obtaining of fraudulent planning applications, which was directly designed to avoid enforcement action within any relevant four year period and succeeded in doing so. This is a conclusion which would still be relevant, were any application to be made for a certificate under section 191(1)(b) or any reliance sought to be placed upon section 171B(1) to preclude enforcement action in respect of the building itself. In the present case, I would allow the Councils appeal, and set aside the grant of the certificate under section 191(1)(a). LORD RODGER I agree with Lord Mance and Lord Brown that the appeal should be allowed. I agree with what Lord Mance says on the first point. But, even assuming that section 171B (2) of the Town and Country Planning Act 1990 (the 1990 Act) did apply and that more than four years have elapsed since the structure was first used as a single dwellinghouse, in agreement with Lord Brown and Lord Mance, I am satisfied that the council would still be entitled to take enforcement action. Section 171B (2) of the 1990 Act allows respite from enforcement action four years after the time when a breach of planning control consisting in the change of use of a structure to a single dwellinghouse occurred. This provision must be based on the general idea that the change of use has been there for all to see for four years. If in that period the breach has not come to the notice of the council or the council has not seen fit to take enforcement action, then the better policy is to allow the change of use to stand and, so, to exclude enforcement action. In this case, however, Mr Beesley took effective steps to conceal the true nature of the development over the four year period since the change of use occurred. In particular, he deliberately concealed the fact that the structure was being used, and was intended to be used, as a single dwellinghouse on greenbelt land. The concealment worked and the true position came to light only when Mr Beesley triumphantly revealed his dwellinghouse immediately after the four years had expired. He does not suggest and it would not lie in his mouth to suggest that, despite his efforts, the council should have spotted the true position before the four years expired. In that situation, where Mr Beesley deliberately set out to conceal the true nature of the development during the whole four year period, with the aim that the council would be prevented (as happened) from taking enforcement action within the four year period, there is no justification for cutting off the councils right to take enforcement action. To hold otherwise would be to frustrate the policy, indeed the raison dtre, of section 171B (2) of the 1990 Act: in short, it is unthinkable that Parliament would have intended the time limit for taking enforcement action to apply in such circumstances. In my view, therefore, in this situation section 171B (2) does not prevent the council from initiating enforcement action. It follows that, having regard to section 191(2)(a) of the 1990 Act, the use of the subjects as a dwellinghouse is not lawful for the purposes of section 191(1)(a). I would therefore allow the appeal and set aside the grant of the certificate of lawful use under section 191(1)(a) of the 1990 Act. LORD BROWN Is Mr Beesley entitled to continue living in the three bedroomed house, masquerading as a modern barn, which in 2002 he built on metropolitan green belt land in Hertfordshire? The Secretary of States Planning Inspector held that he is. Collins J decided the contrary. The Court of Appeal restored the inspectors decision. One of the more surprising features of the litigation has seemed to me the Secretary of States strong support throughout for Mr Beesleys case. Reluctantly allowing the Secretary of States and Mr Beesleys joint appeal to the court below, Mummery LJ observed [2010] PTSR 1296, para 38: It is a surprising outcome which decent law abiding citizens will find incomprehensible: a public authority deceived into granting planning permission by a dishonest planning application can be required by law to issue an official certificate to the culprit consolidating the fruits of the fraud. The Lord Justice went on to note with regret that no public policy argument had been addressed to the court to the effect that statutory provisions should where possible be construed so as to prevent their use as an engine of fraud. Prompted by that judgment, the public policy argument is now for the first time in these proceedings before the Court in addition to the argument that, on the proper construction of section 171B(2) of the Town and Country Planning Act 1990 (as amended) (the 1990 Act), the particular breach of planning control committed here did not fall within its scope. Before us the Secretary of State resisted both arguments with equal vigour and whilst, of course, I recognise his general interest in supporting his inspectors decisions, I confess to some difficulty in understanding the damage he suggests the acceptance of either would occasion to the overall operation of the 1990 Act. On the contrary, what to my mind would be damaging, at least to the publics confidence in our planning law, would be a conclusion that the Court has no option but to permit Mr Beesley to profit from his dishonest scheme. With regard to the first issue the true construction and application of section 171B(2) there is nothing of substance I want to add to Lord Mances detailed judgment on the point. I find his reasoning entirely convincing. Parliament appears to have contemplated that a dwelling house built by way of unpermitted operational development would be enforced against, if at all, within the requisite four year period provided for by section 171B(1) failing which the authority probably would not seek ordinarily to enforce against its continued use as a house. That no doubt explains why the protection of a four year (as opposed to a ten year) limitation period for enforcement in respect of single dwelling houses was not extended to use as such but only to a change of use of any building [inferentially, some building other than a newly built house] as a single dwelling house. Either way, as Lord Mance demonstrates, section 171B(2) is simply not apt to encompass the use of a newly built house as a dwelling house and the nil use concept provides no coherent escape from this conclusion. It is upon the second issue in the case the issue of public policy to which Mr Beesleys deceitfulness gives rise that I wish to add a few thoughts of my own. Is it, one must ask, appropriate to import into this apparently self contained legislative planning scheme the principle of public policy that no one should be allowed to profit from his own wrong? That, critically, is the question arising on this part of the appeal and, it is important to note, it is a question that affects enforcement time limits no less under section 171B(1) (and, indeed, section 171B(3)) than under section 171B(2). At first blush, there might be thought two difficulties in the path of this public policy argument. The first is this. Although Mr Beesleys appeal to the inspector was ostensibly against the councils refusal of a section 191 application for a certificate of lawful existing use, in law his entitlement to such a certificate depended in turn (see section 191(2)(a)) upon whether the existing use could be enforced against i.e. whether the time for enforcement action had expired. Assuming as for the purposes of this part of the appeal one should that Mr Beesleys use of the dwelling house would otherwise fall within the terms of section 171B(2), the 1990 Act appears on its face to preclude the taking of enforcement action. It might be thought one thing to construe the Act in the light of the public policy principle so as to deny Mr Beesley the certificate that he was seeking (the grant of which would no doubt enhance his houses value and saleability) a certificate, as we have seen Mummery LJ describe it, consolidating the fruits of the fraud; quite another thing to construe it as enabling the council, section 171B(2) notwithstanding, to enforce against the use (by now apparently protected and thus lawful) beyond the expiry of the four year limitation period. On true analysis, however, there is nothing in this point. If, as was held in R v Chief National Insurance Commissioner, Ex p Connor [1981] QB 758, monetary payments, or, as decided in R v Secretary of State for the Home Department Ex p Puttick [1981] QB 767, registration as a United Kingdom citizen, could lawfully be withheld on public policy grounds respectively from a widow who had manslaughtered her husband, and from a German woman whose qualifying marriage to a United Kingdom citizen she had procured by fraud despite in each case their having acquired an ostensibly absolute statutory right to these respective benefits, so too a statutory bar on enforcement action can in my judgment be disapplied on similar public policy grounds. Logically a statutory prohibition on enforcement action is simply the other side of the coin from a statutory requirement to make a payment or to register citizenship: the one prevents a public authority from terminating a benefit; the other requires a public authority to confer a benefit. Public policy may operate to negate both. The second problem said to confront the importation into the 1990 Act of the public policy principle (the Connor principle as I shall now call it) is that it would run counter to the plain intention of a legislative scheme as a whole. The very premise of section 171 (and, in turn, of section 191) is that unlawful development development in breach of planning control has taken place and, having been persisted in for more than four years (or, as the case may be, ten years) has become expressly legitimised by Parliament. The whole object of the scheme, essentially in the interests of clarity and certainty, is to recognise and declare that after a certain time unpermitted development, if not already enforced against, has become immune from enforcement and thus lawful. To import the Connor principle into this scheme, submits the Secretary of State, would be inconsistent with that intention and would compromise the very public interest which the scheme is designed to serve. The argument is a serious one and I confess initially to have been troubled by it. Clearly it would be impossible to superimpose upon the statutory scheme any sort of broad principle to the effect that no one guilty of wrongdoing can be allowed to benefit from the limitation provisions of the 1990 Act. That, indeed, would be inconsistent with the plain intention of this legislation. Inevitably the breaches of planning control statutorily said to become immune from enforcement under section 171B involve a spectrum of wrongdoing. These range from cases at one end where the developer is simply unaware of the need for development permission to, at the other extreme, those intent on unpermitted development who plot a whole course of deception designed to circumvent planning control and escape enforcement. The point is illustrated by two cases in particular, Epping Forest District Council v Philcox [2002] Env LR 2 (Philcox) and Arun District Council v First Secretary of State [2007] 1 WLR 523 (Arun), both touched on in Lord Mances judgment. The applicant in Philcox, presumably a disaffected neighbour, was challenging the local authoritys grant of a section 191 certificate in respect of a companys unpermitted use of land for the breaking of motorised road vehicles and storage of parts. Basing his challenge upon the companys failure to obtain a waste management licence as required by the Environmental Protection Act 1990, Mr Philcox sought to invoke the Connor principle to deny the company the benefit of immunity from enforcement action pursuant to section 171B. In considering the Court of Appeals judgments rejecting the challenge, it is important to have in mind three points in particular. First, section 191(7) of the 1990 Act provides in terms that a certificate under the section has effect as if it were a grant of planning permission for the purpose of section 36(2)(a) of the Environmental Protection Act 1990. Secondly, section 171B of the 1990 Act confers no immunity against prosecution by the regulatory authority under the Environmental Protection Act (ie the company could still be prosecuted for their past failure to obtain a waste management licence). Thirdly, the company still required a licence and this could be refused unless the regulatory authority was satisfied both that the applicant was a fit and proper person and that it was not necessary to refuse the licence on environmental grounds. It is in this context that the following passages in the judgments fall to be understood: The court is entitled to construe a statute . in the light of its ability to promote its notions of public policy. The cases do not, however, in my judgment, establish a principle that the plain words of a statute which define what is lawful must be read subject to a proviso that what is criminal cannot be lawful. Section 191, in a systematic way, defines what uses and operations are lawful for the purposes of the Act and states the consequences of achieving that status with specific reference to section 36(2)(a) of the Environmental Protection Act 1990. There is no principle of public policy which requires that the intent of Parliament as expressed in section 191 should be defeated in the manner claimed. (Pill LJ at para 15) Whatever might be the position in other contexts, it is to my mind clear beyond argument that activity which is illegal by reason of contravention of one or other of the regulatory statutes referred to in section 191(7) is not activity which, (for that reason alone) prevents an application being made under section 191(1); or which prevents a local authority from fulfilling the duty imposed upon it by section 191(4). To hold otherwise would be contrary to the plain intention of Parliament when enacting section 191(7) of the Town and Country Planning Act 1990. (Chadwick LJ at para 39) The broad principle of not benefiting from a persons own illegal acts simply does not fit into the reality of what is being done when planning permission is granted or when a certificate of lawful existing use is granted on the basis of failure to take enforcement action over a period of 10 years; and, in particular, it does not fit, for the reasons that my Lords have given, into the particular case here, which is a case specifically addressed in section 191(7). (Buxton LJ at para 47). Not only, therefore, was there no relationship whatever in Philcox between the companys offending under the Environmental Protection Act and its breach of planning control in making unpermitted use of the land, but Parliament in section 191(7) of the 1990 Act expressly contemplated the issue of a certificate notwithstanding the requirement under different legislation for a waste management licence. Arun was a very different case decided, indeed, with no reference at all to the Connor principle. The point directly at issue there was whether the particular breach of planning control in question attracted a four year or a ten year limitation period a point of no materiality to the present appeal. The cases present relevance, however, lies in a short passage in Sedley LJs judgment (at para 36): I can entirely understand the local planning authoritys sense of frustration about this. Their planning department is not a police station, and the discovery that a person such as Mrs Brown has not to put too fine a point on it cheated on a conditional grant of planning permission, to detriment of her neighbours and of planning control, may well be a matter of time and of chance. The ordinary ten year period might well have been thought reasonable for such cases, but . it is not what Parliament decided to provide. What had happened there was that a Mrs K Brown of Bognor Regis had obtained planning permission for an extension (presumably something akin to a granny flat) subject to a number of conditions. One of these was that the extension should be occupied only by Mrs Browns dependent relative, Mrs J Brown; another was that, upon vacation of the extension by Mrs J Brown, its use should become merely ancillary to that of the original single dwelling house and should not be occupied or disposed of as separate residential accommodation. The extension was built shortly after planning permission was granted in 1988 but was not, in the event, occupied by Mrs J Brown. Until 1996 it was used by Mrs K Brown as part of her house and it was then let to students who occupied it independently as separate living accommodation. If one starts introducing the Connor principle into this area of the law, asks the Secretary of State, where will it all end? Given that Mrs Brown, in Arun, cheated on her neighbours and planning authority, should she too have lost the benefit (after whatever was the relevant limitation period) of immunity from enforcement action? In responding with a resounding no to that forensic question (posed, I should at once make clear, in my language rather than Mr Mauricis), it is necessary to identify what seem to me the stark differences between the facts of Arun and those of the present case, and so finally come to indicate just what part the Connor principle should to my mind play in the construction and application of this legislation. In my opinion, the only respect in which Mrs K Brown in Arun can be said to have cheated was in 1996 when she came to let her extension to students as independent living accommodation instead of continuing to occupy it, as for the past eight years she had, as part of her own house. There was no suggestion of any deceit by her either in the obtaining or in the initial implementation of the planning permission, no suggestion that she had always intended to use the extension for independent letting, no suggestion of any positive steps taken by her to disguise her eventual breach of planning control. It is difficult to suppose that there are not many people in the same sort of position as Mrs Brown who let out part of their houses as separate accommodation. Criticise them as one may, they can hardly be thought to have forfeited the statutory protection afforded by the limitation provisions of the 1990 Act. Contrast Mr Beesleys position. His was a deliberate, elaborate and sustained plan to deceive the council from first to last, initially into granting him a planning permission and then into supposing that he had lawfully implemented it and was using the building for its permitted purpose. His conduct throughout was calculated to mislead the council and to conceal his wrongdoing. As necessary features of his deceit he omitted to register any member of the household for the payment of council tax for the period 2002 2006, contrary to section 6 of the Local Government Finance Act 1992, and he failed to comply with a number of the requirements of the Building Regulations (SI 2000/2531) with regard to the construction of the dwelling. Whether this conduct (and that of his father in law with whom he secretly constructed the house) was or was not susceptible to prosecution under the general criminal law cannot be the determining question here. On any possible view the whole scheme was in the highest degree dishonest and any law abiding citizen would be not merely shocked by it but astonished to suppose that, once discovered, instead of being enforced against, it would be crowned with success, with Mr Beesley entitled to a certificate of lawful use to prove it. Frankly the dishonesty involved in this case is so far removed from almost anything else that I have ever encountered in this area of the law that it appears to constitute a category all its own. I say almost, because we all now know of the no less astonishing case of Fidler v Secretary of State for Communities and Local Government and Reigate and Banstead Borough Council [2010] EWHC 143 (Admin), a case concerning the construction without planning permission of a mock tudor castle behind a 40 ft high shield of straw bales and tarpaulin. Mr Fidler, just like Mr Beesley, successfully concealed his dwelling house from the local planning authority for four years. His claim to be immune from enforcement action (taken by the council there with a view to having the building demolished) was, however, defeated, initially before the inspector and then before Sir Thayne Forbes sitting on a section 289 appeal to the High Court. This was on the basis that the overall building operations relating to the construction of the new dwelling included the erection and removal of the straw bales and tarpaulin that had been deliberately put in place to conceal the construction and existence of the new dwelling in order to take advantage of the four year rule [and] were not substantially completed until the removal of the straw bales in July 2006 (para 7). In other words, enforcement action was found to have been taken before the necessary four years had elapsed for the purposes of section 171B(1) of the 1990 Act. Mr Fidlers further appeal to the Court of Appeal is, we are told, currently stayed pending the outcome of this appeal. Although, of course, we are not here deciding Mr Fidlers further appeal, it seems to me plain that, consistent with our judgment in the present case, it will be open to the council there to advance, as an alternative argument to that on which they have hitherto succeeded as to whether for the purposes of section 171B(1) the operational development had been substantially completed four years before the enforcement action was taken the argument based on the Connor principle. It also follows from our decision here that, in this very case, the council can, if it thinks it expedient, seek to enforce not merely against the continued use of this building as a dwelling house but additionally against its construction. One other matter should be mentioned at this stage. Recognising the unattractiveness of Mr Beesleys position and the persuasive public policy arguments against his succeeding in his application for a lawful development certificate, the Secretary of State in December 2010 published the Localism Bill which, if enacted, will by section 104 amend the 1990 Act by inserting three new subsections (171BA, 171BB, and 171BC) expressly to deal with issues of concealment. Without wishing to comment on the details of these provisions, I would observe only, first, that their proposed inclusion in the legislation surely indicates that the legislative scheme as a whole can hardly be thought incompatible with some application of the Connor principle; secondly that, pending the proposed statutory amendments, only truly egregious cases such as this very one (and perhaps Fidler too) should be regarded as subject to the Connor principle. I simply do not accept that amending legislation is required before this salutary principle of public policy can ever be invoked. I do recognise, however, that, as matters presently stand, it should only be invoked in highly exceptional circumstances. For these reasons, together with those given by Lord Mance, I too would allow the councils appeal on both grounds and would set aside the grant of the certificate under section 191(1)(a). |
Act) provide as follows: Sections (1) and (2) of section 123 of the Insolvency Act 1986 (the 1986 (1) A company is deemed unable to pay its debts (a) [non compliance with a statutory demand for a debt exceeding 750 presently due] (b) to (d) [unsatisfied execution on judgment debt in terms appropriate to England and Wales, Scotland and Northern Ireland respectively] (e) if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due. (2) A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the companys assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities. A company in the situation described in subsection (1)(e) is often said to be cash flow insolvent. A company in the situation described in subsection (2) is often said to be balance sheet insolvent, but that expression is not to be taken literally. It is a convenient shorthand expression, but a companys statutory balance sheet, properly prepared in accordance with the requirements of company law, may omit some contingent assets or some contingent liabilities. There is no statutory provision which links section 123(2) of the 1986 Act to the detailed provisions of the Companies Act 2006 as to the form and contents of a companys financial statements. This appeal is concerned with the construction and effect of section 123(1)(e) and (2) as incorporated into the documentation of an issue of loan notes. The statutory provisions were incorporated, with some small modifications, into the conditions applicable to loan notes issued in the course of a securitisation transaction comprising a portfolio of non conforming mortgage loans secured on residential property in the United Kingdom. The issuer is Eurosail UK 2007 3BL plc (Eurosail), one of many similar single purpose entities (SPEs) set up by the Lehman Brothers group (but off the balance sheet of any of that groups companies) not long before its collapse. Eurosail is the principal respondent to this appeal, and it has a cross appeal on a subsidiary issue. The other respondent appearing before this court, BNY Corporate Trustee Services Ltd (the Trustee) is part of the BNY Mellon Group. It is the trustee for the holders (Noteholders) of loan notes of various classes issued by Eurosail. It has adopted a neutral attitude in the proceedings (as explained in its written case), and has not appeared by counsel before this court. But it will, in the event that the appeal succeeds and the cross appeal fails, have an important judgment to make as to material prejudice to the Noteholders interests. In 2007 Eurosail (described in the documentation as the Issuer) acquired a portfolio of mortgage loans, secured on residential property in England and Scotland and denominated in sterling, to the principal amount of approximately 650m. Most of the mortgages were regarded as non conforming in that they did not meet the lending requirements of building societies and banks. This purchase was funded by the issue on 16 July 2007 of loan notes in five principal classes (A, B, C, D and E) comprising 14 different subclasses, some denominated in sterling, some in US dollars and some in euros. In the designation of the classes a indicated that the loan was denominated in euros, b US dollars and c pounds sterling. The senior (class A) notes were divided into three sub classes, denominated in one of the three currencies, designated and issued as follows: A1b A1c A2a A2b A2c A3a A3c US$200,000,000 102,500,000 64,500,000 US$100,000,000 63,000,000 215,000,000 64,500,000 The B, C, D and E Notes were issued in smaller amounts, with variations in currency but no subclasses having different priorities as between themselves. There were also some notes designated as ETc revenue backed notes. The total sum raised was just under 660,000,000. After payment of costs and expenses of the issue the initial surplus of assets over prospective liabilities (if taken at face value) was quite small. The provisions of section 123(1) and (2) of the 1986 Act are incorporated into an important provision in the conditions of issue of the Notes (the Conditions). Condition 9(a) (events of default) provides that the Trustee may on the occurrence of any of five specified events (an Event of Default) serve on Eurosail a written notice (an Enforcement Notice) declaring the Notes to be due and repayable. In some circumstances the Trustee is obliged to serve such a notice. In the absence of an Event of Default the A1 Notes were repayable in 2027 at latest (in fact they have already been repaid, as have the revenue backed notes). All the other Notes are repayable in 2045 at latest. The Events of Default include (Condition 9(a)(iii)): The Issuer, otherwise than for the purposes of such amalgamation or reconstruction as is referred to in sub paragraph (iv) below, ceasing or, through or consequent upon an official action of the Board of Directors of the Issuer, threatens to cease to carry on business or a substantial part of its business or being unable to pay its debts as and when they fall due or, within the meaning of section 123(1) or (2) (as if the words it is proved to the satisfaction of the court did not appear in section 123(2) of the Insolvency Act 1986 (as that section may be amended from time to time), being deemed unable to pay its debts Under a proviso to Condition 9(a), an occurrence falling within sub paragraph (iii) counts as an Event of Default only if the Trustee certifies to Eurosail that it is, in the Trustees sole opinion, materially prejudicial to the interests of the Noteholders. The service of an Enforcement Notice would have immediate and far reaching consequences for all the Noteholders (other than the A1 and ETc Noteholders, whose Notes have already been fully redeemed). As described in more detail below, an Enforcement Notice shifts their rights from the regime prescribed in Condition 2(g) (priority of payments prior to enforcement) to the regime prescribed in Condition 2(h) (priority of payments post enforcement). Under the latter regime Noteholders of Class A3 (A3 Noteholders) rank pari passu with Noteholders of Class A2 (A2 Noteholders) for repayment of principal. That is in contrast with the present regime, under which A2 and A3 Noteholders rank pari passu for interest payments (clause 2(g)(vi)) but A2 Noteholders have priority over A3 Noteholders in receiving repayments of principal out of funds representing principal sums received on the redemption of mortgages in the portfolio (those funds being included in the definition of Actual Redemption Funds in the preamble to the Conditions): Condition 5(b)(i)(2) and (3). It is in these circumstances that the construction of section 123(2) of the 1986 Act, as incorporated into Condition 9(a)(iii), has assumed such importance. Eurosail, together with those of the A2 Noteholders who appeared below, succeeded before Sir Andrew Morritt C [2010] EWHC 2005 (Ch), [2011] 1 WLR 1200, and the Court of Appeal [2011] EWCA Civ 227, [2011] 1 WLR 2524. The Court of Appeal considered that section 123(2) should be interpreted broadly and in line with standards of commercial probity: A balance has to be drawn between the right of an honest and prudent businessman, who is prepared to work hard, to continue to trade out of his difficulties if he can genuinely see a light at the end of the tunnel, and the corresponding obligation to put up the shutters, when, by continuing to trade, he would be doing so at the expense of his creditors and in disregard of those business considerations which a reasonable businessman is expected to observe. (That is a quotation from paragraph 216 of the Report of the Review Committee on Insolvency Law and Practice (1982) (Cmnd 8558), better known as the Cork Report, reflecting the view of Professor Goode; this passage is quoted in para 54 of the judgment of Lord Neuberger MR in the Court of Appeal). The appellant A3 Noteholders say that this passage is not in point. They have argued for a much stricter construction. They have emphasised that a companys inability to pay its debts is no more than a precondition to the exercise of the courts jurisdiction, which is discretionary, to make a winding up order or an administration order. The precondition to be satisfied should be, they have argued, transparent and certain, leaving scope for the exercise of discretion on the hearing of the petition. There has also been argument as to whether the statutory text (as incorporated in an amended form, and also allowing for possible future legislative amendment) must bear the same meaning as it would in actual winding up proceedings, or whether it can and should, as incorporated, take account of the commercial context of the Conditions. Those, in outline summary, are the positions of the opposing parties on the appeal. The cross appeal, which is relevant only if the appeal is successful, is concerned with the so called Post Enforcement Call Option (PECO) which is a subsidiary (but technically important) part of the securitisation transaction. Before going further into the complexities of the appeal I would comment that the image invoked by Professor Goode of an honest and prudent trader working hard to turn his business round relates, as was pointed out by Mr Moss QC for the appellants, to the law of insolvency as it applies to individuals. Even if translated into corporate terms, it has very little bearing on the situation in which Eurosail now finds itself. Its present financial position and future prospects are not matters for which Eurosail and its managers merit either praise or criticism, since those matters are almost entirely out of their control. They depend on three imponderables: first, (since the currency and interest rate hedging arrangements with the Lehman Brothers group have failed, leaving Eurosail with a claim in its insolvency) the movements of the US dollar and the euro relative to the pound sterling; secondly, movements in LIBOR or equivalent interest rates on loans denominated in those three currencies; and thirdly, the performance of the United Kingdom economy in general, and the United Kingdom residential property market in particular, as influencing the performance of the mortgage portfolio. The transaction documents The legal documents relating to the securitisation issue are, as Lord Neuberger MR put it, regrettably and forbiddingly voluminous. Apart from the Conditions themselves there was a formal trust deed made between the Trustee and Eurosail, a Liquidity Facility Agreement, currency swaps agreements, a Fixed/Floating Swap Agreement, a BBR Swap Agreement and other agreements relating to administrative matters (there is a full list of transaction documents in the definition of that expression in the preamble to the Conditions). Several expressions used in the Conditions involve a paperchase to other documents in order to find their definitions. Mr Moss opened the documents very lightly, moving rapidly from Condition 9(a)(iii) to concentrate his submissions on the construction of section 123(1) and (2) of the 1986 Act. Mr Dicker QC (for Eurosail) went into the Conditions more fully to pave the way for his contextual arguments. Without pre judging those arguments I think it is necessary, if only in order to appreciate the consequences of the opposing arguments, to have an outline understanding of how the SPE (which counsel concurred in describing as a closed system or wrapper) operated before the collapse of Lehman Brothers, of how it operates now (after the collapse of Lehman Brothers but before any Enforcement Notice), and of how it would operate after the service of an Enforcement Notice. Interest is payable on all unredeemed Notes quarterly in arrears, the first payment having been made on 13 September 2007. The annual rate of interest is linked to LIBOR or its dollar or euro equivalents (Condition 4(c)(i)), exceeding that rate by a margin (the Relevant Margin as defined in the preamble) which varies from 0.07% for A1b Notes to 4% for E Notes. Mortgage interest received by Eurosail (the principal component in the Available Revenue Fund) cascades down the metaphorical waterfall set out in the 24 sub paragraphs of Condition 2(g) (priority of payments prior to enforcement). The first claims on the income stream are for remuneration, charges and expenses; then (sub paragraph (iv)) sums due to the Liquidity Facility Provider, and (sub paragraph (v), but only until the collapse of Lehman Brothers) sums payable under or in connection with the Fixed/Floating Swap Agreement and the BBR Swap Agreement (but not any currency swaps). Payments to currency swaps counterparties were linked to interest payments to particular classes of Noteholders, so that payments to counterparties in respect of A Noteholders come into the provision for payment of interest to those Noteholders, which is made pari passu as between all the A sub classes (Condition 2(g)(vi)). The next priority (Condition 2(g)(vii)) was for payment off of any A Principal Deficiency (another expression defined in the preamble), but in practice such a deficiency could arise only if all the junior classes of Notes had become valueless. Next in the waterfall come similar groups of provisions for payment of interest, sums due to the currency swaps counterparties (and any B Principal Deficiency) in respect of B Notes (Condition 2(g)(viii) and (ix)) and so on for all the other classes (Condition 2(g)(x) to (xv)). On 15 September 2008 Lehman Brothers Holdings Inc (LBHI), the guarantor of the swaps counterparty, Lehman Brothers Special Financing Ltd (LBSF) filed for Chapter 11 bankruptcy, as did LBSF on 3 October 2008. The swaps were terminated on 13 November 2009. Eurosail has made a claim against LBHIs and LBSFs bankrupt estates for about $221,000,000. At the time of the hearings below, the claim had not been admitted and no distribution has been made in respect of it. During the last three years sterling has depreciated significantly against both the euro and the dollar, but the prevailing low level of interest rates has resulted in a surplus (excess spread) of mortgage interest received by Eurosail, which has enabled it to continue to pay in full the interest on all the outstanding Notes of every class. In the meantime, both before and after the collapse of Lehman Brothers, Eurosail received principal sums from time to time as principal secured by the mortgages was repaid, either by way of partial or total redemption by mortgagors, or by enforcement of the security against mortgagors who were in default. These sums have been and are at present applied under Condition 5(b)(i) as Actual Redemption Funds, on each date for payment of interest, in repaying the principal of the Notes in the order of priority A1 (now fully repaid), A2, A3, B, and so on. There is a proviso to Condition 5(b) under which the order of priority may be altered. The first possible variation (proviso (A)) applies if all the A1 and A2 Notes have been redeemed and other (favourable) specified conditions are satisfied: the A3 to E1c Notes then rank pari passu. Conversely, under the other variation (proviso (B)), which applies if there is an A Principal Deficiency, priority is granted to the A Notes as a single class ranking pari passu. Events of default are regulated by Condition 9. The events specified in Condition 9(a) are, apart from that already set out (para 5 above): default in payment for three business days of any principal or interest due on any of the Notes; breach by Eurosail of any of its obligations and failure to remedy the breach (if remediable) for 14 days after notice of the breach given by the Trustee; the making of an order or resolution for the winding up of Eurosail, otherwise than for an approved amalgamation or reconstruction; and the initiation of insolvency or administration proceedings, or the levying of execution (subject to various qualifications which it is unnecessary to set out in detail). If the Event of Default is an event under Condition 9(a)(iii) or a breach of Eurosails obligations, there is a further requirement that the Trustee shall have certified to Eurosail that such event is, in its sole opinion, materially prejudicial to the interests of the Noteholders. For this purpose the Trustee may under the trust deed (as recorded in Condition 2(c)) have regard only to (i) the interests of the A Noteholders if, in the Trustees sole opinion, there is a conflict between the interests of the A Noteholders (or any Class thereof) and the interests of the B Noteholders, the C Noteholders, the D Noteholders and/or the E Noteholders. This provision does not indicate how the Trustee is to exercise its discretion in the event of a conflict (such as there now potentially is) between the interests of the A2 Noteholders and the A3 Noteholders. If there is an Event of Default (and, in the cases just mentioned, it is materially prejudicial) the Trustee may at its discretion serve an Enforcement Notice on Eurosail. Moreover it is obliged to do so if requested or directed (i) by holders of at least 25% of the outstanding Most Senior Class of Notes (defined as meaning the A Noteholders, rather than a subclass of them) or (ii) by an extraordinary resolution of the holders of that class. This court was not shown any evidence, and did not hear any submissions, as to whether either of those requirements would be likely to be satisfied in practice. On service of the Enforcement Notice the Notes become immediately due and payable and the Noteholders security becomes enforceable (Condition 9(b)). Thereupon the order of priority shifts from that in Condition 2(g) to that in Condition 2(h). It is unnecessary to go through all the detail of Condition 2(h). The all important change is that under Condition 2(h)(v) the available funds are applicable to pay pari passu and pro rata (1) all amounts of interest and principal then due and payable on the A1c Notes, the A2c Notes and the A3c Notes and (2) [subject to provisions about currency swaps that have now lapsed] any interest and principal then due and payable on the A1b Notes, the A2a Notes, the A2b Notes and the A3a Notes, respectively. In practical terms, the A2 Notes would no longer have priority, in terms of principal, to the A3 Notes. The opening words of condition 2(h) express the Trustees obligation as being to make payments to the extent of the funds available to [Eurosail] and from the proceeds of enforcement of the Security (with exceptions that need not be detailed). The penultimate provision of Condition 2(h) provides: The Noteholders have full recourse to [Eurosail] in respect of the payments prescribed above and accordingly are entitled to bring a claim under English law, subject to the Trust Deed, for the full amount of such payments in accordance with Condition 10 (Enforcement of Notes). Mr Dicker did not challenge Mr Mosss submission that the opening words do not contradict the penultimate provision, and that seems to be correct. The opening words are directed to the Trustees obligations, not to those of Eurosail. Condition 5(j) contains the PECO (Post Enforcement Call Option) which is the subject of the cross appeal. This option (which has been given effect to as a separate written agreement between the Trustee and a company named or referred to as OptionCo) is regarded in the industry as a means of achieving the effect of limited recourse without the adverse tax consequences that would then have followed from a simple express non recourse provision. The operative part of Clause 5(j) is as follows: All of the Noteholders will, at the request of the holder of the Post Enforcement Call Option, sell all (but not some only) of their holdings of the Notes to the holder of the Post Enforcement Call Option, pursuant to the option granted to it by the Trustee (as agent for the Noteholders) to acquire all (but not some only) of the Notes (plus accrued interest thereon), for the consideration of one euro cent per Euro Note outstanding, one dollar cent per Dollar Note outstanding and one penny per Sterling Note outstanding (and for these purposes, each Global Note shall be one Note) in the event that the Security for the Notes is enforced, at any time after the date on which the Trustee determines that the proceeds of such enforcement are insufficient, after payment of all other claims ranking higher in priority to the Notes and pro rata payment of all claims ranking in equal priority to the Notes and after the application of any such proceeds to the Notes under the Deed of Charge, to pay any further principal and interest and any other amounts whatsoever due in respect of the Notes. Bankruptcy remoteness Bankruptcy remoteness was the expression used by Standard & Poors credit rating agency, and generally in the industry, to describe one criterion for a SPE to obtain a satisfactory credit rating for its loan notes (see European Legal Criteria for Structured Finance Transactions published by Standard & Poors (28 August 2008), and the comments of the Chancellor [2011] 1 WLR 1200, para 8 and Lord Neuberger of Abbotsbury MR [2011] 1 WLR 2524, para 28). This is not the place to consider either the reliability of the credit rating agencies judgments on Notes secured by sub prime mortgages, or the influence that their judgments seem to have had in the market (caused, some have suggested, by the industrys general inability to comprehend the risks inherent in its own creations). But the notion of bankruptcy remoteness, even if imperfectly understood, underlay many features of the Conditions and the arrangements of which they formed part. In developing his contextual argument that this court should (if necessary) mould the meaning of section 123(1) and (2), as incorporated into Condition 9(a)(3) so as to take account of commercial realities, Mr Dicker drew particular attention to five features of the arrangements. They are set out and discussed in section B2 of Eurosails case. Most of them have been mentioned already, at least in passing, but it may be helpful to bring them together in summary form. They are relevant not only (arguably) to the issue of construction but also (without room for argument) to determining the likely length of deferment of Eurosails long term liabilities under the Conditions, in the absence of an Event of Default which triggers an Enforcement Notice. These points are covered at some length in the witness statements of Mr Mark Filer, a director of Wilmington Trust SP Services (London) Ltd, Eurosails corporate services provider. The five salient features of the Conditions and the supporting documentation bearing on the likely deferment of Eurosails obligations in respect of principal and interest are as follows: (1) Condition 2(g) defines Eurosails obligations for payment of interest on the Notes (after remuneration, charges and expenses) in terms of the Available Revenue Fund (see para 12 above). If that source is insufficient for payment of interest on any of the Junior Notes (that is, those which are not A Notes) the obligation is deferred (while accruing interest) under Condition 6(i) and (j), if necessary until the final redemption date in 2045. (2) Temporary shortages of income can be provided for by the Liquidity Facility (reimbursements to which have a high order of priority under Condition 2(g)(iv)). (3) As to principal, redemption of Notes (other than the redeemed A1 Notes and the revenue backed Notes) is not due until 2045. Until then redemption is limited to the Actual Redemption Funds (as defined in the preamble) which are applied in the appropriate order of priority under Condition 5(b) (see para 14 above). (4) Any loss of principal resulting from default on mortgages is termed a Principal Deficiency and is recorded in the Principal Deficiency Ledger (the detailed provisions as to this are found not in the Conditions but in Clauses 8 and 9 of the Cash/Bond Administration Agreement). If there is surplus income from the mortgage payments, the excess spread can be used to reduce or eliminate any Principal Deficiency on whatever is the highest ranking class of Notes with a deficiency. Recoupment of a Principal Deficiency takes priority to the payment of interest on lower ranking Notes (see para 12 above). (5) Finally there is the PECO, which is intended to produce the same, or a similar result as an express limited recourse provision (see paras 18 and 19 above). The legislation This court was taken to the legislative history of sections 122 and 123 of the 1986 Act, and it will be necessary to refer to it in some detail. But it may be better to start with the sections themselves. The 1986 Act was a consolidating statute which gave effect to the amendments made by the Insolvency Act 1985. Section 122(1), as amended, provides seven cases in which a company may be wound up by the court, of which the most important are the last two: (f) the company is unable to pay its debts, (g) the court is of the opinion that it is just and equitable that the company should be wound up. Section 123(1) then sets out five cases (stated or summarised in para 1 above) in which a company is deemed unable to pay its debts. The four cases in paragraphs (a) to (d) of section 123(1) are true deeming provisions. A companys non compliance with a statutory demand, or non satisfaction of execution of a judgment debt, is a matter that can be proved quite simply, usually by a single short witness statement. If proved, it establishes the courts jurisdiction to make a winding up order, even if the company is in fact well able to pay its debts. If however a debt which has been made the subject of a statutory demand is disputed on reasonable grounds, the petitioner is adopting what has been called a high risk strategy, and the petition may be dismissed with indemnity costs: In Re a Company 12209 of 1991 [1992] BCLC 865, 868 (Hoffmann J). Section 123(1)(e) is significantly different in form: if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due. This is not what would usually be described as a deeming provision. It does not treat proof of a single specific default by a company as conclusive of the general issue of its inability to pay its debts. Instead it goes to that very issue. It may open up for inquiry a much wider range of factual matters, on which there may be conflicting evidence. The range is wider because section 123(1)(e) focuses not on a single debt (which under paragraphs (a) to (d) has necessarily accrued due) but on all the companys debts as they fall due (words which look to the future as well as to the present). The words as they fall due did not appear in the legislation until the Insolvency Act 1985. Similarly the express reference in section 123(2) to the test of the value of the companys assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities did not appear before the Insolvency Act 1985. In the present case both the Chancellor and the Court of Appeal treated the present legislative provisions as materially different from those previously in force: [2011] 1 WLR 1200, para 24; [2011] 1 WLR 2524, para 53. Yet when this point was raised during the passage of the Insolvency Bill in 1985, the government spokesman in House of Lords, Lord Lucas of Chilworth, stated: Commons Amendment No 458 gives effect to the way in which the courts have interpreted section 518 of the Companies Act [1985]; that was previously section [223] of the 1948 Act. We are not seeking to amend the law by this amendment; merely to give effect to that interpretation by the courts, namely, that section 518 contains both a cash flow and a balance sheet test. Hansard (HL Debates, 23 October 1985, col 1247) In these circumstances it is necessary to look quite closely at the legislative history. In considering it I have derived great assistance from a variety of academic commentary, including an article by Dr Peter Walton, Inability to pay debts: beyond the point of no return? [2013] JBL 212. The starting point is sections 79 and 80 of the Companies Act 1862 (25 & 26 Vict, c 89), the general structure of which is similar to that of sections 122 and 123 of the 1986 Act. Section 80(4) of the 1862 Act stated the test simply as: Whenever it is proved to the satisfaction of the court that the company is unable to pay its debts. However, it is to be noted that under section 158, once a winding up order had been made, all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company, a just estimate being made, so far as is possible, of the value of all such debts or claims as may be subject to any contingency or sound only in damages, or for some other reason do not bear a certain value. So a contingent or prospective creditor could not present a petition, but if another creditor presented a petition and secured a winding up order, contingent and prospective liabilities were admitted to proof. In In Re European Life Assurance Society (1869) LR 9 Eq 122 Sir William James V C dismissed a petition for the winding up of a company which had issued large numbers of life policies and annuity contracts, and appeared to be in financial difficulties. In an extempore judgment he decided, with very little reasoning, that (p127) inability to pay debts must refer to debts absolutely due. He then proceeded to consider at greater length, but to dismiss, the alternative just and equitable ground in section 79(5) of the Companies Act 1862. As to this ground he said at p128: And in my view of the law of the case it would be just and equitable to wind up a company like this assurance company if it were made out to my satisfaction that it is, not in any technical sense but, plainly and commercially insolvent that is to say, that its assets are such, and its existing liabilities are such, as to make it reasonably certain as to make the court feel satisfied that the existing and probable assets would be insufficient to meet the existing liabilities. I take it that the court has nothing whatever to do with any question of future liabilities, that it has nothing whatever to do with the question of the probability whether any business which the company may carry on tomorrow or hereafter will be profitable or unprofitable. That is a matter for those who may choose to be the customers of the company and for the shareholder to consider. So here, it seems, the Vice Chancellor was applying a balance sheet test, but only to existing liabilities, in the context of the just and equitable ground. He did not refer to any of the authorities that had been cited. It may be unfortunate that his judgment has come to be regarded as a leading case. Shortly afterwards the law was changed in relation to life offices by the Life Assurance Companies Act 1870 (33 & 34 Vict, c 61), which was effectively the beginning of the modern statutory regulation of life assurance. There was no general change until section 28 of the Companies Act 1907, which made an amendment which was then consolidated by the Companies (Consolidation) Act 1908. The latter provided in section 130(iv) that a company should be deemed to be unable to pay its debts: if it is proved to the satisfaction of the court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company. The amendment made by the Companies Act 1907 was introduced on the recommendation of the Loreburn Committee (Report of the Company Law Amendment Committee) (1906) (Cd 3052), para 43, which was influenced by section 21 of the Life Assurance Companies Act 1870. The amendment is described by Dr Walton [2013] JBL 212, 228 as an abbreviated version of section 21. But there is not a very close parallel, since section 21 referred to a life office being insolvent (meaning, apparently, balance sheet insolvent) rather than its being unable to pay its debts. But the admission of contingent and prospective liabilities, and especially long term liabilities, must tend to focus attention on balance sheet considerations. Thus in In Re Capital Annuities Ltd [1979] 1 WLR 170, 185, Slade J observed: From 1907 onwards, therefore, one species of inability to pay its debts specifically recognised by the legislature as a ground for the making of a winding up order in respect of any company incorporated under the Companies Acts was the possession of assets insufficient to meet its existing, contingent and prospective liabilities. Essentially the same wording appeared in section 223(d) of the Companies Act 1948 and in section 518(e) of the Companies Act 1985. Two cases decided under section 223(d) call for mention. The first is In Re a Company (also referred to as Bond Jewellers) [1986] BCLC 261, decided by Nourse J on 21 December 1983. Like In Re European Life Assurance Society, it was an extempore judgment given without citation of authority, in order to avoid delay, but it has been much cited. It was referred to in both Houses of Parliament during the committee stages of the Insolvency Bill. It concerned a tenant company with a propensity for postponing payment of its debts until threatened with litigation. Nourse J felt unable to make an order under section 223(d), and considered, but ultimately did not make an order, on the just and equitable ground in section 222(f). The case is of interest as illustrating (at p 263) that the phrase as they fall due, although not part of the statutory text, was understood to be implicit in section 223(d). It is also of interest for the judges observation on the second point in section 223(d) (now embodied, in different words, in section 123(2) of the 1986 Act): Counsel says that if I take into account the contingent and prospective liabilities of the company, it is clearly insolvent in balance sheet terms. So indeed it is if I treat the loans made by the associated companies as loans which are currently repayable. However, what I am required to do is to take into account the contingent and prospective liabilities. That cannot mean that I must simply add them up and strike a balance against assets. In regard to prospective liabilities I must principally consider whether, and if so when, they are likely to become present liabilities. The second case, Byblos Bank SAL v Al Khudhairy [1987] BCLC 232, was a considered judgment of Nicholls LJ (with whom Slade and Neill LJJ agreed) delivered after 11 days of argument. It concerned the disputed validity of the appointment of a receiver in June 1985, before either the Companies Act 1985 or the Insolvency Act 1985 was in force. The ostensible ground for appointment of the receiver was not made out, but the bank relied on a new ground, section 223(d). Nicholls LJ observed (p 247): Construing this section first without reference to authority, it seems to me plain that, in a case where none of the deeming paras (a), (b) or (c) is applicable, what is contemplated is evidence of (and, if necessary, an investigation into) the present capacity of a company to pay all its debts. If a debt presently payable is not paid because of lack of means, that will normally suffice to prove that the company is unable to pay its debts. That will be so even if, on an assessment of all the assets and liabilities of the company, there is a surplus of assets over liabilities. That is trite law. It is equally trite to observe that the fact that a company can meet all its presently payable debts is not necessarily the end of the matter, because para (d) requires account to be taken of contingent and prospective liabilities. Take the simple, if extreme, case of a company whose liabilities consist of an obligation to repay a loan of 100,000 one year hence, and whose only assets are worth 10,000. It is obvious that, taking into account its future liabilities, such a company does not have the present capacity to pay its debts and as such it is unable to pay its debts. Nicholls LJ then referred to the judgment of James V C in In Re European Life Assurance Society LR 9 Eq 122, including the passage quoted at para 28 above, and commented (p 248): In my view the exercise described by James V C is the exercise required to be done under section 223 (now section 518 of the 1985 Act). He also referred to the decisions of Slade J in In Re Capital Annuities Ltd [1979] 1 WLR 170 and Nourse J in In Re A Company [1986] BCLC 261 as consistent with the views he had expressed. In my view these authorities go quite a long way to establishing that neither the notion of paying debts as they fall due, nor the notion of balance sheet insolvency, was unfamiliar before the enactment of the Insolvency Act 1985. But petitions by contingent or prospective creditors have been rare even after the repeal in 1986 of the standard requirement for such a creditor to provide security for costs. One reason for that is no doubt the difficulty of quantifying contingent and prospective liabilities to the satisfaction of the court. Another may be the fact that well advised commercial lenders will insist on contractual conditions under which deferred liabilities are accelerated in the event of the borrower getting into financial difficulties. The far reaching reforms effected by the Insolvency Acts of 1985 and 1986, together with related subordinate legislation, were influenced by the report of the Cork Committee, published in 1982. One of its recommendations (para 535) was that the sole ground upon which the court may make an insolvency order in respect of a debtor, whether individual or corporate, will be that the debtor is unable to pay his or its debts. The Committee proposed three cases in which the debtor would be deemed to be insolvent and unable to pay his or its debts. The first two corresponded to the cases in section 123(1)(a) to (d) of the 1986 Act. The third case was: (c) Where the applicant is a contingent or prospective creditor to whom the debtor is or may become indebted in a sum of not less than the prescribed amount, being a debt not yet presently due and payable, and it is proved to the satisfaction of the court that the ultimate repayment of the debt is in jeopardy because the debtors liabilities, including contingent and prospective liabilities, exceed the debtors assets. This proposal limited the balance sheet insolvency test to applications by contingent or prospective creditors whereas the Byblos Bank case suggested that it was also relevant to the payment of debts as they fall due. That point was noted by Briggs J in his perceptive judgment In Re Cheyne Finance plc (No 2) [2008] Bus LR 1562. He referred at paras 42 43 to similar language (as they become due) used in Australian companies legislation, which until 1992 had a single test based on an inability to pay debts as they become due a phrase which looks to the future, as Griffith CJ said in Bank of Australasia v Hall (1907) 4 CLR 1514, 1527. There is a good deal of later Australian authority, mentioned in the judgment of Briggs J, to the same effect. In Re Cheyne Finance Plc (No 2) was concerned with a security trust deed which (in contrast to Condition 9(a)(iii) in the present appeal) incorporated into its definition of insolvency event the terms of section 123(1), but not section 123(2). It was therefore necessary to consider how far section 123(1)(e) was concerned, not only with debts that were immediately payable, but also with those that would be payable in the future. Briggs J decided, rightly in my view, that that is what section 123(1)(e) requires (para 56): In my judgment, the effect of the alterations to the insolvency test made in 1985 and now found in section 123 of the 1986 Act was to replace in the commercial solvency test now in section 123(1)(e), one futurity requirement, namely to include contingent and prospective liabilities, with another more flexible and fact sensitive requirement encapsulated in the new phrase as they fall due. Briggs J considered (para 35), again rightly in my view, that the Byblos Bank case was a case about ability to pay debts as they became due, but that the Court of Appeal recognised that balance sheet insolvency is not irrelevant to that issue. The practical effect of section 123 There is no doubt that, as a matter of form, the statutory test for a company being unable to pay its debts is materially different (as the Chancellor and the Court of Appeal observed) from the position under the Companies Act 1985. Section 123(1)(e) introduced the words as they fall due and section 123(2) has introduced a direct reference to a companys assets and liabilities. These two provisions, both labelled as deeming provisions (though neither is obviously of that character) stand side by side in section 123(1)(e) and section 123(2) with no indication of how they are to interact. It seems likely that part of the explanation lies in the history of the passage through Parliament of the Insolvency Bill in 1985, and the lengthy and interrupted process of review and consultation which had preceded it. This process began as long ago as October 1976 when the Secretary of State announced his intention of setting up what became the Review Committee chaired by Mr (later Sir) Kenneth Cork. It produced an interim report in October 1979 (after a change of government) and its final report in 1982. The whole protracted process is described by Professor Ian Fletcher QC in his Law of Insolvency 4th ed (2009), pp 16 22. He explains how there was no official reaction to the final report until a spate of financial scandals early in 1984: At relatively short notice the government White Paper, referred to above, was published in February 1984 together with an indication that legislation was imminent. In consequence, very little time was allowed for interested parties to submit comments before the drafting of the Insolvency Bill was embarked upon, and the Bill itself was introduced in the House of Lords on 10 December 1984. This regrettable mishandling of the period of preparation for the first major overhaul of insolvency law for over 100 years cannot but be lamented. The inadequate manner in which consultation was conducted, coupled with the near total lack of any form of public debate about the issues of policy and principle at the heart of any radical recasting of insolvency law, were an inauspicious prelude to what was to become a most contentious and confused episode of legislative history. Thereby, what ought to have been a largely non controversial, non Party Bill became the subject of highly dramatic proceedings before both Houses, and also in Committee, and damage was unquestionably inflicted upon the ultimate quality of a highly technical piece of legislation whose detailed provisions were but vaguely understood by all but a minority of those participating in its enactment, but whose social and economic importance was nonetheless immense. The Bills deficiencies, due to haste in preparation, together with the vicissitudes of the parliamentary process, resulted in a quite exceptional number of amendments being tabled to the Insolvency Bill, estimated to have approached 1,200 by the time of Royal Assent. A high proportion of these amendments were tabled by the Government itself, and many were adopted virtually without debate during the closing stages of proceedings. (para 1 034) Despite the difference of form, the provisions of section 123(1) and (2) should in my view be seen, as the Government spokesman in the House of Lords indicated, as making little significant change in the law. The changes in form served, in my view, to underline that the cash flow test is concerned, not simply with the petitioners own presently due debt, nor only with other presently due debt owed by the company, but also with debts falling due from time to time in the reasonably near future. What is the reasonably near future, for this purpose, will depend on all the circumstances, but especially on the nature of the companys business. That is consistent with Bond Jewellers, Byblos Bank and Cheyne Finance. The express reference to assets and liabilities is in my view a practical recognition that once the court has to move beyond the reasonably near future (the length of which depends, again, on all the circumstances) any attempt to apply a cash flow test will become completely speculative, and a comparison of present assets with present and future liabilities (discounted for contingencies and deferment) becomes the only sensible test. But it is still very far from an exact test, and the burden of proof must be on the party which asserts balance sheet insolvency. The omission from Condition 9(a)(iii) of the reference to proof to the satisfaction of the court cannot alter that. Whether or not the test of balance sheet insolvency is satisfied must depend on the available evidence as to the circumstances of the particular case. The circumstances of Eurosails business, so far as it can be said to have a business at all, are quite unlike those of a company engaged in normal trading activities. There are no decisions to be made about choice of suppliers, stock levels, pricing policy, the raising of new capital, or other matters such as would constantly engage the attention of a trading companys board of directors. Instead Eurosail is (in Mr Mosss phrase) in a closed system with some resemblance to a life office which is no longer accepting new business. The only important management decision that could possibly be made would be to attempt to arrange new hedging cover in place of that which was lost when Lehman Brothers collapsed. To that extent Eurosails present assets should be a better guide to its ability to meet its long term liabilities than would be the case with a company actively engaged in trading. But against that, the three imponderable factors identified in para 9 above currency movements, interest rates and the United Kingdom economy and housing market are and always have been outside its control. Over the period of more than 30 years until the final redemption date in 2045, they are a matter of speculation rather than calculation and prediction on any scientific basis. At first instance the Chancellor started with three propositions derived from the case law (paras 29 to 32): that the assets to be valued are the present assets of the company; that contingent and prospective liabilities are not to be taken at their full face value; and that: Taking account of must be recognised in the context of the overall question posed by the subsection, namely whether the company is to be deemed to be insolvent because the amount of its liabilities exceeds the value of its assets. This will involve consideration of the relevant facts of the case, including when the prospective liability falls due, whether it is payable in sterling or some other currency, what assets will be available to meet it and what if any provision is made for the allocation of losses in relation to those assets. (para 32) He then set out four reasons (paras 34 to 37) for concluding (para 38) that the value of Eurosails assets exceeded its liabilities, having taken account of its contingent and prospective liabilities to such extent as appears to be necessary at this stage. In the Court of Appeal Lord Neuberger MR did not disagree with anything in the Chancellors judgment so far as it related to statutory construction. He did however go further in his detailed discussion of section 123(2). He observed (para 44): In practical terms, it would be rather extraordinary if section 123(2) was satisfied every time a companys liabilities exceeded the value of its assets. Many companies which are solvent and successful, and many companies early on in their lives, would be deemed unable to pay their debts if this was the meaning of section 123(2). Indeed, the issuer is a good example of this: its assets only just exceeded its liabilities when it was formed, and it was more than possible that, even if things went well, it would fall from time to time within the ambit of section 123(2) if the appellants are right as to the meaning of that provision. Lord Neuberger MR developed this at paras 47 to 49 of his judgment: 47. More generally, I find it hard to discern any conceivable policy reason why a company should be at risk of being wound up simply because the aggregate value (however calculated) of its liabilities exceeds that of its assets. Many companies in that position are successful and creditworthy, and cannot in any way be characterised as unable to pay [their] debts. Such a mechanistic, even artificial, reason for permitting a creditor to present a petition to wind up a company could, in my view, only be justified if the words of section 123(2) compelled that conclusion, and in my opinion they do not. 48. In my view, the purpose of section 123(2) has been accurately characterised by Professor Sir Roy Goode in Principles of Corporate Insolvency Law, 3rd ed (2005). Having referred to section 123(1)(e) as being the cash flow test and to section 123(2) as being the balance sheet test, he said this, at para 4 06: If the cash flow test were the only relevant test [for insolvency] then current and short term creditors would in effect be paid at the expense of creditors to whom liabilities were incurred after the company had reached the point of no return because of an incurable deficiency in its assets. 49. In my judgment, both the purpose and the applicable test of section 123(2) are accurately encapsulated in that brief passage. Toulson LJ agreed with Lord Neuberger MR but expressed himself in a more guarded way. He agreed that Professor Sir Roy Goode had rightly discerned the underlying policy (para 115) but added (para 119) that Professor Goodes reference to a company having reached the point of no return because of an incurable deficiency in its assets illuminates the purpose of the subsection but does not purport to be a paraphrase of it. He continued: Essentially, section 123(2) requires the court to make a judgment whether it has been established that, looking at the companys assets and making proper allowance for its prospective and contingent liabilities, it cannot reasonably be expected to be able to meet those liabilities. If so, it will be deemed insolvent although it is currently able to pay its debts as they fall due. The more distant the liabilities, the harder this will be to establish. I agree with what Toulson LJ said here, and with great respect to Lord Neuberger MR I consider that the point of no return should not pass into common usage as a paraphrase of the effect of section 123(2). But in the case of a companys liabilities that can as matters now stand be deferred for over 30 years, and where the company is (without any permanent increase in its borrowings) paying its debts as they fall due, the court should proceed with the greatest caution in deciding that the company is in a state of balance sheet insolvency under section 123(2). Reasoning in the courts below Sir Andrew Morritt C, having set out some general propositions as to the effect of section 123 (1)(e) and (2) (in paras 29 to 32 of his judgment, summarized above), rejected the A3 Noteholders submission that Eurosail was plainly insolvent for the purposes of section 123(2) as applied by Condition 9(a)(iii). He relied on four points, set out in paras 34 to 37 of his judgment. First, Eurosails claims in the insolvencies of LBHI and LBSF, though not admitted, could not be ignored. The secondary market indicated that the claim was worth 35% to 37% of US$221m (that is, a value of the order of 60m). Second, a large part of the total deficiency that was claimed to exist was due to conversion into sterling at the prevailing spot rate of liabilities not due for payment until 2045. Third, the future liabilities were fully funded in the limited sense that deficiencies resulting from mortgage defaults reduced Eurosails liability to the Noteholders through the operation of the Principal Deficiency Ledger. Fourth, the Chancellor was able to infer that a calculation of the then present values of assets and liabilities would not show a deficiency, since Eurosail was well able to pay its debts as they fell due, there was no deficiency on the Principal Deficiency Ledger, and projected redemptions of each class of A Notes were in advance of the maturity dates. In the Court of Appeal counsel appearing for the A2 Noteholders did not feel able to give complete support to the Chancellors second point, and Lord Neuberger MR accepted (para 67) the submission of counsel for the appellants: As Mr Sheldon [then appearing for the A3 Noteholders] said, one has to value a future or contingent liability in a foreign currency at the present exchange rate. By definition, that is the present sterling market value of the liability. I would also respectfully question the Chancellors third point. The Chancellor had earlier in his judgment, at para 13, referred to clause 8 of the Cash/Bond Administration Agreement, which provides for the maintenance of Principal Deficiency Ledgers. That seems to be the basis of his point about liabilities being self cancelling. But clause 8 seems to be concerned with no more than an accountancy exercise, not with a permanent extinction of liabilities. It operates to defer liabilities for principal until the final redemption date, if circumstances require, and provided that an Enforcement Notice is not given in the meantime. But Condition 2(h) provides for Eurosail to be liable on a full recourse basis post enforcement, as already noted (para 18 above). Lord Neuberger MR did not accept that a forecast deficiency based on then current exchange rates could be dismissed as entirely speculative. He started (para 63) from Eurosails audited accounts for the year ending 30 November 2009, which showed a net liability of 74.557m. He noted (paras 63 to 74) that this figure required two substantial amendments (one for the Lehman Brothers claim, and the other for the full recourse factor) which, ironically and coincidentally, virtually cancel each other out (para 69). So his final discussion and conclusion (paras 75 to 83) starts with an assumed deficiency of the order of 75m. Against that Lord Neuberger MR set three factors. The first was that a deficiency of 75m, with an aggregate principal sum of just over 420m outstanding on the mortgages, was less than 17% of the assets. Secondly, the deficity was largely based on the assumption that exchange rates would remain constant (para 76): Of course, they are as likely to move in an adverse direction as they are to move in a favourable direction, but the volatility of those rates tell against the appellants given that they have to establish that the issuer has reached the point of no return. Thirdly, the court was looking a long way ahead (para 78): Not only do all the unredeemed notes have a final redemption date in 2045, but it appears from the evidence that the weighted average term of the remaining mortgages is in the region of 18 years, and the rate of early redemption has slowed significantly and is likely, according to expert assessment, to remain low for the time being. Lord Neuberger MR accepted that there was a real possibility that, if no Enforcement Notice was served, events might turn out to the disadvantage of the A3 Noteholders (para 79): However, as mentioned, a future or contingent creditor of a company can very often show that he would be better off if the company were wound up rather than being permitted to carry on business. In a commercially sensible legal system that cannot of itself justify the creditor seeking to wind up the company. Toulson and Wilson LJJ agreed with this reasoning. Toulson LJ emphasised the importance of the liabilities being distant in time (para 119, quoted in para 42 above). The appeal was therefore dismissed, as was the cross appeal. Conclusions The crucial issue, to my mind, is how far the Court of Appeals conclusion depended on the point of no return test. For reasons already mentioned, I consider that that is not the correct test, if and in so far as it goes beyond the need for a petitioner to satisfy the court, on the balance of probabilities, that a company has insufficient assets to be able to meet all its liabilities, including prospective and contingent liabilities. If it means no more than that, it is unhelpful, except as illuminating (as Toulson LJ put it) the purpose of section 123(2). In my view the Court of Appeal would have reached the same conclusion without reference to any point of no return test; and I would myself reach the same conclusion. Eurosails ability or inability to pay all its debts, present or future, may not be finally determined until much closer to 2045, that is more than 30 years from now. The complex documentation under which the loan notes were issued contains several mechanisms (identified in para 22(1) to (4) above, the PECO being disregarded for present purposes) for ensuring that liabilities in respect of principal are, if necessary, deferred until the final redemption date, unless the post enforcement regime comes into operation. The movements of currencies and interest rates in the meantime, if not entirely speculative, are incapable of prediction with any confidence. The court cannot be satisfied that there will eventually be a deficiency. I would therefore dismiss the appeal. I would also dismiss the cross appeal, for the same reasons as were given by the Chancellor and the Court of Appeal. It is not necessary to consider Mr Dickers arguments based on supposed inconsistencies and commercial realities, except to say that they would have encountered serious difficulties in the light of this courts decision in Enviroco Ltd v Farstad Supply A/S [2011] UKSC 16, [2011] 1 WLR 921: see the judgment of Lord Collins of Mapesbury, with which the other members of the court agreed, at paras 51 and 52. The loan notes documentation did indeed contain some provisions (identified in paras 128 to 134 of Eurosails case) which are inconsistent with the post enforcement regime being triggered by a temporary deficiency of assets. But the court might well have taken the view, on documents of such complexity, that the draftsman had simply failed to grasp all its many and various implications, and that it was not for the court to rewrite the documents for the parties. LORD HOPE I would dismiss the appeal for the reasons given by Lord Walker. I would also dismiss the cross appeal, which concerns the effect of the PECO on the application of section 123(2) of the 1986 Act as incorporated into Condition 9(a)(iii). The question which it raises no longer needs to be answered as the Noteholders appeal on the question whether Eurosail (the Issuer) was unable to pay its debts was not successful. But Sir Andrew Morritt C [2011] 1 WLR 122 gave his view on it in paras 39 44 of his judgment, and so too did Lord Neuberger MR in the Court of Appeal [2011] 1 WLR 2524 in paras 84 100. A PECO is widely used in securitisation transactions of the kind that was entered into in this case, and we have been told that the question is of some importance to the securitisation market more generally. So it is appropriate that we should give our reasons for agreeing with the Chancellor and the Court of Appeal that it has no effect on the way the liability of the Issuer to the Noteholders for the purposes of the default provision in Condition 9(a)(iii) is to be calculated. The Trustee entered into a PECO Agreement on behalf of the Noteholders on 16 July 2007, which is the same date as that on which the Notes were issued. By Clause 3.1 it granted an option to a company called Eurosail Options Ltd (referred to in the Agreement as OptionCo): to acquire all (but not some only) of the Notes (plus accrued interest thereon) in the event that the Security for the Notes is enforced and the Trustee, after the payment of the proceeds of such enforcement, determines that the proceeds of such enforcement are insufficient, after payment of all claims ranking in priority to or pari passu with the Notes pursuant to the Deed of Charge, to pay in full all principal and/or interest and any other amounts whatsoever due in respect of the Notes. The Trustee shall promptly after the Security is enforced and the proceeds of such enforcement are paid, make a determination of whether or not there is such an insufficiency. If the Trustee determines that there is such an insufficiency the Trustee shall forthwith give notice (the Insufficiency Notice) of such determination to OptionCo and the Issuer. Clause 3.1 has to be read together with Condition 5(j) (see para 19, above), which provides that each Noteholder will, on the exercise of the option conferred on OptionCo, sell to the company the whole of his holding of notes for the nominal consideration for which the PECO provides. It also has to be read together with the Event of Default described in Condition 9(a)(iii): see para 5, above. Under that provision a default occurs, among other things, in the event of the Issuer: being unable to pay its debts as and when they fall due or, within the meaning of section 123(1) or (2) (as if the words it is proved to the satisfaction of the court did not appear in section 123(2)) of the Insolvency Act 1986 (as that section may be amended from time to time), being deemed unable to pay its debts. The Prospectus at p 26 contains this explanation of the effect of these provisions, under the heading Considerations related to the Instruments, for prospective purchasers: Although the Instruments will be full recourse obligations of the Issuer, upon enforcement of the security for the Instruments, the Trustee will, in practice, have recourse only to the Loans and Collateral Security, and to any other assets of the Issuer then in existence as described in this document The purpose of a PECO is to achieve bankruptcy remoteness for the issuer. Its aim is to prevent the issuer from being susceptible to insolvent winding up proceedings by ensuring so far as possible that, if its assets prove to be insufficient to meet its liabilities, a director of the issuer will not instigate bankruptcy proceedings in respect of it. Bankruptcy remoteness is one of the criteria used by the rating agencies which issuers of notes seek to satisfy so that their instruments will achieve the highest possible credit rating. That criterion is satisfied in other jurisdictions by provisions which limit the rights of noteholders against the issuer to the value of the issuers assets. Until recent tax legislation altered the position, limited recourse provisions of that kind gave rise to UK stamp duty reserve tax at the rate of 1.5% of the amount subscribed for them. As the Chancellor explained in para 40, the PECO is designed to achieve the same result as limited recourse provisions, but without the adverse tax consequences. The Issuer accepts that, as a matter of contract, the liabilities were unlimited in recourse. But it maintains that the commercial reality was that the liabilities alleged to be the debts that the issuer was unable to pay to the Noteholder were liabilities which it would never have to meet. In the event that the assets of the Issuer were exhausted, any claim that the Noteholder had against the Issuer would be assigned to the option holder. That, it is said, would bring an end to the claim. So it would be wrong to treat the Issuer as falling within section 123(2) as incorporated into Condition 9(a)(iii) on the ground that it was unable to pay its debts, as in practice it was never intended or expected that the liabilities would be paid except out of the underlying assets available to the Issuer. The soundness of this approach depends however on whether, in law, the PECO affects the liability of the Issuer to the Noteholder. In answering this question it is important to appreciate that the question is not whether the Issuer should actually be wound up on the grounds described in section 123(2), but whether its financial position is such that it falls within that subsection for the purposes of the default provision in Condition 9(a)(iii). The answer to that question is to be found by examining the wording of the Condition in the context of the provisions of the transaction documents as a whole. Does the PECO in any way alter the conclusion that would otherwise be drawn that the Issuers assets were less than its liabilities and that it was unable to pay its debts? The Chancellor based his judgment that it did not on the wording of section 123(2), as amended for the purposes of Condition 9(a)(iii). He held that if, in the application of that subsection the court concluded that the value of the companys assets was less than the amount of its liabilities, taking into account its contingent and prospective liabilities, the PECO had no effect on those liabilities at all: para 43. As he put it, the liabilities of the Issuer remain the same, whether or not there is a PECO or, if there is, whether or not the call option has been exercised. Unless and until the option holder releases the Issuer from all further liability, which it is under no obligation to do, the liability of the Issuer is unaffected. Lord Neuberger reached the same conclusion, but for fuller reasons: see paras 92 97. He said that, reading the relevant provisions of the documents together, they established that the Issuers liability to the Noteholders was to be treated as a liability of full recourse at least until the security was enforced and, arguably, until the option was exercised and the transfer to the option holder was completed. There was the statement in the Prospectus mentioned in para 54, above. It suggested a two stage process, under which the Issuers liability was treated initially as full recourse and liability would become limited recourse only on enforcement of the security. There was the closing part of clause 6.7 of the Deed of Charge which, having restricted the ability of the Trustee to enforce the Noteholders rights on enforcement of the Security beyond the Issuers assets, provided that this shall not apply to and shall not limit the obligations of the Issuer to the [Noteholders] under the Instruments and this Deed. And there was the provision in Condition 2(h), which stated in terms that the Noteholders had full recourse to the Issuer in respect of payments due and that they were entitled to bring a claim under English law for the full amount of such payments. Finally Lord Neuberger referred to the wording of Condition 9(a)(iii) itself. It was hard to see why any reference should be made in that Condition to section 123(2) if the Noteholders rights against the Issuer were not to be treated as full recourse until the enforcement of the security. He also said that there was nothing commercially insensible in the conclusion that, for the purpose of Condition 9(a)(iii), the Noteholders rights against the Issuer were treated as being of full recourse, notwithstanding the PECO: para 100. The A3 Noteholders submit that the key operative provision is Clause 3.1 of the PECO itself. It makes it plain that it does not have the effect of limiting the liability of the Issuer in respect of the Notes to the value of the Issuers assets. Its reference to there being an insufficiency of assets after enforcement to meet whatever is due in respect of the Notes is a clear indication that it contemplates that the amount of the liabilities that the Notes have created must be capable of exceeding the value of the assets of the Issuer. Then there is the time at which the option is exercisable. It is not said to have any operative effect at all prior to enforcement of the security. So at all times prior to its exercise the Noteholders remain entitled to payment in accordance with the Conditions. And even when exercised all it does is provide a mechanism by which the right to be paid under the Notes is assigned to OptionCo. As the Issuer relies on commercial reality rather than legal form, the legal effect of the documents is not really in dispute. The common intention of the parties is said by the Issuer to be quite different. Its argument is that, as inclusion of a PECO rather than a contractual limited recourse provision was done solely for tax reasons, it was not intended or understood to alter the commercial nature, effect and operation of the asset backed securitisation. As a matter of contract the liabilities were unlimited in recourse. As a matter of commercial substance and in practice, they were the equivalent of a provision by which the rights of Noteholders were expressly limited. The Issuers case is that its future obligations to pay principal under the Notes should be taken into account only to the extent that its assets were sufficient to pay for them. As Mr Dicker QC for the Issuer put it at the end of his argument, legal form should not triumph over commercial substance. I do not think that it is possible to distinguish the intended commercial effect of these provisions from their legal effect in this way. The exercise that Condition 9(a)(iii) predicates is the quantification of the amount of the Issuers assets and liabilities in order to determine whether there has been an Event of Default. The legal effect and the commercial effect of the PECO, on its true analysis, both point in the same direction. It has no effect, for the purpose of that quantification, on the amount of the Issuers liabilities. To limit those liabilities as the Issuer contends would contradict the parties clearly expressed commercial intention as found in the contractual documents. The fact that the economic result of the PECO may be the same as if the Noteholders right of recourse had been limited to the Issuers assets is beside the point. It can be expected to achieve bankruptcy remoteness as effectively. But it would not be in accordance with the true meaning of the documents to treat the two methods as if they had the same effect in law. when the provisions are open to different interpretations. The court should adopt the more, rather than the less, commercial construction: Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900. But, for the reasons given by the Chancellor and Lord Neuberger MR, the meaning to be given to the language that the parties used in this case is not open to doubt. The suggestion that to give effect to that meaning is to surrender to legal form over commercial substance amounts, in effect, to an invitation to depart from the settled role of commercial good sense. Its role is to find out what the parties meant when they entered into the arrangement, not to replace it with something which is not to be found in the language of the documents at all. The ultimate aim in construing provisions of the kind that are in issue in this case, as it is when construing any contract, is to determine what the parties meant by the language that they have used. Commercial good sense has a role to play |
This appeal raises two issues relating to the deportation of foreign criminals as defined in the UK Borders Act 2007. The first concerns the significance of sections 32 and 33 of that Act in appeals relating to deportation which are based on article 8 of the European Convention on Human Rights. The second concerns the significance, in the same context, of changes to the Immigration Rules which came into effect in July 2012. The statutory framework It is convenient to begin by considering the principal elements of the legislative framework, as it stood at the time of the events with which this appeal is concerned. It is unnecessary to consider more recent amendments to the legislation, including those effected by the Immigration Act 2014. The Immigration Act 1971 Section 3(5) of the Immigration Act 1971 provides that a person who is not a British citizen is liable to deportation from the United Kingdom if (a) the Secretary of State deems his deportation to be conducive to the public good, or (b) another person to whose family he belongs is or has been ordered to be deported. Section 3(6) provides that, without prejudice to the operation of section 3(5), a person who is not a British citizen shall also be liable to deportation if, after he has attained the age of 17, he is convicted of an offence for which he is punishable by imprisonment and on his conviction is recommended for deportation by a court empowered by the Act to do so. Section 5(1) provides that, where a person is liable to deportation under section 3(5) or (6), the Secretary of State may make a deportation order against him. A deportation order is defined as an order requiring the person to leave and prohibiting him from entering the UK. Section 5(5) gives effect to the provisions of Schedule 3 with respect to the removal from the United Kingdom of persons against whom deportation orders are in force. In particular, paragraph 1 of Schedule 3 provides that, where a deportation order is in force against any person, the Secretary of State may give directions for his removal to a country or territory specified in the directions. The Nationality, Immigration and Asylum Act 2002 Section 82(1) of the Nationality, Immigration and Asylum Act 2002 provides a right of appeal to the First tier Tribunal against an immigration decision. That expression is defined by section 82(2), and includes a decision to make a deportation order under section 5(1) of the 1971 Act (section 82(2)(j)). The giving of removal directions under Schedule 3 to the 1971 Act, following the making of a deportation order, is not an immigration decision, and is therefore not subject to appeal. In terms of section 82(3A) of the 2002 Act (as inserted by section 35(3) of the UK Borders Act 2007), section 82(2)(j) does not apply to a decision to make a deportation order which states that it is made in accordance with section 32(5) of the 2007 Act (to which it will be necessary to return). However, section 82(3A)(a) provides that a decision that section 32(5) applies is itself an immigration decision, with the consequence that an appeal lies under section 82(1). The grounds on which an appeal can be brought under section 82(1) are set out in section 84(1). So far as material, they are: that the decision is not in accordance with immigration (a) rules . (c) that the decision is unlawful under section 6 of the Human Rights Act 1998 (c 42) (public authority not to act contrary to Human Rights Convention) as being incompatible with the appellants Convention rights . (e) law; (g) that removal of the appellant from the United Kingdom in consequence of the immigration decision would breach the United Kingdoms obligations under the Refugee Convention or would be unlawful under section 6 of the Human Rights Act 1998 as being incompatible with the appellants Convention rights. that the decision is otherwise not in accordance with the On an appeal, the tribunals task is not merely to review the decision made by the Secretary of State. It reaches its decision after hearing evidence, and on the basis of its own findings as to the facts. Under section 86(3), it is required to allow the appeal in so far as it thinks that: (a) a decision against which the appeal is brought or is treated as being brought was not in accordance with the law (including immigration rules), or a discretion exercised in making a decision against (b) which the appeal is brought or is treated as being brought should have been exercised differently. An appeal against a decision of the First tier Tribunal lies to the Upper Tribunal, on a point of law, under section 11 of the Tribunals, Courts and Enforcement Act 2007. A further appeal lies under that Act to the Court of Appeal, or the equivalent courts in Scotland and Northern Ireland, and ultimately to the Supreme Court. The UK Borders Act 2007 Section 32(4) of the 2007 Act provides that, for the purposes of section 3(5)(a) of the 1971 Act, the deportation of a foreign criminal is conducive to the public good. The liability of foreign criminals to deportation, under section 3(5)(a) of the 1971 Act, does not therefore depend on any assessment by the Secretary of State: it is automatic. The expression foreign criminal is defined by section 32(1) of the 2007 Act as meaning a person who is not a British citizen, who is convicted in the United Kingdom of an offence, and to whom one of the conditions in section 32(2) and (3) applies. The first of those conditions is that the person is sentenced to a period of imprisonment of at least 12 months. The second is that the offence is specified by an order made by the Secretary of State, and the person is sentenced to a period of imprisonment. No such order has yet been made. Section 32(5) provides that the Secretary of State must make a deportation order in respect of a foreign criminal (subject to section 33). Section 33 provides, so far as material: (1) Section 32(4) and (5) (a) do not apply where an exception in this section applies (subject to subsection (7) below) . (2) Exception 1 is where removal of the foreign criminal in pursuance of the deportation order would breach a persons Convention rights, or the United Kingdoms obligations under the (a) (b) Refugee Convention . (7) The application of an exception (a) does not prevent the making of a deportation order; (b) results in it being assumed neither that deportation of the person concerned is conducive to the public good nor that it is not conducive to the public good; but section 32(4) applies despite the application of Exception 1 or 4. It follows from the concluding words of section 33(7) that the fact that the removal of a foreign criminal would breach his Convention rights does not affect the application of section 32(4), in terms of which his deportation is conducive to the public good. Nor does it prevent the making of a deportation order. On the other hand, it results in the disapplication of section 32(5) of the 2007 Act. Parliament made that clear in section 33(2)(a), read with section 33(1)(a). The Secretary of State is therefore under no duty to make a deportation order. It may seem puzzling that a person may be liable to deportation even when he cannot be deported, but a possible explanation is that the circumstances which may render deportation incompatible with the Convention can be temporary. For example, the risk of a breach of article 3 in the country to which the person would be deported may disappear following a change of regime, or be removed as a result of negotiated guarantees. Section 32(4) keeps open the possibility of automatic deportation under section 32(5) in the event of a material change of circumstances. If the Secretary of State accepts that removal would breach a foreign criminals Convention rights, then she will not make a deportation order: the Immigration Rules have stated since October 2000 that a deportation order will not be made if the persons removal pursuant to the order would be contrary to the UKs obligations under the Convention. If, on the other hand, the Secretary of State rejects a claim that removal would breach the foreign criminals Convention rights, she must decide to make a deportation order as required by section 32(5). As explained earlier, an appeal lies under section 82(1) and (3A) of the 2002 Act against the decision that section 32(5) applies, on the ground that the decision, or removal, is unlawful under section 6 of the Human Rights Act 1998, or on the ground that the decision is not in accordance with immigration rules, or is otherwise not in accordance with the law. Sections 32 and 33 were enacted in response to Parliamentary and public concern about failures to deport large numbers of foreign citizens who had committed serious offences in the UK, due partly to the practices followed by the Home Office at that time (under which there was not, until July 2006, any presumption in favour of deportation), and partly to delays and uncertainty affecting the procedures for deportation. The level of that concern, and the justification for it, are apparent from the documents forming the background to the 2007 Act: see, in particular, Immigration Control, House of Commons Home Affairs Committee, Fifth Report for 2005 06, HC 775 I, paras 516 535, and Fair, effective, transparent and trusted: Rebuilding confidence in our immigration system, Home Office, July 2006. (One might observe, in parenthesis, that the present appeal illustrates the extent to which delays and uncertainty continue to affect the system: a deportation order was made in 2010, and the appeal proceedings have not yet been completed). Sections 32 and 33 make clear Parliaments view that there is a strong public interest in the deportation of foreign nationals who have committed serious offences, and that the procedures for their deportation should be expeditious and effective. The strength of that public interest is reflected in Laws LJs observation that for a claim under article 8 of the ECHR to prevail, it must be a very strong claim indeed: SS (Nigeria) v Secretary of State for the Home Department [2013] EWCA Civ 550; [2014] 1 WLR 998, para 54. The Immigration Rules Decision making in relation to immigration and deportation is not exhaustively regulated by legislation. It also involves the exercise of discretion, and the making of evaluative judgments, by the Secretary of State and her officials. A perennial challenge, in such a situation, is to achieve consistency in decision making while reaching decisions which are appropriate to the case in hand. The solution generally lies in the adoption of administrative policies to guide decision making: something which the courts have accepted is legitimate, provided two general requirements are met. First, discretionary powers must be exercised in accordance with any policy or guidance indicated by Parliament in the relevant legislation: Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997. In relation to the deportation of foreign offenders, the relevant legislation includes sections 32 and 33 of the 2007 Act. Secondly, decision makers should not shut their ears to claims falling outside the policies they have adopted: British Oxygen Co Ltd v Minister of Technology [1971] AC 610). As Lord Reid observed in that case at p 625, there may not be any great difference between a policy and a rule: some policies may constitute more or less flexible guidance, but others may be more formal and prescriptive. The Immigration Rules are an example of policies of the latter kind. They are unusual in having a statutory basis, in requiring the approbation of Parliament, and in being published as House of Commons papers. Section 1(4) of the 1971 Act refers to the rules laid down by the Secretary of State as to the practice to be followed in the administration of this Act for regulating the entry into and stay in the United Kingdom of persons not having the right of abode. Section 3(2) requires the Secretary of State to lay before Parliament statements of the rules, or any changes in the rules, laid down by him as to the practice to be followed in the administration of this Act for regulating the entry into and stay in the United Kingdom of persons required by this Act to have leave to enter. As was said in R (Munir) v Secretary of State for the Home Department [2012] UKSC 32; [2012] 1 WLR 2192, para 29, the point of this provision is to give Parliament a degree of control over the practice to be followed by the Secretary of State in the administration of the 1971 Act for regulating immigration control. The Rules are not law (although they are treated as if they were law for the purposes of section 86(3)(a) of the 2002 Act: see para 8 above), but a statement of the Secretary of States administrative practice: see Odelola v Secretary of State for the Home Department [2009] UKHL 25; [2009] 1 WLR 1230, paras 6 and 7; Munir, para 37; Mahad v Entry Clearance Officer [2009] UKSC 16; [2010] 1 WLR 48, para 10; R (Aguilar Quila) v Secretary of State for the Home Department (AIRE Centre intervening) [2011] UKSC 45; [2012] 1 AC 621, para 61; and R (Alvi) v Secretary of State for the Home Department [2012] UKSC 33; [2012] 1 WLR 2208, paras 32 and 33. They do not therefore possess the same degree of democratic legitimacy as legislation made by Parliament: Huang v Secretary of State for the Home Department [2007] UKHL 11; [2007] 2 AC 167, para 17. Nevertheless, they give effect to the policy of the Secretary of State, who has been entrusted by Parliament with responsibility for immigration control and is accountable to Parliament for her discharge of her responsibilities in this vital area. Furthermore, they are laid before Parliament, may be the subject of debate, and can be disapproved under the negative resolution procedure. They are therefore made in the exercise of powers which have been democratically conferred, and are subject, albeit to a limited extent, to democratic procedures of accountability. The Secretary of State has a wide residual power under the 1971 Act to grant leave to enter or remain in the UK even where leave would not be given under the Rules: Munir, para 44. The manner in which that power should be exercised is not, by its very nature, governed by the Rules. There is a duty to exercise the power where a failure to do so is incompatible with Convention rights, by virtue of section 6 of the Human Rights Act 1998. The July 2012 changes to the Rules Prior to July 2012, the Rules did not specifically address the requirements of article 8. From October 2000 onwards, rule 2 instructed the relevant officials to carry out their duties in compliance with the provisions of the Human Rights Act 1998. There were also specific rules dealing with deportation, which set out in rule 364 a non exhaustive list of factors to be taken into account, and provided in rule 380 that a deportation order would not be made if removal would be contrary to the UKs obligations under the Refugee Convention or the ECHR. With effect from July 2006, rule 364 was amended so as to provide that, subject to rule 380, where a person was liable to deportation the presumption should be that the public interest required deportation. All relevant factors were to be taken into account in considering whether the presumption was outweighed in any particular case, but it was said that it would only be in exceptional circumstances that the public interest in deportation would be outweighed in a case where it would not be contrary to the ECHR or the Refugee Convention to deport. Rule 364A, introduced after the enactment of the 2007 Act, disapplied rule 364 where section 32(5) of that Act applied. On 13 June 2012 the Secretary of State laid before Parliament a Statement of Changes in Immigration Rules (HC 194), which (so far as material) deleted a number of the previous rules, including rules 364, 364A and 380, and inserted a number of new rules (which will be referred to as the new rules). The new rules were formally made under the negative resolution procedure, and came into force on 9 July 2012. There was also a debate in the House of Commons on 19 June 2012, in which the changes to the Rules were discussed, on a motion that this House supports the Government in recognising that the right to respect for family or private life in article 8 of the European Convention on Human Rights is a qualified right and agrees that the conditions for migrants to enter or remain in the UK on the basis of their family or private life should be those contained in the Immigration Rules. The motion was agreed without a vote (Hansard (HC Debates) 19 June 2012, cols 760 823). It is apparent from the documents which accompanied the Statement of Changes that the changes to the Rules were intended to promote consistency, predictability and transparency in decision making where issues under article 8 arose, and to clarify the policy framework. The changes were said to reflect the Governments and Parliaments view of how, as a matter of public policy, the balance should be struck between the right to respect for private and family life and the public interest in public safety by protecting the public from foreign criminals: Statement of Intent: Family Migration, Home Office, June 2012, para 33. The changes were also intended to align the Rules with the body of case law concerning article 8, and in particular to reflect a consideration of the proportionality of deportation in accordance with article 8: paras 36 38. In relation to the deportation of foreign offenders, in particular, it was explained in the Statement of Intent that the Secretary of State considered that there were some offenders who should almost always be removed because of the seriousness of their crime and the overwhelming public interest in their deportation, despite their family or private life in the UK, and some other offenders who should normally be deported but who might be able to argue in individual cases that their family or private life outweighed the public interest in deportation. There were also cases where the level of criminality was below the automatic deportation threshold, but the offending was so harmful or persistent that deportation would normally be proportionate. The Government believed that a custodial sentence of four years or more represented such a serious level of offending that it would almost always be proportionate that it should outweigh private or family life, even taking into account that the best interests of a child were a primary consideration. Deportation would normally be proportionate where the foreign offender had received a sentence of between 12 months and four years, or where the sentence was of less than 12 months but, in the view of the Secretary of State, the offending had caused serious harm or the person was a persistent offender who showed a particular disregard for the law. Deportation would not, however, be proportionate if the offender had a parental relationship in the UK with a child who was a British citizen or had lived in the UK for the last seven years, the child could not reasonably be expected to leave the UK, and there was no other family member able to care for the child in the UK. Nor would it be proportionate if the offender had a relationship with a partner in the UK who was a British citizen or was in the UK with refugee leave or humanitarian protection, the offender had lived in the UK with valid leave for the last 15 years, and there were insurmountable obstacles to family life with the partner continuing overseas. Nor would it be proportionate if the offender had been continuously resident in the UK for the last 20 years, or was aged under 25 and had spent at least half his life in the UK, and in either case had no ties with his country of origin. Those policies were given effect by the new rules, which provide: 396. Where a person is liable to deportation the presumption shall be that the public interest requires deportation. It is in the public interest to deport where the Secretary of State must make a deportation order in accordance with section 32 of the UK Borders Act 2007. 397. A deportation order will not be made if the persons removal pursuant to the order would be contrary to the UKs obligations under the Refugee Convention or the Human Rights Convention. Where deportation would not be contrary to these obligations, it will only be in exceptional circumstances that the public interest in deportation is outweighed. 398. Where a person claims that their deportation would be contrary to the UKs obligations under article 8 of the Human Rights Convention, and the deportation of the person from the UK is (a) conducive to the public good because they have been convicted of an offence for which they have been sentenced to a period of imprisonment of at least four years; the deportation of the person from the UK is (b) conducive to the public good because they have been convicted of an offence for which they have been sentenced to a period of imprisonment of less than four years but at least 12 months; or (c) the deportation of the person from the UK is conducive to the public good because, in the view of the Secretary of State, their offending has caused serious harm or they are a persistent offender who shows a particular disregard for the law, the Secretary of State in assessing that claim will consider whether paragraph 399 or 399A applies and, if it does not, it will only be in exceptional circumstances that the public interest in deportation will be outweighed by other factors. 399. This paragraph applies where paragraph 398(b) or (c) applies if (a) the person has a genuine and subsisting parental relationship with a child under the age of 18 years who is in the UK, and (i) the child is a British Citizen; or (ii) the child has lived in the UK continuously for at least the seven years immediately preceding the date of the immigration decision; and in either case (a) it would not be reasonable to expect the child to leave the UK; and there is no other family member (b) who is able to care for the child in the UK; or (b) the person has a genuine and subsisting relationship with a partner who is in the UK and is a British Citizen, settled in the UK, or in the UK with refugee leave or humanitarian protection, and (i) the person has lived in the UK with valid leave continuously for at least the 15 years immediately preceding the the date of immigration decision (discounting any period of imprisonment); and there are insurmountable obstacles to (ii) family life with that partner continuing outside the UK. 399A. This paragraph applies where paragraph 398(b) or (c) applies if the person has lived continuously in the UK for (a) at least 20 years immediately preceding the date of the immigration decision (discounting any period of imprisonment) and he has no ties (including social, cultural or family) with the country to which he would have to go if required to leave the UK; or (b) the person is aged under 25 years, he has spent at least half of his life living continuously in the UK immediately preceding the date of the immigration decision (discounting any period of imprisonment) and he has no ties (including social, cultural or family) with the country to which he would have to go if required to leave the UK. The Strasbourg jurisprudence The Human Rights Act 1998 requires public authorities to act compatibly with Convention rights, and requires courts or tribunals to take into account the case law of the European Court of Human Rights. The Convention rights include the right set out in article 8, which provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. The question whether the deportation of a foreign offender would be incompatible with article 8 has been considered by the European court in numerous judgments. In cases concerning settled migrants, that is to say persons who have been granted a right of residence in the host country, the court has accepted that the withdrawal of that right may constitute an interference with the right to respect for private and/or family life within the meaning of article 8. If there is an interference, it must be justified under article 8(2) as being in accordance with the law, as pursuing one or more of the legitimate aims set out in that paragraph, and as being necessary in a democratic society, that is to say justified by a pressing social need and proportionate to the legitimate aim pursued. The court has treated the legitimate aim pursued by deportation, on the basis of a persons conviction of a criminal offence, as the prevention of disorder or crime (although there are also a small number of cases in which public safety has been accepted to be an additional aim): see, for example, AA v United Kingdom [2012] Imm AR 107, paras 53 54. In practice, the critical issue is generally whether the necessity test is met. In that regard, the court has often said that the task of the court or tribunal applying article 8(2) consists in ascertaining whether the decision struck a fair balance between the relevant interests, namely the applicant's right to respect for his private and family life, on the one hand, and the prevention of disorder or crime, on the other. In a well known series of judgments the court has set out the guiding principles which it applies when assessing the likelihood that the deportation of a settled migrant would interfere with family life and, if so, its proportionality to the legitimate aim pursued. In Boultif v Switzerland (2001) 33 EHRR 50, para 48, the court said that it would consider the nature and seriousness of the offence committed by the applicant; the length of the applicants stay in the country from which he or she is to be expelled; the time elapsed since the offence was committed and the applicants conduct during that period; the nationalities of the various persons concerned; the applicant's family situation, such as the length of the marriage, and other factors expressing the effectiveness of a couples family life; whether the spouse knew about the offence at the time when he or she entered into a family relationship; whether there are children of the marriage, and if so, their age; and the seriousness of the difficulties which the spouse is likely to encounter in the country to which the applicant is to be expelled. Two further factors were mentioned in ner v Netherlands (2006) 45 EHRR 14, para 58: the best interests and well being of the children, in particular the seriousness of the difficulties which any children of the applicant are likely to encounter in the country to which the applicant is to be expelled; and the solidity of the social, cultural and family ties with the host country and with the country of destination. In Maslov v Austria [2009] INLR 47, paras 72 75, the court added that the age of the person concerned can play a role when applying some of these criteria. For instance, when assessing the nature and seriousness of the offences, it has to be taken into account whether the person committed them as a juvenile or as an adult. Equally, when assessing the length of the person's stay in the country from which he or she is to be expelled and the solidity of the social, cultural and family ties with the host country, it makes a difference whether the person came to the country during his or her childhood or youth, or was even born there, or whether he or she only came as an adult. Some of the factors listed in these cases relate to the strength of the public interest in deportation: that is to say, the extent to which the deportation of the person concerned will promote the legitimate aim pursued. Others relate to the strength of the countervailing interests in private and family life. They are not exhaustive. As the Grand Chamber noted in Jeunesse v Netherlands (2014) 60 EHRR 17, para 105, these criteria cannot be transposed automatically to the situation of a person who is not a settled migrant but an alien seeking admission to a host country: a category which includes, as the facts of that case demonstrate, a person who has been unlawfully resident in the host country for many years. The court analysed the situation of such a person, facing expulsion for reasons of immigration control rather than deportation on account of criminal behaviour, as raising the question whether the authorities of the host country were under a duty, pursuant to article 8, to grant the person the necessary permission to enable her to exercise her right to family life on their territory. The situation was thus analysed not as one in which the host country was interfering with the persons right to respect for her private and family life, raising the question whether the interference was justified under article 8(2). Instead, the situation was analysed as one in which the person was effectively asserting that her right to respect for her private and family life, under article 8(1), imposed on the host country an obligation to permit her to continue to reside there, and the question was whether such an obligation was indeed imposed. In addition to identifying the issue in Jeunesse as concerning a positive obligation under article 8(1) rather than a negative obligation under article 8(2), the court also identified a number of factors as being relevant: factors which overlapped with those mentioned in the Boultif line of cases, but were also different in some respects. Factors to be taken into account were said in Jeunesse to include the extent to which family life would effectively be ruptured, the extent of the ties in the contracting state, whether there were insurmountable obstacles (or, as it has been put in some other cases, major impediments: see, for example, Tuquabo Tekle v Netherlands [2006] 1 FLR 798, para 48, and IAA v United Kingdom (2016) 62 EHRR SE 19, paras 40 and 44) in the way of the family living in the country of origin of the alien concerned, and whether there were factors of immigration control (for example, a history of breaches of immigration law) or considerations of public order weighing in favour of exclusion (para 107). Another important consideration was said to be whether family life was created at a time when the persons involved were aware that the immigration status of one of them was such that the persistence of that family life within the host state would from the outset be precarious. Where this is the case, the court has said that it is likely only to be in exceptional circumstances that the removal of the non national family member will constitute a violation of article 8 (Jeunesse, para 108). The court has found there to be exceptional circumstances in situations where, notwithstanding the importance of that consideration, removal failed to strike a fair balance between the competing interests involved. In the Jeunesse case, for example, a prolonged delay in removing the applicant from the host country, during which time she had developed strong family and social ties there, constituted exceptional circumstances leading to the conclusion that a fair balance had not been struck (paras 121 122). Where children are involved, their best interests are said by the court to be of paramount importance (by which it does not mean to say that they are determinative: see Jeunesse, para 109). Whilst alone they cannot be decisive, they must be afforded significant weight. Accordingly, national decision making bodies should in principle advert to and assess evidence in respect of the practicality, feasibility and proportionality of any removal of a non national parent in order to give effective protection and sufficient weight to the best interests of the children directly affected by it (Jeunesse, paras 108 109). Counsel for the Secretary of State submitted in the appeal against the decision of the Court of Appeal in Agyarko v Secretary of State for the Home Department [2015] EWCA Civ 440; [2016] 1 WLR 390, heard after the present appeal, that in the light of this approach, the deportation of a foreign criminal unlawfully resident in the UK should similarly be analysed as raising the question whether the state is under a positive obligation to permit him to remain in the UK, applying the Jeunesse criteria, rather than whether his deportation can be justified under article 8(2), applying the Boultif criteria. The court was asked to treat those submissions as applying to the present case, and agreed to do so, counsel for the appellant being given an opportunity to respond in writing. Considering first the question whether a positive or a negative obligation is in issue, liability to automatic deportation under section 32(5) of the 2007 Act is distinct from the regime governing admission to the UK. The aim pursued is more specific than the wider social and economic aims pursued by controls on admission. Nevertheless, it is a measure of immigration control, in that it involves the use of the instruments of immigration control to enforce the expectation that foreign citizens living in the UK should respect the criminal law, and risk having their right to stay withdrawn or denied if they fail to do so. Those foreign criminals who are residing in the UK unlawfully, and who resist their deportation on the basis of article 8, are in substance asserting that their right under article 8 to respect for their private and family life imposes on the UK an obligation to permit them to continue to reside here. They are, in that respect, in a similar position to the applicants in cases such as Jeunesse. Whether the situation is analysed in terms of positive or negative obligations is, however, unlikely to be of substantial importance. Whether the person concerned enjoys private or family life in the UK depends on the facts relating to his relationships with others: whether, for example, he is married or has children. Where he does enjoy private or family life in the UK, he has a right under article 8 to respect for that life, whatever his immigration status may be (although that status may greatly affect the weight to be given to his article 8 right, as Jeunesse makes clear). Whether one poses the question whether, striking a fair balance between the interests of the individual in his private or family life and the competing interests of the community as a whole, his right to respect for his private and family life entails an obligation on the part of the state to permit him to remain in the UK; or whether, striking a fair balance between the same competing interests, his deportation would be a disproportionate interference, one is asking essentially the same question. It is true, as counsel pointed out, that the onus is on the state to justify an interference, whereas there is no such onus on the state to demonstrate the absence of a positive obligation, but questions of onus are unlikely to be important where the relevant facts have been established. Ultimately, whether the case is considered to concern a positive or a negative obligation, the question is whether a fair balance has been struck. Considering next the factors which should be taken into account, those mentioned in the Boultif line of cases have a bearing on the proportionality of the deportation of foreign offenders, whether they are settled migrants or not. Where they are not settled migrants, it will also be necessary to have regard to the factors mentioned in Jeunesse, so far as relevant and not already taken into account: notably, whether there are insurmountable obstacles or major impediments in the way of the family living in the country of origin of the alien concerned; whether there are factors of immigration control, such as a history of breaches of immigration law; and whether the family life was created at a time when the persons involved were aware that the immigration status of one of them was such that the persistence of that family life within the host state would from the outset be precarious. Those factors were mentioned in Jeunesse in a context where family life was relied on to defeat immigration control at the point of admission to the host country. But it is also relevant to consider, in the context of liability to deportation because of criminal behaviour, whether the offender has a bad immigration history, or whether there are major impediments to continuing family life in his country of origin, or whether family life was established in the knowledge that, because of the immigration status of one of the persons involved, its continuation in the UK was uncertain. If that were not so, the perverse consequence would follow that these matters would be liable to carry greater weight if a non offender were sought to be removed on account of his irregular immigration status than if an offender with the same immigration status were sought to be removed on account of serious criminal conduct. It is, however, necessary to bear in mind that whether the continuation of family life in the UK is uncertain may be a more complex question than it might appear at first sight. For example, where a person was residing in the UK unlawfully at the time when the relationship was formed, but would have been permitted to reside here lawfully if an application were made from outside the UK, the latter point should be taken into account. That example illustrates how the distinction between settled migrants and aliens residing in the host country unlawfully may be, in some situations, of limited practical importance when translated into the context of UK immigration law (see, for example, Chikwamba v Secretary of State for the Home Department [2008] UKHL 40; [2008] 1 WLR 1420). While the European court has provided guidance as to factors which should be taken into account, it has acknowledged that the weight to be attached to the competing considerations, in striking a fair balance, falls within the margin of appreciation of the national authorities, subject to supervision at the European level. The ECHR can thus accommodate, within limits, the judgments made by national legislatures and governments in this area. Administrative decision making Considering the new rules in the light of the guidance given by the European court, rule 397 makes it clear that a deportation order is not to be made if the persons removal would be incompatible with the ECHR. Where article 8 claims are made by foreign offenders facing deportation, rule 398 explains that the Secretary of State will first consider whether rule 399 or 399A applies. Those rules, applicable where offenders have received sentences of between 12 months and four years, provide guidance to officials as to categories of case where it is accepted by the Secretary of State that deportation would be disproportionate. The fact that a claim under article 8 falls outside rules 399 and 399A does not, however, mean that it is necessarily to be rejected. That is recognised by the concluding words of rule 398, which make it clear that a claim that deportation would be contrary to article 8 will not be rejected merely because rules 399 and 399A do not apply, but that it will only be in exceptional circumstances that the public interest in deportation will be outweighed by other factors. How is the reference in rule 398 to exceptional circumstances to be understood, compatibly with Convention rights? That question was considered in the case of MF (Nigeria) v Secretary of State for the Home Department [2013] EWCA Civ 1192; [2014] 1 WLR 544. The Court of Appeal accepted the submission made on behalf of the Secretary of State that the reference to exceptional circumstances (an expression which had been derived from the Jeunesse line of case law) served the purpose of emphasising that, in the balancing exercise, great weight should be given to the public interest in deporting foreign criminals who did not satisfy rules 398 and 399 or 399A, and that it was only exceptionally that such foreign criminals would succeed in showing that their rights under article 8 trumped the public interest in their deportation (paras 40 and 41). The court went on to explain that this did not mean that a test of exceptionality was being applied. Rather, the word exceptional denoted a departure from a general rule: The general rule in the present context is that, in the case of a foreign prisoner (sic) to whom paragraphs 399 and 399A do not apply, very compelling reasons will be required to outweigh the public interest in deportation. These compelling reasons are the exceptional circumstances. (para 43) The court added that the exceptional circumstances to be considered in the balancing exercise involve the application of a proportionality test as required by the Strasbourg jurisprudence (para 44). As explained in the next paragraph, those dicta summarise the effect of the new rules, construed compatibly with Convention rights. The implication of the new rules is that rules 399 and 399A identify particular categories of case in which the Secretary of State accepts that the public interest in the deportation of the offender is outweighed under article 8 by countervailing factors. Cases not covered by those rules (that is to say, foreign offenders who have received sentences of at least four years, or who have received sentences of between 12 months and four years but whose private or family life does not meet the requirements of rules 399 and 399A) will be dealt with on the basis that great weight should generally be given to the public interest in the deportation of such offenders, but that it can be outweighed, applying a proportionality test, by very compelling circumstances: in other words, by a very strong claim indeed, as Laws LJ put it in SS (Nigeria). The countervailing considerations must be very compelling in order to outweigh the general public interest in the deportation of such offenders, as assessed by Parliament and the Secretary of State. The Strasbourg jurisprudence indicates relevant factors to consider, and rules 399 and 399A provide an indication of the sorts of matters which the Secretary of State regards as very compelling. As explained at para 26 above, they can include factors bearing on the weight of the public interest in the deportation of the particular offender, such as his conduct since the offence was committed, as well as factors relating to his private or family life. Cases falling within the scope of section 32 of the 2007 Act in which the public interest in deportation is outweighed, other than those specified in the new rules themselves, are likely to be a very small minority (particularly in non settled cases). They need not necessarily involve any circumstance which is exceptional in the sense of being extraordinary (as counsel for the Secretary of State accepted, consistently with Huang [2007] 2 AC 167, para 20), but they can be said to involve exceptional circumstances in the sense that they involve a departure from the general rule. Appellate decision making The nature of appellate decision making in the context of immigration cases involving article 8 was authoritatively considered in the case of Huang. The appellants in that case had entered the UK and were seeking leave to remain on the basis that their removal would violate their rights under article 8. They did not qualify for leave to remain under the Rules as they then stood. The opinion of the Appellate Committee, delivered by Lord Bingham of Cornhill, made five important points. First, Lord Bingham recognised the importance of the Rules for administrative purposes, noting the general administrative desirability of applying known rules if a system of immigration control is to be workable, predictable, consistent and fair as between one applicant and another (para 16). He acknowledged that the Rules, and the supplementary administrative directions, must draw a line somewhere in order to be administratively workable. The rule under which Mrs Huang failed to qualify was unobjectionable. Secondly, appellate decision making was not governed by the Rules, but the Rules were nevertheless relevant to the determination of appeals: [A]n applicants failure to qualify under the rules is for present purposes the point at which to begin, not end, consideration of the claim under article 8. The terms of the rules are relevant to that consideration, but they are not determinative. (para 6) Thirdly, an appeal under the 2002 Act was not equivalent to an application for judicial review: [T]he task of the appellate immigration authority is to decide whether the challenged decision is unlawful as incompatible with a Convention right or compatible and so lawful. It is not a secondary, reviewing, function dependent on establishing that the primary decision maker misdirected himself or acted irrationally or was guilty of procedural impropriety. The appellate immigration authority must decide for itself whether the impugned decision is lawful and, if not, but only if not, reverse it . [T]he appellate immigration authority . is not reviewing the decision of another decision maker. It is deciding whether or not it is unlawful to refuse leave to enter or remain, and it is doing so on the basis of up to date facts. (paras 11 and 13) Fourthly, the first task of the appellate immigration authority was to establish the relevant facts, which might well have changed since the original decision was made, and which the authority was in any event much better placed to assess than the original decision maker (para 15). Fifthly, in considering the issue arising under article 8 in the light of its findings of fact, the appellate authority should give appropriate weight to the reasons relied on by the Secretary of State to justify the decision under appeal. In that connection, Lord Bingham gave as examples a case where attention was paid to the Secretary of States judgment that the probability of deportation if a serious offence was committed had a general deterrent effect, and another case where weight was given to the Secretary of States judgment that the appellant posed a threat to public order. He continued: The giving of weight to factors such as these is not, in our opinion, aptly described as deference: it is performance of the ordinary judicial task of weighing up the competing considerations on each side and according appropriate weight to the judgment of a person with responsibility for a given subject matter and access to special sources of knowledge and advice. That is how any rational judicial decision maker is likely to proceed. (para 16) It may be helpful to say more about this point. Where an appellate court or tribunal has to reach its own decision, after hearing evidence, it does not, in general, simply start afresh and disregard the decision under appeal. That was made clear in Sagnata Investments Ltd v Norwich Corpn [1971] 2 QB 614, concerned with an appeal to quarter sessions against a licensing decision taken by a local authority. In a more recent licensing case, R (Hope & Glory Public House Ltd) v City of Westminster Magistrates Court [2011] PTSR 868, para 45, Toulson LJ put the matter in this way: It is right in all cases that the magistrates court should pay careful attention to the reasons given by the licensing authority for arriving at the decision under appeal, bearing in mind that Parliament has chosen to place responsibility for making such decisions on local authorities. The weight which magistrates should ultimately attach to those reasons must be a matter for their judgment in all the circumstances, taking into account the fullness and clarity of the reasons, the nature of the issues and the evidence given on the appeal. These observations apply a fortiori to tribunals hearing appeals against deportation decisions. The special feature in that context is that the decision under review has involved the application of rules which have been made by the Secretary of State in the exercise of a responsibility entrusted to her by Parliament, and which Parliament has approved. It is the duty of appellate tribunals, as independent judicial bodies, to make their own assessment of the proportionality of deportation in any particular case on the basis of their own findings as to the facts and their understanding of the relevant law. But, where the Secretary of State has adopted a policy based on a general assessment of proportionality, as in the present case, they should attach considerable weight to that assessment: in particular, that a custodial sentence of four years or more represents such a serious level of offending that the public interest in the offenders deportation almost always outweighs countervailing considerations of private or family life; that great weight should generally be given to the public interest in the deportation of a foreign offender who has received a custodial sentence of more than 12 months; and that, where the circumstances do not fall within rules 399 or 399A, the public interest in the deportation of such offenders can generally be outweighed only by countervailing factors which are very compelling, as explained in paras 37 38 above. The approach adopted in Huang has been followed in later decisions of the House of Lords and of this court, including EB (Kosovo) v Secretary of State for the Home Department [2008] UKHL 41; [2009] AC 1159, Zoumbas v Secretary of State for the Home Department [2013] UKSC 74; [2013] 1 WLR 3690, and R (Bibi) v Secretary of State for the Home Department [2015] UKSC 58; [2015] 1 WLR 5055. The latter case is particularly relevant for its consideration of the case of Jeunesse. In her judgment, Lady Hale noted the distinction drawn by the European Court between cases where lawfully settled migrants are facing deportation or expulsion, and cases where an alien is seeking admission to a host country. She also noted that, although the criteria developed in the first context cannot be transposed automatically into the second, the applicable principles are nonetheless similar. She went on at para 29 to state that, although Strasbourg analysed cases in the second category in terms of a fair balance, domestic courts had, at least since Huang, applied the proportionality approach described in Aguilar Quila. That approach was criticised by counsel for the Secretary of State in the present case as being premised on the assumption that there was an interference with the right to respect for private and family life, whereas in cases where the individual was not lawfully resident in the UK the issue was whether the right gave rise to a positive obligation. The structured approach to proportionality which has been adopted in the domestic law of the UK makes provision for consideration of the elements involved in an assessment of fair balance in the context of immigration and deportation, whether the assessment arises in relation to a potential positive obligation or in relation to an interference. It can be said that the first of the four stages of the analysis, as described in Bank Mellat v HM Treasury (No 2) [2013] UKSC 39; [2014] AC 700, para 74 (whether the objective of the measure is sufficiently important to justify the limitation of a protected right), and in similar language in Aguilar Quila and other cases, is not entirely apt where the question is whether a positive obligation is imposed, since the language used presumes that the right in question is being limited. But the point is of no practical importance where, as in the context of immigration and deportation, there is no doubt as to the importance of the objective. What has now become the established method of analysis can therefore continue to be followed in this context. The adoption of that method does not, of course, determine the outcome of the assessment. It is necessary to feed into the analysis the facts of the particular case and the criteria which are appropriate to the context, and, where a court is reviewing the decision of another authority, to give such weight to the judgment of that authority as may be appropriate. In that way, relevant differences between, for example, cases where lawfully settled migrants are facing deportation or expulsion, and cases where an alien is seeking admission to a host country, can be taken into account. In summary, therefore, the tribunal carries out its task on the basis of the facts as it finds them to be on the evidence before it, and the law as established by statute and case law. Ultimately, it has to decide whether deportation is proportionate in the particular case before it, balancing the strength of the public interest in the deportation of the offender against the impact on private and family life. In doing so, it should give appropriate weight to Parliaments and the Secretary of States assessments of the strength of the general public interest in the deportation of foreign offenders, as explained in paras 14, 37 38 and 46 above, and also consider all factors relevant to the specific case in question. The critical issue for the tribunal will generally be whether, giving due weight to the strength of the public interest in the deportation of the offender in the case before it, the article 8 claim is sufficiently strong to outweigh it. In general, only a claim which is very strong indeed very compelling, as it was put in MF (Nigeria) will succeed. A complete code? In MF (Nigeria) [2014] 1 WLR 544 the Court of Appeal described the new rules set out in para 23 above as a complete code for article 8 claims (para 44). That expression reflected the view that the concluding words of rule 398 required the application of a proportionality test in accordance with the Strasbourg jurisprudence, taking into account all the article 8 criteria and all other factors which were relevant to proportionality (para 39). On that basis, the court commented that the result should be the same whether the proportionality assessment was carried out within or outside the new rules: it was a sterile question whether it was required by the rules or by the general law (para 45). The idea that the new rules comprise a complete code appears to have been mistakenly interpreted in some later cases as meaning that the Rules, and the Rules alone, govern appellate decision making. Dicta seemingly to that effect can be found, for example, in LC (China) v Secretary of State for the Home Department [2014] EWCA Civ 1310; [2015] Imm AR 227, para 17, and AJ (Angola) v Secretary of State for the Home Department [2014] EWCA Civ 1636, para 39. As explained at para 17 above, the Rules are not law (although they are treated as law for the purposes of section 86(3)(a) of the 2002 Act), and therefore do not govern the determination of appeals, other than appeals brought on the ground that the decision is not in accordance with the Rules: see para 7 above. The policies adopted by the Secretary of State, and given effect by the Rules, are nevertheless a relevant and important consideration for tribunals determining appeals brought on Convention grounds, because they reflect the assessment of the general public interest made by the responsible minister and endorsed by Parliament. In particular, tribunals should accord respect to the Secretary of States assessment of the strength of the general public interest in the deportation of foreign offenders, and also consider all factors relevant to the specific case before them, as explained at paras 37 38, 46 and 50 above. It remains for them to judge whether, on the facts as they have found them, and giving due weight to the strength of the public interest in deportation in the case before them, the factors brought into account on the other side lead to the conclusion that deportation would be disproportionate. The present appeal The facts of the present appeal, as found by the Upper Tribunal, are as follows. The appellant is an Iraqi national. He left Iraq in 1988, at the age of 12. With the exception of a few visits prior to 2000, he has not lived there since then. He lived unlawfully in Jordan until 2000, when he was 24 years of age. He then entered the UK unlawfully, and has lived in the UK unlawfully ever since. No attempt appears to have been made to remove him as an illegal immigrant. In 2002 he applied for asylum, but his application was refused, and his appeal against that decision was unsuccessful. In November 2005 he was convicted of possession of class A and C drugs and was fined. He had a serious drugs problem at that time. In March 2006 he was arrested and later charged with two counts of possession of class A drugs (11.1 grams of cocaine and 59 tablets of ecstasy) with intent to supply. In December 2006 he pleaded guilty and was sentenced to four years imprisonment. In the meantime he had begun to address his drug taking. He was released from custody in January 2009. He had by then stopped taking drugs, and has remained drug free since then. When he completed his sentence, in January 2011, his probation officer reported that he had complied with his licence conditions and that he was considered to present a low risk of re conviction and a low risk of harm. In April 2014 he pleaded guilty to a count of driving while uninsured and with excessive alcohol in his system. He was fined and disqualified from driving for 12 months. He is not, and never has been, permitted to take employment in the UK. He has nevertheless worked in a variety of occupations. In February 2005 he began a relationship with a British woman, Ms Harwood, who has lived all her life in the UK. They have had periods of cohabitation but were no longer cohabiting at the time when the appellants appeal came before the Upper Tribunal. It is agreed that they nevertheless saw each other almost every day and spent most nights together. It is agreed that they wished to marry and have children. It is agreed that they have not done so as a result of the appellants immigration status, his inability to take lawful employment, and a lack of finances. The appellant is also the father of two children who probably reside in the UK, and who were born before he began his relationship with Ms Harwood. He has no contact with either child. He has no remaining family in Iraq. In September 2007 the Secretary of State notified the appellant that she was considering his immigration status and that he was liable to removal. In response, his solicitors made a fresh claim to the effect that he was at risk of ill treatment in Iraq, and that his deportation would also be contrary to article 8. In January 2008 the Secretary of State made a decision to make a deportation order, but in March 2008 withdrew that decision on the basis that the appellants nationality was unclear. In April 2008 a nationality interview was conducted. In January 2010 an asylum interview was conducted. On 5 October 2010 the Secretary of State decided to make a deportation order in respect of the appellant on the basis that section 32(5) of the 2007 Act applied to him. She found that he did not fall within any of the exceptions in section 33. She rejected his claim to be at risk in Iraq, and also rejected his claim under article 8. She found that he had failed to demonstrate that he was in a subsisting relationship with Ms Harwood, and that in any case the relationship, if it existed, had been entered into at a time when they should both have been aware that it might not be possible to continue it in the UK. She accepted that deportation might interfere with the appellants private life, but considered that this was proportionate to the aim of preventing disorder or crime and the maintenance of effective immigration control. Under the heading Proportionality, the decision letter stated that the reason why the interference with the appellants private life was not considered to be disproportionate was that: Although you have been resident in the United Kingdom for a number of years you spent your youth and formative years in Iraq. In view of this it is not considered unreasonable to expect you to be able to readjust to life in Iraq. The appellant appealed to the First tier Tribunal. On 10 February 2011 the appeal was dismissed. The appellant then appealed to the Upper Tribunal. On 16 March 2012, the decision of the First tier Tribunal was set aside. On 18 January 2013 the Upper Tribunal re heard the appeal. By that stage, the only remaining ground of appeal was that the appellants removal would breach the Refugee Convention and articles 3 and 8 of the ECHR. The new rules had by then come into force. On 11 February 2013 the Upper Tribunal allowed the appeal on the ground that the appellants removal would be incompatible with article 8. The judge found that the appellant was not a danger to the community: his last offence (at that time) had been almost seven years earlier, in March 2006. He had put drug taking behind him. His relationship with Ms Harwood was genuine, and she could not reasonably be expected to live in Iraq. The judge identified the central issue as being whether the interference with private and family life which would result from the appellants removal to Iraq was proportionate to the proper purpose of deporting foreign criminals for the purpose of the prevention of disorder or crime. He acknowledged that the appellant had committed very serious offences, but concluded that the period of time which had elapsed since the appellants last offence, the unlikelihood of his committing further offences, the strength of his relationship with Ms Harwood, and the weakness of the appellants current links with Iraq, were in combination compelling, so that deportation would be disproportionate. In reaching that conclusion, he explained that he accepted that there was an interest in the appellants being removed: Parliament had said so in section 32(4) of the 2007 Act. The judge explained that he had not had regard to the new rules, stating that the Rules did not assist him with the proper application of the appellants human rights. For the reasons explained earlier, they were a relevant and important consideration. He also does not appear to have taken account of the fact that the appellants relationship with Ms Harwood had been formed at a time when his immigration status was such that the persistence of family life within the UK was uncertain. As was explained earlier, that also was an important consideration. The judge noted in his summary of the evidence that the appellant and Ms Harwood had acknowledged these circumstances, but they were not mentioned in the reasons which he gave for his decision. The Secretary of State then appealed to the Court of Appeal on the grounds that the Upper Tribunal had erred (i) in failing to consider the new rules, (ii) in failing to recognise the importance of the public interest in deporting foreign criminals, (iii) in failing properly to apply the guidance established in ner, and (iv) in allowing the appeal in circumstances in which no reasonable tribunal could have done so. On 22 July 2014 the Court of Appeal (Sullivan, Black and Richards LJJ) [2015] Imm AR 207 allowed the appeal on grounds (i) and (ii). The court found it unnecessary to consider grounds (iii) and (iv), and remitted the appeal for re consideration by a differently constituted Upper Tribunal. In relation to grounds (i) and (ii), the Court of Appeal proceeded on the basis, at para 27, that the new rules tell the decision taker what weight they should give to the public interest in deporting foreign criminals. As counsel for the appellant submitted, that might be understood as meaning that the Rules determined the weight which tribunals must give to the public interest in deportation in all cases. For the reasons already explained, that would be an overstatement of the significance of the new rules to appellate decision making by tribunals. That does not, however, undermine the courts conclusion. As explained above, the reasoning of the Upper Tribunal failed to take any account of the new rules, and also failed to take account of the important fact that the appellants family life had been established when his immigration status was known to be precarious. In addition, no assessment of the compatibility of removal with article 8 has been carried out by reference to the facts currently known, as distinct from those which were known at the time of the hearing before the Upper Tribunal (AA v United Kingdom [2012] Imm AR 107, para 67). In the circumstances, it is appropriate that the appeal should be remitted for reconsideration, as the Court of Appeal ordered. This court should therefore forbear from further comment on the merits of the appeal. Conclusion For these reasons, I would dismiss the appeal against the decision of the Court of Appeal, and remit the appeal against the decision of the Secretary of State for reconsideration by a differently constituted Upper Tribunal. LORD WILSON: This is an important day in the life of our court. For it is the first occasion upon which either we or our predecessors in the House of Lords have had occasion to address the interface between the power of the Secretary of State to deport a foreign criminal and the latters ability to resist deportation by reference to his right to respect for his family or private life under article 8 of the ECHR. It is a subject which generates strong views in our society. MR, giving the judgment of the Court of Appeal, said at para 43: In the MF (Nigeria) case, cited by Lord Reed at para 37 above, Lord Dyson The general rule in the present context is that, in the case of a foreign [criminal] to whom paragraphs 399 and 399A [of the Immigration Rules in force on 9 July 2012] do not apply, very compelling reasons will be required to outweigh the public interest in deportation. Of the numerous issues raised in this appeal, the central issue is whether the Court of Appeals exposition of what it called the general rule was correct. I subscribe to the majority view that it was indeed correct. I agree with the judgment of Lord Reed and I concur in the dismissal of the appeal. A person is a foreign criminal under section 32(1) and (2) of the 2007 Act only if, not being a British citizen, he was convicted in the UK of an offence for which he was sentenced to imprisonment for at least 12 months. So the misleadingly entitled automatic deportation, for which the section provides, applies in effect only to a serious offence. Subsection (4) provides that the deportation of a foreign criminal is conducive to the public good for the purpose of section 3(5)(a) of the 1971 Act, in other words with the result that he should be liable to deportation. So it is only the liability to deportation, not the deportation itself, which the section makes automatic. Section 33 (7) of the 2007 Act, set out at para 11 above, provides, at first sight surprisingly, that the deportation of a foreign criminal remains conducive to the public good even when his rights under article 8 bar his removal. At para 12 above Lord Reed convincingly explains the provision: for the barrier to his removal arising from his rights under article 8 may prove to be temporary so there is no harm in maintaining his liability in principle to deportation by continuing to regard it as conducive to the public good. But there is a further feature of the subsection which is less easy to explain: for the effect of limb (a) of it is that the barrier to a foreign criminals deportation arising from his rights under article 8 does not prevent the making of a deportation order. Like Lord Kerr in his dissenting judgment at para 128 below, I have failed to make any sense of this further feature. In para 14 above Lord Reed suggests that sections 32 and 33 of the 2007 Act were enacted in response to public concern about, in particular, the procedures for the deportation of foreign offenders. But it is clear to me that there was equal, if not greater, dissatisfaction with the decisions themselves, in particular when they rejected deportation. Why, in particular, did the people of the UK, by their elected representatives, take the unusual step of pre empting the ministers decision whether a deportation was conducive to the public good by making a formal resolution in section 32(4) that the deportation of a foreign criminal was conducive to it? No doubt they did so primarily because of the strength of their wish to protect themselves from disorder and crime, which, of course, is an aim specifically recognised in paragraph 2 of article 8 of the ECHR and which the Strasbourg court has consistently considered [to be] the legitimate aim pursued by deportation: para 53 of the AA case, cited at para 25 above. This means, says Lord Kerr at para 96 below, that, customarily, the risk of re offending will be of predominant importance. Indeed Lord Kerr proceeds to ask: If an individual is unlikely to commit crime or be involved in disorder, how can his expulsion on that ground be said to be rationally connected to the stated aim? But, with respect, might Lord Kerrs analysis be too narrow? Might not the deterrent effect upon all foreign citizens (irrespective of whether they have a right to reside in the UK) of understanding that a serious offence will normally precipitate their deportation be a more powerful aid to the prevention of crime than the removal from the UK of one foreign criminal judged as likely to re offend? See DS (India) v Secretary of State for the Home Department [2009] EWCA Civ 544; [2010] Imm AR 81, para 37, Rix LJ. In the Court of Appeal in OH (Serbia) v Secretary of State for the Home Department [2008] EWCA Civ 694, [2009] INLR 109, I stated, at para 15(c): A further important facet [of the public interest in deportation] is the role of a deportation order as an expression of societys revulsion at serious crimes and in building public confidence in the treatment of foreign citizens who have committed serious crimes. By his counsel, the appellant mounts a sustained objection to my statement and I am constrained to agree with part of it. I regret my reference there to societys revulsion at serious crimes and I accept Lord Kerrs criticism of it at para 168 below. Societys undoubted revulsion at certain crimes is, on reflection, too emotive a concept to figure in this analysis. But I maintain that I was entitled to refer to the importance of public confidence in our determination of these issues. I believe that we should be sensitive to the public concern in the UK about the facility for a foreign criminals rights under article 8 to preclude his deportation. Even though, for the purposes of the present appeal, we must ignore section 19 of the Immigration Act 2014, the depth of public concern had earlier been made manifest not only in section 32(4) of the 2007 Act but also in the amendments to the immigration rules introduced on 9 July 2012 to which I will turn in the next paragraph. Laws serve society more effectively if they carry public support. Unless it lacks rational foundation (in which case the courts should not pander to it), the very fact of public concern about an area of the law, subjective though that is, can in my view add to a courts objective analysis of where the public interest lies: in this context it can strengthen the case for concluding that interference with a persons rights under article 8 by reason of his deportation is justified by a pressing social need. In the document entitled Statement of Intent: Family Migration, dated 12 June 2012, the Home Office sought to explain the forthcoming changes to the immigration rules. It said: 37. previous Secretaries of State have asserted that if the courts think that the rules produce disproportionate results in a particular case, the courts should themselves decide the proportionate outcome on the facts before them rather than hold that the rule itself is incompatible with article 8. The courts have accepted this invitation to determine proportionality on a case by case basis and do not indeed cannot give due weight systematically to the Governments and Parliaments view of where the balance should be struck, because they do not know what that view is. 38. The new Immigration Rules are intended to fill this public policy vacuum by setting out the Secretary of States position on proportionality and to meet the democratic deficit by seeking Parliaments agreement to her policy. The rules will state how the balance should be struck between the public interest and individual rights, taking into account relevant case law, and thereby provide for a consistent and fair decision making process. Accordingly rule 398, as was then introduced, provided that, other than in the narrow situations in which paras 399 or 399A applied, it will only be in exceptional circumstances that the public interest in deportation will be outweighed by other factors in the determination of an article 8 claim by a person liable to deportation. Provided that the phrase is not misunderstood, there is nothing wrong with an analysis in certain contexts that exceptional circumstances will be necessary for a claim under article 8 to prevail. In certain situations, the public interest in a persons removal from the UK will be inherently so strong, and in other situations his claim to respect for his private and family life will be inherently so weak, that it is appropriate to identify a need for exceptional circumstances before his claim can prevail. An example of the first type of situation is extradition. The public interest in a persons extradition in accordance with domestic law is inherently strong. In Norris v Government of the United States of America (No 2) [2010] UKSC 9; [2010] 2 AC 487, Lord Phillips of Worth Matravers, with whom all eight of the other members of the court agreed, said: 56. The reality is that only if some quite exceptionally compelling feature, or combination of features, is present that interference with family life consequent upon extradition will be other than proportionate to the objective that extradition serves. That, no doubt, is what the commission had in mind in Launder v United Kingdom (1997) 25 EHRR CD 67, 73 when it stated that it was only in exceptional circumstances that extradition would be an unjustified or disproportionate interference with the right to respect for family life. An example of the second type of situation is where the appellants family life with another person developed at a time when, to his knowledge, his immigration status rendered his ability to remain living in the UK precarious. In this situation his claim to respect for his family life is inherently weak. It is therefore legitimate to describe it as likely to prevail only in exceptional circumstances. The court in Strasbourg has said so. Thus in Rodrigues Da Silva, Hoogkamer v Netherlands (2006) 44 EHRR 34, the Strasbourg court said: 39. where this is the case it is likely only to be in the most exceptional circumstances that the removal of the non national family member will constitute a violation of article 8. Two years ago, in Jeunesse v Netherlands, cited at para 27 above, the Grand Chamber at para 108 indorsed, almost word for word, the reference to the need in that situation for exceptional circumstances. In the MF (Nigeria) case the Secretary of State informed the court that, in referring to the need for exceptional circumstances in the new rule 198, she was borrowing the phrase from the Strasbourg court, which had used it in certain article 8 cases: see para 34 of the judgment. Although its application by the Strasbourg court had been to situations other than deportation, the Secretary of State was in my view entitled to borrow the phrase and, by the rule, to commend it to her case workers. For deportation is another example of the first type of situation to which I have referred at para 73 above: the public interest in the deportation of a foreign criminal is inherently so strong, arguably even stronger than in the case of extradition, that it is appropriate to identify a need for exceptional circumstances before his claim under article 8 can prevail. There is, however, a well recognised danger that a decision maker will misunderstand the significance of the phrase. It may lead him to slide away from the requisite inquiry into the degree of strength of the public interest in the deportation of this particular foreign criminal, strong though that will always be; and from inquiry into the gravity of the proposed interference with the exercise of his family life, judged in the light of all the factors upon which he relies insofar as they are relevant to it; and therefore from inquiry into the justification or otherwise for the proposed interference. It may lead him instead simply to ask himself are these circumstances exceptional? Even worse, it may even lead him simply to ask himself are these circumstances unusual? The House of Lords has itself been constrained to recognise that use of the word exceptional is capable of being misunderstood. In R (Razgar) v Secretary of State for the Home Department [2004] UKHL 27; [2004] 2 AC 368, Lord Bingham said: 20. Decisions taken pursuant to the lawful operation of immigration control will be proportionate [for the purposes of article 8] in all save a small minority of exceptional cases, identifiable only on a case by case basis. But in the Huang case, cited at para 17 above, Lord Bingham, on this occasion giving the opinion of the committee, said: 20. It is not necessary that the appellate immigration authority, directing itself along the lines indicated in this opinion, need ask in addition whether the case meets a test of exceptionality. The suggestion that it should is based on an observation of Lord Bingham in Razgar, para 20. He was there expressing an expectation that the number of claimants not covered by the rules and supplementary directions but entitled to succeed under article 8 would be a very small minority. That is still his expectation. But he was not purporting to lay down a legal test. When it analysed the reference to exceptional circumstances in the new rule 398, the Court of Appeal in the MF (Nigeria) case had well in mind the risk that the phrase might be misunderstood. It concluded at paras 41 and 42, in my view correctly, that the rule was no more laying down a test of exceptionality than had been Lord Bingham in the Razgar case or indeed than had been the Strasbourg court in its analysis of the situation where family life was precarious. It continued: Rather [the rule means] that, in approaching the question of whether removal is a proportionate interference with an individuals article 8 rights, the scales are heavily weighted in favour of deportation and something very compelling (which will be exceptional) is required to outweigh the public interest in removal. Then, at para 43, the Court of Appeal articulated the general rule which I have set out at para 66 above and by which in effect it substituted the phrase very compelling reasons for that of exceptional circumstances. In my view its substitution was wise and, as I have said, its general rule was correct. In July 2014, when introducing changes to the rules to accompany the coming into force of the 2014 Act, the Secretary of State made a corresponding amendment to rule 398 so as, among other things, to substitute the words very compelling for the word exceptional. In the MF (Nigeria) case, however, the Court of Appeal proceeded to make an insignificant but unfortunate error. It held at para 44 that the new rules were a complete code which fell to be applied not only by the Secretary of States case workers but on appeal by the First tier Tribunal. It is one thing to suggest that the Secretary of States rule 398 is relevant to the weight which the tribunal should give to the public interest. By doing so, the tribunal would do no more than, in the words of Lord Bingham in the Huang case, para 16, to accord appropriate weight to the judgment of a person with responsibility for a given subject matter and access to special sources of knowledge and advice. But it is another thing altogether to suggest that the rules provide the legal framework within which the tribunal should determine the appeal. Both Lord Reed at para 53 and Lord Kerr at para 163 powerfully demonstrate that it is a constitutional solecism for an appellate body to evaluate a persons human rights by the application of a rubric (however sound) which the Secretary of State has chosen to incorporate into her rules. Crucially, however, the Court of Appeal hastened to add: 45. Even if we were wrong about that, it would be necessary to apply a proportionality test outside the new rules as was done by the [Upper Tribunal]. Either way, the result should be the same. In these circumstances, it is a sterile question whether this is required by the new rules or it is a requirement of the general law. What matters is that it is required to be carried out if paragraphs 399 or 399A do not apply. This error in the MF (Nigeria) case was therefore insignificant. We should not allow it to distract us from the validity of the general rule which it articulated. I have come belatedly to realise that the use of a clich can be a quick way of effectively communicating a point. So I make no apology for concluding that we should resist the appellants invitation to us, by reference to this error on the part of the Court of Appeal, to throw the baby out with the bath water. On the contrary we should lift the general rule carefully out of the bath and embrace it. LORD THOMAS: I agree with the judgment of Lord Reed and in particular the matters he sets out at paras 37 38, 46 and 50. I add three paragraphs of my own simply to emphasise the importance of the structure of judgments of the First tier Tribunal in decisions where article 8 is engaged. Judges should, after making their factual determinations, set out in clear and succinct terms their reasoning for the conclusion arrived at through balancing the necessary considerations in the light of the matters set out by Lord Reed at paras 37 38, 46 and 50. It should generally not be necessary to refer to any further authority in cases involving the deportation of foreign offenders. One way of structuring such a judgment would be to follow what has become known as the balance sheet approach. After the judge has found the facts, the judge would set out each of the pros and cons in what has been described as a balance sheet and then set out reasoned conclusions as to whether the countervailing factors outweigh the importance attached to the public interest in the deportation of foreign offenders. The use of a balance sheet approach has its origins in Family Division cases (see paras 36 and 74 of the decision of the Court of Appeal In re B S (Children) (Adoption Order: Leave to Oppose) [2014] 1 WLR 563). It was applied by the Divisional Court in Polish Judicial Authority v Celinski [2016] 1 WLR 551 to extradition cases where a similar balancing exercise has to be undertaken when article 8 is engaged see paras 15 17. Experience in extradition cases has since shown that the use of the balance sheet approach has greatly assisted in the clarity of the decisions at first instance and the work of appellate courts. LORD KERR: (dissenting) I agree with much of the legal analysis in Lord Reeds judgment. There are, however, some important differences of emphasis in our approaches to the proper application of article 8 in cases such as this. Strasbourg jurisprudence concerning expulsion of foreign criminals In a series of cases, Strasbourg has given close attention to, and generally applicable guidance on, the requirements of article 8 of the European Convention on Human Rights and Fundamental Freedoms (ECHR) in the context of the expulsion of foreign criminals. The court has recognised that the removal of a person from a country where close members of his family are residing may infringe his right to respect for family life (Boultif v Switzerland (2001) 33 EHRR 50, para 39), and that even where there is no family life, the expulsion of a settled migrant constitutes an interference with his private life (ner v Netherlands (2006) 45 EHRR 14, para 59). The facts of these and subsequent cases, and the legal analysis applied to them, is illuminating of the approach required to be undertaken by domestic decision makers when considering making a deportation order after conviction. As Lord Bingham noted in Huang v Secretary of State for the Home Department [2007] 2 AC 167, para 18, these cases are valuable in demonstrating where the European Court of Human Rights (ECtHR), as the ultimate guardian of Convention rights, has drawn the line in a number of different factual scenarios, thus guiding national authorities in making their own decisions. (i) Boultif v Switzerland (2001) 33 EHRR 50 Mr Boultif arrived in Switzerland from Algeria in 1992. He married a Swiss woman in 1993. In 1997 his conviction of offences of robbery and damage to property was confirmed by the Swiss Court of Appeal. Those offences had been committed in 1994. In May 1998 he began a period of imprisonment which the appeal court had imposed. In the same month it was decided that his residence permit would not be renewed. His appeal against that decision was dismissed despite his wife having complained that if he was returned to Algeria she could not be expected to follow him. Ultimately, Mr Boultif complained to the ECtHR that his expulsion from Switzerland was in violation of his rights under article 8 ECHR. The court agreed that it was. That decision was reached notwithstanding the courts conclusion that expelling Mr Boultif from Switzerland was in accordance with law and was rationally connected to the legitimate aim of preventing disorder and crime. The court then addressed the question whether the undoubted interference with Mr Boultifs article 8 rights was necessary in a democratic society. It immediately acknowledged, in para 48, that previously it had only considered this question to a limited extent. Mr Boultifs case required it to establish guiding principles on this question. The court then proceeded to set out with some precision what those principles should be. It said this: In assessing the relevant criteria in such a case, the court will consider the nature and seriousness of the offence committed by the applicant; the length of the applicants stay in the country from which he is going to be expelled; the time elapsed since the offence was committed as well as the applicants conduct in that period; the nationalities of the various persons concerned; the applicants family situation, such as the length of the marriage; and other factors expressing the effectiveness of a couples family life; whether the spouse knew about the offence at the time when he or she entered into a family relationship; and whether there are children in the marriage, and if so, their age. Not least, the court will also consider the seriousness of the difficulties which the spouse is likely to encounter in the country of origin, though the mere fact that a person might face certain difficulties in accompanying her or his spouse cannot in itself exclude an expulsion. Lord Reed has listed those criteria at para 26 of his judgment, but the preface given by the Grand Chamber to this outline of the relevant criteria is particularly important. These were to be guiding principles. Although the weight to be given to them was determined by an examination of their application to Mr Boultifs case, they were precisely what they were stated to be: guiding principles. In other words, principles which should be taken into account in all cases where the propriety of expelling or deporting someone from a member state of the Council of Europe had to be decided. (ii) ner v Netherlands (2006) 45 EHRR 14 Mr ner came to the Netherlands in 1981 at the age of 12. Until then he had lived in Turkey where he was born. He obtained a permanent residence permit in 1988. In 1991 he formed a relationship with a Dutch national and this produced in 1992 and 1996 two children. Mr ner was found guilty of relatively minor offences in 1989, 1990 and 1992. In 1994, however, he was convicted of wounding one man and the manslaughter of another. He was sentenced to seven years imprisonment. While in prison, Mr ner was visited regularly by his partner and children. He undertook various courses and qualified as a sports instructor. Despite his progress in prison his permanent residence permit was withdrawn. Throughout a number of appeals and other hearings that decision was confirmed and he was deported to Turkey. He claimed that he had virtually no familial contacts there and he returned illegally on a number of occasions to the Netherlands. He was deported again, finally in May 2006. On an application to ECtHR, Mr ner claimed that his expulsion represented a breach of his article 8 rights. The court disagreed. But it repeated and confirmed, setting them out in tabular form, what it described as the Boultif principles. At para 58 it referred to two criteria in particular. It said this: The court would wish to make explicit two criteria which may already be implicit in those identified in the Boultif judgment: the best interests and well being of the children, in particular the seriousness of the difficulties which any children of the applicant are likely to encounter in the country to which the applicant is to be expelled; and the solidity of social, cultural and family ties with the host country and with the country of destination. As to the first point, the court notes that this is already reflected in its existing case law (see, for example, Sen v Netherlands (2003) 36 EHRR 7, para 40; Tuquabo Tekle v Netherlands [2006] 1 FLR 798, para 47) and is in line with the Committee of Ministers Recommendation Rec (2002) 4 on the legal status of persons admitted for family reunification (see para 38 above). As to the second point, it is to be noted that, although the applicant in the case of Boultif was already an adult when he entered Switzerland, the court has held the Boultif criteria to apply all the more so (a plus forte raison) to cases concerning applicants who were born in the host country or who moved there at an early age (see Mokrani v France (2005) 40 EHRR 5, para 31). Indeed, the rationale behind making the duration of a persons stay in the host country one of the elements to be taken into account lies in the assumption that the longer a person has been residing in a particular country the stronger his or her ties with that country and the weaker the ties with the country of his or her nationality will be. Seen against that background, it is self evident that the court will have regard to the special situation of aliens who have spent most, if not all, their childhood in the host country, were brought up there and received their education there. Although the court identified these two particular criteria as being of especial importance, the matter of significance (so far as the present appeal is concerned) is the courts proclamation that the Boultif criteria are fundamental in the examination of whether article 8 has been breached. Different emphasis might be placed on some of those criteria in different cases. Particular importance (as in Mr ners case) may be accorded to some of them, reflecting the specific circumstances of an individual. But, the relevance of the factors in article 8 cases involving expulsion is not left in doubt. Their status as guiding principles, to be considered and, where appropriate, applied in all such cases, is clearly affirmed. That was emphasised again by the Grand Chamber in Maslov v Austria [2009] INLR 47. I agree with Lord Reeds analysis at para 26 of his judgment as to the effect of that decision. In particular, I would stress that some of the Strasbourg criteria (such as the nature and seriousness of the offence) will be relevant to the weight to be afforded to the public interest in deportation, and that other criteria will go to the strength of the individuals private and family life. A consequence of the detailed guidance given by the ECtHR in these cases is that the domestic margin of appreciation is narrower than in many other contexts where article 8 is engaged. (iii) AA v United Kingdom [2012] Imm AR 107 In this case the applicant came to the United Kingdom in 2000 at the age of 13. In 2007, when he was 15 years old he was convicted with others of the rape of a girl aged 13. He was sentenced to four years detention at a Young Offenders Institution. While there, it was assessed that he posed a low risk of re offending or of causing harm to the public. Despite this, he was served with a deportation order. This was said to be necessary for the prevention of disorder and crime and for the protection of health and morals. When the application came before ECtHR, the government argued that AAs deportation would serve the aims of public safety and the protection of the rights of others, as well as the aims already referred to in the deportation order. Interestingly, the court observed in para 53 that it had consistently considered that the legitimate aim [in this type of case] was the prevention of disorder and crime citing Bouchelkia v France (1997) 25 EHRR 686; Boujlifa v France (1997) 30 EHRR 419; Boultif and Maslov; Omojoudi v United Kingdom (2009) 51 EHRR 10. While this statement may not amount to a final conclusion by the ECtHR that the only legitimate aim possible for the expulsion of foreign criminals is the prevention of disorder and crime, it must be taken as an indication that that aim will normally be the basis on which deportation is to be justified. Indeed it is doubtful, in cases involving persons who hold indefinite leave to remain in the United Kingdom, whether immigration control (insofar as it is relevant to the economic well being of the country under article 8(2)) is a legitimate aim under which deportation can be justified. This means that, customarily, the risk of re offending will be of predominant importance. If the risk of re offending is low, it will be more difficult to justify an interference with a persons article 8 rights on the basis that this is necessary in order to prevent disorder and crime. If an individual is unlikely to commit crime or be involved in disorder, how can his expulsion on that ground be said to be rationally connected to the stated aim? On the question of whether the expulsion of the applicant was necessary in a democratic society the court said this at para 56: The assessment of whether the impugned measure was necessary in a democratic society is to be made with regard to the fundamental principles established in the courts case law and in particular the factors summarised in ner, cited above, paras 57 85, namely: the nature and seriousness of the offence committed by the applicant; the length of the applicants stay in the country from which he or she is to be expelled; the time which has elapsed since the offence was committed and the applicant's conduct during that period; the nationalities of the various persons concerned; the applicants family situation, such as the length of any marriage and other factors expressing the effectiveness of a couples family life; whether the spouse knew about the offence at the time when he or she entered into a family relationship; whether there are children of the marriage, and if so, their age; the seriousness of the difficulties which the spouse is likely to encounter in the country to which the applicant is to be expelled; the best interests and well being of any children, in particular the seriousness of the difficulties which any children of the applicant are likely to encounter in the country to which the applicant is to be expelled; and the solidity of social, cultural and family ties with the host country and with the country of destination. This constitutes a restatement of the principles and guidelines in Boultif and ner. It is important to note that these are expressed as a generally applicable set of fundamental principles which constitute a prescriptive set of rules to be applied in all cases involving expulsion of what are described as foreign criminals. Foreign criminals are defined in section 32(1) (3) of the UK Borders Act 2007 as persons who are not British citizens, who are either convicted in the United Kingdom of an offence and sentenced to at least 12 months imprisonment, or are sentenced to a period of an imprisonment for an offence which is specified as serious by the Secretary of State under section 72(4)(a) of the Nationality, Immigration and Asylum Act 2002. As it happens and as the cases above demonstrate, to describe all who might be subject to deportation as foreign criminals can be misleading. Some have lived most of their lives in the countries from which it is proposed that they be expelled. Indeed, in the case of the United Kingdom, some so called foreign criminals may even have been born here or hold permanent residency in this country but, because they do not have British citizenship, they are liable to expulsion. Given the wide category of persons who can be expelled after having been found guilty of criminal offences, it is unsurprising that Strasbourg has given prominence, in the article 8 assessment, to the length of time that an individual who claims breach of that provision has spent in the host country and whether that person is a settled migrant, in other words someone who has been granted a right of residence (even if temporary) in the host country. (iv) Jeunesse v Netherlands (2014) 60 EHRR 17 This case does not involve a decision to deport a foreign criminal but it is worth considering because of the difference that is said to apply between settled migrants (ie persons with a right of residence, whether temporary or permanent), and those who do not have a right of residence. Although Jeunesse did not feature quite so prominently on the hearing of this appeal as in the subsequent case of R (Agyarko) v Secretary of State for the Home Department [2016] 1 WLR 390, it is relied on by the Secretary of State to advance a proposition that a person who is not a settled migrant, in order to rely on article 8, is obliged to establish a positive obligation on the part of the state to grant a right of residence. Absent such an obligation, no right to respect for a family or private life arose. If this proposition is correct, it follows that a foreign criminal who is not a settled migrant and who cannot show that there was a positive obligation to grant him permission to reside, cannot rely on article 8. On that basis, discussion of interference with article 8 or justification of any such interference would be irrelevant. Some consideration of the circumstances of Jeunesse is needed. The applicant and her partner were born and lived in Suriname. They had cohabited there. In October 1991 the applicants partner went to stay in the Netherlands with his father and was granted Netherlands nationality. In March 1997 the applicant was granted a visa for the Netherlands for a short period to visit a relative. She entered the country on 12 March 1997 and did not return to Suriname when her visa expired. She had lived in the Netherlands since then. She made various applications for a residence permit, all of which were refused. In June 1999 the applicant married her partner and their first child was born in September 2000 and was a Netherlands national. She renewed her applications for a residence permit and, apart from a short lived success in obtaining an injunction against removal, her applications were refused. In December 2005 she had a second child, again a Netherlands national. Further applications for residence followed again with no success. Finally, in April 2010, while pregnant with her third child, the applicant filed a fifth request for a residence permit in order to stay with her children. This was also rejected, it being decided that the refusal did not contravene article 8. The relevant minister attributed decisive weight to the fact that the applicant had never resided lawfully in the Netherlands and that there was no indication that it would be impossible to exercise family life in Suriname. Although the argument was not raised in the present appeal, in the subsequent case of R (Agyarko) v Secretary of State for the Home Department it was submitted for the Secretary of State that the effect of Jeunesse was that it was necessary for an applicant who was not a settled migrant to show that his or her circumstances were sufficiently weighty to oblige the state to allow him or her to remain before article 8 was engaged in their case. In other words, the applicant had to show that the state was under a positive obligation to admit the applicant. Implicit in this argument was that, in the case of someone who was not a settled migrant, the question of a states negative obligation not to act in violation of that persons article 8 rights did not arise because access to those rights could only be obtained by such a person by showing that the state had a positive obligation to grant leave to remain. Reference was made to paras 103 108 of the Grand Chambers judgment in Jeunesse. It is not necessary to set out all of these passages but para 103 sets the scene: Where a contracting state tolerates the presence of an alien in its territory thereby allowing him or her to await a decision on an application for a residence permit, an appeal against such a decision or a fresh application for a residence permit, such a contracting state enables the alien to take part in the host countrys society, to form relationships and to create a family there. However, this does not automatically entail that the authorities of the contracting state concerned are, as a result, under an obligation pursuant to article 8 of the Convention to allow him or her to settle in their country. In a similar vein, confronting the authorities of the host country with family life as a fait accompli does not entail that those authorities are, as a result, under an obligation pursuant to article 8 of the Convention to allow the applicant to settle in the country. The court has previously held that, in general, persons in that situation have no entitlement to expect that a right of residence will be conferred upon them. It is important to note that the Grand Chamber did not say that an applicant for permission to remain who prays article 8 in aid of his or her application must show, as a prerequisite to reliance on the rights enshrined in that provision, that the state is obliged to allow him or her to remain. The burden of the Grand Chambers reasoning is that a person who has been allowed to remain while applications for a right of residence are being dealt with cannot expect that the period accumulated by those processes will automatically bring entitlement to a right to reside. Likewise, the creation of a family and the presentation of that circumstance to state authorities as a fait accompli carries no automatic right to the grant of leave to remain. And there is no general obligation to respect a married couples choice of country for their matrimonial residence (para 107). It is also relevant that, at the time that family life was created, the persons involved were aware that the immigration status of one of them was such that family life being permitted to continue in the host state was precarious. In para 108 of Jeunesse the Grand Chamber said that where this was the case, it was likely only to be in exceptional circumstances that the removal of the non national family member would constitute a violation of article 8. It is important to understand, however, that none of these considerations has been expressed by the Strasbourg court as determinative. Each, provided it is relevant to the particular circumstances of the individual case, must be taken into account. But the weight to be attached to them will depend upon the significance that they have according to those circumstances. The fact that an applicant is or is not a settled migrant a settled migrant being someone who has been granted some form of residence, whether temporary or indefinite is likewise a relevant factor. On that account, the Grand Chamber, in para 104, drew a distinction between Ms Jeunesses case and those of settled migrants. As was pointed out, withdrawal of a right to residence inevitably involves an interference with family or private life. The same is not true in the case of someone who is not a settled migrant. The factual and legal situation of a settled migrant and that of an alien seeking admission to a host country are, self evidently, not the same see para 105. As the Grand Chamber there pointed out: the question to be examined is whether, having regard to the circumstances as a whole, the Netherlands authorities were under a duty pursuant to article 8 to grant her a residence permit, thus enabling her to exercise family life on their territory. (emphasis supplied) The conjunction of the obligation to grant a residence permit and the facilitation of the exercise of family life in the host state is critical. The flaw in the argument made by the Secretary of State is the suggestion that these two issues should be considered disjunctively and, moreover, that the duty to grant a residence permit should be considered by way of anterior inquiry to the question of whether the article 8 rights of the individual are engaged and should prevail over the community interests at stake. It is true that the Grand Chamber in Jeunesse said that the case was to be seen as one involving an allegation of failure on the part of the respondent state to comply with a positive obligation under article 8 of the Convention (para 105), but that does not mean that it is to be considered in isolation from the conventional approach to the question of whether a right to respect for family and private life is engaged. Showing that the state is under a positive obligation to grant permission to reside must not be regarded as a gateway to reliance on article 8 rights. On the contrary, examination of the particular circumstances of the individual who seeks to rely on article 8 and which are claimed to constitute family life is central to the question of whether the article is engaged. This cannot be determined by some extraneous, abstract assessment of whether the state is under a positive obligation to grant a right to reside. The Secretary of State, while acknowledging that the distinction between positive and negative obligations had recently tended to be downplayed by Strasbourg in many contexts, argued in the subsequent case of Agyarko v Secretary of State for the Home Department that, in cases such as that of Mr Ali, it was of especial significance. Unless it could be shown that there was a positive obligation to grant a right to remain, the question of whether there was an interference with article 8 did not arise, she argued. This does not chime well with observations of the Grand Chamber in para 106 of Jeunesse, where it said that: the boundaries between the states positive and negative obligations under [article 8] do not lend themselves to precise definition. The applicable principles are, nonetheless, similar. In both contexts regard must be had to the fair balance that has to be struck between the competing interests of the individual and of the community as a whole This passage, which confirms the approach taken in Nunez v Norway (2011) 58 EHRR 17, para 69, exposes the essential nature of the debate. It is not a question of an applicant for leave to reside showing that they are owed a positive obligation to be allowed to remain before they can rely on article 8. Rather, what is required is an open ended examination of the interests of the individual pitted against those of the community as a whole. In the Jeunesse case the interests of the community as a whole were, principally, control of immigration. In the present appeal the community interests are the prevention of disorder and crime. But the following passage from para 107 of Jeunesse is pertinent for either context: in a case which concerns family life as well as immigration, the extent of a states obligations to admit to its territory relatives of persons residing there will vary according to the particular circumstances of the persons involved and the general interest. Factors to be taken into account in this context are the extent to which family life would effectively be ruptured, the extent of the ties in the contracting state, whether there are insurmountable obstacles in the way of the family living in the country of origin of the alien concerned and whether there are factors of immigration control (for example, a history of breaches of immigration law) or considerations of public order weighing in favour of exclusion. The striking of a fair balance between general community interests and the particular circumstances of the persons involved is the cornerstone on which the dispute is to be resolved, so far as Strasbourg jurisprudence is concerned. Expressed in that way, one can recognise the distinction between, on the one hand, the generally constant, if not unalterable, nature of the community interests and, on the other, the potentially infinitely variable importance of individual family and private life interests. The distinction between positive and negative obligations has not been thought to be significant by our domestic courts. As Lord Bingham held in Huang, whether an article 8 claim involves a complaint of interference or a lack of respect, the ultimate question is proportionality: In most cases where the applicants complain of a violation of their article 8 rights, in a case where the impugned decision is authorised by law for a legitimate object and the interference (or lack of respect) is of sufficient seriousness to engage the operation of article 8, the crucial question is likely to be whether the interference (or lack of respect) complained of is proportionate to the legitimate end sought to be achieved. (para 18) Domestic law has developed somewhat differently from the Strasbourg jurisprudence in relation to the approach to be taken to the question of proportionality, as Lord Reed has explained in paras 47 50 of his judgment. But this does not affect the question of whether someone who is not a settled migrant must show, as a preliminary step, that he or she is owed a positive obligation by the state to grant leave to remain before they can canvass the normal factors that constitute article 8 entitlement. The statement in the passage quoted at para 111 above whether there are insurmountable obstacles in the way of the family living in the country of origin of the alien concerned is not of prominent importance to the issues arising in this appeal. But the expression insurmountable obstacles does appear in rule 399 of the 2012 Rules, and is discussed below, at para 150. The message provided by the Strasbourg cases A consistent thread running through the cases which I have discussed (and others which preceded them such as Benhebba v France (Application No 53441/99) (unreported) 10 July, 2003 and Mehemi v France (1997) 30 EHRR 739) is the need to review and assess a number of specifically identified factors in order to conduct a proper article 8 inquiry. Another theme is that this examination must be open textured so that sufficient emphasis is given to each of the factors as they arise in particular cases. Of their nature factors or criteria such as these cannot be given a pre ordained weight. Any attempt to do that would run counter to the essential purpose of the exercise. This can be readily exemplified: a significant prison sentence may be offset by the strength of family ties or progress on the part of the offender post conviction, for instance. Or expulsion might be justified where the offending is relatively minor but the length of time spent in the host country is short and there are no strong family ties there. The application of the various factors as opposed to the recognition of their relevance involves a holistic, open minded approach. For this reason, giving pre emptive, indicative weight to particular factors on a generic basis is impermissible if it distorts the proper assessment of these in their peculiar and individual setting. ECtHR jurisprudence does not expressly forbid the making of policies in relation to the normal circumstances in which expulsion of foreign criminals should take place but it has not sanctioned the setting of policy standards as to how article 8 might be applied. In Boultif the court said at para 46: The court recalls that it is for the contracting states to maintain public order, in particular by exercising their right, as a matter of well established international law and subject to their treaty obligations, to control the entry and residence of aliens. To that end they have the power to deport aliens convicted of criminal offences. However, their decisions in this field must, in so far as they may interfere with a right protected under paragraph 1 of article 8, be necessary in a democratic society, that is to say justified by a pressing social need and, in particular, proportionate to the legitimate aim pursued. Likewise in ner the court said this in para 54: The court reaffirms at the outset that a state is entitled, as a matter of international law and subject to its treaty obligations, to control the entry of aliens into its territory and their residence there [see, among many other authorities, Abdulaziz v United Kingdom (1985) 7 EHRR 471, para 67; Boujlifa v France (1997) 30 EHRR 419, para 42]. The Convention does not guarantee the right of an alien to enter or to reside in a particular country and, in pursuance of their task of maintaining public order, contracting states have the power to expel an alien convicted of criminal offences. The Grand Chamber in Maslov, at para 68, quoted paras 54 to 58 of the ner judgment in full, stating, at para 69, that in this judgment, as well as in Boultif, the court had taken care to establish the criteria which were so far implicit in its case law to be applied when assessing whether an expulsion measure is necessary in a democratic society and proportionate to the legitimate aim pursued. The entitlement of an individual state to set policy standards as to when deportation should normally occur must not be confused with a power to prescribe how article 8 is to be applied in its territory. Rules as to when deportation should generally take place may be unexceptionable, so long as they yield to an uninhibited assessment of an individuals article 8 right, where that right is claimed. The ECtHR cases do not permit a national policy which limits or dictates the weight to be given to the Boultif factors in the article 8 balancing exercise. This is clear from, for example, the courts judgment in ner where in para 60 it said that all the [Boultif] factors should be taken into account in all cases concerning settled migrants who are to be expelled and/or excluded following a criminal conviction. When it comes to applying article 8, therefore, as opposed to following a purely domestic policy, it is not open to the state to say that some of the Boultif factors should not be taken into account or should be subservient to others. If those factors are relevant to a potential deportees situation, they must be taken into account and they must be given the weight that they deserve, following an open ended and rounded evaluation of the case. This approach is also endorsed in Maslov where, at para 70, the Grand Chamber said: The court would stress that while the criteria which emerge from its case law and are spelled out in the Boultif and ner judgments are meant to facilitate the application of article 8 in expulsion cases by domestic courts, the weight to be attached to the respective criteria will inevitably vary according to the specific circumstances of each case. Moreover, it has to be borne in mind that where, as in the present case, the interference with the applicants rights under article 8 pursues, as a legitimate aim, the prevention of disorder or crime (see para 67 above), the above criteria ultimately are designed to help evaluate the extent to which the applicant can be expected to cause disorder or to engage in criminal activities. (emphasis added) It follows that such of the criteria from Boultif and ner as are relevant to a particular article 8 claim must be taken into account and evaluated according to the circumstances of the individual case rather than by reference to some preconceived weighting accorded to them by national rules. This was again made clear in AA v United Kingdom [2012] Imm AR 107 where, at para 57, the court said: The court reiterates that these criteria are meant to facilitate the application of article 8 in expulsion cases by domestic courts and that the weight to be attached to the respective criteria will inevitably vary according to the specific circumstances of each case. Further, not all the criteria will be relevant in a particular case. It is in the first instance for the domestic courts to decide, in the context of the case before them, which are the relevant factors and what weight to accord to each factor. This, then, is the setting in which the relevant immigration legislation and the status and effect of the Immigration Rules 2012 (which are the rules which were applied in Mr Alis case) must be considered. The Immigration Act 1971 Lord Reed has set out the relevant provisions of the Immigration Act 1971 at paras 3 and 4 of his judgment. Under this Act deportation was a two stage process requiring: (i) a person to be liable to deportation under the provisions of the Act; and (ii) the Secretary of State, in the exercise of her discretion under section 5(1), to have decided whether a deportation order should be made in respect of him. If the deeming provision in play was (as here) section 3(5)(a), therefore, the Secretary of State, before deciding whether to make a deportation order, had to make a judgment that the deportation of the person concerned was conducive to the public good. If she made that judgment, she then had to exercise a discretion as to whether the deportation order should be made. These functions underwent significant change as a result of the enactment of the UK Borders Act 2007. UK Borders Act 2007 The purpose of the UK Borders Act 2007 was stated to be to make deportation the presumption for foreign criminals (p 11 of the Immigration and National Directorate review in July 2006, Fair, effective, transparent and trusted: Rebuilding confidence in our immigration system). Deportation of certain foreign criminals was to become mandatory. As noted above, (at para 98) foreign criminals are defined in section 32(1) (3) of the Act. By section 32(4) the deportation of those coming within that category is stated to be conducive to the public good. Effectively, therefore, this provision removes from the Secretary of State the function of deciding whether the deportation of someone who meets the criteria for designation as a foreign criminal conduces to the public good. But it goes further than that. The terms of the provision, that the deportation of a foreign criminal is conducive to the public good, purport to foreclose any legal debate as to whether the deportation of anyone who comes within that category can be other than conducive to the public good. Thus, the deportation of a person convicted of a criminal offence and sentenced to more than 12 months imprisonment is to be considered as immutably in the public good, irrespective of, for instance, any philanthropy or other worthy endeavours in which he may have engaged since his incarceration. The second major change brought about by the 2007 Act was the requirement in section 32(5) that the Secretary of State must make a deportation order against a foreign criminal unless he came within one or more of the exceptions stipulated in section 33. This transformed the open ended discretion that the Secretary of State had under section 5(1) of the 1971 Act into a circumscribed judgment as to whether the person to be deported came within any of the exceptions in section 33 of the 2007 Act. Sub sections (2) to (6A) of section 33 (as amended by section 146 of the Criminal Justice and Immigration Act 2008) contain six exceptions. The only one relevant to this appeal is the first. It is to the effect that section 32(4) and (5) do not apply where deportation would breach a persons rights under the ECHR. The disapplication of section 32(4) and (5) of the 2007 Act, provided for in section 33(1), is made subject to section 33(7), however. It provides: The application of an exception (a) does not prevent the making of a deportation order; (b) results in it being assumed neither that deportation of the person concerned is conducive to the public good nor that it is not conducive to the public good; but section 32(4) applies despite the application of Exception 1 or 4. So, even if a deportation order would, under the first exception provided for in section 33(2), breach a persons Convention right, section 33(7) states that this would not prevent its being made. This is difficult to reconcile with section 6 of the Human Rights Act 1998 (HRA) which provides that it is unlawful for a public authority to act in a way which is incompatible with a Convention right. If the Secretary of State (a public authority) made a deportation order in the case of someone whose Convention right would thereby be breached, she would inevitably act in contravention of her section 6 HRA duty. In these circumstances, it appears to me that it would be problematic for the Secretary of State to have recourse to this particular power. Moreover, it would not be easy to square the preservation of the operation of section 32(4) (that the deportation of a foreign criminal is conducive to the public good) with the breach of a potential deportees Convention rights. For how could it be said to conduce to the public good to do something which conflicts with the Secretary of States legal obligation not to act in a way which is incompatible with a Convention right? These difficulties may be theoretical rather than practical, however. It has not been suggested that the Secretary of State has used or would use her powers under section 32 in a way that would bring her into conflict with her duty under section 6 of HRA. Indeed, after the hearing of the appeal in this case, the court received a letter dated 21 January 2016 from the Government Legal Department. This gave the Secretary of States view as to how section 33(7) would be applied when it is accepted that a persons deportation would breach the UKs obligations under the ECHR. The letter referred to the fact that, since at least 2000, para 380 of the Immigration Rules had provided that a deportation order would not be made against any person whose removal would be contrary to the United Kingdoms obligations under ECHR. That paragraph was deleted in July 2012, although replaced by the new para 397 which was to the same effect. The letter asserted that the Secretary of State would not make a deportation order in the majority of cases where there is a protection or human rights barrier to deportation because it would not be right to do so, and in any event could not be enforced. The letter went on to say, however, that a deportation order might be made, despite the existence of an ECHR barrier to deportation when it is known that the barrier will fall away. Two examples of when this might arise were given: This could be because the breach (on the basis of article 8, for example) is known to be time limited or because [the Secretary of State] will obtain reliable assurances from the country of return that the person will not be subjected to treatment that would breach the ECHR Another example of when the [Secretary of State] might consider that a deportation order could be made would be where the foreign criminal decides to leave the UK of his own accord or the person waives his or her rights In such circumstances the deportation order would not be enforced but the foreign criminal would comply with the requirement to leave the UK and the order would serve as preventing re entry to the UK while it is in force. There are two principal difficulties in the examples given by the Secretary of State. In the first place, the distinction between making a deportation order and enforcing it does not signify when one is considering a Convention right. The imperative in section 6 HRA is not to act in a way which is incompatible with a Convention right. If deporting someone would conflict with his article 8 right, I cannot see how it can be said to be compatible with that right to make an order for his deportation, irrespective of whether, at the time of the making of the order, it is not intended to enforce it. Moreover, it is not the enforcement of an immigration order which is in contravention of a Convention right that animates a right of appeal but the making of the order or the refusal to revoke it see section 82 of the Nationality, Immigration and Asylum Act 2002. The second difficulty with the Secretary of States examples is that, properly analysed, most of these do not involve any conflict with a Convention right at all and do not come within the first exception in section 33. Thus, for instance, if the Secretary of State receives assurances on which she can properly rely that the deported persons Convention rights will not be violated in the country to which he is deported, then no Convention right is in play. Likewise, if the ECHR barrier to deportation has fallen away, self evidently, the Convention right no longer exists. And if the Convention right has been waived, there is no question of the Secretary of State acting in contravention of it. That does not mean that the Secretary of State may deport in anticipation of a Convention right disappearing. So long as the right is in existence no public authority may act in a way that is incompatible with it. Plainly, to deport someone in contravention of a subsisting Convention right which is expected to vanish (but has not done so) is just as much a breach of section 6 of HRA as is acting in violation of a right which, it is believed, will endure. Although these difficulties may be no more than theoretical, they demonstrate the error of the approach taken by the Court of Appeal in SS (Nigeria) v Secretary of State for the Home Department [2013] EWCA Civ 550; [2014] 1 WLR 998, where at para 54 Laws LJ suggested that the effect of section 33(7) was to demonstrate the strength of the public interest in deportation. The 2012 Immigration Rules The 2012 rules were made under Section 3(2) of the 1971 Act. On 12 June 2012 the Secretary of State published her Statement of Intent: Family Migration. Explaining the reasons for making the new rules she said, in paragraph 7, that they would reflect fully the factors that weigh for and against an article 8 claim. Paragraph 11 stated: The Immigration Rules will reflect all the factors which, under current statutes and case law, can weigh in favour of an article 8 claim, eg a childs best interests, or against an article 8 claim, eg criminality and poor immigration history. The courts will continue to determine individual cases according to the law but, in doing so, they will be reviewing decisions taken under Immigration Rules which expressly reflect article 8. If an applicant fails to meet the requirements of the new Immigration Rules, it should only be in genuinely exceptional circumstances that refusing them leave and removing them from the UK would breach article 8. It is interesting to note two of the themes from this passage. First, the claim that the rules would reflect all the factors engendered by applicable statute and case law. Secondly, that, although courts would determine individual cases according to the law, they would be reviewing decisions under rules that expressly reflected article 8. The somewhat Delphic nature of the latter of these statements can be viewed in at least two ways. On the one hand, it might appear to recognise the courts autonomous function in applying the law, independent of any guidance that the rules purported to give. On the other, there is more than a hint that it was expected of judges that, in their review of immigration decisions, they should acknowledge and give due weight to the fact that those decisions had been informed by consideration of what was claimed to be a complete charter of all relevant Convention factors. Moreover, the statement that removing from the UK an applicant who fails to meet the requirements of the rules would only breach article 8 in exceptional circumstances is not expressed to be for the guidance of immigration officers only. Paragraph 12 reiterates that where article 8 is prayed in aid, whether under the Immigration Rules or on an asylum application, or if it is raised in the course of an appeals or enforcement process, the applicant is expected to meet the requirements of the Immigration Rules in order to be granted leave on article 8 grounds. This again indicates an intention that the article 8 assessment should be contained within and conducted according to the precepts of the 2012 rules, rather than as an exercise freestanding of them. The 2012 rules took effect on 9 July 2012. So far as concerns the present appeal, the relevant provisions are contained in rules 396 399A. Rule 396 expresses an important presumption and makes a significant statement about the public interest. It stipulates that where a person is liable to deportation, it is to be presumed that the public interest requires deportation. And where the Secretary of State must make a deportation order in accordance with section 32 of the 2007 Act, it is in the public interest to deport. Rule 397 provides that a deportation order will not be made if the persons removal would be contrary to the UKs obligations under the Refugee Convention or ECHR. Where, however, it would not be contrary to those obligations, it is stated that the public interest in deportation is only to be outweighed in exceptional circumstances. Rule 398 makes provision for circumstances where a person claims that their deportation would be contrary to the UKs obligations under article 8 but their deportation is deemed to be conducive to the public good because they have been convicted of an offence for which they have been sentenced to a period of imprisonment of at least four years (sub paragraph (a)); or a period of imprisonment of less than four years but at least 12 months (sub paragraph (b)); or because, in the view of the Secretary of State, their offending has caused serious harm or they are a persistent offender who shows a particular disregard for the law (sub paragraph (c)). In any of the specified circumstances, the Secretary of State, in assessing the claim, is required to consider whether paragraph 399 or 399A applies and if neither does, it is stated that the public interest in deportation will only be outweighed by other factors in exceptional circumstances. Rules 399 and 399A need to be set out in full. They are in these terms: 399. This paragraph applies where paragraph 398(b) or (c) applies if (a) the person has a genuine and subsisting parental relationship with a child under the age of 18 years who is in the UK, and the child is a British Citizen; or (i) the child has lived in the UK continuously (ii) for at least the seven years immediately preceding the date of the immigration decision; and in either case (a) it would not be reasonable to expect the child to leave the UK; and (b) there is no other family member who is able to care for the child in the UK; or (b) the person has a genuine and subsisting relationship with a partner who is in the UK and is a British Citizen, settled in the UK, or in the UK with refugee leave or humanitarian protection, and the person has lived in the UK with valid (i) leave continuously for at least the 15 years immediately preceding the date of the immigration decision (discounting any period of imprisonment); and (ii) there are insurmountable obstacles to family life with that partner continuing outside the UK. 399A. This paragraph applies where paragraph 398(b) or (c) applies if (a) the person has lived continuously in the UK for at least 20 years immediately preceding the date of the immigration decision (discounting any period of imprisonment) and he has no ties (including social, cultural or family) with the country to which he would have to go if required to leave the UK; or (b) the person is aged under 25 years, he has spent at least half of his life living continuously in the UK immediately preceding the date of the immigration decision (discounting any period of imprisonment) and he has no ties (including social, cultural or family) with the country to which he would have to go if required to leave the UK. These complicated provisions require to be unravelled. It is probably easiest to consider them as a series of categories. The first category arises under rule 398(a). This relates to persons liable to deportation who have been sentenced to at least four years imprisonment. Paragraphs 399 and 399A do not apply to this category of persons (see the opening words of each of those provisions), although it is clear from ECtHR jurisprudence that persons falling within this category may be able to succeed in resisting deportation under article 8. A number of recent cases involving the UK exemplify this: Omojudi v United Kingdom (2009) 51 EHRR 10, AW Khan v United Kingdom (2010) 50 EHRR 47, AA v United Kingdom (2011) Imm AR 107. The effect of rule 398 is that, notwithstanding a claim by such persons that their deportation would contravene their article 8 rights, the public interest in having them deported can only be outweighed by other factors in exceptional circumstances. This means that the article 8 assessment in relation to this class of persons is necessarily skewed. Their claim that deportation would disproportionately interfere with their right to respect for private and family life will only avail if they are able to demonstrate exceptional circumstances. Otherwise, the compulsorily assumed public interest in having them deported will prevail. The threshold imposes two requirements. In addition to demonstrating exceptional circumstances, the factors which such persons can call upon to substantiate their article 8 claim are factors other than those in paragraphs 399/399A. A similar two fold threshold applies in the 2014 Rules: the public interest in deportation will only be outweighed by other factors where there are very compelling circumstances over and above those described in paragraphs 399 and 399A. The second category relates to those who are liable to deportation and who have been sentenced to a period of at least 12 months but less than four years imprisonment and who have a genuine and subsisting parental relationship with a child under the age of 18 years. Several requirements as to the condition of the child are stipulated. First he or she must be a British citizen. So a child with leave to remain, but without British citizenship, will not bring a parent within the provision. Alternatively, the child must have lived in the UK continuously for at least seven years before the date of the immigration decision. In either case, in order to come within para 399, it must be established that it would not be reasonable to expect the child to leave the UK and that there is no other family member able to care for the child in the UK. It goes without saying that vibrant family life can exist in circumstances other than those specified in this second category. It is not difficult to envisage tight knit families where it would be possible under the rules to separate a parent from his or her child if that child is not a British citizen or is less than seven years old or where there is another family member who might care for her or him. But whether to bring about a separation in those circumstances would violate the right of the parent and the child to respect for his or her family life is an entirely different matter. Family life is not to be defined by the application of a series of rules. Disturbance of that precious aspect of existence is not avoided by a limited set of exemptions. While a limited area of discretionary judgment must be allowed the government in the matter of justification of an interference with the rights enshrined in article 8(1) of ECHR, it is important, as a first step in an examination of whether there has been a breach of that article, that one should recognise that family life and the requirement to respect it are not susceptible to verification solely by a system of checks against a set of prescriptive rules. It is crucial, also to draw attention here to the obligation under section 55 of the Borders, Citizenship and Immigration Act 2009, incorporating article 3(1) of the United Nations Convention on the Rights of the Child, to treat the childs best interests as a primary consideration (as discussed in ZH (Tanzania) v Secretary of State for the Home Department [2011] 2 AC 166). The rules do not permit consideration of the best interests of the children concerned. Indeed, insofar as they envisage that where an alternative family member can care for a child deportation will be proportionate, the rules positively disregard the childs interests. The third category involves those who have a genuine and subsisting relationship with someone who comes within one of the groups specified in para 399(b): British citizens, persons with indefinite leave to remain, and those who have been granted refugee or humanitarian protection. Again, conditions are applied in order to qualify for the exemption provided for in this sub paragraph. The person with whom the relationship exists must have lived in the UK for at least 15 years and there must be insurmountable obstacles to continuing family life with that partner outside the UK. Similar observations about these requirements may be made as those that pertain to the second category. Some comment in particular is required on the use of the phrase insurmountable obstacles. In the article 8 contexts, our domestic courts have repeatedly emphasised that the test for whether a family can be expected to relocate abroad to continue their family life is whether relocation would be reasonable. In Huang at para 20, Lord Bingham refers to circumstances where the life of the family cannot reasonably be expected to be enjoyed elsewhere; in EB (Kosovo) v Secretary of State for the Home Department [2009] 1 AC 1159, para 12, whether the spouse can reasonably be expected to follow the removed spouse to the country of removal, (see also para 18); and in ZH (Tanzania), where Lady Hale at para 15 observes that of particular importance is whether a spouse or a child can reasonably be expected to follow the removed parent to the country of removal (see also para 29). The issue was laid to rest in VW (Uganda) v Secretary of State for the Home Department [2009] EWCA Civ 5; [2009] Imm AR 436 (paras 19, 24)). The ECtHR, although it uses the phrases insurmountable obstacles, major impediments, serious impediments or, in the French version of certain judgments, merely obstacles, looks in substance at the difficulties facing families and whether it is reasonable to expect family members to relocate. This is so, not only in cases involving settled migrants (see Boultif, paras 48, 52 55) but also in cases involving a precarious immigration status. For example, in Mokrani v France (2003) 40 EHRR 5, which involved a relationship commenced after a deportation order had been issued, the court, noting that the applicant could not have been unaware of the relative precariousness of his situation went on to say, in finding a violation of article 8, it is hardly conceivable that the wife, a French national who has never lived in Algeria and who has no links with that country, should be expected to follow the applicant to Algeria (para 34). The fourth and fifth categories under para 399A (the article 8 private life provisions, whilst para 399 purports to deal with family life) involve those who have been living in the UK for a prescribed number of years or who are less than 25 years old and have spent at least half their life in the UK and have no ties with the country to which they would be deported. This is an extremely high threshold to meet. Despite having lived in the UK for many years, a person may continue to speak the language of their country of origin, or may have family who remain living there. But this does not mean that their deportation would not be disproportionate. Furthermore, the rules do not take into account the personal, cultural, linguistic and economic ties that a person has with the United Kingdom, or assess their degree of integration in this country, factors which are indisputably relevant to an article 8 assessment. One can accept that all five categories describe groups of people who may readily be supposed to have established a family or private life in the UK. It cannot be said, however, that these groups are comprehensive of all whose circumstances might properly come within that rubric. Indeed, the rules also make the mistake of addressing family and private life separately, rather than recognising that the impact of expulsion on private and family life must be considered cumulatively (Maslov para 63; AA v United Kingdom [2012] Imm AR 107, para 49). Many who fall outside the categories set out in the rules enjoy a full family or private life in every sense. The significance of that inescapable truth is that, under the 2012 Immigration Rules, anyone who does not come within any of the specified categories and who is liable to deportation as a result of their status as a foreign criminal must demonstrate exceptional circumstances in order to outweigh the statutorily imposed public interest in their deportation. That requirement runs directly counter to a proper assessment of whether an interference with the right to respect for family or private life on the part of those who do not come within one of the exemptions is justified. Exceptional circumstances In requiring exceptional circumstances to be established for a claim made by someone who does not come within one of the narrowly prescribed exemptions in the various categories described above, the Immigration Rules are contrary to a long line of authority, beginning with Huang. At paras 39 to 44 of his judgment in this case, Lord Reed has set out the background to the appeal in Huang and quoted a number of passages from the speech of Lord Bingham which, as Lord Reed has said, remain entirely pertinent to the issues in the present appeal. It is of supreme importance to recognise two features of the Huang decision. The first of these is that consideration of whether an individuals article 8 rights will be infringed by a decision to deport her or to refuse her permission to reside in this country, notwithstanding her article 8 right, does not lend itself naturally to the application of a series of rules. The essential nature of the inquiry into whether (i) the article 8 right is engaged; (ii) there has been an interference with it; and (iii) if so, the interference is justified, inevitably involves a fact sensitive focus. Of course, Immigration Rules, in order to be administratively workable, must contain a series of checks or filters. But two points need to be made about this. First, the primary function of such checks should be to determine whether the applicant qualifies under the rules. And the second is that failure to qualify under the rules should not inhibit the open minded examination of whether article 8 mandates that a decision to grant leave to enter or remain or, as in this case, to refuse to make a deportation order, should be made. The second feature of the Huang decision mirrors the second point made above. At para 20 of Huang Lord Bingham said: In an article 8 case the ultimate question for the appellate immigration authority is whether the refusal of leave to enter or remain, in circumstances where the life of the family cannot reasonably be expected to be enjoyed elsewhere, taking full account of all considerations weighing in favour of the refusal, prejudices the family life of the applicant in a manner sufficiently serious to amount to a breach of the fundamental right protected by article 8. If the answer to this question is affirmative, the refusal is unlawful and the authority must so decide. It is not necessary that the appellate immigration authority, directing itself along the lines indicated in this opinion, need ask in addition whether the case meets a test of exceptionality. So, the ultimate question is whether the refusal of leave to enter or remain (or, as in this case, the decision to make a deportation order) prejudices the family or private life of the individual sufficiently seriously to amount to a breach of the article 8 right. That quest should not be encumbered by pre emptive considerations of exceptionality. It is, in essence, a simple exercise. Of course, the fact that the person liable to deportation has committed a criminal offence looms large in the considerations weighing in favour of the refusal. But that consideration is no more than a factor to be accorded the weight that the particular circumstances of the case warrant. It must not be an intrinsic impediment of unvarying significance which creates a hurdle of identical weight in all cases and which can only be overcome by the existence of closely defined exceptional circumstances. A proper understanding of the role of the appellate immigration authority, on an appeal from a decision to refuse leave is, as Lord Reed has pointed out (in paras 42 43), vital to an appreciation of how it is to perform its function. It is not a reviewing body. It is not inhibited by findings previously made. On the contrary, it is its duty to find facts for itself and these must include, where relevant, circumstances which have arisen since the original findings were made. For this reason, although the Upper Tribunal in the present case was bound to take account of the Secretary of States reasons for making a deportation order, that was only because these were relevant considerations to which appropriate weight should be given. The fact that the Secretary of State had decided to make a deportation order has no significance for the Upper Tribunal beyond that. Lord Reed refers at para 45 to a licensing decision case, Sagnata Investments Ltd v Norwich Corpn [1971] 2 QB 614, which quotes, at p 637, from a much older licensing case, Stepney Borough Council v Joffe [1949] 1 KB 599, 603. I question the relevance of those decisions in the present context. In a human rights appeal, the function of the Tribunal is to anxiously scrutinise the decision of the Secretary of State, and to assess the proportionality of the interference with the individuals rights for itself. I find myself unable to agree with the statement, in the human rights context, that a court ought not lightly to reverse the Secretary of States decision. My view that this is not the correct approach is reinforced by the existence of a statutory appeal right on human rights grounds. As Lord Reed has observed at para 47, Huang has been followed and developed in such cases as EB (Kosovo) v Secretary of State for the Home Department [2008] UKHL 41; [2009] 1 AC 1159; Zoumbas v Secretary of State for the Home Department [2013] UKSC 74; [2013] 1 WLR 3690, para 13, and R (Bibi) v Secretary of State for the Home Department [2015] UKSC 58; [2015] 1 WLR 5055. Observations made by Lord Bingham in EB (Kosovo) as to the impossibility of subjecting article 8 assessments by appellate tribunals to general rules are reflected in the more recent cases referred to, and are thus worthy of particular emphasis: Thus the appellate immigration authority must make its own judgment and that judgment will be strongly influenced by the particular facts and circumstances of the particular case. The authority will, of course, take note of factors which have, or have not, weighed with the Strasbourg court . [T]here is in general no alternative to making a careful and informed evaluation of the facts of the particular case. The search for a hard edged or bright line rule to be applied to the generality of cases is incompatible with the difficult evaluative exercise which article 8 requires. (para 12) I agree with Lord Reeds rejection at para 48 of counsel for the Secretary of States criticism of the decision in Bibi. For the reasons given earlier, although the fact that a person resisting deportation is not a settled migrant is relevant, it does not mean that they are debarred from relying on the same type of circumstances as would a settled migrant in advancing an article 8 claim. And as Lady Hale said in Bibi the applicable principles are similar in both instances. Moreover, as Lord Reed has explained, the analytical structure by which the proportionality of a decision or measure should be assessed can, with modest modification, be applied to the present circumstances. That structure has been developed and refined through such cases as Huang; R (Aguilar Quila) v Secretary of State for the Home Department (AIRE Centre intervening) [2011] UKSC 45; [2012] 1 AC 621, and Bank Mellat v HM Treasury (No 2) [2013] UKSC 39; [2014] AC 700. It is now firmly established as the appropriate means by which the proportionality of an impugned decision should be determined and it comprehends the fair balance element. It should be applied in this case. MF (Nigeria) v Secretary of State for the Home Department and later cases In MF (Nigeria) the Secretary of State had asserted (in a statement produced during the hearing of the appeal and at the request of the court) that the new rules sought to reflect the Strasbourg jurisprudence when applied to the deportation of foreign criminals: see para 34. In as much as the Court of Appeals statement in MF (Nigeria), at para 44, that the new rules were a complete code suggests that article 8 factors which are not covered by the rules need not be considered, I would strongly disagree. As I have said, the primary function of the checks which the rules contain is to determine whether the applicant qualifies under them. They cannot be regarded as a comprehensive means by which a persons article 8 rights are determined and, indeed, on the hearing of this appeal, Ms Giovanetti made no such claim. In the words of Lord Bingham, an applicant's failure to qualify under the rules is the point at which to begin, not end, consideration of the claim under article 8 (Huang, para 6). The approach to proportionality can be structured; indeed, the formulation of the correct approach in such cases as Aguilar Quila and Bank Mellat is positively helpful in ensuring that examination of whether a decision or measure is proportionate is conducted in a controlled way. But the content of Convention rights and whether interference with them can be said, in any given context, to be proportionate cannot be prescribed. Indeed, although the ECtHR has set out a number of factors that will frequently require to be examined, these do not purport to be exhaustive of the circumstances in which a Convention right is in play or whether interference with such a right is proportionate. Nor will all of those factors be relevant in every conceivable situation. Much less will it be appropriate to attempt to attach a particular weight to individual factors in any general, pre emptive way. For these reasons, the suggestion (made in AJ (Angola) v Secretary of State for the Home Department [2014] EWCA Civ 1636, para 39) that an official or a tribunal should seek to take account of any Convention rights of an appellant through the lens of the new rules themselves, rather than looking to apply Convention rights for themselves in a free standing way outside the new rules cannot be accepted. Nor can it be accepted, as was said in Secretary of State for the Home Department v AQ (Nigeria) [2015] EWCA Civ 250; [2015] Imm AR 990, para 70, that national policy as to the strength of the public interest in the deportation of foreign criminals is a fixed criterion. That proposition cannot be accepted if it was intended to convey that this was a factor of unvarying, immutable weight. The public interest The strength of the public interest in favour of deportation must depend on such matters as the nature and seriousness of the crime, the risk of re offending, and the success of rehabilitation, etc. These factors are relevant to an assessment of the extent to which deportation of a particular individual will further the legitimate aim of preventing crime and disorder, and thus, as pointed out by Lord Reed at para 26, inform the strength of the public interest in deportation. I do not have trouble with the suggestion that there may generally be a strong public interest in the deportation of foreign criminals but a claim that this has a fixed quality, in the sense that its importance is unchanging whatever the circumstances, seems to me to be plainly wrong in principle, and contrary to ECtHR jurisprudence. It is important for the decision maker to scrutinise the elements of public interest in deportation relied upon in an individual case, and the extent to which these factors are rationally connected to the legitimate aim of preventing crime and disorder. That exercise should be undertaken before the decision maker weighs the public interest in deportation against the countervailing factors relating to the individuals private or family life, and reaching a conclusion on whether the interference is proportionate. Three component factors of the public interest in deportation were discussed in OH (Serbia) v Secretary of State for the Home Department [2008] EWCA Civ 694; [2009] INLR 109, para 15): risk of re offending, deterrence and societal revulsion towards the commission of criminal offences. I have touched upon the risk of re offending at para 96 above. Where an individual is assessed to pose a low risk of re offending, interference with his article 8 rights on the basis that it is necessary to prevent crime and disorder is more difficult to justify, and the weight to be attached to the public interest in deportation in such a case will be reduced. As to deterrence, Lord Bingham at para 16 of Huang acknowledged the need to discourage non nationals admitted to the country temporarily from believing that they can commit serious crimes and yet be allowed to remain. This observation posits an appropriate distinction between migrants admitted temporarily to the United Kingdom, and persons who hold permanent residence or who have resided in this country for a substantial period of time, for example, children who have lived in this country all or most of their lives. It is at least open to question whether deterrence is a relevant component of the public interest in deportation so far as this latter group is concerned. Where the threat of a custodial sentence has failed to deter such persons from offending, one must query whether the threat of deportation would have any greater effect. No evidence has been presented to support such a contention. Expression of societal revulsion, the third of the factors applied in OH (Serbia), should no longer be seen as a component of the public interest in deportation. It is not rationally connected to, nor does it serve, the aim of preventing crime and disorder. Societal disapproval of any form of criminal offending should be expressed through the imposition of an appropriate penalty. There is no rational basis for expressing additional revulsion on account of the nationality of the offender, and indeed to do so would be contrary to the spirit of the Convention. Much has been said of the public interest in the deportation of foreign national criminals. But the public interest is multi faceted, and there are other important factors which contribute to the positive development of our society and are thus matters in the general public interest. These factors may be a relevant consideration in the article 8 proportionality assessment, and have a free standing value, independent of that which attaches to the individual facing deportation. For example, there is a public interest in families being kept together, in the welfare of children being given primacy, in valuing a person who makes a special contribution to their community, and in encouraging and respecting the rehabilitation of offenders. These factors all play a role in the construction of a strong and cohesive society. They are recognised outwith the immigration context, and certain factors are given statutory recognition. Where relevant they should be part of the proportionality equation. The proceedings I agree with and gratefully adopt Lord Reeds account of the proceedings, save for his review of the Upper Tribunals consideration of the appellants circumstances. Lord Reed has said (in para 60) that it is not apparent that the judge took account of the fact that the appellants relationship with Ms Harwood had been formed at a time when his immigration status was such that the persistence of family life within the UK was precarious and that its continuance after his release from prison took place when he was facing deportation proceedings. At para 42 of the judges reasons he recorded that the appellant had accepted that his relationship with [Ms Harwood] developed when his immigration status was uncertain. And at para 64, the judge observed that Ms Harwood had learned of the appellants precarious immigration status following his involvement in criminal offences. At para 70, Ms Harwood is recorded as having said that she wanted to marry the appellant and have a proper wedding but that this was difficult because of his uncertain immigration status. Quite apart from these items of evidence and the judges express reference to them, the appellants precarious immigration status and the fact that he was facing deportation proceedings when he was released from prison are indisputable facts. I find it hard to believe in these circumstances that the judge did not attach weight to them. The fact that they were not discussed prominently among the welter of matters that the judge was required to consider does not mean that they were left out of account. On the contrary, his mention of the appellants and Ms Harwoods awareness of them seems to me to suggest that he had them well in mind in reaching his conclusion. Lord Reed also considers that the Upper Tribunal erred in failing to take any account of the new rules on the basis that they did not assist with the proper assessment of the applicants human rights (paras 60 and 63). I do not consider that the Upper Tribunals failure to take account of the rules impaired its approach to the article 8 proportionality assessment. In my opinion, the Upper Tribunal succinctly, but correctly, expressed the proper approach to article 8, apart from its reference to societys disapproval as a basis on which deportation could be justified. (Since the Upper Tribunal found that the decision to deport was disproportionate, however, this error does not signify.) At para 95 of his Determination and Reasons the judge said: I have to decide if the interference in (sic) the private and family life consequent on removal is proportionate to the proper purpose of deporting foreign criminals for the purposes of the prevention of disorder and crime. I have to do that knowing that it is unlikely that this appellant will commit further offences. The point is the deterrent effect or general expression of societys disapproval of foreign criminals, rather than preventing further trouble from this particular man, that is important in this case. The judge also recognised that the 2007 Act had expressed a legitimate public interest in the deportation of foreign criminals and acknowledged that he was bound to respect the policy as set out in section 32(5) of the 2007 Act (para 96), and subsequently referred to the imperative of removal in his discussion (paras 98 and 102). He then set out a number of reasons which, taken in combination, led him to the conclusion that his deportation would be disproportionate. These included that the appellant had no family in Iraq and had not lived there since the age of 12 (this was not determinative, but a factor against removal para 100); the appellants length of stay in the UK and positive attitude to future behaviour were significant factors to weigh in the balance against the imperative of removal (para 102); and his genuine, strong and important relationship with his fiance (paras 94, 99), whose being required to relocate to Iraq would not be reasonable (para 88). This is precisely the type of fact sensitive proportionality assessment that both ECtHR jurisprudence and binding domestic authority requires and I cannot fault it. The Court of Appeal decision The Court of Appeals basic error was its misunderstanding of the significance of sections 32 and 33 of the 2007 Act, and its conclusion that MF (Nigeria) [2014] 1 WLR 544 and SS (Nigeria) [2014] 1 WLR 998 required tribunals to give preponderant weight to the public interest in the deportation of foreign criminals at the expense of a proper examination of the circumstances of individual cases. All article 8 claims had to be refused if they fell outside rules 399 and 399A unless they could identify exceptional or compelling circumstances. The inevitable circumscription of a proper article 8 inquiry that such an approach entails cannot be upheld for the reasons earlier given. The second ground of appeal (that the Upper Tribunal had failed to recognise the importance of the public interest in deporting foreign criminals) is plainly unsustainable once the correct approach to sections 32 and 33 is understood. As I pointed out in para 172 above, the judge actually overstated the scope of the public interest but, for the reasons given, this had no impact on the otherwise correct decision that he reached. Grounds (iii) and (iv) (which the Court of Appeal found it unnecessary to consider in light of its conclusion on grounds (i) and (ii)) are unarguable, in my opinion. Ground (iii) averred that the Upper Tribunal had failed to apply the guidance given in ner. I need not repeat my discussion of the guidance to be derived from that case. There is nothing in that guidance which is in conflict with the approach of the Upper Tribunal. Since, for the reasons that I have given as to the general propriety of the Upper Tribunals approach, I consider that ground (iv) is unsustainable. Conclusion I would allow the appeal and restore the decision of the Upper Tribunal. |
The liability of employers for deaths caused by mesothelioma has pre occupied courts and legislators over recent years. The present appeals concern claims to pass the burden of this liability on to insurers, made either by employers or in the case of insolvent employers by the personal representatives of former employees using the mechanism of the Third Party (Rights against Insurers) Act 1930. The appeals concern employers liability insurance. This is in contrast with Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 where public liability insurance was in issue. Employers liability focuses necessarily upon the relevant employment relationships and activities. Public liability relates to any of the insureds relationships and to activities affecting the world at large. Another feature of employers liability is that, under the Employers Liability (Compulsory Insurance) Act 1969 (the ELCIA), it has since 1 January 1972 been compulsory for every employer other than local authorities carrying on any business in Great Britain to insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain The appeals arise because the relevant insurers maintain that the employers liability insurances which they issued respond (or, better, could only have responded) to mesothelioma which developed (or, possibly, manifested itself) as a disease during the relevant insurance periods all long past. In contrast, the relevant employers and personal representatives maintain that the insurances respond to mesothelioma which develops and manifests itself later; all that is required, they say, is exposure of the victim during the insurance period to asbestos in circumstances where the law attributes responsibility for the mesothelioma to such exposure. These alternative bases of response (or triggers of liability) have been loosely described as an occurrence (or manifestation) basis and an exposure (or causation) basis. It is in issue whether the ELCIA, after it came into force, mandated any particular basis of response. A secondary issue, arising if the insurances only respond on an occurrence basis, is whether the aetiology of mesothelioma justifies a conclusion that there was during the relevant insurance period an occurrence sufficient to trigger liability under the insurances. Burton J, [2008] EWHC 2692 (QB), concluded that the relevant insurances all responded on an exposure basis. The Court of Appeal, [2010] EWCA Civ 1096, by a majority (Rix and Stanley Burnton LJJ), upheld the judge in relation to some of the insurances (particularly those covering disease contracted during the relevant insurance period); but they concluded that others (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. Smith LJ would have upheld the judges judgment in its entirety. The full judgments in both courts repay study. They have been of great assistance to this court and make it possible to go directly to the heart of the issues. Mesothelioma is a hideous disease that is inevitably fatal. In most cases, indeed possibly in all cases, it is caused by the inhalation of asbestos fibres: Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229, para 1, per Lord Phillips. It is a cancer of the pleura, which are thin linings around the lungs and on the inside of the rib cage. It is usually undetectable until shortly before death. Its unusual features include what Burton J in this case at para 30 described as the unknowability and indescribability of its precise pathogenesis. In particular, it is impossible to know whether any particular inhalation of asbestos (at least any occurring more than ten or so years prior to diagnosability) played any or no part in such development. Because of this unusual feature, the law has developed a special rule. The special rule was the product of judicial innovation in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and in Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572. It was modified by statutory intervention in the form of the Compensation Act 2006, section 3. Leaving aside exposures occurring within the ten or so years prior to diagnosability, the rule can now be stated as being that when a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a "material increase in risk" of the victim contracting the disease will be held to be jointly and severally liable in respect of the disease. Burton Js findings in the present case justify certain further propositions, mostly also corresponding with the summary in Lord Phillips judgment in Sienkiewicz (para 19): (i) A significant proportion of those who contract mesothelioma have no record of occupational exposure to asbestos. The likelihood is that (vi) in their case the disease results from inhalation of asbestos dust that is in the environment. There is, however, a possibility that some cases of mesothelioma are "idiopathic", i.e. attributable to an unknown cause other than asbestos. (ii) The more fibres that are inhaled, the greater the risk of contracting mesothelioma. (iii) There is usually a very long period between the exposure to asbestos and the development of the first malignant cell. Typically this can be at least 30 years. (iv) For a lengthy period (perhaps another five years) after the development of the first malignant cell, there remains a possibility of dormancy and reversal, but at a point (Burton J thought a further five years or so before the disease manifested itself, and was thus diagnosable) a process of angiogenesis will occur. This involves the development by malignant cells of their own independent blood supply, so assuring their continuing growth. (v) The mechanism by which asbestos fibres cause mesothelioma is still not fully understood. It is believed that a cell has to go through 6 or 7 genetic mutations before it becomes malignant, and asbestos fibres may have causative effect on each of these. It is also possible that asbestos fibres have a causative effect by inhibiting the activity of natural killer cells that would otherwise destroy a mutating cell before it reaches the stage of becoming malignant. Mesothelioma currently claims about 3000 lives a year in the United Kingdom. This speaks to the common use of asbestos materials up to the 1960s and 1970s. In Annex I to his judgment Rix LJ set out the insuring clauses of the various forms of policy wording in use from time to time. Subject to re ordering to reflect the development of the language, Annex A to this judgment includes the same and some further wording. It can be seen that the Excess policies and the first two MMI policies promise to indemnify the insured employer against liability if at any time during the period of insurance (or of any renewal) any employee shall sustain under the earlier policies personal injury by accident or disease or under the later policies [any] bodily injury or disease in the case of the first Excess policy while engaged in the service of the Employer or in other cases arising out of and in the course of [his] employment by the insured employer. In the case of the Independent policy, the insurer, under the recital, promised to indemnify the employer during the period of insurance or of any renewal. The insuring clause itself contains no express limitation to any period. It promises indemnity against all sums for which the employer shall be liable for damages for such injury or disease if any employee shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule. The third MMI policy and the BAI policies were in more developed form. The former promises indemnity in respect of legal liability for sums payable as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any employee when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The latter promised indemnity against all sums which the Insured may become liable to pay to any Employee . in respect of any claim for injury sustained or disease contracted by such Employee during the period of insurance or any renewal. The insurers party to the present appeals have at all times represented only a small part of the employers liability insurance market. By far the larger part of the market consists of companies who until the late 1960s (when competition rules intervened) operated a tariff system which bound them to adopt a specified policy form and specified rates. Until 1948 tariff insurance was focused on Workmens Compensation Act claims, but in 1948 legislative changes (in particular the abolition by the Law Reform (Personal Injuries) Act 1948 of the doctrine of common employment) made a common law claim for future accruing causes of action much more attractive. It may well have been in anticipation of these changes that the tariff companies introduced a new form of policy in May 1948, still in widespread use today, providing indemnity if any employee shall sustain any personal injury by accident or disease caused during the period of insurance. Under this tariff wording, sustain looks to the occurrence of an accident or development of a disease at any time, while caused makes clear that the trigger to cover is that the accident or disease has been caused during the insurance period. The present insurers were non tariff companies, and have always been free to set their own wordings. From dates after the insurances the subject of this appeal, three of the insurers in fact ceased to use the wordings set out in Annex A, and themselves moved expressly to causation based wordings Excess in about 1976, Independent in the mid 1980s, and BAI in 1983. As a matter of insurance practice, however, until the decision in Bolton in 2006, all these wordings, whether tariff or non tariff and whether using the language caused, sustain or sustained or contracted, paid out on long tail claims (including the mesothelioma claims which became increasingly frequent in the 1980s) by reference to the date(s) of exposure. Where successive employers with different insurers had exposed a particular employee victim to asbestos, liability was in practice apportioned between the employers, and so insurers, broadly according to the extent of exposure for which each employer was responsible. The rival cases Insurers submit that all the wordings in Annex A require the injury or disease to occur during the period of insurance or of any renewal. In the alternative, if the use of the word contracted in the third MMI policy and the BAI policies or the different formulation of the Independent policy leads to any different conclusion in any of such cases, they submit that this leaves unaffected the clear meaning of the Excess and first two MMI policy wordings. The employers and interested employees contend that all these policies are to be understood as operating on an exposure or causation basis. The implications of these alternative interpretations are clear. On insurers primary contention, the policies set out in Annex A would not respond to current mesothelioma claims. It is unlikely that most of them would have responded to many, if any, mesothelioma claims, since it was only in the 1980s that such claims began to emerge to any great extent. Policies written on a causation basis since the dates indicated in paragraph 10 above would also not respond to current mesothelioma claims. Insurers response is that any insurance must be read according to its terms. Until 1 January 1972, when the ELCIA came into force, it was not obligatory for employers to have any form of employers liability insurance. Further, viewed on an occurrence or manifestation basis, the policies would pick up long tail claims arising from exposure occurring at any time in the past. In this connection, it is to be noted that various long tail diseases were well recognised perils from the era of Workmens Compensation legislation before 1948. Instances were scrotal cancer, pneumoconiosis and more specifically (from the time of Merewether and Prices 1930 Report on Effects of Asbestos Dust on the Lungs and Dust Suppression in the Asbestos Industry) asbestosis. All these would only develop over and could manifest themselves after considerable periods of years. Following upon the 1930 report, The Asbestos Industry Regulations 1931 (SI 1931/1140) were introduced to regulate factories handling and processing raw fibre, and in 1969 The Asbestos Regulations 1969 (SI 1969/690) extended this regulation more widely it appears in the light of an appreciation that mesothelioma could result from exposure to small quantities of asbestos dust (see In re T & N Ltd (No 3) [2006] EWHC 1447 (Ch), [2007] 1 All ER 851, para 118). The Court of Appeals conclusions The force of insurers case rests in the use of the word sustain, whether in connection with the phrase personal injury by accident or disease or bodily injury or disease or in the conjunction injury or disease . sustained or contracted or injury sustained or disease contracted. Rix and Stanley Burnton LJJ concluded that the word sustain looked prima facie at the experience of the suffering employee rather than its cause (paras 232 and 343). Insurances responding to injury or disease sustained during the insurance period would not, on this basis, cover mesothelioma sustained long afterwards. Rix LJ had some compunction about the result because of what he (though not Stanley Burnton LJ) felt was a tension with the commercial purpose of employers liability insurance in the extraordinary context of mesothelioma (para 235). Rix LJ would have liked to hold that mesothelioma sufferers sustained sufficient injury on exposure to asbestos to trigger the insurances in force at the date of such exposure, but felt bound by Bolton to conclude the contrary (paras 277 289). However, Rix LJ, though not Stanley Burnton LJ, considered that the particular wording of the Independent insurances did not explicitly require the injury or disease to be sustained during the insurance period, and could be read as covering the sustaining of injury at any time arising out of and in the course of employment during the insurance period (paras 300 and 350). Rix and Stanley Burnton LJJ differed as to the significance of the ELCIA extension provisions included in the Independent wording, the third MMI wording and the second BAI wording, as quoted in Annex A. Rix LJ thought that the ELCIA required employers to insure on a causation basis (paras 184 and 186) although, since he also expressed the view that an insurance arranged and maintained on a sustained basis could comply with the ELCIA, he may perhaps only have meant required in practice. At all events, he held that the ELCIA extension provisions covered liability incurred to the personal representatives of employees on a causation basis, while enabling insurers to recoup themselves so far as possible from the relevant employers in respect of liability they would not otherwise have had to meet (paras 292, 300 and 302). Stanley Burnton LJ did not agree that the ELCIA required causation wording (para 342), but considered that it required insurance to be taken out and maintained in respect of ex employees, or at least those who were or had been employed at any time after the coming into force of ELCIA (para 342; and see Rix LJs comments at paras 305 307). Rix, Smith and Stanley Burnton LJJ were all agreed that, where provision was made for disease contracted, this could and should be construed as introducing cover on a causation basis, even if or though wording such as injury (or disease) sustained could only respond on an occurrence basis. Analysis Annex A sets out the insuring clauses. Insurers case is, as I have said, rooted most strongly in the word sustain, particularly when it is used by itself, rather than in conjunction with a more ambivalent alternative in the phrase sustained or contracted. The natural meaning of the word sustain, taken in isolation and as defined in the Shorter Oxford English Dictionary from an appropriate date (1965, 3rd ed), is, with respect to injury, undergo, experience, have to submit to, or, possibly, to have inflicted upon one, suffer the infliction of. But the insurance cover granted (and no doubt required) extended expressly beyond injury by accident to embrace disease. This was achieved by less natural conjunctions, such as sustain [any] personal injury by accident or disease or sustain [any] bodily injury or disease. Conscious perhaps that the verb sustain does not fit naturally with the concept of disease, some companies (MMI in its third wording and BAI in its first and second wordings) introduced the different verb contracted in the formulations sustained or contracted or injury sustained or disease contracted. This use of contracted with respect to disease is considerably more natural, but is clearly open to an interpretation that it looks back to the initiating or causative factor of the disease, and (whatever the answer on that point) highlights a question whether any substantial difference exists in this connection between such wordings and other wordings referring more awkwardly to the sustaining of personal injury by disease or the sustaining simply of disease. To resolve these questions it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more broadly. As Lord Mustill observed in Charter Reinsurance Co Ltd v Fagan [1977] AC 313, 384, all such words must be set in the landscape of the instrument as a whole and, at p 381, any instinctive response to their meaning must be verified by studying the other terms of the contract, placed in the context of the factual and commercial background of the transaction. The present case has given rise to considerable argument about what constitutes and is admissible as part of the commercial background to the insurances, which may shape their meaning. But in my opinion, considerable insight into the scope, purpose and proper interpretation of each of these insurances is to be gained from a study of its language, read in its entirety. So, for the moment, I concentrate on the assistance to be gained in that connection. A first point, made very clearly below by Rix LJ (para 263), is that the wordings on their face require the course of employment to be contemporaneous with the sustaining of injury. This leaves open what is meant either by sustaining or by injury. Rix LJ thought that the Independent wording could be understood differently in effect, as if it had expressly read: If any person who is under a contract of service or apprenticeship with the Insured shall at any time sustain bodily injury or disease arising out of and in the course of his employment by the Insured during the policy period in connection with the Contract specified or type of work described in the Schedule . That interpretation assumes that sustain in this context equates with the occurrence, rather than causation, of the injury or disease, and only arises for consideration if that assumption is correct. A second point is that the insurance wordings demonstrate a close link between the actual employment undertaken during each insurance period and the premium agreed to be payable for the risks undertaken by insurers in respect of that period. Premium is linked expressly to actual wages, salaries and earnings during the insurance period under the Excess policies, the first MMI wording and the BAI policies. The second and third MMI wordings contemplate that premium may be linked to wages, salaries and earnings, and, to the extent that any inference regarding the general nature and scope of cover under these standard wordings can be drawn from such a link, it must be capable of being drawn whether or not premium was actually so linked in any particular case. As to the Contractors Combined Policy issued by the Independent, it is a probable inference that the estimates which were provided and were to be updated will have included, in respect of the employers liability cover in section 1, wages, salaries and other earnings paid. Finally, the Independent cover is linked to the actual contract or work which the employer is undertaking during the insurance period. These links are in my view significant. True, premium may sometimes be calculated on a rough and ready basis. Minor discrepancies between the premium calculation and the risk may be understandable: see e.g. Ellerbeck Collieries, Ld v Cornhill Insurance Co [1932] 1 KB 401, 418, per Greer LJ (who pointed out that any such discrepancy there was more apparent than real, since workmen not earning wages because off work would not actually be at risk of any fresh accident, even though they would remain susceptible to certification for disablement). Here the position is quite different. Great care is taken in all the policies to tie premium to the actual employment undertaken during the insurance period, and in the case of the Excess, Independent and MMI policies to tie cover to a business, contract or activities described in the schedule. The natural expectation is that premium is measured by reference to actual employment or work during the insurance period because it is the risks attaching to such employment or work which are being undertaken by insurers. At the very least, the drawing of this link makes improbable the contention advanced by some of the insurers that the present insurances were apt to pick up liabilities emerging during the insurance period which could be attributable to employment and activities undertaken and negligent conduct committed at times long past. The number of employees, their employment activities and the risks involved at those times could be very different. The significance which attaches to the employment current during the insurance period is underlined by legal and practitioner texts. As long ago as 1912, MacGillivray on Insurance (1st ed), pp 966 wrote: The nature and scope of the employers business must be clearly defined in the insurance policy, and workmen employed outside the scope of the assureds business as described in the policy will not be covered In the section on Employers Liability Insurance in Stone & Coxs Accident, Fire and Marine Year Book (1957), pp 688 689, the authors stressed the importance of identifying any special hazards, such as signs of careless management or lack of control or careless workmen, and observed: The surveying of Employers Liability risks has probably become more general than formerly. Apart from the question of the possibilities of accident, there is now the serious question of disability due to disease and in particular the disease known as pneumoconiosis. In 1974 MMI produced a Guide to Insurance Officers in Local Government, which it said that it would like to see on the desk of every insurance officer for ready reference at any time; this, after noting that employers liability was almost invariably dealt with by a separate policy and that its importance had been increased by the ELCIA, went on: "7. Premiums are usually based on wages and salaries this is not only a convenient yardstick but is logical since loss of earnings usually represents a substantial part of claims. Rates of premiums vary according to the nature of the work of the labour force, and the claims experience. 8. A feature of employers liability claims is the length of time which often elapses between the date of the accident and the final settlement, and the cost of servicing claims tends to be high. Injury caused at work during the period of insurance even though it may not be diagnosed till years afterwards can be a liability under the policy." I note in parenthesis that 1974 was the year in which MMI changed from a pure sustain form of wording to a form covering bodily injury or disease suffered, when sustained or contracted during the currency of the policy. Yet there is no suggestion in the Guide of any change in substance. It is in this light improbable that the present insurances can or should be read as offering cover in respect of ancient, as opposed to current, employment and activities. But there is a third point. If insurances in the present form only address risks arising from employment during the insurance period, then, on insurers case, there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to injury or disease in another later period. If the employment relationship spans both insurance periods and the employer remains insured with the same insurers in both periods, there may be no problem. The employee is employed at all relevant times and the insurance may be viewed as a single continuing contract. The policy wordings set out in Annex A, with their references to insurance during the period of insurance or during any subsequent renewal period, would support the latter view. But, even in the days of more stable long term employment and insurance relationships, employees could and would move employment or retire, or employers would cease business, or change insurers. On the basis that the insurances only cover risks arising from employment during the insurance period, there would be no cover unless the liability arose from and in the course of and involved injury or disease during the currency of the same employment and the same insurance (including any renewal). Fourthly, on insurers case, employers would as a result be vulnerable to any decision by insurers not to renew; and such a decision might arise from the simple performance by employers of their common law duty to disclose past negligence to insurers upon any renewal. Employers who discovered or came to appreciate that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease (e.g. by exposing their employees to asbestos) would have such a duty. Insurers could then, on their own case, simply refuse any renewal or further cover. Employers could then have to disclose that refusal also to any further insurers to whom they made a proposal for cover. One response made by insurers to such problems is that they would not arise in the large bulk of cases. That is no doubt true. Most employers liability cases involve short tail claims: typically, an accident involving injury. It is not surprising if the language of the insurances fits more easily with situations in which cause and effect coincide in time. But, by the same token, this does not mean that the underlying risk being assumed was in either partys mind limited to circumstances in which a cause gave rise to an effect during one and the same insurance period. Rix LJ, in accepting that cover depended upon injury being sustained in the sense of experienced during the insurance period, was influenced by the thought that this was not an absurd or meaningless interpretation. The insurance could operate entirely successfully in some 99% of cases (para 235). In the light of this Courts recent decision in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, para 30, this, in my view, gives too little weight to the implications of the rival interpretations and to the principle that where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense. The 1% of cases in which there might be no cover could not be regarded as insignificant. Well before 1948, there was general awareness of the existence of long tail diseases which would only develop and manifest themselves after considerable periods of years (see para 12 above; and see also Cartledge v E Jopling & Sons Ltd [1963] AC 758). The connection between asbestos exposure and mesothelioma became generally known in the mid 1960s, following the publication in 1965 of Newhouse and Thompsons report on Mesothelioma of pleura and peritoneum following exposure to asbestos in the London area and a Sunday Times article. Yet on insurers case, the present insurances would not cover any situation where, after the termination of employment or the expiry of an insurance, injury or disease developed from an employers breach of duty to a relevant employee during an insurance period. A fifth point concerns the way in which the policies deal with the issue of extra territorial scope. The first Excess wording stands apart from the others in its treatment of that issue. Cover only exists in respect of any employee in the employers service who shall sustain any personal injury by accident or disease while engaged in the service of the employer in Great Britain, Northern Ireland, the Isle of Man or Channel Islands, in work forming part of the process in the employers business. As soon as one postulates a delay in time between the causation and experiencing of a disease, it becomes apparent that this wording could operate to very curious effect if sustain looks to the latter rather than the former. A disease (e.g. a cancer) experienced during employment could be covered although caused by pre employment exposure, while a disease caused by employment would not be covered if only experienced while working abroad. The natural inference to draw from the references to being engaged in the employers service and in work forming part of the employers business process is that it was envisaged that the accident or disease would and should arise out of such service and work, rather than merely occur during it. That points to an underlying focus on causation, even if the assumption was that in the majority of cases causation and experiencing of any injury by accident or disease would coincide. As to the other policies, at the very least, the way they deal with territorial issues throws doubt on any proposition that their wordings are so carefully or well chosen that a court should be careful to stick literally to whatever might be perceived as their natural meaning. They address territorial scope by specific exclusions, but the cover and the exclusions use different language. Thus, although the second and third Excess wordings cover liability to employees who sustain personal injury by accident or disease, the territorial exclusion is in respect only of accidents occurring outside Great Britain, etc, leaving it unclear how disease, whether caused or developing outside Great Britain, should be dealt with. The Independent wording also covers liability to employees who sustain bodily injury or disease, while the territorial exclusion is for injury, illness, loss or damage caused elsewhere than in Great Britain, etc. While the contrast in language is capable of lending some support to a view that sustain looks to experiencing, rather than to causation, an alternative possibility is that the two words were understood as having the same effect and that the cover was understood as focused on causation. The language of this exclusion thus cuts both ways, as Rix LJ recognised (para 297). A similar position applies to the contrast between injury or disease sustained and injury or disease caused outside Great Britain, etc. under the first two MMI wordings. Under the third wording, the language of the cover and the exclusion have been deliberately matched. Under the BAI wordings, however, there is an incongruity between cover for injury sustained or disease contracted and the exclusion in respect of liability for accidents . arising outside the United Kingdom. Again, this leaves the position in respect of disease unclear, and the difference between injury sustained and accidents arising can be read either as deliberate or as suggesting that no significance was attached to the difference or that the real concern was with causation. The history and Workmens Compensation Acts Much attention was, both below and before the Supreme Court, paid to the development of employees rights to compensation in respect of personal injury and disease, at common law and under the scheme of the Workmens Compensation Acts (WCAs). The WCAs were in force from 1897 until replaced in 1948 under the National Insurance (Industrial Injuries) Act 1946. The history and a number of the decisions under the WCAs were examined by Rix LJ in paras 126 to 165 of his judgment. He concluded that such an examination yields in the present context not a lot. To a considerable extent, I agree and I shall not repeat the whole exercise, but identify some potentially relevant aspects. Etymologically, some of the language presently in issue can be traced back to statutory language found in the Employers Liability Act 1880 and the WCA 1897. The 1880 Act modified the common law doctrine of common employment, by entitling employees to recover common law compensation for injury caused by specified matters for which employers were responsible, provided that they gave notice, within six weeks of sustaining the injury of its cause and the date at which it was sustained. The 1897 Act, applying to personal injury by accident arising out of and in the course of employment, also required notice to be given of the accident as soon as it occurred, stating the cause of the injury and the date at which it was sustained. These Acts therefore distinguished the causation and the sustaining of an injury, but not in any presently relevant context. Further, any reference to sustaining disappeared from the Workmens Compensation scheme in the 1906 Act, which amended the scheme to require a notice stating the cause of the injury and the date at which the accident happened. The 1906 WCA also expressly extended the scheme to cover certain diseases specified in section 8. In that context, it provided that, where a workman was certified as disabled or suspended from employment or died due to a disease and the disease is due to the nature of any employment in which the workman was employed at any time within the twelve months previous the date of the disablement or suspension, whether under one or more employers, then he or his dependants shall be entitled to compensation under this Act as if the disease or such suspension . were a personal injury by accident arising out of and in the course of that employment . Section 8(a) provided: The disablement or suspension shall be treated as the happening of the accident. Under section 8(c), the compensation was recoverable from the employer last employing the employee within the previous twelve months, providing the employee furnished that employer with particulars of all his other employers in the employment to the nature of which the disease was due. It was not necessary to prove that the disease actually arose from the last employment, merely to prove that the relevant employment gave rise to a risk of such a disease: Blatchford v Staddon and Founds [1927] AC 461. The 1906 Act may be regarded in this respect as involving an early statutory instance of the kind of liability recognised in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572. However, failing such particulars, the last employer could excuse himself upon proving that the disease was not contracted whilst the workman was in his employment (section 8(c)(i)). The last employer might also join any other employer (within the last twelve months) and it was provided that upon proof that the disease was in fact contracted whilst the workman was in the employment of that other employer, that other employer shall be the employer from whom the compensation is to be recoverable (section 8(c)(ii)). Finally, section 8(c)(iii) provided that: if the disease is of such a nature as to be contracted by a gradual process, any other employer within the last twelve months was liable to make such contributions as might be agreed or determined by arbitration under the Act. Under this scheme, therefore, compensation for disease was initially based upon the nature of the employment and its potential for causing, rather than upon proof that it caused, such a disease. The paternal benevolence of the Legislature (as Visc Sumner put it in Blatchford: p 469) is well known, and if the price of that benevolence is paid by the last employer, who thus has to bear others burdens, that is nothing new in this kind of legislation. However, the last relevant employer could seek, in specified circumstances, to avoid or to pass on to another employer responsibility by proof that the disease was not actually contracted in his employment. Alternatively, in the case of a disease of such a nature as to be contracted by a gradual process, all relevant employers within the last twelve months would be liable to contribute. The scheme was, as I see it, concerned with either the risk of or actual causation, and in its use of the word contracted it appears to me to have been directing attention to the causation, rather than the mere experiencing or manifestation, of disease. The WCA scheme was the subject of further amendment by the 1925 Act. Section 43 superseded section 8 of the 1906 Act as regards scheduled diseases, while section 47 made specific provision for the introduction of a parallel scheme covering silicosis. Effect was given to this by inter alia the Metal Grinding Industries (Silicosis) Scheme which came into force in July 1927, making provision for obtaining compensation from the last employer within the previous three years, and giving such employer rights to look to other such employers within the last five years. An insurance covering employers liability in this connection was considered in Smith & Son v Eagle Star (1933) 47 Ll. L.R. 88, (1934) 48 Ll. L.R. 67. Mr Hill had been employed in processes giving rise to silicosis for some 20 years. For the last two of these years, from 31 March 1928 to 16 June 1930, he worked for Smith & Son. From 30 June 1927 to 17 June 1930, Smith & Son had an insurance against WCA liability in respect of any personal injury or disease which at any time during the continuance of this policy shall be sustained or contracted by any workmen . The policy was expressly extended to cover any liability in connection with any claim made by employees in respect of silicosis, and the decision of the Court of Appeal rested on this ground. But Scrutton LJ also examined the main policy language, and in particular what was meant by contracted. He noted that there has been a good deal of discussion in the Courts about a disease which is gradually contracted commencing at some stage and through the process going on increasing the disease until at last it results in total disablement (p 70), and concluded that the word was not to be read as first contracted, but in the sense of influenced or increased until it ultimately comes to total disablement. This, although not directly focusing on the first development of a disease from some earlier cause, suggests a flexible view of the word contracted, directed once again to the employments responsible for causing the disease. Confirmation that this was Scrutton LJs view can be found in the earlier case of Ellerbeck Collieries Ltd v Cornhill Insurance Co [1932] 1 KB 401. Two workmen who had been in the colliery companys service for many years were on respectively 11 and 12 March 1929 (dates they were actually off work) certified as suffering from miners nystagmus. The Cornhill had on 8 March 1929 issued the colliery company with a three month provisional cover note insuring in terms matching the wording of the insuring clause in the first Excess wording (i.e. against liability in respect of any employee who shall sustain any personal injury by accident or disease while engaged in the service of the employer). Failing a satisfactory survey, the cover note actually expired on 18 March 1929. The first point decided was whether the employees had sustained personal injury by accident or disease during the period of validity of the cover note (8 to 18 March 1929). It was held that they did. The judgments in the Court of Appeal are of interest for a number of reasons. First, both Scrutton LJ (p 408) and Greer LJ (p 417) approached the question of construction on the basis that the policy was intended to protect the employers against their liability to their workmen under the WCAs. Scrutton LJ added that it seems to me that the policy was intended to cover the liability of the employers for the results of industrial diseases caused by the employment (p 409). His description of the policy, covering in terms any employee sustaining personal injury by accident or disease in service, as intended to cover liability . for the results of diseases caused by the employment fits precisely with the analysis which I consider correct (paragraphs 18 28 above). Second, Scrutton LJ went on to refer to the difficulties in saying when an industrial disease, such as miners nystagmus or lead poisoning, begins, and in these circumstances the difficulty for an employee to pick the proper employer to sue. He described the way in which Parliament, by what became section 43 of the WCA 1925, had addressed such difficulties by providing a conventional and artificial means for enabling the workman to get compensation, leaving the various employers to fight out their proportion of the liability between themselves (p 409). He said that the last employer, liable under the WCA scheme, then claims on the insurance company on the ground that he is liable to make compensation for an injury by disease, and the date of the injury or disablement is by statute and certificate fixed as happening between the dates for which he is provisionally covered (p 411). On this basis, and in the light of the House of Lords decision in Blatchford, Scrutton LJ concluded that he was bound to hold that an accident has happened within the period of the provisional cover against the consequences of which the insurance company is bound to indemnify the employer (p 413). In short, the conventional and artificial provisions of the WCA defined what constituted an accident and when personal injury by accident or disease was sustained for the purposes of the insurance. Greer LJ, more shortly, adopted the same approach (p 418). Only Slesser LJ (p 421) expressed a reservation about the possibility that the artificial deeming provisions of section 43(a) of the WCA 1925 might only apply as between employee and employer, and that it might have been necessary to consider separately the date of the sustaining of injury as between the employer and the insurer, had there been any admissible evidence that the two employees had actually contracted the scheduled disease before the granting of the statutory medical certificate. Commercial purpose and practice Much general evidence was directed or elicited before Burton J in relation to the commercial purpose of the present insurances, and to practice relating to their operation in the years before the present issue arose. It was argued that there was, prior to the decision in Bolton, a universal usage of the insurance industry to pay out mesothelioma or similar claims under [employers liability] policies by reference to the date of inhalation/exposure whatever the wording, or an estoppel by convention to like effect. Burton J rejected the argument (paras 180 to 201, esp. para 201), for the reasons that, first, there was no evidence relating to years earlier than the 1980s which could be put down to any kind of arguable usage, second, any usage was not certain, not least because of the multiplicity of approaches to or bases for it and, third, it was not binding. It was not incorporated into the insurance contracts. No issue of estoppel by convention was pursued to the Court of Appeal (Rix LJ, para 24, and Stanley Burnton LJ, paras 332 and 335) and the issue of a universal custom was only pursued by Zurich Insurance Company (Rix LJ, para 24). By a multiplicity of approaches to or bases for insurers practice, Burton J was referring to evidence that insurers followed the practice they did in some cases because they believed that their contracts were to be interpreted on a causation/exposure basis, in others because they believed that the aetiology of diseases such as mesothelioma was such that injury was in fact sustained (in the sense of experienced) at the date of inhalation, while yet others may have failed to realise that their historically relevant wordings had been on a different basis to the causation wordings to which they had since switched or may have failed to address their minds to any relevant issue at all in relation to an insured who was usually a longstanding repeat client. Rix LJ (para 228) contented himself with agreeing with Burton Js reasoning on this aspect, while Stanley Burnton LJ noted and agreed in particular with Burton Js second reason, relating to the believed aetiology of mesothelioma (para 335). Smith LJ, on the other hand, treated the commonly held understanding that diseases such as mesothelioma involved injury at the date of inhalation as part of the factual matrix of all the insurance contracts (paras 322 323), and considered against that background that no difference in meaning should be held to exist between policies using sustained and causation wording, until the time when the two sides of the insurance industry should be considered to have appreciated that some diseases, including mesothelioma, do not occur until many years after exposure to the causative agent (para 327). She put that as around the time of the decision in Bolton, after which parties using a sustained wording must be taken to have meant only to cover injuries actually occurring during the policy period (para 327). The argument of a binding usage was not pursued before the Supreme Court, rightly so for the reasons given by the judge and the majority in the Court of Appeal. Equally, there has been no suggestion of estoppel by convention, along the lines recognised as possible in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, para 47. However, on the issues of policy interpretation, Mr Stuart Smith QC for Zurich Insurance, maintained before the Supreme Court an argument that there was a consensus based on market practice, whereby, for one reason or another, such policies would respond to long tail diseases by reference to the date of exposure, and that this could constitute relevant background to their construction. Assuming that, short of a binding usage or estoppel by convention, a practice, if known to or shared by the relevant parties, could in some circumstances be relevant background (see e.g. Reardon Smith Line Ltd v Yngvar Hansen Tangen [1976] 1 WLR 989), still, in my opinion the argument fails in the present case. It fails in particular in the light of the judges findings, even in relation to policies made in and after the 1980s. A practice based on a mistaken understanding, by only some insurers, that the policies operated on a causation basis cannot be relevant background to the interpretation of every policy; on the judges findings other insurers do not appear to have understood that the policies operated on that basis. A practice based on a mistaken understanding by others in the market as to when long tail diseases could be said to have been experienced or to involve injury is likewise an unpromising start for construing all policies; if the understanding were good, it would mean that such diseases fell within the policies, even though the policy cover was restricted to injury or disease experienced during the policy period. The understanding would not therefore carry any imperative to read a sustained wording as meaning caused. Before the Supreme Court, both employers and employees continued to rely upon the evidence given at trial regarding the general purpose of employers liability insurance as part of the background to the interpretation of the present insurances. Rix LJ (paras 223 to 235) gave it some weight as such, but Stanley Burnton LJ thought that there was little if any assistance to be gained by reference to the commercial purpose of EL insurance, as this was simply to provide the cover defined in the policy (para 333). The Supreme Court was provided with a useful summary of the considerable volume of evidence relied upon in this connection. It consisted in general of answers given by insurers, two at least of them with experience going back to the 1940s. They were asked (frequently in response to leading though not inadmissible on that score questions in cross examination) about their or others views, understandings or perceptions as to the purpose of the policies, and the way in which these would or should respond, in relation to injuries arising from exposure in the course of activities during the policy period. In my judgment, Stanley Burnton LJ was right to reject such evidence as inadmissible. The parties cannot be asked what they meant by their contract, and, failing any binding usage, it is equally inadmissible to ask other persons operating in the market to give general evidence as to what they would have understood the parties to have meant by the words used in the context in which they were used. The evidence does not seem to have amounted to more than that. However, I do not agree with Stanley Burnton LJs suggestion that no useful conclusions can be drawn about the commercial purpose of the policies, save that it was to provide the defined cover. In my opinion, relevant conclusions about the general nature and purpose of the individual policies can be drawn in this case, just as they could in the case of the different (and wordier) instrument in issue in In re Sigma Finance Corporation [2009] UKSC 2, [2012] 1 All ER 571 (see especially paras 10, 12 and 37). They can be drawn from an overall consideration of the individual insurance wordings, and particularly from the features which tie cover to the employees and activities during the relevant policy period and the five points considered in paragraphs 18 to 28 above. Further, if the policies are on any view apt to cover employers liability for long tail diseases which initiate during, but only manifest themselves years after, the original policy period, one may look with scepticism at an interpretation which distinguishes this situation from other situations where a long tail disease is caused but does not strictly begin during the policy period, and only manifests itself years later. This is particularly so if a conclusion that the latter diseases fell outside the policy cover meant that they would or might well not fall within any subsequent employers liability policy. ELCIA 1969 Section 1 of the ELCIA provides: 1. (1) Except as otherwise provided by this Act, every employer carrying on any business in Great Britain shall insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain (3) For the purposes of this Act (a) approved policy means a policy of insurance not subject to any conditions or exceptions prohibited for those purposes by regulations. 4. (1) Provision may be made by regulations for securing that certificates of insurance in such form and containing such particulars as may be prescribed by the regulations, are issued by insurers to employers entering into contracts of insurance in accordance with the requirements of this Act . (2) . the employer shall during the currency of the insurance and such further period (if any) as may be provided by regulations (a) comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees; . The only conditions or exceptions ever prohibited were certain exemptions from liability. Under section 3, the ELCIA did not however apply to local authority employers, such as most of MMIs insureds. Under section 4, provision might be made for certificates of insurance to be issued to employers, and in that event the employer was, obliged during the currency of the insurance and such further period (if any) as may be provided by regulations to comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees. In reaching his conclusions on the ELCIA (para 16 above), Rix LJ engaged in an impressive analysis, to which I would refer (paras 166 to 186). The only doubt this leaves is how, if the ELCIA requires a causation wording, an employer could properly insure on a wording which only covered injury sustained in the sense of experienced (see para 186 and paragraph 16 above). The scope of the ELCIA is, as Rix LJ indicated, open to three alternative analyses: that it requires cover in respect of (i) all future liability incurred during the insurance period, whenever the negligence or injury, or (ii) liability for all future injury or disease sustained (in the sense of experienced) by employees during the insurance period, whenever the negligence, or (iii) liability for all negligence or breach of statutory duty during the insurance period giving rise to liability as in (ii). The retrospectivity of cover involved in (i) and (ii) is unlikely to have been intended. The only one of the three possibilities not involving a degree of retrospectivity is (iii). A duty on every employer to insure, and maintain, insurance is consistent with a requirement to have the insurance in place during, though to maintain it after, the relevant insurance period. The provision, contemplated by section 4, for copies of insurance certificates to be issued by insurers and to be displayed by any employer for the information of his employees during the currency of the insurance and such further period as may be provided by regulations indicates, first, a desire to assure employees of their insurance protection during the relevant insurance period, and, secondly, an awareness that this assurance might need to remain in place after such insurance period; it is therefore suggestive of (iii), rather than (i) or (ii). As Rix LJ observed, it is only cover in accordance with (iii) that can give an employee the assurance that any injury or disease suffered as an employee and arising out of and in the course of [his] employment will be covered by insurance, the benefit of which would, if necessary, be available to him at the time under the Third Party (Rights against Insurers) Act 1930. An obligation to have a policy in force only at or by the time when injury is actually experienced would leave employees or ex employees at the mercy of compliance with the statute by their employers or ex employers at uncertain future dates. It would also leave such employees or ex employees at the mercy of employers who, for whatever reason, ceased to carry on business either in Great Britain or (for example due to insolvency) at all. Further, if injury or disease suffered or contracted bears the same meaning as insurers suggest that injury or disease sustained or contracted bears, then an employee, who had the misfortune to succumb to a disease abroad caused by his employment or previous employment in Great Britain, would not be covered (unless regulations intervened to ensure that he was). Stanley Burnton LJ thought that any issue as to the nature of the insurance required under ELCIA was resolved by its use of the word sustained, rather than caused. He went on to conclude that the ELCIA covered any injury sustained (in the sense of experienced) during a period of insurance, by anyone who was then or had at any previous time been an employee. However, that latter conclusion introduces a retrospectivity into the scope of the ELCIA, which, as already indicated, I think unlikely to have been intended. The statute could have used the tariff wording of causation instead of sustained. But in the statutory language the word sustained is not coupled with a phrase such as during the period of the insurance. Even if sustained means experienced in the context of the statute, the statute may require insurance on what is effectively a causation basis; the words sustained by his employees may well mean sustained at any future time by his current employees. The key to the meaning of the statutory language seems to me the combination of the phrases arising out of and in the course of their employment in Great Britain and not including injury or disease suffered or contracted outside Great Britain. Together, and for reasons given in the last two paragraphs, they indicate a statutory requirement to insure in respect of activities during the course of employment in Great Britain which may in the future give rise in or out of Great Britain to liability to the employees involved in such activities. In my judgment, therefore, the conclusion which gives proper effect to the protective purpose of the legislation is that the ELCIA requires insurance on a causation basis. The ELCIA extension provision to the Independent and second BAI wordings (see Annex A), as well as a similar extension provision to the MMI policy intended for insureds who were not local authorities, achieved this result expressly in relation to policies written subsequent to the coming into force of the ELCIA, at least for the purpose of ensuring that employees claims were covered by insurance. Any other subsequent insurances not containing that extension provision should, if possible, be read as providing the relevant employers cover required by statute. This is a powerful tool in the interpretation of such insurances. Bolton M.B.C. v Municipal Mutual Insurance Ltd The Court of Appeal in the present case was bound by its previous decision in Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 on public liability policies. The majority regarded that case as, in effect, determining the meaning which must be put on the word sustained in the present employers liability policies: see paras 284, per Rix LJ, and 339, per Stanley Burnton LJ, who however also found the logic of Longmore LJs judgment convincing in relation to the latter type of policies. Smith LJ on the other hand considered that public liability and employers liability insurances gave rise to different considerations (para 328). In my opinion, that is right. Employers liability policies are subject to particular terms and considerations, analysed above (particularly in paragraphs 18 28 and, in the case of policies effected after the coming into effect of the ELCIA, paragraphs 41 46). These considerations are not or certainly not necessarily applicable to public liability insurances. The present case was concerned with employers liability not public liability insurances, and it may well be that not all the relevant facts relating to the latter are before us. We certainly have not heard full argument on the proper conclusions which may be drawn regarding the basis of liability or trigger generally applicable under the latter. In these circumstances, I would proceed on the basis that we are not bound by Bolton, that this does not involve any view about the correctness or otherwise of Bolton, but only that it is unnecessary to consider what the position generally may be under public liability policies. Assuming that, in relation to public liability insurance, the position generally is as stated in Bolton, that does not alter the conclusions which I reach. It merely means, in their light, that public liability insurance generally and the present employers liability policies operate on different bases, because of their different backgrounds, terms and purposes. Contracted There is no difficulty about treating the word contracted as looking to the causation or initiation of a disease, rather than to its development or manifestation. In relation to the two BAI wordings and the third MMI wording, this interpretation obtains strong support from the general nature and purpose of the relevant policies, derived from their immediate context and terms and analysed in paragraphs 18 to 28 and 41 above. To the limited extent that the WCA background may assist to inform the meaning of later policies, it can be seen overall as a legislative scheme which was concerned with either the risk of or actual causation (para 32 above). Even if, in the phrase sustained or contracted or injury sustained or disease contracted, the word sustained is to be understood as meaning experienced, that would reflect no more than the fact that the cause and effect of an injury commonly coincide; I would still unhesitatingly conclude, as did the Court of Appeal, that the word contracted used in conjunction with disease looks to the initiating or causative factor of the disease. Sustained The majority of the Court of Appeal considered that it was impossible to view policies with pure sustained wordings as operating by reference to the initiating or causative factor of a disease. They did so primarily by reference to the wording of the insuring clauses. In my view, as indicated in paragraphs 18 19 above, a broader approach is necessary. The general nature and purpose of these policies can be derived from their immediate context and terms, analysed in paragraphs 18 to 28 and 41 above. It is true, as Rix LJ said, that phrases such as injury sustained by an employee or an employee who shall sustain injury, in either case by accident or disease, appear to address the impact of the accident or disease on the employee. But the underlying focus of the insurance cover is on the employees and activities current during the insurance period. The cover would be potentially incomplete, and employers would be potentially exposed to uninsured risks, were sustained to be understood as meaning developed or manifested. This is so, even before the ELCIA came into force. Any policies written subsequent to the coming into force of the ELCIA either afford cover consistent with the Acts requirements by virtue of an ELCIA extension provision, or, to the extent that this is not the case, should be construed, if at all possible, as meeting employers obligations under that Act. In my view, such obligations included taking out insurance in respect of negligence during the insurance period affecting an employee in a manner giving rise to bodily injury or disease then or at any subsequent time. On this basis, I consider that, although the word sustained may initially appear to refer to the development or manifestation of such an injury or disease as it impacts employees, the only approach, consistent with the nature and underlying purpose of these insurances both before and after the ELCIA, is one which looks to the initiation or causation of the accident or disease which injured the employee. The disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself subsequently. Disease sustained, read as meaning experienced or incurred Rix LJ was attracted by the submission that, even if sustaining disease meant experiencing or incurring it during the period of the insurance, long tail diseases could be said to have been sustained during the period of insurance in this sense. He asked rhetorically whether an employee who had inhaled asbestos had not sustained an injury in the form of an assault of the fibres, as a result of which he was worse off through having dangerous fibres in his lungs (para 280). He noted that, although there was at most trivial injury or damage, and nothing that could create actionable damage, nevertheless, when mesothelioma develops, it is the risk of mesothelioma created by the exposure which is the damage (see . Barker ) and it is the exposure, and the risk of mesothelioma, that is the damage (para 281). He only felt bound to reject this analysis (para 284) because of the Court of Appeals previous decision in Bolton. It may be that in the case of some long tail diseases, the victim can be said to have incurred or caught them at the same time as the initial ingestion or scratch giving rise to them. But it is clear that this is not the position with inhalation of asbestos in relation to either asbestosis or mesothelioma. No cause of action arises from exposure or inhalation alone: Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281. Further, for reasons which I develop in paragraphs 64 65 below, the exposure and risk are not by themselves damage in any sense known to the law. Damage is only incurred when mesothelioma develops. Only when it develops does the victim incur damage which is legally relevant, and even then this is not because any physical link necessarily exists or can be proved between the mesothelioma and the original exposure. The rule in Fairchild and Barker imposes liability for the mesothelioma upon persons who have exposed the victim to asbestos, and so created a risk of mesothelioma. But it is not a rule which, even as between employers and employees, deems the latter to have suffered injury or disease at the time of any exposure. And, even if it were viewed simply as a rule imposing retrospective liability on employers for exposing their employees to the risk of mesothelioma, the insurance policies do not insure risks of physical injury or disease, but only actual injury or disease. The application of the insurances in respect of mesothelioma At the outset of these appeals, the application of the insurances in respect of mesothelioma suffered by employees exposed to asbestos during their employment by an insured employer did not appear controversial. This changed after a question from Lord Phillips on day 4 of the hearing, followed by a later written note. All the same, the transcript pages containing any argument on the point numbered only 40 out of a total of some 1140. So far as Mr Edelman made any submissions on this point, in his written case or orally, they were to this effect: if the correct analysis of the Houses decision in Fairchild be that an employer who exposes an employee to asbestos is deemed to have caused that employees mesothelioma, then employers liability insurances held by the employer on a causation basis should respond; but, if the policies do not respond on a causation basis, there is no justification for treating the employee as having suffered injury or a disease during their currency, because employers cannot prove that any particular inhalation caused any injury. This led to some discussion, particularly with counsel for employers and employees, of the points which I have already addressed in paragraphs 50 52 above. The point now expressed forcefully by Lord Phillips in his judgment is that exposure to the risk of mesothelioma is the correct analysis of the Fairchild principle, at least as subsequently interpreted, and that such exposure can satisfy neither the concept of injury nor the concept of causation for the purposes of the policies. If that is right, then the present insurance claims must all fail. Indeed, the great bulk of insurance claims settled by other insurers (e.g. former tariff insurers) or by the present insurers under the causation policies they have issued in more recent years (paragraph 10 above) should presumably also have failed. The only exception may be the case of an employee exposed to asbestos in only one employment by an employer holding insurance throughout with only one insurer. In such a case it might (perhaps) be said that, whichever particular inhalation(s) may have been responsible for the employees mesothelioma, it (or they) must have been insured. Even then, the logic of the Supreme Courts reasoning in Fairchild and Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229 might lead to the conclusion that causation was still unprovable in the light of the possibilities of environmental or idiopathic causation of mesothelioma. Rules regarding causation are created by the courts for the purpose of determining when liability arises in particular contexts. Normally, they reflect a common sense understanding of what is ordinarily understood when we speak of a cause in a particular context. In their leading work on Causation in the law (Clarendon Press, 2nd ed 1985) Professor H. L. A. Hart and Tony Honor examined both this understanding and its relationship to legal decision making. Generally, but not always, a cause must involve an act or omission that was at least a sine qua non of the injury in respect of which responsibility attaches (the but for test). But sometimes two separate acts or omissions may each independently have been sufficient to give rise to that injury (as when A and B simultaneously, but independently shoot C dead), and then we may as a matter of legal policy accept a weaker causal relationship for the imposition of responsibility: see p lxv in the preface to and p 123 of the 2nd edition. Other cases where causal requirements have been relaxed include Bonnington Castings Ltd v Wardlaw [1956] AC 613; there, materially contributing to part of an accumulation of dust which cumulatively led to pneumoconiosis gave rise to liability for the whole disease (although it has been suggested that some apportionment might now be possible in fact and law). Another relevant authority is McGhee v National Coal Board [1973] 1 WLR 1; there, liability for dermatitis was held to exist because the defendant had materially contributed to part of the claimants exposure to dirt, any part of which might, independently of any other, have given rise to the abrasion leading to the claimants dermatitis. It was recognised that this involved liability based on materially contributing to the risk of the injury. Lord Reid at p.4G H described the result as reached taking a broader view of causation, and Lord Wilberforce at p 5G viewed it as involving a conclusion as to the causal connection that had to exist between the default and the disease complained of. The contrary view (viz, that proof of risk was insufficient without proof that the risk caused or materially contributed to the disease) had a logic which Lord Wilberforce acknowledged, but rejected for policy and evidential reasons set out at p.6C F. In Fairchild, McGhee was seen as a precursor of the decision there reached. Putting aside the possibility of an idiopathic or environmental cause, a Fairchild type situation exists when (a) there are two separate potential causes exposing the claimant to the same risk, one involving an act or omission by the defendant, (b) either one of which causes would have been sufficient to give rise to the injury, and (c) one of which did so, but (d) neither of which can as a matter of probability be shown to have done so. Taking into account the later decisions in Barker v Corus and Sienkiewicz, the Fairchild principle extends to any case where there has been an act or omission exposing a person to asbestos, which exposure may have caused the mesothelioma, but which cannot be shown as a matter of probability to have done so. On that basis, the House held in Barker v Corus that each or any persons liability should only be proportionate to the extent that he had exposed another to the risk of mesothelioma. Parliament by the Compensation Act 2006 reversed that conclusion and made each such person liable in respect of the whole of the damage caused by the mesothelioma. Lord Phillips in his judgment addresses the basis of Fairchild in the light of Barker v Corus, the 2006 Act and Sienkiewicz. He accepts that, if Fairchild is now correctly to be understood as a special rule deeming employers who have exposed an employee to asbestos to have caused any subsequently suffered mesothelioma, then the insurance policies should apply (para 109). But he concludes that Fairchild must be understood as creating liability not for the disease, but for the creation of the risk of causing the disease. It follows in his view that employers and employees gain no assistance from the special rule in asserting that mesothelioma suffered by any person was caused or initiated in any particular policy period. On this basis, even though the insurances respond to injuries caused or initiated during their periods, the employers and employees fail for want of proof. It is not fruitful to repeat the exercise undertaken in Barker v Corus of examining in detail the significance of the speeches in Fairchild. The House was not agreed about this in Barker, but the majority speeches of Lords Hoffmann, Scott and Walker were at pains to reject any analysis of Fairchild as proceeding upon a fiction that each exposure had caused or materially contributed to the disease: see paras 31, 61 and 104; they each also referred to the liability created by Fairchild as being not for causing the disease, but for materially increasing the risk of the mesothelioma which was in fact suffered: paras 31, 36 and 40, 53, 61 and 113. Lord Rodger (dissenting) perceived the majority to be misinterpreting Fairchild by failing to acknowledge that it was based on an equation of materially increasing risk with materially contributing to causation, an equation which he thought had been accepted as sufficient causation in Bonnington Castings Ltd v Wardlaw [1956] AC 613 and McGhee v National Coal Board [1973] 1 WLR 1. It is on the apparently bright line distinction said to have been drawn by the majority in Barker between materially contributing to increasing the risk of, and causing, a disease that Lord Phillips now founds his judgment in these appeals. The Compensation Act 2006 applies where a person who has exposed someone to asbestos is liable in tort in connection with damage caused to the latter by mesothelioma whether by reason of having materially increased a risk or for any other reason (section 3(1)(d)). It makes the former person liable in respect of the whole of the damage (section 3(2)(a)). On its face, the Act assumes rather than creates the liability, and only alters the measure of recovery. That was the view expressed in Sienkiewicz by Lords Phillips, Rodger and Brown (paras 70, 131 and 183). However, on further analysis, the distinction identified in paragraphs 58 59 above proves more elusive. Even in Barker itself, Lord Walker described exposing the employee to the risk of mesothelioma as being equated with causing his injury and the result as an explicit variation of the ordinary requirement as to causation (para 104), and spoke of the rule as one by which exposure to the risk of injury is equated with legal responsibility for that injury (para 109). However, it is conceivable that he meant that the ordinary requirement of causation of the disease was entirely replaced by another liability creating rule. It is in the later authority of Sienkiewicz that the difficulty of drawing any clear cut distinction between creating a risk and causation of the disease becomes most apparent. Lord Phillips there stated that the rule in its current form was that the person responsible for the exposure and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease (para 1). Later, he said that the law was presently contained in Fairchild and Barker which had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances (para 70). That was the analysis of Fairchild advanced by Lord Rodger in Barker v Corus (paras 73 and 83) but rejected there by the majority. Lord Brown in Sienkiewicz spoke of a more relaxed approach to causation (para 178) and flexibility in the approach to causation (para 187). I referred to Fairchild and Barker as involving a special rule of causation (para 188), and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims (para 196) and to adjustments in the burden of proof (paras 198 and 200). Lord Rodger was, on the other hand, loyal to the majority view in Barker by referring to liability as based on materially increas[ing] the risk (para 113), and Lord Dyson was cautious in speaking of materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Lord Phillips has in para 123 set out a passage from an extra judicial commentary written by Lord Hoffmann in Perspectives on Causation (2011), p 8. In it, Lord Hoffmann describes the two ways in which the changes introduced by Fairchild and Barker could be characterised, one as changing the causal requirements for an action for damages for mesothelioma ; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent; the other as creat[ing], exceptionally, a cause of action for the increased risk of mesothelioma, rather than for the disease itself. Lord Hoffmann notes that the House in Barker (Lord Rodger dissenting) adopted the second explanation of what had happened in Fairchild. But in the next sentence, not quoted by Lord Phillips, Lord Hoffmann went on: Parliament almost immediately reversed this decision by a statute giving effect to the first explanation, which had been advocated by Lord Rodger in his dissenting speech. Lord Hoffmanns extra judicial (or judicial) words cannot by themselves alter the true effect of a statute, but his comments do again show that the suggested distinction is more fluid than might at first appear. It is relevant to look more closely at what Barker decides. In Barker, Lord Hoffmann spoke of Fairchild as applying an exceptional and less demanding test for the necessary causal link between the defendants conduct and the damage (para 1) and of the requirement of a sufficient causal link between the defendants conduct and the claimants injury (para 17). In his note in Perspectives on Causation, he picked up this language with references to the causal requirements of the relevant rule and to the issues in cases of mesothelioma and analogous situations as involving the causal requirements for an action for damages for mesothelioma. Lady Hale in Barker also viewed the common law rules governing the measure of recovery as closely linked to the common laws approach to causation, and said that there was no reason in principle why the former rules should not be modified as the latter approach is courageously developed to meet new situations (para 122). In paras 123 and 124, she made clear that in her view the issue in Barker could be seen as arising from the expanded perceptions or developed concept of causation which the law had accepted. These citations all suggest that it is both possible and appropriate to characterise the position achieved by the common law after Barker v Corus as one concerned with the issue of the causal requirements or causal link, as between the defendants conduct and the disease, which the common law requires in order for there to be an action for mesothelioma. But analysis of the rule arrived at after Fairchild and Barker justifies further propositions. Despite the apparent clarity of the suggested distinction between liability for a risk and for a disease, no cause of action at all exists unless and until mesothelioma actually develops. Neither the exposure to asbestos nor the risk that this may one day lead to mesothelioma or some other disease is by itself an injury giving rise to any cause of action: see Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281; the House there decided that not even the emergence of pleural plaques marking the past exposure to asbestos constituted injury for the purpose of giving a cause of action. In order to fall within the principle in Fairchild and Barker, the development of mesothelioma is a pre condition: see Barker, per Lord Hoffmann (para 48) and Lord Scott (para 53). Lady Hale went further, stressing that she in fact agreed with Lord Rodgers view that the damage which is the gist of these actions is the mesothelioma and its physical and financial consequences. It is not the risk of contracting mesothelioma (para 120). In reality, it is impossible, or at least inaccurate, to speak of the cause of action recognised in Fairchild and Barker as being simply for the risk created by exposing someone to asbestos. If it were simply for that risk, then the risk would be the injury; damages would be recoverable for every exposure, without proof by the claimant of any (other) injury at all. That is emphatically not the law: see Rothwell and the statements in Barker itself, cited above. The cause of action exists because the defendant has previously exposed the victim to asbestos, because that exposure may have led to the mesothelioma, not because it did, and because mesothelioma has been suffered by the victim. As to the exposure, all that can be said (leaving aside the remote possibility that mesothelioma may develop idiopathically) is that some exposure to asbestos by someone, something or some event led to the mesothelioma. In the present state of scientific knowledge and understanding, there is nothing that enables one to know or suggest that the risk to which the defendant exposed the victim actually materialised. What materialised was at most a risk of the same kind to which someone, who may or may not have been the defendant, or something or some event had exposed the victim. The actual development of mesothelioma is an essential element of the cause of action. In ordinary language, the cause of action is for or in respect of the mesothelioma, and in ordinary language a defendant who exposes a victim of mesothelioma to asbestos is, under the rule in Fairchild and Barker, held responsible for and in respect of both that exposure and the mesothelioma. This legal responsibility may be described in various ways. For reasons already indicated, it is over simple to describe it as being for the risk. Another way is to view a defendant responsible under the rule as an insurer, but that too is hardly a natural description of a liability which is firmly based on traditional conceptions of tort liability as rooted in fault. A third way is to view it as responsibility for the mesothelioma, based on a weak or broad view of the causal requirements or causal link appropriate in the particular context to ground liability for the mesothelioma. This third way is entirely natural. It was adopted by Lords Reid and Wilberforce in McGhee, by Lord Hoffmann, Lady Hale and (possibly) Lord Walker in Barker and by Lord Hoffmann in his extra judicial commentary. It seems to have received the perhaps instinctive endorsement of a number of members of this Court, including myself, in Sienkiewicz. Ultimately, there is no magic about concepts such as causation or causal requirements, wherever they appear. They have the meanings assigned to them and understood in ordinary usage in their context. A logician might disagree with a reference to causation or a causal link in a particular context, but that is not the test of meaning: see Lord Wilberforces words in McGhee, p 6C F (cited in para 56 above). The present appeals concern the meanings we assign to the concept of causation, first in the context of considering employers liability to their employees and then in considering the scope of employers insurance cover with respect to such liability. It is instructive in this connection to look more closely at the Compensation Act 2006. Section 3(3) states that section 3(2) does not prevent (a) one responsible person from claiming a contribution from another, or (b) a finding of contributory negligence. Section 3(4) goes on to provide that [I]n determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible . Section 3(3) necessarily relates to the legal bases for claiming contribution or asserting contributory negligence, which are to be found in, respectively, the Civil Liability (Contribution) Act 1978 and the Law Reform (Contributory Negligence) Act 1945. The 1978 Act addresses the situation where two or more persons are liable in respect of the same damage (section 1(1)), while section 2(1) provides for contribution in such situations to be such as may be found by the court to be just and equitable having regard to the extent of that persons responsibility for the damage in question. Although under section 3(4) of the 2006 Act, the court must have regard to the relative lengths of the exposure for which each was responsible, the same damage which is a pre condition to the application of the 1978 Act must be the mesothelioma. It cannot be the risk created by the person by or from whom contribution is sought, because each person and exposure creates a separate risk, and no one person or exposure creates the total risk resulting from all exposures. The 2006 Act, by its reference to the 1978 Act, thus assumes that every person, who has exposed to asbestos a victim who later experiences mesothelioma, incurs responsibility for the mesothelioma. That language again fits an analysis whereby the rule in Fairchild and Barker identifies the appropriate weak or broad causal link between the exposure and the mesothelioma. A similar position applies under the 1945 Act. Under section 1(1), that Act applies [w]here any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons. In that event, the damages recoverable are to be reduced to such extent as the court thinks just and equitable having regard to the claimants share in the responsibility for the damage. The application of this section, as contemplated by the 2006 Act, is only possible on the basis that a mesothelioma sufferer may be said to have suffered the mesothelioma partly as the result . of the fault of anyone who has exposed him to asbestos. In other words, the rule in Fairchild and Barker must have been viewed by the drafters in my opinion entirely understandably as establishing a causal link, between the exposure and the mesothelioma, sufficient for it to be said that the mesothelioma was the result of each (and every) exposure. A similar view is also implicit in the provisions of the Act drafted on the basis that insurers who would commonly of course be employers liability insurers would be among the persons by or for whose benefit or against whom contribution would be sought in cases of multiple responsible persons: see section 3(7)(b) and (10)(a) of the 2006 Act. Those provisions necessarily assume that employers liability insurances, written generally on a causation basis, would respond to Fairchild/Barker type liability incurred by employers. Ultimately, the present appeals raise the questions how the present employers liability insurance policies respond as a matter of construction in circumstances within the rule in Fairchild and Barker. Where two contracts are linked, the law will try to read them consistently with each other. This is so with language in a bill of lading, incorporated from a charterparty: The Njegos [1936] P 90. A similar approach applies to language in a reinsurance incorporated from the insurance: Forsikringsaktieselskapet Vesta v Butcher [1989] AC 852 and Groupama Navigation et Transports v Catatumbo CA Seguros [2000] 2 Lloyds Reports 350, even though there is no guarantee that a reinsurance will in every possible circumstance that may develop pick up every liability that may be held to exist under an insurance: see Wasa International Insurance Co Ltd v Lexington Insurance Co [2009] UKHC 40, [2010] 1 AC 180. The intention under the present insurances must be taken to have been that they would respond to whatever liability the insured employers might be held to incur within the scope of the risks insured and within the period in respect of which they were insured. Thus, as Scrutton and Greer LJJ accepted in the Ellerbeck Collieries case (paragraph 34 above), an employers liability insurance could have been expected to respond to the conventional and artificial definition in the WCAs as to what constituted an accident and when personal injury by accident or disease was sustained for the purposes of employers liability to employees. Furthermore, if the common law during or even after the currency of an insurance develops in a manner which increases employers liability, compared with previous perceptions as to what the common law was, that is a risk which the insurers must accept, within the limits of the relevant insurance and insurance period. Eady J correctly identified this in Phillips v Syndicate 992 Gunner [2003] EWHC 1084 (QB), [2004] Lloyds Insurance and Reinsurance Reports 426, 429 (left). The declaratory theory does not presume the existence of an ideal system of the common law, which the judges from time to time reveal in their decisions. But it does mean that, when judges state what the law is, their decisions do . have a retrospective effect in the sense that the law as stated will, generally speaking, be applicable not only to the case coming before [them] but, as part of the common law, to other comparable cases which come before the courts, whenever the events which are the subject of those cases: Kleinwort Benson Ltd v Lincoln CC [1999] 2 AC 349, 378G H, per Lord Goff. The declaratory theory is a pragmatic tool, essential when cases can only come before the court some time, perhaps some years after the relevant events occurred, and when the law [must] be applied equally to all, and yet be capable of organic change (p 379A). A similar principle must, generally speaking, apply in relation to a statute such as the Compensation Act 2006, which changes or corrects the common law to what Parliament perceives to be a more appropriate result for the purposes of all future cases coming before the courts, whenever the events giving rise to them. In the case of that Act, the result was one which the courts might as a matter of common law well have themselves accepted (and which indeed Lord Rodger in his powerful dissent in Barker v Corus believed that the common law had accepted) in Fairchild. Concluding, as I have done, that the present insurances covered employers liability for injuries or diseases caused during the relevant insurance periods, the question is whether they cover employers liability for mesothelioma arising under the rule in Fairchild and Barker from having exposed employees to asbestos during such periods. It is not in dispute that, if the rule is characterised as a rule of deemed causation, then the policies must respond. A parallel example, so familiar that it is easy to overlook, is the vicarious liability to an employee, A, which rests on any employer, B, who has not himself been negligent but must answer vicariously for the negligence of another employee, C. We have no hesitation in saying that the employer B has in such a case caused the injury or disease suffered by A. But this is so in reality only because a rule of law requires us to equate the acts or omissions of C with those of B. The argument, accepted by Lord Phillips, is that the rule in Fairchild and Barker is not one of deemed causation of or, therefore, liability for the disease, but one of liability for the risk created by the exposure. For reasons which I have set out, I regard this distinction as too simple. The liability arises only because of the incurring of the disease and is for the disease. A condition of such liability is that the employer (negligently) exposed the victim to asbestos. The insurance policies, read as operating on a causation basis, are aimed at covering liability generated by employers activities during their insurance periods: see paragraphs 18 28 and 41 above; unless liability for mesothelioma flowing from negligent exposure during an insurance period is covered by the policies, this aspect of employers activities will not in practice be covered at all. In my view, these considerations justify a conclusion that, for the purposes of the insurances, liability for mesothelioma following upon exposure to asbestos created during an insurance period involves a sufficient weak or broad causal link for the disease to be regarded as caused within the insurance period. It would, I think, have been anomalous and unjust if the law by deeming there to have been causation of the disease could have created policy liability (which is common ground), but the law by insisting that the liability in respect of mesothelioma was for the risk of causation achieved a quite different result. As I have sought to show, it is not in any event accurate to treat the liability as being either solely or strictly for the risk. The risk is no more than an element or condition necessary to establish liability for the mesothelioma. The reality, reinforced by provisions in the 2006 Act, is that the employer is being held responsible for the mesothelioma. For this purpose, the law accepts a weak or broad causal link. The link is to exposure which may but cannot be shown on the ordinary balance of probabilities to have played a role in the actual occurrence of the disease. But for the purposes of the policies the negligent exposure of an employee to asbestos can properly be described as having a sufficient causal link or being sufficiently causally connected with subsequently arising mesothelioma for the policies to respond. The concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the rule in Fairchild and Barker. Viewing the point slightly more broadly, if (as I have concluded) the fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them, then the liability for mesothelioma imposed by the rule in my opinion fulfils precisely the conditions under which these policies should and do respond. Conclusion I would therefore dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. ANNEX A The policy wordings (dates are approximate) (1) Excess First Wording (late 1940s): Whereas . (hereinafter called The Employer) carrying on the business of . has made a proposal . this Policy witnesseth that in consideration of the payment of . as premium to the Company on the estimated total amount, as set forth in the Schedule hereto, of the wages, salaries, and other earnings of Employees, a description of whom is set forth in the said Schedule (which premium is subject to adjustment as hereinafter provided) the Company agrees to indemnify the Employer in the manner following, namely That if at any time during the period commencing on theday of19 , and ending on theday of19 (both days inclusive) and for such further period or periods as may be mutually agreed upon, any employee in the Employer's immediate service shall sustain any personal injury by accident or disease while engaged in the service of the Employer in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands, in work forming part of or process in the business above mentioned, and in case the Employer shall be liable to damages for such injury, either under or by virtue of the Common Law, the Fatal Accidents Acts 1846 to 1908, or the Law Reform (Miscellaneous Provisions) Act 1934, the Company will indemnify the Employer The Schedule required a description of the insured companys employees and their estimated total wages, salary and other earnings. Condition 1 of the policy further provided that: the Employer shall truly record in a wages book the name of every employee and the amount of wages, salary and other earnings paid to him. Second Wording (late 1950s to 1960s): Whereas the Employer . carrying on the business described in the . Schedule has made . a written proposal and declaration, containing particulars and statements which it is hereby agreed are the basis of this Contract . and has paid the premium mentioned in the Schedule, which premium is subject to adjustment as hereinafter provided, this Policy witnesseth that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in work forming part of the process in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease The policy provided that the Company should not be liable under it in respect of accidents occurring elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. The policy provided that premiums were to be regulated by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with a wages book being kept open to inspection for that purpose and the employer supplying the correct amounts within one month of the expiry of each insurance period. Condition 1 and the Schedule were in similar form to those in the first wording. Third Wording (1970 to 1976) After a recital in the same form as the second wording, this wording provided: that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease Under the third wording, there was the same territorial limitation as under the second wording in relation to accidents occurring elsewhere than in Great Britain, etc. Premiums were also regulated by reference to wages, salaries, etc. and condition 1 and the Schedule were in the same terms as in the second wording. (2) Independent Sole wording in Issue (1972 to 1987): This was a Contractors Combined Policy, covering Employers Liability (section 1), Public Liability (section 2) and Loss of or Damage to Contract Works (section 3). It provided: NOW THIS POLICY WITNESSETH that during the Period of Insurance or during any subsequent period for which the Company may accept payment for the continuance of this Policy and subject to the terms, exceptions and conditions contained herein and or endorsed hereon, the Company will indemnify the Insured as hereinafter specified. SECTION 1 EMPLOYERS' LIABILITY If any person who is under a contract of service or apprenticeship with the Insured shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule the Company will indemnify the Insured against all sums for which the Insured shall be liable at law for damages for such injury or disease The Policy provided that the Company was not to be liable for injury, illness, loss or damage caused elsewhere than in Great Britain, the Isle of Man or the Channel Islands. As a result of the ELCIA 1969 making insurance in respect of employers liability compulsory, the Independent wording also contained the further provision (the ELCIA extension provision): "AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY The indemnity granted by section 1 of this Policy is deemed to be in accordance with the provisions of any law relating to compulsory insurance of liability to employees in Great Britain. It is agreed the Insured shall repay to the Company all sums paid by the Company which the Company would not have been liable to pay but for the provisions of such law. " The policy Schedule contains spaces for entry of first, annual and minimum premium, as well as of the name of the Principal for whom the insured is undertaking work, the details of the contract or type of work covered by the policy and its situation. Condition 7 provides that the premium is based on estimates provided by the Insured, for record keeping, for the supply of updated information as required by the Company within one month of the expiry of each insurance period and for adjustment of the premium on that basis. (3) MMI First Wording (1949 to 1958) the Company hereby agrees that if at any time during the period of insurance specified in the schedule or thereafter during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified in the said schedule, or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any personal injury by accident or disease arising out of and in the course of his employment by the Insured in their activities described in the schedule and if the Insured shall be liable to pay damages for such injury or disease then, subject to the terms and conditions contained herein or endorsed hereon, the Company shall indemnify the Insured against all sums for which the Insured shall be so liable The policy was expressed not to apply to or include liability in respect of injury or disease caused elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. Condition 5 regulated premiums by reference to wages, salaries, etc, and made provision for a wages book and adjustment to like effect to the Excess second wording. The policy Schedule provided for the classification of staff and employees according to departments and job description, with corresponding figures for estimated total remuneration. Second Wording (1958 to 1974) the Company hereby agrees that if at any time during the First Period of Insurance specified in the said Schedule or during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified as the Renewal Premium in the said Schedule or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any bodily injury or disease arising out of and in the course of his employment by the Insured in the Insured's activities described in the said Schedule and if the Insured shall be liable to pay damages for such injury or disease or for death resulting from such injury or disease then, subject to the terms, exceptions and conditions contained herein or endorsed hereon or set out in the Schedule to this Policythe Company will indemnity the Insured against all sums for which the Insured shall be so liable. Like the first wording, this wording contained a territorial exclusion of liability in respect of injury or disease caused elsewhere than in Great Britain, etc. The policy Schedule provided for the entry of the Estimates (if any) on which the premium is calculated, including in particular any such estimate of wages, salaries, etc. paid to staff, and cross referred to condition 7, which provided that, if the premium had been based on any estimates, an accurate record should be kept (of actual amounts), the insured should provide insurers with such particulars and information as might be required within one month of the expiry of the policy period and the premium adjusted accordingly. Third Wording (1974 to 1992) The Company agrees to indemnify the Insured in respect of all sums without limit as to amount which the Insured shall be legally liable to pay as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any person under a contract of service or apprenticeship with the Insured when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The policy Schedule contemplated a premium adjustable in accordance with condition 5, which in turn provided (in like manner to condition 7 of the second wording) for the adjustment of any premium so calculated by reference to actual amounts at the end of the policy period. (4) BAI First Wording (1953 to 1974) . the Company willindemnify the Insured against all sums of money which the Insured may become liable to pay to any Employee engaged in the direct service of the insured or any dependent of such Employee in respect of any claim for injury sustained or disease contracted by such Employee betweenandboth inclusive The policy carried the note: This policy does not cover the insureds liability for accidents to workmen arising outside the United Kingdom. Conditions 1 and 2 made elaborate provision for the regulation of premiums by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with pay sheets and books of account being kept open to inspection for that purpose and the employer making a return, and the premium being adjusted, subject to a minimum, at the end of each insurance period. Second Wording (1974 to 1983) the Company willindemnify the Insured against all sums of money which the Insured may become legally liable to pay in respect of any claim for injury sustained or disease contracted by any person engaged in and upon the service of the Insured and being in the Insured's direct employment under a Contract of Service or Apprenticeship between theday ofand theday ofboth inclusive This wording also excluded insurers from liability in respect of accidents to employees arising outside the United Kingdom. Like the Independent and third MMI wordings, the BAI second wording also included the ELCIA extension provision. Conditions 1 and 2 provided for the regulation and adjustment of premiums by reference to actual wages, salaries, etc. during each insurance period, in like terms to conditions 1 and 2 in the first wording. (5) Zurich The Municipal First Select wording (1993 to 1998) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury sustained during the Period of Insurance by any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The Municipal Second Select wording (1998 ) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury caused during the Period of Insurance to any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The tariff wording (1948 ) if any person under a contract of service or apprenticeship with the Insured shall sustain any personal injury by accident or disease caused during the period of insurance and arising out of and in the course of his employment by the Insured in the business above mentioned and if the Insured shall be liable to pay damages for such injury or disease the Association shall indemnify the Insured against all sums for which the Insured shall be so liable. LORD CLARKE Like other members of the Court, I agree with Lord Mance on the construction issue. Thus I agree that, for the purposes of the EL policies, mesothelioma is sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the asbestos fibre or fibres which cause the disease. I do not wish to add to Lord Mances reasoning on the construction issue. I do however wish to add some words of my own on the causation issue which sharply divides Lord Phillips and Lord Mance. I wish to say shortly why I prefer the conclusion of Lord Mance to that of Lord Phillips. As I see it, the effect of Fairchild, Barker and Sienkiewicz may be summarised in this way. An employer who, in breach of duty, has exposed an employee to asbestos is liable in damages if the employee subsequently suffers the disease. The employees cause of action is not that he was exposed to the risk of mesothelioma. He has no claim unless he in fact suffers the disease. It is the disease which represents the damage which completes the cause of action and it is only then that his cause of action accrues and the relevant time limit begins to run. It is axiomatic that, in order to succeed in tort, the employee must show a sufficient causal link between the breach of duty, namely the exposure to asbestos, and the disease which represents the damage, namely mesothelioma. The effect of the majority opinion in Barker is that, where there are two or more employers who have exposed the claimant to the risk of mesothelioma, they are not jointly and severally liable to the claimant for the whole of the consequences of the disease but only severally liable for an aliquot part. That decision was reversed by the Compensation Act 2006, so that such employers are jointly and severally liable for the whole of the consequences. The question in this appeal is whether the employers liability insurers are liable to indemnify the employers in respect of that liability. It would in my opinion be a remarkable result if they were not. Lord Phillips notes at para 109 that Mr Edelman QC accepted that, if the correct analysis of the special rule, which (using Lord Phillips definitions) was the result of the combined effect of the special approach in Fairchild and Barker and the Compensation Act 2006, was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust, the insurers would be liable. Lord Phillips accepts that that concession was correctly made. I agree, for the reasons he gives at paras 109 to 114. The question is therefore whether the correct analysis of the special rule is indeed that the employers were deemed to have caused the mesothelioma. I accept that in such a case the employee cannot show on the balance of probabilities that the employers negligence caused the disease. The effect of Fairchild and Sienkiewicz was however that the employer is liable where the exposure contributed to the risk that the employee would suffer the disease and where the employee in fact suffers the disease. That is not in dispute. Lord Phillips says at para 124 that the majority in Barker drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease. He quotes para 2 of Lord Hoffmanns speech as follows: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Phillips further notes that at para 125 Lord Hoffmann advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. See also the passages to like effect referred to by Lord Mance at para 61. I accept that Lord Hoffmann and others did indeed advance that view of Fairchild but it is I think important to note that it was in the context of the question whether, in a case of two or more employers, each was severally liable for a proportion of the consequences of the mesothelioma or whether each was jointly and severally liable for the whole. Lord Hoffmann cannot have intended to hold, without more, that the basis of liability was the wrongful creation of the risk or chance of causing the disease because there would be no liability at all but for the subsequent existence of the mesothelioma. It seems to me that, whether the majority in Barker were correct or not, there is no escape from the conclusion that, in all these cases, where it is not possible to show that the particular employer caused the claimant to suffer mesothelioma, the underlying question is who should be held responsible for causing the mesothelioma which in fact struck down the employee. None of the cases is authority for the proposition that causation is irrelevant. On the contrary, the quest is for the employer who can fairly be held liable for the consequences of the disease and therefore for the employer who can fairly be said to have caused the disease. The courts have embarked on similar quests over the years. Lord Mance has given a number of examples. As Lord Mance shows at para 56, they include Bonnington and McGhee, where Lord Reid was prepared to take a broad view of causation and Lord Wilberforce rejected a traditional approach for policy or evidential reasons. In my opinion the reasoning in Sienkiewicz is of some significance in this context. Lord Mance has given the relevant references in para 61. Thus, as Lord Mance observes, at para 61 Lord Phillips said that Fairchild and Barker had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances. Lord Mance further refers to Lord Brown speaking of a more relaxed approach to causation and flexibility in the approach to causation at paras 178 and 187. Lord Mance had himself referred to Fairchild and Barker as involving a special rule of causation at para 188, and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims at para 196 and to adjustments in the burden of proof at paras 198 and 200. Again, as Lord Mance observes at para 61 above, Lord Dyson referred (at para 207) to materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Both Mr Beloff QC and Mr Stuart Smith QC addressed these issues in their oral submissions. They both in effect submitted that the effect of Fairchild, Barker and Sienkiewicz was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust. They both recognised that the ordinary rule of causation could not apply and that some element of policy or doctrine was required in order to explain Fairchild. Mr Stuart Smith submitted that the effect of Fairchild was that each material exposure to asbestos dust is doctrinally held responsible for the mesothelioma. Mr Beloffs submission was to much the same effect. He relied upon a dictum of Lord Walker in Barker at para 109: A rule of law by which exposure to risk of injury is equated with legal responsibility for that injury entails the possibility that an employer may be held liable for an injury which was not in fact caused by that exposure (though in the present state of medical science, that fact can be neither proved nor disproved). The injury is of course the mesothelioma, which is necessary to complete the cause of action. On that basis it seems to me that Lord Walkers statement that the risk of injury is equated with legal responsibility for the injury is in effect to say that, by creating the risk of mesothelioma in the future, the employer is deemed to have caused the mesothelioma, if it should develop in the future. It appears to me that these conclusions are supported by Lord Mances analysis of section 3 of the Compensation 2006 at paras 67 and 68, with which I agree and to which I do not wish to add anything. Given Mr Edelmans concession that, if that is correct, the employers are liable under the policies (and this Courts acceptance of it) I would hold that the causation point does not assist the insurers. I would only add this. It appears to me that, once it is held that, on these facts, the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies. Rather as in AXA, the whole purpose of the policies was to insure the employers against liability to their employees. That purpose would be frustrated if the insurers submissions on this point were accepted. I agree with Lord Mance, for the reasons he gives at paras 69 73 that these policies respond to these claims. For these reasons, I too would dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD DYSON I too agree with Lord Mance on the construction issue. As to the causation issue, I agree with the reasoning of Lord Mance and Lord Clarke. Accordingly, I would dismiss the appeals by insurers in so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD PHILLIPS Introduction So called long tail industrial diseases have raised peculiar difficulties in the field of tort. These diseases result from the effect on the body of exposure to noxious substances. The effect can be long, drawn out and mysterious, in as much as medical science has not yet identified the precise mechanism, or chain of causation, by which the noxious substance causes the disease. Mesothelioma is a long tail disease in which the problems raised have been particularly acute. The problems arise in the application of principles of law that do not ordinarily give rise to difficulty. An employer will be liable in damages if by an act or omission that is negligent or in breach of statutory duty he causes physical harm to an employee. In the vast majority of cases there will be no difficulty in identifying the moment at which the negligence or breach of duty causes the physical harm, for the harm will take the form of an obvious injury. This is not the position in respect of mesothelioma. Asbestos dust, inhaled into the lungs, is the agency that causes mesothelioma, but as long as forty or fifty years may elapse before the effects on the body of dust inhaled culminate in symptoms of mesothelioma. Once the symptoms are felt, the disease will develop swiftly to bring about an inevitable and extremely unpleasant death. Where a victim of mesothelioma was exposed to asbestos dust over a period of years it is impossible, even with hindsight, to determine on balance of probabilities whether dust inhaled in a particular year caused or contributed to the development of the mesothelioma. It follows that, where the victim worked for a series of employers, each of whom exposed him to asbestos dust, it is impossible to prove on balance of probability that any particular employer caused or contributed to the victims mesothelioma. This means that the normal principles of the law of tort provide no remedy to the employee or his dependants. The manifest injustice of this position led the House of Lords in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572 to create what I shall describe as a special approach to causation in respect of mesothelioma, whose effect was immediately varied by Parliament by section 3 of the Compensation Act 2006. I shall describe the composite result achieved by the House of Lords and Parliament as the special rule. I shall examine the nature of this special rule in due course. Its effect was, however, to place each employer in the same position as that employer would have been under at common law if it were proved, on balance of probability, that its negligence or breach of duty in exposing the employee to asbestos dust had contributed to causing the employees mesothelioma. These developments of the law of tort have formed the backdrop to the issue that has occupied almost all of the eight days that this Court has devoted to this appeal. I shall call this issue the construction issue. The construction issue relates to the true construction of a number of policies of insurance against employers liabilities (EL policies) with similar, but not identical, provisions as to the cover provided. The EL policies provided cover by reference to specific periods usually of a year. The central issue relates to the event or events that, on true construction of each policy, had to occur within the period of the policy in order to render the insurer liable to indemnify the employer in respect of liability for causing an employees mesothelioma. The policies provided cover in respect of diseases sustained or contracted during the period of the policy. The meaning of each of those words, in its context, lies at the heart of the construction issue. It does not seem that the construction issue initially received a great deal of consideration. Insurers treated the policies as if they covered an employer whose breach of duty within the period of the policy had contributed to causing the disease and regarded this requirement as satisfied if the employer was held liable because he had exposed the employee to asbestos dust during that period. Where more than one insurer was liable on this basis, they apportioned liability according to the period of exposure covered by each. The attitude of four of the five insurers party to this appeal changed as a result of the decision of the Court of Appeal in Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50; [2006] 1 WLR 1492. Those insurers are MMI, Excess, BAI and Independent, each of which is in run off. I shall describe them collectively as the insurers. Their opponents I shall describe collectively as the employers, although they embrace solvent employers, individuals claiming under the Third Party (Rights against Insurers) Act 1930, and Zurich, which has a community of interest with these. Bolton concerned the scope of cover of a public liability policy (PL policy) in relation to liability for causing mesothelioma. The policy provided cover in respect of an injury that occurs during the currency of the policy. The argument proceeded on the premise that the chain of causation of mesothelioma, once it was diagnosed, could be traced back to the initial inhalation of asbestos dust. The issue was whether the mesothelioma could properly be said to have occurred at the time of the initial inhalation. The Court of Appeal held that it could not. The injury only occurred, at earliest, at the stage of development of the disease at which malignancy occurred. This was, on the evidence, ten years, give or take a year, from the date on which it became possible to diagnose the existence of the tumour but very many years after the initial inhalation of asbestos dust. This decision led the insurers to take the point that a similar approach should be taken to the interpretation of the cover afforded by the EL policies. Mesothelioma was not, on true construction of the policies, sustained or contracted at the time of the initial inhalation of asbestos dust. It was only sustained or contracted at the much later stage when, as a consequence of the process initiated by asbestos dust, an actionable injury in the form of malignancy, developed. Before Burton J, the Court of Appeal and this Court the construction issue has been argued at great length and in great detail. I agree, as do the other members of the Court, with the conclusions reached by Lord Mance on the construction issue. These conclusions have application not merely to mesothelioma but to employers liabilities in relation to other long tail industrial diseases such as asbestosis and pneumoconiosis. For the purpose of EL policies, these diseases are sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the noxious substance that causes, or contributes to the cause or the extent of, the disease. Throughout the hearing of this appeal there has lurked a second issue. It has not been the subject of argument below, nor does it feature in the agreed Statement of Facts and Issues. This is, perhaps, because it relates to a point that does not arise out of Bolton. It has always been there for the taking, but insurers have not hitherto chosen to raise it, perhaps because its consequences are unattractive. It arises out of a problem that is similar to that which led the House of Lords to formulate the special approach in Fairchild and Barker. It is not possible for an employer to prove that an employees mesothelioma was, in fact, caused in whole or in part by any particular period of exposure to asbestos dust. Thus the employer cannot prove, on balance of probability, that the mesothelioma for which he has been held liable under the special rule was, in fact, initiated in any particular policy year. How, then, can he prove that his liability falls within the scope of the cover, even if the policy bears the construction contended for by the employers and upheld by this Court? How can he prove that his liability arises out of disease sustained or contracted within the policy period, giving these words the same meaning as initiated? I shall call this issue the causation issue. The causation issue and the judgments below Although the causation issue was not raised in argument below, it was dealt with, at least implicitly, in the judgments of both courts. Burton J at first instance, and Rix and Stanley Burnton LJJ in the Court of Appeal proceeded on the basis that, in the case of a mesothelioma victim, exposing the victim to asbestos dust could be treated as equivalent to causing his disease. This approach was based on the special rule. Thus Burton J at paras 42 to 58 summarised, without significant comment, what he described as the special mesothelioma jurisprudence as it was at the time of his judgment. This included Fairchild, Barker and the 2006 Compensation Act. He thereafter proceeded on the basis that exposing a mesothelioma victim to asbestos dust could be treated as having been equivalent to causing the victim to contract the disease. Thus, when summarising his conclusions at para 243 he said: I conclude, in relation to the policies in issue before me, that they respond, just as would policies with caused wording, to claims against insurers where employers are liable on the basis of inhalation by employees during the policy period. They respond, consistently with other EL policies, in respect of mesothelioma claims, on an exposure basis. For the purposes of these policies, injury is sustained when it is caused and disease is contracted when it is caused, and the policies fall to be so construed. Rix LJ drew a distinction between the meaning of contracted and sustained. Contracted referred to the time of the diseases causal origins para 245. He felt constrained by Bolton, however, to hold that no injury was sustained until the disease reached the malignant stage. Implicit in his judgment was the premise that exposure to asbestos dust during the period of the policy could be treated as the causal origin of the disease see for example his comments at para 244. A difficult passage in his judgment at paras 280 283, when considering the meaning of injury, suggests that this premise was founded on the special rule. Thus he was able to conclude that the disease was contracted at the time that the victim was exposed to asbestos dust albeit that injury was not sustained at that point. In a short judgment Stanley Burnton LJ adopted similar reasoning. He stated, at para 338: We are agreed that in any year in which there was substantial exposure to asbestos, mesothelioma was caused by that exposure during that year. The fact that the disease did not develop for some years does not break the chain of causation. Submissions on the causation issue The causation issue was not raised by the insurers as a discrete issue. It none the less surfaced in a passage of the written case for Excess that was addressing the employers case that personal injury by disease was sustained at the moment of inhalation of asbestos dust that triggered the process of sustaining personal injury by disease. One of the arguments advanced by Excess in answer to this submission read as follows: Medically and empirically, one cannot be said to have suffered an injury on a particular day because it cannot be known in (say) a 10 year occupational exposure period on which of the 3652 days the fatal dose was inhaled (and it may be on more than one). It is likely that any ingestion on a particular day was irrelevant to the development of the final condition. There has been a tendency on the part of the claimants to treat inhalation as a single event from which an unbroken line can be drawn to malignancy. It is not. Inhalation (and hence on this theory) injury may occur over several thousands of days. Each day does not bring injury. Any particular day cannot therefore be selected as injury day. To overcome problems of medical causation in a personal injury action against an employer, the House of Lords extended the McGhee principle to mesothelioma in Fairchild. However this was a rule of causation and not definition. There is no such rule in insurance policies which defines what amounts to an injury. The Supreme Court in Sienkiewicz stressed the limits of the Fairchild exception in no uncertain terms, and it is submitted that it would be quite wrong for it now to invade the law of contract. A liability policy responds only to indemnify against a liability (i.e. actionable injury). There is no such liability on inhalation. Injury occurs when the claimant has a personal injury by disease. Thus Excess took the point that the special rule could not properly be invoked to establish that, on true construction of the contracts of insurance, injury was sustained upon inhalation of asbestos dust. This passage appeared after a submission at para 209 that it was only possible to equate the inhalation of a culpable quantity of asbestos dust with sustaining personal injury by disease by, inter alia, creating a special rule governing the response of EL policies in respect of mesothelioma, and possibly other long tail diseases. This proved to be what counsel for the employers sought to do when invited by the Court to address the causation issue. They did so in short oral submissions that cannot, when taken together, have occupied more than half an hour of the eight day hearing. The relevant submissions made by Mr Beloff QC for Akzo and AMEC and the Local Authorities are reported at pp 120 122 of the transcript for 15 December 2011. He started by observing that we had to cut the Gordian knot. He suggested that we should do so by equating creation of a risk with causing bodily injury. This he submitted was permissible because the object of the policy was to provide cover to an employer who, in breach of duty to employees, caused them compensatable damage. Were this approach not adopted, it would be impossible to show that any of a number of insurers providing cover over a period of years was liable. The law should rebel against such a result. In support of this submission Mr Beloff cited a statement by Lord Walker of Gestingthorpe in Barker at para 109 suggesting that the special approach to mesothelioma equated the exposure to the risk of injury with legal liability for the injury. Mr Stuart Smith QC for Zurich dealt with the causation issue at rather greater length in a passage reported at pp 126 to 131 of the same transcript. He started by accepting that it was impossible to know when the metabolic changes that led to the development of mesothelioma in fact occurred. Fairchild dealt with this problem by creating a doctrinal rule under which each significant exposure to asbestos dust was held to be responsible for the mesothelioma. Thus doctrinally the process of developing mesothelioma started upon inhalation. This doctrinal framework for the application of the law of tort was that within which policies of insurance against tortious liability had to operate. Mr Stuart Smith agreed with this summary of his argument advanced by Lord Mance: If the law of tort treats someone, an employee, as having sustained a personal injury and treats the employer as liable to pay damages for such personal injury, then the policy answers. These submissions on behalf of the employers raise the following questions: i) Will the policies respond to fictional or doctrinal events that are deemed to have occurred under the special rule? If so: ii) Does the special rule deem that events have occurred to which the policies should respond? If not: iii) Can this Court properly reformulate the special rule in such a way as to require the policies to respond? Will the policies respond to fictional or doctrinal events? On the premise that he failed on the construction issue, Mr Edelman accepted that, if the correct analysis of the special rule was that the employers were deemed to have caused the mesothelioma by exposing the victims to asbestos dust, then the policies should properly respond. Because of the view that I take of the next two questions I do not need to decide whether the concession was properly made. I have, however, concluded that it was. The policies exist to provide protection against employers liability in tort. If the law of tort, whether laid down by the courts or by Parliament, resorts to legal or doctrinal fictions, it seems logical that the policies should respond as if the fictions were facts. A purposive approach to construction of the policies would lead to this result. Two examples illustrate this approach. Ellerbeck Collieries Ltd v Cornhill Insurance Co Ltd [1932] 1 KB 401 involved a policy of insurance against liability under the Workmens Compensation Act 1925. The terms of the policy entitled the employer to indemnity if at any time during the currency of the insurance any employee sustained any personal injury by accident or disease. The 1925 Act imposed a fictitious test for identifying when an industrial disease was sustained, namely the date on which a certifying surgeon issued a certificate that the employee was suffering from the disease. On the strength of a certificate issued within the currency of a policy of insurance an employer was held liable to two workmen who had, in fact, sustained the relevant disease before the period of the insurance began. The Court of Appeal held that this liability fell within the cover of the policy. The argument for applying the fictional date was a strong one because, as Greer LJ observed at p 417, the policy was intended to cover the employers liability under the Act. The parallel between Ellerbeck and the present case would have been stronger had the relevant policies been taken out after the special rule had been created. In Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] AC 281 the House of Lords held that pleural plaques caused by exposure to asbestos dust did not constitute actionable injury because they produced no adverse physical effects. The Scottish Parliament responded to this decision by introducing the Damages (Asbestos related Conditions) (Scotland) Act 2009 (the Scottish Act). That Act provides by section 1 that asbestos related pleural plaques constitute a personal injury which is not negligible and that accordingly they constitute actionable harm for the purpose of an action for damages for personal injury. In AXA General Insurance Ltd v HM Advocate [2011] UKSC 46, [2011] 3 WLR 871 the Supreme Court rejected a challenge by insurers to the lawfulness of this Act. The Scottish Act effected a limited alteration to the common law in decreeing that asymptomatic pleural plaques constituted non negligible personal injury and thus actionable damage. Lord Mance at para 88 suggested that the main target of the legislation was employers insurers. He went on at para 89 to consider whether the Act would, in fact, alter the meaning to be given to bodily injury under a policy of insurance: A Scottish Act will not on the face of it change the legal effect of an English insurance contract, even in Scotland. However, depending upon the particular policy language, the scope of the concept of bodily injury under a worldwide policy may respond to different conceptions of bodily injury in different parts of the world. Here, the question would be whether it would respond to a development or change, such as that introduced retrospectively by the 2009 Act, in the conception of bodily injury. I say no more about the answer, which may be elicited in another context or suit. While Lord Mance left open the effect of the Scottish Act on the construction of policies of liability insurance, Lord Brown was in no doubt that the effect of the Scottish Act was to subject insurers to liabilities to which they would not have been subject prior to that Act. He referred at para 80 to the undoubted, and deliberate, impact of the legislation upon pending claims. Earlier, at para 77, he drew an analogy with the effect of the decision in Fairchild on EL insurers liability: Had the House of Lords in Rothwell decided that asymptomatic pleural plaques of themselves constitute a non negligible personal injury and thus actionable damage decided in other words that in this particular context the common law should develop in this admittedly novel way the appellants would doubtless have deplored the decision but they could certainly not have questioned its legitimacy. No doubt they would have resented the fact that, as a consequence of the decision, they would unexpectedly have had to pay out on claims resulting from the employees exposure to asbestos upwards of 20 years (quite likely up to 40 years) previously. But they could no more have advanced an [article 1, Protocol 1] challenge to this development of the law than they could have challenged the House of Lords decision some four years earlier in Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32 to adopt a less stringent than the usual but for test for establishing the necessary causal connection between an employers negligence and a claimants condition in, most notably, mesothelioma cases. Employers (and their liability insurers) necessarily take the risk of the common law developing in ways which may adversely affect them with regard to personal injury claims. In this passage Lord Brown assumed that the effect of Fairchild was to bring employers liabilities in respect of mesothelioma within the scope of the cover afforded by EL policies. I am about to consider whether he was correct in this. I agree, however, with the general principle expressed in the last sentence of the extract from his judgment that I have just cited. It is for this reason that I would give an affirmative answer to the first of the three questions posed at para 108 above. I turn to the second. What is the special rule? The employers submissions on the causation issue proceed on the premise that the special rule deems exposure to asbestos dust of an employee who is subsequently diagnosed with mesothelioma to have been a cause of the mesothelioma. I have reached the conclusion that that premise is unsound. In Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 I summarised the special rule as follows at para 1: When a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease. This is certainly the effect of the special rule, but in order to discover the juridical basis of the rule it is necessary first to identify the basis of the special approach adopted by the House of Lords in Fairchild and Barker and then to consider the effect of section 3 of the Compensation Act, which adapted the special approach into the special rule. The special approach In Sienkiewicz, at para 70, I stated that Fairchild and Barker developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances, which include ignorance of how causation in fact occurs. As I shall show, this was not an accurate summary of the special approach adopted in those cases. In Fairchild the House of Lords confronted the position where a mesothelioma victim had worked consecutively for a number of employers, each of which had exposed him to asbestos dust. One or more of these had caused his mesothelioma, but because of the limits of medical knowledge it was not possible, on balance of probability, to identify which. In these circumstances their Lordships adopted a special approach that enabled them to find that each of the employers was jointly and severally liable for the mesothelioma. In doing so they purported to be following a similar approach adopted by the House of Lords in McGhee v National Coal Board [1973] 1 WLR 1. They were not, however, all agreed as to the basis of that approach. Lord Hutton, at para 109, held that it was based on the drawing of a factual or legal inference leading to the conclusion that the breach of duty [in exposing the employee to asbestos dust] was a cause of the disease. The majority of the House did not agree. Lord Bingham said, at para 35: I prefer to recognise that the ordinary approach to proof of causation is varied than to resort to the drawing of legal inferences inconsistent with the proven facts. Lord Nicholls of Birkenhead said, at para 42: So long as it was not insignificant, each employer's wrongful exposure of its employee to asbestos dust, and, hence, to the risk of contracting mesothelioma, should be regarded by the law as a sufficient degree of causal connection. This is sufficient to justify requiring the employer to assume responsibility for causing or materially contributing to the onset of the mesothelioma when, in the present state of medical knowledge, no more exact causal connection is ever capable of being established." Lord Hoffmann at para 65 rejected the suggestion that the House in McGhee held that materially increasing the risk of the disease should be treated as equivalent to material contributing to the injury. He concluded: I would respectfully prefer not to resort to legal fictions and to say that the House treated a material increase in risk as sufficient in the circumstances to satisfy the causal requirements for liability. Lord Rodger of Earlsferry did not agree. His reasoning was close to that of Lord Hutton. He held, at para 168: Following the approach in McGhee I accordingly hold that, by proving that the defendants individually materially increased the risk that the men would develop mesothelioma due to inhaling asbestos fibres, the claimants are taken in law to have proved that the defendants materially contributed to their illness. What then happened has been summarised by Lord Hoffmann in Perspectives on Causation (2011) at p 8: There are two ways in which one could characterise this change in the substantive law of negligence. One is to say that the causal requirements for an action for damages for mesothelioma have been changed; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent. The other is to say that the House created, exceptionally, a cause of action for the increased risk of mesothelioma rather than for the disease itself. In the former case, satisfying the new causal requirement would entitle the claimant to sue for the whole injury caused by contracting the disease. In the latter case, he would be able to sue only for the loss caused by the risk of his contracting the disease having been increased. That would be a proportion of the injury caused by the disease, depending on the extent to which the risk had also been created by other causes. In Barker v Corus the House of Lords (Lord Rodger of Earlsferry dissenting) adopted the second explanation of what had happened in Fairchild. I believe that this summary of the position is essentially correct. The majority in Barker were persuaded that justice would best be served if the special approach adopted in Fairchild were applied in such a way as to render each defendant who had wrongfully exposed the claimant to asbestos dust severally liable for that proportion of the mesothelioma that represented the proportion of the wrongful exposure attributable to that defendant. This was achieved by holding that the liability of each defendant resulted from adding to the risk that the employee would contract mesothelioma. It did not result from an implication that each defendant had actually contributed to the cause of the disease. At the start of his speech at para 2 Lord Hoffmann drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Hoffmann went on to adopt the latter analysis as the basis of liability in Fairchild. At para 31 he held that the majority in Fairchild had not proceeded upon the fiction that a defendant who had created a material risk of mesothelioma was deemed to have caused or materially contributed to the contraction of the disease. The creation of a material risk of mesothelioma was sufficient for liability. At para 35 he advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. Liability for the mesothelioma that developed should be apportioned according to the contribution that each defendant made to the risk that mesothelioma would be contracted. Lord Scott of Foscote and Lord Walker of Gestingthorpe expressly agreed with both Lord Hoffmanns conclusion that liability for the mesothelioma fell to be apportioned and with his reasons for so concluding. Lord Scott held at para 53 that it was essential to keep firmly in mind that liability in Fairchild was not imposed on any of the defendant employers on the ground that the employers breach of contract had caused the mesothelioma. That causative link had not been proved against any of them. It was imposed because each, by its breach of duty, had materially contributed to the risk that the employee would contract mesothelioma. At para 61 he emphasised that the Fairchild principle was not based on the fiction that each defendant had actually caused the eventual outcome. It was based on subjecting the victim to a material risk. Lord Walker, having stated that he was in full agreement with Lord Hoffmanns reasons went on at para 104 to make a statement that was inconsistent with them, this being to the same effect as the statement relied on by Mr Beloff see para 106 above. Lord Walker stated that the decision in Fairchild equated exposing the victim to the risk of injury with causing his injury. This was the same mistake as I made in Sienkiewicz see para 117 above. Had this been the case, each defendant would have been jointly and severally liable for the injury. Lord Walker went on to say, however, that the result in Fairchild was achieved, not by some fiction, but as an explicit variation of the ordinary requirement as to causation. At para 113 he stated that Fairchild was decided by the majority, not on the fictional basis that the defendants should be treated as having caused the victims damage, but on the factual basis that they had wrongfully exposed him to the risk of damage. Lady Hale did not adopt Lord Hoffmanns thesis that the creation of risk constituted the damage for which each defendant was liable. In general, however, she agreed with the majority. She held that in Fairchild, for the first time in our legal history defendants were made liable for damage even though they might not have caused it at all. It was not said that the defendants had caused or materially contributed to the harm. All that could be said was that each had contributed to the risk of harm. In these circumstances it was sensible and fair to apportion liability for the harm in proportion to the contribution that each had made to the risk of harm. Lord Rodger of Earlsferry vigorously dissented from the reasoning of the majority and from the result in so far as it apportioned liability. He observed at para 71 that the majority were not so much reinterpreting as rewriting the key decisions in McGhee and Fairchild. At para 85 he stated that the new analysis that the House was adopting would tend to maximise the inconsistencies in the law. I have some sympathy with the observations of Lord Rodger. It would, I think, have been possible for the House in Barker to have defined the special approach in Fairchild as one that treated contribution to risk as contribution to the causation of damage. The important fact is, however, that the majority did not do so. They were at pains to emphasise that the special approach was not based on the fiction that the defendants had contributed to causing the mesothelioma. Liability for a proportion of the mesothelioma resulted from contribution to the risk that mesothelioma would be caused and reflected the possibility that a defendant might have caused or contributed to the cause of the disease. This was no obiter expression of opinion. It formed the basis of the substantive decision that liability was severable and not joint. The special rule The special approach rendered each employer who had wrongfully exposed a mesothelioma victim to asbestos dust liable for a proportion of the mesothelioma without creating any inference or legal fiction that the employer in question had actually contributed to causing the disease. Section 3 of the Compensation Act altered the position by imposing joint and several liability on those who were only severally liable under the special approach. Did the special rule that resulted involve a different basis of liability to that which formed the basis of the special approach? This question is considered by Jonathan Morgan in his interesting Chapter 4 of Perspectives on Causation headed Causation, Politics and Law: The English and Scottish Asbestos Saga. At p 79 he poses the following question: Has Parliament, by implication, therefore also reversed Lord Hoffmanns principled reinterpretation of Fairchild? Is the nature of Fairchild liability now after all for causing mesothelioma and not increasing risk? Mr Morgan gives a negative answer to this question, expressing the view that Barker has altered the jurisprudential basis of the Fairchild liability irrevocably. I agree that section 3 of the Compensation Act did not alter the jurisprudential basis of the special approach laid down by the House of Lords in Fairchild and Barker. All that it did was to alter the effect of the special approach by making each defendant jointly and severally liable for the whole of the injury sustained. Section 3(1) provides that the section applies where (c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure [for which the defendant was responsible]or another exposure which caused the victim to become ill, and (d) the responsible person is liable in tort(whether by reason of having materially increased a risk or for any other reason). It is not possible to read section 3 as imposing a different basis of liability to that identified by the majority in Barker. The consequence of the special rule Having regard to its jurisprudential basis I cannot see how the employers can found upon the special rule as identifying the policy year or years in which a victims mesothelioma is initiated. The position is that it is impossible to prove on balance of probability when mesothelioma is initiated, or contracted, or sustained, giving each of those words the same meaning. The special rule does not fill the gap for it raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. Should this Court redefine the special rule in order to engage the EL policies? The special approach of the majority in Barker had the object of ensuring that employers who had wrongfully subjected their employees to asbestos dust should bear what the majority considered to be a fair share of responsibility for their wrongdoing. It does not seem likely that the majority gave consideration to the implications for the responsibility of EL insurers of the manner in which this object was achieved. Should this Court now redefine the special rule with the object of enabling claims to be brought under the EL policies? This would, I think, involve holding that the majority in Barker erred in their analysis and that the true basis of the special approach in Fairchild was that contribution to risk should be deemed to be contribution to causation. I would give a firm No to this question. The adoption of the special approach in Fairchild has provoked considerable criticism, both judicial and academic. An example of the former is to be found in the judgment of Lord Brown in Sienkiewicz. An example of the latter is Mr Morgans closely reasoned Chapter 4 of Perspectives on Causation. But the object of the special approach in Fairchild and Barker was at least to ensure that those who had breached the duties that they owed to their employees did not escape liability because of scientific uncertainty. It would be judicial law making of a different dimension to create a legal fiction as to the policy years in which cases of mesothelioma were initiated in order to render liable insurers who could not otherwise be shown to be liable. The Secretary of State has intervened in this appeal and has submitted that, should the claims of employees or their dependants not be met by insurers, they are likely to be a burden on the public purse. It is open to question whether this is a proper consideration, even when considering whether the special rule should be redefined for what are essentially reasons of policy. In any event it seems to me that the position is somewhat more complex than the Secretary of State suggests. The burden of claims in respect of mesothelioma on a scale that was never anticipated is reducing both employers and insurers to insolvency. If this Court were to redefine the special rule so as to impose liability for mesothelioma claims on EL insurers where it could not otherwise be made out, this would in many cases be at the expense of others with claims on the same insurers founded on facts and not legal fictions. The liabilities in respect of mesothelioma will increase the overall shortfall on the part of insurers and this is also likely to have implications for the public purse. So far as I am concerned, however, these considerations have little relevance. Even if there were a compelling case for contending that a means should be found to render EL insurers liable, my reaction would be that this was a matter for Parliament not the courts. It would be wrong in principle for this Court to depart from the reasoning of the majority in Barker for the sole purpose of imposing liability on EL insurers. |
This is an appeal against a decision of the Court of Appeal allowing the respondents appeal from a decision of Mr Andrew Sutcliffe QC, sitting as a Deputy High Court Judge, who granted the appellants relief against a debarring order, in circumstances where such relief had already been refused by another judge. The background facts and proceedings The respondent had entered into an agreement with the appellants, John Riordan and Eugene and Barrington Burke, to buy the shares which they owned in Prestige Property Develper UK Ltd. Having paid 1.572m to the appellants, the respondent sought specific performance of the agreement and associated relief, in proceedings issued in March 2013. After obtaining an initial order without notice a week earlier, the respondent obtained a freezing order (the freezing order) from Arnold J on 17 May 2013 at a hearing attended by the appellants and their legal representatives. This order required the appellants to provide by 24 May 2013 information and documents relating to all their assets, including details of all of their bank accounts and bank statements going back to 1 October 2010. The freezing order also stated that such assets extended to those held by Prestige Properties Ltd (the Company). Arnold J also directed that the proceedings be heard during October 2013. The appellants did not afford the disclosure required by the freezing order by 24 May 2013, and the respondent gave them the opportunity to comply out of time. However, the appellants still failed to comply, although they gave some further disclosure. The respondent issued an application for an unless order, which came before Henderson J. On 21 June 2013, he gave a judgment in which he held that the appellants disclosure was in many respects seriously inadequate [2013] EWHC 3356 (Ch). He also described the failure to disclose full bank statements for the period of three years in the names of the relevant defendants as a particularly glaring omission. Accordingly, he made an unless order which required the appellants to disclose certain identified assets that they had failed to disclose, and which also provided that, in default of compliance by 1 July 2013, the appellants would be debarred from defending the claim. Although the appellants gave some further disclosure, they failed to comply fully with the unless order. On 9 August 2013, Hildyard J heard (i) the respondents application for an order debarring the appellants from defending as they had failed to comply with the unless order, and (ii) the appellants application for (a) a determination that they had complied with the unless order, or, if they had not (b) an order for relief from sanctions under CPR 3.9 (the first relief application). The appellants application was partly based on the contention that they had given further disclosure on 31 July 2013. Hildyard J made the debarring order sought by the respondent and dismissed the appellants application for relief from sanctions [2013] EWHC 3464 (Ch). There was no appeal against that order. In his judgment, Hildyard J recorded the appellants contention that their failures were de minimis [or] the product of matters beyond their control. He did not accept that contention, and described the position as less than satisfactory. He rejected the argument that the appellants failure to produce certain charges had been caused by the refusal of the Bank of Cyprus to cooperate, and also held that there had been an obvious failure to give disclosure of certain other documents. He observed that it was most difficult to reach any other conclusion than that there have been substantial failures to comply with the unless order. He then referred to the fact that just one page of a bank account at HSBC in the name of the Company had been produced, and described this as a very unsettling turn of events, and a further illustration of the reasons for my conclusion that there has been a material failure, which cannot be dismissed as de minimis. He then carefully addressed the question whether he should grant the appellants relief under CPR 3.9 from the sanction of the debarring order. Having considered the principles as laid down in earlier cases, he explained that he felt constrained to refuse any relief from sanctions, while personally regret[ting] the need for such a step. The trial of the action was due to start on 3 October 2013, with a time estimate of five days (which apparently was not altered following Hildyard Js order). Having instructed fresh solicitors, the appellants issued an application on 2 October 2013 for relief from sanctions (the second relief application), supported by a lengthy affidavit, which provided, at least according to the appellants, full disclosure as required by the freezing order. The trial and the second relief application were adjourned to 7 October 2013, when they came on before Mr Sutcliffe. He heard the second relief application, over the next four days, and granted the appellants relief from sanctions, adjourned the trial, and fixed a new trial window in January 2014 [2013] EWHC 3179 (Ch). In his judgment, the Deputy Judge began by summarising the substantive facts and issues and the procedural history. He mentioned that he did not have approved transcripts of the ex tempore judgments of Henderson or Hildyard JJ, but quoted from informal notes or reported summaries of their respective judgments. The Deputy Judge then summarised the appellants case in support of the second relief application, namely that they had tried hard to comply with the requirements of the freezing and unless orders, that their failure to comply was due to the extensive nature of the disclosure required, that any such failure had been relatively slight and some of it due to their former solicitors, that any such failure had now been put right, and that to maintain the debarring order would, in all the circumstances, be disproportionate. He then referred to the respondents case in reply, namely that the second relief application was an abuse of process, and that, in any event, the debarring order ought to be maintained on the merits not least because the appellants had still not given the requisite disclosure in full. The Deputy Judge then addressed the question of how he should resolve the appellants second relief application. He began by mentioning the courts power to grant relief from sanctions, contained in CPR 3.9, and the guidance as to its exercise in certain judicial decisions. He then referred to the freezing and unless orders, and turned to the respondents contention that the appellants remained in breach of the unless order in that they had not disclosed bank statements in respect of the Companys account at HSBC. Because other bank statements had been provided for the Company, the Deputy Judge concluded that the omission of this evidence does not amount to a breach of the unless order and even if it did, in the context of the disclosure provided as a whole, it is de minimis and would not justify a finding that the [appellants] had failed to comply. He also accepted that the appellants former solicitors were in part to blame for any failure on the appellants part to comply with the freezing and unless orders. After mentioning one or two other factors, he held that the appellants were in all the circumstances entitled to take a full part in the trial, and that the debarring order should be discharged. He added that, if, as the respondent contended relying on CPR 3.1(7), it was necessary for the appellants to show a change of circumstances since the decision of Hildyard J, in order to justify a second application for relief from sanctions, the fact that they had now substantially complied with their disclosure obligations was a sufficient change. The respondent appealed against the decision of the Deputy Judge to grant the appellants relief from sanctions, and, for reasons set out in a judgment of the court given by Richards LJ (sitting with Aikens and Davis LJJ), the Court of Appeal allowed the appeal and restored the debarring order imposed by Hildyard J [2014] CP Rep 19. The essence of the Court of Appeals reasoning was that, as Hildyard J had already rejected the appellants first relief application, CPR 3.1(7) applied and the Deputy Judge could not properly have acceded to the second relief application unless there had been a material change of circumstances since Hildyard Js decision, and there had been no such change. To complete the history, the appellants were granted permission to appeal against this decision to this court. Meanwhile, the trial duly took place on 21 March 2014 before Mr David Donaldson QC, whose decision was reversed on 4 February 2015 by the Court of Appeal, who ordered, inter alia, that the appellants pay just over 2.205m to the respondent see [2014] EWHC 725 (Ch) and [2015] EWCA Civ 41. Discussion I have summarised the effect of the judgment given by Richards LJ in very brief terms because I agree with it, and what follows is not intended to differ from its essential reasoning. Indeed, I had wondered whether simply to say that this appeal should be dismissed for the reasons given by the Court of Appeal at [2015] EWCA Civ 41, paras 23 32. However, having given permission to the appellants to appeal to this Court, we may leave them with an understandable feeling of grievance if we do not explain to them in our own words why their appeal is being dismissed. The effect of Henderson Js unless order, coupled with Hildyard Js finding that the appellants had failed to comply with the disclosure requirements in that order, was that, unless the appellants were granted relief from sanctions under CPR 3.9, they would be debarred from defending the claim. CPR3.9(1) provides: On an application for relief from any sanction imposed for a failure to comply with any Rule, Practice Direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application including the need (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with Rules, Practice Directions and orders. The basis upon which a court should approach an application for relief from sanctions under CPR 3.9 has been authoritatively considered by the Court of Appeal in Mitchell v News Group Newspapers Ltd (Practice Note) [2014] 1 WLR 795 and Denton v TH White Ltd (De Laval Ltd, Part 20 defendant) [2014] 1 WLR 3926. Although Hildyard J gave his decision refusing relief from sanctions before those two decisions of the Court of Appeal, his reasoning and decision reflected the guidance and approach set out in them. Quite rightly, there has been no suggestion that we should reconsider what was said in those decisions. As explained above, the Court of Appeal in this case held that the Deputy Judge should not have considered the second relief application on its merits, as it failed to get off the ground, because CPR 3.1(7) applied and the appellants could not show that there had been a material change of circumstances since the hearing of the first relief application before Hildyard J. Mr Letman, who appears for the appellants, contends that the Court of Appeal erred in two respects, namely (i) in holding that the appellants needed to establish a material change in circumstances, or, in the alternative, (ii) in holding that they had failed to establish such a material change. So far as the first point is concerned, the appellants raise rather an arid point, namely whether CPR 3.1(7) applied to the second relief application. CPR 3.1(7) provides that [a] power of the court under these Rules to make an order includes a power to vary or revoke the order. The reason that it is said to be significant whether CPR 3.1(7) should have been taken into account by the Deputy Judge is because, as Lord Dyson MR giving the judgment of the court put it in Mitchell at para 44, citing the judgment of Rix LJ in Tibbles v SIG plc (trading as Asphaltic Roofing Supplies) [2012] 1 WLR 2591, para 39(ii): The discretion [exercisable under CPR 3.1(7)] might be appropriately exercised normally only (i) where there had been a material change of circumstances since the order was made; (ii) where the facts on which the original decision was made had been misstated; or (iii) where there had been a manifest mistake on the part of the judge in formulating the order. Moreover, as the court emphasised, the application must be made promptly. This reasoning has equal validity in the context of an application under CPR 3.9. Lord Dyson went on to explain in para 45 that, on an application for relief from a sanction, therefore, the starting point should be that the sanction has been properly imposed and complies with the overriding objective. Nothing said in Denton, where the Court of Appeal clarified some of the reasoning in Mitchell, undermines these observations. It is worth mentioning that none of this was revolutionary when it was expounded in Mitchell. In Collier v Williams [2006] 1 WLR 1945, para 40, Dyson LJ giving the judgment of the Court of Appeal had approved an observation of Patten J in Lloyds Investment (Scandinavia) Ltd v Christen Ager Hanssen [2003] EWHC 1740 (Ch) at para 7 to this effect: Although this is not intended to be an exhaustive definition of the circumstances in which the power under CPR 3.1(7) is exercisable, it seems to me that, for the High Court to revisit one of its earlier orders, the applicant must either show some material change of circumstances or that the judge who made the earlier order was misled in some way, whether innocently or otherwise, as to the correct factual position before him. In my view, the Court of Appeal in this case rightly held that CPR 3.1(7) did apply to the second relief application. As a matter of ordinary language, the Deputy Judge was being asked to vary or revoke the order made by Hildyard J, who had refused relief from sanctions and thereby confirmed the debarring order, which the Deputy Judge was being asked, in effect, to set aside. However, even if that were not right, it appears to me that, as a matter of ordinary principle, when a court has made an interlocutory order, it is not normally open to a party subsequently to ask for relief which effectively requires that order to be varied or rescinded, save if there has been a material change in circumstances since the order was made. As was observed by Buckley LJ in Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 WLR 485, 492 493: Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter. Accordingly, even if CPR 3.1(7) did not apply to the second relief application, it appears clear that the appellants would have faced the same hurdle before the Deputy Judge. That conclusion also derives support from the last sentence in para 44 in Mitchell, quoted in para 15 above. There was no question of the facts having been misstated by Hildyard J or of manifest mistake in formulating his order. Accordingly, unless (perhaps) they could show that this was not a normal case, the appellants had to establish a material change in circumstances since the hearing before Hildyard J before the Deputy Judge could properly consider the second relief application on its merits. Mr Letman was unable to point to any factors which rendered this case relevantly not normal. Accordingly, I reject the appellants first point. That brings me to the second point made by the appellants, namely that the Court of Appeal were wrong to hold that their subsequent alleged compliance with the unless order was not a material change of circumstances. In my view, that point must also be rejected, and that is for two reasons. The first reason is that, where a party is subject to a debarring order for failing to comply with an unless order to do something within a specified period and relief from sanctions is refused at a time when he is still in default, the mere fact that he then complies with the unless order (albeit late) cannot amount to a material change of circumstances entitling him to make a second application for relief from sanctions. By refusing the partys first application for relief from sanctions, the court would have effectively been saying that it was now too late for that party to comply with the unless order and obtain relief from sanctions. So, if the court on a second application for relief from sanctions granted the relief sought simply because the unless order had been complied with late, its reasoning would ex hypothesi be inconsistent with the reasoning of the court which heard and determined the first application for relief. Of course, that does not mean that late compliance, subsequent to a first unsuccessful application for relief from sanctions, cannot give rise to a successful second application for relief from sanctions. If, say, the unless order required a person or company to pay a sum of money, and the court subsequently refused relief from sanctions when the money remained unpaid, the payment of the money thereafter might be capable of constituting a material change of circumstances, provided that it was accompanied by other facts. For instance, if the late payment was explained by the individual having inherited a sum of money subsequent to the hearing of the first application which enabled him to pay; or if the company had gone into liquidation since the hearing of the first application and, unlike the directors, the liquidator was now able to raise money. These are merely possible examples, and I am far from saying that such events would always constitute a material change of circumstances, or, even if they did, that they would justify a second application for relief from sanctions. In this case, such subsequent compliance with the unless order which did occur after the hearing before Hildyard J was not accompanied by any explanation which could possibly have justified a court concluding that there had been a material change of circumstances since that hearing. Accordingly, the Deputy Judge simply had no grounds to justify his entertaining the second relief application on its merits. Quite apart from this, it seems to me that the Deputy Judge was not entitled to hold that the appellants had complied with the terms of the unless order, or that any breach of that order was de minimis, as he did. Hildyard J had found that the appellants should have disclosed the HSBC bank statements for the Company and that their failure to do so cannot be dismissed as de minimis. In those circumstances, it was simply inappropriate for the Deputy Judge to reach a different conclusion on essentially the same facts. (Indeed, that is a very good illustration of why it would only have been open to the Deputy Judge to consider the second relief application on its merits if there had been a material change of circumstances. He could not simply revisit the same issues as had already been considered by another judge and reach a different conclusion.) Further, it was not appropriate for the Deputy Judge to conclude that the appellants former solicitors were partly to blame for any failure on their part to comply with the unless order. The contention that the appellants former solicitors were responsible for some of the breaches of the unless order was based on very slight evidence indeed a mere statement to that effect in a witness statement and two emails each of three or four lines, one of which was plainly incomplete. That was quite insufficient to justify the finding that the former solicitors were to blame. The Court of Appeal also considered that the appellants should have been in difficulties on the second relief application because of the delay. Given that they made that application eight weeks after Hildyard J made his order and one day before the trial was due to begin, without any satisfactory explanation for the delay or last minute nature of the application (except for a change of solicitors), I see considerable force in that view. It is fair to the Deputy Judge to mention that he did not have approved transcripts of the judgments of Henderson J or Hildyard J, but he had a pretty clear note and summary of the latter judgment. It was incumbent on the appellants, who made the second relief application, to have obtained approved transcripts of those judgments: it was certainly no fault of the respondent that they were not available. It is also fair to the Deputy Judge to add that Mitchell and Denton were decided after he determined the second relief application. However, he was referred to Collier, which should have led him to the conclusion which the Court of Appeal reached. It should perhaps also be added that the respondent had adduced evidence before us, which had not been available to the Court of Appeal or the Deputy Judge, to support a contention that, if we had disagreed with the Court of Appeal, we should proceed to determine the second relief application on its merits and dismiss it. This evidence suggested that the appellants failure to produce the Companys bank accounts was indeed a serious failure, but it is unnecessary, indeed it would be inappropriate, to consider that aspect further. Conclusion Accordingly, I would dismiss this appeal. |
London suffered from serious rioting for four days from 6 to 9 August 2011. The rioters caused extensive damage to property. Property owners and insurers suffered significant losses. Several owners of uninsured property, including two of the respondents in this appeal, lost their businesses when they became insolvent as a result of those losses. Property owners and insurers, which had compensated their assureds, submitted claims for compensation from the appellant police authority (MOPC) under section 2 of the Riot (Damages) Act 1886 (the 1886 Act). The MOPC contested those claims initially on both liability to compensate and the quantification of loss. The liability of the MOPC to pay compensation is no longer in issue. The question is the quantification of the claims. This appeal raises a question of statutory construction. It is whether persons who suffer loss when rioters destroy their property can in principle obtain compensation for consequential losses, including loss of profits and loss of rent, under section 2 of the 1886 Act, and if so on what basis. Factual background This appeal is concerned with one riotous incident which occurred on the third night of the London riots. At about 11.40 pm on 8 August 2011 a gang of youths broke into the Sony DADC distribution warehouse, which is situated in a business park on Solar Way in Enfield. The youths stole goods from the warehouse and also threw petrol bombs which caused a fire. The fire destroyed the warehouse and the stock, plant and equipment within it. The insurers of Sony DADC, which were the lessees of the warehouse, the insurers of the freehold owner of the warehouse, and companies which were customers of Sony DADC and whose stock in the warehouse had been destroyed, made claims against the MOPC. The legal proceedings In the Commercial Court of the High Court, Flaux J had to decide two preliminary issues. The first issue concerned liability and was whether the warehouse had been destroyed by persons assembled together riotously and tumultuously within the meaning of section 2(1) of the 1886 Act. In his judgment dated 12 September 2013 Flaux J held that it had been. The Court of Appeal (Lord Dyson MR, Moore Bick and Lewison LJJ) in a judgment dated 20 May 2014 upheld that finding. The second preliminary issue is the subject matter of this appeal. Flaux J held that section 2 of the 1886 Act provided compensation only for physical damage and not for consequential losses. The Court of Appeal reversed that finding. It held that section 2(1) of the 1886 Act provided a right to compensation for all heads of loss, including consequential loss, proximately caused by physical damage to property for which the trespassing rioter is liable at common law, save to the extent that they are excluded by the statute. The MOPC appeals to this court against that finding. The Riot (Damages) Act 1886 Section 2(1) of the 1886 Act as amended provides: Where a house, shop, or building in a police area has been injured or destroyed, or the property therein has been injured, stolen, or destroyed, by any persons riotously and tumultuously assembled together, such compensation as hereinafter mentioned shall be paid out of the police fund of the area to any person who has sustained loss by such injury, stealing, or destruction; but in fixing the amount of such compensation regard shall be had to the conduct of the said person, whether as respects the precautions taken by him or as respects his being a party or accessory to such riotous or tumultuous assembly, or as regards any provocation offered to the persons assembled or otherwise. (emphasis added) I can cover the other relevant provisions of the 1886 Act briefly. Section 2(2) allows the insurer which has indemnified its assured in whole or in part to claim compensation. Section 3(1) provides: Claims for compensation under this Act shall be made to the compensation authority of the police area in which the injury, stealing, or destruction took place, and such compensation authority shall inquire into the truth thereof, and shall, if satisfied, fix such compensation as appears to them just. Section 3(2) empowers the Secretary of State to make regulations governing when, how and under what conditions claims for compensation are to be made under the Act and subsection (3) provides that the regulations are to be published in the London Gazette. The compensation authority does not have the final say on the fixing of compensation, as section 4 provides that an aggrieved claimant may bring an action against the authority to recover compensation. Section 6 provides that the Act applies to damage to or the destruction of machinery, plant and equipment used in manufacturing, agriculture and mining. Finally, section 7 identifies the appropriate claimants if a church or chapel, or school, hospital, public institution or public building is damaged or destroyed. The Court of Appeals judgment In support of its view that the 1886 Act provides for the recovery of consequential losses, the Court of Appeal began with a linguistic analysis of section 2(1). It pointed out that the words, which I have emphasised in para 7 above, compensated for loss sustained by such injury, stealing, or destruction. This was loss that was caused by (i) damage to or destruction of a building, or (ii) damage, destruction or stealing of property in the building. Such loss could as a matter of linguistic analysis include consequential losses, such as the loss of rent while an owner repaired his building. Secondly, the other provisions in the 1886 Act, including the now repealed preamble (which I discuss in para 31 below), did not militate against this view. Case law on predecessor legislation suggested that remedial statutes should be given a liberal interpretation. Thirdly, that case law, which I discuss in paras 20 to 23 below, also suggested a principle that the relevant community, which was then the hundred, stood as sureties for the trespassers. There was no reason to think that a rioter would not have been liable in tort for consequential losses before Parliament legislated in 1714. Thus the local authority incurred such liability under statute. The 1886 Act did not depart from what the Court of Appeal described as the fundamental standing as sureties principle. Fourthly, the court rejected any reliance on the regulations which the Secretary of State promulgated in the London Gazette in 1886 as an aid to the interpretation of the 1886 Act. Fifthly, the court rejected for lack of evidence a submission on behalf of the MOPC that there was a settled practice of interpreting the 1886 Act as excluding compensation for consequential losses. Sixthly, the court considered that there was an anomaly if the 1886 Act did not cover consequential loss. An owner of a commercial building which was damaged in a riot might choose to sell it in a damaged state and claim as his compensation the diminution in value caused by the physical damage. Where a building was valued by reference to its capacity to generate income, part of that diminution in value could be attributable to loss of rent or loss of profits that the purchaser would suffer pending the completion of remedial works. By contrast, if an owner decided to repair the building and suffered a loss of rent or a loss of profits while the remedial works were carried out, he could not recover such losses if the 1886 Act did not extend to consequential losses. The court said that there was no rational basis for imputing to Parliament an intention to allow recovery for such losses as part of a claim for diminution of value but to exclude a free standing claim for losses of the same character. Seventhly and finally, the court derived no assistance from parallel Scottish legislation, namely section 10 of the Riotous Assemblies (Scotland) Act 1822 (3 Geo IV, c 33) because of its use of different language. The MOPCs challenge and the respondents answer Lord Pannick QC for the MOPC submitted that Flaux J had reached the correct conclusion on the interpretation of section 2 of the 1886 Act and that his order on this point should be restored. In support of his contention he relied on what he called the purpose and the plain meaning of the words in section 2(1) and also on sections 3 and 7 and the repealed preamble of the 1886 Act. He also relied as a contemporaneous exposition of meaning on the first regulations under the 1886 Act which the Home Secretary promulgated on 28 July 1886. He departed from the argument of settled practice which had been included in his written case, accepting that evidence of such practice had not been adduced. But he submitted that the historical background to the 1886 Act and in particular the history of prior legislation and judicial pronouncements on that legislation supported the view that the legislation from the outset was a self contained statutory scheme for compensation which was not co extensive with the tortious liability of the trespasser. In the prior legislation the compensation was limited to physical damage to the premises or property in it. The 1886 Act did not materially alter the nature of that compensation scheme. Mr Michael Crane QC for the first to third respondents presented the issue for this court as being whether the 1886 Act excludes in principle a head of loss caused by physical damage to property inflicted by rioters and otherwise compensable under the English law of tort. In advocating a negative answer to that question, he submitted that the words of the 1886 Act contained no such limitation and that the history of the legislation since the 1714 Riot Act (1 Geo I, c 5) was consistent with the ancient notion that the inhabitants of the hundred stood surety for the good behaviour of their fellow subjects. The principle was that the liability in damages of the rioter should be transferred to the hundred. That principle survived the transfer by the 1886 Act of that liability from the hundred to the police authority. The 1886 Act contained no clear language to limit the liability of the police authority by excluding the recovery of consequential loss. In short, the history of the legislation showed that the heads of loss recoverable from time to time in an action against the trespasser were recoverable as a matter of strict liability initially from the hundred and since 1886 from the police authority. The Court of Appeal had been correct in concluding that the police authority stood in the shoes of the trespasser save to the extent that the 1886 Act provided otherwise. The appropriate analogy in construing the 1886 Act was with a strict liability in tort, arising from the failure of the police to maintain law and order. He founded his argument also on the anomaly which had carried weight in the judgment of the Court of Appeal (its sixth reason which I have summarised in para 10 above). Mr Simon Pritchard for the fourth and fifth respondents, which had been trading companies, made submissions adopting and supporting those of Mr Crane. He also explained that those respondents were in large part uninsured and that Sony DADCs liability as bailee had been restricted by contract to the manufacturing replacement cost of damaged stock. Their inability to recover the market value of their stock and their lost profits had precipitated their insolvency. Discussion The appeal, as I have said, raises a question of statutory construction. While the arguments have been wide ranging, the resolution of the dispute is to be found in the words of the 1886 Act, interpreted against the backdrop of the prior legislative history. In my view this is a case in which history rather than legal theory casts light, revealing the correct answer. Linguistic analysis of the relevant provisions of the 1886 Act by itself does not provide a clear cut answer. Section 2(1) speaks of compensation for loss by the injury or destruction of a building or the injury, stealing or destruction of property within the building. Those statutory words do not disclose whether the loss which the claimant has sustained by the destruction etc of his property is simply the damage to the property, to be compensated by payment of the cost of repair or the diminution in value of the building or other property, or extends to consequential loss, such as the loss of rent or loss of profit which the claimant would have derived from the property. Section 6 of the 1886 Act provides that compensation will be payable in the same way for the injury or destruction of manufacturing or agricultural machinery and fixtures and for equipment in a mine or quarry. By providing that the Act will apply in like manner to such property, it casts no light on the scope of section 2. What is striking, however, is that the 1886 Act does not expressly provide compensation for either (a) personal injury caused by rioters and resulting medical expenditure or (b) damage to property in the streets such as a parked car. We were referred to no jurisprudence to support the view that such losses could be claimed under the 1886 Act even where they resulted from damage to or the collapse of a building. On any view, therefore, the Act provides only partial compensation for damage caused by rioters. Further, those limitations show that it is not correct to interpret the words sustained loss by such destruction as creating an unqualified causal test to which the normal rules of causation in tort can readily be applied. I do not find the other provisions of the 1886 Act to be of any assistance in addressing the disputed question. Section 3 requires the compensation authority of the police area to fix such compensation as appears to them just, while section 4 allows persons who are aggrieved by the decision of the compensation authority to raise an action against it in order to obtain a judicial determination of their claims. Section 7 identifies who may be the claimants for damage to a church, chapel, school, hospital, public institution or public building by deeming them to have sustained loss from such injury, stealing, or destruction. It goes on to state that claims may be made in relation both to the building and to the property therein. I do not interpret its speaking of loss from destruction etc as altering the test in section 2. Nor do I construe the phrase in relation both to the building as casting light on the scope of the claims that may be made in relation to a building. Such light comes in my view from the interpretation of the 1886 Act in the context of the prior legislative history since 1714, to which I now turn. Parliament first provided for compensation for riot damage in 1714 in response to the public disorder which followed the succession to the throne of Great Britain of George, the Elector of Hanover, as George I. Section 1 of the Riot Act 1714 made it a felony punishable by death for an unlawful assembly of 12 or more persons to fail to disperse after a justice of the peace or other specified official had read a proclamation commanding them to do so. The procedure, which was a precondition of the felony, became popularly known as reading the Riot Act. Section 4 made it a felony punishable by death for rioters to demolish or pull down buildings for religious worship, dwelling houses and farm buildings. Section 6, provided that when rioters had demolished or pulled down all or part of such buildings, the inhabitants of the hundred in which such damage shall be done, shall be liable to yield damages to the person or persons injured and damaged by such demolishing or pulling down wholly or in part The 1714 Act did not specify the scope of the damages to be paid by the local community. Cases, which followed later riots, enabled judges to give some guidance. In Ratcliffe v Eden (1776) 2 Cowp 485 (98 ER 1200), which followed upon a riot by sailors in Liverpool, the Court of Kings Bench was concerned with the question of whether the victim of a riot could recover compensation not only for the damage to his house but for also the destruction of the furniture and household goods within his house. The hundred argued that the victim could not recover for the furniture and goods as their destruction was a separate and independent act from the damage to the house. The court rejected this defence. Lord Mansfield (at p 488) explained that the 1714 Act had altered the nature of the offence; rioters were no longer trespassers but felons and were to be hanged. Before the Act the trespassers would have been liable in damages. Under the Act the inhabitants of the hundred instead were liable in damages and this was an inducement to them to perform their duty of preventing or suppressing riots. He stated: This is the great principle of the law, that the inhabitants shall be in the nature of sureties for one another. It is a very ancient principle; as old as the institution of the decennaries by Alfred, whereby the whole neighbourhood or tithing of freemen were mutual pledges for each others good behaviour. The same principle obtains in the Statutes of Hue and Cry. It is the principle here. As the destruction of the furniture and goods occurred at the same time as the damage to the house, it was part of the demolition of the house just as it would be if the pulling down of the house crushed the furniture. Ashhurst J took the same view. Aston J advocated a liberal interpretation, at p 489: The object and principle of this Act was, to transfer the damages occasioned by the trespass, from the rioters to the hundred; to make it felony in the offenders themselves, and to put the party injured in the same state as before. It is a remedial law, and ought to be extended. Other cases followed the anti Catholic Gordon Riots in London in June 1780, which caused extensive damage and destruction of property, including Lord Mansfields house in Bloomsbury Square. In Hyde v Cogan (1781) 2 Doug 699 (99 ER 445) the court again considered whether the hundred was liable for the destruction of furniture in a house as well as the demolition of the house. In this case the argument advanced on behalf of the hundred was that the 1714 Act was penal against both the trespasser and the hundred and ought to be interpreted narrowly. Lord Mansfield, although present, declined to express an opinion, leaving Willes, Ashhurst and Buller JJ to decide the case. The judges rejected the contention that section 6, which provided for the compensation, was penal and held that it was remedial; Buller J said that, as a result, it should be interpreted liberally. In that bygone age when, according to Willes J, the furniture in a London house might be worth twice as much as the house itself, that liberal interpretation brought household goods within the scope of the statutory compensation scheme. The court also had before it a note of the judgment of Lord Loughborough in the Court of Common Pleas in the case of Wilmot v Horton, which had been decided earlier in the same year. In that case Lord Loughborough gave both the remedial nature of the Act and its substitution of the liability of the hundred for that of the offender as the reasons for allowing the recovery of compensation for the destruction of furniture within the house. In Mason v Sainsbury (1782) 3 Doug 61 (99 ER 538) the question was whether insurers, who had indemnified the owner for the damage to his house in those riots, could maintain an action in the name of the assured against the hundred under the 1714 Act. In answering the question affirmatively, the Court of Kings Bench again explained that the Act put the hundred in the place of the trespassers. Lord Mansfield stated (at p 64): the Act puts the hundred, for civil purposes, in the place of the trespassers; and upon principles of policy, as in the case of other remedies against the hundred, I am satisfied that it is to be considered as if the insurers had not paid a farthing. In London Assurance Co v Sainsbury (1783) 3 Doug 245 (99 ER 636) the court held that insurers could not sue the hundred in their own names and overturned the award of damages by a jury. Mr Crane pointed out that the jury had awarded damages on the buildings, rent, and stock in trade, in both houses and furniture (emphasis added). Indeed it did; but its judgment was reversed on other grounds and this court was referred to no other case in which the courts have allowed recovery for anything other than physical damage to property. Moving on over two centuries, in Yarls Wood Immigration Ltd v Bedfordshire Police Authority [2010] QB 698 Rix LJ at para 54 described the rationalisation of the liability of the hundred and now the police authority in these terms: It seems to me that what Lord Mansfield had to say about that question, so much closer to the origin of the first Riot Act 1714, still retains pertinence, expressing as it does the common sense of the matter. It is for the sake of the party whose property has been damaged, it is to encourage the inhabitants (now the police force) of the locality, but including the party injured himself, all to assist in the preservation of the peace, it is to share the burden both of keeping the peace and of the misfortune of loss or injury. Moreover, as is so often the case with strict liability, it is because those who are liable to compensate are also regarded by the law as standing in the shoes of the wrongdoers themselves (as, for instance, in the case of the vicariously liable), in part because their obligation, their strict obligation, is to prevent what has happened happening. I recognise the force of the respondents emphasis on the statements of principle that the community (and now the police force) stood as sureties for the wrongdoer. But, for the following three reasons, I do not accept that the rationalisation can bear the weight that the respondents seek to place on it. First, while the 1714 Act imposed on the hundred the obligation to compensate only for loss occasioned by the destruction of, or damage to, buildings, which the case law to which I have referred extended to furniture and household goods, the prior law of hue and cry imposed no such restriction. The obligation on the community to raise hue and cry (hutesium et clamor) when encountering an offender dates back to before the Norman Conquest, as Lord Mansfield said. For example, John Hudson, The Oxford History of the Laws of England, (2012) vol 2, p 171, refers to a statute of King Cnut (II Cn, c 29) imposing the obligation on someone who failed to raise hue and cry to make amends at the rate of the thiefs wergeld, in other words to pay compensation to the victim. Historically, wergild and bot, which had been features of law in England since at the latest the reign of the Kentish king, Aethelbert, in the late sixth and early seventh centuries, extended to payment of compensation for injuries or death and continued as part of the legal scene after the Norman Conquest at least into the 12th century, and afterwards in out of court settlements: Professor Anthony Musson, Wergeld: Crime and the compensation culture in medieval England, www.gresham.ac.uk. Codes were made from time to time establishing fixed values for specified types of injury and damage. The Statute of Winchester of 1285 (13 Edw I) made the hundred answerable for any theft or robbery if it failed to apprehend and deliver up the offender. Pollock and Maitland, The History of English Law before the Time of Edward I (1898) vol 1, pp 648 649, describe this as a form of joint and several liability to the victim. The Statute of Hue and Cry 1584 1585, to which reference was made in section 6 of the 1714 Act, allowed the victim to prosecute the hundred by way of special action on the case for damages where the offender was not apprehended. It also set up a system by which a Justice of the Peace and constables could recover the damages from the inhabitants of the hundred and pay the victims, thereby sharing the burden within the community. Secondly, while under the 1714 Act the hundred incurred strict liability for the riot, the prior hue and cry legislation allowed the community to escape liability if hue and cry were raised and the offenders caught. Under the older law, therefore, the hundred were not sureties for the offender unless they failed to apprehend him. It may have been the intention of Parliament that because the 1714 Act made riot a felony punishable by death, with the result that the offender would not be around to pay compensation and as, like other felons, his assets would be forfeited to the Crown, the injured party should have a right of compensation against the hundred in substitution for his action of trespass. Be that as it may, it is clear that the principle on which the respondents founded could vary in its application. Thirdly, and to my mind most importantly, the legislative history after 1714 undermines the respondents reliance on the general principle in the interpretation of the 1886 Act. The toughening of the criminal law which the 1714 Act represented was extended by the notorious Criminal Law Act 1722 (9 Geo I, c 22), commonly known as the Black Act. This introduced many new statutory felonies in response to the activities of poaching gangs (known as blacks because they blackened their faces) after the economic downturn caused by the South Sea Bubble. Section 7 of the Black Act provided for compensation from the hundred for the damages sustained by the killing and maiming of cattle, the cutting down of trees and the destruction of agricultural buildings and equipment. In the Malicious Injury Act 1769 (9 Geo III, c 29), in order to remove uncertainties as to the scope of the 1714 Act, Parliament made it a felony for any rioter to demolish, destroy or damage any mills or specified engines and equipment used in the mining industry or fences made for enclosing land by virtue of Acts of Parliament. Compensation for damage by rioters to mills and to works associated with mills was introduced by the Compensation for Injuries to Mills etc Act 1801 (41 Geo III, c 24). In response to the developing industrial revolution, Parliament enacted the Malicious Damage Act 1812 (52 Geo III, c 130) which extended the compensation regime to protect industrial buildings and equipment by creating statutory felonies of (a) maliciously setting fire to commercial and industrial buildings and engines and (b) demolishing or beginning to demolish such buildings and equipment in the course of a riot. Section 3 of the Act provided that persons injured by the damage caused by rioters (in (b) above) were empowered to recover the value of such erection, building or engine, and of the machinery belonging thereto, or used therein, which shall be destroyed in such demolishing as aforesaid, or the amount of the damage which may be done to any such erection, building or engine or machinery aforesaid, in such tumultuous and riotous demolishing in part as aforesaid Section 2 of the Malicious Damage Act 1816 (56 Geo III, c 125) provided for compensation for destruction or damage by rioters of equipment used in the mines and collieries. Like the 1812 Act above it empowered the claimants to recover the value of such property. Section 38 of the Seditious Meetings Act 1817 (57 Geo III, c 19) imposed on the inhabitants of the hundred the liability to pay full compensation for the destruction of or damage or injury to any house, shop, or other building whatever or for the destruction, taking away or damage of any fixtures thereto attached, or any furniture, goods, or commodities in those buildings in the course of a riot. Thereby it gave statutory effect to the 18th century decisions which included furniture and household goods within the scope of the compensatory regime of the 1714 Act. The Riotous Assemblies Act 1822 (3 Geo IV, c 33) introduced separate provisions for compensation in England and Wales on the one hand and Scotland on the other. Section 1 of the Act prohibited the raising of proceedings against the hundred under the legislation mentioned above if the damage sustained in the riot did not exceed 30. Section 10, which established a new compensation regime for Scotland, survived the repeal of the English provisions by the Act which I discuss next. The Remedies against the Hundred (England) Act 1827 (7 & 8 Geo IV, c 31) is particularly important as it amended and consolidated the prior legislation and as it remained in force until repealed by the 1886 Act. Section 2 provided for compensation for the demolition or destruction in whole or in part of a wide range of buildings and industrial machinery, requiring the hundred to yield full compensation to the person or persons damnified by the offence, not only for any damage so done to any of the subjects hereinbefore enumerated, but also for any damage which may at the same time be done by any such offenders to any fixture, furniture, or goods whatever, in any such church, chapel, house, or other of the buildings or erections aforesaid. In my view this wording of the 1827 Act, like the 1812 Act and the 1816 Act before it, makes it clear that the statutory compensation was confined to physical damage to property. repealed preamble stated: I can detect nothing in the 1886 Act which removed that limitation. The now Whereas by law the inhabitants of the hundred or other area in which property is damaged by persons riotously and tumultuously assembled together are liable in certain cases to pay compensation for such damage, and it is expedient to make other provision respecting such compensation and the mode of recovering the same. (emphasis added) There was no suggestion in the preamble of any intention to alter the basis on which compensation would be paid. The 1886 Act made the following principal changes to the arrangements for statutory compensation: (i) As a result of changes in local government, it transferred liability to pay compensation from the hundred to the police authority (section 2(1)); (ii) The Secretary of State became responsible for creating and regulating the procedure by which claims could be made, the conditions for those claims and the circumstances in which they might be rejected (section 3(2)); (iii) The police authority was charged with inquiring into the claims and fixing compensation as appeared to it to be just (section 3(1)); (iv) The police authority was directed to have regard to the conduct of the claimant, such as any provocation of the rioters or failure to take proper precautions to protect his property, when deciding what compensation was due (section 2(1)); (v) Compensation was payable not only if a building or property inside it had been destroyed or damaged by rioters but also if property in the building had been stolen by them (section 2(1)); (vi) Insurers were given a right to claim compensation in their own names and the right of the insured person who had received insurance payments was correspondingly reduced (section 2(2)); and (vii) A claimant who was dissatisfied with the police authoritys decision could commence an action in the courts to recover compensation, which could not exceed the amount claimed from the police authority (section 4(1)). None of the provisions suggested any intention to extend the measure of compensation beyond physical damage to property. In my view it is not correct to use a judicial rationalisation of a statutory scheme to override the words which Parliament has used. From 1714 to this day, the community, whether in the form of the hundred or the police authority, has not stood in the shoes of the offender for all purposes of compensation. As I have said (in para 16 above) the statutory provisions have given only partial compensation for the loss, injury and damage which a person may suffer as a result of rioting. I see no reason for inferring that Parliament intended that the statutory compensation should extend beyond the cost of repairing physical damage to property. When regard is had to the words of the statute, in the context of the prior legislative history, there is no reason to think that Parliament ever intended that the compensation scheme should mirror the offenders liability in tort or that its scope should develop as the law of damages for tort developed. While the adoption of a liberal interpretation, as enjoined by the 18th century case law, justified the inclusion of furniture and household goods within the scheme if they were damaged as a result of the demolition of the building or at the same time in the course of the same riot, it cannot alter the nature of the compensation scheme. In summary, I consider that the words of the 1886 Act should be construed in the light of the prior legislation. The 1714 Act used open textured wording, requiring the payment of damages to persons injured or damaged by the demolition of their houses. The courts liberal interpretation extended the hundreds liability to cover physical damage to household goods and furniture but no further. This limited extension was incorporated into the 1817 Act. Over time, statutory innovations extended the scope of the compensation to cover agricultural buildings, mills, commercial and industrial buildings, the contents of those buildings, and mines and collieries. There is nothing in the wording of the 1886 Act that supports an intention to extend the scope of the compensation to cover consequential loss. Several provisions suggest a contrary intention. I refer in particular to the absence of compensation for personal injury, or for injury to property other than buildings and their contents, together with the unusual provision for compensation to be reduced according to very broad assessments of the conduct of the claimant. Together, they support the conclusion that the 1886 Act, like its predecessors, created a self contained statutory scheme which did not mirror the common law of tort. Further, I do not accept that there is any anomaly in this interpretation. A claim for loss of rent or loss of profits in addition to the cost of restoring or replacing a building is different from an estimation of the diminution in value of a commercial building, in which the valuation of the undamaged building had regard to its income earning potential. They are different heads of loss. A claim for the diminution in value of the building is a measure of the compensation available for the damage to the building itself, for example if the owner chooses to sell the damaged building instead of restoring it. If that diminution in value is greater than the cost of the restoration of the building, the claim will normally be capped at the latter figure. Even if there were an anomaly, that would not entitle the court to refuse to give effect to the words of the statute. In the debate in this appeal counsel speculated on when the common law first recognised a claim for consequential loss. This court was referred to The Kate [1899] P 165, an Admiralty case concerning the collision of two vessels. The court held that the proper measure of damages was the value of the lost vessel at the end of the voyage and also the profits lost under the charter party. In his judgment, the President, Sir F H Jeune, supported that conclusion by referring to The Columbus (1849) 3 Wm Rob 158. In the absence of further citation of authority, I am prepared to assume that by 1886 the common law of damages for tort would in principle include a claim for lost rent or lost profits arising from damage to a building. But that does not assist the respondents unless they could establish that the 1886 Act was intended to mirror the common law. Mr Crane also referred to Bedfordshire Police Authority v Constable [2009] 2 All ER (Comm) 200, in which the Court of Appeal addressed the question whether a police authoritys liability under the 1886 Act for the damage to property caused by a riot in an immigration detention centre was covered by its insurance contract, which gave an indemnity in respect of all sums which the assured may become legally liable to pay as damages. The court, in the leading judgment of Longmore LJ, held that it was because the police authority was notionally in breach of its responsibility for preservation of law and order (paras 24 26). I have no difficulty with that conclusion, which is consistent with the thinking behind the medieval practice of hue and cry. But it falls far short of equating the statutory scheme with the wrongdoers civil liability in tort. I can deal with the other submissions relatively briefly. First, in reaching my conclusion on the meaning of the 1886 Act I do not rely on the 1886 regulations which the Secretary of State promulgated in the London Gazette as an aid to the interpretation of the Act. The regulations were not laid before Parliament. But that of itself, while affecting their weight, would not exclude them from consideration as a guide to statutory meaning in accordance with Lord Lowrys guidance in Hanlon v The Law Society [1981] AC 124, 193G 194G. They are consistent with the view which I have reached of the meaning of the Act by other means and might have been an important adminicle of evidence if the MOPC had produced evidence in support of a case of settled practice. Secondly, section 10 of the Riotous Assemblies (Scotland) Act 1822 (3 Geo IV, c 33), formerly part of the Riotous Assemblies Act 1822 which I mentioned in para 29 above, gives only limited support to my view. Although my conclusion about the 1886 Act tallies with that reached by Temporary Judge, Morag Wise QC, in her opinion on the Scottish provision in the 1822 Act in Board of Managers of St Marys Kenmure v East Dunbartonshire Council 2013 SLT 285, there are, as she recognised, minor differences between the wording of the Scottish provision and that of both the English provisions in the 1822 Act and the 1886 Act, which might have supported a different interpretation of the English provisions. In any event, I do not need to rely on the Scottish provision in reaching my clear view on the meaning of the 1886 Act. Thirdly, the MOPC advances an argument of public policy. The argument runs thus. The common law does not impose a duty of care on the police to prevent a third party injuring a person or damaging property: Michael v Chief Constable of South Wales Police [2015] AC 1732. The strict liability of the police under the 1886 Act is an exception to the common law principle of no liability. Therefore the court should be slow to widen the liability imposed by the Act. I am not persuaded by this argument. In my view, it is difficult to use the public policy of the common law as an interpretative tool because the statutory compensation has never sought to mirror the common law, but has created a self contained regime for compensation for property damage caused by rioters. Conclusion For these reasons I would allow the appeal. |
This appeal is primarily concerned with the circumstances in which an employer is vicariously liable for the conduct of its employees, and provides the court with an opportunity to address the misunderstandings which have arisen since its decision in the case of Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11; [2016] AC 677. It also raises an important question about the Data Protection Act 1998 (the DPA). The facts The appellant, Morrisons, is a company which operates a chain of supermarkets. The respondents are 9,263 of its employees or former employees. I shall refer to them as the claimants. Personal information about them was published on the Internet by another of Morrisons employees, Mr Andrew Skelton. At the material time, Skelton was a senior auditor in Morrisons internal audit team. In July 2013 he was subject to disciplinary proceedings for minor misconduct and was given a verbal warning. Following those proceedings, he harboured an irrational grudge against Morrisons, which led him to make the disclosures in question. Morrisons accounts are subject to an annual external audit. In preparation for the audit, on 1 November 2013 the auditors, KPMG, requested payroll data from Morrisons in order to test their accuracy. The head of Morrisons internal audit team delegated the task of collating and transmitting the data to Skelton. He had also performed that task in 2012. To enable him to carry out the task, he was given access to the payroll data relating to the whole of Morrisons workforce: around 126,000 employees. These consisted of the name, address, gender, date of birth, phone numbers, national insurance number, bank sorting code, bank account number and salary of each member of staff. On 9 October 2013 Skelton had searched, using his work computer, for Tor, a software which is capable of disguising the identity of a computer which has accessed the Internet. On 7 November he made an internal request for the payroll data. On 14 November he obtained a pay as you go mobile phone, which could not be traced back to him. On 15 November 2013 the payroll data was provided to Skelton so that he could carry out his task. On a date between then and 21 November, he transmitted the data to KPMG as he had been instructed to do. On 18 November, he surreptitiously copied the data from his work laptop on to a personal USB stick. On 8 December he used the username and date of birth of a fellow employee, Mr Andrew Kenyon, to create a false email account, in a deliberate attempt to frame him. Mr Kenyon had been involved in the disciplinary proceedings earlier that year. The email account was linked to the pay as you go phone. He then deleted the data from his work laptop. On 12 January 2014 Skelton uploaded a file containing the data of 98,998 of the employees to a publicly accessible file sharing website, with links to the data posted on other websites (the disclosure). The file was created from the personal copy of the data which he had made on his USB stick on 18 November. He made the disclosure when he was at home, using the mobile phone, the false email account and Tor. Having made the disclosure, he deactivated the email account, and on 12 March deleted the data and the file from the USB stick. On 13 March 2014, the day on which Morrisons financial results were due to be announced, Skelton sent CDs containing the file anonymously to three UK newspapers. He purported to be a concerned member of the public who had found the file on the file sharing website. The newspapers did not publish the data. Instead, one of them alerted Morrisons. Within a few hours, Morrisons had taken steps to ensure that the data was removed from the Internet, instigated internal investigations, and informed the police. It also informed its employees and undertook measures to protect their identities. Skelton was arrested a few days later. He was subsequently convicted of a number of offences and sentenced to eight years imprisonment. It was noted that Morrisons had spent more than 2.26m in dealing with the immediate aftermath of the disclosure. A significant element of that sum was spent on identity protection measures for its employees. The proceedings below The claimants brought proceedings against Morrisons for its own alleged breach of the statutory duty created by section 4(4) of the DPA, misuse of private information, and breach of confidence. The claims are also brought on the basis that Morrisons is vicariously liable for Skeltons conduct. The particulars of claim do not specify the respects in which that conduct is alleged to have been wrongful on his part, but the claimants argument before the judge was that vicarious liability arose under the same three heads: breach of the DPA, misuse of private information and breach of confidence. The claims are for damages in respect of alleged distress, anxiety, upset and damage. The High Court made a group litigation order in connection with the claims. Ten lead claimants were selected, with the remainder of the claims being stayed pending judgment. The claimants solicitors have provided details of the circumstances of each of the lead claimants, so far as considered relevant to the quantification of damages. These describe how the disclosure caused the claimants to experience feelings of anxiety and anger. The trial of liability was separated from the trial of quantum, which has not yet taken place. The trial judge, Langstaff J, rejected the contention that Morrisons was under a primary liability in any of the respects alleged, but held that it was vicariously liable for Skeltons breach of statutory duty under the DPA, his misuse of private information, and his breach of his duty of confidence: [2017] EWHC 3113 (QB); [2019] QB 772. He rejected Morrisons argument that vicarious liability could not attach to a breach of the DPA by Skelton as the data controller of the data copied on to his USB stick and subsequently disclosed by him, holding that the object of Directive 95/46/EC of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (the Directive), transposed by the DPA, was the protection of data subjects, and that if vicarious liability did not apply, the purpose of the Directive would be defeated. He also rejected Morrisons argument that the DPA excluded vicarious liability for misuse of private information or breach of confidence, holding that since the purpose of the Directive, and therefore of the DPA, was the protection of data subjects, it should be treated as providing additional protection rather than as replacing such protection as already existed under domestic law. Finally, he rejected Morrisons argument that Skeltons wrongful conduct was not committed in the course of his employment, holding that Morrisons had provided him with the data in order for him to carry out the task assigned to him, and that what had happened thereafter was a seamless and continuous sequence of events an unbroken chain (para 184). That language was taken from the judgment of Lord Toulson in Mohamud ([2016] AC 677, para 47). He added that Morrisons trusted Skelton to deal with confidential information, and took the risk that it might be wrong in placing that trust in him. His role in respect of the payroll data was to receive and store it, and to disclose it to a third party. That in essence was his task: the fact that he disclosed it to others than KPMG was not authorised, but was nonetheless closely related to what he was tasked to do. The five factors listed by Lord Phillips in Various Claimants v Catholic Child Welfare Society [2012] UKSC 56; [2013] 2 AC 1, para 35, were all present. The judge concluded ([2019] QB 772, para 195): Adopting the broad and evaluative approach encouraged by Lord Toulson JSC in Mohamuds case [2016] AC 677 I have therefore come to the conclusion that there is a sufficient connection between the position in which Skelton was employed and his wrongful conduct, put into the position of handling and disclosing the data as he was by Morrisons (albeit it was meant to be to KPMG alone), to make it right for Morrisons to be held liable under the principle of social justice which goes back to Holt CJ. The latter quotation was taken from Lord Toulsons judgment in Mohamud, para 45. Morrisons appeal to the Court of Appeal (Sir Terence Etherton MR, Bean and Flaux LJJ) was dismissed: [2018] EWCA Civ 2339; [2019] QB 772. The court stated at para 37 that there was no pleaded claim against Morrisons on the ground of vicarious liability for Skeltons breach of the DPA. It was conceded that the causes of action for misuse of private information and for breach of confidence were not excluded by the DPA. The court considered that there was nothing in the DPA which excluded vicarious liability for such conduct. In relation to the question whether, on the facts, Morrisons were vicariously liable for Skeltons wrongdoing, the court found at para 72 that [t]he tortious acts of Mr Skelton in sending the claimants data to third parties were in our view within the field of activities assigned to him by Morrisons. Like the judge, the court also emphasised at para 74 that the relevant facts constituted a seamless and continuous sequence or unbroken chain of events. Although it was an unusual feature of the case that Skeltons motive in committing the wrongdoing was to harm his employer, Lord Toulson had said in Mohamud that motive was irrelevant. The court therefore agreed with the judge that Morrisons was vicariously liable for Skeltons wrongdoing. Notwithstanding the pleading point raised by the Court of Appeal, the issues in the present appeal are agreed to be the following: (1) Whether Morrisons is vicariously liable for Skeltons conduct. (2) If the answer to (1) is in the affirmative: (a) Whether the DPA excludes the imposition of vicarious liability for statutory torts committed by an employee data controller under the DPA. (b) Whether the DPA excludes the imposition of vicarious liability for misuse of private information and breach of confidence. I shall consider the issues in that order. (1) Whether Morrisons is vicariously liable for Skeltons conduct The Mohamud decision The courts below applied what they understood to be the reasoning of Lord Toulson in Mohamud [2016] AC 677. They treated as critical, in particular, his reference in para 45 of his judgment to the principle of social justice which goes back to Holt CJ, his references in para 47 to the connection between the employees conduct in that case and his employment (an unbroken sequence of events, or a seamless episode), which they appear to have regarded as referring to an unbroken temporal or causal chain of events, and his statement in para 48 that Mr Khans motive is irrelevant, Mr Khan being the employee whose conduct was in question in that case. The resultant approach, if correct, would constitute a major change in the law. Lord Toulsons judgment was not intended to effect a change in the law of vicarious liability: quite the contrary. That becomes clear if the judgment is read as a whole, as I shall explain. The judgments below focused on the final paragraphs, in which Lord Toulson summarised long established principles in the simplest terms and applied them to the facts of the case then before the court. A few phrases in those paragraphs, taken out of context, were treated as establishing legal principles: principles which would represent a departure from the precedents which Lord Toulson was expressly following. The question which arose on the facts of Mohamud was whether the employer of a petrol station attendant was liable for an assault which the attendant had perpetrated on a motorist. The motorist went into the sales kiosk and asked if some documents could be printed. The attendant, Mr Khan, refused the request and ordered the motorist to leave, using racist and threatening language, then followed the motorist back to his car, opened the door and ordered him never to come back, again using threatening language. When the motorist told Mr Khan to close the door, Mr Khan assaulted him. The judge dismissed a claim against the employer on the ground that Mr Khans actions were beyond the scope of his employment. An appeal against that decision was dismissed by the Court of Appeal ([2014] EWCA Civ 116; [2014] 2 All ER 990). The argument in the appeal to this court was that the test of vicarious liability should be broadened so as to turn, in the case of a tort committed by an employee, on whether a reasonable observer would have considered the employee to be acting in the capacity of a representative of the employer at the time of committing the tort. The court rejected that argument, holding that the established test remained good without need of further refinement. Applying the established test, however, the court allowed the appeal on the facts of the case. In his judgment, with which the other members of the court agreed, Lord Toulson described the origins and development of vicarious liability, explaining, amongst other matters, the influential role which Sir John Holt CJ had played during the late 17th and early 18th centuries, when the doctrine was broadened in response to the expansion of commerce and industry. The Chief Justice had explained the doctrine as resting on the principle that, where an employer employed the wrongdoer, and the employee committed a wrongful act against the claimant within the area of the authority given to him, it was fairer that the employer should suffer for the wrongdoing than the person who was wronged. Lord Toulson went on to refer to the familiar formula introduced by Sir John Salmond in the first edition of Salmond on Torts (1907), pp 83 84, and repeated in later editions, which defined a wrongful act by a servant in the course of his employment as either (a) a wrongful act authorised by the master or (b) a wrongful and unauthorised mode of doing some act authorised by the master, with the amplification that a master is liable for acts which he has not authorised if they are so connected with acts which he has authorised, that they may rightly be regarded as modes although improper modes of doing them (Lord Toulsons emphasis: [2016] AC 677, para 25). Lord Toulson explained that, although Salmonds formula was applied in many cases over the course of the 20th century, it was not universally satisfactory, particularly in cases concerned with deliberate acts of misconduct. As Lord Toulson explained, the Salmond formulation was stretched to breaking point in Lister v Hesley Hall Ltd [2001] UKHL 22; [2002] 1 AC 215, which concerned the sexual abuse of children by the warden of a school boarding house. Even on its most elastic interpretation, the sexual abuse of children could not be described as a mode, albeit an improper mode, of caring for them. Lord Steyn (with whom Lord Hutton and Lord Hobhouse of Woodborough agreed) said that it was not necessary to ask whether the acts of sexual abuse were modes of doing authorised acts. He posed the broader question whether the warden's torts were so closely connected with his employment that it would be just to hold his employers liable. He concluded that they were, stating at para 28 that the sexual abuse was inextricably interwoven with the carrying out by the warden of his duties. Lord Millett, in a passage in his speech which proved to be influential in later cases, suggested at para 69 that the Salmond formulation could be adapted to impose vicarious liability where the unauthorised acts of the employee are so closely connected with acts which the employer has authorised that they may properly be regarded as being within the scope of his employment. The close connection approach to vicarious liability was considered again by the House of Lords in Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366, a case of commercial fraud committed by one of the partners in a firm. In a passage which is of particular importance, and which Lord Toulson cited in Mohamud, at para 41, Lord Nicholls of Birkenhead (with whom Lord Slynn and Lord Hutton agreed) said: 22. it is a fact of life, and therefore to be expected by those who carry on businesses, that sometimes their agents may exceed the bounds of their authority or even defy express instructions. It is fair to allocate risk of losses thus arising to the businesses rather than leave those wronged with the sole remedy, of doubtful value, against the individual employee who committed the wrong. To this end, the law has given the concept of ordinary course of employment an extended scope. If, then, authority is not the touchstone, what is? Perhaps the best general answer is that the wrongful conduct must be so closely connected with acts the partner or employee was authorised to do that, for the purpose of the liability of the firm or the employer to third parties, the wrongful conduct may fairly and properly be regarded as done by the partner while acting in the ordinary course of the firms business or the employees employment. Lord Millett said as much in Lister v Hesley Hall Ltd 25. This close connection test focuses attention in the right direction. But it affords no guidance on the type or degree of connection which will normally be regarded as sufficiently close to prompt the legal conclusion that the risk of the wrongful act occurring, and any loss flowing from the wrongful act, should fall on the firm or employer rather than the third party who was wronged 26. This lack of precision is inevitable, given the infinite range of circumstances where the issue arises. The crucial feature or features, either producing or negativing vicarious liability, vary widely from one case or type of case to the next. Essentially the court makes an evaluative judgment in each case, having regard to all the circumstances and, importantly, having regard also to the assistance provided by previous court decisions. In this field the latter form of assistance is particularly valuable. (Original emphasis) 23. In that passage, Lord Nicholls identified the general principle (the best general answer, as he said at para 23) applicable to vicarious liability arising out of a relationship of employment: the wrongful conduct must be so closely connected with acts the employee was authorised to do that, for the purposes of the liability of the employer to third parties, it may fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment. That test was repeated in later cases such as Bernard v Attorney General of Jamaica [2004] UKPC 47; [2005] IRLR 398, Brown v Robinson [2004] UKPC 56, and Majrowski v Guys and St Thomass NHS Trust [2006] UKHL 34; [2007] 1 AC 224. As Lord Phillips noted in Various Claimants v Catholic Child Welfare Society [2013] 2 AC 1, paras 83 and 85, the close connection test has been applied differently in cases concerned with the sexual abuse of children, which cannot be regarded as something done by the employee while acting in the ordinary course of his employment. Instead, the courts have emphasised the importance of criteria that are particularly relevant to that form of wrongdoing, such as the employers conferral of authority on the employee over the victims, which he has abused. The general principle set out by Lord Nicholls in Dubai Aluminium, like many other principles of the law of tort, has to be applied with regard to the circumstances of the case before the court and the assistance provided by previous court decisions. The words fairly and properly are not, therefore, intended as an invitation to judges to decide cases according to their personal sense of justice, but require them to consider how the guidance derived from decided cases furnishes a solution to the case before the court. Judges should therefore identify from the decided cases the factors or principles which point towards or away from vicarious liability in the case before the court, and which explain why it should or should not be imposed. Following that approach, cases can be decided on a basis which is principled and consistent. Having explained how the close connection case was expressed in Lister and elaborated in Dubai Aluminium, and having also explained that it had been applied in a number of subsequent cases at the highest level, Lord Toulson summarised the present law in paras 44 46 of his judgment ([2016] AC 677). In the simplest terms, he said, the court had to consider two matters. The first question was what functions or field of activities had been entrusted by the employer to the employee. In other words, as Lord Nicholls put it in Dubai Aluminium at para 23, it is necessary to identify the acts the employee was authorised to do. Secondly, Lord Toulson said at para 45, the court must decide whether there was sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable under the principle of social justice which goes back to Holt CJ. That statement, expressly put in the simplest terms, was more fully stated by Lord Nicholls in Dubai Aluminium [2003] 2 AC 366, para 23: in a case concerned with vicarious liability arising out of a relationship of employment, the court generally has to decide whether the wrongful conduct was so closely connected with acts the employee was authorised to do that, for the purposes of the liability of his employer, it may fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment. That statement of the law, endorsed in Mohamud and in several other decisions at the highest level, is authoritative. Lord Toulson was not suggesting any departure from the approach adopted in Lister and Dubai Aluminium. His position was the exact opposite. Nor was he suggesting that all that was involved in determining whether an employer was vicariously liable was for the court to consider whether there was a temporal or causal connection between the employment and the wrongdoing, and whether it was right for the employer to be held liable as a matter of social justice. Plainly, the close connection test is not merely a question of timing or causation, and the passage which Lord Toulson cited from Dubai Aluminium makes it clear that vicarious liability for wrongdoing by an employee is not determined according to individual judges sense of social justice. It is decided by orthodox common law reasoning, generally based on the application to the case before the court of the principle set out by Lord Nicholls at para 23 of Dubai Aluminium, in the light of the guidance to be derived from decided cases. In some cases, the answer may be clear. In others, inevitably, a finer judgment will be called for. Finally, Lord Toulson considered how this approach applied to the facts of the case before the court. He began by identifying Mr Khans functions or field of activities ([2016] AC 677, para 47): In the present case it was Mr Khans job to attend to customers and to respond to their inquiries. His conduct in answering the claimants request in a foul mouthed way and ordering him to leave was inexcusable but within the field of activities assigned to him. Lord Toulson then rejected the argument that the assault on the customer was unconnected with Mr Khans field of activities; an argument which had emphasised in particular the fact that Mr Khan had left the sales kiosk and followed the customer to his vehicle. In that regard, he said (ibid): What happened thereafter was an unbroken sequence of events. It was argued by the respondent and accepted by the judge that there ceased to be any significant connection between Mr Khans employment and his behaviour towards the claimant when he came out from behind the counter and followed the claimant onto the forecourt. I disagree for two reasons. First, I do not consider that it is right to regard him as having metaphorically taken off his uniform the moment he stepped from behind the counter. He was following up on what he had said to the claimant. It was a seamless episode. Secondly, when Mr Khan followed the claimant back to his car and opened the front passenger door, he again told the claimant in threatening words that he was never to come back to the petrol station. This was not something personal between them; it was an order to keep away from his employers premises, which he reinforced by violence. In giving such an order he was purporting to act about his employers business. It was a gross abuse of his position, but it was in connection with the business in which he was employed to serve customers. Read in context, Lord Toulsons comments that there was an unbroken sequence of events, and that it was a seamless episode, were not directed towards the temporal or causal connection between the various events, but towards the capacity in which Mr Khan was acting when those events took place. Lord Toulson was explaining why, in his view, Mr Khan was acting throughout the entire episode in the course of his employment. When he followed the motorist out of the kiosk and on to the forecourt, he was following up on what he had said to the motorist in the kiosk. He ordered the motorist to keep away from his employers premises, and reinforced that order by committing the tort. In doing so, he was purporting to act about his employers business. As Lord Toulson said, this was not something personal. Lord Toulson concluded his analysis of the facts by stating, at para 48: Mr Khans motive is irrelevant. It looks obvious that he was motivated by personal racism rather than a desire to benefit his employers business, but that is neither here nor there. Read in isolation, the statement that motive is irrelevant would be misleading. Lord Toulson had just said, in the preceding paragraph, that one of his reasons for finding that there was a close connection was that Mr Khan was purporting to act about his employers business, and that his conduct towards the customer was not, therefore, something personal. So the question whether Mr Khan was acting, albeit wrongly, on his employers business, or was acting for personal reasons, was plainly important. When Lord Toulson said that Mr Khans motive was irrelevant, he was addressing a point which the judge had mentioned, namely that the reasons why Mr Khan had become violent were unclear. As just mentioned, Lord Toulson had already concluded that Mr Khan was going, albeit wrongly, about his employers business, rather than pursuing his private ends, and had treated that fact as supporting the existence of a close connection between his field of activities and the commission of the tort. Having reached that conclusion, the reason why Mr Khan had become so enraged as to assault the motorist could not make a material difference. That is all, I believe, that the remark that Mr Khans motive is irrelevant was intended to convey. Vicarious liability in the present case It follows from the foregoing that the judge and the Court of Appeal misunderstood the principles governing vicarious liability in a number of relevant respects, of which the following were particularly important. First, the disclosure of the data on the Internet did not form part of Skeltons functions or field of activities, in the sense in which those words were used by Lord Toulson: it was not an act which he was authorised to do, as Lord Nicholls put it. Secondly, the fact that the five factors listed by Lord Phillips in Various Claimants v Catholic Child Welfare Society [2013] 2 AC 1, para 35, were all present was nothing to the point. Those factors were not concerned with the question whether the wrongdoing in question was so connected with the employment that vicarious liability ought to be imposed, but with the distinct question whether, in the case of wrongdoing committed by someone who was not an employee, the relationship between the wrongdoer and the defendant was sufficiently akin to employment as to be one to which the doctrine of vicarious liability should apply. Thirdly, although there was a close temporal link and an unbroken chain of causation linking the provision of the data to Skelton for the purpose of transmitting it to KPMG and his disclosing it on the Internet, a temporal or causal connection does not in itself satisfy the close connection test. Fourthly, the reason why Skelton acted wrongfully was not irrelevant: on the contrary, whether he was acting on his employers business or for purely personal reasons was highly material. The question whether Morrisons is vicariously liable for Skeltons wrongdoing must therefore be considered afresh. Applying the general test laid down by Lord Nicholls in para 23 of Dubai Aluminium [2003] 2 AC 366, the question is whether Skeltons disclosure of the data was so closely connected with acts he was authorised to do that, for the purposes of the liability of his employer to third parties, his wrongful disclosure may fairly and properly be regarded as done by him while acting in the ordinary course of his employment. Considering first the acts which Skelton was authorised to do, so far as relevant, he was given the task of collating and transmitting payroll data to KPMG. He performed that task on a date between 15 and 21 November 2013. The remaining question is whether Skeltons wrongful disclosure of the data was so closely connected with the collation and transmission of the data to KPMG that, for the purposes of the liability of his employer to third parties, the disclosure may fairly and properly be regarded as made by him while acting in the ordinary course of his employment. The connecting factor between what Skelton was authorised to do and the disclosure is that he could not have made the disclosure if he had not been given the task of collating the data and transmitting it to KPMG. It was the provision of the data to him, so that he could perform that task, that enabled him to make a private copy of the data on 18 November 2013, which he subsequently used to make the disclosure on 12 January 2014. Clearly, the mere fact that Skeltons employment gave him the opportunity to commit the wrongful act would not be sufficient to warrant the imposition of vicarious liability: see, for example, Morris v C W Martin & Sons Ltd [1966] 1 QB 716, 737, and Lister [2002] 1 AC 215, paras 25, 45, 50, 59, 65, 75, and 81 82. The courts below, however, treated it as important that Skeltons disclosure of the data on the Internet was, as the judge said closely related to what he was tasked to do ([2019] QB 772, para 186): a remark which the Court of Appeal described as plainly correct ([2019] QB 772, para 63). The fallacy in that approach was explained by Lord Wilberforce in Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982] AC 462, which concerned an employee who was authorised to carry out valuations, and negligently carried out a valuation without authority from his employers and not on their behalf. Lord Wilberforce rejected the argument that so long as the employee is doing acts of the same kind as those which it is within his authority to do, the employer is liable, and is not entitled to show that the employee had no authority to do them. He said at p 473: the underlying principle remains that a servant, even while performing acts of the class which he was authorised, or employed, to do, may so clearly depart from the scope of his employment that his master will not be liable for his wrongful acts. As already explained, in applying the close connection test it is necessary to have regard to the assistance provided by previous court decisions. Perhaps unsurprisingly, there does not appear to be any previous case in which it has been argued that an employer might be vicariously liable for wrongdoing which was designed specifically to harm the employer. The decided cases which are most closely comparable to the present case are those which have concerned vicarious liability for deliberate wrongdoing intended to inflict harm on a third party for personal reasons of the employee (leaving aside sexual abuse cases, where, as explained in para 23 above, a more tailored version of the close connection test is applied). The basic principle normally applicable to cases where an employee is engaged in an independent personal venture was explained in Joel v Morison (1834) 6 C & P 501, which concerned a claim for personal injuries brought by a plaintiff who had been knocked down by a cart driven by the defendants employee. Parke B said at p 503: The master is only liable where the servant is acting in the course of his employment. If he was going out of his way, against his masters implied commands, when driving on his masters business, he will make his master liable; but if he was going on a frolic of his own, without being at all on his masters business, the master will not be liable. More recently, the issue of liability for acts performed by an employee in the course of an independent venture of his own was considered by Lord Nicholls in Dubai Aluminium [2003] 2 AC 366, para 32: A distinction is to be drawn between cases such as Hamlyn v John Houston & Co [1903] 1 KB 81, where the employee was engaged, however misguidedly, in furthering his employers business, and cases where the employee is engaged solely in pursuing his own interests: on a frolic of his own, in the language of the time honoured catch phrase The matter stands differently when the employee is engaged only in furthering his own interests, as distinct from those of his employer. Then he acts as to be in effect a stranger in relation to his employer with respect to the act he has committed: see Isaacs J in Bugge v Brown (1919) 26 CLR I10, 118. There are a number of relevant cases which have been decided since Lister and Dubai Aluminium. A particularly relevant example at the highest level is Attorney General of the British Virgin Islands v Hartwell [2004] UKPC 12; [2004] 1 WLR 1273, a decision of the Judicial Committee of the Privy Council. The case concerned a police officer who left his post and went into a bar where his partner worked as a waitress and, in a fit of jealous rage at finding her there with another man, fired a number of shots at one or other or both of them with a service revolver to which he had access in the course of his duties. A bystander was injured and claimed damages from the Government. The contention that the Government was vicariously liable was rejected on the ground that since, at the relevant time, the officer had abandoned his post and embarked on a vendetta of his own, his wrongful use of the gun was not something done in the course of his employment. Lord Nicholls, giving the judgment of the Board, applied the close connection test laid down in Dubai Aluminium at para 23. The connecting factors relied upon as satisfying the test were that the officer was a police officer on duty at the time of the shooting, that the place where the shooting occurred was within his jurisdiction, and that he had used a police revolver to which he was given access at the police station where he was posted and which he was permitted to use for police purposes: factors that created a connection between the wrongdoing and the acts which the officer was authorised to do which might be thought to bear a close analogy to those relied on in the present case (where Skelton committed the wrong using data to which he was given access at work and which he was permitted to use for an authorised purpose), and to be at least as strong. Those factors were held to be insufficient. Lord Nicholls explained at para 17: From first to last, from deciding to leave the island of Jost Van Dyke to his use of the firearm in the bar of the Bath & Turtle, Laurents activities had nothing whatever to do with any police duties, either actually or ostensibly. Laurent deliberately and consciously abandoned his post and his duties. He had no duties beyond the island of Jost Van Dyke. He put aside his role as a police constable and, armed with the police revolver he had improperly taken, he embarked elsewhere on a personal vendetta of his own. That conduct falls wholly within the classical phrase of a frolic of his own. That case might be contrasted with Bernard v Attorney General of Jamaica [2004] UKPC 47; [2005] IRLR 398, where a shooting was carried out by a police officer with his service revolver while purportedly acting in the execution of his duties, and vicarious liability was held to be established. There are numerous other cases decided at a lower level. It is unnecessary to consider them all, but it may be worth mentioning the two cases on which the Court of Appeal principally focused. The first is the case of Warren v Henlys Ltd [1948] 2 All ER 935, a ruling by a trial judge which was cited with approval in Mohamud [2016] AC 677, para 32. The case was one in which a customer at a petrol station had an angry confrontation with the petrol station attendant, who wrongly suspected him of trying to make off without payment. The customer became enraged at the manner in which he was spoken to by the attendant. After paying for the petrol, the customer saw a passing police car and drove off after it. He complained to the police officer about the attendants conduct and persuaded the officer to return with him to the petrol station. The officer listened to both men and indicated that he did not think that it was a police matter, whereupon the customer said that he would report the attendant to his employer. The officer was on the point of leaving, when the attendant punched the customer in the face, knocking him to the ground. Hilbery J held that the assault was not committed in the course of the attendants employment, applying the Salmond formula. He said at p 938: It seems to me that it was an act entirely of personal vengeance. He was personally inflicting punishment, and intentionally inflicting punishment, on the plaintiff because the plaintiff proposed to take a step which might affect Beaumont in his own personal affairs. It had no connection whatever with the discharge of any duty for the defendants. The act of assault by Beaumont was done by him in relation to a personal matter affecting his personal interests and there is no evidence that it was otherwise. It is unconvincing to say that the assault had no connection whatever with the discharge of the attendants duties. The attendants function was to deal with his employers customers. He committed the assault at his workplace, while at work, against a customer of his employer, as the culmination of a sequence of events which began when the attendant was acting for the benefit of his employer. The connection between the wrongdoing and the acts which the employee was authorised to do was appreciably stronger than in the present case. The judges reasoning is more convincing when he says that the assault was an act entirely of personal vengeance, and that the tort was committed by the attendant in relation to a personal matter affecting his personal interests. Like the police officer in the case of Hartwell, he was not acting on his employers business, but in pursuit of his own private ends. The other case which the Court of Appeal considered in detail was Bellman v Northampton Recruitment Ltd [2018] EWCA Civ 2214; [2019] 1 All ER 1133. The claimant in that case was an employee of a company run by its managing director. The managing director arranged for the company to pay for a staff Christmas party, and for accommodation and drinks for the staff at a hotel near the venue where the party was being held. At the hotel, the conversation turned to matters at work. The managing director became annoyed after being questioned about the appointment of a new employee. He summoned the employees who were at the hotel and began to lecture them on how he owned the company, that he was in charge and would do what he wanted to do, that the decisions were his to take and that he paid their wages. The claimant challenged a statement made by the managing director about the appointment. The managing director responded by telling him that he made the decisions in the company and assaulting him. The Court of Appeal held that there was a sufficiently close connection between the managing directors authorised activities and his commission of the assault to justify the imposition of vicarious liability. His remit included the maintenance of his authority over the staff. At the time when he committed the assault, he was purporting to act as managing director, and was asserting his authority in front of members of staff, over a subordinate employee who had challenged his managerial decision making. Although in some respects the judgment in Bellman adopted a similar approach to Mohamud to that adopted by the Court of Appeal in the present case, the conclusion reached was correct. Notwithstanding that the assault occurred outside working hours and away from the workplace, there was clearly a very close connection between the managing directors authorised activities as an employee and his commission of the assault: it was committed while he was purporting to act in the course of his employment as the managing director by asserting his authority over his subordinates in relation to a management decision which he had taken. Unlike the cases of Hartwell and Warren, this was not a case in which the employee was pursuing a personal vendetta of his own or an act entirely of personal vengeance. All these examples illustrate the distinction drawn by Lord Nicholls at para 32 of Dubai Aluminium [2003] 2 AC 366 between cases where the employee was engaged, however misguidedly, in furthering his employers business, and cases where the employee is engaged solely in pursuing his own interests: on a frolic of his own, in the language of the time honoured catch phrase. In the present case, it is abundantly clear that Skelton was not engaged in furthering his employers business when he committed the wrongdoing in question. On the contrary, he was pursuing a personal vendetta, seeking vengeance for the disciplinary proceedings some months earlier. In those circumstances, applying the test laid down by Lord Nicholls in Dubai Aluminium in the light of the circumstances of the case and the relevant precedents, Skeltons wrongful conduct was not so closely connected with acts which he was authorised to do that, for the purposes of Morrisons liability to third parties, it can fairly and properly be regarded as done by him while acting in the ordinary course of his employment. (2) Whether the DPA excludes the imposition of vicarious liability for (a) statutory torts committed by an employee data controller under the DPA and (b) misuse of private information and breach of confidence The remaining issue in the appeal is whether the DPA excludes vicarious liability for breaches of its own provisions, committed by an employee as a data controller, or for misuse of private information and breach of confidence. Having concluded that the necessary conditions for the imposition of vicarious liability do not exist in this case, it is not strictly necessary for the court to go on to consider those issues. They have however been fully argued, and it is therefore desirable that the court should express its view. As explained earlier, the judge considered that the DPA did not exclude vicarious liability either for a breach of the duties imposed by the DPA itself or for a breach of common law or equitable obligations, on the view that domestic principles of statutory interpretation did not lead to that conclusion, and the underlying EU legislation was intended to increase the protection of data subjects rather than to take away existing protections. The Court of Appeal did not decide the issue concerning breaches of the DPA but agreed with the judge in relation to vicarious liability for breaches of common law or equitable obligations. In their written case, Morrisons relied upon the fact that the DPA, now repealed and replaced by the Data Protection Act 2018, was intended to implement the Directive, now replaced by the General Data Protection Regulation, (EU) 2016/679. It argued that the Directive was intended to achieve a harmonisation of national laws governing the processing of personal data, and that the existence of vicarious liability under English law, in circumstances falling within the scope of the Directive, was therefore precluded. However, in their oral submissions to the court, counsel for Morrisons departed from that argument in the light of the judgment of the Court of Justice in Fashion ID GmbH & Co KG v Verbraucherzentrale NRW eV (Facebook Ireland Ltd intervening) (Case C 40/17) [2020] 1 WLR 969. In the circumstances, it is unnecessary to consider the Directive. Instead, counsel for Morrisons presented their submissions on the basis of domestic principles of statutory interpretation. The relevant principles were explained by Lord Nicholls in Majrowski [2007] 1 AC 224, para 10: The rationale [of the principle of vicarious liability] also holds good for a wrong comprising a breach of a statutory duty or prohibition which gives rise to civil liability, provided always the statute does not expressly or impliedly indicate otherwise. A precondition of vicarious liability is that the wrong must be committed by an employee in the course of his employment. A wrong is committed in the course of employment only if the conduct is so closely connected with acts the employee is authorised to do that, for the purposes of the liability of the employer to third parties, the wrongful conduct may fairly and properly be regarded as done by the employee while acting in the course of his employment: see Lister v Hesley Hall Ltd [2002] 1 AC 215, 245, para 69, per Lord Millett, and Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366, 377, para 23. If this prerequisite is satisfied the policy reasons underlying the common law principle are as much applicable to equitable wrongs and breaches of statutory obligations as they are to common law torts. Lord Nicholls summarised the resultant position at para 17: Unless the statute expressly or impliedly indicates otherwise, the principle of vicarious liability is applicable where an employee commits a breach of a statutory obligation sounding in damages while acting in the course of his employment. Counsel for Morrisons argued that the DPA impliedly excluded the vicarious liability of an employer. In that regard, counsel referred in particular to section 13 of the DPA. Subsection (1) provides that [an] individual who suffers damage by reason of any contravention by a data controller of any of the requirements of this Act is entitled to compensation from the data controller for that damage. Subsection (2) makes similar provision in relation to compensation for distress. Subsection (3) provides that [i]n proceedings brought against a person by virtue of this section it is a defence to prove that he had taken such care as in all the circumstances was reasonably required to comply with the requirement concerned. The seventh data protection principle (Schedule 1, paragraph 10) also provides: The data controller must take reasonable steps to ensure the reliability of any employees of his who have access to personal data. The DPA therefore made it clear, it was argued, that liability was to be imposed only on data controllers, and only where they had acted without reasonable care. That statutory scheme was inconsistent with the imposition of a strict liability on the employer of a data controller, whether for that persons breach of the DPA or for his breach of duties arising at common law or in equity. Since it was common ground that Morrisons performed the obligations incumbent upon them as data controllers, and that Skelton was a data controller in his own right in relation to the data which he copied and disclosed, it followed that Morrisons could not be under a vicarious liability for his breach of the duties incumbent upon him. Attractively though this argument was presented, it is not persuasive. The imposition of a statutory liability upon a data controller is not inconsistent with the imposition of a common law vicarious liability upon his employer, either for the breach of duties imposed by the DPA, or for breaches of duties arising under the common law or in equity. Since the DPA is silent about the position of a data controllers employer, there cannot be any inconsistency between the two regimes. That conclusion is not affected by the fact that the statutory liability of a data controller under the DPA, including his liability for the conduct of his employee, is based on a lack of reasonable care, whereas vicarious liability is not based on fault. There is nothing anomalous about the contrast between the fault based liability of the primary tortfeasor under the DPA and the strict vicarious liability of his employer. A similar contrast can often be drawn between the fault based liability of an employee under the common law (for example, for negligence) and the strict vicarious liability of his employer, and is no more anomalous where the employees liability arises under statute than where it arises at common law. It follows that, applying the orthodox principles of statutory interpretation explained by Lord Nicholls in Majrowski, since the DPA neither expressly nor impliedly indicates otherwise, the principle of vicarious liability applies to the breach of the obligations which it imposes, and to the breach of obligations arising at common law or in equity, committed by an employee who is a data controller in the course of his employment, as explained in Dubai Aluminium. Conclusion For the reasons explained above, the circumstances in which Skelton committed wrongs against the claimants were not such as to result in the imposition of vicarious liability upon his employer. Morrisons cannot therefore be held liable for Skeltons conduct. It follows that the appeal must be allowed. |
This appeal relates to personal independence payment, which is a non means tested allowance paid to certain people with long term health problems or disability. The appeals focus is upon one of the markers used to determine whether a claimants ability to live his or her daily life is limited, by his or her physical or mental condition, to such an extent as to generate an entitlement to personal independence payment (PIP). Various daily living activities are examined as markers, and the one in question here is engaging with other people face to face. The general scheme of the Welfare Reform Act 2012 and the Social Security (Personal Independence Payment) Regulations 2013 PIP is dealt with in Part 4 of the Welfare Reform Act 2012 (the Act). Section 77 introduces the allowance and establishes that a person may be entitled to one or both of its two components, namely the daily living component and the mobility component. This case is concerned with the daily living component. Entitlement is dealt with in section 78, which also points the way to other relevant provisions contained in Part 4 and in the regulations made under it. The component can be paid at either the standard rate (which is what is in question here) or, for those whose ability is more limited, the higher enhanced rate. By section 78(1), there are two requirements which the claimant must satisfy in order to be entitled to the daily living component at the standard rate, namely the requirement in section 78(1)(a) (which I will refer to as the limited ability requirement), and the required period condition in section 78(1)(b). So far as is material, the section reads: 78. Daily living component (1) A person is entitled to the daily living component at the standard rate if (a) the persons ability to carry out daily living activities is limited by the persons physical or mental condition; and the person meets the required period (b) condition. [entitlement to enhanced rate] (2) [meaning of standard and enhanced rate] (3) In this Part daily living activities means such (4) activities as may be prescribed for the purposes of this section. (5) See sections 80 and 81 for provision about determining (a) whether the requirements of subsection (1)(a) or (2)(a) above are met; (b) whether a person meets the required period condition for the purposes of subsection (1)(b) or (2)(b) above. (6) This section is subject to the provisions of this Part, or regulations under it, relating to entitlement to the daily living component Section 80 provides that the question whether a persons ability to carry out daily living activities is limited by the persons physical or mental condition (the limited ability requirement in section 78(1)(a)) is to be determined in accordance with regulations, and that the regulations must provide for that question to be determined, except in prescribed circumstances, on the basis of an assessment (or repeated assessments) of the person. The question of whether the person meets the required period condition for the purposes of section 78(1)(b) is similarly to be determined in accordance with regulations. The Social Security (Personal Independence Payment) Regulations 2013 (the Regulations) prescribe the activities which are daily living activities for section 78 as those set out in column 1 of the table in Part 2 of Schedule 1 to the Regulations. The table lists ten activities. Column 2 focuses in some detail on the ability of the claimant (referred to throughout the Regulations as C) to carry out each activity, on a scale ranging from being able to carry out the activity unaided to being unable to do it. For example, activity 1 in the list is Preparing food, and there are six levels of ability in column 2 ranging from a. Can prepare and cook a simple meal unaided to f. Cannot prepare and cook food. Each sub paragraph in column 2 is called a descriptor. In column 3, points are attributed, according to the level of ability measured by the descriptors; the greater the difficulty experienced by the claimant, the greater the number of points awarded. So, a claimant who can prepare and cook a simple meal unaided has no points attributed, whereas, at the other end of the scale, eight points are attributed where the claimant cannot prepare and cook food. There are gradations between the two; for example, a claimant who needs prompting to be able to prepare or cook a simple meal has two points attributed, as does a claimant who needs to use an aid or appliance to do so. The same ascending scale of difficulty, reflected in increasing numbers of points, can be seen in relation to each of the activities in the table. Regulation 5 provides that the points attributed for each activity in the table are added together and, if the total is at least eight but less than 12, the claimant has limited ability to carry out daily living activities, and is entitled to PIP at the standard rate, whereas if the total is 12 points or more, the claimant will be classed as having severely limited ability and is entitled to the enhanced rate. Regulation 4(2A) provides some more detail as to how the assessment of ability is approached, providing that: C is to be assessed as satisfying a descriptor only if C can do so safely; to an acceptable standard; repeatedly; and (a) (b) (c) (d) within a reasonable time period. Regulation 4(4) defines these concepts as follows: repeatedly means as often as the activity being (a) safely means in a manner unlikely to cause harm to C or to another person, either during or after completion of the activity; (b) assessed is reasonably required to be completed; and (c) reasonable time period means no more than twice as long as the maximum period that a person without a physical or mental condition which limits that persons ability to carry out the activity in question would normally take to complete that activity. The assessment of the claimant is more than just a snapshot of ability, given that the required period condition has to be satisfied, see section 78(1)(b). Section 81 dictates the shape of the regulations about this condition, providing (so far as material) that they: must provide for the question of whether a person meets the required period condition to be determined by reference to (a) whether, as respects every time in the previous three months, it is likely that if the relevant ability had been assessed at that time that ability would have been determined to be limited by the person's physical or mental condition; and (b) whether, as respects every time in the next nine months, it is likely that if the relevant ability were to be assessed at that time that ability would be determined to be limited by the persons physical or mental condition. For present purposes, the relevant ability is, of course, the ability to carry out daily living activities (section 81(2)). Section 81(3) deals with the reckoning of the periods of three and nine months, providing that the previous three months means the three months ending with the prescribed date and the next nine months means the nine months beginning with the day after that date. The Regulations make provision as required by section 81, including establishing what the prescribed date is, and also dealing with further issues to do with the required period. The detail does not matter for the issue presently under consideration. What is important is to recognise that it is not just the claimants situation on one day of assessment that is under consideration, but his or her situation over a period of 12 months. Furthermore, it is clear from the Regulations that some degree of fluctuation in the claimants presentation is anticipated. Regulation 7, which is entitled Scoring: further provision, sets out how to choose which descriptor applies to a claimant in relation to each activity in the table. It involves looking to see which descriptors are satisfied on over 50% of the days of the required period, and from that information, working out which descriptor is to be applied. Regulation 7(1)(a) (which deals with the most straightforward situation) will serve as an example; it provides that where one descriptor is satisfied on over 50% of the days of the required period that descriptor applies to the claimant. The provision under consideration in the present case It is Activity 9 in the table in Part 2 of Schedule 1 to the Regulations which gives rise to the issues in this appeal. In relation to this activity, the table provides: Column 1 Activity 9. Engaging with other people face to face. Column 3 Points 0 2 4 8 Column 2 Descriptors a. Can engage with other people unaided. b. Needs prompting to be able to engage with other people. c. Needs social support to be able to engage with other people. d. Cannot engage with other people due to such engagement causing either (i) overwhelming psychological distress to the claimant; or (ii) the claimant to exhibit behaviour which would result in a substantial risk of harm to the claimant or another person. Difficulty has arisen over descriptor 9c, and in particular over what is meant by social support, and how it differs from prompting in descriptor 9b so as to justify descriptor 9c attracting four points, whereas descriptor 9b only attracts two points. A subsidiary issue that arises is whether social support only covers help given whilst actually engaging with other people face to face, or whether help given in advance is also relevant. Definitions are provided for the purpose of Schedule 1 by Part 1 of the Schedule, including the following: In this Schedule aided means with (a) (b) the use of an aid or appliance; or supervision, prompting or assistance; assistance means physical intervention by another person and does not include speech; communication support means support from a person trained or experienced in communicating with people with specific communication needs, including interpreting verbal information into a non verbal form and vice versa; engage socially means interact with others in a contextually and (a) socially appropriate manner; (b) understand body language; and establish relationships; (c) prompting means reminding, encouraging or explaining by another person; psychological distress means distress related to an enduring mental health condition or an intellectual or cognitive impairment; social support means support from a person trained or experienced in assisting people to engage in social situations; supervision means the continuous presence of another person for the purpose of ensuring Cs safety; unaided means without (a) (b) the use of an aid or appliance; or supervision, prompting or assistance. There is no definition of engaging with other people face to face or of engage. As can be seen, Part 1 provides, instead, a definition of engage socially, a term which does not appear anywhere else in the Schedule. It is thought that this is an error, arising when Activity 9, which was originally entitled engaging socially, was refined following consultation on the provisions. The settled position in the tribunals (endorsed by the Court of Appeal in Hickey v Secretary of State for Work and Pensions [2018] EWCA Civ 851; [2018] 4 WLR 71, para 9) is that factors set out in relation to engaging socially are nevertheless relevant to the consideration of a persons ability to engage with other people face to face, and there does not appear to be any reason to disrupt that approach. The context in which the present issues arise The respondent is a man in his forties. He made a claim for PIP relying, inter alia, upon the effects that his mental health has upon his ability to engage with other people. When his claim was refused because he had not been awarded the required eight points, he appealed unsuccessfully to the First tier Tribunal (FTT). A central issue in the appeal was the number of points that should be attributed to him under Activity 9. The FTT considered that the decision maker had correctly found him to fall within descriptor 9b (prompting), rather than 9c (social support). Explaining this, the FTT Judge simply said: Two points have been awarded in respect of 9b. From the activities of daily living and our findings in fact above we consider that this is the appropriate descriptor. The appellant did not require social support as defined to be able to engage with other people nor did engaging with other people cause him overwhelming psychological distress or to exhibit behaviour which would result in a substantial risk of harm to himself or another person. Two points are due as awarded. The respondent appealed to the Upper Tribunal, contending that he should have been awarded four points under 9c, which would have qualified him to receive PIP. The appeal was allowed on the basis that the FTT had given an inadequate explanation of why 9b had been selected rather than 9c, and that it had failed to make adequate findings of fact going to that issue. The Upper Tribunal judge remitted the case to the FTT for rehearing, providing directions as to how the tribunal should approach Activity 9. The essence of the directions might be said to be as follows: i) what is envisaged as social support is emotional or moral support and perhaps also physical support, and other interventions which could include everything in the definition of prompting provided it can only be accepted by the claimant if given by a qualified person; ii) qualified people are those who are trained or experienced in assisting people to engage in social situations and friends or family can come within that category; iii) support. the qualified person needs to be present or available to provide the The Secretary of State appealed to the Inner House of the Court of Session. The Upper Tribunals decision to set aside the FTTs determination and to remit the matter for rehearing was not challenged, but the directions which were to govern the FTTs approach were. The grounds of appeal were that the Upper Tribunal should have directed the FTT that the social support must be contemporaneous with the social engagement being supported, and that social support requires something more substantial than prompting. The Inner House refused the appeal. It rejected the argument that the support had to be contemporaneous with the social engagement, considering that there might be situations in which a qualified person could provide sufficient support in anticipation of the claimant meeting people face to face, without the supporter actually having to be present during the meeting. However, although there was, in the Inner Houses view, no justification for a requirement that the support must be given during or immediately before the engagement, there did have to be a temporal or causal link of some sort between the help given and the activity in respect of which the help is needed (para 51 of the Inner Houses opinion). As to the nature of social support, the Secretary of States position was encapsulated by the Inner House in this way (at para 53 of its opinion): the exercise suggested is, in effect, to treat prompting and social support as mutually exclusive, deduct everything that amounts to prompting and see what, if anything, you are left with which, if sufficient in quantity, might amount to social support. This approach had found favour with a number of Upper Tribunal judges (in CPIP/1861/2015 UKUT(AAC) (unreported) 12 April 2016; CSPIP/203/2015 and CSPIP/210/2015 UKUT (AAC) (unreported) 11 March 2016; AH v Secretary of State for Work and Pensions [2016] UKUT 276 (AAC); EG v Secretary of State for Work and Pensions [2017] UKUT 101 (AAC)). In the view of the Inner House, however, the Secretary of States approach failed to recognise the potential for overlap between the prompting and the social support categories (para 54 ibid). It held that they are not mutually exclusive categories. As the Inner House saw it, the critical distinction between descriptor 9b prompting and descriptor 9c support lay not in a difference in the nature of the help provided but in the fact that, with social support, there is a necessity for the help to come from a person trained or experienced in assisting people to engage in social situations (para 55). Having given the example of psychological support given by someone trained in psychology, which would clearly count as social support, it went on to say: But there may be cases where the support is in the nature of encouragement or explanation but, because of the claimants mental state, will only be effective if delivered by someone who is trained or experienced in delivering that type of support to that individual. In such a case there will not be a qualitative difference in the help given, but the help can be regarded as support because of the necessity for it to be provided by someone trained or experienced in delivering it. The Inner House slightly modified the Upper Tribunal judges direction to the FTT, setting out its own formulation, at para 56, as follows: Encouragement or any other sort of prompting can qualify as social support if, to render it effective or to increase its effectiveness, it requires to be delivered by someone trained or experienced in assisting people to engage in social situations. The case was remitted to the FTT for determination in accordance with the guidance given in the Inner Houses opinion. The Secretary of State then appealed to this court, challenging the Inner Houses interpretation of social support (termed by the parties the qualitative issue), and its conclusion that it need not be contemporaneous with the engagement being supported (the timing issue). The respondent, who made his claim for PIP in February 2015, meanwhile continues to await the factual findings and ruling in the FTT that is necessary to resolve whether or not he is entitled to any payment. He maintains that the Inner Houses ruling is substantially correct. Mind was given permission to intervene and has provided helpful submissions, both in writing and orally. It considers the respondents position in relation to the timing issue to be correct, but invites the court not to decide that issue, on the basis that it is unnecessary and undesirable to do so in the circumstances of this case. It concentrates its submissions on the qualitative issue, aligning itself with the respondent and the courts below. The Secretary of States argument: the qualitative issue Contrary to the position taken below, in this court the Secretary of State accepts that social support for the purposes of descriptor 9c may consist of prompting, but submits that the prompting involved in social support is different by virtue of the fact that, in accordance with the definition of social support, the support needed has to be support from a person trained or experienced in assisting people to engage in social situations. If a person trained or experienced were to be narrowly construed, denoting someone who has such training or experience by virtue of their professional training or occupational history, there would be no difficulty in identifying situations within 9c, but the Secretary of State adheres to the assurance given during the consultation process that a friend or family member who knows the claimant well, and can offer support, can also be included as a relevantly experienced person. So, the Secretary of State submits, the key feature that distinguishes social support is that, as it is put in the written case: the help needs to be given by [the] trained or experienced person by reason of their training or experience. Familiarity is not enough. The Secretary of States concern (as articulated in the written case) is that the Inner Houses direction risks generating confusion: between the persons who require support from a person because of their relevant experience (which might include experience gained in the course of being friends or family), and those who require support from a friend or family member solely because of that relationship It is very common for a person to only respond well to someone they know and trust. However, the need for help from someone familiar or trusted on its own does not turn prompting into social support. There will be a qualitative difference, the Secretary of State says, in the help given by a helper using his or her training or experience as opposed to other help. The trained or experienced person will understand what is lacking in the claimants social engagement and be able to overcome this, or enable the claimant to do so, whereas an inexperienced person would not necessarily be able to see what was lacking, anticipate a difficulty, or know how to remedy it. Discussion: the qualitative issue The difference between the Secretary of States interpretation and that of the Inner House (supported by the respondent and the intervener) is somewhat nebulous, and appears as if it might, in fact, be limited. Rather than risk confusing the issue by indulging in a comparison of the two positions, it might be better to return directly to the text of Activity 9. It is well to bear in mind, when considering the ambit of the various limbs of Activity 9, that engaging with people face to face is an activity that can take many differing forms. As was pointed out in the course of oral argument, face to face interactions will range from engagements such as formal interviews and medical examinations to establishing and furthering close personal relationships. Similarly, the sort of assistance that enables the engagement to occur will take many differing forms. The obvious starting point, in determining which of the Activity 9 descriptors applies, is to establish what help the particular person needs in order to be able to engage with other people face to face, remembering that this is not about the help the person is actually receiving, but about the help that they need, although the one may of course inform the other. It is worth stressing that the provisions are not concerned with support that the person would like to have, or would appreciate as generally comforting; the particular support has to be needed to enable the activity to take place. Having assembled the facts in this way, one can start to consider whether the help needed is of a type that falls within the ambit of social support for the purposes of descriptor 9c. Early in the oral argument, the Secretary of State sought to confine the scope of social support by adopting a rather technical construction of the Activity 9 descriptors. The starting point was that descriptor 9a concerns a person who can engage with other people unaided. The submission flowing from this had the following elements: it can be inferred that, in contrast to those within 9a who can manage i) unaided, claimants falling within 9b and 9c all need to be aided; ii) aided is a term defined in Part 1 of the Schedule (see para 13 above), and involves the use of an aid or appliance, or supervision, prompting or assistance; iii) iv) is meant by social support in 9c. so 9b and 9c claimants will all require aid in one of these forms; and other forms of support are therefore irrelevant in considering what There are difficulties with this proposed interpretation, but there is nothing to be gained in elaborating them. It suffices to say that, in my view, such a narrow and technical approach would introduce an unwarranted limitation of the broad word support which has been used in descriptor 9c. This would be inconsistent with the governments objectives in introducing the new disability benefit provisions, including PIP, which included simplifying matters, and creating a benefit that was easier to understand, and reached those in need of extra support to live independently and participate in everyday life. In practice, support might take many forms, responding, no doubt, to the varied needs of claimants, and the varied forms of face to face engagement. The examples provided by Mind underline the wide variation in the help people have/require in order to engage with other people. Prompting is one form of support, as is now accepted, but there will be other forms, and they may well not fall within the definition of aided. The use of an aid or appliance might not often be relevant, supervision is about ensuring safety rather than directed at Activity 9, and the only other form of aid included in the definition is assistance which means physical intervention not includ[ing] speech, and might play a part, but is unlikely to sweep up all other available forms of support. I would accordingly reject the argument that only support that falls within the definition of aid is relevant, although acknowledging that a consideration of the various forms of prompting and of the other sorts of aid identified in the Regulations could assist in lending some colour to the concept of support. I return, therefore, to the central question of what differentiates the claimant who needs social support and is entitled to four points under descriptor 9c, from the claimant who is only entitled to two points, because he or she only needs prompting in the form covered by descriptor 9b. It is inherent in the scheme that, broadly speaking, descriptor 9c reflects a greater degree of disability than descriptor 9b, so attracting increased points. Responding to the greater degree of disability requires the attention not just of another person (as in the case of prompting simpliciter), but of a person trained or experienced in assisting people to engage in social situations. That is what differentiates prompting for the purposes of 9b from prompting which is social support for the purposes of 9c. And where the support takes a form other than prompting, it will similarly only qualify for 9c if the claimant needs it to come from a person so trained or experienced. The Secretary of States anxiety that the provision will be taken to include the sort of confidence boosting and reassurance that occurs in most close relationships can be allayed by keeping the focus very firmly on the twin requirements of necessity and relevant training or experience. Applied in the family/friends setting, to qualify for points under 9c, the claimant has to need support from someone who is not just familiar with him or her, but who is also experienced in assisting engagement in social situations. It is the training/experience of the helper upon which the claimant depends in order to enable the face to face engagement with others to take place, not simply the close and comforting relationship that may exist between the claimant and the helper. Having dispatched the idea that prompting can never constitute social support, the words of descriptor 9c, taken with the definition of social support, clearly define the ambit of the category and distinguish it from descriptor 9b. There is no need to complicate them. As the Inner House observed in para 55 of its opinion (see the passage quoted at para 20 above), the nature of the support provided might not differ between 9b and 9c. What brings the claimant into 9c rather than 9b is that, to be able to engage with others, he or she needs that support to come from someone trained or experienced in assisting people to engage in social situations. As the Inner House helpfully put it, the support will only be effective if delivered by someone who is trained or experienced. I would express a word of caution about the Inner Houses statement (at para 56) that help can qualify as social support if, to render it effective or to increase its effectiveness (my italics), it requires to be delivered by a trained or experienced person. It is useful to ask oneself what is required to render help effective in enabling the social engagement to take place, as I have observed in my preceding paragraph. But I cannot endorse the addition of the italicised words. Descriptor 9c revolves around what the claimant needs, and need is not a relative term. The claimant either needs or does not need trained/experienced help in order to be able to engage with other people. If only trained/experienced help will be effective in achieving the objective, the claimant can be said to need it. If what could be called, for want of a better shorthand, lay help would enable the claimant to engage, the claimant does not fall within 9c, but might fall within 9b. And, of course, if not even trained/experienced help would work, the claimant might fall within 9d. There will, inevitably, be cases in which it is not immediately evident whether descriptor 9c applies, and it is only after scrutinising the facts particularly carefully that the decision maker will be able to reach a determination. Although the provision is concerned with the help the claimant needs, rather than with the help which he or she is actually getting in practice, it seems likely that, in many family/friends cases, someone will already be carrying out the supportive role in face to face engagements. Where this is so, the assessment/decision making process will be assisted by looking at the elements of the support that they actually provide, how they have come to know what to do, whether or not the sort of help that they provide could be provided by any well meaning friend or family member, and what additional help (if any) is required. Exploring these issues will no doubt be a sensitive task. Mind points out that people often struggle to convey the relevant information or they put it in terms which are misunderstood. Claimants are likely to be handling their applications for PIP themselves, or with assistance only from family and friends. Here, for example, the respondent and his partner attended the hearing before the FTT, both gave evidence, and the partner acted as the respondents representative. During the application process, whether it be upon the first request for payment or in the tribunal system upon appeal, it may be necessary to probe what is being said in support of the claim so as to establish the elements of the help that is required to enable the face to face engagement to take place and the characteristics of the person who will need to provide it in order for it to be effective. By way of example, if a claimant says, I need to have someone I trust with me when I meet people face to face, a number of questions are likely to be required to follow this up, and to determine whether the claimant comes within descriptor 9b or 9c. Everything will depend on the facts of the particular case, but they might include questions (sensitively put, of course) such as why is that?, who would you trust in that role?, what sort of things could they do to help you engage?, how would they know what to do?, what would happen if that person was not there? The Secretary of States argument: the timing issue The Secretary of State submits that social support needs to be contemporaneous with the face to face engagement being supported, and that it does not include help provided in advance of it. The contrary interpretation would, submits the Secretary of State, leave matters so open that it would inevitably generate inconsistencies and arbitrariness in decision making. The reasons given in support of the narrow approach include: i) The assessment is a calibration of the claimants functional limitations at the date of the claim with the application of the qualifying periods; it is an assessment of actual disability during the activity. ii) Descriptor 9c uses the present tense: needs. This suggests presence during the activity, for example to do the reminding, encouraging or explaining involved in prompting. iii) Supporting the face to face engagement requires that the supporter perceives the full context of the engagement and has the ability to react to what is done by the person with whom the claimant is seeking to engage. iv) Descriptor 9c is concerned with an intensity of need on the part of the claimant (as reflected in the need for a trained/experienced supporter) which is such as to make it unrealistic to contemplate sufficient support being given without the supporter actually being present during the engagement. v) Social support would be in an anomalous position if it could occur in advance of the engagement, whereas other descriptors require support to be contemporaneous. The Secretary of State invites comparison with, for example, communication support (relevant to Activity 7) which it is submitted would, by its nature, have to be provided at the time of the communication. vi) It would be very difficult to apply the provision if support in advance would qualify. How would the moral, social and emotional support which is an ordinary incident of family relationships and friendships, be distinguished from assistance that would qualify for 9c? vii) As for psychological support, the Secretary of State would say that it is not within the scope of social support at all, but if it were, the problem would be to know how far back one should go, and whether to include counselling sessions the day before the engagement, or a week before, or a year before. Discussion: the timing issue It might be helpful to consider the timing issue having in mind some examples of the practical ways in which a person can be helped to engage face to face with others. Given that no findings of fact have yet been made in relation to the respondents circumstances, it is desirable to avoid focusing particularly on him, but in the course of his counsels submissions, examples were given of the sort of support that an experienced family member might give. Preparation might occur prior to the engagement which enables it to occur without, for example, overwhelming psychological distress. One technique that can be deployed is to look together, in advance of the meeting, at the worst case scenario. During the meeting, with knowledge of the claimant, the supporter can watch out for things that are known to trigger his or her anxiety, and redirect the conversation. Where memory is a problem, the supporter can remind the claimant of things they have forgotten. Private signs of reassurance can be given where required. And, where required, the supporter might recognise the need to remove the person from the meeting. It is important to remember that each claimant is an individual with individual needs, and that different techniques might help in different cases, or at different times in the life of the same person. It seems to me that the Secretary of States insistence on it being necessary for the supporter to be present with the claimant during the face to face engagement would stand in the way of other means of support which work for the particular claimant, and would also be likely to impede attempts to improve the claimants abilities to handle matters without support at all, or with diminished support. It is not difficult to contemplate a situation in which the trained or experienced supporter is aiming to make progress so that a claimant, who initially cannot manage without the supporter physically present during the face to face engagement, learns in stages to manage with the supporter at the door of the room, next door, leaving the building for a short period during the meeting, bringing the claimant to the meeting and collecting him after it, and so on. Discussion before (and possibly after) engagements, and also practical exercises, might be deployed, in order to equip the claimant to deal with encounters without the physical presence of the supporter. At some point in the progress, the claimant will cease to qualify under 9c, but, looking at things entirely practically, rather than legalistically, it would be hard to say that, in all cases, from the moment in the continuum when the supporter is no longer in the room with the claimant, he no longer needs social support to be able to engage with people. It is also relevant to consider the sensitivity of some of the face to face engagements that a claimant may need to undertake. Social support by physical presence with a claimant during a medical examination, or what was called during the hearing a romantic engagement, might be counter productive, whereas social support which did not involve actual presence might enable the claimant to engage when that would not otherwise have been possible. For example, it is easy to contemplate that the claimant and the experienced supporter might have a discussion in advance of a medical examination, going through every element of the procedure and exploring how the claimant might respond to it, the claimant might then allow him or herself to be accompanied to the door of the consultation room and given into the care of the doctor or nurse, and the necessary continuing reassurance might come from the knowledge that the supporter was nearby in the waiting room. It is undesirable to construe the provision in a way that runs counter to these sorts of considerations, unless that is dictated by the provision itself, or by something in its legal context. There is nothing in the wording of descriptor 9c, or the definition of social support, to require actual presence of the supporter during the engagement, nor yet to require that the support is timed to coincide with the engagement, rather than being provided in advance, or indeed afterwards. The use of the present tense (needs) does not carry the Secretary of State this far. It does dictate that the claimant actually needs the support as respects every time over the course of the 12 months made relevant by the required period condition (see para 9 above). The need has to be a continuing one, not one that has been addressed or otherwise ceased, and I would certainly agree with the Inner House when they said (para 49) that descriptor 9c (and for that matter descriptor 9b) would not apply to a case: where, as a result of a successful psychiatric or psychological intervention in the past, the person being assessed was now able to engage with other people satisfactorily and without further help. He would not be able to say, on the strength of that previous intervention, that he continued to fall within Activity 9, descriptor c. But the requirement that there should be a current need at all relevant times does not, of itself, exclude the possibility of assistance given outside the confines of the engagement itself. This is perhaps most easily demonstrated by an example: if social support includes, say, advice and discussion prior to a face to face engagement, it could perfectly properly be said of a claimant, who can only engage if that sort of help is provided, that he needs social support. The Secretary of States interpretation would only be made out if social support is confined to that which is provided on the spot, and there is nothing in the definition of it to confine it in that way. In the absence of express wording dictating contemporaneity, the Secretary of States argument must depend upon inferences drawn from elsewhere in the Regulations and/or from the likely circumstances of claimants. Comparisons with other daily living activities where presence is required during the activity are unhelpful, in my view, because all the various activities are different in nature, and the ways of overcoming difficulties in carrying them out will inevitably be different. Nor am I persuaded by the submissions based upon the intensity of the claimants need and the supposed need for the supporter to perceive and react to the engagement as it unfolds. Sometimes these factors will dictate that the supporter can only provide effective help if actually present, but I see no reason to assume that this will always be the case, and no reason to limit the scope of descriptor 9c so as to exclude cases where support is required from a person trained or experienced in assisting people to engage in social situations but which do not fall within this model. In short, I do not consider that descriptor 9c is limited to cases where a claimant needs social support actually during the face to face engagement. Given that social support is likely to take many different forms, depending on the individual needs of the claimant, it is undesirable to attempt to prescribe, in the abstract, which other forms of support will be sufficient. It will be a question of fact and degree, and is something that will have to be worked out on a case by case basis, by those with expertise in making assessments and decisions in relation to claims, keeping the wording of the provision firmly in mind. I am hopeful that it will prove possible to do this without the Secretary of States fears of inconsistent and arbitrary decisions being realised. Before concluding, I should say something about the Inner Houses acceptance that what was required was a temporal or causal link of some sort between the help given and the activity in respect of which the help is needed (para 51). This is not a formulation that should, in my view, be adopted. A detailed explanation of why not is unlikely to be of assistance, and one illustration of the problem will perhaps suffice. The formulation contemplates two separate ways in which the requisite link could exist, expressed as alternatives, namely a link by virtue of timing (temporal link) and a link by virtue of being instrumental in securing the engagement (causal link). It is difficult to envisage how support which is linked in time to a face to face engagement but has no causal link to what occurs could have any relevance. Sometimes, explaining and elaborating upon a provision confuses rather than assists, and this might be one of those situations. The answer is more likely to be found, in any given case, by close attention to the words of descriptor 9c, as defined in the Regulations, and to the required period condition. This exercise, paying close attention in particular to the requirement that the claimant needs the support (see para 43 above), should serve to confine the scope of descriptor 9c within appropriate time boundaries. Conclusion I would allow the appeal in the limited sense that I would interpret the relevant legal provisions slightly differently from the Inner House, as I have explained above. |
A school minibus draws up on a country road on a winters evening. Two children get off. One of the children tries to cross the road. She steps out from behind the minibus, into the path of an oncoming car. The driver is driving too fast: he has seen the bus, but has made no allowance for the possibility that a child might attempt to cross in front of him. He is not keeping a proper look out, and does not see her, but he is going too fast to have stopped in time even if he had seen her. His car hits the child, causing her to sustain severe injuries. If he had been driving at a reasonable speed, and had been keeping a proper look out, he would not have hit her. The trial judge finds that the accident was caused by the drivers negligence, but that the child was also contributorily negligent. He assesses her contributory negligence at 90%, and reduces the award of damages accordingly. On appeal, the court reduces that assessment to 70%. On a further appeal, this court is invited to reduce the assessment further. How should responsibility be apportioned in a case of this kind? What principles should govern the review of an apportionment by an appellate court? These are the central questions posed by this appeal. The facts of the case The facts of the case, as found by the Lord Ordinary, Lord Tyre, are not in dispute. It should be said at the outset that he faced considerable difficulties in establishing the facts, and he exercised notable care in doing so. The accident occurred on 12 January 2004 on the A98 road between Banff and Fraserburgh, near its junction with a private road leading to the farm where the pursuer lived with her parents and her twin sister. At that point, the A98 is 7.6 metres wide. Traffic is subject to a 60 mph speed limit. There is no street lighting. The pursuer was then 13 years old. She and her sister travelled to and from school every day by school minibus. On the way home, the minibus dropped off the various children at or near their homes. In particular, it dropped off the pursuer and her sister on the opposite side of the road from the entrance to the farm road. They would then cross the road to the farm road. On the day of the accident, the bus arrived at the farm road end at about 4.30 pm. It was then about 40 minutes after sunset, and the light was fading. Vehicles had their lights on. The bus stopped, with its headlights on, and signs to the front and rear indicating that it was a school bus. The driver put on the buss hazard lights. A number of vehicles following the bus stopped behind it. The defender was driving home in the opposite direction. His lights were switched on. As he approached the scene, he saw the stationary bus on the other carriageway. He had a view of the stationary bus for at least 200 metres. He had seen the school bus on this road before. He was travelling at about 50 mph. He did not slow down. His position in evidence was that he could not remember whether he had thought at the time that the bus might have stopped to drop children off. He regarded the risk of children running out unexpectedly as irrelevant: such a risk was not his fault, as he put it. Partly in view of the defenders evidence about the irrelevance, to his responsibilities as a driver, of the possibility that children might unexpectedly attempt to cross the road, the Lord Ordinary inferred that he did not address his mind to the risk that a person might emerge from behind the stationary bus and attempt to cross the road in front of his car. The pursuer and her sister got off the bus on its nearside. The pursuer passed between the rear of the bus, which was still stationary, and the car behind it. She paused briefly at the offside rear of the bus and then took one or two steps into the road, before breaking into a run. She was struck by the defenders car, still travelling at about 50 mph. She was projected into the air by the force of the impact, and the car passed beneath her. She landed on the road surface. At the point of impact, she was running across the road. The defender was unaware of her presence until the moment of impact. Since she must have been within his line of vision for approximately 1.5 seconds between emerging from behind the bus and the moment of impact, the Lord Ordinary inferred that he was not keeping a look out for the possibility of such an event occurring. If he had had in mind the possibility that someone might emerge, he would have seen her earlier than he did. The negligence of the defender The Lord Ordinary found that the defender had failed to drive with reasonable care. He ought in the first place to have kept a proper look out. In the exercise of that duty, he ought to have identified the bus as being a school bus, or at least as a bus from which children were likely to alight. He ought then to have foreseen that there was a risk that a person might, however foolishly, attempt to cross the road. The defender had not done so. Either he did not identify the bus as a school bus, or he did not regard that as relevant to the manner in which he ought to drive towards it and past it. Secondly, the defender had failed to modify his driving. He did not reduce his speed from 50 mph as he approached the stationary bus. That was too high a speed at which to approach the hazard which it potentially presented. A reasonable speed in the circumstances would have been somewhere between 30 and 40 mph. He ought to have been travelling at no more than 40 mph for at least 100 metres before reaching the bus. Thirdly, the defender had failed to be vigilant for any child stepping out or running into the road. These findings are not now in dispute. Causation The Lord Ordinary found that the defender could not have reacted in the time available to him, after the pursuer emerged from behind the bus, so as to avoid hitting her. If, however, he had been travelling at a reasonable speed, the pursuer would have made it safely past the line of the cars travel before the car arrived at the point of impact, and the accident would not have occurred. Contributory negligence The Lord Ordinary considered that the principal cause of the accident was the recklessness of the pursuer in attempting to cross the road without taking proper care to check that the road was clear to allow her to do so. At the age of 13, she was fully aware of the danger of crossing a major road without taking reasonable care to check that no cars were approaching. The pursuers own account of the critical events was unreliable, and there was a paucity of other reliable evidence. Her decision to cross could not however have been the result of a justifiable misjudgement: at the time when she emerged from behind the minibus, the defenders car could only have been about 30 40 metres away. The Lord Ordinary concluded: 46. Either she did not look to the left before proceeding across the road or, having done so, she failed to identify and react sensibly to the presence of the defender's car in close proximity. On either scenario, the overwhelmingly greater cause of this unhappy accident was the movement of the pursuer into the path of the defender's car at a time when it was impossible for him to avoid a collision. 47. One has, therefore, in my opinion, a situation in which the pursuer bears responsibility for having committed an act of reckless folly, and the defender bears responsibility for having failed to take reasonable care for the safety of a person such as the pursuer who might commit an act of reckless folly. In that situation, I consider that a very large proportion of the overall responsibility rests upon the perpetrator of the act. On that basis, the Lord Ordinary assessed contributory negligence at 90%. An appeal against that finding was allowed by an Extra Division of the Inner House (Lord Clarke, Lord Drummond Young and Lord Wheatley), for reasons explained in an opinion delivered by Lord Drummond Young. His Lordship noted that it had been said in Porter v Strathclyde Regional Council 1991 SLT 446, 449 that the Inner House would not interfere with the Lord Ordinarys apportionment of negligence except in exceptional circumstances which must demonstrate that he has manifestly and to a substantial degree gone wrong. The Extra Division considered that the Lord Ordinary had clearly been entitled to hold that contributory negligence existed in this case. At the age of 13, the pursuer must have been fully aware of the danger of crossing a major road from behind a bus without taking reasonable care to check for approaching cars. She was familiar with the location and accepted that she was aware of the potential dangers of crossing this particular road. She was aware of the risk of traffic on what was a relatively major road. In those circumstances it was difficult to imagine any reason that she might have for not checking properly for approaching cars and, if a car was approaching, not crossing the road. On that basis, the obvious course for her to take was to remain on the verge or at least to remain behind the bus until it moved off and she had a clear view of other traffic and drivers had a clear view of her. At the very most she could have stopped between the bus and the centre line of the road. The argument that these points should have been put to the pursuer in cross examination, and had not been put, was rejected: they were too obvious for cross examination on these points to be necessary. In relation to apportionment, the Extra Division considered that the Lord Ordinarys apportionment of 90% of the responsibility for the accident to the pursuer was too high. The court reduced this to 70%. It gave four reasons for its decision, at paras 27 28: (1) In the first place, we are of opinion that insufficient regard was had to the circumstances of the pursuer. The pursuer was only 13 at the time of the accident. While at 13 she was old enough to understand the dangers of traffic, a 13 year old will not necessarily have the same level of judgment and self control as an adult. Moreover, in assessing whether it was safe to cross, she was required to take account of the defender's car approaching at a fair speed, 50 mph, in very poor light conditions with its headlights on. The assessment of speed in those circumstances is far from easy even for an adult, and even more so for a 13 year old. (2) In the second place, we are of opinion that greater stress should have been placed on the actings of the defender. He was found to have been driving at excessive speed and not to have modified his speed to take account of the potential danger presented by the minibus. The danger was obvious because the minibus had its hazard lights on. The Lord Ordinary inferred that as he approached the minibus the defender did not address his mind to the risk that a person might emerge from behind it and attempt to cross the road. In all the circumstances we consider that the defender's behaviour was culpable to a substantial degree, and that that is a factor which should be taken into account. (3) In the third place, we are of opinion that the Lord Ordinary was wrong to describe the actings of the pursuer as an act of reckless folly. Those actings were clearly negligent, but recklessness implies that the pursuer acted without caring about the consequences. We do not think that such a description of the pursuer's conduct is justified on the facts found by the Lord Ordinary. (4) In the fourth place, the causative potency of the parties' actings must be taken into account. Two factors are relevant in this connection. First, in apportioning responsibility account must be taken not only of the relative blameworthiness of the parties but also the causative potency of their acts. As is pointed out in Eagle [v Chambers [2003] EWCA Civ 1107; [2004] RTR 115] and Smith [v Chief Constable Nottinghamshire 18. Police [2012] EWCA Civ 161; [2012] RTR 294], a car is potentially a dangerous weapon, and accordingly the attribution of causative potency to the driver must be greater than that to the pedestrian. Secondly, the Lord Ordinary held that the pursuer would have escaped the accident had she had an additional 1.12 seconds available. That suggests that the defender's excessive speed was causally significant. The court concluded, at para 28: When all of these factors are taken together, we are of opinion that they clearly support an apportionment that is more favourable to the pursuer than the Lord Ordinary's apportionment. We nevertheless recognize that the major share of responsibility must be attributed to the pursuer, because her negligence was both seriously blameworthy and of major causative significance. Was there contributory negligence? It is contended on the pursuers behalf that, on the findings of fact made by the Lord Ordinary, there was no basis for a finding of contributory negligence. It had been assumed that the pursuer ought to have looked to her left very shortly before emerging from behind the bus, and that if she had done so, the defenders car would have been so close that she ought to have realised that it was unsafe for her to cross the road. The pursuer had however also to bear in mind the possibility of traffic emerging from her right, or from the farm track across the road. She could reasonably have looked to her left at a time when the defenders car was far enough away for her to think that it was safe to cross the road, unaware of the excessive speed at which the car was being driven. I am unable to accept this contention. Counsel for the pursuer neither challenges the findings in fact made by the Lord Ordinary nor proposes that any additional findings should be made. On the findings made, either she did not look to the left before proceeding across the road or, having done so, she failed to identify and react sensibly to the presence of the defender's car in close proximity. The contention now advanced is inconsistent with either of those scenarios. I should add, in relation to the latter scenario, that the Lord Ordinary calculated that a vehicle travelling at 50 mph covers a distance of 100 metres in 4.47 seconds. He also concluded that the defenders car was only 30 40 metres away when the pursuer stepped out. He was entitled to conclude that, if the pursuer had looked to her left within a reasonable time before stepping out into the road, the defenders car would have been within such proximity that she ought to have realised that it was unsafe to cross. Apportionment 19. Section 1(1) of the Law Reform (Contributory Negligence) Act 1945 provides: Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimants share in the responsibility for the damage. 20. Section 1(1) does not specify how responsibility is to be apportioned, beyond requiring the damages to be reduced to such extent as the court thinks just and equitable having regard to the claimants share in the responsibility for the damage (not, it is to be noted, responsibility for the accident). Further guidance can however be found in the decided cases. In particular, in Stapley v Gypsum Mines Ltd [1953] AC 663, 682, Lord Reid stated: A court must deal broadly with the problem of apportionment and in considering what is just and equitable must have regard to the blameworthiness of each party, but the claimants share in the responsibility for the damage cannot, I think, be assessed without considering the relative importance of his acts in causing the damage apart from his blameworthiness. 21. That approach is illustrated by its application to the facts of that case, where the deceased and a co worker had been instructed by their employer to bring down a dangerous roof, and not to work beneath it in the meantime. In disobedience of the instruction, they had given up their attempts to bring down the roof, and the deceased had then proceeded to work beneath it. It collapsed and killed him. Although there was held to have been negligence on the part of the co worker, for which the employer was responsible, the deceaseds conduct had contributed much more immediately to the accident than anything that the co worker did or failed to do: both men were at fault up to the stage when the deceased entered the area in question, but he alone was at fault in working beneath the dangerous roof. The House of Lords therefore assessed the contributory negligence of the deceased at 80%, altering the 50% apportionment made by the trial judge. 22. A further illustration is provided by Baker v Willoughby [1970] AC 467. The case was one in which the plaintiff was a pedestrian who had been struck by the defendants car while crossing the road. The plaintiff had negligently failed to see the defendants car approaching. The defendant had a clear view of the plaintiff prior to the collision, but was driving at an excessive speed or failing to keep a proper look out or both. The judge found that the plaintiff was 25% to blame. On appeal, the Court of Appeal increased that apportionment to 50%. The House of Lords restored the judges assessment. 23. Lord Reid, with the agreement of the other members of the House, made some general observations about apportionment in cases of this kind at p 490: The Court of Appeal recognised that the trial judge's assessment ought not to be varied unless some error in the judge's approach is clearly discernible. But they appear to have thought it impossible to differentiate when both parties had a clear view of each other for 200 yards prior to impact and neither did anything about it. I am unable to agree. There are two elements in an assessment of liability, causation and blameworthiness. I need not consider whether in such circumstances the causative factors must necessarily be equal, because in my view there is not even a presumption to that effect as regards blameworthiness. A pedestrian has to look to both sides as well as forwards. He is going at perhaps three miles an hour and at that speed he is rarely a danger to anyone else. The motorist has not got to look sideways though he may have to observe over a wide angle ahead: and if he is going at a considerable speed he must not relax his observation, for the consequences may be disastrous . In my opinion it is quite possible that the motorist may be very much more to blame than the pedestrian. 24. That dictum was applied by the Second Division in McCluskey v Wallace 1998 SC 711, a case in which a child aged 10 had crossed the road without taking reasonable care to check whether traffic was coming. She was struck by a driver who was driving at an appropriate speed but had failed to notice 28. her, and could have avoided her if he had been paying proper attention. An assessment of the childs contributory negligence at 20% was upheld. 25. A similar approach to the assessment of blameworthiness, in cases concerning motorists who drive negligently and hit careless pedestrians, can be seen in the judgment of the Court of Appeal, delivered by Hale LJ, in Eagle v Chambers [2003] EWCA Civ 1107; [2004] RTR 115. The claimant had been walking down the middle of a well lit road, late at night, while in an emotional state. The defendant motorist would have seen and avoided her if he had been driving with reasonable care. He had however failed to see her. His ability to drive safely was impaired by alcohol. The trial judge reduced the claimants damages by 60%. On appeal, that apportionment was reduced to 40%. 26. Hale LJ noted that there were two aspects to apportioning liability between claimant and defendant, namely the respective causative potency of what they had done, and their respective blameworthiness. In relation to the former, it was accepted that the defendants causative potency was much greater than the claimants on the facts of the case. In relation to blameworthiness, the defendant was equally if not more blameworthy. In that regard, Hale LJ noted that a car could do much more damage to a person than a person could usually do to a car, and that the potential destructive disparity between the parties could be taken into account as an aspect of blameworthiness. The court had consistently imposed a high burden upon the drivers of cars, to reflect the potentially dangerous nature of driving. In the circumstances of the case, the judges apportionment had been plainly wrong. Review of apportionment 27. It is not possible for a court to arrive at an apportionment which is demonstrably correct. The problem is not merely that the factors which the court is required to consider are incapable of precise measurement. More fundamentally, the blameworthiness of the pursuer and the defender are incommensurable. The defender has acted in breach of a duty (not necessarily a duty of care) which was owed to the pursuer; the pursuer, on the other hand, has acted with a want of regard for her own interests. The word fault in section 1(1), as applied to the person suffering the damage on the one hand, and the other person or persons on the other hand, is therefore being used in two different senses. The court is not comparing like with like. It follows that the apportionment of responsibility is inevitably a somewhat rough and ready exercise (a feature reflected in the judicial preference for round figures), and that a variety of possible answers can legitimately be given. That is consistent with the requirement under section 1(1) to arrive at a result which the court considers just and equitable. Since different judges may legitimately take different views of what would be just and equitable in particular circumstances, it follows that those differing views should be respected, within the limits of reasonable disagreement. In Kerry v Carter [1969] 1 WLR 1372, the Court of Appeal reviewed some earlier authorities concerned with appellate review of apportionments under the 1945 Act. Lord Denning MR said, with the agreement of the other members of the court: 29. We have been referred to cases on this subject, particularly the recent case of Brown v Thompson [1968] 1 WLR 1003. Since that case it seems to have been assumed in some quarters that this court will rarely, if ever, alter an apportionment made by the judge. Such is a misreading of that case. I think that the attitude of this court was correctly stated in that case, at p 1012, by Edmund Davies LJ when he quoted from the judgment of Sellers LJ in Quintas v National Smelting Board [1961] 1 WLR 401, 409. This court adopts in regard to apportionment the same attitude as it does to damages. We will interfere if the judge has gone wrong in principle or is shown to have misapprehended the facts: but, even if neither of these is shown, we will interfere if we are of opinion that the judge was clearly wrong. After all, the function of this court is to be a Court of Appeal. We are here to put right that which has gone wrong. If we think that the judge below was wrong, then we ought to say so, and alter the apportionment accordingly. (p 1376) In that case, the court altered an apportionment which placed 80% of the responsibility on the defendant to one which placed two thirds of the responsibility on the plaintiff. The dictum of the Master of the Rolls has been applied in subsequent cases: see, for example, Pride Valley Foods v Hall and Partners [2001] 76 Con LR 1. 30. The same approach is in principle appropriate in the event that a question of apportionment comes before this court. In practice, such a question would not ordinarily raise an arguable point of law of general public importance, and therefore would not ordinarily meet the criteria for the granting of permission to appeal. Where, however, permission has been granted (as, for example, in Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366, where there was a question concerning apportionment under the Civil Liability (Contribution) Act 1978), or is not required (as in the present case), then this court also approaches the matter as a court of appeal. 31. Given the broad nature of the judgment which has to be made, and the consequent impossibility of determining a right answer to the question of apportionment, one can say in this context, as Lord Fraser of Tullybelton said in relation to an exercise of judgment of a different kind in G v G (Minors: Custody Appeal) [1985] 1 WLR 647, 651: It is comparatively seldom that the Court of Appeal, even if it would itself have preferred a different answer, can say that the judge's decision was wrong, and unless it can say so, it will leave his decision undisturbed. 32. As one would expect, given that section 1(1) applies throughout the United Kingdom, the same approach has been followed in Scotland. In McCusker v Saveheat Cavity Wall Insulation Ltd 1987 SLT 24, 29, Lord Justice Clerk Ross cited the dictum of Lord Justice Clerk Wheatley in the unreported case of Beattie v Halliday, 4 February 1982: An appeal court will not lightly interfere with an apportionment fixed by the judge of first instance. It will only do so if it appears that he has manifestly and to a substantial degree gone wrong. The case of Beattie concerned contribution between joint wrongdoers, where the court is concerned with the comparative responsibility of persons who are both liable for the damage. The dictum would apply a fortiori to apportionment under the 1945 Act, where the difficulties are more acute, for the reasons I have explained. 33. Applying the dictum in Beattie v Halliday, Lord Justice Clerk Ross said in McCusker that although he would have made a different apportionment from the Lord Ordinary, he was not satisfied that the Lord Ordinary had gone so far wrong that the court would be warranted in interfering with his apportionment. The same approach was followed in MacIntosh v National Coal Board 1988 SLT 348 and Porter v Strathclyde Regional Council 1991 SLT 446. In McFarlane v Scottish Borders Council 2005 SLT 359, and in the present case, the court confirmed the general approach while overturning the assessment of contributory negligence made at first instance. 34. It should be noted that words such as manifestly and to a substantial degree merely add emphasis, and do not modify the substance of the test. As Lord Fraser said in G v G, at p 652: Certainly it would not be useful to inquire whether different shades of meaning are intended to be conveyed by words such as blatant error used by the President in the present case, and words such as clearly wrong, plainly wrong, or simply wrong used by other judges in other cases. All these various expressions were used in order to emphasise the point that the appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution which is different from an alternative imperfect solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which a reasonable disagreement is possible. 35. The question, therefore, is whether the court below went wrong. In the absence of an identifiable error, such as an error of law, or the taking into account of an irrelevant matter, or the failure to take account of a relevant matter, it is only a difference of view as to the apportionment of responsibility which exceeds the ambit of reasonable disagreement that warrants the conclusion that the court below has gone wrong. In other words, in the absence of an identifiable error, the appellate court must be satisfied that the apportionment made by the court below was not one which was reasonably open to it. 36. There may be cases of apportionment under the 1945 Act where the appellate court can identify an error on the part of the court below. In the case of Stapley, for example, although Lord Reid observed at p 682 that normally one would not disturb such an award, the trial judge appeared to have left out of account a material fact, namely that the deceased deliberately and culpably entered the area of danger. Similarly, in the present case, the Extra Division identified an error on the part of the Lord Ordinary in categorising the pursuers conduct as reckless. 37. Even in the absence of an identifiable error, a wide difference of view as to the apportionment which is just and equitable, going beyond what Lord Fraser described as the generous ambit within which a reasonable disagreement is possible, can in itself justify the conclusion that the court below has gone wrong. The point is illustrated by the case of National Coal Board v England [1954] AC 403, in which the trial judge considered a 50% apportionment to be appropriate, on the basis that the plaintiff and the defendants employee were equally to blame. The House of Lords held that the damages should be reduced by only 25%. Lord Reid observed at p 427 that it was not right to disturb the trial judges apportionment lightly, but that the difference between holding the parties equally to blame and holding the ones share of responsibility to be three times that of the other is so substantial that we should give effect to it. Lord Porter, with whom Lord Oaksey agreed, similarly considered that, as in Stapley, the wide difference between [the Houses] view and that held in the court of first instance warranted a variation in the proportional amount awarded (p 420). 38. The need for the appellate court to be satisfied, in the absence of an identifiable error, that the apportionment made by the court below was outside the range of reasonable determinations is reflected in the fact that apportionments are not altered by appellate courts merely on the basis of a disagreement as to the precise figure. In Kerry v Carter, as I have explained, the appellate court disagreed with the trial judge as to which party bore the greater share of responsibility. In Quintas v National Smelting Co Ltd [1961] 1 WLR 401, Brannan v Airtours Plc, The Times, February 1, 1999 and McFarlane v Scottish Borders Council, as in Stapley v Gypsum Mines Ltd, National Coal Board v England and Baker v Willoughby, the appellate court intervened on the basis of a difference of view as to whether the parties bore equal responsibility or one party bore much greater responsibility than the other. The same is true of Eagle v Chambers, where Hale LJ observed that a finding as to which of the parties, if either, was the more responsible for the damage was different from a finding as to the precise extent of a less than 50% contribution. There was a qualitative difference between a finding of 60% contribution and a finding of 40% which was not so apparent in the quantitative difference between 40% and 20%. The present case 39. Having explained the reasons for their conclusion that the Lord Ordinarys apportionment of 90% of the responsibility for the accident to the pursuer was too high, the Extra Division provided only a very brief explanation of their own apportionment of 70% of the responsibility to the pursuer, at para 28: We nevertheless recognize that the major share of responsibility must be attributed to the pursuer, because her negligence was both seriously blameworthy and of major causative significance. The Extra Division had however already stated, at para 27, that the defenders behaviour was culpable to a substantial degree. They had also stated, at para 28, that the defenders excessive speed was causally significant and that the attribution of causative potency to the driver must be greater than that to the pedestrian. It would appear to follow that it could be said of the defender, as well as the pursuer, that his negligence was both seriously blameworthy and of major causative significance. Why then did the Extra Division conclude that the major share of responsibility must be attributed to the pursuer? 40. As the Extra Division recognised, it is necessary when applying section 1(1) of the 1945 Act to take account both of the blameworthiness of the parties and the causative potency of their acts. In relation to causation, the Extra Division based its view that the attribution of causative potency to the driver must be greater than that to the pedestrian on the fact that a car is potentially a dangerous weapon. Like the Court of Appeal in Eagle v Chambers, I would take the potentially dangerous nature of a car being driven at speed into account when assessing blameworthiness; but the overall assessment of responsibility should not be affected by the heading under which that factor is taken into account. Even leaving out of account the potentially dangerous nature of a car being driven at speed, I would not have assessed the causative potency of the conduct of the defender as being any less than that of the pursuer. This is not a case, such as Ehrari v Curry [2007] EWCA Civ 120; [2007] RTR 521 (where contributory negligence was assessed at 70%), in which a pedestrian steps directly into the path of a car which is travelling at a reasonable speed, and the driver fails to take avoiding action as promptly as he ought to have done. In such a case, the more direct and immediate cause of the damage can be said to be the conduct of the pedestrian, which interrupted a situation in which an accident would not otherwise have occurred. Nor is it a case, such as Eagle v Chambers (in which contributory negligence was assessed at 40%) or McCluskey v Wallace (where the contributory negligence of a child was assessed at 20%), in which a driver ploughs into a pedestrian who has been careless of her own safety but has been in his line of vision for long enough for him easily to have avoided her. In the present case, the causation of the injury depended upon the combination of the pursuers attempting to cross the road when she did, and the defenders driving at an excessive speed and without keeping a proper look out. If the pursuer had waited until the defender had passed, he would not have collided with her. Equally, if he had slowed to a reasonable speed in the circumstances and had kept a proper look out, he would have avoided her. 41. Given the Extra Divisions conclusion that the causative potency of the defenders conduct was greater than that of the pursuers, their conclusion that the major share of the responsibility must be attributed to the pursuer, to the extent of 70%, can only be explained on the basis that the pursuer was considered to be far more blameworthy than the defender. I find that difficult to understand, given the factors which their Lordships identified. As I have explained, they rightly considered that the pursuer did not take reasonable care for her own safety: either she did not look to her left within a reasonable time before stepping out, or she failed to make a reasonable judgment as to the risk posed by the defenders car. On the other hand, as the Extra Division recognised, regard has to be had to the circumstances of the pursuer. As they pointed out, she was only 13 at the time, and a 13 year old will not necessarily have the same level of judgment and self control as an adult. As they also pointed out, she had to take account of the defenders car approaching at speed, in very poor light conditions, with its headlights on. As they recognised, the assessment of speed in those circumstances is far from easy, even for an adult, and even more so for a 13 year old. It is also necessary to bear in mind that the situation of a pedestrian attempting to cross a relatively major road with a 60 mph speed limit, after dusk and without street lighting, is not straightforward, even for an adult. 42. On the other hand, the Extra Division considered that the defenders behaviour was culpable to a substantial agree. I would agree with that assessment. He had to observe the road ahead and keep a proper look out, adjusting his speed in the event that a potential hazard presented itself. As the Extra Division noted, he was found to have been driving at an excessive speed and not to have modified his speed to take account of the potential danger presented by the minibus. The danger was obvious, because the minibus had its hazard lights on. Notwithstanding that danger, he continued driving at 50 mph. As the Lord Ordinary noted, the Highway Code advises drivers that at 40 mph your vehicle will probably kill any pedestrians it hits. As in Baker v Willoughby and McCluskey v Wallace, that level of danger points to a very considerable degree of blameworthiness on the part of a driver who fails to take reasonable care while driving at speed. In these circumstances, I cannot discern in the reasoning of the Extra Division any satisfactory explanation of their conclusion that the major share of the responsibility must be attributed to the pursuer: a conclusion which, as I have explained, appears to depend on the view that the pursuers conduct was far more blameworthy than that of the defender. As it appears to me, the defenders conduct played at least an equal role to that of the pursuer in causing the damage and was at least equally blameworthy. 43. 44. The view that parties are equally responsible for the damage suffered by the pursuer is substantially different from the view that one party is much more responsible than the other. Such a wide difference of view exceeds the ambit of reasonable disagreement, and warrants the conclusion that the court below has gone wrong. I would accordingly allow the appeal and award 50% of the agreed damages to the pursuer. LORD HODGE: (with whom Lord Wilson agrees) 45. 46. I am grateful to Lord Reed for setting out the facts of the case (in paras 4 9 and 12 of his judgment) and also the legal principles that govern the apportionment of responsibility under section 1(1) of the Law Reform (Contributory Negligence) Act 1945. I agree with his presentation of those legal principles and consider it unfortunate that I find myself having to dissent in an appeal which does not raise a disputed issue of legal principle. I agree that no court can arrive at an apportionment that is demonstrably correct. The exercise is one of broad judgment and different views must be respected for the reasons which Lord Reed gives. The ground on which this court or any appellate court can overturn the assessment of responsibility which another court has made is that the court below has manifestly and to a substantial degree gone wrong. In Stapley v Gypsum Mines Ltd [1953] AC 663 Lord Reid observed (at p 682) that normally an appellate court would not disturb an award following an assessment of responsibility. An appellate court can intervene only if it is satisfied that the court, whose judgment is under appeal, has gone wrong in the sense that its determination is outside the generous limits of reasonable agreement. On that I agree with the majority view in this case. My disagreement is in the application of the test in the circumstances of this case. 47. The Lord Ordinary assessed the pursuers contributory negligence at 90%. In reaching that view he appears to have been influenced by the evidence of the eyewitnesses of their impressions about what had occurred. The bus driver, Mr Fraser, stated that the defenders car was not travelling at an excessive speed. Mr Scroggie, an experienced driver who was in a stationary Land Rover two vehicles behind the bus, had told the police of his impression that the pursuer was 100% responsible for the accident. Mrs Corbett, a passenger in another car immediately behind the bus, said that the defenders car was not going fast and denied that the pursuer had stopped and looked before attempting to cross the carriageway. The late Mr Corbett, the driver of that car, had told the police that the pursuer had run into the westbound carriageway and that he had known that she was going to get knocked down. 48. But the Lord Ordinary also preferred the defenders recollection of his speed to the eye witnesses estimates. He held that the defender in the exercise of reasonable care should have reduced his speed from approximately 50 mph to somewhere between 30 and 40 mph before he approached the bus, and also inferred that he had not addressed his mind to the possibility of someone coming from behind the stationary bus to cross the road in front of his car. While the defender could have done nothing to avoid the accident in the circumstances that existed at the moment when the pursuer suddenly appeared from behind the bus, his prior failure to reduce his speed on approaching the bus was a potent cause of the accident. This assessment put a different perspective on the matter from that of the eye witnesses who appear to have focused on the immediate circumstances of the accident. In my view, the Extra Division were entitled to conclude that in finding the pursuer responsible to the extent of 90% the Lord Ordinary had gone wrong to the requisite degree. 49. Where I differ from the majority in this appeal is that I am not persuaded that the Extra Divisions assessment is open to the same criticism. It is true that the Extra Division did more to explain why they were reducing the percentage to be attributed to the pursuers contributory negligence than they did to justify their acceptance of the Lord Ordinarys view that the major share of responsibility rested with her. But there were findings of fact in the Lord Ordinarys opinion which are the background to their assessment and are capable of supporting their judgment. In my view the Extra Division were entitled to share the Lord Ordinarys view that the pursuer was more responsible for the accident than the defender. 50. Each case must depend upon its particular facts and a court gets little assistance from detailed comparisons of outcomes in other cases. But case law points up general principles. One such principle, which favours the pursuer, is the recognition of the moral blameworthiness or, alternatively, the causative potency of driving a motor vehicle without exercising reasonable care, because a vehicle can be a dangerous weapon. The trend of the case law is to attribute more responsibility to the driver than to a pedestrian. Hale LJ stated in Eagle v Chambers (at para 16): It is rare indeed for a pedestrian to be found more responsible than a driver unless the pedestrian has suddenly moved into the path of an oncoming vehicle. The reason for that is not hard to find: it is the vehicles potential to injure. The Highway Code states that a vehicle driven at 40 mph is likely to kill a pedestrian if it hits her. The Extra Division recognised this and attributed greater causative potency to the defender than to the pursuer. In reaching their apportionment the Extra Division clearly thought that the pursuers behaviour was significantly more blameworthy than the defenders. The question therefore is: do the Lord Ordinarys findings of fact give sufficient support to that conclusion?. 52. 51. Neither counsel sought to persuade this court to depart from the Lord Ordinarys findings of fact. But there is a danger of an appellate court attaching significance to findings which they do not carry and reinterpreting them and what may have lain behind them in a way which the judge, who heard the evidence, did not intend. I deal first with the fault of the defender. Counsel for the pursuer in both the Inner House and this court put emphasis in his submissions on what he called the defenders failure to respond to the buss hazard lights. But there is nothing in the Lord Ordinarys findings that treats the hazard lights as doing more than alerting the traffic to the stationary bus because it was holding up the traffic. As Mr Hooghiemstra explained in his evidence, the principal use of hazard lights in the Highway Code (Rule 116) is when a vehicle is stationary to warn that it is temporarily obstructing traffic. It was possible, as the defender conceded, that the hazard lights might have been used to alert of another risk. But there was no evidence that they were used on this occasion, and would reasonably have been understood to be used, to warn of children crossing the opposite carriageway and no finding of fact to that effect. The significance of the hazard lights was that they drew attention to the stationary bus and a careful driver could foresee the possibility that passengers, including children, might alight from the bus. 53. The bus had its headlights on and the sign on the windscreen which identified it as a school bus was not illuminated. The sign may not have been visible at dusk to a driver approaching the bus on the opposite carriageway. The Lord Ordinarys conclusion was not that the defender should have identified the bus as a school bus. He stated alternatives: if not, the defender should at least have identified the bus as a bus from which children were likely to alight. 54. Counsel for the defender did not dispute that the defender was culpable to the extent that the Extra Division had found. But the defenders negligence amounted to this. While he was driving well within the statutory speed limit in a rural location, he failed to anticipate a foreseeable risk. He approached the bus which was stationary in the opposite carriageway at what might have been a bus stop. He was negligent in not reducing his speed by at least 10 mph and not keeping a proper lookout because there was a danger, which he ought to have foreseen, that a passenger, who might be a child, might emerge from behind the bus and attempt to cross the road without exercising care. 55. Turning to the Lord Ordinarys findings concerning the pursuers responsibility, the Extra Division did not accept his characterisation of reckless folly because they thought it could not be said that she had acted without caring about the consequences. But they treated her behaviour as being at the serious end of the spectrum of carelessness, rejecting her counsels submission that she had not darted out from behind the bus. There was no challenge to the Lord Ordinarys finding that she was fully aware of the danger of crossing the road. Such a challenge would have been difficult to mount having regard to her age and experience and as the bus driver, Mr Fraser, had given evidence that he had warned the pursuer and her sister in the past when they had run across the road. 56. Counsel for the pursuer was not justified in suggesting that she faced significant risks from traffic approaching from several directions. The predominant risk which the pursuer faced from traffic was from vehicles approaching on the westbound carriageway, as the defender did. Vehicles on the eastbound carriageway were forbidden to overtake by a solid white line on the road; vehicles had to stop behind the stationary bus, as they did. Traffic from the farm road was not a problem on this occasion. The pursuers mothers car was in the bellmouth of the farm road opposite as she waited to pick her up in accordance with her normal practice and her fathers tractor had entered the farm road. In short, faced with a clear and predominant risk from traffic approaching on the westbound carriageway of a major road, the pursuer ran out in front of the defenders vehicle when it was only 30 40 metres away. 57. On the Lord Ordinarys unchallenged findings, there was no reason for the pursuer not to have seen the approaching car. Either she did not look or (as he said, at para 46) she failed to identify and react sensibly to the presence of the defenders car in close proximity. I construe the latter possibility as meaning that she saw the car and took the risk of running in front of it. Not to look or knowingly to run into the path of the car displayed a very high degree of carelessness. The Extra Division were entitled to view her behaviour as both very seriously blameworthy and of major causative significance and also, because of the extent of her blameworthiness, to attribute to her the major share of responsibility. 58. As I have said, the opinion of the Extra Division must be read with the Lord Ordinarys findings of fact. On those findings I might have concluded that the defender was one third responsible and the pursuer two thirds. But that is not the role of an appellate court, which cannot substitute its judgment for that of a court below unless that court is plainly wrong. Nobody has submitted that the Extra Division failed to take into account any material fact or misunderstood the evidence. Thus their assessment is one of broad judgment in which there is ample room for reasonable disagreement. 59. As I am not persuaded that the Extra Divisions determination was outside the generous limits of reasonable disagreement, I would have dismissed the appeal. |
The issue in this appeal is whether the conditions of entitlement to state pension credit prescribed by regulation 2 of the State Pension Credit Regulations 2002 (SI 2002/1792) (the 2002 Regulations) are compatible with EU law. Regulation 2 is not easy to summarise in a few words, but its general effect is to restrict entitlement to state pension credit to those who have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland (the Common Travel Area). The question is whether this is compatible with article 3(1) of Council Regulation (EC) No 1408/71 (Regulation 1408/71). Regulation 1408/71 was replaced on 1 May 2010 by Regulation (EC) No 883/2004, which need not be examined as all the relevant events preceded that date. Article 2(1) of Regulation 1408/71 provides that the Regulation applies to employed persons or self-employed persons who are or have been subject to the social security legislation of a Member State as well as to members of their families. Article 3(1) provides, in respect of those to whom the Regulation applies, for equality of treatment in the application of social security schemes. They are to be entitled to the same benefits under the legislation of any Member State of the kind to which Regulation 1408/71 applies as the nationals of that State. The general effect of the 2002 Regulations, on the other hand, is as stated above. Entitlement to state pension credit depends on whether the person concerned has a right to reside in the United Kingdom or elsewhere in the Common Travel Area. The problem arises because regulation 2(2) of the 2002 Regulations affects nationals of different Member States in different ways. A citizen of the United Kingdom has a right to reside in the United Kingdom by virtue of his or her right of abode under section 2(1) of the Immigration Act 1971. An Irish citizen has, by virtue of his or her Irish nationality, a right to reside in the Republic of Ireland. In their case regulation 2 of the 2002 Regulations does not preclude entitlement to state pension credit. But nationals of other Member States do not qualify for the same treatment unless they have a right to reside here, which they do not have simply on the grounds of their nationality. The appellant was born in Latvia on 1 June 1938. She came to the United Kingdom on 12 June 2000 before Latvia joined the European Union. She claimed asylum on the ground that, as she is of Russian ethnic origin, she had a well founded fear of persecution if she were to return there. Her claim to asylum was finally refused in January 2004, but no steps were taken to remove her from this country. On 1 May 2004 Latvia joined the EU, so pursuant to derogations from article 39(3) of the EC Treaty the appellant became entitled to work here if she complied with the Workers Registration Scheme in the Accession (Immigration and Worker Registration) Regulations 2004: see Zalewska v Department for Social Development (Child Poverty Action Group and another intervening) [2008] UKHL 67; [2008] 1 WLR 2606. She had worked in factories and as a kitchen assistant for about 40 years in Latvia. She is in receipt of a retirement pension from the Latvian social security authorities which is worth between 50 and 170 a month, depending upon the rate of exchange for the time being. But she has not worked at any time while she has been in this country, and she has no other income. In August 2005 the appellant claimed state pension credit from the respondent, the Secretary of State for Work and Pensions. Her claim was refused on 7 September 2005 on the ground that she lacked a right to reside in the United Kingdom. She appealed against that refusal, asserting direct discrimination on grounds of her nationality contrary to article 3(1) of Regulation 1408/71. Her case was that it was her Latvian nationality that precluded the entitlement to state pension credit which she would have had if she had been a United Kingdom national. On 12 December 2005 the appeal tribunal allowed her appeal on the grounds of direct discrimination. But on 11 June 2008 Commissioner Rowland allowed the respondents appeal against that decision. He held that the imposition of the right to reside test was indirect discrimination, but that it was justified as a proportionate means of achieving the legitimate aim of protecting the public finances of the host member state. There was, in his view, no obligation on the United Kingdom under Community law to afford access to social assistance to those who have no right of residence here. On 25 June 2009 the Court of Appeal (Lord Clarke of Stone-cum-Ebony MR and Moses and Sullivan LJJ) dismissed the appellants appeal against the decision of the Commissioner: [2009] EWCA Civ 621. State pension credit: the 2002 Regulations State pension credit is a means tested non-contributory benefit. The details of how it is calculated do not matter for present purposes. But it is worth noting that it is made up of two elements, a guarantee credit and a savings credit, each of which have their own rules as to eligibility. Section 2(2)(b) of the State Pension Credit Act 2002 provides that the guarantee credit is the difference between the prescribed amount and the claimants income. Income includes retirement pension income, and an overseas arrangement such as a state pension from another Member State is retirement pension income for this purpose: sections 15(1)(c) and 16(1)(g). Section 1(2)(a) provides that a claimant is entitled to state pension credit if he is in Great Britain. Section 1(5)(a) provides that regulations may make provision as to the circumstances in which a person is to be treated as being in or not being in Great Britain for the purposes of the Act. Regulation 2 of the 2002 Regulations was amended by regulation 5 of the Social Security (Habitual Residence) Amendment Regulations 2004 (the 2004 Amendment Regulations). As so amended, it was in the form that was in force from 1 May 2004 to 29 April 2006. This is the period during which the appellant made her claim. In that form it provided as follows: (1) Subject to paragraph (2), a person is to be treated as not in Great Britain if he is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, but for this purpose, no person is to be treated as not habitually resident in the United Kingdom who is (a) a worker for the purposes of Council Regulation (EEC) No 1612/68 or (EEC) No 1251/70 or a person with a right to reside in the United Kingdom pursuant to Council Directive No 68/360/EEC or No 73/148/EEC or a person who is an accession state worker requiring registration who is treated as a worker for the purpose of the definition of qualified person in regulation 5(1) of the Immigration (European Economic Area) Regulations 2000 pursuant to regulation 5 of the Accession (Immigration and Worker Registration) Regulations 2004; or (b) a refugee within the definition in article 1 of the Convention relating to the Status of Refugees done at Geneva on 28 July 1951, as extended by article 1(2) of the Protocol relating to the Status of Refugees done at New York on 31 January 1967; or (c) a person who has been granted exceptional leave to enter the United Kingdom by an immigration officer within the meaning of the Immigration Act 1971, or to remain in the United Kingdom by the Secretary of State; or (d) a person who is not a person subject to immigration control within the meaning of section 115(9) of the Immigration and Asylum Act 1999 and who is in the United Kingdom as a result of his deportation, expulsion or other removal by compulsion of law from another country to the United Kingdom; [or] (e) a person in Great Britain who left the territory of Montserrat after 1 November 1995 because of the effect on that territory of a volcanic eruption. (2) For the purposes of treating a person as not in Great Britain in paragraph (1), no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. The persons referred to in regulation 2(1)(a) are various categories of persons who are afforded rights of residence by EU law. Among these categories are nationals of other EU Member States who are workers (that is to say, in employment or looking for work with a genuine chance of being engaged) or who are self-employed. They have a right to reside here and they are not to be treated as not habitually resident in the United Kingdom. So if they are actually in this country too, they are in Great Britain for the purpose of entitlement to state pension credit under the statute. Other nationals of EU Member States who have a right to reside in the United Kingdom or elsewhere in the Common Travel Area and are habitually resident in the United Kingdom or elsewhere in the Common Travel Area are also eligible to claim state pension credit if they are in Great Britain. As they have a right to reside in the Common Travel Area, they are brought within the scope of the opening words of regulation 2(1) by regulation 2(2) which was inserted by regulation 5(c) of the 2004 Amendment Regulations. All Irish nationals have a right to reside in the Republic of Ireland by virtue of their nationality. As the Common Travel Area includes the Republic of Ireland they too are eligible to claim state pension credit if they are in Great Britain. The appellant does not fall within any of the provisions listed in regulation 2(1)(a) to (e). That being so, she can only qualify for entitlement to state pension credit if she is in Great Britain and habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. That is the effect of the opening words of regulation 2(1). But regulation 2(2) provides that no person shall be treated as habitually resident in the United Kingdom or elsewhere in the Common Travel Area if he does not have a right to reside in the United Kingdom or elsewhere in the Common Travel Area. As the appellant does not have that right, she is not to be treated as habitually resident in the United Kingdom (regulation 2(2)). So she is to be treated as not in Great Britain for the purposes of section 1 of the 2002 Act (regulation 2(1)). The Community law provisions At the time when the appellant made her claim the Treaty Establishing the European Community (the EC Treaty) contained the general prohibition on discrimination to which, subject to the special provisions of the Regulation, article 3(1) of Regulation 1408/71 gave effect. Article 12 (now, post-Lisbon, article 18 of the Treaty on the Functioning of the European Union) provided: Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. The Council, acting in accordance with the procedure referred to in article 251, may adopt rules designed to prohibit such discrimination. Article 18 (now article 21 TFEU) provided: 1. Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect. 2 the Council may adopt provisions with a view to facilitating the exercise of the rights referred to in paragraph 1; save as otherwise provided in this Treaty, the Council shall act in accordance with the procedure referred to in article 51. The Council shall act unanimously throughout this procedure. Article 39 (now article 45 TFEU) provided for free movement of workers. It included, among other things, the following rights mentioned in article 39(3): (c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; (d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in implementing regulations to be drawn up by the Commission. Article 42 (now article 48 TFEU) of the EC Treaty provided: The Council shall, acting in accordance with the procedure referred to in article 251, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, it shall make arrangements to secure for migrant workers and their dependants: (a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries; (b) payment of benefits to persons resident in the territories of Member States. The Council shall act unanimously throughout the procedure referred to in article 251. Regulation 1408/71 contains a system for the coordination of the different social security schemes of the Member States, while respecting the different characteristics of the national legislation: see the fourth recital of its preamble. It was made under article 42 EC. Its object is to ensure that social security schemes governing workers in each Member State moving within the EU are applied in accordance with uniform EU criteria. To this end it lays down a set of rules founded in particular upon the prohibition of discrimination on grounds of nationality or residence and upon the maintenance by a worker of his rights acquired by virtue of one or more social security schemes which are or have been applicable to him: Cases C-95/99, C-96/99 and C-97/99 Khalil, Chaaban and Osseili v Bundesanstalt fr Arbeit [2001] 3 CMLR 1246, para 67. Article 2 provides as to the persons covered by the Regulation (the personal scope) as follows: 1. This Regulation shall apply to employed or self-employed persons and to students who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States or who are stateless persons or refugees residing within the territory of one of the Member States, as well as to the members of their families and their survivors. It has been conceded for the purposes of these proceedings that the appellant falls within the personal scope of Regulation 1408/71 under article 2(1). This is because she falls within the definition of employed person in article 1(a), which includes any person who is insured for one or more of the contingencies covered by the branches of a social security scheme for employed or self-employed persons. The effect of the meaning that is given to employed person is that the Regulation applies to persons who have retired from employment in the EU but who remain insured because of contributions paid during their working life. One of its main functions is to provide for retired workers who are living in a Member State which is different from that in which they worked. The appellant remains insured under the Latvian social security scheme by virtue of the contributions paid during her working life there. She did not come to this country to work here, but the basis of her residence in this country is irrelevant to the personal scope of Regulation 1408/71. Its application is not limited to those whose current residence arises from an exercise of the right of free movement for the purpose of employment or other economic activity conferred by EU law. Article 3 of Regulation 1408/71 addresses the issue of equality of treatment. It was amended by Regulation (EC) No 647/2005 with effect from 13 April 2005. As amended, it provides as follows: 1. Subject to the special provisions of this Regulation, persons to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of the State. The parties are agreed that article 3(1) prohibits both direct and indirect discrimination in respect of the appellants entitlement to state pension credit on grounds of nationality. They are also agreed that it does not prohibit indirect discrimination if it is objectively justified by considerations independent of the nationality of the person concerned. Article 4 sets out the matters covered by Regulation 1408/71 (the material scope). Article 4(1) provides that the Regulation shall apply to all legislation concerning the branches of social security listed in that paragraph, including old- age benefits: paragraph (1)(c). Article 4(2) provides as follows: 2. This Regulation shall apply to all general and special social security schemes, whether contributory or non-contributory, and to schemes concerning the liability of an employer or shipowner in respect of the benefits referred to in paragraph 1. General social benefits of a kind not listed in article 4(1) were held not to constitute a social security benefit within the meaning of Regulation 1408/71: Case 249/83 Vera Hoeckx v Centre Public dAide Sociale de Kalmthout [1987] 3 CMLR 638, para 14. But article 4(2a), which was inserted by Regulation (EEC) No 1247/92 with effect from 1 June 1992, as amended by Regulation (EC) No 647/2005 with effect from 13 April 2005, now provides so far as relevant: This Article shall apply to special non-contributory cash benefits which are provided under legislation which, because of its personal scope, objectives and/or conditions for entitlement has characteristics both of the social security legislation referred to in paragraph 1 and of social assistance. Special non-contributory cash benefits means those: (a) which are intended to provide either: (i) supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in paragraph 1, and which guarantee the persons concerned a minimum subsistence income having regard to the economic and social situation in the Member State concerned; or (ii) , and (b) where the financing exclusively derives from compulsory taxation intended to cover general public expenditure and the conditions for providing and for calculating the benefits are not dependent on any contribution in respect of the beneficiary. and (c) which are listed in Annex IIa. Among the special non-contributory benefits listed in Annex IIa in respect of the United Kingdom is state pension credit: para Y(a). The parties are agreed that state pension credit falls within the material scope of Regulation 1408/71 as a special non-contributory benefit to which it applies. Article 4(4) of Regulation 1408/71 provides: This Regulation shall not apply to social and medical assistance, to benefit schemes for victims of war or its consequences. State pension credit is a means tested non-contributory benefit. As such, it would not previously have fallen within the definition of social security. As a non- discretionary cash benefit, it does not fall within the concept of social assistance either, unlike a discretionary cash benefit or the provision of social services. But it falls within the material scope of the Regulation because it is among the special non-contributory benefits listed in Annex IIa. For this purpose it is classified as a social security benefit. Issues The appellant contends that the refusal of state pension credit to a Latvian because she did not have a right to reside in the United Kingdom is prohibited by article 3(1) of Regulation 1408/71. Her case is that the refusal was on grounds of nationality, as the requirement to have a right to reside is met in the case of all UK nationals simply by virtue of their British nationality whereas nationals of the other Member States, other than Irish citizens (who can rely on their right to reside in Ireland), do not have that right. The Secretary of State concedes, and the Court of Appeal held in paras 25-26 of its judgment [2009] EWCA Civ 621, that regulation 2 of the 2002 Regulations is covertly, or indirectly, discriminatory between Latvian and United Kingdom nationals in that fewer nationals of EU Member States other than the United Kingdom have or will acquire a right to reside in the United Kingdom or elsewhere in the Common Travel Area. The appellants primary case, however, is that regulation 2 is overtly, or directly, discriminatory. Mr Lewis QC for the Secretary of State said that, if the requirement constituted direct discrimination, he could not seek to justify it. The following issues are therefore raised by this appeal: (1) Do the conditions of entitlement to benefit in regulation 2 of the 2002 Regulations give rise to direct discrimination for the purposes of article 3(1) of Regulation 1408/71? (2) If they give rise only to indirect discrimination, is that discrimination objectively justified on grounds independent of the appellants nationality? (3) If the indirect discrimination would otherwise be objectively justified, is that conclusion undermined by the favourable treatment that regulation 2(2) gives to Irish nationals? In the Court of Appeal Moses LJ, with whom the other members of the Court agreed, held that the conditions for entitlement to state pension credit were not overtly based on the nationality of the claimant because nationals from other Member States might satisfy the right to reside test in other words, they did not discriminate on grounds of nationality so the conditions were not directly discriminatory: paras 24-25. Addressing himself to the question whether the indirect discrimination was justified on grounds independent of the appellants nationality, he held that it was so justified: paras 52-53. State pension credit had the characteristics of social assistance, despite its inclusion within the scope of Regulation 1408/71. The prohibition on discrimination might be restricted in that context to those who were economically or socially integrated with the country whose social assistance they sought, for the purpose of protecting the finances of the country. He said that this conclusion imposed no disadvantage on the appellant in the exercise of her rights under the Treaty, as she retained her Latvian pension. He rejected the appellants argument that the justification for restricting entitlement to those economically or socially integrated within the United Kingdom was undermined by the special treatment of Irish nationals: para 54. Discrimination The fifth recital of the preamble to Regulation 1408/71 recognised that it was necessary, within the framework of the system of coordination that it laid down, to guarantee to workers living in the Member States within the Community equality of treatment under the various national legislations. Article 3(1) gives effect to this aim by requiring that persons to whom the Regulation applies are to enjoy the same benefits under the legislation of any Member State as the nationals of that State. The approach which the national court must adopt to this issue was described in Case C-124/99 Borawitz v Landesversicherungsanstalt Westfalen [2000] ECR I-7293: 23 In this respect, it must be borne in mind that the object of article 3(1) of Regulation No 1408/71 is to ensure, in accordance with [article 39 EC], equal treatment in matters of social security, without distinction based on nationality, for the persons to whom that regulation applies by abolishing all discrimination in that regard deriving from the national legislation of the Member States (Case C- 131/96 Mora Romero v Landesversicherungsanstalt Rheinprovinz [1997] ECR I-3659, paragraph 29. 24 It is settled case law that the principle of equal treatment, as laid down in that article, prohibits not only overt discrimination based on the nationality of the beneficiaries of social security schemes but also all covert forms of discrimination which, through the application of other distinguishing criteria, lead in fact to the same result (Mora Romero, paragraph 32). 25 Accordingly, conditions imposed by national law must be regarded as indirectly discriminatory where, although applicable irrespective of nationality, they affect essentially migrant workers or where the great majority of those affected are migrant workers, as well as conditions which are applicable without distinction but can more easily be satisfied by national workers than by migrant workers or where there is a risk that they may operate to the particular detriment of migrant workers (Case C-237/94 OFlynn v Adjudication Officer [1996] ECR I-2617, paragraph 18). 26 It is otherwise only if those provisions are justified by objective considerations independent of the nationality of the workers concerned, and if they are proportionate to the legitimate aim pursued by the national law (OFlynn, paragraph 19). The European Court applied the adjectives overt and covert to the two forms of discrimination discussed in this passage. As Mr Cox for the appellant explained, however, they are best described as direct and indirect discrimination. Direct discrimination occurs where the discrimination is based on the nationality of the beneficiaries of social security schemes: Borawitz, para 24. Indirect discrimination occurs where, through the application of other criteria, the legislation leads to the same result: Borawitz, para 25. Advocate General Sharpston used the expressions direct and indirect when she analysed the Courts case law on discrimination in Case C-73/08 Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559, as did the Court in paras 40-41 of its judgment. In para 46 of her opinion the Advocate General said that the distinction between direct and indirect discrimination lacks precision, and in para 50 that the distinction between what is overt and covert does not necessarily always coincide with that between direct and indirect discrimination. But I think that Mr Lewis identified the issue in this case correctly when he said that the key question on the discrimination issue is whether the conditions for entitlement to state pension credit are formulated in terms of the nationality of the claimants, or in terms of criteria other than nationality. The basis of entitlement under section 1(2)(a) of the State Pension Credit Act 2002 is whether the claimant is in Great Britain. Thus far, it appears to be based solely on physical presence in this country and to have nothing to do with nationality. But the matter does not, of course, stop there. Section 1(2)(a) must be read with the 2002 Regulations which, as required by section 1(5)(a) of the 2002 Act, set out the circumstances in which a person is to be treated as being in, or not being in, Great Britain. This test appears, at a superficial level, to have nothing to do with nationality either. It is expressed in terms of whether or not the person is habitually resident in the United Kingdom or elsewhere in the Common Travel Area. But the rules as to when a person is or is not to be treated as habitually resident do introduce tests which raise issues about nationality. They are also hard, at first reading, to assimilate. They involve the use of not just one, but two double negatives. In regulation 2(1) a list is given of five circumstances in which no person is not to be treated as habitually resident. Then in regulation 2(2) a direction is given that no person shall be so treated if he does not have a right to reside there. As Lord Walker said in the course of the argument, the wording of these provisions suggests that they may be trying to hide something. It is necessary to look more closely at their effect. Read in isolation, the right to reside requirement in regulation 2(2) sets out a test which no United Kingdom national could fail to meet. And it puts nationals of other Member States at a disadvantage. As already noted, a British citizen has, by virtue of his or her United Kingdom nationality, a right to reside in the United Kingdom by virtue of his right of abode under section 2(1) of the Immigration Act 1971. Those who do not have United Kingdom nationality do not have that right automatically. Nationals of other Member States of the EU who do not fall within the provisions of regulation 2(1) must do something else to acquire it. Under EU law they must be economically active or self-sufficient, or must be a member of the family of an EU citizen who meets these requirements. The disadvantage which nationals of other Member States will encounter in trying to meet the requirements of regulation 2(2) is due entirely to their nationality. Had a right to reside in the United Kingdom or elsewhere in the Common Travel Area been the sole condition of entitlement to state pension credit, it would without doubt have been directly discriminatory on grounds of nationality. The effect of regulation 2(2) of the 2002 Regulations must, however, be looked at in the context of section 1(2)(a) of the 2002 Act and regulation 2 as a whole. The condition which all claimants must meet, if they are to be treated as in Great Britain for the purposes of section 1(2)(a) of the 2002 Act, is that they must be habitually resident in the United Kingdom or elsewhere in the Common Travel Area. Everyone, including United Kingdom nationals, must meet this requirement. But while all United Kingdom nationals have a right to reside in the United Kingdom, not all of them will be able to meet the test of habitual residence. Most are, of course, habitually resident here. Others are not. They can all meet the right to reside requirement that regulation 2(2) sets out because of their nationality. But nationality alone does not enable them to meet the requirement in regulation 2(1). Katherine Fleay, an employee of the Department of Work and Pensions involved in formulating policy relating to access by people from abroad to income-related benefits, referred in para 17 of her witness statement to the Departments memorandum to the Social Security Advisory Committee in February 1994. In that statement it was pointed out that some UK nationals returning to the UK after a long period of absence may be held not to be habitually resident in this country. EU nationals who satisfy one of the conditions listed in regulation 2(1) do not need to meet the right to reside test, as they are to be treated as habitually resident here. Mr Cox for the appellant submitted that the requirement to have a right to reside here discriminated directly between citizens of the United Kingdom on the one hand and citizens of other Member States on the other. It was a clear case of discrimination on the basis of nationality: Vera Hoeckx v Centre Public dAide Sociale de Kalmthout [1987] 3 CMLR 638, para 24. That being so, article 3(1) of Regulation 1408/71 required that discrimination to be eliminated by deeming the appellant to be a British citizen for the purposes of entitlement to state pension credit. I do not think that it is as simple as that when regulation 2 of the 2002 Regulations is read as a whole. The requirement which everyone must satisfy is that they are in Great Britain. The test which regulation 2 lays down is a composite one. Some United Kingdom citizens will be able to say that they are in Great Britain. Some will not. That is true also of nationals of other Member States. No doubt it will be more difficult in practice for nationals of other Member States to meet the test. But not all United Kingdom nationals will be able to meet the test either. In James v Eastleigh Borough Council [1990] 2 AC 751 a rule that those who were not of pensionable age had to pay for admission to a public swimming pool was held to directly discriminate between men and women because their pensionable ages were different. In that case there was an exact match between the difference in pensionable ages and the rule, as the right to free admission depended upon a single criterion an exact coincidence, as Lady Hale puts it: see para 91, below. The statutory pensionable age alone determined whether the person had to pay or not. As Lord Ackner put it at p 769, if you were a male you had, vis--vis a female, a five-year handicap. This was true of every male, not just some or even most of them. That is not so in the present case. There is no such exact match. The composite test is one that some UK nationals may fail to meet too because, although they have a right of residence, they are not habitually resident here. Furthermore, we are not required in this case to say whether this amounts to direct discrimination in domestic law. The question for us is whether it amounts to direct discrimination for the purposes of article 3(1) of Regulation 1408/71. The approach which EU law takes to a composite test of this kind is indicated by the decision of the European Court of Justice in Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559. The Belgian legislation that was analysed in that case was similar in structure to that of regulation 2 of the 2002 Regulations. It too involved a composite test, one element of which could be satisfied by a person who was not a national of the host Member State only if he met certain additional conditions but which every national of the host member state would automatically satisfy. A restrictive French education policy had resulted in an influx of students from France to Belgium, whose system was based on free access to education. This was thought to impose an excessive burden on public finances and to jeopardise the quality of the education provided in Belgium. So the government sought, by a decree adopted in June 2006 by the Parliament of the French Community of Belgium, to limit the number of non-resident students who were entitled to enrol in certain programmes in the first two years of undergraduate studies in each university or school of higher education. A resident student for the purposes of this decree was defined as a student who, at the time of registration in an institution of higher education, proved that his principal place of residence was in Belgium. This was the first of two cumulative conditions which a prospective student had to satisfy. He also had to fulfil one of eight other conditions, one of which was that he had the right to remain permanently in Belgium. Belgians have that right by virtue of their Belgian nationality. Citizens of other Member States have the right to remain permanently in Belgium only if they have a right to do so which is recognised by EU law. Among the questions referred to the Court by the Belgian Constitutional Court was whether this measure was precluded by articles 12 and 18 EC read with articles 149 and 150 EC. Advocate General Sharpston, in a powerful opinion, identified the issues that this question gave rise to as being whether the conditions, which had to be satisfied cumulatively, constituted direct or indirect discrimination. She said that discrimination could be considered to be direct where the difference in treatment was based on a criterion which was either explicitly that of nationality or was necessarily linked to a characteristic indissociable from nationality: para 53. She then examined each of the cumulative conditions separately. She held that the first cumulative condition that the principal place of residence was in Belgium did not constitute direct discrimination. This was because Belgians and non-Belgians alike could establish their principal place of residence in Belgium. As this, apparently neutral, condition was likely to operate mainly to the detriment of nationals of other member states, it was indirectly discriminatory: paras 60-62. It seemed to her, in contrast, that the second cumulative condition was necessarily linked to a characteristic indissociable from nationality. Belgians automatically had the right to remain permanently in Belgium. They therefore satisfied the second cumulative condition automatically. Non-Belgians, on the other hand, had to fulfil additional criteria to acquire a right permanently to remain in Belgium or to satisfy one of the seven other conditions. This discrimination was based on nationality and was therefore direct discrimination. The answer to the question was that the measures in question were precluded by the articles of the EC Treaty that had been founded upon. However the Court did not adopt the approach of the Advocate General. As Lord Walker points out, it did not explain why it thought that the Advocate General was wrong to treat the case as direct discrimination. But the contrast between her carefully reasoned approach and that of the Court is so profound that it cannot have been overlooked. One must assume that her approach, which was to find that the measures were precluded because the second condition was directly discriminatory, was rejected by the Court as too analytical. The Court looked at the conditions as a whole. It referred to its judgment in Case C-212/05 Hartmann v Freistaat Bayern [2007] ECR I-6303, para 29, where it acknowledged that the principle of non-discrimination prohibits not only direct discrimination on grounds of nationality but also all indirect forms of discrimination which lead in fact to the same result by the application of other criteria of differentiation. It said that a provision of national law was to be regarded as indirectly discriminatory if it was liable to affect nationals of other Member States more than nationals of the host State and there was a consequent risk that it would place the former at a particular disadvantage: paras 40-41. It then proceeded in para 42 to make the following analysis, by looking at the residence conditions cumulatively: In the cases in the main proceedings, the decree of June 16, 2006 provides that unrestricted access to the medical and paramedical courses covered by that decree is available only to resident students, that is those who satisfy both the requirement that their principal residence be in Belgium and one of the eight other alternative conditions listed in points 1-8 of the first paragraph of article 1 of that decree. [Emphasis added] The Court concluded that, looked at in this way, the national legislation created a difference in treatment between resident and non-resident students. A residence condition, such as that required by this legislation, was more easily satisfied by Belgian nationals, who more often than not reside in Belgium, than by nationals of other Member States, whose residence is generally in a Member State other than Belgium. It followed that the national legislation affected nationals of Member States other than Belgium more than Belgian nationals and placed them at a particular disadvantage which was indirectly discriminatory. The second cumulative condition as to the right to remain permanently in Belgium which the Advocate General said was necessarily linked to a characteristic indissociable from nationality and directly discriminatory, was subsumed into the first when the two conditions were treated cumulatively. The fact that the Court then went on to consider whether the difference in treatment was objectively justified makes it plain beyond any doubt that it considered the case to be one of indirect, rather than direct, discrimination. There is an obvious similarity between the provisions under consideration in Bressol and the circumstances in which a person is to be treated as being in Great Britain by regulation 2 of the 2002 Regulations. The tests are of the same type and they can be analysed in the same way. Just as in that case the specified courses were to be available to resident students only, here a person must be in Great Britain to be entitled to state pension credit. The European Court did not follow the Advocate Generals invitation to concentrate exclusively on the second cumulative condition. Nor did it pick up the point that she made in footnote 34 to her opinion, where she drew attention to Advocate General Jacobs opinion in Case C-79/99 Schnorbus v Land Hessen [2000] ECR I-10997, [2001] 1 CMLR 40, para 33 which has been discussed by Lord Walker (paras 66-68, below) and by Lady Hale (paras 88-91, below). Instead it looked at the conditions cumulatively and treated them overall as importing a residence test which was indirectly discriminatory. So it would be wrong in this case to concentrate exclusively on the regulation 2(2) right to reside test which is linked to nationality. Looking at the regulation as a whole, in the context of section 1(2)(a) of the 2002 Act, the test which is laid down is that the claimant must be in Great Britain. This test is constructed in a way that is more likely to be satisfied by a United Kingdom national than by a national of another Member State. The Courts reasoning in Bressol tells us that it is not directly discriminatory on grounds of nationality. But it puts nationals of other Member States at a particular disadvantage, so it is indirectly discriminatory. As such, to be lawful, it has to be justified. Justification The test that must be applied is to be found in Case C-209/03 R (Bidar) v Ealing London Borough Council [2005] QB 812, para 54. In that case the European Court held that the criteria in the Education (Student Support) Regulations 2001 for granting assistance to cover the maintenance of students risked placing primarily nationals of other Member States at a disadvantage, because the condition requiring them to have residence in the United Kingdom prior to their studies was likely to be more easily satisfied by United Kingdom nationals: para 53. In para 54 the Court said that such a difference in treatment could be justified only if it was based on objective considerations independent of the nationality of the persons concerned and was proportionate to the legitimate aim of the national provisions. Another source for this test is Case C-138/02 Collins v Secretary of State for Work and Pensions [2005] QB 145, para 66, where the same formula is set out; see also Case C-164/07 Wood v Fonds de Garantie des Victimes des Actes de Terrorisme et dAutres Infractions [2008] 3 CMLR 265, para 13. The parties are agreed that article 3(1) of Regulation 1408/71 does not prohibit indirect discrimination if it is objectively justified by considerations that are independent of the nationality of the person concerned. They are also agreed that the proportionality of the conditions for state pension credit under regulation 2 of the 2002 Regulations is not in issue. As Mr Cox put it in his reply, what the Secretary of State has to show is that the difference in treatment of nationals of other member states is based on objective considerations independent of nationality. If the Secretary of State can meet this requirement, there is no need to examine the question of proportionality. If he cannot do so, it will not help him to say that the conditions for entitlement are proportionate. There are, then, two questions that need to be addressed. First, do the Secretary of States reasons for the difference in treatment provide an objective justification for it? Secondly, if they do, is that justification based on considerations that are independent of the nationality of the persons concerned? The jurisprudence of the European Court has consistently shown that these are matters for the national court to determine: Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559, para 64. The Secretary of States reasons for the introduction of the right to reside requirement in the 2002 Regulations were set out in a statement made in accordance with section 174(2) of the Social Security Administration Act 1992 in April 2004 in response to concerns raised by the Social Security Advisory Committee (Cm 6181). As Katherine Fleay explained in her witness statement, para 4, it was made at the same time as regulations introducing the right to reside test were laid before Parliament. The underlying purpose was said to be to safeguard the United Kingdoms social security system from exploitation by people who wished to come to this country not to work but to live off income- related benefits, while allowing those who come here genuinely to work to have access to them: para 4 of Cm 6181. The purpose of the habitual residence test was to prevent benefit tourism. It was believed to be not unreasonable to expect people who were not economically active, whatever their nationality, to show that they had decided to live indefinitely in the United Kingdom and had a right to reside here before being entitled to benefits funded by the UK tax-payer: paras 13-17. In para 45 he gave this further explanation: As already explained, the Government considers that it is not unreasonable to concentrate benefits on people who have a particularly close connection with the UK or to expect people to have a right to reside in the UK before they become entitled to income-related benefits funded by the UK tax-payer. The EC Directives governing the right of those who are economically inactive to reside in other member states have been in place since the early 1990s. Before the current Immigration (European Economic Area) Regulations 2000, the Immigration (EEA) Order 1994 made clear in line with those Directives that EEA nationals who were economically inactive (for example, retired people) had to have sufficient resources to avoid their becoming a burden on our social assistance system in order to be entitled to reside in the UK without having leave to remain. The Governments proposals merely seek to bring the income-related benefit rules into line with this long- standing requirement. In para 57 of the statement the Secretary of State said that the government believed that its proposals were compatible with EU law as there would be no difference in treatment as between nationals of the eight accession states and other nationals. In para 58 he added this further point: Moreover, the new requirement to have a right to reside in the UK as a condition of access to income-related benefits will apply to UK nationals as well as current EEA nationals and nationals of the acceding states. It will thus apply equally to nationals of all Member States. In para 61 he again stated that the government was concerned that some current EEA nationals had taken advantage of free movement within the European Economic Area to become an unreasonable burden on this countrys benefit system, even though this negated their right to reside in the United Kingdom. It was reasonable to expect people to have a right to reside in the United Kingdom before they could have access to its income-related benefits, particularly as support might last for many years. His proposals were expected to bring the United Kingdom into line with the broad approach of policy and practice in Europe. It should be noted, in regard to that last observation, that by letter dated 4 June 2010 the European Commission invited the United Kingdom pursuant to article 258 TFEU to submit observations on the compatibility with EU law of the imposition of a right to reside test for benefits, including state pension credit, falling within the scope of Regulation 1408/71. Under this procedure, if the Commission is not satisfied with the United Kingdoms observations, it will send a reasoned opinion to the Member State following which, if it does not remedy the alleged breach within the time-frame set by the Commission, the Commission may bring the matter before the Court of Justice of the European Union. Mr Drabble QC for the intervener, the AIRE Centre (Advice on Individual Rights in Europe), submitted that the Commissions decision to issue a letter of formal notice supported the conclusion that it was at least not acte clair that right to reside test was compatible with EU law. So far, no opinion has yet been issued by the Commission with reference to any alleged infringement of Regulation 1408/71. In these circumstances I would not draw any conclusions either one way or the other from these developments. The justification that was given in para 45 of the Secretary of States statement is repeated in the agreed Statement of Facts and Issues, para 33: The justification advanced by [the Secretary of State] for the discriminatory effect of regulation 2 of the 2002 Regulations is to protect the resources of the United Kingdom by refusing means- tested benefits to non-economic European Union migrants who cannot support themselves and that there is a principle of EU law that Member States were entitled not to grant social assistance to non-economically active nationals of other EU Member States. Mr Lewis submitted that the requirements of regulation 2 of the 2002 Regulations were objectively justifiable. He said that para 33 of the Statement of Facts and Issues was not meant to be a complete statement. A person would be eligible to receive state pension credit if he could show economic integration in the United Kingdom or a sufficient degree of social integration here. Where there was social integration, the person would be eligible. What the regulation sought to do was to prevent exploitation of welfare benefits by people who came to this country simply to live off benefits without working or having worked here. It was important to understand the nature of state pension credit. As the Court of Appeal observed in para 41, Regulation 1408/71 draws a distinction between social security benefits within article 4(1) and hybrid benefits within article 4(2a). Social security benefits, such as the appellants Latvian pension, could not be the subject of a residence condition. They must be exportable to any state within the EU. Hybrid benefits on the other hand, such as state pension credit, reflected the social and economic conditions in the country where they were paid. They did not lose their character as social assistance simply because they were treated by the article as hybrid. What mattered was the nature and function of the benefit. State pension credit was social assistance despite the hybrid status that it was given by Regulation 1408/71. It is an income-related benefit to help people in need. So it was not inconsistent with the purpose of Regulation 1408/71 for access to this benefit to be refused to people who did not have right to reside in this country. Mr Lewis submitted that this approach was supported by the judgment of the European Court in Case C-456/02 Trojani v Centre Public dAide Sociale de Bruxelles [2004] 3 CMLR 820 and various EU measures dealing with the right of residence in EU law and its consequences such as Council Directive 90/364 EEC, which made it a condition of the grant of a right of residence in a host Member State to nationals of other Member States that they have sufficient resources to avoid becoming a burden on its social assistance system during their period of residence. Mr Trojani was a French national. He moved to Belgium where he worked for a while without being registered. He then sought social assistance in the form of a benefit known as the minimex. One of the questions was whether he had a right of residence in Belgium, and was thus entitled to social assistance there, simply by virtue of being an EU citizen. In para 17 of his opinion in Trojani Advocate General Geelhoed said that the differential treatment of economic and non-economic migrants, viewed historically, was based on the need to remove obstacles to inter-state trade and later to provide for the free movement of persons. In para 18 he contrasted the historical position with what it is today: The difference in treatment now has a more pragmatic basis. So long as social security systems have not been harmonised in terms of the level of benefits, there remains a risk of social tourism, ie moving to a Member State with a more congenial social security environment. And that is certainly not the intention of the EC Treaty, which to a considerable extent leaves responsibility for social policy in the hands of the Member States. The Community legislature has acted on the assumption that an economic migrant will not claim any subsistence allowance in the host Member State. In para 70 he said that the basic principle of Community law is that persons who depend on social assistance will be taken care of in their own Member State. There was no doubt that Mr Trojani was applying for the minimex because he did not have sufficient resources to provide for himself. In these circumstances he could not claim a right of residence on the basis of article 18 EC. The Court endorsed the approach of the Advocate General. In paras 35-36 it said: 35 It follows from the judgment making the reference that a lack of resources was precisely the reason why Mr Trojani sought to receive a benefit such as the minimex. 36 In those circumstances, a citizen of the Union in a situation such as that of the claimant in the main proceedings does not derive from article 18 EC the right to reside in the territory of a Member State of which he is not a national, for want of sufficient resources within the meaning of Directive 90/364. Mr Coxs response to these arguments was that the purpose of regulation 2 of the 2002 Regulations was simply to exclude other EU citizens. This was plainly contrary to article 3(1) of Regulation 1408/71, whose effect was that the provisions of Regulation 1408/71 applied to all those who were within its personal scope without distinction as to whether they were lawfully resident in the host Member State. When the Secretary of State used the word people in his statement (see paras 37-38, above) it was plain that he was referring to citizens of other Member States. He was not seeking to impose additional conditions on United Kingdom nationals, as it was enough for them to prove British citizenship. For those who were not United Kingdom or Irish nationals, habitual residence was no longer to be enough. The Secretary of States purpose was not independent of nationality. So the regulation could not be justified by objective considerations independent of the nationality of the persons concerned. As for the nature of state pension credit, some benefits which had the characteristics of social assistance were properly characterised as social security. That was what article 4(2a), inserted by Regulation (EC) No 647/2005, was designed to do. There was consistent case law, starting with Case 1/72 Rita Frilli v The State (Minister for Social Security) [1973] CMLR 386, para 14, to the effect that benefits which had the dual characteristics of social assistance and social security, and which conferred upon beneficiaries a legally defined position giving them a right to benefit, are to be treated as social security. This was significant because, if the principle which the Secretary of State relied upon (see para 40, above) did exist, it was only relevant to social assistance benefits and not in respect of social security. As I understood Mr Coxs argument, he did not seriously question the proposition that the Secretary of States reasons are objectively justifiable. The purpose of regulation 2 of the 2002 Regulations is to ensure that the claimant has achieved economic integration or a sufficient degree of social integration in the United Kingdom or elsewhere in the Common Travel Area as a pre-condition of entitlement to the benefit. The effect of article 4(2a) of Regulation 1408/71 is that social assistance benefits such as state pension credit share features with social security. But I agree with the Court of Appeal that the widening of the scope of Regulation 1408/71 does not preclude a justification of indirect discrimination which is based on the nature of the benefit: para 51. The Secretary of States justification lies in his wish to prevent exploitation of welfare benefits by people who come to this country simply to live off benefits without working here. That this is a legitimate reason for imposing the right of residence test finds support in Advocate General Geelhoeds opinion in Trojani v Centre Public dAide Sociale de Bruxelles [2004] 3 CMLR 820, para 70 that it is a basic principle of Community law that persons who depend on social assistance will be taken care of in their own Member State. The more difficult question is whether this justification is independent of the nationality of the persons concerned. A finding that the conditions in regulation 2 are indirectly discriminatory on grounds of nationality provides the context for a consideration of this question. Inevitably the two questions are bound up together. But the fact that the difference in treatment is based indirectly on grounds of nationality cannot be permitted to lead inevitably to the conclusion that a justification for it cannot be regarded as independent of the nationality of the persons concerned. Otherwise the test for its justification which the court has laid down would be incapable of ever being met. The approach which the test invites at this stage is to examine the justification on its own merits without regard to its indirect discriminatory consequences. The justification is founded on the principle that those who are entitled to claim social assistance in the host Member State should have achieved a genuine economic tie with it or a sufficient degree of social integration as a pre-condition for entitlement to it. In Kaczmarek v Secretary of State for Work and Pensions [2008] EWCA Civ 1310, [2009] 2 CMLR 85, para 2, Maurice Kay LJ said that if a citizen of one Member State who is lawfully present in another Member State can, without difficulty and whilst economically inactive, access the social security benefits of the host State, the implications for the more prosperous Member States with more generous social security provisions are obvious. The rules that regulation 2 of the 2002 Regulations lays down are intended to meet this problem. There are various ways in which the pre-condition for entitlement can be achieved under its provisions. They are not exclusively dependent on the nationality of the persons concerned. I think that there is force in Mr Coxs point that the persons to whom the Secretary of State was directing attention in his statement in response to concerns raised by the Social Security Advisory Committee were persons who were not nationals of the United Kingdom. The context for the Secretary of States remarks was the perception that nationals of other Member States would take advantage of the right of free movement to access income-related benefits. But even nationals of the United Kingdom must satisfy the test of habitual residence in order to be entitled to state pension credit: see para 26, above. The same is true of Commonwealth citizens who have a right of abode here under section 2 of the Immigration Act 1971 and persons with a right of residence in the United Kingdom granted pursuant to that Act. The principle on which the Secretary of States justification relies underlies the EU rules as to whether, and if so on what terms, a right of residence in the host Member State should be granted. This is the issue to which Council Directive 90/364 EEC is directed. In that context there is no prohibition on discrimination on grounds of nationality under EU law. So there is no need to be concerned with the question whether the approach that is taken there can be justified on grounds that are independent of nationality. Three questions then arise. The first is whether the Secretary of States justification can be regarded as relevant in the present context. The second is whether it is a sufficient justification given the effect of the rules that regulation 2 of the 2002 Regulations lays down. The third is whether it is independent of the nationality of the person concerned. The first and second questions can be taken together. The justification is relevant because the issues that arise with regard to the grant of a right of residence are so closely related to the issues that are raised by the appellants claim to state pension credit. They are, at heart, the same because they are both concerned with a right of access to forms of social assistance in the host Member State. It is also a sufficient justification, in view of the importance that is attached to combating the risks of what the Advocate General in Trojani v Centre Public dAide Sociale de Bruxelles [2004] 3 CMLR 820, para 18 described as social tourism. As for the third question, the answer to it depends not just on what the Secretary of State himself said in his statement (see paras 37-38, above), but also on the wording of the regulation and its effect. They show that the Secretary of States purpose was to protect the resources of the United Kingdom against resort to benefit, or social tourism by persons who are not economically or socially integrated with this country. This is not because of their nationality or because of where they have come from. It is because of the principle that only those who are economical or socially integrated with the host Member State should have access to its social assistance system. The principle, which I take from the decision in Trojani, is that it is open to Member States to say that economical or social integration is required. A persons nationality does, of course, have a bearing on whether that test can be satisfied. But the justification itself is blind to the persons nationality. The requirement that there must be a right to reside here applies to everyone, irrespective of their nationality. For these reasons I would hold that the Secretary of State has provided a sufficient justification, and that it is independent of the nationality of the person concerned. It follows that the indirect discrimination that results from regulation 2 of the 2002 Regulations was not made unlawful by article 3(1) of Regulation 1408/71. Irish nationals Citizens of the Republic of Ireland have, as Irish nationals, a right to reside in the Republic of Ireland by virtue of their Irish citizenship. So they meet the requirement of regulation 2(2) of the 2002 Regulations, even though they do not have a right to reside in the United Kingdom and are not habitually resident here. It is enough that they are habitually resident in Ireland. So, if they are in Great Britain too, they have the same right to state pension credit as United Kingdom nationals who are habitually resident in the United Kingdom and in Great Britain. The appellant submits that, as entitlement to state pension credit is extended to Irish nationals, it is discriminatory not to extend it to nationals of all other Member States. As regulation 2(2) treats Irish citizens as if they were United Kingdom citizens, Latvian citizens too should be so treated by the operation of Regulation 1408/71. This is because that Regulation abolished all discrimination based on nationality and, in consequence, the domestic measure is to be disregarded. Mr Cox summarised his point graphically in his closing submission. He said that it was not open to the United Kingdom to give Irish nationals a free pass to state pension credit simply by showing their passports, while starving out nationals of the other Member States. The provision for Irish citizens in regulation 2 is protected by article 2 of the Protocol on certain aspects of article 14 EC (now article 26 TFEU) to the United Kingdom and Ireland, commonly referred to as the Protocol on the Common Travel Area. Having first been annexed to the Treaty of Amsterdam, it is now annexed to the Treaty on the Functioning of the European Union and the Treaty on European Union as Protocol (No 20). It states that the United Kingdom and Ireland may continue to make arrangements between themselves relating to the movement of persons between their territories. It also provides that nothing in articles 26 and 77 of the Treaty on the Functioning of the European Union or in any other provision of that Treaty or of the Treaty on European Union or in any other measure adopted under them shall affect any such arrangements. Mr Lewis said that the appellants argument gave rise to four questions: (1) Does the fact that different arrangements are made for Irish nationals than for nationals of other Member States undermine the policy justification for not extending the benefit to the other Member States? (2) Is this permitted by the Protocol? (3) If not, is it unlawful because it is discriminatory and unjustified? (4) If it is unlawful, what can be done about this? He submitted that the answer to the first question was straightforward. For economic, historical and social reasons Ireland is simply different from the other Member States. Recognising these differences did not undermine the policy justification for treating the other Member States differently. I do not think that Mr Cox had any answer to that submission. Indeed he said that he did not seek in any way to affect the operation of regulation 2(2) in respect of Irish citizens. The appellants case was that, as a citizen of Latvia, she was entitled to the same treatment as they receive under the arrangements that are protected by the Protocol. The points in issue, therefore, are those focussed by the second, third and fourth questions. The key words in the Protocol are those which indicate that the arrangements between the United Kingdom and Ireland that are protected by it are those relating to the movement of persons between their territories. The principle of international law which precludes a State from denying its own nationals the right to enter its territory and reside there must be complied with in applying those arrangements: Case C-171/96 Roque v Lieutenant Governor of Jersey [1998] 3 CMLR 143, paras 38-39. Mr Cox submitted that the arrangements with which the 2002 Regulations were concerned were not related to movement of persons between Ireland and the United Kingdom. This was because an Irish citizen who had never set foot in Ireland and arrived in the United Kingdom could meet the requirement simply because he had a right to reside in Ireland. Mr Lewis said that the situation referred to was wholly exceptional. In any event, such a person would not, on arrival, satisfy the requirement as he would not be habitually resident either in the United Kingdom or in Ireland. Looking at the matter realistically, it was plain that the arrangements with which the 2002 Regulations were concerned did facilitate free movement of persons between the two countries. It did not limit the entitlement of Irish nationals to state pension credit to those who were economically active. It facilitated the free movement of persons, not just workers. Mr Cox submitted that there was no arrangement between the United Kingdom and Ireland protected by the Protocol because the provision made by each country for the others nationals was not reciprocal. Mr Lewis accepted that different rules as to entitlement to social security applied in Ireland. The Irish legislation does not provide an exemption for United Kingdom nationals or provide that residence in the United Kingdom is to be treated as residence in Ireland, as it is to be presumed unless the contrary is shown that a person is not habitually resident in the State unless he has been present in the State or any part of the Common Travel Area for a continuous period of two years: Social Welfare (Miscellaneous Provisions) Act 2004, section 17 and Schedule 1. But he submitted that absolute reciprocity was not required for an arrangement to fall within the protection of the Protocol. The arrangements could be one way only, so long as they related to the free movement of persons between the two countries. I think that some measure of reciprocity is contemplated by the Protocol. But, as these are arrangements between two sovereign States, it would be going too far to insist on a precise match between the arrangements on one side of the Irish Sea and the other. The words of article 2 do not suggest that the arrangements must meet this test to attract its protection. Mr Cox submitted that, as it derogated from fundamental Community law principles, the Protocol fell to be construed strictly. But in my opinion the rather loose word arrangements indicates that it is for the two States themselves to determine what would best suit the overall objective of promoting free movement between their territories, while taking account of each countrys different economic and social circumstances. I would hold therefore that there is sufficient reciprocity between the respective conditions for entitlement, and a sufficient connection between the social security arrangements on either side and the aim of promoting free movement between the two countries, for the arrangements in regulation 2 of the 2002 Regulations to attract the protection of article 2 of the Protocol. The third and fourth questions on Mr Lewiss list do not need to be answered. I would reject the appellants argument that she is entitled to be treated in the same way as Irish nationals. Conclusion I would hold that regulation 2 of the 2002 Regulations is indirectly discriminatory, but that the condition that it lays down is objectively justifiable on grounds independent of the appellants nationality. I would dismiss the appeal. Lord Hope has given a full and clear summary of the facts and the relevant national and EU legislation. I can proceed at once to the three issues identified in para 20 of Lord Hopes judgment. Direct or indirect discrimination? The judgment of the Court of Appeal now under appeal was, by a strange coincidence, delivered on the same day (25 June 2009) as the opinion of Advocate General Sharpston in Bressol v Gouvernement de la Communaut Franaise (Case C73/08) [2010] 3 CMLR 559. The Court of Appeal did not therefore have the opportunity of considering it. The Advocate Generals opinion and the judgment of the Grand Chamber of the Court of Justice (delivered on 13 April 2010) are discussed in paras 30-34 of Lord Hopes judgment. As he says, the difference between the Advocate Generals opinion and the Grand Chambers judgment is profound. The opinion (paras 43-58) sets out a lengthy, scholarly and closely- reasoned discussion of the difference between direct and indirect discrimination. The Grand Chamber made no reference to this discussion. It treated the case as one of indirect (and therefore potentially justifiable) discrimination without explaining why the Advocate General was wrong to treat the case as direct discrimination. Lord Hope (para 33) reads the judgment as treating the second cumulative condition (as to the right to remain permanently in Belgium) as having been subsumed into the first condition, but I confess that I cannot discern that subtlety in the judgment. The Grand Chamber seems to have regarded it (para 45) simply as a residence condition more easily satisfied by Belgian nationals. I regret that the Grand Chamber did not explain why they disagreed with the Advocate General. She has, if I may respectfully say so, grappled with the real difficulties of this issue, although I do not agree with all her conclusions. She has proposed a general definition of direct discrimination (para 56): I take there to be direct discrimination when the category of those receiving a certain advantage and the category of those suffering a correlative disadvantage coincide exactly with the respective categories of persons distinguished only by applying a prohibited classification. In my view this is too narrow a definition. As Lord Mance said in R (E) v Governing Body of JFS [2010] 2 AC 728, para 89, approving a submission from Miss Rose QC, an organisation which admitted all men but only women graduates would be engaged in direct discrimination on the grounds of sex. The Advocate Generals proposed test works only if in this example the categories are limited to cohorts of non-graduates (or, in the well-known case of James v Eastleigh Borough Council [1990] 2 AC 751, to cohorts of men and women over 60 years but under 65 years of age). It follows that in my opinion the Court of Appeal were wrong in adopting the reasoning in paras 22 to 24 of the judgment of Moses LJ. He said in para 22: Article 3 [of Council Regulation (EC) No 1408/71] requires the conditions for entitlement to State Pension Credit, under the legislation of the United Kingdom, to be the same for Latvian nationals as for United Kingdom nationals. Accordingly, it is necessary to focus on those conditions as a whole rather than one particular element of those conditions to the exclusion of others. The right to reside condition does not by itself entitle a claimant to the benefit. I do not see why the fact that there is more than one condition makes it necessary to focus on the conditions as a whole, if it is only one condition that produces unequal treatment. The right to reside condition is not a sufficient condition for entitlement, but it is a necessary condition, and it is one that is automatically satisfied by every British national. The fact that there is another cumulative condition (actual or deemed habitual residence) is irrelevant (Gravier v City of Lige (Case 293/83) [1985] ECR 593, para 14). It might be different if there were alternative conditions, because neither condition would then be necessary (although one would be sufficient). Returning to Bressol, I note that Advocate General Sharpston referred to the opinion of Advocate General Jacobs in Schnorbus v Land Hessen (Case C-79/99) [2000] ECR I-10997, para 33: It may be said that discrimination on grounds of sex arises where members of one sex are treated more favourably than the other. The discrimination is direct where the difference in treatment is based on a criterion which is either explicitly that of sex or necessarily linked to a characteristic indissociable from sex. It is indirect where some other criterion is applied but a substantially higher proportion of one sex than the other is in fact affected. That is, to my mind, the best guidance that we have. The second category (necessarily linked to a characteristic indissociable from sex) roughly corresponds to Advocate General Sharpstons proposed general definition, but is, I think, a better way of putting it. Schnorbus was a case brought by a female law graduate whose progress to the final part of her professional training had been held up by a shortage of training places. In the allocation of places some categories of applicants were given priority, including those (all male) who had completed a years compulsory national service. This was, Advocate General Jacobs advised, potentially indirect discrimination on the ground of sex, but was justified as one in a list of cases where priority was appropriate (others were disability, adverse social or family circumstances, and being a mature student). Advocate General Sharpston (para 67) sought to distinguish this case from Dekker v Stichting Vormingscentrum voor Jong Volwassenen (VJVCentrum) Plus (Case C-177/88) [1990] ECR I-3941 (the well-known case of a female refused a job because she was pregnant) on the ground that not all men actually completed national service (some were no doubt found medically unfit). But by the same token not every woman applying for a job is capable of becoming pregnant: her age or medical history may make that impossible. The true distinction was pointed out by Advocate General Jacobs in Schnorbus, that capacity for childbearing is a natural physical characteristic of women, whereas a mans liability to do national service was imposed by legislation (para 40): No amount of legislation can render men capable of bearing children, whereas legislation might readily remove any distinction between men and women in relation to compulsory national service. The difference depended on a statutory obligation, and was not between men and women as such. Advocate General Jacobs opinion in Schnorbus has other valuable insights. He discussed whether there is some circularity in the rule that provisions potentially amounting to indirect discrimination can be justified only if those provisions are justified by objective considerations independent of the nationality of the workers concerned, a form of words frequently used by the Court of Justice (for instance in Borawitz v Landesversicherungsanstalt Westfalen (Case C-124/99) [2000] ECR I-7293, para 26, but not, as it happens, by the Grand Chamber in Bressol, paras 47-48). In his opinion in Schnorbus Advocate General Jacobs observed (para 47): The Courts usual formulation may seem circular. To say that there is no discrimination based on sex when a difference in treatment is justified by factors unrelated to discrimination based on sex appears self-evident. In line with the definition in Directive 97/80, however, I take it to mean that (indirect) discrimination is not unlawful when the difference in treatment is justified by objective factors not in themselves (that is to say, not directly) related to sex. (This question of circularity seems to have been also in the mind of the Social Security Commissioner, Mr Rowland, in his decision in this case, para 13). As examples Advocate General Jacobs would, I think, have given those that he had already referred to: pregnancy (Dekker) is in itself related to sex, whereas liability to national service (Schnorbus) is not, although a national legislature may choose sex as a demarcation line. But this test of seeing whether the suspect ground of discrimination is directly (in the sense, as I understand it, of centrally, or intrinsically) involved is more difficult to apply to the abstract juridical concept of nationality. I agree with Lord Hope (para 33) that in Bressol the Grand Chamber must be taken to have regarded the Advocate Generals approach as too analytical. I would like to be able to agree that her approach accords well with our domestic law, but I must say that it seems to me hard to reconcile with the approach of the Court of Appeal in R (Elias) v Secretary of State for Defence [2006] 1 WLR 3213, the case of Mrs Elias who was British enough to be interned (in Hong Kong between 1941 and 1945) but not British enough to be compensated (under an official scheme introduced in 2000). In that case Mummery LJ, who gave the leading judgment, acknowledged (paras 104-113) the strength of the submissions made on behalf of Mrs Elias by Mr Rabinder Singh QC. But he felt bound to reject them (paras 113 and 114): The powerful submissions of Mr Singh raised serious doubts in my mind about the correctness of the judges ruling on this point, which, as Mr Singh pointed out, focused more on the edges of the effects of the criteria than on their central purpose or effect. In a general sense, discrimination with a discriminatory purpose, regardless of the particular form it takes, can be perceived as treating a person less favourably on racial grounds. I am, however, clear that, in the present state of the law, the particular form of discrimination matters, even if there are present in the circumstances of the case a discriminatory purpose and discriminatory effects. The 1976 Act, as amended, makes an important broad distinction between two different forms of discrimination. This distinction is consistent with the [Race Equality] Directive [2000/43/EC] and this Court must observe it. Discriminatory purpose? Mummery LJs observations about discrimination with a discriminatory purpose make it appropriate to mention a point which is not, I think, controversial, but may be worth spelling out. The dividing line between direct and indirect discrimination is emphatically not to be determined by some sort of mens rea on the part of one or more individual discriminators. A discriminatory purpose is not necessary for direct discrimination, nor (as Mummery LJ recognised) is it inconsistent with a finding of indirect discrimination. Where there is an allegation of direct discrimination of a systemic sort (embodied in legislation or rules, or in the settled practices and procedures of a public authority or an employer) it makes no difference whether or not the objectionable feature is in some way deliberately targeted at a particular group. That has been clear since the decisions of the House of Lords in R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] AC 1155 and James v Eastleigh Borough Council [1990] 2 AC 751. Conversely, it seems that a discriminatory purpose does not, on the present state of the law, prevent unequal treatment being regarded as no more than indirect discrimination which is capable of justification. It is hard to avoid the suspicion that legislators and government lawyers throughout the EU have become well aware of this. There is an obvious temptation for governments, in the face of understandable popular feeling (in this case, against benefit tourism) to try to draft their way out of direct into indirect discrimination, with a view to avoiding having to distribute large sums out of public funds, or having to make some other commitment of national resources, to beneficiaries whom their electors would not regard as deserving. Bressol and other cases concerned with the Belgian social security and education systems may be examples of this. In the area of fishing rights Commission of the European Communities v Ireland [1978] ECR 417 seems to be a striking example, since the Irish legislations detailed prescription for exempted vessels coincided with characteristics of vessels used by the Irish fishing fleet and was not justified by the need of conservation. In this country, Elias may be an example; and so may the amendments made in 2004 to the State Pension Credit Regulations 2002. Having said all that, I recognise that this Court must follow the judgment of the Court of Justice of the EU in Bressol, even if some of us do not fully understand its reasoning. This case must be treated as one of indirect discrimination. But the correlation between British nationality and the right to reside in Great Britain is so strong that the issue of justification must in my view be scrutinised with some rigour. Justification The justification advanced in the Secretary of States printed case (para 54, an expanded version of the summary in para 33 of the statement of facts and issues) is that the provisions of regulation 2 (as amended) are indeed objectively justified, as they legitimately seek to identify either economic integration or a sufficient degree of social integration (an objective which applies equally to UK and other EU nationals, and indeed to nationals of third countries). Reference is made to the Secretary of States formal statement under section 174(2) of the Social Security Administration Act 1992 laid before Parliament in April 2004. Reference is also made to Zalewska v Department for Social Development [2008] 1 WLR 2602, 2617. That was a split decision of the House of Lords on an issue as to the proportionality of measures taken in relation to economically active workers from A8 nations, and I find it of no assistance in this appeal. Proportionality is not an issue here. Nor are we concerned with economically active nationals of other EU States. The issue is whether the objective of a sufficient degree of social integration is something for the attainment of which the provisions of regulation 2(2) are an appropriate test, independent of the nationality of the person whose social integration is in question. This Court has had little assistance as to what social integration means in this context, as something separate from economic integration. The Court of Appeal (paras 27 to 40) seem to have addressed only economic integration. But I will assume in favour of the Secretary of State that it is a meaningful concept recognised by EU law, and that its precise content need not be defined. The Secretary of States statutory statement is very largely concerned with the habitual residence test (introduced into social security legislation in 1994). It had the legitimate purpose of discouraging benefit tourism. The statement (para 16) indicates that the decision of the House of Lords in Chief Adjudication Officer v Wolke [1997] 1 WLR 1640 was perceived as creating a major difficulty in relation to economically inactive EU nationals. That is the introduction to the explanation of the new right to reside requirement (para 17 of the statement): The Government believes that it is not unreasonable to expect that, whatever their nationality, people should show that they have a right to reside in the UK before being entitled to benefits funded by the UK taxpayer: indeed, correspondence that I and my Ministerial colleagues have received suggests that the public generally expects this. The proposed regulations are thus intended to fill a gap in measures to safeguard the public purse against exploitation by people with no right to reside here, irrespective of nationality. Their purpose is therefore different from the more limited purpose of the habitual residence test. The appellants printed case (para 93) comments that the paragraph quoted above suggests that the Secretary of State may not have understood the effect of his amendment. I have to say that I think this may be too kind: the Secretary of State and his advisers are unlikely to have misunderstood the effect of the amended regulation 2(2). The reference to people with no right to reside here, irrespective of nationality may be regarded as a disingenuous description of a test which every British national passes automatically, by virtue of section 2 of the Immigration Act 1971, but which non-nationals will not pass unless they come within the special categories in regulation 2(1) (and are not excluded by regulation 2(2): under the amendment regulation 2(2) trumps regulation 2(1) in case of conflict; this particular point was not, I think, explored in argument). The appellant, and anyone else in her position, is caught by regulation 2(2), and no amount of effort on her part to achieve social integration (whatever that means) will change the position (apart possibly from future marriage or naturalisation, which may be academic points so far as the appellant is concerned). In the Court of Appeal Moses LJ (para 25) distinguished this case from R (Bidar) v Ealing London Borough Council [2005] QB 812, where the student applicant had to be not only ordinarily resident but also settled, a status which he could not obtain as a student (since students were not given permission to remain indefinitely). But in my view the two cases are indistinguishable. Other EU nationals were in a different position, but Mr Bidar and all other students in his position were excluded. The same is true of the appellant and others in her position. The fact that other EU nationals may be in a better position is irrelevant, for reasons already noted. It is in the end a fairly short point. In my opinion the provisions of regulation 2(2) are probably aimed at discriminating against economically inactive foreign nationals on the grounds of nationality. Whether or not that was the intention of those who framed them, they have that effect. That can, I think, be simply demonstrated. If the appellant (who is now aged 72) had been a British national who had gone to Latvia 50 years ago, but was in all other respects in the same position that is, had come to England in 2000 with no family, friends or other human or financial resources here she would not be excluded, and the only reason for that difference is her nationality. That difference of treatment is something to which the appellants nationality was central, intrinsic or (in the sense in which Advocate General Jacobs used it in Schnorbus) direct. Even though classified as indirect discrimination, it is not capable of justification because the proposed justification, once examined, is founded on nationality. In my view the third issue, raising the Irish element, does not arise. But I am in full agreement with what Lord Hope says on that aspect of the matter. There was a good deal of discussion about Trojani [2004] ECR I-7573, and in particular some general remarks made in the opinion of Advocate General Geelhoed. It raises some difficult and interesting issues but I do not think it would be appropriate for me, in a dissenting judgment, to say more about them. For my part I would allow this appeal. Since I differ from the majority only on the issue of justification, which is for the domestic court, a reference to the Court of Justice would not be appropriate. This is a difficult case. It is difficult not only because of the mind-numbing complexity of the words used by the legislators but also because of the inherent complexity of the concepts developed in the pursuit of equal treatment. As Lord Walker commented in the course of the argument in this case, the wording of regulation 2 of the State Pension Credit Regulations 2002 (SI 2002/1792) is so obscure that it looks as if it is trying to cover something up. As Lord Walker has also commented, extra-judicially, Why does the topic of discrimination get so abstract and complicated as soon as it gets into the hands of the lawyers?. . . Why cannot the topic be left to the intuitive decency and common sense of the right- thinking citizen? The answer, he suggests, is that intuition and common sense are sufficient in clear cases, but cannot by themselves provide the answer in marginal cases (Treating like cases alike and unlike cases differently: Some problems of anti-discrimination law, Victoria University, Wellington, New Zealand, 2 September 2010, pp 2-3). Another answer, I would suggest, is that the concepts of direct and indirect discrimination, justification and proportionality, become altogether more difficult to apply the greater the number of prohibited grounds of discrimination and the wider the circumstances in which discrimination is prohibited. We are concerned with a rather different prohibition of discrimination from the more familiar domestic provisions, now contained in the Equality Act 2010, which aim to prohibit discrimination in the supply of employment, goods, services and the like on the grounds of protected characteristics such as race, sex or religion. Its foundation rests in article 12 of the EC Treaty: Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. This is not a general prohibition of discrimination on grounds of nationality. Only the nationals of Member States are protected. Discrimination against third country nationals is not prohibited. Indeed it is positively expected. The underlying purpose is to promote the objects of the Union and in particular the free movement of workers between the Member States and the free establishment of businesses within them. The special provision made in Council Regulation (EEC) No 1408/71 is article 3.1. This requires that: Subject to the special provisions of this Regulation, persons to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of the State. Under article 2 of Regulation 1408/71, the persons covered by the Regulation must, among other things, be nationals of one of the Member States (or stateless persons or refugees residing within the territory of one of the Member States) or members of their families or their survivors. Once again, therefore, this is not a general requirement of equal treatment irrespective of nationality. It is there principally to protect the nationals of Member States. Moreover, on the face of it, there is no breach of article 3.1 in the United Kingdoms State Pension Credit Regulations 2002. Nationals of other Member States are subject to the same obligations and enjoy the same benefits under those Regulations as do the nationals of the United Kingdom. The question, however, is whether the rules under which they do so discriminate against them in a way which is prohibited by article 12 of the Treaty. The European jurisprudence on the interpretation of article 12 is not as clear cut as is the jurisprudence on sex discrimination. Thus, for example, it tends to talk about overt and covert discrimination rather than direct and indirect and the concepts may not be precisely equivalent. Also, there is no emphatic statement that direct discrimination can never be justified. Commissioner Rowland referred, at para 16 of his decision in this case, to Martinez Sala v Freistaat Bayern (Case C-85/96) [1998] ECR I-2691, at para 64: Since the unequal treatment in question thus comes within the scope of the Treaty, it cannot be considered to be justified: it is discrimination directly based on the appellants nationality and, in any event, nothing to justify such unequal treatment has been put before the Court. Commissioner Rowland commented that this certainly shows that the Court did not exclude the possibility that direct discrimination might in certain circumstances be justified, although he was inclined to agree that the paragraph was equivocal in that regard. I mention these considerations only to suggest that we may here be dealing with a rather more flexible concept, designed for a particular purpose within the law of the European Union, than with the more familiar concepts in our domestic anti-discrimination law, based though they are upon European Union law, but with the rather different purpose of securing equality of treatment by suppliers irrespective of personal characteristics which are deemed immaterial to the transaction. But with that small caveat, I agree that the questions are (i) whether there is here direct or indirect discrimination against nationals of other Member States; and (ii) whether any such discrimination is justified. I have nothing to add to what Lord Hope has said on the Irish question. The difference between direct and indirect discrimination assumes great importance if it controls what, if any, justification may be possible. (In this respect, European Union and domestic anti-discrimination law is different from the European Convention on Human Rights, which does not draw this sharp distinction.) Yet it is by no means a straightforward question. Lord Walker has drawn attention to the opinions of Advocate General Jacobs in Schnorbus v Land Hessen (Case C-79/99) [2001] 1 CMLR 1025 and Advocate General Sharpston in Bressol v Gouvernement de la Communaut Franaise (Case C-73/08) [2010] 3 CMLR 559, ostensibly applying the same test but doing so in a rather different way. At para AG52 of Bressol, Advocate General Sharpston quoted Advocate General Jacobs statement at para A33 of Schnorbus: The discrimination is direct where the difference in treatment is based on a criterion which is either explicitly that of sex or necessarily linked to a characteristic indissociable from sex. It is indirect where some other criterion is applied but a substantially higher proportion of one sex than the other is in fact affected. The complaint in Schnorbus was that candidates who had completed their national service were given priority over other candidates in admission to the second stage of legal training but only men were eligible for national service. Advocate General Jacobs took the view that this was indirect discrimination: eligibility for national service was a legal requirement rather than one, such as pregnancy, based on a physical characteristic which is indissociable from sex. He went on to opine that the discrimination was justified. The Court agreed with him on both points. Yet this distinction between legal requirements and physical characteristics might come as something of a surprise, for example, to readers of James v Eastleigh Borough Council [1990] 2 AC 751, where the discrimination between male and female swimmers was linked to a legal requirement, the statutory retirement age, which was indissociable from sex. But at least in Schnorbus, as in James, there was an exact coincidence between the requirement and the sex of those whom it advantaged or disadvantaged as the case might be: in Schnorbus all men were advantaged and all women were disadvantaged; in James all men were disadvantaged and all women were advantaged. In Bressol Advocate General Sharpston took up the notion of a difference in treatment necessarily linked to a characteristic indisssociable from in her case nationality and formulated it thus, at para AG56: I take there to be direct discrimination when the category of those receiving a certain advantage and the category of those suffering a correlative disadvantage coincide exactly with the respective categories of persons distinguished only by applying a prohibited classification. But she went on to opine that this test was fulfilled when there was no exact congruence between those advantaged and those disadvantaged by the requirement in question. Thus she held it direct discrimination on grounds of nationality when both Belgians and other nationals might fulfil the requirement of a right to remain permanently in Belgium, but only Belgians could do so automatically. This may be an attractive approach: it is, of course, the exact equivalent of the situation in this case. But it is certainly a development of the principle established in Schnorbus. It suggests that there can be direct discrimination even when some members of the disadvantaged group do fulfil the requirement in question even though others do not. The equivalent in Schnorbus would have been if all men were eligible to do national service but only some women were eligible to do so. At all events, it seems clear that the Grand Chamber in Bressol did not accept the Advocate Generals opinion on this point. The Court expressly stated, at para 47, that this was indirect discrimination on the ground of nationality, which was prohibited unless it was objectively justified. The Court then went on to discuss what might amount to objective justification in that case. The Court must therefore have rejected the Advocate Generals view that this amounted to direct discrimination. It follows, in my view, that we too should regard this case as a case of indirect, rather than direct, discrimination. No-one doubts that it is indirect. There have been many subtly different formulations of the test for indirect discrimination (Monaghan, for example, Equality Law, Oxford University Press, 2007, identifies four): but in essence it is the application of a criterion which is applied equally both to nationals and to non- nationals but which in fact places non-nationals at a particular disadvantage when compared with nationals. The right to reside criterion obviously places non- nationals at a particular disadvantage when compared with nationals and has in fact placed Ms Patmalniece at that disadvantage. Justification The Grand Chamber stated the test thus in R (Bidar) v Ealing London Borough Council (Case C-209/03) [2005] QB 812, para 54: Such a difference in treatment can be justified only if it is based on objective considerations independent of the nationality of the persons concerned and is proportionate to the legitimate aim of the national provisions. This is a rather less precise way of putting the test than the way in which it is put in other contexts. The other formulations, for example in the Burden of Proof Directive (Council Directive 97/80/EC) or the Framework Directive on Equal Treatment (Council Directive 2000/78/EC), all make it clear that it is the provision, criterion or practice which has to be justified as a proportionate means of achieving a legitimate aim, ex hypothesi for reasons which are independent of the protected characteristic involved. Although the concept of justification under article 12 has not been articulated in precisely this way, perhaps because it has not in itself been the subject of a Directive, it seems unlikely that the Court of Justice would approach it any differently. The approach in the Directives mentioned is the product of its own jurisprudence. If that is so, then it is the criterion of a right to reside which has to be objectively justified by considerations other than the nationality of those involved because it is that criterion which leads to the difference of treatment complained about. There is no doubt about the broad aim which it is sought to pursue. This is to protect the public purse, or more precisely, those who pay taxes in the United Kingdom, from the burden of relieving the poverty of everyone who is here, irrespective of the reasons why they are here. When the welfare state was first established, this was not seen as a problem. Everyone who was here could claim social assistance, in the shape of health and social services and also means-tested financial benefits. But the state progressively withdrew that support. That may be an explanation for the peculiar drafting technique of granting benefits to people in Great Britain and then defining the people who are, and are not, to be treated as in Great Britain for this purpose. The general aim is to identify those who are, or rather those who are not, considered deserving of income-related, that is, means- tested benefits. The Regulations contain two separate requirements, with two rather different aims. The requirement of habitual residence has been there since 1994 to combat benefit tourism, people coming here with a view to claiming benefits, rather than with a view to working or establishing themselves in business or a profession here. Thus certain categories of people who come here for other reasons are entitled to make claims even though they are not habitually resident here: these include people from other Member States who are workers or realistically looking for work, or have been workers but for a variety of reasons are so no longer, or people who have moved here to set up in self-employment, and members of the families of each of these, as well as people who have been granted refugee status here. Other people, including UK nationals, have to show that they are habitually resident here. However, as the Government said in its response to the Report of the Social Security Advisory Committee, which preceded the introduction of the right to reside test, the habitual residence test cannot and was never intended to restrict longer-term access to the income-related benefits payable out of general taxation among people who, for various reasons, may decide to live indefinitely in the UK without being economically active (2004, Cmnd 6181, para 14). The right to reside test was introduced expressly for that purpose. It is necessary to look at these aims in the context of what Regulation 1408/71 is trying to achieve. As its recitals show, it is principally designed to co- ordinate national social security legislation in order to promote freedom of movement for employed and self-employed persons, while recognising that there are differences between the social security systems of the Member States. It caters for three different kinds of benefit in three different ways. At the top are those benefits described in article 4.1 as branches of social security. Many of these are based upon contributory social insurance schemes but some are not. Their main distinguishing feature is that they are paid as of right. They are not designed to top up the income of people whose individual means of support fall short of the nationally set subsistence level. Workers who move from one country to another must be allowed to participate in these social security schemes in the same way as workers in the host country. Further, if they have accrued certain benefits, including old age pensions, in one country, article 10 requires that they cannot be denied these simply because they have moved to live in another country. Thus Ms Patmalniece is entitled to have the Latvian authorities pay her her Latvian pension here. At the bottom are social and medical assistance [and] benefit schemes for victims of war or its consequences. Article 4.4 provides that these are excluded from the Regulation altogether. Social assistance used to encompass the kinds of income-related benefits with which we are here concerned. But now it appears to be limited to benefits in kind social and medical services along with discretionary cash benefits such as the grants and loans which are made by the United Kingdoms social fund. In the middle are the special non-contributory cash benefits, financed out of general taxation to guarantee a minimum subsistence level or to cater for disabled people, and specifically listed in Annex IIa to the Regulation. State pension credit is one of these. So too are income-based jobseekers allowance, income support, and disability living allowance (mobility component). Under article 10a, these are excluded from article 10 and are payable exclusively in the territory of the Member State in which they reside and under the legislation of that State. The question is whether it is legitimate to limit these benefits, entitlement to which under the Regulation depends upon the Member State in which the claimant resides, to people who are entitled to reside in that Member State. In answering that question, it is logical to look at the European law on the right to reside. If nationals of one Member State have the right to move to reside in another Member State under European Union law, it is logical to require that they also have the right to claim these special non-contributory cash benefits there in other words that the State in which they reside should be responsible for ensuring that they have the minimum means of subsistence to enable them to live there. But if they do not have the right under European Union law to move to reside there, then it is logical that that State should not have the responsibility for ensuring their minimum level of subsistence. That is why the Court of Appeal in this case, as in the earlier cases of Abdirahman v Secretary of State for Work and Pensions [2007] EWCA Civ 657, [2008] 1 WLR 254, and Kaczmarek v Secretary of State for Work and Pensions [2008] EWCA 1310, [2009] PTSR 897, focussed on article 18.1 of the Treaty, coupled with Directive 90/364/EEC (since replaced by Directive 2004/38/EC), which restrict the right to reside (for people who do not have it under other provisions) to those who have sufficient resources to avoid becoming a burden on the social assistance system of the host member state during their period of residence. As the Grand Chamber held in Trojani v Centre Public dAide Sociale de Bruxelles (Case C-456/02) [2004] 3 CMLR 820, a non-national citizen of the Union, applying for a benefit because of lack of resources, did not derive a right to reside from article 18 of the Treaty, because that very lack of resources took him outside the terms of Directive 90/364/EEC. However, that is not the end of the story. The Secretary of State understandably places weight on the observation of Advocate General Geelhoed, at para AG70 of Trojani: The basic principle of Community law is that persons who depend upon social assistance will be taken care of in their own Member State. But the Court, having held that a person such as Mr Trojani did not derive a right to reside from European Union law, went on to say that a citizen of the Union who had been lawfully resident in the host Member State for a certain time or possessed a residence permit, and satisfied the conditions required of nationals of that Member State, could not be denied such benefits. He was entitled, during his lawful residence in the host Member State, to benefit from the fundamental principle of equal treatment in article 12. I take that to mean that, even where a national of another Member State does not have the right to reside in the host country under European Union law, if he has the right to reside under the national law of the host country, he is also entitled to claim these benefits on the same terms as nationals of the host country. I do not find anything in Trojani to suggest that mere presence, without any right to reside in the host country, is sufficient. All the emphasis in the relevant paragraphs 40 to 45 is on residence and not presence and moreover on formally approved residence. The Courts answer to the question posed concludes, at para 46: However, once it is ascertained that a person in a situation such as that of the claimant in the main proceedings is in possession of a residence permit, he may rely on article 12 EC in order to be granted a social assistance benefit such as the minimex. This is a fairly clear indication that it is open to Member States to make entitlement to such benefits dependent on the right to reside in the host country, even though, of necessity, such a right will be enjoyed by all nationals but only some non-nationals. The AIRE Centre intervene in support of the appellant, essentially to argue that the correct mechanism to protect the public purse against non-economically active claimants from other European Union countries is, not to deny those who are lawfully present the basic means of subsistence, but to remove those who have no right to remain here: in other words, compulsorily to expel them rather than to starve them out. The Court in Trojani pointed out at paragraph 45 that: it remains open to the host Member State to take the view that a national of another Member State who has recourse to social assistance no longer fulfils the conditions of his right of residence. In such a case the host Member State may, within the limits imposed by Community law, take a measure to remove him. However, recourse to the social assistance system by a citizen of the Union may not automatically entail such a measure. Once again, the emphasis is on the right to reside. I do not find there any suggestion that it is not open to the host Member State to make entitlement to such benefits conditional upon that right. For that reason, and in agreement with Lord Hope, I would dismiss this appeal. For the reasons given by Lord Hope and by Lady Hale, with which I fully agree, I too would dismiss this appeal. For the reasons given by Lord Hope and by Lady Hale, with which I fully agree, I too would dismiss this appeal. |
Between 01.00 and 07.00 on 11 May 2009, Mr Renford Braganza, Chief Engineer on BPs oil tanker the British Unity, then in the mid North Atlantic, disappeared. No one knows for certain what happened to him. But his employers formed the opinion that the most likely explanation for his disappearance was that he had committed suicide by throwing himself overboard. This would mean that his widow was not entitled to the death benefits provided for in his contract of employment. Clause 7.6.3 of that contract provided relevantly as follows: For the avoidance of doubt compensation for death, accidental injury or illness shall not be payable if, in the opinion of the Company or its insurers, the death, accidental injury or illness resulted from amongst other things, the Officers wilful act, default or misconduct whether at sea or ashore . (emphasis supplied) It is not the task of this or any other court determining a claim under such a contract to decide what actually happened to Mr Braganza. The task of the court is to decide whether his employer was entitled to form the opinion which it did. The issue of general principle in this appeal, therefore, is the test to be applied by the court in deciding that question. The facts Mr Braganza was an able and well qualified Chief Engineer. Like all the crew of the MV British Unity, he was an Indian national. He was a Roman Catholic and married with two children. In July 2008, the family had moved from India to Toronto in Canada and he had taken extended leave for this purpose. After returning to work with BP, he joined the British Unity in Gibraltar in February 2009. The vessels main engine had broken down in August 2008 and been repaired but the damaged cylinder liners had not been replaced. This major work was done in April 2009 in Ferrol, Spain. Shortly after leaving Ferrol, the cooling water jacket of one of the cylinders began to leak. The vessel then proceeded via Falmouth to Brofjorden in Sweden, where a cargo of unleaded gasoline was loaded and also two spare cooling water jackets, which were stored in an alleyway on the main deck, close to a hatch providing access to the engine room below. After sailing from Brofjorden, Mr Braganza received an email on 5 May 2009 from an engineering superintendent asking him to carry out a scavenge inspection/ring inspection of the engine in about six days time and suggesting that it would be prudent to replace the cooling water jacket at the same time as the engine was stopped for that purpose. Mr Braganza replied that he would do the inspection in about six days time and try to carry out the jacket replacement at the earliest opportunity. To do this, it would first be necessary to lower the cooling water jacket through the hatch into the engine room below. Ms Belinda Bucknall QC, for Mrs Braganza, stresses the highly weather sensitive nature of the cooling water jacket exchange. (Indeed, Mr Williamson, the engineering superintendent who had supervised the major works in Ferrol had intended to telephone Mr Braganza on the morning of 11 May to suggest that he think about the operation because obviously the lifting of a one and half tonne cylinder head in any sort of swell would be risky.) The main engine would have to be shut down for several hours, leaving the vessel at the mercy of wind and wave. The vessel was originally bound for Jebel Ali in the United Arab Emirates, but on 7 May, while in the middle of the Bay of Biscay, it was ordered to proceed to New York instead. It therefore altered course and headed across the Atlantic. On 9 May, the weather worsened during the day and the log recorded at 20.00 a rough sea and high swell and shipping water on deck. On 10 May the weather began to improve. At 19.00, the Master, the Chief Officer, Mr Braganza and the second engineer met to discuss the plans for the next day. These included lowering liner jacket to engine room from main deck and M/E scavenge inspection and liner jacket renewal. It was agreed that the Master and Chief Officer would check the weather in the morning. At about 23.30 that same night, the Master and Mr Braganza met for about an hour. They discussed the weather conditions for the next day, with the assistance of a weather routing report which the Master had sent to Mr Braganzas computer. During the meeting, Mr Braganza emailed an engineering superintendent to report that he intended to stop the main engines the next day and do a scavenge inspection and that, weather permitting, he would like to change the liner jacket at the same time. He was advised to go ahead if weather and schedule permits. The Master left Mr Braganzas cabin at about 00.30 on 11 May. That was the last anyone saw of the Chief Engineer. At 01.00 he sent a routine email to the second engineer. At 07.00 it was noticed that his cabin door was open, as it habitually was unless he was sleeping. His bed looked as if it had been slept in. He did not breakfast as usual in the officers mess. The Chief Officer carried out a risk assessment around 08.00 and the Master agreed that the job could be carried out. The Judge concluded that it was unlikely that there was no pitching or rolling but that it was not such as to make the planned operations unsafe. Lowering the cooling water jackets into the engine room began shortly after 08.00 and was safely completed by about 09.30. Mr Braganza was not there. Soon afterwards, the Master announced that he was missing. A search was made on board but he was not found. The vessel was turned around and a search and rescue operation conducted but he was not found. The cooling water jacket replacement was postponed until some days later. On arrival in New York, an investigation was carried out on behalf of the Isle of Man where the British Unity was registered. The ships crew were interviewed under caution. Its conclusion was that Mr Braganza was lost overboard, presumed drowned, but no finding was made as to the reason for this. BP then set up its own inquiry, in accordance with its own procedures, to investigate the relevant circumstances leading up to the loss of Mr Braganza, identify if possible the root causes of the incident and identify any changes required to the BP Shipping Safety Management System. The five person team took about four months to make their extensive inquiries. Their eventual report was dated 17 September 2009. It considered five possible scenarios. The team were able to discount three explanations hiding or being hidden on board, collection by another vessel and fall from vessel due to horseplay, altercation or foul play. That left an accidental fall from the vessel, which could not be discounted, and suicide. Under the heading suicide, the team made six bullet points which led them to consider that suicide was a possibility. There was much criticism of each of these points in the courts below and the conclusions of each are briefly summarised below: (1) Mr Braganzas behaviour was reported to be notably different on this voyage than on previous voyages: (a) he was quiet and withdrawn, (b) there were no clean officers uniforms in his cabin, and (c) his attention to detail in record keeping had slipped. The judge rejected (a) and (b) but found (c) justified. The Court of Appeal found all three justified. (2) The shoes and sandals he usually wore on board were found in his cabin after his disappearance. The judge found it difficult to see how this could be probative of suicide as he could have worn his work boots. The Court of Appeal agreed with him but thought it unimportant. (3) Several e mail messages received from his immediate family . suggest [he] had some family and/or financial difficulties that were causing him concern. The judge set out the emails from Mrs Braganza in some detail, including one on the 27 March, where she wrote I really cannot figure out what has shaken you out so much that you seem to be so afraid of life (see also paras 73 and 74 of Lord Neubergers judgment). They certainly suggest that he was worried about something. The team did not interview Mrs Braganza about her communications with her husband during the voyage and what these might mean, but the judge concluded that this was not unfair, because she could have provided an explanation as soon as she got their report. The Court of Appeal considered that the team was undoubtedly correct on this point (para 30). (4) He was not aware, before joining the ship, of its status and reputation and was reported to be unhappy about this. The judge accepted that this was correct. (5) He considered himself eligible for the 2008 bonus which had been paid to him, but the employer had later advised him that it would be withdrawn. The judge thought that this could not be a cogent reason for inferring suicide. The Court of Appeal held (as we shall see) that this was not a necessary approach for the team to adopt. (6) There were indications that the watertight door from the accommodation block that opens onto the upper deck on the starboard side may have been opened during the hours of darkness on the morning of 11 May. No member of the crew reported opening this door. The judge rejected this point, as there was no evidence that the door had been opened during the hours of darkness and the bosun could have left it secured on only one dog when he went on deck at the start of the working day. The Court of Appeal considered this an extremely small point (para 33). The teams report went through several drafts. The first version did not mention suicide. After exchanges with BP Legal, the final version concluded that Having regard for all the evidence the investigation team considers the most likely scenario to be that the C/E jumped overboard intentionally and therefore took his own life. The judge rejected the suggestion that there had been a fundamental shift between the first and final versions. The team had always felt that suicide was the most likely explanation. However, they could not rule out that he had gone on deck for a work related reason and that his fall had been accidental. The judge commented that What can perhaps be said is that the teams initial reluctance to identify suicide as . the likely cause of death suggests that such a conclusion was not clearly proven in the minds of the team (para 88). The report was produced by and for BP Shipping Limited, who owned and managed the vessel. It was then forwarded to Mr Sullivan, General Manager of BP Maritime Services (Singapore) Pte Ltd, a Singapore Company which provides management services to the shipping company and employed the officers on board the vessel. Mr Sullivan made no further enquiries of his own. On the basis of the teams report, he concluded that there had been wilful default within the meaning of Clause 7.6.3 of the contract of employment and thus that death in service benefits were not payable to Mrs Braganza. BP Legal informed her solicitors of this on 13 November 2009. Mrs Braganza brought a claim in contract against the employer for death benefits amounting to US$230,265. She also brought a claim in tort under the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934 for damages quantified as US$1,325,945, alleging that the death was caused by negligence on the part of both the shipping company and the employer. BP produced a supplemental report in answer to the claims (see paras 83 to 85 of Lord Neubergers judgment). Mr Sullivan maintained his decision. The action was tried over 8 days in 2012 before Teare J, sitting as a judge of the Admiralty Court: [2012] EWHC 1423 (Comm). Teare J was unable to make a finding as to the cause of Mr Braganzas death (para 60): there was a real possibility, but it was not more likely than not, that he had fallen overboard (para 57); but the evidence was not sufficiently cogent to warrant a finding of suicide on the balance of probabilities (para 58). He rejected the claim in tort on the ground that there had been no breach of duty in deciding to carry out the two operations that day (para 64) and that, even if there had been a breach of duty, it had not caused the death (para 65). Mrs Braganza has not appealed against that conclusion. Teare J upheld the contractual claim. It was common ground between the parties that the opinion formed by the employer had to be reasonable (para 76). This meant reasonable in the sense in which that expression is used in Associated Provincial Picture Houses Ltd v Wednesbury Corporation. [1948] 1 KB 223, which had been applied to the exercise of a contractual discretion (by a P & I Club) in The Vainqueur Jos [1979] 1 Lloyds Rep 557 (para 91). As Clause 7.6.3 was in the nature of an exception or exclusion clause, the burden of proving that the opinion was a reasonable one lay with the employer (para 93). The investigation team did not direct themselves that before making a finding of suicide there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide (para 94). They, and therefore Mr Sullivan, failed to take into account the real possibility that Mr Braganza had gone out on deck in order to check the weather to see whether it was safe to carry out the planned work (para 96). They had stated in the first draft of their report that they could not find any work related reason for him to be outside during this time. His interest in the weather furnished such a reason and they should have taken it into account (para 97). This mattered because they had concluded that an accidental fall could not be discounted (para 98). Thus they were not properly directed in law and failed to take into account a relevant matter when forming their opinion (para 99). BP had conceded that if the opinion was not reasonable, the contractual claim should succeed (rather than the matter be sent back to them for reconsideration) (para 93). Having reached that conclusion, nevertheless Teare J very properly went on to consider the reasons advanced against the teams conclusion and formed the views outlined in para 9 above on the six bullet points. The employer appealed: [2013] EWCA Civ 230. Longmore LJ (with whom Rimer and Tomlinson LJJ agreed) thought it not entirely clear whether the judge had considered that the failure of the team, and Mr Sullivan, to direct themselves as to the need for cogent evidence before making a finding of suicide was in itself enough to render their opinions unreasonable (para 9). But, as Mocatta J had pointed out in The Vainqueur Jos, at 577, it would be a mistake to expect [of a lay body] the same expert, professional and almost microscopic investigation of the problems, both factual and legal, that is demanded of a suit in a Court of Law (para 13). It could not be the law that a non lawyer such as Mr Sullivan had to give himself directions before forming his opinion (para 14). It would be impossible for him to give himself such a direction without taking legal advice of a kind which cannot have been contemplated by the requirements of the death benefit clause (para 20). As to the failure to appreciate that there might be work related reasons for Mr Braganza to go on deck, that failure could not make the employers opinion unreasonable in the absence of a mechanism explaining how he could accidentally fall overboard (para 22). Thus Longmore LJ was unable to agree with either of Teare Js reasons for saying that the opinion was unreasonable (para 23). He therefore went on to consider and reject the wider ranging attack mounted upon the six bullet points (see para 9 above). The conclusion of suicide was a reasonable one in all the circumstances (para 34). The principles This case raises two inter linked questions of principle, one general and one particular. The particular issue is the proper approach of a contractual fact finder who is considering whether a person may have committed suicide. Does the fact finder have to bear in mind the need for cogent evidence before forming the opinion that a person has committed suicide? The general issue is what it means to say that the decision of a contractual fact finder must be a reasonable one. There are many statements in the reported cases to the effect that the principles are well settled and well understood, but this case illustrates that all is not as clear or as well understood as it might be. Contractual terms in which one party to the contract is given the power to exercise a discretion, or to form an opinion as to relevant facts, are extremely common. It is not for the courts to re write the parties bargain for them, still less to substitute themselves for the contractually agreed decision maker. Nevertheless, the party who is charged with making decisions which affect the rights of both parties to the contract has a clear conflict of interest. That conflict is heightened where there is a significant imbalance of power between the contracting parties as there often will be in an employment contract. The courts have therefore sought to ensure that such contractual powers are not abused. They have done so by implying a term as to the manner in which such powers may be exercised, a term which may vary according to the terms of the contract and the context in which the decision making power is given. There is an obvious parallel between cases where a contract assigns a decision making function to one of the parties and cases where a statute (or the royal prerogative) assigns a decision making function to a public authority. In neither case is the court the primary decision maker. The primary decision maker is the contracting party or the public authority. It is right, therefore, that the standard of review generally adopted by the courts to the decisions of a contracting party should be no more demanding than the standard of review adopted in the judicial review of administrative action. The question is whether it should be any less demanding. The decided cases reveal an understandable reluctance to adopt the fully developed rigour of the principles of judicial review of administrative action in a contractual context. But at the same time they have struggled to articulate precisely what the difference might be. In Abu Dhabi National Tanker Co v Product Star Shipping Ltd (The Product Star) (No 2) [1993] 1 Lloyds Rep 397, 404, after contrasting the position in judicial review, Leggatt LJ explained that: The essential question is always whether the relevant power has been abused. Where A and B contract with each other to confer a discretion upon A, that does not render B subject to As uninhibited whim. In my judgment, the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably. That was in the context of a ship owners decision as to whether a port to which a vessel was directed was dangerous. In Paragon Finance plc v Nash [2001] EWCA Civ 1466, [2002] 1 WLR 685, the court had to consider whether there was any implied term limiting the power of a mortgagee to set interest rates under a variable rate mortgage. Dyson LJ had no difficulty in holding (at paras 32 to 36) that it was necessary, in order to give effect to the reasonable expectations of the parties, to imply a term that the power would not be exercised dishonestly, for an improper purpose, capriciously or arbitrarily. He went on to discuss whether there should also be a term that the power would not be exercised unreasonably. He concluded that there had been a somewhat reluctant extension of the implied term to include unreasonableness that is analogous to Wednesbury unreasonableness (paras 37 to 42). These authorities, together with Ludgate Insurance Co Ltd v Citibank NA [1998] Lloyds Rep IR 221, 239 240, and Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2) [2001] EWCA Civ 1047, [2001] 2 All ER (Comm) 299, at paras 64, 67, 73, are helpfully summarised by Rix LJ in Socimer International Bank Ltd v Standard Bank London Ltd [2008] EWCA Civ 116, [2008] Bus LR 1304. In his conclusion, at para 66, he substitutes the more modern term irrationality for unreasonableness: It is plain from these authorities that a decision makers discretion will be limited, as a matter of necessary implication, by concepts of honesty, good faith, and genuineness, and the need for the absence of arbitrariness, capriciousness, perversity and irrationality. The concern is that the discretion should not be abused. Reasonableness and unreasonableness are also concepts deployed in this context, but only in a sense analogous to Wednesbury unreasonableness, not in the sense in which that expression is used when speaking of the duty to take reasonable care, or when otherwise deploying entirely objective criteria: as for instance when there might be an implication of a term requiring the fixing of a reasonable price, or a reasonable time. In the latter class of case, the concept of reasonableness is intended to be entirely mutual and thus guided by objective criteria. Laws LJ in the course of argument put the matter accurately, if I may respectfully agree, when he said that pursuant to the Wednesbury rationality test, the decision remains that of the decision maker, whereas on entirely objective criteria of reasonableness the decision maker becomes the court itself. The same point was made (albeit in a completely different context, and so obiter) by Lord Sumption in Hayes v Willoughby [2013] UKSC 17, [2013] 1 WLR 935, at para 14: Rationality is not the same as reasonableness. Reasonableness is an external, objective standard applied to the outcome of a persons thoughts or intentions. A test of rationality, by comparison, applies a minimum objective standard to the relevant persons mental processes. It imports a requirement of good faith, a requirement that there should be some logical connection between the evidence and the ostensible reasons for the decision, and (which will usually amount to the same thing) an absence of arbitrariness, of capriciousness or of reasoning so outrageous in its defiance of logic as to be perverse. (emphasis added) This is an obvious echo of the classic definition given by Lord Diplock when summarising the grounds of judicial review in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, 410: By irrationality I mean what can by now be succinctly referred to as Wednesbury unreasonableness. It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it. The problem with this formulation, which is highlighted in this case, is that it is not a precise rendition of the test of the reasonableness of an administrative decision which was adopted by Lord Greene MR in Associated Provincial Pictures Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 233 234. His test has two limbs: The court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. The first limb focusses on the decision making process whether the right matters have been taken into account in reaching the decision. The second focusses upon its outcome whether even though the right things have been taken into account, the result is so outrageous that no reasonable decision maker could have reached it. The latter is often used as a shorthand for the Wednesbury principle, but without necessarily excluding the former. The parties in this case disagree as to whether the term to be implied into this contract includes both limbs. Mrs Braganza argues that the employer must keep within the four corners of the matters which they ought to consider, while the employer argues that its decision may only be impugned if it is a decision which no reasonable employer could have reached. Mrs Braganza can pray in aid the approach of Mocatta J in The Vainqueur Jos. He held that the common law principles applicable to the exercise of a contractual discretion include fairness, reasonableness, bona fides and absence of misdirection in law (p 574). He later quoted (p 575), without reservation, Lord Greenes summary of the public law concept of reasonableness. There is nothing on Mocatta Js judgment to suggest that only the second of those elements is applicable to the exercise of a contractual discretion. He did (at 574) contrast the contractual principles with the principles applicable to the exercise of a statutory discretion by Ministers of the Crown, but on the basis that, in addition, the Ministers decision had to be consistent with the objects and other provisions of the statute in question, citing Laker Airways Ltd v Department of Trade [1977] QB 643. On that point, on the other hand, in Hayes v Willoughby, just before the passage quoted in para 23 above, Lord Sumption stated that rationality has in recent years played an increasingly significant role in the law relating to contractual discretions, where the laws object is also to limit the decision maker to some relevant contractual purpose: [2013] 1 WLR 935, para 14. This is consistent with his earlier observations in British Telecommunications Plc v Telefnica O2 UK Ltd [2014] UKSC 42, [2014] Bus LR 765, at para 37: As a general rule, the scope of a contractual discretion will depend on the nature of the discretion and the construction of the language conferring it. But it is well established that in the absence of very clear language to the contrary, a contractual discretion must be exercised in good faith and not arbitrarily or capriciously [citing Abu Dhabi, Gan, and Paragon, above]. This will normally mean that it must be exercised consistently with its contractual purpose [citing Ludgate Insurance, above and Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 459 (Lord Steyn), 461 (Lord Cooke of Thorndon)]. There are signs, therefore, that the contractual implied term is drawing closer and closer to the principles applicable in judicial review. The contractual cases do not in terms discuss whether both limbs of the Wednesbury test apply. However, in Gan Insurance, where the issue was the limits, if any, to the reinsurers power to withhold approval to the insureds agreement to settle a claim, Mance LJ first commented that what was proscribed was unreasonableness in the sense of conduct or a decision to which no reasonable person having the relevant discretion could have subscribed (para 64); but he concluded that any withholding of approval by reinsurers should take place in good faith after consideration of and on the basis of the facts giving rise to the particular claim and not with reference to considerations wholly extraneous to the subject matter of the particular reinsurance . (para 67). If it is part of a rational decision making process to exclude extraneous considerations, it is in my view also part of a rational decision making process to take into account those considerations which are obviously relevant to the decision in question. It is of the essence of Wednesbury reasonableness (or GCHQ rationality) review to consider the rationality of the decision making process rather than to concentrate upon the outcome. Concentrating on the outcome runs the risk that the court will substitute its own decision for that of the primary decision maker. It is clear, however, that unless the court can imply a term that the outcome be objectively reasonable for example, a reasonable price or a reasonable term the court will only imply a term that the decision making process be lawful and rational in the public law sense, that the decision is made rationally (as well as in good faith) and consistently with its contractual purpose. For my part, I would include both limbs of the Wednesbury formulation in the rationality test. Indeed, I understand Lord Neuberger (at para 103 of his judgment) and I to be agreed as to the nature of the test. But whatever term may be implied will depend upon the terms and the context of the particular contract involved. I would add to that Mocatta Js observation in The Vainqueur Jos, that it would be a mistake to expect [of a lay body] the same expert, professional and almost microscopic investigation of the problems, both factual and legal, that is demanded of a suit in a court of law (577). Nor would some slight misdirection matter, at least if it were clear that, had the legal position been properly appreciated, the decision would have been the same. It may very well be that the same high standards of decision making ought not to be expected of most contractual decision makers as are expected of the modern state. However, it is unnecessary to reach a final conclusion on the precise extent to which an implied contractual term may differ from the principles applicable to judicial review of administrative action. Given that the question may arise in so many different contractual contexts, it may well be that no precise answer can be given. The particular context of this case is an employment contract, which, as Lord Hodge explains, is of a different character from an ordinary commercial contract. Any decision making function entrusted to the employer has to be exercised in accordance with the implied obligation of trust and confidence. This must be borne in mind in considering how the contractual decision maker should approach the question of whether a person has committed suicide. Teare J directed himself, in relation to his own decision as to the cause of Mr Braganzas disappearance, that before a finding of suicide is made there must be evidence of sufficient cogency commensurate with or proportionate to the seriousness of the finding (para 46), citing the observation of Watkins LJ in R v West London Coroner, Ex p Gray [1988] QB 467, 477 478, that suicide is still a drastic action which often leaves in its wake serious social, economic and other consequences. He also directed himself, following the House of Lords decision in The Popi M [1985] 1 WLR 948, 955 956, that, where two improbable causes are suggested, he was not bound to make a finding one way or another. I agree with Lord Neuberger, at para 100 of his judgment, that it is also perfectly proper for the employer to conclude that he or she is unable to form an opinion as to the cause of death. But the question is how he or she should go about making a positive finding of suicide. Longmore LJ pointed out that the direction based on Gray might itself be said to be a little outdated since the decisions in In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563 and In re B (Children) (Care Proceedings: Standard of Proof) [2009] AC 11, which have emphasised that in civil cases there is only one standard of proof, viz. the balance of probabilities (para 15). Those cases make it clear that there is not a sliding scale of probability to be applied, commensurate with the seriousness of the subject matter or the consequences of the decision. The only question is whether something is more likely than not to have happened. Lord Hoffmann put it thus in In re B at para 15: There is only one rule of law, namely that the occurrence of the fact in issue must be proved to have been more probable than not. Common sense, not law, requires that in deciding this question, regard should be had, to whatever extent appropriate, to inherent probabilities. Some things are inherently a great deal less likely than others. The more unlikely something is, the more cogent must be the evidence required to persuade the decision maker that it has indeed happened. As Lord Nicholls explained in In re H, at 586, When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probabilities. Thus, for example, most parents do not sexually abuse their children. Cogent evidence is therefore required to establish that sexual abuse is more likely than not to have happened. But once it is clear that such abuse has happened, the threshold of incredulity has been surmounted, and the question of who was responsible can be answered on the balance of probabilities. Hence it is not the seriousness of the consequences of a finding of suicide which demands that there be cogent evidence to support it, but its inherent improbability. However, Longmore LJ also took the view that the employer did not have to approach the matter in this way. I respectfully disagree. The employer is entrusted with making a decision which has serious consequences for the family of a deceased employee. It deprives them of what would otherwise be a contractual right. There is no reason why the employer should not approach that decision in the same way that any other decision maker should do. On the contrary, in view of the special nature of the employment relationship, there is every reason why they should do so. Employers can reasonably be expected to inform themselves of the principles which are relevant to the decisions which they have to make. Employment law is complicated and demanding in many legal systems, but employers are expected to know it. They can also reasonably be expected to know how they should approach making the important decisions which they are required or empowered to make under the terms of the employment contract. In my view, a decision that an employee has committed suicide is not a rational or reasonable decision, in the terms discussed above, unless the employer has had it clearly in mind that suicide is such an improbability that cogent evidence is required to form the positive opinion that it has taken place. The employer now accepts that it is for him to show that the decision which it reached was a reasonable decision in the sense which is required by the contract. Application to the facts In my view, Mr Sullivan should not simply have accepted the view of the investigation team that suicide was the most likely explanation for Mr Braganzas disappearance. The team had been conducting their investigation for purposes which were different from the purpose of his decision. Their purpose was to see whether BPs systems could be improved. They could and did make recommendations about the steps to be taken to support officers who might be experiencing financial or emotional problems. Those recommendations were equally valid and sensible whether or not Mr Braganza had in fact committed suicide. 40. Although I would not have phrased the correct approach exactly as Teare J phrased it, in my view he was right to conclude (para 95) that the investigation teams report and conclusion could not be regarded as sufficiently cogent evidence to justify Mr Sullivan, and hence BP, in forming the positive opinion that he had committed suicide. No one suggests that his decision was arbitrary, capricious or perverse, but in my view it was unreasonable in the Wednesbury sense, having been formed without taking relevant matters into account. 43. I would therefore allow this appeal, with the result that Mrs Braganzas claim in contract (for the comparatively modest sum of US$230,265, albeit with interest) succeeds. I agree with Lady Hale that this appeal should be allowed. LORD HODGE: (with whom Lord Kerr agrees) 44. 45. For the sake of brevity I do not set out again the facts which Lady Hale and Lord Neuberger have summarised at paras 1 to 16 and 66 to 96 respectively. For the sake of simplicity I refer to the two BP companies involved in this appeal as BP without drawing distinctions between them, except in the next paragraph in which I identify Mr Braganzas employer. 46. Mr Renford Braganzas contract of employment entitled him to compensation in the form of a death in service benefit if he died in the employment of BP Maritime Services (Singapore) Pte Ltd, the second defendants (Clause 7.3.1). Any sum payable as compensation was to be paid to his nominated beneficiary, in this case his widow, the claimant and appellant. That entitlement was subject to Clause 7.6.3 which provided (so far as material) compensation for death shall not be payable if, in the opinion of the Company or its insurers, the death resulted from amongst other things, the Officers wilful act, default or misconduct 47. BP denied Mrs Braganza the compensation because it was of the opinion that Mr Braganza had committed suicide. That opinion, which Mr Sullivan reached on behalf of BP, was based on a report of the investigation team and his subsequent confirmation of his decision was based on the second report of that team after Mrs Braganza challenged the decision. As Lady Hale has shown in para 9, the teams conclusion that suicide was the most likely explanation for Mr Braganzas disappearance was based on six points which it set out as bullet points in its report. 48. The task which the investigation team and Mr Sullivan faced was, as Lord Neuberger says, to decide how an unlikely event, which undoubtedly occurred, was actually caused. As a result of the detailed investigations there were only two realistic possibilities: accident or suicide. 49. I am struck by the paucity and the insubstantial nature of the evidence from which BP inferred that Mr Braganza committed suicide. While the six points must be considered in aggregate, the only ones which seem to me to be capable of bearing any weight are (a) his lack of timely record keeping on his last voyage, (b) the evidence in Mrs Braganzas emails of his financial worries since his family had settled in Canada and (c) his concerns about the state of repair of his ship and the workload which fell on him as chief engineer as a result. Evidence of some moodiness during the voyage and irritation over the refusal of a bonus added little to the picture. I agree with Lady Hales description of the six points on which the investigation team relied as straws in the wind: para 40. Unsurprisingly, the team could not rule out the possibility that Mr Braganza had gone on deck for some work related reason and that he had fallen into the sea by accident. 50. Against the conclusion which BP reached is the inherent improbability of suicide. Mr Braganza had no history of depression or mental disorder. There was no evidence that he had spoken to anyone about suicide. On 13 February 2009, before commencing his last voyage, he had undergone a medical examination and was pronounced physically and psychologically fit. His colleagues who saw him in the 36 hours before his disappearance expressed no concerns about his appearance or behaviour. The ships master, who was the last person to see him alive, also had no concerns about his demeanour at 0030 hours when they discussed the arrangements for the planned inspection and repairs which were scheduled for the following morning. Mr Braganza left no suicide note or message that indicated any intention to kill himself. Further, he and his wife were devout Roman Catholics, for whom suicide is a mortal sin. 51. Accordingly, I readily understand Teare Js conclusion, in the part of his judgment in which he considered Mrs Braganzas claim in tort, that the evidence before the court was not sufficiently cogent to warrant a finding of suicide on the balance of probabilities. But the issue in this case is not what a court would decide if determining the matter at first instance. As Teare J recognised later in his judgment when he addressed Mrs Braganzas claim in contract, the decision maker was BP. The principal issue is: when is the court entitled to intervene in the exercise of a contractual discretion?. 52. As Lady Hale has shown (paras 18 31), the court is not entitled to substitute its own view of what is a reasonable decision for that of the person who is charged with making the decision; it conducts a rationality review. In Clark v Nomura International Plc [2000] IRLR 766, a case concerning an employees entitlement to a discretionary bonus, Burton J stated (at para 40): the right test is one of irrationality or perversity (of which caprice or capriciousness would be a good example) ie that no reasonable employer would have exercised his discretion in this way. 53. Like Lady Hale, with whom Lord Neuberger agrees on this matter (para 103), I think that it is difficult to treat as rational the product of a process of reasoning if that process is flawed by the taking into consideration of an irrelevant matter or the failure to consider a relevant matter. While the courts have not as yet spoken with one voice, I agree that, in reviewing at least some contractual discretionary decisions, the court should address both limbs of Lord Greenes test in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 233 234. In my view it is clearly appropriate to do so in contracts of employment which have specialties that do not normally exist in commercial contracts. In Johnson v Unisys Ltd [2003] 1 AC 518 (at para 20) Lord Steyn stated: It is no longer right to equate a contract of employment with commercial contracts. One possible way of describing a contract of employment in modern terms is as a relational contract. 54. Similarly, in Keen v Commerzbank AG [2007] ICR 623, Mummery LJ stated (at para 43): Employment is a personal relationship. Its dynamics differ significantly from those of business deals and of state treatment of its citizens. In general there is an implied mutual duty of trust and confidence between employer and employee. Thus it is the duty on the part of an employer to preserve the trust and confidence which an employee should have in him. This affects, or should affect, the way in which an employer normally treats his employee. It would not be correct to treat that duty on the employer as flying off at the moment of the employees death so as to free the employer from the constraints of that duty when it determines whether the nominated beneficiary is entitled to the contractual death in service benefit. While the duty as an inherent feature of the relationship of employer and employee does not survive the ending of the relationship, such as by dismissal or the expiry of a contractual period of employment, the death in service compensation was part of his contractual benefits, to which his nominated beneficiary was entitled unless BP were satisfied that the death was the result of his wilful act. For the employer to behave otherwise than in accordance with that duty would be to betray the trust of the deceased employee. 55. The personal relationship which employment involves may justify a more intense scrutiny of the employers decision making process than would be appropriate in some commercial contracts. 57. 56. The scope for such scrutiny differs according to the nature of the decision which an employer makes. In this case Clause 7 gave the employee a prima facie entitlement to the death benefit unless BP could satisfy itself of a factual circumstance which excluded the benefit. The nature of the exercise which BP had to undertake in deciding the cause of death was very different from the assessment of whether an employee was entitled to a discretionary bonus, which is an exercise that involves a qualitative judgement of the employees performance. In cases such as Clark v Nomura International Plc, Keen v Commerzbank AG and Horkulak v Cantor Fitzgerald International [2005] ICR 402 the courts have reviewed contractual decisions on the grant of performance related bonuses where there were no specific criteria of performance or established formulae for calculating a bonus. In such cases the employee is entitled to a bona fide and rational exercise by the employer of its discretion. The courts are charged with enforcing that entitlement but there is little scope for intensive scrutiny of the decision making process. The courts are in a much better position to review the good faith and rationality of the decision making process where the issue is whether or not a state of fact existed, such as whether an employees wilful act caused his death. The decision of the employer is not a judicial determination and the court cannot expect judicial reasoning. But I see no reason why an employers decision making should be subject to scrutiny that is any less intense than that which the court applies to the decision of a public authority which is charged with making a finding of fact. A large company such as BP is in a position to support its officials with legal and other advisory services and should be able to face such scrutiny. 58. The investigation team and Mr Sullivan appear not to have considered the real possibility of accident if Mr Braganza had a work related reason to be on deck after dawn, namely to check the weather conditions which would affect the planned replacement of the cooling water jacket, and had acted carelessly while standing at or even on the deck railings. While there was evidence that Mr Braganza was generally very conscious of safety, people do unexpected things and unforeseen accidents occur; accidents are often difficult to predict, as Teare J stated at para 56. 59. The focus of the teams second report was on responding to Mrs Braganzas suggestion that her husband might have been washed overboard or slipped while inspecting engine spares on the deck and fallen over or between the railings as a result of the rolling of the ship. The team found no evidence in support of such an accident. The weather conditions did not support such hypotheses. The railings were in good repair and adequate to prevent someone falling on the deck and sliding overboard. Those railings would also protect someone from falling overboard unless they acted carelessly. But if Mr Braganza had behaved carelessly at the railings, there would in all probability have been no evidence of the cause of his fall which could be set against the exiguous evidence pointing to suicide. 60. Given the improbability of suicide in this case, I agree with Lady Hale (para 36 above) there had to be cogent evidence to overcome that improbability. Not only do I not see that evidence but also I do not detect any consideration of both the possibility of Mr Braganza having acted carelessly while at the railings and that there would in all probability be no evidence of such behaviour. On those bases the appeal succeeds. 61. There is a further point. I do not rely on it in reaching my decision because it was not argued in this appeal and it may merit further argument in a suitable case. I think that the employers obligation of trust and confidence may provide a further reason for requiring cogent evidence. A finding that an employee has committed suicide carries a stigma for the spouse of the deceased employee. Teare J in his judgment (at para 46) cited Watkins LJ in R v West London Coroner, Ex p Gray [1988] QB 467 (at pp 477 478) where he stated that suicide is a drastic action which often leaves in its wake serious social, economic and other consequences. I accept that there is no logical or necessary connection between seriousness and probability In re B (Children) [2009] AC 11, Lady Hale at para 72. In many cases the court or a lay decision maker may have to decide on very thin evidence whether an event occurred on a balance of probability. But it may not be appropriate to do so in every context. Because employment is a relational contract, an employer may require cogent evidence before it makes a finding that has such consequences for an employee or his family, including the loss of the death in service benefit. I am inclined to think that it is consistent with the duty of trust and confidence that where, as here, the evidence is exiguous, the employer should ask itself whether there was evidence of sufficient quality to justify the finding, and when there is no cogent evidence, it should refrain from making a positive finding as to the cause of death. Unlike a judge in civil disputes or in family justice cases, an employer can sit on the fence; it does not have to find a cause of death if one is not clear. 63. 62. Whether or not the obligation of trust and confidence imposes this constraint on an employer, I am satisfied that there was not sufficient evidence of suicide in this case to outweigh its inherent improbability and Teare J was justified in so finding. Absent cogent evidence to support it, Mr Sullivan and thus BP should not have made a finding of suicide. I do not question the good faith of the investigation team, who carried out a thorough investigation under a different remit, or of Mr Sullivan, who made the positive finding on behalf of BP. Nor do I think that BP acted unfairly in the manner it carried out the task. But, like Lady Hale and Teare J, I do not think that the report of the investigation team gave Mr Sullivan the evidential basis for forming the positive opinion that Mr Braganza had committed suicide. I would therefore allow the appeal. 64. LORD NEUBERGER: (with whom Lord Wilson agrees) (dissenting) 65. The ultimate issue on this appeal is whether Niloufer Braganza, the widow of Renford Braganza, is disentitled from obtaining a death in service payment from his employer (whom I will refer to as BP) following his death at sea, on the ground that his death was caused by suicide. In agreement with the Court of Appeal, and respectfully differing from the majority of the court and from Teare J, I consider that Mrs Braganza is disentitled from obtaining the benefit in question. The basic facts 66. In order to explain my reasons for reaching this conclusion, I will set out the significant facts as I see them, although I am conscious that this means a degree of overlap with Lady Hales judgment. Mr Braganza had been employed by BP since 2004 as Chief Engineer. His terms of employment were set out in a contract, of which only parts of clause 7 (Clause 7) are relevant for present purposes. The effect of clause 7.3 was that, in the event of his death whilst in the employment of [BP], Mr Braganzas nominated beneficiary (in this case Mrs Braganza, the claimant in these proceedings) would be entitled to compensation equal to three times [his] annual salary. However, this entitlement was subject to certain exceptions. One of those exceptions was set out in clause 7.6.3 which stipulated that no such compensation would be payable if, inter alia, in the opinion of [BP] or its insurers, the death resulted from [his] wilful act, default or misconduct whether at sea or ashore . 67. On 9 February 2009, Mr Braganza joined the MV British Unity, a 183 metre long, 46,803 mt deadweight oil tanker, at Gibraltar. Unusually, and contrary to standard practice, he was not given a briefing, and in particular he was not told that the vessel needed substantial repairs. Major work was carried out while the vessel was in Ferrol, Spain between 18 and 22 April 2009, an operation for which Mr Braganza was responsible, albeit under supervision. After leaving Ferrol, further problems came to light and the vessel berthed in Falmouth for work and then went on to Brofjorden in Sweden for further work. The vessel was then loaded with unleaded gasoline, and set sail for Jebel Ali, but was then ordered to divert to New York. On 11 May 2009, Mr Braganza was lost overboard when the vessel was in the mid North Atlantic, en route for New York, between 01.00 (when he sent an email) and 07.00 (when his cabin was seen to be empty). The relevant background facts 68. Mr Braganza was an able and experienced engineer, a staunch Roman Catholic and a strong family man, with a wife and two children, and he telephoned his family when he was at sea every two or three days. He had been found to be physically and psychologically fit when examined in February 2009. 69. During the 36 or so hours before his disappearance, Mr Braganza was described as normal by those who saw him. On the evening of 9 May 2009, he was the caller in a game of bingo played by a number of the crew members, and, according to the Chief Officer, he made the party a lot of fun. He had discussions for around ninety minutes on 10 May with the Master and the second engineer about the replacement of a cooling water jacket (CWJ) which cooled one of the six cylinders of the vessels diesel engine, which involved the engines being turned off and which required reasonably clement weather. Mr Braganza thought that this needed doing, and it was agreed that it would be carried out next day, weather permitting. After meeting crew members and watching a comedy film with them, he discussed the proposed operation and the likely weather conditions in his cabin with the Master at about 23.30 for rather over an hour. At 23.24, while the Master was with him, he emailed an engineering superintendent about the proposed operation, which was approved in an email nine minutes later [i]f weather and schedule permits. Before the Master left his cabin, Mr Braganza checked the Indian Premier League cricket results on his computer. At 01.00 on 11 May, Mr Braganza emailed the second engineer concerning entries in the log book. He was not seen alive again. 70. While he was Chief Engineer on the MV British Unity, Mr Braganza was described by some of those on board as being withdrawn and staring into space, in contrast with his happy character noted on previous voyages although he was, as mentioned, in good humour on 9 May. During the carrying out of the works at Ferrol in April, Mr Braganzas skills did not impress the BP superintendent, who told him how he might improve them. 71. On 24 March 2009, Mr Braganza was advised by the Captain of the British Unity that he had been awarded a bonus of $1688, but on 18 April, the Master was told to deduct this sum from Mr Braganzas salary as he had had a break in service in 2008, which disentitled him from having a bonus. This was communicated on the same day to Mr Braganza, who immediately challenged the deduction, but his challenge was rejected by BP on 7 May. 72. As Chief Engineer, Mr Braganza was responsible for writing up the daily orders he gave his staff in the Chief Engineers Order Book. The last entry which he made was on 18 April 2009, when the vessel was still at berth, and when he was not under any obligation to make any entries. However, from 22 April 2009, when the vessel left Ferrol, he was obliged to make such entries, but he made none at any time thereafter. It is also appropriate to refer to emails which were sent to Mr Braganza by his wife after he had joined the British Unity. According to the evidence of Mrs Braganza to Teare J, Mr Braganza was worried about the cost of living in Toronto, where he had moved with his family from India in July 2008. The two had had telephone discussions on 13, 14 and 15 February, and in an email on the last of those dates, his wife had emailed Mr Braganza saying that she thank[ed] God for what we have and what the last seven months have done to us, and encouraging him to make a decision to let go of anything that is holding you down. Again according to the evidence of Mrs Braganza, Mr Braganza was also concerned about the amount of work that needed to be done to the vessel, and on 17 February, his wife emailed him saying please do not break your head about getting this opportunity on Unity. Just relax, 73. think this is like any other ship. So please do not stress yourself thinking of unnecessary stuff. However, it appears that Mr Braganza continued to worry about money and the repairs. 74. On 27 March, in what strikes me as a particularly relevant email, Mrs Braganza asked her husband not to worry, saying that everything will work out just fine and that I really cannot figure out what has shaken you out so much that you seem to be so afraid of life, adding If we keep crying over spilt milk we will not be able to go on with life. And, on 6 May, she emailed him, begging him to be happy for whatever we have and expressing concern that In Toronto you seem[ed] sad and Now on the ship too you do not seem happy. She also said that you are thinking too much about the future and that is eating you. She added that she wished he could share [her] enthusiasm, asking what are you frightened about?. The Reports commissioned by BP 75. After Mr Braganza had disappeared, BP appointed a five person investigation team (the team), pursuant to its Group Defined Practice, which applies to any fatality on board a vessel. The team consisted of a Vice President in the Engineering, Refining and Logistics Technology department, a Health Safety Security and Environment Manager, a Marine Incident Investigator, a Marine Standards Superintendent, and a Fleet Offshore Marine Services Superintendent. 76. The members of the team boarded the vessel on 18 May 2009 when it arrived in New York, and carried out an investigation, and produced their detailed Fatal Incident Report (the First Report) on 17 September 2009. According to the uncontradicted evidence, the First Report had been produced after carrying out careful inspections, interviewing 54 witnesses, and looking at hundreds of documents. 77. The terms of reference were set out at the start of the First Report. They were to investigate the relevant circumstances leading up to the loss of Mr Braganza, to identify if possible the root causes of the incident, [a]s a result [to] identify any changes or improvements in BPs safety systems, and to identify any common factors with another incident on a different vessel. The First Report then set out some other formal information. 78. The First Report then summarised its conclusions. After referring to the teams in depth investigation, the summary stated that the team could not conclude for certain the root cause of the incident. Then, after ruling out certain other possibilities, the Findings concluded by saying that the team considers the most likely scenario to be that the C/E jumped overboard intentionally and therefore took his own life. The First Report then set out certain recommendations for the future. 79. The First Report next recited the history leading up to the tragic death of Mr Braganza in some detail, including the need for the vessels repairs, the experience of Mr Braganza, and such details of the incident as the team could identify, including the response to his disappearance from the vessel. The First Report then explained the investigatory steps which the team had taken, including interviewing those on board, interviewing other people who might have relevant information, photographing and logging documents, inspecting the vessel, collecting other relevant information and analysing all data. The First Report went on to consider and reject the possibilities of Hiding on board, Collec[tion] by a 3rd party vessel or Fall from vessel due to horseplay, altercation or foul play. 80. The First Report then addressed Accidental fall from vessel, and while the team found [n]o evidence of sub standard or unsafe structures, they considered that slipping overboard cannot be discounted although there was no evidence to support it. The report then considered the possibility of suicide, and mentioned the matters referred to in paras 69 74 above, namely Mr Braganzas withdrawn character, his concerns about his finances, his worry about the vessels poor repair, the emails from his wife, the criticism he received at Ferrol, and the withdrawal of his bonus. The First Report then stated that, although Mr Braganzas state of mind cannot be known, it was possible that he jumped overboard. Under the heading of Findings, the First Report then repeated the conclusions contained at the start, including this: the most likely scenario to be that the C/E jumped overboard intentionally and therefore took his own life. 81. Mr Sullivan, BPs General Manager, was appointed by BP to address the cause of Mr Braganzas death for the purpose of clause 7. He considered the First Report and accepted the conclusion reached by the team. Accordingly, he decided that the death in service benefits under clause 7.3 were not payable to Mrs Braganza, and this was duly communicated to her. 82. Mrs Braganza then challenged the teams rejection of the possibility that Mr Braganzas death was caused by an accident, on the basis that, for the purpose of seeing whether the CWJ could be replaced, he could well have gone on deck to see the state of the weather and fallen overboard. Accordingly, Mrs Braganza contended that the right conclusion was that her late husband had died as a result of an accident. She provided a statement to the team, which then reconsidered the matter. On 12 July 2011, the team produced a Supplemental Report (the Second Report) in which they adhered to their conclusion. 83. The Second Report referred to many of the findings of the First Report. It also observed that the state of the weather during the night of the 10 May and the morning of the 11 May was ever improving and could be considered good weather mid Atlantic, which rendered it improbable that Mr Braganza had been washed overboard or had fallen on deck due to a roll. It stated that, as a senior and respected Chief Engineer, and reported as being very safety conscious by his ship mates, Mr Braganza is highly unlikely to have ventured out on deck during the hours of darkness and certainly not without informing the officer of the watch on the bridge. The Second Report went on to point out that there would have been no reason for his checking on the weather, because that assessment would in any event be carried out from the bridge by the Master and/or the [Chief Officer] who was responsible for the task. The report also said that the safety standards on board impressed those of the team visiting a BP ship for the first time. A little later, the team stated that it would be extremely unlikely that a person could trip, slip or fall in such a manner so as to fall overboard while carrying out normal shipboard duties and in the weather conditions which were known to prevail at that time. The Second Report also stated that the team were not aware of any previous cases within BP where weather conditions or rolling of the vessel had caused anyone to go overboard accidentally (emphasis in the original). The report also stated that the team had considered the statement of Mrs Braganza dated May 2011 and that the contents do not affect the teams conclusions. 84. The Second Report went on to say that the team considered that the scenario of C/E Braganza going outside to check on equipment during the night or early morning and suffering a fall that took him over the side of the vessel, [to have been] unlikely in the extreme. The report then turned to the possibility of suicide and repeated the points which gave some support for that notion, which were summarised in these terms: there seemed a lot of independent and reported (although circumstantial) evidence indicating a depressed state of mind combined with personal problems. The lack of a suicide note, it said, cannot be taken as a firm indication that suicide was not the cause of his disappearance. 85. The Second Report therefore explained that the team assess[ed] suicide as the most likely scenario, although equally the investigation team cannot firmly conclude what happened to C/E Braganza on the night of the incident (emphasis in the original). The team also explained that they did not reach this conclusion [sc that Mr Braganza committed suicide] on the basis of exclusion ie because we could not find any other cause as being likely or possible. They added that there was no single piece of evidence on which [the team] concluded suicide, and that it was very much a collection of a number of issues and the general feeling based on this evidence that C/E Braganza intended to take his own life. 86. Following Mrs Braganzas contentions and the provision of the Second Report, Mr Sullivan reconsidered his opinion in the light of those contentions and that report, and remained of the view that Mr Braganzas death resulted from suicide. As he explained in the subsequent court proceedings, he took the view that there was a reasonable basis on which to conclude that deliberate suicide was the most likely scenario, which was a conclusion reached on the basis that there was positive evidence that made deliberate suicide the most probable cause of death. He also said that he did not arrive at this conclusion by a process of elimination. The decisions in the courts below 87. Mrs Braganza issued proceedings against BP claiming (i) damages under the Fatal Accidents Act 1976 on the ground that BP was in breach of its duty of care to Mr Braganza (the first claim), and (ii) that BPs opinion as to the cause of Mr Braganzas death, based as it was on the First and Second Reports (the Reports) was flawed and ought to be declared invalid (the second claim). The trial lasted eight days before Teare J, who heard a number of witnesses primarily directed to the first claim. Having heard argument, he gave a reserved judgment in favour of BP on the first claim and in favour of Mrs Braganza on the second claim [2012] EWHC 1423 (Comm). The judgment included some detailed findings of fact and conclusions in relation to Mr Braganzas death, because of the first claim, namely that under the 1976 Act. In paras 54 and 57 of his judgment, the judge concluded that, while there was a real possibility that Mr Braganza went out on deck to assess the weather himself, he was not persuaded that it is probable that he did so, and he concluded that while there was a real, not a fanciful, possibility that Mr Braganza fell overboard, it was not probable that he did so. In para 58, the judge said that there was also a real, not a fanciful, possibility that he committed suicide. 88. 89. The judge therefore concluded that Mrs Braganzas claim under the 1976 Act failed, as the onus was on her to show that her husbands death was accidental para 61. Although it was not necessary to do so, the judge went on in paras 64 65 to hold that, even if she had succeeded in establishing an accident, Mrs Braganzas claim under the 1976 Act would have failed on the additional grounds that she had failed to prove breach of duty by BP or causation. 90. The judge then turned to the second claim, namely Mrs Braganzas challenge to BPs opinion under clause 7.6.3 that Mr Braganza committed suicide, and concluded that Mr Sullivan had not properly directed himself before forming the opinion that Mr Braganza had committed suicide. In particular, in para 94, Teare J said that the team: did not direct itself that before making a finding of suicide there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide. This is understandable in circumstances where the purpose of its investigation focussed upon whether there were any BP systems had failed and to make recommendations to improve BPs systems. [T]he teams remit did not include considering whether the Claimant should receive any death in service benefit pursuant to Mr Braganza's contract of employment. However, the findings of the team were adopted by Mr Sullivan when forming BPs opinion for the purposes of clause 7.6.3 of the contract of employment. There is no evidence that he directed himself that before forming the opinion that Mr Braganza committed suicide there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide. It is unlikely that he did. This was required because the consequence of forming that opinion was that Mr Braganzas widow would be deprived of the death benefits under her husband's contract of employment. Fairness required that BP and in particular Mr Sullivan should have been properly directed in that regard. 91. Teare J expanded on this in paras 96 97 in these terms: The Investigation Team, and hence Mr. Sullivan, failed to take into account the real possibility that Mr. Braganza went out onto deck in order to check the weather to see whether it was safe to carry out the planned work. The existence of a real possibility that Mr. Braganza went out on deck to check the weather is, in my judgment, a relevant matter to take into account when considering whether suicide has been shown to [be] more likely than not. The [teams] report strongly suggests that this was not taken into account. 92. The judge then went on to reject various other criticisms of the Reports, namely the lack of any psychiatric expertise (irrelevant as BP did not suggest that Mr Braganza suffered from a psychiatric illness), lack of engineering expertise (irrelevant to the issues which the team had to decide), and the fact that the team divided up to hear evidence (there was no requirement that they heard all the evidence together). The judge also considered and accepted some of Mrs Braganzas criticisms about the findings made by the team (and the more important examples are given by Lady Hale in para 9(1), (2) and (6) above), but he did not base his decision in favour of Mrs Braganza on these criticisms (para 120). 93. One further criticism raised on behalf of Mrs Braganza before the judge against the opinion formed by Mr Sullivan is worth mentioning, namely that neither the team nor Mr Sullivan had interviewed Mrs Braganza. The Judge thought that in principle fairness did require her to be interviewed, although he accepted Mr Sullivans explanation that he did not want to intrude unnecessarily into the familys grief. However, given that Mrs Braganza had the opportunity to comment on the First Report and did not offer any comment in relation to the matters the team relied on to justify its finding of suicide, the Judge rejected her case on this point. In these circumstances, the Judge effectively set aside the opinion of Mr Sullivan on behalf of BP that Mr Braganza had committed suicide, and determined that Mrs Braganza was entitled to the death in service benefit under clause 7.3, and gave judgment in her favour in the sum of $230,265 with interest. 94. 95. BP appealed against the judgment, and the Court of Appeal, for reasons given in a judgment given by Longmore LJ, with which Rimer and Tomlinson LJJ agreed, allowed its appeal [2013] EWCA Civ 230. Longmore LJ disagreed with the notion that Mr Sullivan (or the team) should have directed himself (or themselves) that there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide, on the ground that it was unreasonable to expect him (or them) to take such an approach (paras 19 20). Longmore LJ then went to explain that that was not necessarily the end of the matter, as [t]he relevant opinion still has to be reasonable. However, he disagreed with Teare Js view that the team did not take into account the fact that Mr Braganza might have had legitimate (non suicidal) reasons for being on deck. Longmore LJ also said that, even if the team had failed to take that possibility into account, it would not render its conclusion unreasonable, given the absence of a mechanism explaining how he could accidentally fall overboard para 22. 96. The Court of Appeal also considered the various minor items of evidence relied on by the team and referred to in para 92 above. They considered that the Judge had adopted too rigid a test in relation to some of those matters, but as the Judge had not relied on them to justify his conclusion, that aspect took matters no further. The three lines of attack raised on behalf of Mrs Braganza 97. Miss Belinda Bucknall QC, on behalf of Mrs Braganza, raised three lines of argument in support of her contention that this court should set aside the order of the Court of Appeal and restore Teare Js order. First, she contended that the Court of Appeal did not appear to have appreciated that it should not have interfered with the Judges conclusion, given that he was the trial judge, who had heard the witnesses and reached a fact sensitive conclusion. In my view, that contention is not well founded, because it confuses the judges role when he was deciding what in para 87 above I have called the first claim, namely whether BP had been in breach of duty, with his role when considering the second claim, namely whether BPs opinion under clause 7.6.3, based on the two Reports, should be set aside. When ruling on the first claim, the Judge was indeed the primary finder of fact, and it would only be if he had gone seriously wrong (eg if he had come to a conclusion which no reasonable judge could have come to, or made a demonstrable error such as ignoring a significant relevant piece of evidence) on a factual issue that an appeal court could properly have reversed his conclusion. However, the position on the second claim was entirely different: far from being the primary finder of fact, Teare J was carrying out a reviewing function of the two Reports, prepared by the team, and it was the team, or more precisely Mr Sullivan (who relied on the two Reports in forming his opinion), not the Judge, who represented the primary finder of fact. 98. Miss Bucknalls second line of attack was based on a number of alleged errors in the two Reports, which are briefly referred to in para 92 above. Although I agree with some of them, I do not accept all the criticisms which were accepted by the Judge. However, it is unnecessary to discuss this aspect further, as I agree with the Judge and the Court of Appeal that the mistakes could not possibly justify challenging the conclusion reached in the two Reports. It appears to me to be fanciful to think that, if all of them had been pointed out to the team and corrected, it could conceivably have resulted in the team reaching any different conclusion from that which they did. Just as minor errors in a full and careful judgment do not justify interfering with a judgment, so it is with minor errors in a report which may have legal effect. To hold otherwise would be wrong in principle, and it would serve to encourage unmeritorious appeals and to discourage full, considered and informative reports and judgments. Of course, different considerations apply where the error of fact might well have affected the outcome. 99. The third line of attack raised by Miss Bucknall was very similar to the Judges reasoning for rejecting Mr Sullivans reliance on the two reports as set out in para 94 of his judgment, namely that the basis for determining that Mr Braganza committed suicide was too flimsy to justify such a conclusion, at least by Mr Sullivan. That argument merits much fuller consideration, but, before turning to consider it, it is convenient to address the appropriate approach which the court should take to a contention such as that raised by Mrs Braganzas second claim. The proper approach to Mr Sullivans opinion 100. In some circumstances, it may be that the cause of an officers death is very difficult to determine. In such a case, the exercise envisaged in clause 7.6.3 does not require the person charged with carrying out the enquiry to form an opinion. It is perfectly proper for that person to conclude that he or she is unable to form an opinion as to the cause of the death in question. Clause 7.6.3 provides for an exception to BPs liability to pay compensation under clause 7.3, and if it is impossible for the person who is charged with forming an opinion under clause 7.6.3 to come to a conclusion, then BP must pay the compensation. 101. A second point, which requires a little more exegesis, arises from the fact that the person who is given the primary duty of determining the cause of death under clause 7.6.3 is BP or its insurers (and for present purposes one can ignore the reference to the insurers). If a provision such as clause 7.6.3 does not specify how the issue is to be determined, it would be for a judge to decide it as the primary fact finder. Save where for some reason BP cannot or refuses to consider the cause of death, the courts only have a role to play once BP forms an opinion on the issue and an interested party seeks to challenge the opinion as happened in this case. 102. There was some discussion as to the standard which the court should expect of the decision maker or opinion former in such circumstances. That question was fully considered by Rix LJ in Socimer International Bank Ltd v Standard Bank Ltd [2008] EWCA Civ 116, paras 60 66. He began by describing the issue as arising When a contract allocates only to one party a power to make decisions under the contract which may have an effect on both parties, and, after considering a number of previous authorities, he concluded: [A] decision makers discretion will be limited, as a matter of necessary implication, by concepts of honesty, good faith, and genuineness, and the need for the absence of arbitrariness, capriciousness, perversity and irrationality. The concern is that the discretion should not be abused. Reasonableness and unreasonableness are also concepts deployed in this context, but only in a sense analogous to Wednesbury unreasonableness, not in the sense in which that expression is used when speaking of the duty to take reasonable care, or when otherwise deploying entirely objective criteria: as for instance when there might be an implication of a term requiring the fixing of a reasonable price, or a reasonable time. Lord Justice Laws in the course of argument put the matter accurately when he said that pursuant to the Wednesbury rationality test, the decision remains that of the decision maker, whereas on entirely objective criteria of reasonableness the decision maker becomes the court itself. 103. Like Lady Hale, I consider that there is considerable force in the notion that this approach is, and at any rate should be, the same as the approach which domestic courts adopt to a decision of the executive, as described in the judicial observations which she quotes in paras 23 and 24 above (as indeed is reflected by the reference to the Wednesbury decision in the passage I have quoted from Rix LJ). I do not think that there is any inconsistency of approach between Lady Hale and Lord Hodge or myself in this connection. 104. However, a third point I should mention does concern a point of difference between us. It is best expressed by reference to Lord Hodges statement that contracts of employment have specialties that do not normally exist in commercial contracts, which he discusses in para 54 57. It appears to me questionable whether the special implied mutual duty of trust and confidence survived the death of Mr Braganza, but I accept that there is a powerful case for contending that it did, at least for present purposes. However, I do not think it necessary to decide the point, because I fail to see how it assists Mrs Braganzas case. Once it is accepted that BP had to carry out the investigation with honesty, good faith, and genuineness and had to avoid arbitrariness, capriciousness, perversity and irrationality, I do not see what trust and confidence add. I find it difficult to accept that trust and confidence would require more than what in a normal commercial context would be expected, either of BP when carrying out the investigation, or of the court when scrutinising the investigation and its results. Either the investigation was properly carried out or it was not, either there was enough evidence to justify the conclusion reached by Mr Sullivan or there was not, and either the reasoning which led to the conclusion was defensible or it was not. Accordingly, as I see it, the duty of trust and confidence is simply irrelevant to deciding that question. 105. A fourth point is also worth mentioning. A court considering a decision such as that reached in this case by the team or by Mr Sullivan should bear in mind the fact that it is performing a reviewing function, and, as I have already mentioned, not an originating fact finding function. The courts approach should therefore be similar to that of an appellate court reviewing a trial judges decision. In this case, the team, and then Mr Sullivan on behalf of BP, were entrusted with forming a view on a point of fact, namely how Mr Braganza died. As Lord Hoffmann pointed out in Biogen Inc v Medeva PLC [1997] RPC 1, 45, albeit in connection with a trial judges decision, this is a kind of jury question and should be treated with appropriate respect by an appellate court. And that is, in my view, at least as true where the parties have agreed by whom the issue should be determined. 106. Lord Hoffmann then explained that [t]he need for appellate caution in reversing the trial judges evaluation of the facts is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. He continued: [the judges] expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance of which time and language do not permit exact expression, but which may play an important part in the judges overall valuation. I would add that (i) it cannot be right to expect a higher standard from non lawyer decision makers than from a judge, and (ii) the respect to be shown to the decision makers determination may often be greater when it is that of a person or people with relevant expertise or experience than when it is that of a judge. Was the opinion that Mr Braganza committed suicide unreasonable? 107. One would have to be unusually stony hearted not to hope that a way could be found to ensure that, having suffered the terrible blow of losing her husband, Mrs Braganza could be spared the additional blows of an inquiry concluding that he had killed himself and the deprivation of a death in service benefit. However, it is the most fundamental duty of a judge to apply the law, even if it sometimes leads to hard consequences in the circumstances of a particular case. 108. In my view, the position in this case is, in summary, as follows. As the First Report made clear (see para 77 above), BP appointed a team of experienced people from different disciplines specifically to form a view as to how Mr Braganza had died, the team carried out what appears to have been a very thorough investigation (see para 78 above), and produced a full and meticulous report in which they expressed themselves in moderate and considered terms, and in which they concluded that, while Mr Braganza could have suffered an accident, that was very unlikely, and that the probable cause of his death was suicide (see paras 79 81 above). They then carefully reconsidered that conclusion following a request from Mrs Braganza, and, sadly for her, confirmed it in a further carefully considered report (paras 83 85 above). When Mr Sullivan was instructed by BP to consider the cause of Mr Braganzas death for the purpose of clause 7, it was entirely reasonable for him, in the light of that background to consider the First Report and adopt its conclusions, and, when the First Report was challenged, to readdress the matter and to consider the Second Report and adopt its conclusions. 109. However, it is said that Mr Sullivans opinion is flawed because of a combination of factors. When analysed, it appears to me that those factors may be summarised as follows: a) It was inappropriate for Mr Sullivan simply to rely on the Reports, as they were prepared for a different purpose; b) A finding that a person committed suicide amounts to an inherently improbable, serious or damaging conclusion which required more cogent evidence than was available; c) Mr Braganza exhibited no signs that he was depressed or had suicidal intentions during the 24 or 36 hours prior to his death; d) The consequence of Mr Sullivan concluding that Mr Braganzas death was caused by suicide was so severe, namely, the loss of a death in service benefit, that it was not justified on the evidence; e) Mr Sullivan ought at least have directed himself as to the inherent unlikelihood of Mr Braganza having committed suicide; f) The team, and therefore Mr Sullivan, failed to take into account the fact that Mr Braganza had good reason to go on deck in the early morning; g) Mr Sullivans failure to ask Mrs Braganza about the emails impugned his opinion. I shall take those arguments in turn. 110. As to argument (a), it was, in my view, neither unreasonable nor inappropriate for Mr Sullivan, when forming his opinion for the purposes of clause 7.3, to adopt the conclusion reached in a carefully considered report prepared by a group, such as the team, on behalf of BP. I am unpersuaded by the argument that the team was concerned with a different issue from Mr Sullivan. The team was specifically instructed to investigate the relevant circumstances and root causes of Mr Braganzas disappearance, and they clearly could only conclude that it was suicide if that was, in their view, the likely cause, ie on the balance of probabilities, after fairly considering all the evidence. Precisely the same applies to the forming of Mr Sullivans opinion as to the cause of Mr Braganzas death. Further, the fact that the team was investigating the issue for a purpose different from Mr Sullivan is nothing to the point. Even if one assumes (which I do not accept) that the sole purpose of the team was to make recommendations as to what steps should be taken by BP to improve safety on board their vessels, it was still essential for them to assess, if they could, just how Mr Braganza had died. 111. If the team had concluded in their report that Mr Braganza had fallen overboard as a result of an accident or that it was impossible to say how Mr Braganza had died, it could not seriously be suggested that Mr Sullivan could not have adopted that conclusion. Indeed, to many people, it would have been a little surprising if, in the absence of new facts not known to the team or plain error on the part of the team, Mr Sullivan had reached a different view from that taken by the team. Of course, Mr Sullivan was not entitled unthinkingly to adopt the view of the team: he had to form his own opinion. However, once he was satisfied that the team had conducted a very thorough investigation, and had carefully considered all the evidence and had reached a conclusion with which he considered that he agreed, it would in my view be little short of absurd to hold that he was nonetheless obliged in law to carry out his own separate investigation. 112. As to argument (b) in para 109, support for the proposition that the more serious the allegation, the more cogent the evidence required to prove it can be found in the opinion of Lord Nicholls in In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563. At p 586, he said the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence. However, that point also can only be taken so far, as Lord Hoffmann and Baroness Hale each said in In re B (Children) (Care Proceedings: Standard of Proof) [2008] UKHL 35, [2009] AC 11, paras 1 15 and 64 70 respectively. As Baroness Hale pointed out in para 72, there is no logical or necessary connection between seriousness and probability. She then said that serious allegations are [not] made in a vacuum, and went on to give examples of statements which might seem intrinsically unlikely if made without a particular context, but appear quite likely if made in the context of certain assumed facts. In the end, the decision maker has to come to a conclusion on the particular facts of the case. 113. The point is also apparent from the opinion of Lord Carswell (with whom the other members of the committee agreed) in In re D (Secretary of State for Northern Ireland intervening) [2008] UKHL 33, [2008] 1 WLR 1499. At para 29, he said, in connection with the serious finding in civil family proceedings that an adult had been guilty of very serious sexual assaults on young girls, [t]he panel had to be satisfied on the balance of probabilities that he was, but it did not follow that specially cogent evidence was required. In reaching that decision, the House of Lords accepted the appellant panels argument identified at para 22 that the court below was wrong to say that the flexible approach to the civil standard of proof required more cogent evidence than would be conventionally required and that a more compelling quality of evidence was needed. 114. In the present case, it seems to me clear that there was a combination of reasons which can fairly be said to be sufficiently cogent to justify Mr Sullivans opinion, based on the two Reports, that Mr Braganza had taken the unusual and tragic course of committing suicide. First, this is a case where it is clear that Mr Braganza died at sea, and the only two plausible possible causes (as the Judge and the team both considered) were accident or suicide. So this is not a case where the issue is whether an unlikely event occurred: the issue is how an unlikely event, which undoubtedly occurred, was actually caused. 115. Secondly, when one turns to consider that issue, it is clear that there were various factors which either concerned, or could well have concerned, Mr Braganza. In particular, the emails from his wife strongly suggest that he was depressed about his financial affairs and that he was oppressed by the vessels state of repair (paras 73 and 74 above). Furthermore, he could well have been upset by the withdrawal of his bonus (especially if he had money problems) (para 71), and by the criticism of his supervision of the works at Ferrol (para 70). It does seem pretty clear from the emails from his wife that, to a significant degree, he let at least some of these matters cause him serious concern. Although there was evidence that he was on good form in the 36 hours immediately before his disappearance, there were a number of comments about his uncharacteristically moody state for most of the three weeks he was on board the British Unity see paras 69 and 70 above. And there is the curious fact that he did not make entries as he should have done in the Order Book see para 72 above. 116. Thirdly, the only serious alternative to suicide, as both the Judge and the team separately concluded, was an accident, and for the reasons summarised in paras 80 and 83 84 above, that would seem to have been very unlikely. The weather was relatively calm, Mr Braganza was very safety conscious, he was unlikely to have gone on deck without warning someone, he had no reason to go on deck, the vessel was very well protected, and nobody in the BP fleet had ever fallen overboard from this class of vessel. On the teams analysis, it was, at least in my view, plainly open to them, and therefore to Mr Sullivan, to conclude that suicide was more likely than an accident. 117. Of course, as already mentioned, it was open to the team to conclude (as the Judge did) that it was not possible to reach a conclusion as to how Mr Braganza had died. However, that is not at all the same thing as saying that this was the only conclusion that the team could have reached. If the team or Mr Sullivan had proceeded on the basis that they were bound to come to a conclusion as to how Mr Braganza had died, or if they had arrived at their conclusion by a process of simply eliminating all other possible causes, they would have been guilty of an error of law which would, I think, have vitiated the conclusion which the team reached. However, that is not how they approached the issue: on the contrary see paras 85 and 86 above. 118. Argument (c) in para 109 above is that there was no evidence of depression or suicidal behaviour in the day or two before Mr Braganzas disappearance. In the first place, there was evidence to support the possibility of suicide as already discussed. Quite apart from that, we do not, alas, need expert evidence to tell us that many suicides occur out of the blue so far as loving relatives are concerned. The very fact that some suicides occur at all is attributable to the fact that there are no signs that it will happen. Of course, a number of suicides are preceded by aberrant behaviour or warnings, but I am quite unpersuaded that the absence of any such matters is of much significance. 119. As to argument (d), namely the consequence of Mr Sullivans forming the opinion that the Mr Braganza killed himself was so great that the decision making process was flawed, of course, cogent evidence was needed: it always is. And, as The House of Lords has emphasised in a number of different cases, apart from the criminal standard of proof, there is but one standard of proof, namely on the balance of probabilities, ie more likely than not see what Lord Nicholls said in In re H [1996] AC 563, 586, affirmed and explained by Lord Hoffmann and Lady Hale in In re B, [2009] AC 11, paras 13 and 68 70 respectively, and applied by Lord Carswell in In re D [2008] 1 WLR 1499, para 28. 120. I accept that it may be right to take into account the seriousness of the consequences of a particular finding when deciding whether the evidence justified it, but, as Lord Carswell explained in In re D, para 28, [t]he seriousness of consequences is another facet of the [the seriousness of the allegation]. In other words, in this case it is illogical to suggest that, because Mr Sullivans opinion, unlike the decision of the team, would result in Mrs Braganza not receiving the death in service benefit, he should have been more reluctant than the team to conclude that Mr Braganza had committed suicide. The only relevance that the non receipt of the benefit could have had to Mr Sullivans opinion would be that, because the benefit would be lost if Mr Braganza committed suicide, it could be said to render it less likely that he would have done so. However, that applies equally to the teams decision. 121. As to the argument (e) in para 109 above, I do not think that it would be appropriate to hold it against either the team or Mr Sullivan that they did not expressly say that it is inherently unlikely that a person would commit suicide. There was evidence that could support the notion that Mr Braganza was in an unhappy state emotionally, and the only alternative to suicide was an accident, which the team rejected as very unlikely indeed. Particularly in those circumstances, it would, in my view, involve setting an unrealistically, and therefore an undesirably, high standard on investigators or writers of reports, whose investigations and reports are intended to have legal effect, to hold that the investigator or writer had to mention in terms that suicide was inherently unlikely. 122. Even if the Reports had been judgments, I very much doubt that they could have been fairly criticised for failing expressly to say that suicide is an inherently unlikely act. However, even if that is wrong, any such criticism is impossible to sustain in connection with the Reports. As Mocatta J said in The Vainqueur Jose [1979] 1 Lloyds Rep 557, 577: Where, as here, the success or failure of a claim depends upon the exercise of a discretion by a lay body, it would be a mistake to expect the same expert, professional and almost microscopic investigation of the problems, both factual and legal, that is demanded of a suit in a Court of law. 123. So far as argument (f) in para 109 is concerned, Miss Bucknall, in the course of her submissions, emphasised on a number of occasions that Mr Braganza could have gone on deck in daylight to check the weather. This echoes the Judges observation in para 96 of his judgment that the team and hence Mr. Sullivan, failed to take into account the real possibility that Mr Braganza went out onto deck in order to check the weather to see whether it was safe to carry out the planned work. However, the simple answer to that contention is that (i) in the First Report, the team simply thought that an accident was very unlikely for the reasons they gave, even if Mr Braganza had gone on deck, and (ii) in the Second Report, the team reconsidered the possibility of an accident and rejected it as very unlikely, because (a) Mr Braganza would probably not have checked the weather, (b) if he had gone on deck to do so he would have told the officer of the watch, and (c) perhaps most importantly, because the possibility of his falling overboard by accident was very unlikely indeed see paras 80 and 83 84 above. 124. Nor would I accept that argument (f) in para 109 above provides a good reason for doubting Mr Sullivans opinion, namely that he did not ask Mrs Braganza about the emails before forming his opinion. If, as the Judge found, the team was entitled to assume that Mrs Braganza had had the opportunity to make representations about the emails to them once she got the First Report, then Mr Sullivan was equally entitled to make that assumption. Indeed, she was free to make any points which she wanted, and apparently did so in her note of May 2009, which was referred to in the Second Report (para 83 above). Mr Sullivan knew that she had complained about the First Report, as it was her complaint which resulted in the Second Report, and, having read the Second Report, he knew that she had been free to make any point she wanted to the team. 125. In any event, although Mr Sullivan referred in his witness statement to the fact that he had not thought it appropriate to approach Mrs Braganza about the emails, he was not cross examined about this. It is therefore difficult to see how he could be criticised on this ground. Quite apart from this, Mrs Braganza gave evidence before Teare J that her husband was not happy because their money was running out, [t]hey had sold everything, that life [was] tough in Toronto, and that Mr Braganza was frightened: para 17. Although the Judge rejected BPs case that this evidence understated Mrs Braganzas degree of concern, it does not seem to me that such evidence would have undermined a conclusion that he had killed himself: it confirms what is plain from the emails. 126. In my view, in the light of the discussion in paras 107 125 above, it is not fairly open to a court to decide that the conclusion reached by the team in the First and Second Reports, and therefore the opinion formed by Mr Sullivan, fell foul of the test laid down by Rix LJ in the passage cited in para 102 above. In my view, neither the conclusion reached by the team nor the consequential opinion formed by Mr Sullivan can be characterised as arbitrar[y], capricious , pervers[e] [or] irrational , to use Rix LJs words. The two Reports are, as I have indicated, impressive both in the extent of the investigations on which they were based and the care with which they were compiled, and the conclusion they reached was carefully and rationally explained, and Mr Sullivan cannot be criticised for relying on them. Conclusion 127. I would accordingly dismiss this appeal. Mr Sullivans task was quite different. He had to consider whether he was in a position to make a positive finding that Mr Braganza had committed suicide. He should have asked himself whether the evidence was sufficiently cogent to overcome the inherent improbability of such a thing. In my view that can be expected of any employer making a decision under a provision such as this. But it could certainly be expected of BP, which clearly had access to in house legal expertise to guide it in the decision making process. In this case, there were no positive indications of suicide. There was no suicide note, no evidence of suicidal thoughts (apart perhaps from his wifes reference six weeks earlier to his seeming so afraid of life), no evidence of over whelming personal or financial pressures of the sort which would be likely to lead a mature professional man to take his own life, no evidence of psychiatric problems or a depressive personality. The bullet points are at most straws in the wind. The two most significant are the emails and the record keeping deficiencies. The cogency of the emails from Mrs Braganza is much diminished by the failure to ask her about them. The teams failure to do so is completely understandable, given the task which had been set for them. But the employers failure to do so is much less understandable. Nor do the record keeping deficiencies appear to have been explored in any depth. 41. Against those straws in the wind is the evidence that Mr Braganzas behaviour had appeared entirely normal to the Master and the other officers with whom he was in contact the night before. There was also a good deal of evidence of his concern about the weather, which would have constituted a good work related reason for him to go on deck that morning. A further relevant factor which ought to have been in the mind of this employer is that Mr Braganza was a Roman Catholic. There are cultures in which suicide is an acceptable, even an honourable, solution to certain problems or dilemmas. But his was not one of them. For him, suicide was a mortal sin. This increases its inherent improbability in his case and the corresponding need for cogent evidence to support a positive finding. |
This is an appeal against a decision of the Court of Appeal upholding a series of case management decisions by judges of the Chancery Division. It arises out of a joint venture between Apex Global Management Ltd (Apex), a Seychelles company owned by Mr Almhairat, and Global Torch Ltd (Global), a BVI company owned by Prince Abdulaziz (the Prince), Mr Abu Ayshih and Mr Sabha. Apex and Global set up an English company Fi Call Ltd (Fi Call), and then fell out badly. On 2 December 2011, Global issued a petition under section 994 of the Companies Act 2006 against Apex, Mr Almhairat and Fi Call seeking share purchase orders, and pecuniary and declaratory relief. Ten days later, Apex issued a not dissimilar cross petition against Global, the Prince, Mr Abu Ayshih, the Princes father, and Fi Call. Allegations and counter allegations of seriously unlawful misconduct are involved, including money laundering, financial misappropriation, and funding of terrorism. The two petitions were ordered to be heard together. It is relevant to mention that the pecuniary relief sought by Apex included a claim for just under $6m (and for convenience I shall treat it as $6m) plus interest, which it contended was owing to Apex by the Prince. The Prince denied that the $6m was owing on the ground that he had paid it into various bank accounts of Fi Call for which Mr Abu Ayshih and Mr Almhairat were apparently joint signatories. Apex accepted that it had been agreed that the Prince could pay the $6m to Apex by paying it into Fi Call bank accounts, but did not accept that the payments relied on by the Prince were intended to discharge, or did discharge, his liability to pay Apex $6m. A Case Management Conference took place before Vos J on 30 and 31 July 2013, at which he considered and resolved a number of disputed case management issues, and his directions were set out in a detailed order (the Order). For present purposes, only paras 14 and 15 of the Order are relevant. Both paragraphs contain a direction that all parties (save Fi Call) should by 6 August (para 14) or 12 August (para 15) file and serve a statement, certified by a Statement of Truth signed by them personally in the case of individuals and by an officer of the company in the case of the two companies. The statements under para 14 were required to identify the location and other details of servers, electronic devices and email accounts of Fi Call to which the party concerned had or had had access. The statements under para 15 were required to identify the location and other details of email accounts and electronic device not provided by Fi Call to which the party concerned had or had had access. The Prince did not object to this form of order when it was proposed on 30 July, but, on the following day, his counsel argued that he ought not be required to sign the statements referred to in paras 14 and 15 of the Order personally, but Vos J rejected the argument. Thereafter, the Prince purported to comply with paras 14 and 15 of the Order, but his statements did not deal with mobile devices, and, more to the point, the accompanying Statements of Truth were signed not by the Prince, but by Mr Abu Ayshih, who was his close adviser, on his own and on the Princes behalf. As the Prince had failed to comply with paras 14 and 15, Apex and Mr Almhairat (the Apex parties) applied to Norris J on 9 September 2013, seeking an unless order, ie an order that, unless the Prince complied with those paragraphs of the Order, and in particular signed a Statement of Truth, his defence be struck out and judgment be entered against him. On the basis that he was being asked to enforce[e] compliance with rules, practice directions and orders under CPR 1.1(2)(f), Norris J made the unless order sought, giving the Prince nine days to comply, and refused permission to appeal. The Prince maintained his position, and accordingly the Apex parties applied to Norris J on 14 October 2013 under CPR 3.5(2) for judgment to be entered in their favour, and in particular Apex applied for judgment to be entered in its favour for the $6m plus interest. Norris J granted that application on the papers ie without an oral hearing. The Prince then applied under CPR 3.1(7) for a variation of Vos Js order so as to permit his solicitor to confirm on oath, on his behalf, that he had given full disclosure and for relief from sanctions. He also filed a witness statement from his solicitor, seeking to make it clear that the Prince had had explained to him the effect of paras 14 and 15 of the Order, and that he had complied with it. In a judgment given on 30 October 2013, Mann J refused to vary the order of Vos J on the ground that there had been no change of circumstances. Subsequently, in a judgment given on 29 November he rejected the Princes application to be relie[ved] from sanctions under CPR 3.9. On 31 July 2014, Hildyard J refused, with some reluctance, an application (the precise nature of which is unimportant for present purposes) for summary judgment in relation to the question whether the $6m had in fact been repaid by the Prince. Meanwhile, the Prince appealed the decisions of Vos J, Norris J and Mann J to the Court of Appeal which rejected his appeals for reasons contained in a judgment, which (like that of Hildyard J) was given on 31 July 2014, the reasons being expressed by Arden LJ with whom McFarlane and McCombe LJJ agreed [2014] EWCA Civ 1106. The Prince now appeals to this court against that decision. The Prince sought permission to appeal to this Court against the decision of the Court of Appeal, and he was given permission on terms that he paid $6m (plus interest) to his solicitors to abide the order of the court, a condition which he complied with, albeit late. Because the trial was due to start shortly, the Princes appeal was heard on 13 October, and on the day following the hearing we informed the parties that the appeal would be dismissed for reasons which would be given later, on the basis that the parties could thereafter make written submissions as to the order which should be made in relation to the monies paid to the Princes solicitors. 12. The attack on the decisions below: general 14. 13. Accordingly, at least as at present advised, I consider that the view taken by Vos J and the Court of Appeal, namely that a direction requiring personal signing of disclosure statements reflected the normal practice, was correct. However, that is not, in my view, the essential question when it comes to challenging paras 14 and 15 of the Order. The essential question is whether it was a direction which Vos J could properly have given. Given that it was a case management decision, it would be inappropriate for an appellate court to reverse or otherwise interfere with it, unless it was plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree as Lewison LJ expressed it in Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743, para 51. It appears clear from the transcript of the hearing before Vos J that the ground on which he was being invited not to order the Prince to sign the disclosure statement personally was that the Prince would not sign the document because there was a Saudi Arabian protocol (to use Vos Js description) that members of the Royal Family should not become personally involved in any way in litigation. Vos J was sceptical as to the existence and the applicability of this protocol. This is unsurprising, as (i) the evidence as to its existence was principally given by a witness, whose evidence on other points the Judge had previously rejected as incredible, (ii) Vos J was also told by the Princes counsel that he understood that the question of his client giving evidence was still being considered, (iii) another Saudi prince had given evidence in a case before Peter Smith J, and (iv) even if the protocol existed, it was hard to accept that it can have been intended to apply outside Saudi Arabia. In any event, as Arden LJ put it in para 29 in the judgment of the Court of Appeal, Vos J considered it of the utmost importance having regard to the gravity of the allegations that there should be proper pleadings and full disclosure. 15. Given the very serious and bitterly disputed allegations and counter allegations in the proceedings, the doubts as to the existence, status and reach of the alleged protocol and the fact that all other parties were being required to sign disclosure statements personally (and it was not suggested by anyone to Vos J that all the parties should have the same indulgence as the Prince), it is very difficult to see how Vos Js conclusion could be faulted; it appears to me to have been well within the generous margin accorded to case management decisions of first instance judges. 16. As for the hearing before Norris J on 9 September ([2013] EWHC 2818 (Ch)), the Prince again raised the alleged protocol, and suggested that Mr Abu Ayshih could sign the required statement on his behalf confirming that full disclosure had been given. In the course of a careful judgment, Norris J accepted, at para 8, that the striking out of a statement of case is one of the most powerful weapons in the courts case management armoury and should not be deployed unless its consequences can be justified. He also accepted, at para 11, that he should consider the effect of making, or not making, the order sought on the overall fairness of the proceedings and the wider interests of justice as reflected in the overriding objective (quoting from Christopher Clarke J in JSC BTA Bank v Ablyazov (No 3) [2010] EWHC 2219). 17. Norris J then rejected the Princes proposal, saying at para 13 that, if that suggestion was adopted there is a real risk that the overall fairness of the proceedings will be jeopardised. Everyone else will have put their cards on the table. The Prince will deal through an agent. He explained that this would be unfair because [e]veryone else will be exposed to criticism and have their credibility attacked if they are shown to have concealed some relevant account, relevant device, or relevant communication. But, the Prince says that he should be exempt from that criticism. He therefore considered (para 15) that some sanction must be applied and was satisfied that an unless order is the only proper relief to grant in these circumstances, not least because it gave the Prince another opportunity to comply with paras 14 and 15 of the Order. 18. Again, I find it very hard to discern any grounds for challenging Norris Js first decision, which resulted from a correct approach in principle and a careful consideration of the competing arguments, unless it can be said to have resulted in a disproportionate result the first point mentioned in para 11 above, and which I shall consider below. Similarly, there is no basis for challenging the second decision of Norris J (which was almost administrative in nature). 19. The first decision of Mann J ([2013] EWHC 3478 (Ch)), rejecting the Princes application to vary paras 14 and 15 of the Order, was based on a very full analysis of the factual and procedural position, and he approached the issue by reference to the guidance given by Rix LJ in Tibbles v SIG plc [2012] 1 WLR 2591, para 39. He concluded, at para 20, that the requirements for attacking the decision of Vos J within the Tibbles catalogue have [not] come even close to being fulfilled. It is unnecessary to expand on this brief and allusive summary of Mann Js first decision, because, realistically, the reasoning has not been questioned on this appeal. What is relied on by the Prince are the three arguments summarised in para 11 above, which I shall consider below. 20. The second judgment of Mann J ([2013] EWHC 3752 (Ch)) dealt with many issues which are irrelevant for present purposes. However, he dealt in some detail with the Princes application to be relieved from the sanction imposed and enforced by Norris J, which amounted to an application to set aside the judgment entered against the Prince. This was proposed on the basis that the Prince had substantially complied with paras 14 and 15 of the Order in the light of a very full witness statement from his solicitor. Mann J thought that the Prince was raising points which had already been decided. In any event, he was concerned that, if the Princes proposal was adopted, there would not be what he called a level playing field so far as the other litigants were concerned a point which had also weighed with Norris J, as explained in para 16 above. Mann J was also sceptical about the existence of the alleged protocol, which he described as having emerged in a piecemeal and relatively casual way for something which is as central as it is now said to be. He also described it as a matter of collective choice for members of the Saudi Royal Family, to which an English court should not defer (para 41, viii). He also rejected arguments based on the points mentioned in para 11 above, which I deal with below. At any rate subject to those points, it seems to me that the second decision of Mann J was unassailable. In the light of my conclusion that, at least subject to the three points mentioned in para 11 above, the decisions of Vos J, Norris J and Mann J in these proceedings were unassailable, it follows that, in dismissing the appeals against those decisions, I consider that the Court of Appeal was right, albeit again subject to the three points to which I now turn. 21. Alleged disproportionality 22. There is undoubtedly attraction in the contention that preventing the Prince from challenging his liability for $6m is a disproportionate sanction in circumstances where he appears to have what was referred to on his behalf at first instance as a substantive defence (and as it was put by Mann J in his first judgment). A stark view of the Court of Appeals decision is that it deprived a defendant of the opportunity to maintain a defence to a claim for $6m simply because he has failed to comply with an order that he sign a document, when his solicitor was prepared to sign it on his behalf. Expressed thus, the decision may indeed look like an overreaction, and that is no doubt how it would strike the Prince. 23. This contention effectively involves saying that, although each decision on the way to the final result is unassailable (at least subject to the Princes two remaining arguments), the final result is wrong on the ground of lack of proportionality. I suppose that may be logically possible, but it is a difficult 24. position to maintain. More to the point, in my view, on analysis, the contention does not stand up. The importance of litigants obeying orders of court is self evident. Once a court order is disobeyed, the imposition of a sanction is almost always inevitable if court orders are to continue to enjoy the respect which they ought to have. And, if persistence in the disobedience would lead to an unfair trial, it seems, at least in the absence of special circumstances, hard to quarrel with a sanction which prevents the party in breach from presenting (in the case of a claimant) or resisting (in the case of a defendant) the claim. And, if the disobedience continues notwithstanding the imposition of a sanction, the enforcement of the sanction is almost inevitable, essentially for the same reasons. Of course, in a particular case, the court may be persuaded by special factors to reconsider the original order, or the imposition or enforcement of the sanction. In the present case, essentially for the reasons given by the three judges in their respective judgments, there do not appear to be any special factors (subject to what I say in the next two sections of this judgment). Further, it is difficult to have much sympathy with a litigant who has failed to comply with an unless order, when the original order was in standard terms, the litigant has been given every opportunity to comply with it, he has failed to come up with a convincing explanation as to why he has not done so, and it was he, albeit through a company of which he is a major shareholder, who invoked the jurisdiction of the court in the first place. 25. One of the important aims of the changes embodied in the Civil Procedure Rules and, more recently, following Sir Rupert Jacksons report on costs, was to ensure that procedural orders reflected not only the interests of the litigation concerned, but also the interests of the efficient administration of justice more generally. The Prince has had two very clear opportunities to comply with the simple obligation to give disclosure in an appropriate fashion, namely pursuant to the orders of Vos J and of Norris J. Indeed, there would have been a very good chance that, if he had offered to sign the relevant statement after judgment had been entered against him, the court would have set aside the judgment and permitted him to defend (provided that no unfair prejudice was thereby caused to the other parties, and he satisfied any appropriate terms which were imposed). 26. The offer made to Mann J and repeated to the Court of Appeal that the Princes solicitor would confirm, on the Princes instruction, that full disclosure had been given, does not assist the Prince. It would not, I think, have complied with the normal procedure as set out in the relevant Practice Direction, and while the court had the power to depart from that procedure, there is no obvious reason why it should have done so in this case. It would have involved undermining the case management decisions of Vos J, Norris J and Mann J. It would also have been unfair on the respondents as it would have meant that the intended contemporaneous exchange of disclosure statements could not take place. Further, the Prince would have been accorded a privilege over the other parties. In addition, even now the disclosure given by the Princes solicitor is self evidently defective as he failed to give details of all email addresses and electronic devices to which the Prince had access. It also seems quite probable that the hearing date would have been lost if the Prince had been permitted to take part in the trial at such a late stage. 27. Mr Fenwick relied on Cropper v Smith (1884) 26 Ch D 700, 710, where Bowen LJ said that he knew of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. There are three problems for the Prince in this connection. The first is that these observations were made in connection with a proposed amendment to a pleading, ie an attempt by a litigant to do something which he would be entitled to do, but to do it late; whereas here we are concerned with a party who does not even now intend to obey a court order. Secondly, as the points made in the last few sentences of the immediately preceding paragraph of this judgment illustrate, there would be prejudice to the other parties if the Princes current proposal was adopted. Thirdly and even more importantly, the approach laid down in Cropper has been overtaken by the CPR. The strength of the Princes defence 28. Mr Fenwick also relied on the fact that the Princes contention in his pleaded case that he had already paid the $6m was very strong, that this should have been taken into account by the courts below, and should have resulted in his being permitted to defend the claims against him. Presumably, this would be on the basis that some other unspecified sanction should be imposed on the Prince. Some of the evidence relied on to justify this contention came into existence after the Court of Appeal gave its decision, but I am prepared to assume, without deciding, that it can be taken into account. In my view, the strength of a partys case on the ultimate merits of the proceedings is generally irrelevant when it comes to case management issues of the sort which were the subject matter of the decisions of Vos J, Norris J and Mann J in these proceedings. The one possible exception could be where a party has a case whose strength would entitle him to summary judgment. Both the general rule and the exception appeared to be common ground between the parties, although Mr Fenwick seemed to be inclined at one stage 29. to suggest that the exception might be a little wider. In my view, the general rule is justifiable on both principled and practical grounds. 31. 30. A trial involves directions and case management decisions, and it is hard to see why the strength of either partys case should, at least normally, affect the nature or the enforcement of those directions and decisions. While it may be a different way of making the same point, it is also hard to identify quite how a court, when giving directions or imposing a sanction, could satisfactorily take into account the ultimate prospects of success in a principled way. Further, it would be thoroughly undesirable if, every time the court was considering the imposition or enforcement of a sanction, it could be faced with the exercise of assessing the strength of the parties respective cases: it would lead to such applications costing much more and taking up much more court time than they already do. It would thus be inherently undesirable and contrary to the aim of the Woolf and Jackson reforms. In principle, where a person has a strong enough case to obtain summary judgment, he is not normally susceptible to the argument that he must face a trial. And, in practical terms, the risk involved in considering the ultimate merits would be much reduced: the merits would be relevant in relatively few cases, and, in those cases, unless the court could be quickly persuaded that the outcome was clear, it would refuse to consider the merits. Accordingly, there is force in the argument that a party who has a strong enough case to obtain summary judgment should, as an exception to the general rule, be entitled to rely on that fact in relation to case management decisions. For present purposes, I am prepared to assume in the Princes favour that that is indeed correct. I should add that I do not think that it would be enough for a party to show that, while his arguments were not strong enough to justify summary judgment, his arguments were strong enough to justify the other party being required to bring the disputed sum into court if he was to be entitled to proceed with his case. For present purposes, as with an outright order for summary judgment, a claim or defence is either unanswerable or it is not. A conditional order, typically requiring a party to provide security if it wishes to proceed with its claim or defence, is granted in rather nuanced and case specific circumstances. Neither as a matter of principle nor as a matter of practicality would it be appropriate to extend the exception to such a case. 33. Turning to the facts of this case, I do not need to set them out, not least because they are clearly recited by Lord Clarke in paras 48 61, 64 66 and 68 73 of his judgment. I readily accept that the evidence shows that the Prince would have had a good prospect of establishing that the $6m was paid as he 32. 34. contends in his defence. However, I cannot accept that his prospects can be said to be any higher. In the first place, it would risk unfairness to the Apex parties to hold that the Prince had an unanswerable case, as that point had not really been flagged up as part of his argument until the Prince was given permission to appeal to this court. As mentioned, before Mann J, the Prince argued that he had a substantive defence, and before the Court of Appeal it was argued that the merits of the case should be considered, but it does not appear to have been claimed that he had an unanswerable case (see para 87 of Arden LJs judgment). Even in his printed case for this appeal, the Prince is described as having a very strong defence on the merits, not an unanswerable defence. If, at an interlocutory hearing which is not a summary judgment hearing, a party wishes to rely on the contention that he has an unanswerable claim or defence, it seems to me that he should spell out that contention very clearly in advance, as otherwise the raising of the contention at the hearing could wreak obvious unfairness on the other party. 35. Secondly, even based on the current evidence, I do not consider that it can be said that it is plain that the Prince will succeed in establishing that he had paid the $6m as he alleges. It is true that payments totalling around $6m were made by the Prince into accounts in the name of Fi Call mentioned in para 2 above. However, the payments were not made on the dates or into the accounts into which they ought to have been made if they were paid pursuant to the arrangements relied on by the Prince. The Apex parties suggestion that the money was paid by the Prince under a $20m loan agreement does not appear fanciful, although it may ultimately be rejected: it is common ground that the loan agreement exists. Further, the fact that much of the money may have been subsequently paid out to the Prince may be inconsistent with the Princes case. We have seen some of the payments into and out of the bank accounts into which the Prince paid the $6m, but we have not seen all of them. It is also true that the Apex parties case on the payments by the Prince has not been consistent. However, the proceedings involve many serious allegations by and against the Prince, and it would require a particularly clear case before any court could properly conclude that the claim for $6m against him was plainly bound to fail or indeed to succeed. It is also true that, when the matter was before him, Hildyard J described the case against the Prince on this issue as [to] put it lightly, frail. But he did not think it right to enter summary judgment, and in any event we have to form our own view. The fact that there will be a trial 36. The final point relied on by Mr Fenwick was that the issue of whether the $6m had been paid may well be raised at the trial, and at least will be the basis on an attack on the credibility of Mr Almhairat. Thus, the very issue which the Prince would be precluded from contesting if his appeal is dismissed may be determined in the very proceedings which he would have been debarred from defending. This was a point which featured in the Princes argument before Mann J, who rejected it. And although it has some attraction, I consider that he was right, and certainly entitled, to reject it. 37. While, as I say, this argument has some attraction, in the end it seems to me that it simply represents, as Lord Hodge pointed out in argument, a relatively extreme example of what happens if the court orders that a default judgment be entered against a defendant. It is inherent in such an order that the claimants will obtain judgment for relief to which it may subsequently be shown that they were not entitled. Indeed, it is fair to say that, even where judgment for some relief is obtained by claimants after a full trial, evidence may emerge in a later case which establishes that they were not entitled to that relief. 38. So far as this case is concerned, it is worth considering the point a little further. It seems unlikely that, if the contention that the Prince had already paid the $6m is maintained at trial, it will be ruled on by the trial judge unless it is necessary to do so in order to resolve a live issue between the remaining parties, ie an issue which will affect the terms of any court order. And, if the contention had to be resolved in order to determine such an issue between the remaining parties, and the trial judge concluded that the $6m had in fact been paid by the Prince, it is conceivable that the Prince would be able to recover the $6m or its equivalent. That is, I must emphasise, mere speculation on my part, but it illustrates that the Prince may not be without some hope, albeit of a highly speculative nature, of getting the $6m returned, if he had in fact paid it. To that extent, he is actually better off than if this was a more normal case involving the enforcement of a sanction. Concluding remarks 39. It is right to acknowledge that, in the course of this judgment, I have expressed myself in some places in somewhat tentative terms (eg in paras 12 13, 23, and 31). This reflects the point that issues such as those raised by this appeal are primarily for the Court of Appeal to resolve. It would, of course, be wrong in principle for this court to refuse to entertain an appeal against a decision simply because it involved case management and the application of the CPR. However, when it comes to case management and application of the CPR, just as the Court of Appeal is generally reluctant to interfere with trial judges decisions so should the Supreme Court be very diffident about interfering with the guidance given or principles laid down by the Court of Appeal. It is also right to say that nothing in this judgment is intended to impinge on the decisions or reasoning of the Court of Appeal in Mitchell vs News Group Newspapers Ltd [2013] EWCA Civ 1537, [2014] 1 WLR 795 or Denton v TH White Ltd [2014] EWCA Civ 906. 40. 41. As it is, for the reasons I have given, I consider that we should dismiss the Princes appeal. 43. Postscript 42. After the argument on this appeal had been concluded and we had notified the parties of our conclusion, but before we handed down this judgment, we were advised of recent judgments of Hildyard J in the principal action, given on 3 and 5 November, when he reluctantly adjourned the trial to 2015 (subject to certain conditions) on the application of Mr Almhairat and, in light of Mr Almhairats own evidence as to what had happened to some of the assets of Fi Call, gave some protection to the Prince in respect of the monies held by his solicitors. It would not be right for this Court to address the question whether to reconsider its decision to dismiss the Princes appeal in the light of these developments, and in particular in the light of any breaches of the CPR or any orders by any of the Apex parties. If, in the light of events which have occurred since we heard and decided the Princes appeal, reconsideration, revocation or modification of any of the orders affirmed by the Court of Appeal is appropriate (as to which it would be wrong for this Court to give any encouragement or discouragement), then that is a matter which should be raised before a Judge of the Chancery Division. As I have already indicated, case management and procedural issues should be determined by a first instance judge, and, occasionally, on appeal, by the Court of Appeal, when they decide it is right not to send a matter back to a judge, but to decide it for themselves. It may be worth emphasising that, if such an application were made, then the effect of the previous first instance decisions of Vos J, Norris J and Mann J should not be treated as having any greater (or any lesser) force than if they had not been upheld by the Court of Appeal and the Supreme Court. 44. As to the monies held by the Princes solicitors, we can well understand what led Hildyard J to be concerned about the possibility of the monies being released to the Apex parties or any of them. It seems to me that the appropriate order for this Court to make in connection with the monies is that they continue to be held by the Princes solicitors until such time as a High Court Judge directs them to be paid out, whereupon they should be paid out in accordance with the Judges direction. 45. The parties counsel should draw up and agree a form of order which gives effect to our decision. LORD CLARKE: 46. I have reached a different conclusion from the majority in this appeal.1 I would have allowed the appeal on the ground that, in all the circumstances, justice requires that Prince Abdulaziz (the Prince) should be allowed to challenge the claim by Apex and Mr Almhairat that he owes them the US$6m referred to by Lord Neuberger in para 1 of his judgment. I would allow him to do so on terms that the monies amounting to US$8,699,988.49 (ie US$8,700,000 less US$11.51 bank charges) secured by the Princes solicitors in an undertaking given to the Supreme Court by letter dated 8 October 2014 should be made available to the respondents if they succeed. In this way all parties would be protected and justice would be done because the court would be able to resolve all the issues between the parties, both to this appeal and to the underlying proceedings. Moreover there would be no possibility of inconsistency between the outcome of this appeal and the outcome of the underlying proceedings. 47. Lord Neuberger has set out in detail an account of the proceedings to date. I do not disagree with his conclusions at paras 1 to 21. Indeed, I agree that the Prince only has himself to blame for the predicament he is in. However, each case depends upon its own facts and this is in some respects a most unusual case. In a somewhat different context, in Summers v Fairclough Homes Ltd [2012] UKSC 26, [2012] 1 WLR 2004, I expressed the view in para 48 (on 1 In this judgment I will for the most part use the same abbreviations as Lord Neuberger has used in his judgment. behalf of the court) that, in deciding whether to strike out an action, both under the inherent jurisdiction of the court and under the CPR, the court must examine the circumstances of the case scrupulously in order to ensure that to strike out the claim is a proportionate means of controlling the process of the court and deciding cases justly. Then, before expressing the view that the draconian step of striking a claim out is always a last resort, I then referred (at para 49) to a number of cases and, in particular, this statement of Rix LJ in Aktas v Adepta [2011] QB 894, para 92: Moreover, it should not be forgotten that one of the great virtues of the CPR is that, by providing more flexible remedies for breaches of rules as well as a stricter regulatory environment, the courts are given the powers and the opportunities to make the sanction fit the breach. That is the teaching of one of the most important early decisions on the CPR to be found in Biguzzi v Rank Leisure plc. [1999] 1 WLR 1926, 1933 48. As I see it, the same principles apply to the striking out of a defence. In my opinion it would be disproportionate to allow the judgment to stand, at any rate on the basis that the respondents would forthwith be able to call upon the undertaking referred to above. I have reached this conclusion on the particular facts of this case. It is important to have regard to the stance taken by all the parties in this litigation. Lord Neuberger has referred to what I agree have been the failings of the Prince in this litigation. However, account must in my opinion also be taken of the stance taken by the respondents as well as the Prince. If such account is taken, it is my opinion that the just course is that proposed above. 49. The position on the pleadings is as follows. In paras 64 to 71 of the amended points of claim Apex and Mr Almhairat pleaded their case in relation to the Al Masoud SPA shortly in this way. The agreement included the following. Apex would sell 4,400,000 A shares in Fi Call to Mr Al Masoud for US$5,984,000 and Global Torch would sell 2,933,333 B shares in Fi Call to Mr Al Masoud for US$4,016,000. The total purchase price was thus US$10,000,000. Payment was to be by bankers drafts into the bank account of Fi Call at HSBC in London. Fi Call would receive the monies as agent for Apex and Global Torch respectively. It was alleged in para 67 that Mr Al Masoud did not pay any part of the price into a Fi Call company account at HSBC. Instead (it is said) on or about 7 February 2010 he or his agent paid the sum of US$10m to the Prince, purportedly in satisfaction of the debts owed by Mr Al Masoud to Apex and Global Torch, and the Prince accepted 50. 51. 52. 53. that payment in purported satisfaction of those debts. It was alleged in para 68 that Apex was entitled to treat the Prince as having received the sum of US$5,984,000 on behalf of and for the benefit of Apex. It was alleged in para 69 that Apex elected to treat the Prince as having received the sum of US$5,984,000 on its behalf on various bases and in para 70 that the Prince held that sum on trust for Apex. It was then alleged in para 71 that the Prince had failed to account for any part of the US$5,984,000 or indeed of the US$10m. In para 151.5 it was asserted that there should be added to the notional value of Apexs shares the sum of US$5,984,000 to which Apex was entitled pursuant to the Al Masoud SPA but which was instead paid to the Prince. In para 75 of the defence and counterclaim of Global Torch (and the defence of Mr Abu Ayshih) the following pleas were advanced in response to para 67 of the amended points of claim. It was admitted that Mr Al Masoud paid the share purchase consideration to the Prince on 7 February but not that it was done without the knowledge or consent of Apex. On the contrary it was alleged that Mr Almhairat knew full well how the payment would be made because it was discussed beforehand. The following was alleged in para 75.3. It was admitted that the Prince accepted the payment as being in satisfaction of the debt owed under the Al Masoud SPA. However, it was averred that he did not retain the whole sum for his own benefit. He retained US$1,999,985 in his account as representing part payment of the sum that would have been due to Global Torch under the Al Masoud SPA. The remainder of the monies were paid as follows: US$1,999,985 to Fi Calls bank account held at Al Mawarid Bank in the Lebanon; US$1,999,985 to Fi Calls bank account held by HSBC in London; and on 11 March 2010 US$3,999,973 to Fi Calls bank account held at the ABC Bank in Jordan. It was noted that once regard is had to bank charges the total of those sums is US$10m. In para 76 it was alleged that on 15, 24 and 26 March 2010 Mr Almhairat withdrew from those various bank accounts a total of US$4,410,115 for his own purposes, leaving the balance of the sale proceeds as a contribution by Apex to the working of Fi Call. In para 77, para 68 of the amended points of claim was denied and it was specifically denied that the Prince received any element of the funds for the benefit of Apex. In para 39 of the reply and defence to counterclaim, which was dated 24 January 2014, it was admitted that Mr Al Masoud made the payments alleged but it was denied that they were made pursuant to, or in performance of, the Al Masoud SPA. By para 42, paras 75 and 76 of the defence and counterclaim were not admitted. Thus no positive case was pleaded as to the detailed payments alleged in paras 75.3 and 76 summarised in paras 5 and 6 above. 54. The position of the Global Parties (ie Global Torch and Mr Abu Ayshih) was summarised in a notice to admit the following facts served on 5 February 2014. On or about 7 or 8 February 2010 the equivalent of US$10m was paid into the Princes SABB bank account. That payment represented the payment by Mr Al Masoud in consideration of the shares sold by Apex and Global Torch to him under the Al Masoud SPA. Between 16 and 18 February, the equivalent of US$1,999,985 was transferred from the Princes SABB bank account to his M300 bank account. Between 16 and 17 February 2010 the equivalent of US$1,999,985 was transferred from the Princes SABB account to Fi Calls Al Mawarid bank account. On or about 11 March 2010 the equivalent of US$3,999,373 was transferred from the Princes SABB account to Fi Calls Arab Banking Corporation (Jordan) bank account. Between 13 and 15 March 2010 the equivalent of US$1,999,871 was transferred from the Princes SABB account to Fi Calls Arab Banking Corporation (Jordan) bank account. As a result of those transactions, out of the US$10m paid to him by Mr Al Masoud in connection with the Al Masoud SPA, the Prince paid about US$8m (or US$7,999,829) to accounts in Fi Calls name and did not retain any part for his own purposes except for the US$1,999,985 transferred to his M300 account. 55. Further, the notice to admit invited admission of the following further facts. On or about 15 March 2010 Mr Almhairat withdrew (or transferred to an account controlled by him and/or Apex) US$2,310.115 from Fi Calls Arab Banking Corporation (Jordan) bank account. On or about 26 March 2010 Mr Almhairat withdrew (or transferred to an account controlled by him and/or Apex) US$1,850,000 from Fi Calls Al Mawarid bank account. 56. The respondents declined to respond to the notice to admit or to explain the position. Thereafter, on 9 May 2014 Mr Jeremy Marshall made his 14th statement in support of the application to strike out, alternatively for summary judgment dismissing, paras 70, 71 and 151.5 of the amended points of claim, which are summarised in paras 49 and 50 above. The statement described the nature of the pleaded issues as set out above. It then relied upon the first witness statement, dated 28 October 2013, of an independent accountant, Mr Sumail Nerula, which is based on accounts which showed the payments identified above. 57. The Court of Appeal heard the appeals referred to in detail by Lord Neuberger, beginning on 21 May 2014, although they did not give judgment until the morning of 31 July. In the meantime, on 17 June 2014, there was a directions hearing on the strike out/summary judgment application before Chief Registrar Baister to which the Prince was not of course a party, although Global Torch was. Counsel for Global Torch (Mr Saoul) submitted to the Registrar that, if the Princes appeal to the Court of Appeal succeeded, the issues identified above would have to go to trial. However, he also submitted that the allegations were part of the wider undue prejudice issues so that they were likely to go to trial in any event. He invited counsel for the respondents (Mr Lightman) to identify the true issues between the parties relating to the payment of the US $6m. The Chief Registrar was attracted by that approach but Mr Lightman said that the issue would have to go to trial in any event, if only as between Prince Mishal and the respondents. At best, he said, Global Torch were seeking to strike out allegations only as against themselves, that the issue would survive as against Prince Mishal and that both Global Torch and Prince Mishal would have to give disclosure relating to it. Mr Lightman added (at A/3/45): It is very likely that they [ie Global Torch and Mr Abu Ayshih] will want to put in evidence anyway about this issue. If the summary judgment application fails of course they will have to do it anyway. If it succeeded, clearly they would want to do a proxy defence for the Princes, as they have in the past. Mr Saoul represents the Prince in other hearings. Also they will want to say, We issue a summary judgment application in respect of something, we succeeded, this allegation should never have been made, so this is unfair prejudice. It is fanciful to say that this is a side issue which, if it was disposed of now, would not nevertheless be live at trial. 58. The Chief Registrar said that this seemed to him to be an important issue which, if Mr Lightman was right, should be resolved sooner rather than later. He therefore gave directions for the filing of evidence. 59. Mr William Christopher made a statement on 30 June 2014 on behalf of Apex and Mr Almhairat, in response to the application to strike out and for summary judgment by the Global Torch parties. So far as I can see, while throwing some doubts upon the way the payments were made, Mr Christopher does not say that no payments were made to Fi Call by the Prince. He said in para 9 that Mr Almhairat informed him that he only discovered that Mr Al Masoud had made a payment direct to the Prince on or about 23 February and he was not aware that the Prince had subsequently made any payments into bank accounts of Fi Call which were intended to be in satisfaction of the share purchase monies payable to Apex under the Al Masoud SPA. Mr Almhairat told Mr Christopher that he only became aware of the Global Torch Parties present position when Mr Narulas statement of 28 October 2013 was served. Mr Christopher said that there remained issues of fact, which could only be resolved at a trial after hearing oral evidence in the light of the disclosure given by the parties. Importantly, he noted that the Prince was debarred from defending the proceedings and that Prince Mishal had refused to take part in the proceedings but that the issues would continue to be live at the trial, at the very least in the context of Apexs claim against Prince Mishal and so would be an issue in respect of which the Global Torch Parties would be obliged to give disclosure regardless of the outcome of the application. He concluded that that was a compelling reason why the application should be dismissed even if (contrary to the Apex Parties primary contention) the court were to form the view that Apex had no real prospect of succeeding on the issue against the Global Torch Parties. The Apex Parties also relied upon the first statement of Victoria Middleton, a chartered accountant, dated 30 June 2014 in response to Mr Narulas first statement. She cast doubt on some of his conclusions. 60. Mr Marshall and Mr Narula responded in their seventeenth and second statements respectively, each dated 14 July 2014. Their main point was that the respondents did not rely upon any positive case. In summary they said that it was undisputed that the Prince received the US$10m from Mr Al Masoud. Further, it was accepted that the Prince had paid US$7,999,829 to Fi Call. The Global Torch Parties case was that, of that sum, US$5,984,000 was due to Apex as its share of the share purchase price. In the absence of any explanation to the contrary the only reasonable inference to be drawn was that the monies were intended to be payments for the shares under the Al Masoud SPA and that the Prince had accounted to Apex for its share of the proceeds by paying the money to Fi Call. It is true that the monies were paid to a Fi Call bank account other than that provided for in the SPA but there is no evidence that anything turns on that. On the contrary, as I see it, based on the evidence which was available in July, there was no arguable case that payment to a Fi Call company did not have the effect of accounting to Apex for the US$5,984,000 in respect of the price of the shares. As stated in para 4 above, the Apex parties pleaded that payment under the Al Masoud SPA was to be by payment into a Fi Call bank account and that Fi Call would receive the monies as agent for Apex and Global Torch respectively. I note in passing that in a solicitors letter dated 24 May 2012 the Apex Parties case was advanced on the basis that Mr Al Masouds payment should be paid into Fi Calls bank account and that this 61. would have been received by the Company as agent for Apex and as agent for Global Torch, although it was envisaged that the Company might subsequently be permitted 62. 63. to retain some or all of the money by way of loans from Apex and Global Torch. In these circumstances, viewed on the basis of that evidence, the Apex parties had no defence to the application for summary relief because Fi Call had received approximately US$6m on behalf of Apex and there was no basis upon which the Prince could have been held separately liable for it. In the absence of a satisfactory explanation, there is also force in the point that a reasonable inference can be drawn from the fact that on or about 15 and 26 March 2010 Mr Almhairat withdrew (or transferred to an account controlled by him and/or Apex) the sums of US$2,310.115 and US$1,850,000 from Fi Calls Arab Banking Corporation (Jordan) and Mawarid bank account respectively. They were the opening balances in each account. The inference is that the monies used came from Mr Al Masoud and that Mr Almhairat regarded those sums as his to use. 64. No positive case was made by the Apex Parties at any time before the matter came before Hildyard J on the afternoon of 31 July 2014, which was after the Court of Appeal had given judgment that morning. Both the transcript of the hearing and of his judgment, which is now available, are in my opinion instructive. They show that, although he declined to grant either of the Global Torch Parties applications for summary relief, he made it clear that he would have granted summary relief but for the fact that the trial was so soon. 65. Hildyard J had before him the evidence to which I have referred above. The position was explained to him by Mr Fenwick, who was representing the Global Torch Parties, in much the same way as I have set it out above. With respect to Mr Lightman, who represented the Apex Parties before the judge, it is far from clear what their case was. He accepted that some payments were made into Fi Calls accounts. He at first suggested (at A8/124) that his clients did not regard the payments as accounting for the monies due to them under the SPA. He suggested that the Prince was lending money to the company. The judge asked him whether Apex thought the payments were a loan. He said that it was unclear what they were, whereupon the judge said that his clients had not been very forthcoming as to what they thought (A8/125). As I see it, the difficulty for them was that, while for the purposes of this application they were saying that there was a triable issue, their pleaded case was that the Prince held the monies for them on the basis that he had received monies from Mr Al Masoud as agent or trustee for them. Yet, as stated above, there was strong evidence that those monies were paid into the Fi Call company accounts referred to above for the benefit of the shareholders. However that may be, Mr Lightman told the judge at A8/125 that his clients 66. were saying that there was a triable issue as to the extent to which the Prince discharged his obligation as trustee. In giving judgment, Hildyard J expressed some concern (at A9/137/para 3) that, if the decision of the Court of Appeal stood, with the result that the Prince owed US$6m, and it was subsequently held that Apex had been paid, that would give rise to an inconsistency and, one might have thought, some anxiety. As I read paras 4 to 6 of the judgment, the judge would have afforded the Global Torch Parties a summary remedy disposing of the Apex parties claim but concluded that the safest course was to allow the issue to go to trial. He said at A9/138 139: 4. If the respondents are right in the matter now, they will be right then. It is not suggested that the trial will be seriously disrupted if the issue is held over until then: it is of short compass. 5 Accordingly I have approached the matter by reference to what is loosely described as the approach in Williams & Humbert Ltd v W&H Trade Marks (Jersey) Ltd [1986] AC 368 and I have sought simply to weigh the advantages and disadvantages of dealing with the matter now, safe in the knowledge that the ultimate merits will not spoil. As I have said, my initial instinct and my abiding instinct is that the balance is in favour of allowing the matter to proceed. I say that with particular regard to an argument which may or may not be proved correct, which was raised by Mr Lightman, that it is inevitable that the issues regarding the $6m, even if decided on a point of liability, will be ventilated on the broader questions which arise in the petition. These include issues as to the honesty of Mr Almhairat generally and in procuring this claim to be brought forward, it being my assumption that if at any stage he had accepted and told his solicitors that he accepted payment, that should of course have been reflected in the claim being withdrawn. 6. I do this in some senses with a heavy heart because, notwithstanding the general rule that the court at this stage should not poison the water, I should say by way of warning that as matters presently appear to me at this stage, the arguments on behalf of the petitioners seem, if I can put it lightly, frail. I quite understand that they may be entitled to contend that it is the third respondent who agreed to accept the monies in effect as a fiduciary and who bears the responsibility of explaining each and every twist and turn and has not done so. But I consider there to be at least a powerful argument that if receipt is demonstrated and not allocated to any other reason, that will conclude the matter against the petitioners. I do not dare in a sense say more than that, since to say more would falsify my approach of leaving the matter over for determination at trial. But I do caution the petitioners in persisting with this and call upon them to exercise restraint and utmost care. If at trial it were to emerge that there was never any proper defence, though I cannot tie the hands of the trial judge which may very well be myself I would expect the trial judge to separate out these costs and make the strongest possible order in respect of them. 67. For the reasons given above, I agree with Hildyard J that, but for the reasons advanced by Mr Lightman why the matter should proceed to trial, this would have been a proper case for summary disposal based upon the strength of the Global Torch Parties case and the failure on the part of the Apex Parties to advance an arguable defence. What then changed thereafter? 68. There was further evidence before us in the form of the sixth and seventh statements of Mr Almhairat which were dated 8 September and 6 October 2014 respectively. They were prepared for the trial and thus cover many different aspects of the dispute, including the issues discussed above. They were put before this court without demur. In para 43 of the sixth statement he says that on 1 November 2009 the Prince entered into a loan agreement with Fi Call under which he agreed to lend up to US$20m to Fi Call. In para 46 he says that the Prince advanced 1m to Fi Call pursuant to that loan facility. There is however no evidence that any of the monies referred to above were part of a loan. 69. 70. The sixth statement accepts at para 62 that on or about 7 February 2010 Mr Al Masoud (or someone at his request) paid the sum of US$10m to the Prince. He says in para 63 that Apex has never received any of the purchase price paid to the Prince. He says in para 64 that he has seen that it is alleged that the Prince paid about US$6m into various accounts of Fi Call in February and March 2010, although he says that he was not aware of it. He further says that, if it is said that those payments are proceeds of the Al Masoud SPA, neither he nor Apex agreed to its share being paid to the Company rather than Apex. This is odd in circumstances where the SPA originally provided to the monies to be paid to a Fi Call account, namely HSBC. 71. 72. 73. 74. 75. It is fair to say that Mr Almhairat does give an explanation in paras 65 to 68 for the receipt of US$4.41m referred to in para 52 above. He says that it was a loan agreed to by the Prince and the other Global Torch Parties, that some of it was paid back and that he ultimately received a net loan of US$2.1m. In Mr Almhairats most recent statement, the seventh, which was dated 6 October 2014, he again focuses on payments that the Global Torch parties say were paid to the Prince and then to various Fi Call accounts. He now says (contrary to para 64 of his sixth statement) that he was aware that the sums set out above had been paid into Fi Calls accounts. As to their source, he simply says that he did not know precisely where they had originated, although he understood that they had been paid by the Prince or on his behalf. He says that he did not understand that they were the proceeds of the Al Masoud SPA. It is thus unclear on what basis he now says that the Prince was liable to him for the US$6m. In the remainder of the seventh statement Mr Almhairat speculates that the Prince used money paid into the various Fi Call accounts to discharge various obligations of his own, to make transfers to his other accounts and to facilitate what he calls the Princes money laundering activities referred to in the pleadings as the Beirut Transaction (at paras 13 et seq). This statement has been prepared for the trial and gives some indication of the issues at the trial. It appears to me that there may be a close relationship between the Princes alleged liability for US$6m and the shareholders liabilities inter se which will are likely to be the subject matter of dispute at the trial. I recognise, however, that ultimately the question of what issues are to be determined at the trial are matters for the trial judge. In all these circumstances it seems to me (as I stated at the outset) that the just disposal of this appeal would be to allow the appeal to the extent of setting aside the default judgment against the Prince but ensuring that the monies secured by the undertaking referred to above would be available to Apex if they succeed at the trial. I recognise the force of the points made by Lord Neuberger in paras 22 to 27 of his judgment. However, I am of the opinion that each case depends upon its own facts and that it is almost always wrong in principle to disregard the underlying merits altogether as irrelevant. In paragraphs 28 to 35 Lord Neuberger expresses the view that the merits will be relevant where party has a case whose strength would entitle him to summary judgment. Although I entirely agree that the court should not conduct a trial of the issues, I would not limit the relevance of the merits to such a case. On an application for summary judgment it is not uncommon for the judge to refuse summary judgment but only to grant leave to defend on terms that the defendant pays the amount in dispute into court (or otherwise provides satisfactory security) in order to permit the defendant to advance what the judge thinks is a weak case provided that the claimants claim is secured. 77. 76. On a summary judgment application the court has power to make a conditional order: see CPR 24.6.1 and 24PD5 under which it may order a party to pay a sum of money into court. In volume 1 of Civil Procedure, para 24.6.6 notes that in Olatawura v Abiloye [2002] EWCA Civ 998, [2003] 1 WLR 275 Simon Brown LJ gave guidance as to the court's approach to the making of conditional orders requiring a party advancing an improbable case to give security for their opponent's costs. In the present case, for the reasons given above, it is Apex that has the improbable case on the merits, not the Prince. Apex would be fully protected if my proposed order were made. I appreciate that, as Lord Neuberger observes, there is now a good deal of evidence which was not available to the Court of Appeal. However, that is in large part due to the fact that the proceedings before Hildyard J took place after the decision of the Court of Appeal and evidence relevant to the trial has been put before this court. Those circumstances make this a very unusual case. I would add that, notwithstanding the position as it was before Norris J as explained in para 15 of his judgment delivered on 9 September 2013, nobody suggested before Hildyard J (or this court) that it will not now be possible to have a fair trial because of the Princes breach of the orders which led to judgment being entered against him. That seems to me to be a further reason why it would be disproportionate not to afford the Prince relief. 78. For my part, I hope that, if it is established at the trial that the Prince did account for the US$6m as he says he did, it will be possible for that fact to be taken into consideration in resolving the issues between the parties. 79. Finally, I would like to express my agreement with para 39 of Lord Neubergers judgment. As to para 40, as in his case, nothing in this judgment is intended to impinge on the decision or reasoning of the Court of Appeal in Mitchell or Denton. Postscript 80. I learned of the developments referred to by Lord Neuberger in his para 42, only after completing paras 46 to 79 above. As to those developments, I agree with the approach described by Lord Neuberger in his paras 42 to 44. Subject to arguments based on (i) general disproportionality, (ii) the fact that there will be a trial in any event, and (iii) the strength of the Princes case (arguments which I consider in the next three sections of this judgment), it appears clear to me, as it did to the Court of Appeal, that the decisions of Vos J, Norris J and Mann J, as summarised above, cannot be faulted. It was suggested on behalf of the Prince by Mr Fenwick QC and Mr Saoul (neither of whom appeared before Vos J or Norris J) that Vos J erred in making the order in paras 14 and 15, because he mistakenly believed that this was the usual order. The fact that Vos J and the Court of Appeal (see per Arden LJ in the Court of Appeal at para 44) considered that it was the usual order to make renders it very hard for this court to take a different view. However, while it is unnecessary to decide the point, I incline to the view that the standard form of disclosure by a party does require personal signing by the party. CPR 31.10(6) refers to a disclosure statement as being a statement made by the party disclosing the documents, and the notion that it should be the party himself also seems to get support from CPR 31.10(7). Similarly, that conclusion is supported by para 4 of PD31A, especially sub paras 4.2, 4.3, 4.4 and 4.7 (and also the annex to PD31A). It also seems clear that, no doubt when good reasons are made out, the court can permit a departure from this see CPR 31.5(1)(a) and (b). It is true that para 3.7 of PD22 specifically permits a statement of truth to be signed by a partys solicitor and that para 15 of the Order referred to statements of truth not disclosure statements. However, it seems to me that, although it referred to statements of truth, para 15 was actually referring to disclosure statements a view supported by paras 1.1 and 1.4 of PD22 and CPR 22.1(1). |
Part II of the Housing Act 1980 was enacted in order to give the residential tenants of local authorities and certain other social landlords a degree of protection broadly comparable to that enjoyed by private tenants under the Rent Act 1977. It introduced a category of secure tenancy, whose essential features were that the tenant enjoyed a qualified security of tenure, and that the tenancy was transmissible once only to a member of the tenants family occupying the property. The relevant statutory provisions governing secure tenancies are now to be found in Part IV of the Housing Act 1985. This appeal raises a short but difficult point of law about the effect of the provisions governing the transmission of secure tenancies, where the property is let to joint tenants. Mr. and Mrs. Hickin became the joint tenants of a three bedroom terraced house at 81 Leahill Croft, Chelmsley Wood, Solihull in 1967. The freehold owner was initially Birmingham City Council, but the property was transferred in September 1980 to Solihull Metropolitan Borough Council, who were thereupon substituted as the landlords. On 3 October 1980, Part II of the Housing Act 1980 came into force and the tenancy became a secure tenancy. Mr. and Mrs. Hickin lived in the house together until some time after 1980 when Mr. Hickin left. Thereafter, Mrs. Hickin continued to live there until her death on 8 August 2007. Their daughter Elaine, the Appellant on this appeal, has lived in the house from the inception of the tenancy and is still there. The joint tenancy was never severed or replaced and was still subsisting at the time of Mrs. Hickins death. At common law, upon the death of a joint tenant, the tenancy is vested in the survivor, or jointly in the survivors if there is more than one: Cunningham Reid vs Public Trustee [1944] KB 602. Upon Mrs. Hickins death, therefore, her absent husband would have become the sole tenant. On that footing, the Council served notice to quit on him, and then began proceedings against Elaine for possession. Her case is that the common law right of her father was displaced by section 89 of the Act, which vested the tenancy in her. After a trial on agreed facts, Deputy District Judge Hammersley rejected that contention and ordered possession. HHJ Oliver Jones QC allowed the appeal and declared that the tenancy vested in Elaine on her mothers death. The Court of Appeal (Lord Neuberger MR, Laws LJ and Sullivan LJ) allowed the appeal and restored the order of the Deputy District Judge. The Housing Act 1985 has recently been amended, but the relevant provisions are those in force in August 2007, when Mrs. Hickin died. They are as follows: 79. Secure tenancies (1) A tenancy under which a dwelling house is let as a separate dwelling is a secure tenancy at any time when the conditions described in sections 80 and 81 as the landlord condition and the tenant condition are satisfied. (2) Subsection (1) has effect subject to the exceptions in Schedule 1 (tenancies which are not (a) secure tenancies), sections 89 (3) and (4) and 90 (3) and (4) (tenancies (b) ceasing to be secure after death of tenant), and (c) sections 91 (2) and 93 (2) (tenancies ceasing to be secure in consequence of assignment or subletting). (3) The provisions of this Part apply in relation to a licence to occupy a dwelling house (whether or not granted for a consideration) as they apply in relation to a tenancy. 81. The tenant condition The tenant condition is that the tenant is an individual and occupies the dwelling house as his only or principal home; or, where the tenancy is a joint tenancy, that each of the joint tenants is an individual and at least one of them occupies the dwelling house as his only or principal home. 87. Persons qualified to succeed tenant A person is qualified to succeed the tenant under a secure tenancy if he occupies the dwelling house as his only or principal home at the time of the tenants death and either (a) he is the tenants spouse or civil partner, or (b) he is another member of the tenants family and has resided with the tenant throughout the period of twelve months ending with the tenants death; unless, in either case, the tenant was himself a successor, as defined in section 88. 88. Cases where the tenant is a successor (1) The tenant is himself a successor if (a) the tenancy vested in him by virtue of section 89 (succession to a periodic tenancy), or (b) he was a joint tenant and has become the sole tenant, or the tenancy arose by virtue of section 86 (periodic (c) tenancy arising on ending the term certain) and the first tenancy there mentioned was granted to another person or jointly to him and another person, or (d) he became the tenant on the tenancy being assigned to him (but subject to subsections (2) to (3), or (e) he became the tenant on the tenancy being vested in him on the death of the previous tenant, or (f) the tenancy was previously an introductory tenancy and he was a successor to the introductory tenancy. 89. Succession to periodic tenancy (1) This section applies where a secure tenant dies and the tenancy is a periodic tenancy. (2) Where there is a person qualified to succeed the tenant, the tenancy vests by virtue of this section in that person, or if there is more than one such person in the one to be preferred in accordance with the following rules (a) the tenants spouse or civil partner is to be preferred to another member of the tenants family; (b) of two or more other members of the tenants family such of them is to be preferred as may be agreed between them or as may, where there is no such agreement, be selected by the landlord. (3) Where there is no person qualified to succeed the tenant, the tenancy ceases to be a secure tenancy. (a) when it is vested or otherwise disposed of in the course of the administration of the tenants estate, unless the vesting or other disposal is in pursuance of an order made under (i) (ii) section 23A or 24 of the Matrimonial Causes Act 1973 (property adjustment orders made in connection with matrimonial proceedings), section 17 (1) of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders after overseas divorce, &c.), or (iii) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents); or (iv) Part 2 of Schedule 5, or paragraph 9(2) or (3) of Schedule 7, to the Civil (property Partnership Act 2004 adjustment orders in connection with civil partnership proceedings or after overseas dissolution of civil partnership, etc.) (b) when it is known that when the tenancy is so vested or disposed of it will not be in pursuance of such an order. (4) A tenancy which ceases to be a secure tenancy by virtue of this section cannot subsequently become a secure tenancy. 90. Devolution of term certain (1) This section applies where a secure tenant dies and the tenancy is a tenancy for a term certain. (2) The tenancy remain a secure tenancy until (a) it is vested or otherwise disposed of in the course of the administration of the tenant's estate, as mentioned in subsection (3), or it is known that when it is so vested or disposed of it will not be a secure tenancy. (3) The tenancy ceases to be a secure tenancy on being vested or otherwise disposed of in the course of administration of the tenant's estate, unless (a) the vesting or other disposal is in pursuance of an order made under section 24 of the Matrimonial Causes Act 1973 (property adjustment orders in connection with matrimonial proceedings), or (b) (b) the vesting or other disposal is to a person qualified to succeed the tenant. (4) A tenancy which ceases to be a secure tenancy by virtue of this section cannot subsequently become a secure tenancy. 91. Assignment in general prohibited (1) A secure tenancy which is a periodic tenancy, or a tenancy for a term certain granted on or after November 5, 1982, is not capable of being assigned except in the cases mentioned in subsection (3). (a) (b) . (2) The exceptions are (a) (b) (i) (ii) with an assignment in accordance with section 92 (assignment by way of exchange); an assignment in pursuance of an order made under section 24 of the Matrimonial Causes Act 1973 (property adjustment orders in connection matrimonial proceedings), section 17(1) of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders after overseas divorce, etc.), (iii) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents); or (iv) Part 2 of Schedule 5, or paragraph 9(2) or (3) of Schedule 7, to the Civil (property Partnership Act 2004 adjustment orders in connection with civil partnership proceedings or after overseas dissolution of civil partnership etc.) an assignment to a person who would be qualified to succeed the tenant if the tenant died immediately before the assignment. (c) . 113. Members of a persons family (1) A person is a member of anothers family within the meaning of this Part if (a) he is the spouse or civil partner of that person, or he and that person live together as husband and wife or as if they were civil partners, or (b) he is the persons parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece. The Appellants argument is very simple. It is that sections 87 to 89 of the Act constitute an exhaustive code governing the fate of a secure periodic tenancy upon the death of a tenant. The operation of these provisions is mandatory and automatic, displacing the general law. The tenancy therefore vested automatically in her under section 89 if four and only four conditions were satisfied, namely (i) that a secure tenant, i.e. Mrs. Hickin, had died; (ii) that the tenancy was a periodic tenancy; (iii) that the Appellant occupied the house as her only or principal home for the period of twelve months ending with Mrs. Hickins death, and (iv) that the Mrs. Hickin was not herself a successor as defined in section 88. There is no issue about conditions (ii), (iii) and (iv). They were all satisfied. But the Court of Appeal held that condition (i) was not. In my view, they were right about this. The relationship between Part IV of the Housing Act and the common law is not in doubt. A secure tenancy is not just a personal right of occupation. It is an estate in land whose incidents are defined by the general law, save insofar as these are modified by the Act. Subject to that proviso, as Lord Hoffmann pointed out in Birmingham City Council v Walker [2007] 2 AC 262 at [5], it can be assigned, held in joint names, pass by survivorship and be disposed of by will on death, and can in principle pass in any way permissible at common law. Sections 87 to 89 of the Act are part of a wider scheme contained in sections 87 to 91. These provisions extensively modify the general law which would otherwise govern the transmission of a secure tenancy. Their general scheme is that, subject to limited exceptions (such as property adjustment orders in matrimonial proceedings), a secure tenancy cannot be transmitted with the benefit of the statutory security of tenure, whether inter vivos or in the course of the administration of the tenants estate, except to a person qualified to succeed under section 87. This means the deceaseds spouse or civil partner, or any other member of the deceaseds family within the very broad definition in section 113. This result is achieved in one or other of three ways. In the case of a purported disposition inter vivos of a periodic tenancy or a tenancy for a term certain granted on or after 5 November 1982, it is achieved by providing that the tenancy is not transferrable at all except to a qualified person: see section 91 and Burton v Camden London Borough Council [2000] 2 AC 399. In the case of the death of a periodic tenant, where there is a person qualified to succeed, it is achieved by providing for the secure tenancy to vest automatically in that person: section 89(2). In three cases, namely (i) the death of a periodic tenant where there is no person qualified to succeed, (ii) the death of a tenant for a term certain, and (ii) the disposition inter vivos of a tenancy for a term certain granted before 5 November 1982, the Act proceeds on the footing that the tenancy may be transmitted in any manner permitted by the general law, but achieves the statutory purpose by providing that the tenancy thereupon ceases to be secure: see sections 89(3), 90 and 91(2). It will be apparent that sections 87 to 91 of the Act do not wholly displace the general law, even in the area which they cover. In the first place, they are concerned only with the transmission of secure tenancies by dispositions inter vivos or upon death. They do not deal, at any rate expressly, with the subsisting contractual and proprietary relationship between the landlord and an existing tenant who has not died or disposed of his interest. Second, the statute necessarily operates by reference to certain basic principles of the law of property which serve to identify what are the legal characteristics of the estates in land whose transmission is being regulated. Third, in a number of cases the Act does not modify the general law governing the transmission of tenancies, but only the statutory security of tenure available where the tenancy has been transferred. Against that background, the first question to be addressed is what is the legal basis on which Mr Hickin would be entitled to the tenancy apart from section 89 of the Act. This depends on the legal incidents of a joint tenancy at common law. Upon the death of one of two persons holding under a joint tenancy, the interest of the deceased person is extinguished. The survivor thereby becomes the sole tenant. But there is no transmission of the tenancy. In Tennant v Hutton (Court of Appeal, 9 July 1996, unreported) , Millett LJ, delivering the judgment of the Court of Appeal, put the point in this way: The essence of a joint tenancy is that the property is vested in all or both of the joint tenants together. In contemplation of law there is only one tenant, though the tenant consists of two or more persons and the survivors and survivor of them. On the death of any one of them, the property becomes vested in survivors or survivor. There is no true transmission of title. The property remains vested after the death in the same tenant as it did before, though the number of persons who compose the tenant is reduced by one. The result, at common law, is this. By virtue of section 81 of the Housing Act, both Mr and Mrs Hickin were secure tenants for as long as at least one of them occupied the property as an only or principal home. Upon Mrs Hickins death, the tenancy subsisted and Mr. Hickin remained the tenant. He did not succeed Mrs Hickin. He simply continued to enjoy the same rights as he had always had, under an agreement with the local authority landlord to which he was and remained party. The only change in his position was that there was no longer another person concurrently enjoying the same rights. Accordingly, he became the sole tenant. Since he was absent, there was now no one occupying the property as his or her only or principal home. The tenant condition in section 81 of the Act was therefore no longer satisfied, and the tenancy while continuing to exist ceased to be secure. But because a tenancy may be a secure tenancy at any time when the landlord condition and the tenant condition are satisfied (see section 79), it would have been open to Mr. Hickin to revive its secure status by returning to live in the property at any time before the tenancy was terminated by service of a notice to quit. The next question is whether this result and the analysis that leads to it is excluded by the terms of the Housing Act. In Tennant v Hutton, which I have already cited for Millett LJs analysis of the right of survivorship at common law, a very similar question arose under the succession provisions of the Rent Act 1977. Schedule I, Part 1 of the Rent Act provided that where a protected or statutory tenant died, a qualifying member of his family who was living with him in the property at the time of his death (and in some cases for a minimum period before) became the statutory tenant in his or her place. The facts were that a husband and wife held the property as joint tenants under a three year lease protected by the Act and lived in it with their daughter. The issue was whether, upon the death of the wife, the husband or the daughter was the statutory tenant. by succession, after the death of the person. who, immediately before his death, was a protected tenant of the dwelling house. The Court of Appeal held that the daughter could not succeed by statute to the tenancy of the wife, because upon the wifes death the tenancy still subsisted at common law in the husband. Millett LJ, who delivered the sole reasoned judgment, based this conclusion on the legal characteristics of a joint tenancy by reference to which the Act must be assumed to operate. The daughter, he held, cannot claim a statutory tenancy by succession to her mother because immediately before her death her mother was not the protected tenant of the house. She was merely one of the two persons who constituted the tenant. He concluded: Parliament's intention is clear and accords with a literal application of the statute. The family of a statutory tenant is to be protected from eviction when the tenancy comes to an end on the death of the tenant. When the tenancy is vested in joint tenants, the tenancy does not come to an end on the death of the first of them to die and the survivor needs no protection. There is neither need nor room for the application of the schedule and the statutory rules of succession until the death of the survivor. Until after Mrs Tennant's death, there was no single tenant of the house on whose death the statutory provisions could or needed to apply. As it happens, the daughter was unrepresented in Tennant v Hutton. But Millett LJ recorded that he was satisfied that all the relevant material had been put before the court by counsel for the landlord. It has not been suggested before us that anything was overlooked or that the decision was wrong as applied to the Rent Act 1977. On the contrary, I think it was clearly right. It does not of course follow that Part IV of the Housing Act 1985 produces the same outcome, in spite of the similar purpose of that legislation. What does follow, as it seems to me, is that there must be something in the language of the Housing Act or inherent in its purpose which excludes the operation of the relevant features of the general law relating to joint tenancies. The only possible basis for such an exclusion in the case of the Housing Act is the use of the indefinite article in the phrase where a secure tenant dies in section 89(1). The argument has to be (and is) that in the case of a joint tenancy a secure tenant means any one of the individuals constituting the joint tenant. A similar argument was considered by Millett LJ in Tennant v Hutton. The precondition for the operation of the succession provisions of the Rent Act 1977 is the death of a person who, immediately before his death, was either a protected tenant of the dwelling house or the statutory tenant of it: section 2(1)(b). Millett LJ declined to read these words as referring, in the case of a joint tenancy, to the death of any one or more of the joint tenants. In my view, the argument is no better as applied to the corresponding language of section 89 of the Housing Act 1985. For the purposes of subsection (1), a secure tenant dies when a sole tenant dies. If the tenancy is a joint tenancy, the tenant has not died if there remains at least one living joint tenant in whom all the proprietary and contractual rights attaching to the tenancy subsist. Section 89 of the Housing Act 1985 is a mandatory provision which is wholly concerned with the transmission of the tenancy to a person other than the previous tenant, on account of the latters death. This makes sense only on the assumption that there no longer is a previous tenant. Where there is a surviving joint tenant, the whole statutory basis for disposing of the succession to the tenancy is absent. It is no answer to this to say that the purpose of the statute is to transfer the tenancy to members of the tenants family living in the house. That simply begs the question. It is not necessary to provide for the transmission of a tenancy on death unless there is, so to speak, a vacancy. If the tenancy subsists in the surviving joint tenant, there is none. It is obvious that section 89 implicitly excludes the possibility of the transmission of the tenancy upon death in a manner inconsistent with its terms. But the recognition of the right of the survivor under a joint tenancy is not inconsistent with the provisions of section 89 relating to the transmission of tenancies, because the survivors right is not a matter of transmission. The survivor has the same rights as he always did. It follows from the basic legal characteristics of a joint tenancy that the argument based on the use of the indefinite article in section 89(1) depends on a false distinction between a tenant and the tenant. The distinction is false because the section is concerned with the tenant and the tenancy, not with the partial interest of any one individual in the tenancy. Where property is held under a joint tenancy, there is only one tenant, albeit that there are two or more people who jointly constitute that tenant. The draftsman of the Housing Act undoubtedly envisaged that secure tenancies might be held jointly. The possibility is referred to in terms in sections 81 and 88(1)(b). In construing a statute, the ordinary presumption is that Parliament appreciated the legal incidents of those relationships which it is regulating. If, therefore, the draftsman had intended a secure tenant in section 89 to mean any one of two or more joint tenants it is hardly conceivable that he would have left that intention to be inferred from his use of an indefinite article, instead of dealing with the point expressly (e.g. a secure tenant, or in the case of a joint tenancy, any person having an interest under a joint tenancy). It remains to consider the effect of section 88(1)(b) of the Housing Act, which assumed some importance in the argument and is the main basis on which Lord Mance has reached the conclusion that Mr. Hickins rights as the surviving joint tenant were displaced in favour of his daughter. I do not, with respect, believe that this provision will bear the weight which Lord Mance has placed on it. Section 88 is a definition section which operates in conjunction with section 87. Section 87 is concerned with the succession to the tenant under a secure tenancy, i.e. to a person who was a secure tenant when he or she was alive. The proviso in the final words of section 87, mean that a spouse or other member of the tenants family occupying the property as his only or principal residence at the relevant time, is nevertheless not qualified to succeed the tenant if the tenant is himself a successor. Section 88 determines who is to be treated as a successor for this particular purpose. Section 88(1)(b) provides that a successor includes a person who was a joint tenant and has become the sole tenant. The result is that upon his wifes death Mr. Hickin was deemed to be her successor for the purpose of section 87, notwithstanding that there was no transmission of the tenancy at common law but only a continuation of the rights which as tenant had always been vested in him as the tenant. It does not, however, follow that Mr. Hickin ceased to be the tenant. On the contrary, section 88(1)(b) recognises that he became the sole tenant upon his wifes death, something which could not have happened if the tenancy passed automatically to his daughter at that point. Nor does it follow that Mr Hickins rights as the deemed successor of his wife had to compete with the claim of his daughter to succeed her. All that follows from section 88(1)(b) is that since there was deemed to have been a succession on Mrs. Hickins death, there could not thereafter be another one. So if Mr Hickin had exercised his right as the now sole tenant to move back into the property after his wifes death, thereby becoming a secure tenant, and had then died, no one would have been qualified under section 87 to succeed him and section 89 would not have applied. The provisions of sections 87 and 88 are there for the protection of the landlord against being kept too long out of the property. They do not serve to create rights of succession in resident family members which would otherwise not exist. In my judgment, the tenancy did not vest in the Appellant upon Mrs Hickins death because the rights of the previous tenant still subsisted. A secure tenant had not died. All that had happened was that one of the two persons constituting the secure tenant had died. I am fortified in this conclusion by another consideration. If, as the Appellant argues, the tenancy vests in a third party upon the death of one of two joint tenants, then the survivors contractual right and his interest in the property are expropriated. It is a consistent theme of the interpretation of statutes that an intention to take away the property of a subject without giving him a legal right to compensation for the loss of it is not to be imputed to the legislature unless that intention is expressed in unequivocal terms. The words are those of Lord Atkinson in Central Control Board (Liquor Traffic) v Cannon Brewery Co Ltd [1919] AC 744, 752, but the principle has been restated many times, and has been applied not only to property but to other vested common law rights, including contractual rights. Yet if the Appellant is right Parliament must be supposed not only to have abrogated the subsisting tenancy of the survivor, but to have done it without express words, let alone unequivocal ones, without any provision for compensation, and without regard to the survivors circumstances. This seems to me to be an extremely implausible construction of the Act. It is fair to say that on the facts of the present case Mr. Hickin will suffer no detriment because his interest as the surviving joint tenant was of little if any real value to him. He had been out of occupation for a number of years when Mrs. Hickin died, and had no intention of returning to the former family home. The tenancy was not assignable. Its subsistence mattered only to the landlord, and then only for the purpose of enabling the landlord to terminate it by serving notice to quit. I therefore have every sympathy for Elaine Hickins position. However, the issue before us cannot be decided simply on her particular facts. If she is right in principle, the operation of section 89 will have a much wider application. It will apply to defeat the interest of a surviving joint tenant who is out of occupation but wishes to return to the property on the death of the deceased and has every interest in doing so, for example because the survivor is the deceaseds wife who left the property on account of her husbands violence or abuse. It will apply to defeat the interest of a survivor who has been in occupation throughout but is not a member of the deceaseds family. If Mr. and Mrs. Hickin had been divorced, and it was Mr. Hickin who died, section 89 would on the Appellants construction require the automatic expropriation of Mrs. Hickins joint tenancy in favour of her daughter, notwithstanding that she was occupying the property, because in those circumstances the daughter but not the mother would be a member of the deceaseds family as defined in section 113. Mrs. Hickin would on that hypothesis have been converted by the operation of section 89 from a secure tenant to an unprotected licensee. The same result would follow if the joint tenants had never been members of the same family but had simply been sharing accommodation and the one who died had a child or other close relative living with him or her at the relevant time. I have no doubt that in the great majority of cases, the joint tenants of social landlords will be members of the same family within the very broad definition in section 113. They will therefore be qualified to succeed each other under section 87, even if their subsisting rights as joint tenants have been abrogated. But I do not think that Parliament can be taken to have legislated on the assumption that that would always be so, or that the exceptions were unimportant. Public sector landlords are likely to vary in their letting policies, both as between themselves and over time. The letting policies of housing associations, housing co operatives and charitable housing trusts (which are also covered by Part IV) may well be even more heterogeneous, depending on their purposes. The examples that I have cited are not fanciful. What they show is that although it may seem arbitrary, even capricious, for Elaine Hickins claim to be defeated on account of the rights of her absent father, equally arbitrary and capricious consequences follow from any alternative construction. It is difficult to say which consequences will arise more often. Nor does it matter. Any system of statutory protection which deals with interests as varied as residential tenancies and depends for its practical operation on the accidents of cohabitation, matrimonial break up and death will inevitably give rise to anomalies at the margins. But the scope of the rights created and the circumstances in which they arise are questions to be resolved on a principled basis. It is not productive, on an issue like this one, to decide it by reference to the competing anomalies and injustices that result from each side of the argument. For these reasons, I would dismiss the appeal. LORD HOPE For the reasons given by Lord Sumption I too would dismiss this appeal. As there is a difference of opinion and the case is far from easy, I should like to add a few words of my own to explain why I have reached this conclusion. The starting point must be that the rules of the common law apply except to the extent that they are abrogated or modified by the words of the statute. Where there is a joint tenancy there is one estate which is vested in all of them, with a right of survivorship. According to that principle, Mr Hickin became the sole tenant of the dwelling house by reason of his right of survivorship on his wifes death. The tenancy remained in being, except that there was now only one person entitled to the rights that were vested in the tenant under it. The question is whether the provisions in Part IV of the Housing Act 1985, which confer on tenants who occupy the dwelling house as their only or principal home the additional benefit of a secure tenancy, had the effect of depriving Mr Hickin of his right of survivorship to the tenancy at common law. Mr Hickin was not qualified to succeed to the secure tenancy when his wife died, as he was residing somewhere else. The tenant condition in section 81 was, for the time being at least, no longer satisfied. But this did not mean that the tenancy itself had ceased to exist. That is indicated by section 79(1), which provides that a tenancy under which a dwelling house is let as a separate dwelling is a secure tenancy at any time when the conditions described in section 80 and 81 as the landlord and the tenant condition are satisfied. The words at any time when show that there can be a period during the life of a tenancy that is recognised by the statute when these conditions, or one or other them, are not satisfied. So it would have been open to Mr Hickin to resume occupation of the dwelling house as his only or principal home, so long as he did so before the tenancy was terminated by the operation of the notice to quit served on him by the landlord. In that event, as the tenant condition would then have been satisfied, the continuing tenancy would have become a secure tenancy. Section 89(4) excludes the resumption of that protection where a tenancy has ceased to be a secure tenancy by virtue of the provisions of that section. But that exclusion does not apply more generally. This sets the scene for the way that Part IV of the 1985 Act addresses the question of how succession on the death of a tenant under a secure tenancy should be approached. If full weight is given to the right of survivorship to the tenancy at common law (which, until one reaches section 87, the Act has done nothing to abrogate or modify), the question whether there was a person qualified to succeed the tenant under a secure tenancy did not need to be answered when Mrs Hickin died. There was still a tenant, although the tenant condition was no longer satisfied. The argument to the contrary is that the common law is displaced by the fact that when she died the tenancy was a secure tenancy. In that situation the governing section is section 89, as this is what subsection (1) of that section itself provides. If there is a person qualified to succeed the tenant under the rules in sections 87 and 88, the tenancy vests in that person by virtue of section 89. As the appellant is such a person because she satisfies the conditions in section 87, the tenancy has vested in her to the exclusion of the common law right of survivorship. There is nothing inherently unreasonable in such a result, so long as it can be said to have been provided for expressly by the statute or by necessary implication from the provisions that it sets out. An example of how this can be done is provided by the Housing (Scotland) Act 2001, asp 10. Chapter 1 of Part 2 of that Act provides for a form of tenancy in the field of social housing that is known as a Scottish secure tenancy. It recognises that the tenancies to which its provisions apply can include joint tenancies. But it also recognises that there can be policy objections to the situation where not all of the joint tenants under a tenancy which is a secure tenancy occupy the dwelling house as their only or principal home. Section 81 of the 1985 Act that applies to England and Wales permits this, so long as at least one of the joint tenants satisfies this condition. But section 20 of the 2001 Act enables the landlord under a Scottish secure tenancy, if it has reasonable grounds for believing that a joint tenant is not occupying the house and does not intend to occupy it as the tenants home, to bring that tenants interest in the tenancy to an end. The rules about succession to a Scottish secure tenancy apply the same policy to joint tenants who no longer have their only or principal home in the house which is the subject of a secure tenancy when a tenant dies. Section 22(1) of the 2001 Act provides that, on the death of a tenant under a Scottish secure tenancy, the tenancy passes by operation of law to a qualified person. Section 22(5) gives effect to Schedule 3, which makes provision as to who are qualified persons for the purposes of that section. Paragraphs 1 4 of Schedule 3 provide as follows: 1 For the purposes of section 22, a person falling within any of paragraphs 2 to 4 is a qualified person. 2 (1) A person whose only or principal home at the time of the tenants death was the house and (a) who was at the time (i) the tenants spouse, or (ii) living with the tenant as husband and wife or in a relationship which has the characteristics of the relationship of husband and wife except that the persons are of the same sex, or (b) who is, where the tenancy was held jointly by two or more individuals, a surviving tenant. (2) In the case of a person referred to in sub paragraph (1)(a)(ii), the house must have been the persons only or principal home throughout the period of 6 months ending with the tenants death. 3 A member of the tenants family aged at least 16 years where the house was the persons only or principal home at the time of the tenants death. 4 A carer providing, or who has provided, care for the tenant or a member of the tenants family where (a) the carer is aged at least 16 years, (b) the house was the carers only or principal home at the time of the tenants death, and (c) the carer had a previous only or principal home which was given up. Paragraph 2(1)(b), when read with section 22(1) and the opening words of that sub paragraph, makes it clear that the common law right of survivorship has been replaced with a right of succession by operation of law under the statute. It is a condition of a surviving joint tenants continuing right to remain as a tenant that the house was his only or principal home at the time of the other joint tenants death. It would, of course, be wrong to use the 2001 Act as an aid to the construction of the provisions of Part IV of the 1985. The contrast between the wording of these two statutes is nevertheless instructive. It shows what can be done if the policy to which the statute seeks to give effect is to override the common law right of survivorship and to restrict those who are qualified as persons to whom the tenancy can pass to those for whom the house was their only or principal home. I do not detect a policy imperative of that kind in the wording of Part IV of the 1985 Act. The wording of the tenant condition in section 81 indicates that the common law rights of the individual tenants under a joint tenancy are not being subjected to a requirement that they must each occupy the house as their only or principal home. Confirmation that the common law right of survivorship is not being abrogated or modified is provided by section 88(1)(b), which recognises that a person who was a joint tenant may become the sole tenant in the exercise of that right irrespective of where his only or principal home is. The closing words of section 87 (unless, in either case, the tenant was himself a successor, as defined in section 88) do two things. First, they restrict the succession to a qualified tenancy to one succession only. But, secondly, when read with section 88(1)(b), they also show that it is only when the last to die of the joint tenants under a secure tenancy dies that the question of who is qualified to succeed under it will arise. The words the tenant in the closing words refer to the tenant in the opening words of the section, to whose succession the question of qualification is directed because that tenant has died. Against that background, I agree with Lord Sumption that the words where a secure tenant dies in section 89(1) must be understood as applying only where there is a vacancy because there no longer is a tenant: para 11, above. So long as at least one of the tenants under a joint tenancy survives and the tenant condition in section 81 continues to be satisfied, there will still be a secure tenant. There is no need to consider the question of succession, as the right of survivorship applies. Nor is there any question of the tenancy vesting or being otherwise disposed of in the course of the administration of the tenants estate, as section 89(3) contemplates, because questions of that kind are rendered irrelevant by the right of survivorship. The tenancy will, of course, cease to be a secure tenancy if the person or persons who are entitled to continue as tenants under the right of survivorship do not occupy the dwelling house as their only or principal home. In that event the landlord can serve a notice to quit, as was done in this case. The provisions about succession are designed to extend the benefit of a secure tenancy on strict conditions, and then once only, to persons who were not party to the original tenancy. But a tenancy which continues to exist has no need of them. LORD MANCE Introduction Mr and Mrs Hickin, were joint tenants at 81 Leahill Croft, a three bedroom terraced house in Chelmsley Wood, Solihull initially from 1967 of Birmingham City Council and later from 29th September 1980 of the respondent Solihull Metropolitan Borough Council. They became secure tenants from 3rd October 1980 when Part II of the Housing Act 1980 came into force. Mr Hickin left the property at some time after 1980. Mrs Hickin continued to live there until her death on 8th August 2007. Mr and Mrs Hickins daughter Miss Hickin has lived there since her birth in 1967. Notice to quit was served by the Council on Mr Hickin on 18th January 2008 and on Miss Hickin on 6th February 2009. The Council offered Miss Hickin alternative accommodation, but Miss Hickin wishes to remain in her home. She maintains that on her mothers death she herself succeeded to a secure tenancy under what is now section 89(2) of the Housing Act 1985. The Council did not seek within the permitted period of six to twelve months after Mrs Hickins death to recover possession from Miss Hickin on the ground that, if she was a successor under section 89, the accommodation afforded by the dwelling house is more extensive than is reasonably required by her: Ground 16 in Part III of Schedule 2 to the Housing Act 1985. The Council denies that Miss Hickin succeeded to her mothers position as secure tenant. It submits that the effect of the continuing joint tenancy between Mr and Mrs Hickin was that Mr Hickin became sole surviving tenant at common law on Mrs Hickins death. Since he was not in occupation of the house, he could not be a tenant under a secure tenancy under section 79 or qualify under section 87 (if otherwise applicable) to become a secure tenant by succession. The notice to quit addressed to him was therefore valid. The Council adds for good measure that, since the combination of section 87 and 88(1) treats a joint tenant [who] has become the sole tenant as a successor to the previous joint tenancy, there could in any event be no question under sections 87 to 89 of Miss Hickin being qualified to succeed to any interest of Mr Hickin. The Council commenced possession proceedings against Miss Hickin on 1st April 2009. Deputy District Judge Hammersley upheld its claim on 10th August 2009. HHJ Oliver Jones QC allowed Miss Hickins appeal on 18th December 2009. The Court of Appeal (Lord Neuberger MR, Laws LJ and Sullivan LJ) allowed the Councils appeal on 27th July 2010 and restored the Deputy District Judges order for possession. In this eminently arguable case, Miss Hickin now appeals to the Supreme Court by permission granted on 24th March 2011. Housing Act 1985 The relevant provisions of the Housing Act 1985 are contained in Part IV headed Secure Tenancies and Rights of Secure Tenants. They read in August 2007 as follows: 79. Secure tenancies (1) A tenancy under which a dwelling house is let as a separate dwelling is a secure tenancy at any time when the conditions described in sections 80 and 81 as the landlord condition and the tenant condition are satisfied. (2) Subsection (1) has effect subject to (a) the exceptions in Schedule 1 (tenancies which are not secure tenancies), (b) sections 89 (3) and (4) and 90 (3) and (4) (tenancies ceasing to be secure after death of tenant), and (c) sections 91 (2) and 93 (2) (tenancies ceasing to be secure in consequence of assignment or subletting). (3) The provisions of this Part apply in relation to a licence to occupy a dwelling house (whether or not granted for a consideration) as they apply in relation to a tenancy. 81. The tenant condition The tenant condition is that the tenant is an individual and occupies the dwelling house as his only or principal home; or, where the tenancy is a joint tenancy, that each of the joint tenants is an individual and at least one of them occupies the dwelling house as his only or principal home. 87. Persons qualified to succeed tenant A person is qualified to succeed the tenant under a secure tenancy if he occupies the dwelling house as his only or principal home at the time of the tenants death and either (a) he is the tenants spouse or civil partner, or (b) he is another member of the tenants family and has resided with the tenant throughout the period of twelve months ending with the tenants death; unless, in either case, the tenant was himself a successor, as defined in section 88. 88. Cases where the tenant is a successor (1) The tenant is himself a successor if (a) the tenancy vested in him by virtue of section 89 (succession to a periodic tenancy), or (b) he was a joint tenant and has become the sole tenant, or (c) the tenancy arose by virtue of section 86 (periodic tenancy arising on ending of term certain) and the first tenancy there mentioned was granted to another person or jointly to him and another person, or (d) he became the tenant on the tenancy being assigned to him (but subject to subsections (2) to (3)), or (e) he became the tenant on the tenancy being vested in him on the death of the previous tenant, or (f) the tenancy was previously an introductory tenancy and he was a successor to the introductory tenancy. 89. Succession to periodic tenancy (1) This section applies where a secure tenant dies and the tenancy is a periodic tenancy. (2) Where there is a person qualified to succeed the tenant, the tenancy vests by virtue of this section in that person, or if there is more than one such person in the one to be preferred in accordance with the following rules (a) the tenants spouse or civil partner is to be preferred to another member of the tenants family; (b) of two or more other members of the tenants family such of them is to be preferred as may be agreed between them or as may, where there is no such agreement, be selected by the landlord. (3) Where there is no person qualified to succeed the tenant, the tenancy ceases to be a secure tenancy (a) when it is vested or otherwise disposed of in the course of the administration of the tenants estate, unless the vesting or other disposal is in pursuance of an order made under (i) section 23A or 24 of the Matrimonial Causes Act 1973 (property adjustment orders made in connection with matrimonial proceedings), (ii) section 17 (1) of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders after overseas divorce, &c.), or (iii) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents); or (iv) Part 2 of Schedule 5, or paragraph 9(2) or (3) of Schedule 7, to the Civil Partnership Act 2004 (property adjustment orders in connection with civil partnership proceedings or after overseas dissolution of civil partnership, etc.) (b) when it is known that when the tenancy is so vested or disposed of it will not be in pursuance of such an order. (4) A tenancy which ceases to be a secure tenancy by virtue of this section cannot subsequently become a secure tenancy. 91. Assignment in general prohibited (1) A secure tenancy which is (a) a periodic tenancy, or (b) a tenancy for a term certain granted on or after November 5, 1982, is not capable of being assigned except in the cases mentioned in subsection (3). (3) The exceptions are (a) an assignment in accordance with section 92 (assignment by way of exchange); (b) an assignment in pursuance of an order made under (i) section 24 of the Matrimonial Causes Act 1973 (property adjustment orders in connection with matrimonial proceedings), (ii) section 17(1) of the Matrimonial and Family Proceedings Act (property adjustment orders after overseas divorce, etc.), (iii) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents); or (iv) Part 2 of Schedule 5, or paragraph 9(2) or (3) of Schedule 7, to the Civil Partnership Act 2004 (property adjustment orders in connection with civil partnership proceedings or after overseas dissolution of civil partnership etc.) (c) an assignment to a person who would be qualified to succeed the tenant if the tenant died immediately before the assignment. 113. Members of a persons family (1) A person is a member of anothers family within the meaning of this Part if (a) he is the spouse or civil partner of that person, or he and that person live together as husband and wife or as if they were civil partners, or (b) he is the persons parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece. Common law joint tenancy At common law, Mr and Mrs Hickin were and remained joint tenants until Mrs Hickins death, whereafter Mr Hickin continued as sole tenant. Millett LJ said in Tennant v Hutton (1996) 73 P&CR D10 that: The essence of a joint tenancy is that the property is vested in all or both of the joint tenants together. In contemplation of law there is only one tenant, though the tenant consists of two or more persons and the survivors and survivor of them. On the death of any one of them, the property becomes vested in survivors or survivor. There is no true transmission of title. The property remains vested after the death in the same tenant as it did before, though the number of persons who compose the tenant is reduced by one. Section 3(4) of the Administration of Estates Act 1925 supplements the common law for the purposes of inheritance, by providing: The interest of a deceased person under a joint tenancy where another tenant survives the deceased is an interest ceasing on his death. However, as Millett LJ recognised, the concept of the tenant under a joint tenancy was in Lloyd v Sadler [1978] 1 QB 774 benevolently extended in the context of the policy of the Rent Acts to protect the possession of a tenant against eviction by the landlord. In that case one joint tenant had left permanently to get married and the surviving tenant alone was held to remain the protected tenant. The words the tenant were read in context as meaning the joint tenants or any one or more of them. By contrast in Tennant v Hutton Mr and Mrs Tennant had been joint tenants under a three year lease, and as such were protected tenants under the Rent Act 1977. Though divorced, both lived separately in the house together with their daughter Caroline until Mrs Tennants death during the currency of the lease. On the expiry of the lease Mr Tennant became a statutory tenant under the Rent Act 1977 while he continued to occupy the house as his home. Their daughter Caroline continued to live there with Mr Tennant until he remarried and moved out permanently. She then claimed to be a statutory tenant on the basis that she had succeeded to her mother as a protected tenant under Rent Act provisions which provided who could become a statutory tenant in succession to someone who immediately before his or her death was a protected tenant pursuant to Schedule 1, paras 1 to 3 to the Rent Act 1977. The Court of Appeal dismissed her claim on the basis that on Mrs Tennants death the contractual tenancy vested in Mr Tennant as sole surviving joint tenant and Caroline was no more than his licensee. Millett LJ said that any other result would operate to the detriment of the other joint tenant rather than the landlord and would, I think, be completely unworkable. Moreover, it would be inconsistent with Lloyd v Sadler. If one of two joint tenants can become the statutory tenant when the other leaves the property, notwithstanding the fact that the joint tenancy is not thereby determined, he must be capable of becoming the only statutory tenant when the departing joint tenant dies. In Tennant v Hutton, Mr Tennant, the surviving tenant, was, as stated, in occupation before and for some period after Mrs Tennants death. That Mr Tennant was and remained in occupation after Mrs Tennants death was in my opinion critical to the decision. This can be seen from the provisions of the Rent Act 1977. Under section 1 (as enacted) a tenancy under which a dwelling house . is let as a separate dwelling is a protected tenancy for the purposes of this Act. Section 2 provided that: . (a) after the termination of a protected tenancy of a dwelling house the person who, immediately before that termination, was the protected tenant of the dwelling house shall, if and so long as he occupies the dwelling house as his residence, be the statutory tenant of it; and (b) Part I of Schedule 1 to this Act shall have effect for determining what person (if any) is the statutory tenant of a dwelling house at any time after the death of a person who, immediately before his death, was either a protected tenant of the dwelling house or the statutory tenant of it by virtue of paragraph (a) above. Schedule 1 provided: STATUTORY TENANCIES STATUTORY TENANTS BY SUCCESSION PART I 1. Paragraph 2 or, as the case may be, paragraph 3 below shall have effect, subject to section 2(3) of this Act, for the purpose of determining who is the statutory tenant of a dwelling house by succession after the death of the person (in this Part of this Schedule referred to as " the original tenant") who, immediately before his death, was a protected tenant of the dwelling house or the statutory tenant of it by virtue of his previous protected tenancy. 2. If the original tenant was a man who died leaving a widow who was residing with him at his death then, after his death, the widow shall be the statutory tenant if and so long as she occupies the dwelling house as her residence. 3. Where paragraph 2 above does not apply, but a person who was a member of the original tenant's family was residing with him at the time of and for the period of 6 months immediately before his death then, after his death, that person or if there is more than one such person such one of them as may be decided by agreement, or in default of agreement by the county court, shall be the statutory tenant if and so long as he occupies the dwelling house as his residence. Had Mr Tennant left the house before his wifes death, she would, in accordance with the decision in Lloyd v Sadler [1978] 1 QB 774, have remained as the protected tenant (and, if she had lived till the end of the lease, then have become the statutory tenant). Lloyd v Sadler establishes that, where one joint tenant leaves, the other who remains becomes the sole statutory tenant: see per Megaw LJ at pp. 782B C and 783D, per Lawton LJ at pp.l798A B and 790C E and per Shaw LJ at p.790E H, even though this may mean that the landlord can no longer sue the departed tenant for rent. It is clear that the court would not in these circumstances have regarded Mr Tennant, after his departure, as continuing to be either a protected or the statutory tenant under section 1 or section 2(1)(a) by virtue of his wifes occupation. Lawton LJ stated as much at p.789A. Caroline would thus have become statutory tenant of the house upon Mrs Tennants death under section 2(1)(b) read with Schedule 1 paragraphs 1 and 3 of the Rent Act 1977. In arriving at its conclusion in Lloyd v Sadler, the Court of Appeal recognised that its role was to find an efficient, sensible and humane way of filling any remaining gaps in the law as to the effect of joint tenancies in the Rent Acts: p.785D per Megaw LJ, and to construe the word tenant in a way which avoided unreasonable results, or results which the legislature is unlikely to have intended: p.786G H per Megaw LJ. We should adopt a similar general approach in relation to the present scheme. The Housing Act 1985 In the present case, while Mrs Hickin was alive she continued to reside in the house, although Mr Hickin did not. Under section 81 of the Housing Act 1985, her occupation was sufficient for the joint tenancy to meet the tenant condition. The joint tenancy was therefore a secure tenancy when she died. Mr Jan Luba QC for Miss Hickin submits that in these circumstances the 1985 Act mandates a staged approach, starting with section 89. Where a secure tenant dies (section 89(1)), it is necessary to consider under section 89(2), read with sections 87 and 88, whether there is a person qualified to succeed the tenant. Under section 87(1), a person is and can only be qualified to succeed the tenant under a secure tenancy, if he [or she] occupies the dwelling house as his only or principal home at the time of the tenants death. Here, there was only one such candidate, Miss Hickin, so no problem of priority could arise under the rules of preference in section 89(2). On this basis, Mr Luba submits that Miss Hickin, succeeded under the statute to the secure tenancy previously held by her mother; any rights which Mr Hickin might otherwise have had at common law on or after the death of his joint tenant were to that extent over ridden; under section 89(2), the tenancy vests by virtue of this section in whoever is entitled to be preferred under the rules in section 89(2), here Miss Hickin; the statutory provisions for succession render irrelevant any other disposition that a secure tenant may have purported to make, and the statute is capable of vesting the secure tenancy in a relative who was not one of the previous joint secure tenants. I agree with Mr Luba that section 89 is a logical starting point. Sections 87 and 88 are definitional sections needed for the operation of section 89. It is worth noting that the 1985 Act was passed to consolidate various previous statutes including the Housing Act 1980, in which section 30(1), the equivalent of section 89(2) in the 1985 Act, was placed first, and followed by section 30(2), the equivalent of section 87, and section 31, the equivalent of section 88. I also agree that section 89(1) is capable in certain circumstances of vesting a secure tenancy in a spouse, civil partner or family member who has been in occupation for 12 months prior to a previous secure tenants death, irrespective of any other disposition that the previous secure tenant may have purported to make. Section 89(3) makes clear that a secure tenancy will be vested and continue by succession in a spouse, civil partner or other family member qualified by occupation to succeed under section 87, over riding any other disposition. In Birmingham City Council v Walker [2007] UKHL 22, [2007] 2 AC 262, in an opinion concurred in by all members of the House, Lord Hoffmann explained (para 3) that in providing for the new interest called a secure tenancy, the 1980 and 1985 Acts adopted a technique different from that used by the Rent Acts. Under section 32 of the 1980 Act, and now section 82 of the 1985 Act, the contractual tenancy was preserved, by a scheme which added statutory incidents to that tenancy which overrode some of the contractual terms. Those overriding provisions include the provisions which prevent it being terminated except by an order of the court on the statutory grounds. They also include the provisions of section 89 under which a secure tenancy vests in statutorily specified successors, irrespective of what might otherwise be the position as a matter of contract and/or property law. However, Mr Lubas further submissions assume that, when section 89(1) speaks of a secure tenant dying, it is sufficient to activate the statutory provisions for succession that only one of two joint tenants under a secure tenancy has died, and that the survivor can only retain any right as a secure tenant in respect of the property if in occupation, and even then only if entitled to preference in accordance with the rules stated in section 89(2). The joint tenancy is of no relevance unless either the joint tenant is the person entitled to succeed under section 89 or no one is entitled to succeed. In the latter case, the common law survivorship can take effect unconstrained by the statute. Mr Bryan McGuire QC for the Council takes issue with all these submissions. He submits that it would require clear words to oust the common law rule of survivorship, and that nothing in the statute overrides the contractual and property rights inherent in a joint tenancy which at common law enure to the benefit of the survivor. The policy of the Act, he further submits, is to protect a secure tenant from the loss of that tenancy and Mr Hickin was a tenant under a secure tenancy while his wife lived, even though he was not himself in occupation. Although Mr Hickin had not in fact shown any interest in doing this, he might after his wifes death have wished to resume occupation of the house. Although the Council has in fact served notice to quit on Mr Hickin because he is not in occupation, the court should not adopt an interpretation which would, or at least might in other circumstances, impinge on rights on which Mr Hickin might have wished to rely under article 1 of the First Protocol to the European Convention on Human Rights. At a linguistic level, Mr McGuire submits that the statutory references to the or a tenant must in the context of a joint tenancy be read as referring to both or all joint tenants wherever they appear in sections 87 to 89. In particular, the phrase where a secure tenant dies in section 89(1) must refer to and can only apply on the death of all joint tenants. The succession provisions were thus inapplicable since Mr Hickin remained alive and could continue as tenant at common law after Mrs Hickins death. The phrase where a secure tenant dies in section 89(1) is clearly not used to cater for the rare situations where joint tenants die simultaneously. Further, the legislator, when speaking of the tenants spouse or civil partner in section 89(2) cannot have had in mind joint tenants having together a third person as their spouse or civil partner. Elsewhere, in sections 81 and 88(1)(b), the Act distinguishes between the individuals holding a joint tenancy. So too in section 89(1) the phrase where a secure tenant dies must contemplate an individual secure tenant. On Mr McGuires approach, therefore, the phrase must, in the case of a joint tenancy, be read as referring to the death of the last surviving joint tenant who is a secure tenant. But on that basis section 89 can never apply to enable succession to a sole surviving joint tenant. Under section 88(1)(b) anyone who has become the sole tenant, having previously been a joint tenant, is a successor for the purposes of section 87, and under section 87 there can be no statutory succession to someone who was him or herself a successor. There thus appears to be no reason, in the case of a joint tenancy, to read the tenant in sections 87 to 89 as referring to the last surviving tenant, or indeed to worry at all about how the word applies. It contemplates situations where a secure tenant an individual dies and there is a person qualified under section 89(2), read with sections 87 and 88, to succeed to the secure tenancy. In support of the Councils case, Mr McGuire invites consideration of the situation of two joint tenants who both occupy a property until one dies. He points out that on Mr Lubas case the survivor could find him or herself deprived of possession in favour of a third person, also in occupation of the property but with a prior claim to succession under the rules of preference stated in section 89(2)(a) and (b). He submits that it is unlikely that the legislator intended to override the survivorship rights of a joint tenant in this way. The Master of the Rolls was likewise strongly influenced by possible situations in which on Mr Lubas case the common law interests of a joint tenant could be overridden in favour of a third party. As one example, he took the hypothesis of a joint tenancy involving joint occupation by two friends who were not married or in civil partnership and not members of the same family within the broad definition in section 113; if one of them then died leaving a child, the secure tenancy would, on Mr Lubas case, vest in the child, leaving the surviving joint tenant without his or her former secure tenancy. The Master of the Rolls also referred to two further examples: one related to siblings who were joint tenants living together with their children, but Mr Lubas riposte to this is that the definition of family would bring them on Mr Lubas case within the rules of preference in section 89(2); the other example related to gay couples, but the riposte to this is that the definition of family in section 50(3) of the 1980 Act (the forerunner of section 113 of the 1985 Act) was clearly drawn to exclude them (as Ministerial statements on the debate in Standing Committee F on the Housing Bill on 28th February 1980, Hansard column 681 682 confirm). As to the basic example of joint tenancies between friends, one of them with a child who could succeed under section 89(2), it seems likely that any apparent problems dissipate or are marginal in the light of practical realities. Joint tenants are most commonly spouses or partners. The definition of family has always included persons living together as husband and wife (and now also includes persons living together as if they were civil partners). If Mr Lubas submissions are otherwise correct, the need to address the position of a surviving joint tenant through the means of section 89 is unlikely often to disturb such expectations as otherwise attach to a joint tenancy. Further analysis Nonetheless, I accept that there is some oddity about a conclusion, unlikely though it may be often to arise, that a joint tenancy between two persons both actually occupying a property is automatically subordinated to any prior claim which a third person might be able to make under the rules of preference in section 89(2). There is weight in Mr McGuires submissions that one might have expected this to be made clear and in his invocation by analogy of Millett LJs words in Tennant v Hutton, quoted in paragraph 32 above. However, this appeal is not concerned with the right of survivorship as between joint tenants both in occupation. In relation to the subject matter which it does concern, it can in my view be said to be at least equally odd indeed odder, especially when it is probably a much commoner situation that a joint tenant, who was not in occupation and whose tenancy was only secure by virtue of the occupation of the other joint tenant, should be treated as the surviving sole tenant after the death of the other, when such a conclusion excludes succession by a relative who would otherwise qualify under section 89(2) and brings the secure tenancy to an end, rather than continues it. Mr McGuires arguments that Mr Hickin had valuable contractual and property rights of which he should not lightly be deprived strike a particularly hollow note in this connection; the Councils only aim in asserting such rights is to rely on their vulnerability in the face of the notice of quit which it served on Mr Hickin on 18th January 2008. If, as Mr McGuire submits, the policy of the Act is to protect a secure tenant from the loss of that tenancy, Mr McGuires analysis runs in a different direction to that policy and applies to the 1985 Act a less protective approach than the courts were in Lloyd v Sadler [1978] 1 QB 774 ready to adopt under the Rent Acts towards persons in occupation. In these circumstances, Mr Lubas case comes in my view much closer than Mr McGuires to reflecting the protective purpose of the 1980 and 1985 Acts, and I prefer it. But, although it is unnecessary to decide this definitively on this appeal, I also consider that Mr Luba probably puts his case higher than is appropriate, and that the better analysis of situations of joint tenancies lies between the opposing cases. The 1985 Act is focused on the creation and preservation of secure tenancies, and I see no reason why its provisions need or should be read as overriding common law rules where these would themselves secure the continued existence of the secure tenancy. In this connection, it is highly significant that the Act recognises the existence of joint tenants, and expressly provides that the occupation of one of them is sufficient to constitute the tenancy a secure tenancy (sections 79 and 81), and that it further provides that, where a person was a joint tenant and has become a sole tenant, he is treated as a successor: section 88(1)(b). This latter definition, Mr McGuire accepts, only arises and applies where the person who was a joint tenant and has become a sole tenant was before and remains after the survivorship a tenant under a secure tenancy: see the opening words of section 87. Leggatt LJ rightly observed in Bassetlaw D. C. v Renshaw [1992] 1 All ER 925, 928d: Successor [in section 88] must mean successor to the tenancy referred to in section 87. When, therefore, the draftsman in para (b) says he was a joint tenant and has become the sole tenant he must be referring to the secure tenancy referred in section 87. In Birmingham City Council v Walker at para 11, Lord Hoffmann endorsed this conclusion: the word successor most naturally means successor to a secure tenancy. he was a joint tenant and has become the sole tenant in section 88(1)(b) means that he was a joint tenant under a secure tenancy and has become the sole tenant under a secure tenancy. The prime situation in which one joint tenant becomes a sole tenant is of course on death of the other joint tenant: see e.g. Burton v Camden London Borough Council [2000] 2 AC 399, 410E per Lord Millett. If two joint tenants are both in occupation, the secure tenancy can, on the death of one, continue in favour of the survivor, even in those rare cases where the other has a spouse, civil partner or relative who would otherwise have been qualified to succeed under sections 87 and 88. This situation is outside the scope of the provisions regarding succession contained in section 89. However, it is recognised by section 88(1)(b) which provides that the conversion of the joint tenancy on the death of one joint tenant into a tenancy held by the sole surviving tenant counts as a succession preventing any relative or family member of the latter being qualified to succeed to the latter. Section 88(1)(b) expressly recognises a type of succession by a surviving joint tenant which falls outside the scope of the succession regulated by section 89. It is section 88(1)(a) that refers to succession falling within section 89. However, section 88(1)(b) only contemplates succession by a surviving joint tenant who, because he or she is in occupation, can continue the secure tenancy held previously as joint tenant: see the authorities cited in paragraph 45 above. Where a joint tenant who is in occupation and is a secure tenant dies, and the surviving joint tenant is not in occupation, the secure tenancy cannot continue in the surviving tenant and the surviving tenant cannot be a secure tenant. In this situation, nothing in the Act recognises or permits any right of survivorship which can oust the mandatory statutory provisions for succession contained in section 89, read with sections 87 and 88. Where a secure tenant dies, the language of section 89(1) and (2) vests the secure tenancy immediately on the death in any person qualified under the definitional sections 87 and 88. Here, it vested and continued in Miss Hickin the secure tenancy which until her mothers death existed by virtue of her mothers occupation. It is immaterial on this appeal to consider whether a person who otherwise has priority under the rules in section 89(2) enjoys any and what right to disclaim the benefit of the secure tenancy thus vested in him or her by the statute. The statutory language makes clear that his or her entitlement to the benefit of the secure tenancy arises immediately on the death. There is no opportunity for anyone else to intervene, or, in particular, for the joint surviving tenant to resume occupation which a view to foreclosing or preventing the statutory vesting. Any objections to which this might lead seem unlikely to exist except in remote and unusual situations, and to give rise to no real objection to a solution which does justice in the great majority of foreseeable contexts. The majority view Since writing the first draft of this judgment, I have seen Lord Sumptions judgment reaching an opposite result and Lord Hopes judgment concurring with it and making additional remarks on Scottish law. A number of points arise, which have led me to insert paragraphs 33 and 34 above and lead to the following further observations. First, Lord Sumption notes (para 1), and I agree, that the Housing Act 1980 was enacted to give residential tenants of local authorities and certain other social landlords a degree of protection broadly comparable to that enjoyed by private tenants under the Rent Act 1977, and he relies upon the Rent Act case of Tennant v Hutton on which I have also relied in paragraph 32 above. In my opinion, the result he reaches, far from being comparable with or supported by the position under the Rent Act 1977, is inconsistent with it. As indicated in paragraphs 33 and 34 above, in comparable circumstances, Miss Hickin would under the Rent Act scheme succeed as statutory tenant to her mothers protected or statutory tenancy. Second, the suggestion (Lord Sumptions paragraph 13) that section 88(1)(b) recognises that [Mr Hickin] became the sole tenant is not consistent with the case law. Section 88(1)(b) postulates and is only concerned with situations in which the sole tenant was a joint tenant under a secure tenancy and has become the sole tenant under a secure tenancy: see the citations in paragraph 45 above, I cannot therefore agree with Lord Hopes statement (paragraph 24) that section 88(1)(b) recognises that a person who was a joint tenant may become the sole tenant in the exercise of that right irrespective of where his only or principal home is. That is the common law rule, but section 88(1)(b) deals and deals only with situations where a secure joint tenancy becomes a secure tenancy in the hands of a surviving sole tenant. That situation can only arise where the surviving sole tenant is in occupation at the time when the death and survivorship occur. If (as in the case of Mr Hickin) the surviving sole tenant is not in occupation at that time, he cannot be a secure tenant, because he does not fulfil the tenant condition in section 81. In this situation, section 89 prescribes the consequence: on the death of a secure tenant, the secure tenancy vests in the person qualified to succeed under sections 87 and 88. This occurs automatically on the death. There is no such window of opportunity, as Lord Hope suggests in paragraph 19 for someone like Mr Hickin (out of occupation in 2007 for up to 25 years) to resume his position as a secure tenant: see paragraph 48 above. The words at any time when in section 79(1) relate to the period of a tenants life. If on death a tenant is not in occupation, no secure tenancy then exists, and no one can succeed under the language of section 89. When Mrs Hickin died, she was in occupation, but Mr Hickin was not qualified to succeed her under sections 87 and 88, because he was not in occupation. But Miss Hickin was qualified and can therefore succeed under section 89. Third, Lord Sumption focuses on and rejects Mr Lubas submission that a successor under section 89 could oust a surviving joint tenant who remained in occupation: see e.g. paragraph 15. For the reasons given in paragraphs 41 to 44 above, I believe that the problem is over stated, and does not raise any insuperable obstacle to acceptance of Mr Lubas submissions about what Parliament must be taken to have intended. However, as explained in paragraphs 42 to 46 above, I also think that Mr Luba put his case higher than necessary or appropriate; the better analysis is, in my view, one whereby the problem never arises: a successor under section 89 cannot oust an surviving joint tenant who was in occupation, but the secure tenancy can on a joint tenants death vest under section 89 in a qualified successor where the surviving joint tenant is not in occupation. Fourth, references to the extreme implausibility of Parliament having decided to expropriate Mr Hickins interest appear to me unpersuasive for all the various reasons indicated in paragraphs 36, 43 and 49 above. On any view, the effect of the legislation is in certain circumstances to vest a secure tenancy on death in any spouse, civil partner or family member occupying the house with the deceased, irrespective of any other purported disposition by the deceased. In my opinion, those circumstances include the present. Finally, it is of interest to note the Housing (Scotland) Act 2001 to which Lord Hope draws attention. Section 22(1) provides that On the death of a tenant under a Scottish secure tenancy, the tenancy passes by operation of law to a qualified person. By section 22(5), Schedule 3 makes provision as to who are qualified persons for this purpose. Under paragraph 2 of Schedule 3, one such person is, as Lord Hope notes, a person whose only or principal home at the time of the tenants death was the house and . (b) who is, where the tenancy was held jointly by two or more individuals, a surviving tenant. So, the Scottish drafters, presumably with the English legislation before them, had no difficulty in using the terms the death of a tenant in section 22(1) and the tenants death in Schedule 3 paragraph 2 to refer to the death of only one joint tenant. There should be equally little difficulty in doing so under section 89(1) The fact that the Scottish Act, which is differently framed, made clear the position that a surviving joint tenant could succeed to a secure tenancy provided that the house was his or her only or principal home does not, of course, mean that a similarly enlightened position is not implicit in the English Act. In my opinion, it is. Conclusion In summary, Mr Hickin was not in occupation and could not succeed to or continue to hold any secure tenancy. Section 88(1)(b) did not apply to make Mr Hickin a successor, because it only applies where a joint tenant is in occupation and can succeed as a secure tenant. In contrast, Miss Hickin was qualified to succeed to her mothers secure tenancy under section 87. The effect of section 89 was to provide that, on Mrs Hickins death, the secure tenancy enjoyed by virtue of Mrs Hickins occupation vest[ed] by virtue of this section in Miss Hickin, notwithstanding the common law right of survivorship which Mr Hickin would otherwise have had despite his lack of occupation. I would accordingly allow the appeal, set aside the order made by the Court of Appeal and restore the order made by HHJ Oliver Jones QC. The majoritys opinion is, however, to the contrary. It leads to what I regard as an unhappy discordance with both the Rent Act and the Scottish legal positions. The philosophy of the Housing Act 1985 is that one statutory succession to a secure tenancy should be available between a tenant and a qualified successor, each in turn enjoying occupation as secure tenant. The majoritys opinion means that, on Mrs Hickins death in 2007, no such statutory succession could occur as between Mrs Hickin and her otherwise qualified daughter who had lived together in the house from 1967. This is because of the notional and insecure legal interest which Mr Hickin, who departed the house and family up to 25 years before Mrs Hickins death, is said to enjoy and on which the Council only relies in order to serve notice to quit on him to terminate it. If this is the law, I would suggest that Parliament might appropriately take another look at it, and see whether similar protection should not be made available to persons in Miss Hickins position to that made specific in Scotland. I would allow this appeal, essentially for the reasons given by Lord Mance. LORD CLARKE I add a few words of my own because the court is divided. The question is one of construction of the Housing Act 1985 (the Act), and especially section 89(1), which provides that the section applies where a secure tenant dies and the tenancy is a periodic tenancy. In particular, the question is whether the reference to a secure tenant includes a reference to a tenant under a periodic joint tenancy. The majority say that it does not. As Lord Sumption puts it at para 11, if the tenancy is a joint tenancy, the tenant has not died if there remains at least one living joint tenant in whom all the proprietary and contractual rights attaching to the tenancy subsist. However, I respectfully disagree. By section 79, a tenancy under which a dwelling house is let as a separate dwelling is a secure tenancy at any time when the landlord condition and the tenant condition are satisfied. Section 81 provides that the tenant condition is satisfied where the tenancy is a joint tenancy and each of the joint tenants is an individual and at least one of them occupies the dwelling house as his only or principal home. It appears to me that, as a matter of language, the Act recognises that in such a case joint tenants are tenants under a secure tenancy. In these circumstances the natural meaning of secure tenant in section 89(1) includes an individual joint tenant under a secure tenancy. It follows that a secure tenant dies within the meaning of section 89(1) when a joint tenant dies and that section 89 accordingly applies in such a case. By section 89(2), where there is a person qualified to succeed the tenant, the tenancy vests by virtue of the section in that person. In this case there was such a person, namely Mrs Hickins daughter, because she satisfied the condition in section 87(b). The vesting takes place automatically on the death, with the result that, by necessary implication, the rights of a joint tenant such as Mr Hickin, must lapse. As I see it, the position would be different if, at the date of the tenants death, there was a joint tenant who occupied the dwelling house as his only or principal home. In that event the ordinary common law rule would apply and he or she would become a sole tenant under a secure tenancy. Thus if, on Mrs Hickins death, Mr Hickin had occupied the house as his only or principal home, he would have satisfied the first part of the tenant condition in section 81. The effect of section 88(1)(b) is that Mr Hickin would have been treated as a successor to Mrs Hickin. As Lord Mance notes at para 45, under section 88(1)(b) anyone who has become a sole tenant, having previously been a joint tenant, is a successor for the purposes of section 87, but only where the person who was a joint tenant and has become a sole tenant was before and remains after the survivorship a tenant under a secure tenancy. This is made clear by the opening words of section 87. I agree with Lord Mances analysis at paras 46 to 48. In particular, I agree that section 88(1)(b) recognises a type of succession by a surviving joint tenant which falls outside the scope of the succession regulated by section 89. It applies only where the survivor, because he or she is in occupation, can continue the secure tenancy held previously as joint tenant. In the case where the survivor is not in occupation, the secure tenancy cannot continue in the surviving tenant and the surviving tenant cannot be a secure tenant. Thus in the present case the effect of the Act is that Miss Hickin was the successor to the secure tenancy. I prefer this approach to that adopted by the majority because it seems to me to be more consistent with the language of the Act, especially section 89(1), construed in its context. It also seems to me to be consistent with the authorities referred to by Lord Mance. Both approaches contain some oddities but this solution is consistent with the approach to the Rent Acts and, indeed with the position in Scotland. I recognise that this is a minority view but I agree with Lord Mance that consideration might be given to the question whether it would be appropriate for the approach in England and Scotland to be the same. |
The appellant, Michael Mark Junior Darnley, who was then aged 26, was assaulted in the late afternoon of 17 May 2010 when he was struck on the head by an unknown assailant in south London. He later telephoned his friend Robert Tubman. The appellant told Mr Tubman about the assault and complained that he had a headache and that it was getting worse. Mr Tubman was sufficiently concerned that he drove the appellant to the Accident and Emergency Department (A & E department) at Mayday Hospital, Croydon which was managed by the respondent NHS Trust. It was noted in the clerking record that the appellant attended at 20:26 on 17 May 2010. Mr Tubman accompanied the appellant at the A & E department and was a witness to the conversation with the female A & E receptionist. The trial judge accepted Mr Tubmans account of the conversation which took place. The appellant provided his personal details. He informed the receptionist that he had been assaulted by being struck over the back of the head and he thought that he had a head injury, that he was feeling very unwell and that his head was hurting. The receptionist did not have a helpful attitude and was more concerned about how the injury occurred. She asked the appellant if the Police were involved. The appellant and Mr Tubman both told the receptionist that the appellant was really unwell and they were worried that he had a head injury and needed urgent attention. The receptionist told the appellant that he would have to go and sit down and that he would have to wait up to four to five hours before somebody looked at him. The appellant told the receptionist that he could not wait that long as he felt as if he was about to collapse. The receptionist replied that if the appellant did collapse he would be treated as an emergency. The identity of the A & E receptionist who spoke to the appellant and Mr Tubman is not known, save that it must have been one of the two receptionists on duty at that time, namely Valerie Ashley or Susan Reeves Bristow. Neither had any recollection of the conversation that took place and each was able to give evidence only of her usual practice. The appellant sat down with Mr Tubman in the waiting area of the A & E department. However, the appellant decided to leave because he felt too unwell to remain and he wanted to go home to take some paracetamol. The judge found that the appellant and Mr Tubman left after 19 minutes at 20:45. Neither informed the receptionist or told anyone else that they were leaving. However, Mrs Reeves Bristow and Mrs Ashley noticed that they had left and they told the receptionist taking over on the next shift to look out for the appellant because they were concerned that a patient with a reported head injury had left the A & E department. Mrs Ashley and Mrs Reeves Bristow gave evidence as to their usual practice when a person with a head injury asked about waiting times. Mrs Ashley said that she would tell them that they could expect to be seen by a triage nurse within 30 minutes of arrival and it would be quite incorrect to tell them that they would have to wait up to four to five hours before being seen. Mrs Reeves Bristow stated that she would tell them that the triage nurse would be informed and they would be seen as soon as possible. Mr Tubman drove the appellant to his mothers house, some 13 minutes drive away, arriving shortly after 21:10. The appellant went to bed. At about 21:30 that evening the appellant became distressed and attracted the attention of his sister by banging on the wall of his bedroom. An ambulance was called at 21:44. The ambulance was re routed and a second ambulance was called arriving at his mothers home at 22:05. The appellant was taken by ambulance back to the A & E department at Mayday Hospital. During the journey he became hypertensive, his GCS was recorded as 9/15 and he projectile vomited. He arrived at the Mayday Hospital A & E department at 22:38. A CT scan (reported at 00:15 on 18 May 2010) identified a large extra dural haematoma overlying the left temporal lobe and inferior parietal lobe with a marked midline shift. The appellant was intubated and ventilated and transferred from Mayday Hospital by ambulance into the care of neurosurgeons at St Georges Hospital, Tooting arriving at 00:55. He was transferred to the operating theatre at 01:00 and underwent an operation for the evacuation of the haematoma. Unfortunately, the appellant has suffered permanent brain damage in the form of a severe and very disabling left hemiplegia. The appellant brought proceedings against the respondent NHS Trust. His pleaded case included an allegation of breach of duty by the non clinical reception staff concerning the information he was given about the time he would have to wait before being seen by a clinician and also a failure to assess the appellant for priority triage. The trial took place on 25 27 April 2015 before HHJ Robinson, sitting as a judge of the High Court. He gave judgment on 31 July 2015: [2015] EWHC 2301 (QB). The judge made the following findings of fact and came to the following conclusions of law. (1) The appellant did not fall into the category of patients who should have been fast tracked under the priority triage system. His presentation was not such as to have alerted the reception staff to the presence of a condition so serious that it was immediately necessary to bring it to the attention of the nurse. (2) The fact that the appellant was not seen by a triage nurse during the 19 minutes he was present at the hospital did not amount to a breach of duty or cause any loss. (3) If the appellant had been told that he would be seen within 30 minutes he would have stayed and would have been seen before he left. He would have been admitted or told to wait. He would have waited and his later collapse would have occurred within a hospital setting. (4) The appellants decision to leave the A & E department was, in part at least, made on the basis of information provided by the receptionist which was inaccurate or incomplete. (5) It was reasonably foreseeable that some patients do leave A & E departments without being seen or treated and that, in such cases, harm may result. It is reasonably foreseeable that someone who believes it may be four or five hours before they will be seen by a doctor may decide to leave, in circumstances where they would have stayed if they believed they would be seen much sooner by a triage nurse. (6) Had the appellant suffered the collapse at around 21:30 whilst at the Mayday Hospital he would have been transferred to St Georges Hospital and would have undergone the surgery earlier. In those circumstances he would have made a very near full recovery. (7) Receptionists in A & E departments are not under a duty to guard patients against harm caused by failure to wait to be seen, even if such harm could, as a matter of fact in the individual case, be prevented by the provision of full and accurate information about waiting times. (8) The harm suffered in this case was outside the scope of any duty or obligation owed by the respondent by its reception staff. (9) It would not be fair, just and reasonable to impose liability upon the respondent for harm arising as a result of the failure by the receptionist staff to inform the appellant of the likely waiting time to be seen by a triage nurse. (10) The connection between the alleged inadequacies of the information provided and the harm suffered was broken because the decision to leave was one that was ultimately the decision of the appellant. Court of Appeal The appellant appealed to the Court of Appeal (Jackson, McCombe and Sales LJJ): [2018] QB 783. The appeal was dismissed by a majority (McCombe LJ dissenting) on the ground that neither the receptionist nor the health trust acting by the receptionist owed any duty to advise about waiting times, alternatively the damage was outside the scope of any duty owed, alternatively there was no causal link between any breach of duty and the injury. Jackson LJ considered that the giving of incorrect information by the receptionist was not an actionable mis statement. When she told the appellant that he would have to wait for up to four or five hours, she was not assuming responsibility to the appellant for the catastrophic consequences which he might suffer if he simply walked out of the hospital. Nor did he consider that it was fair, just and reasonable to impose upon the receptionist, or the trust acting by the receptionist, a duty not to provide inaccurate information about waiting times. To do so would add a new layer of responsibility to clerical staff and a new head of liability for NHS health trusts (at para 53). Moreover, even if the receptionist were in breach of duty by giving incorrect information to the appellant, the scope of that duty could not extend to liability for the consequences of a patient walking out without telling staff that he was about to leave (at paras 56 57). The appellant should accept responsibility for his own actions. In a concurring judgment, Sales LJ considered that, whether what had occurred was a failure to provide information or the provision of inaccurate information, no relevant duty of care would arise (at para 83). In his view, the fair, just and reasonable view was that information as to likely waiting times was provided as a matter of courtesy and out of a general spirit of trying to be helpful to the public (at para 88). Both judges in the majority pointed to undesirable social I consider that the approach of the majority in the Court of Appeal to the issue consequences which would follow if such a duty of care were imposed (at paras 55, 84, 87, 88). In his dissenting judgment, McCombe LJ considered that, on the particular facts found by the judge, the respondent was in breach of a duty of care owed to the appellant. The information provided could only have given the false impression that the appellant would not be seen or assessed by anyone sooner than the indicated period of up to four or five hours, short of something like a collapse (at para 68). Moreover, he rejected the suggestion that the functions of a hospital can be divided into those of receptionists and those of medical staff; it is the duty of the hospital not to provide misinformation to patients, whether it is provided by reception staff or medical staff (at para 71). Incomplete and inaccurate information had been provided negligently. The failure to impart the reality of the triage system to the appellant on his arrival was, on the facts of this case, a breach of duty by the hospital (at para 77). Furthermore, that breach of duty was causative of the appellants injury (at para 79). Duty of care of duty of care is flawed in a number of respects. First, we are not here concerned with the imposition of a duty of care in a novel situation. The common law in this jurisdiction has abandoned the search for a general principle capable of providing a practical test applicable in every situation in order to determine whether a duty of care is owed and, if so, what is its scope. (Caparo Industries plc v Dickman [1990] 2 AC 605 per Lord Bridge at p 617; Michael v Chief Constable of South Wales Police (Refuge intervening) [2015] AC 1732 per Lord Toulson at para 106; Robinson v Chief Constable of West Yorkshire Police [2018] 2 WLR 595 per Lord Reed at para 24). In the absence of such a universal touchstone, it has taken as a starting point established categories of specific situations where a duty of care is recognised and it has been willing to move beyond those situations on an incremental basis, accepting or rejecting a duty of care in novel situations by analogy with established categories (Caparo per Lord Bridge at p 618 citing Brennan J in the High Court of Australia in Sutherland Shire Council v Heyman (1985) 60 ALR 1, at pp 43 44). The familiar statement of principle by Lord Bridge in Caparo at pp 617 618 in which he refers to the ingredients of foreseeability of damage, proximity and fairness does not require a re evaluation of whether those criteria are satisfied on every occasion on which an established category of duty is applied. In particular, as Lord Reed demonstrated in his judgment in Robinson (at paras 26, 27), where the existence of a duty of care has previously been established, a consideration of justice and reasonableness has already been taken into account in arriving at the relevant principles and it is, normally, only in cases where the court is asked to go beyond the established categories of duty of care that it will be necessary to consider whether it would be fair, just and reasonable to impose such a duty. The recent decision of the Supreme Court in James Bowen v Comr of Police of the Metropolis [2018] 1 WLR 402 was such a case and it was necessary for the court on that occasion to consider whether extension by analogy of established categories of duty was justified and the policy implications of such an extension. By contrast, Robinson itself involved no more than the application of a well established category of duty of care and all that was required was the application to particular circumstances of established principles. In the present case Jackson LJ observed (at para 53) that to hold the respondent responsible would create a new head of liability for NHS health trusts. To my mind, however, the present case falls squarely within an established category of duty of care. It has long been established that such a duty is owed by those who provide and run a casualty department to persons presenting themselves complaining of illness or injury and before they are treated or received into care in the hospitals wards. The duty is one to take reasonable care not to cause physical injury to the patient (Barnett v Chelsea and Kensington Hospital Management Committee [1969] 1 QB 428, per Nield J at pp 435 436). In the present case, as soon as the appellant had attended at the respondents A & E department seeking medical attention for the injury he had sustained, had provided the information requested by the receptionist and had been booked in, he was accepted into the system and entered into a relationship with the respondent of patient and health care provider. The damage complained of is physical injury and not economic loss. This is a distinct and recognisable situation in which the law imposes a duty of care. Moreover, the scope of the duty to take reasonable care not to act in such a way as foreseeably to cause such a patient to sustain physical injury clearly extends to a duty to take reasonable care not to provide misleading information which may foreseeably cause physical injury. While it is correct that no authority has been cited in these proceedings which deals specifically with misleading information provided by a receptionist in an A & E department causing physical injury, it is not necessary to address, in every instance where the precise factual situation has not previously been the subject of a reported judicial decision, whether it would be fair, just and reasonable to impose a duty of care. It is sufficient that the case falls within an established category in which the law imposes a duty of care. Secondly, this duty of care is owed by the hospital trust and it is not appropriate to distinguish, in this regard, between medical and non medical staff. In the specific context of this case, where misleading information was provided as to the time within which medical attention might be available, it is not appropriate to distinguish between medically qualified professionals and administrative staff in determining whether there was a duty of care. That distinction may well be highly relevant in deciding whether there was a negligent breach of duty; there the degree of skill which can reasonably be expected of a person will be likely to depend on the responsibility with which he or she is charged. In the present circumstances, however, questions as to the existence and scope of a duty of care owed by the trust should not depend on whether the misleading information was provided by a person who was or was not medically qualified. The respondent had charged its non medically qualified staff with the role of being the first point of contact with persons seeking medical assistance and, as a result, with the responsibility for providing accurate information as to its availability. In Kent v Griffiths [2001] QB 36 the London Ambulance Service was held liable in negligence for its delay in responding to an emergency call as a result of which the claimant suffered brain damage. The Court of Appeal upheld the judges decision on the ground that the ambulance had not arrived in a reasonable time. However, it also founded liability on the alternative basis that the call handler had given misleading assurances that an ambulance would be arriving shortly. (See the reference to Kent v Griffiths by Lord Toulson in Michael v Chief Constable of South Wales Police at para 138.) In Kent v Griffiths Lord Woolf MR, with whom Aldous and Laws LJJ agreed, observed with regard to the existence of a duty of care (at para 45) that what was being provided was a health service and he asked rhetorically why the position of the ambulance staff should be different from that of doctors or nurses. More specifically, he stated (at para 49) that the acceptance of the emergency call established a duty of care and that, if wrong information had not been given about the arrival of the ambulance, other means of transport could have been used. On this point, therefore, I find myself in total agreement with the observations of McCombe LJ in his dissenting judgment. The duty of the respondent trust must be considered in the round. While it is not the function of reception staff to give wider advice or information in general to patients, it is the duty of the NHS Trust to take care not to provide misinformation to patients and that duty is not avoided by the misinformation having been provided by reception staff as opposed to medical staff. In this regard, it is simply not appropriate to distinguish between medical and non medical staff in the manner proposed by the respondent. It is convenient to observe at this point that Kent v Griffiths is also relevant in another sense. For the reasons explained earlier in this judgment, in deciding whether a duty of care is owed in the present circumstances it is not necessary to proceed incrementally by analogy with decided cases because no extension of an established category of duty is called for here. Nevertheless, I note the close analogy between the present case and the alternative basis of decision in Kent v Griffiths. In both cases, as a result of the provision of inaccurate information by non medically qualified staff, there was a delay in the provision of urgently required medical attention with the result that serious physical injury was suffered. Thirdly, I consider that the judgments of the majority in the Court of Appeal elide issues of the existence of a duty of care and negligent breach of duty. They place emphasis on what a reasonable person would have done and could reasonably be expected to have done in the context of a busy A & E department. Thus Jackson LJ draws attention to the difficult conditions in which staff at such departments often have to work, observing (at para 54) that A & E department waiting areas are not always havens of tranquillity. Similarly, Sales LJ considers (at paras 84 87) that if there is a duty to provide precise and accurate information about the length of time before a patient might be seen by a triage nurse, it is difficult to see why it does not extend to an obligation to correct such information as changing pressures on resources arise. He observes (at paras 85, 87) that it would not be fair, just or reasonable to impose a duty of fine grained perfection regarding the information provided and that it is not as a matter of legal duty incumbent on a receptionist and the employing NHS trust to provide minute perfect or hour perfect information about how long the wait might be. These observations seem to me to be directed at false targets; it is not suggested that receptionists in an A & E department should act in this way. The question under consideration is whether the respondent owes a duty to take reasonable care when providing, by its receptionists, information as to the period of time within which medical attention is likely to be available. More fundamentally, however, these observations are really concerned not with the existence of a duty of care but with the question whether there has been a negligent breach of duty as a result of a failure to meet the standard reasonably expected. For these reasons, I consider that the submissions of Mr Havers QC on behalf of the respondent and the observations by the majority in the Court of Appeal (at paras 55 and 88) on the social cost of imposing such a duty of care are misplaced. This is not a new head of liability for NHS health trusts. In any event, I consider that what are said to be the undesirable consequences of imposing the duty in question are considerably over stated. Jackson LJ considered (at para 55) that litigation about who said what to whom in the waiting rooms of A & E departments could become a fertile area for claimants and their representatives. Alternatively, in his view, health care providers could close down this area of risk altogether by instructing reception staff to say nothing to patients apart from asking for their details. In the same way, Sales LJ considered (at para 88) that the imposition of such a duty could lead to defensive practices on the part of NHS Trusts resulting in the withdrawal of information which is generally helpful to the public. There is no reason to suppose that the factual context of an A & E department is likely to give rise to any unusual evidential difficulties. The burden of proof of the provision of misleading information will be on the claimant. Hospital staff will be able to give evidence as to their usual practice. So far as substantive liability is concerned, the requirements of negligence and causation will remain effective control factors. It is undoubtedly the fact that Hospital A & E departments operate in very difficult circumstances and under colossal pressure. This is a consideration which may well prove highly influential in many cases when assessing whether there has been a negligent breach of duty. Finally in this regard, I should record that in considering the issue of duty of care I have been greatly assisted by a case note on the decision of the Court of Appeal in the present case by Professor James Goudkamp ([2017] CLJ 481). He considers that the parties were within an established duty category and that the only question, relevantly, was whether the defendant breached that duty. He observes that discussion as to what the reasonable person would have done in the circumstances in question indicates that the dispute is about the breach element, that being the only element of the cause of action in negligence that is concerned with the satisfactoriness of the defendants conduct. He concludes: Accordingly, on traditional principles, Darnley is not, in fact, a duty of care case at all. Rather, properly understood, the issue was whether the defendant had breached its duty in giving, by its receptionist, inaccurate information to the claimant. (at p 482) I agree with his analysis. It is to that question of negligent breach of duty that I now turn. Negligent breach of duty The reception desk at the A & E department was the first point of contact between the respondent trust and members of the public seeking medical assistance. It has not been suggested that the respondent was in any way at fault in allocating this responsibility to receptionists who were not medically qualified. Moreover, it has not been suggested that the receptionists should have provided accurate information to each patient on arrival as to precisely when he or she would be seen by a medically qualified member of staff. Anyone who has any experience of A & E departments will know that this would be impossible. The pressures on medical staff are enormous, the demand for attention is constantly fluctuating and priorities are likely to change. However, it is not unreasonable to require receptionists to take reasonable care not to provide misleading information as to the likely availability of medical assistance. The particular role performed by the individual concerned will be likely to have an important bearing on the question of breach of the duty of care. As Mustill LJ explained in Wilsher v Essex Area Health Authority [1987] QB 730, 750 751, the legitimate expectation of the patient is that he will receive from each person concerned with his care a degree of skill appropriate to the task which he or she undertakes. A receptionist in an A & E department cannot, of course, be expected to give medical advice or information but he or she can be expected to take reasonable care not to provide misleading advice as to the availability of medical assistance. The standard required is that of an averagely competent and well informed person performing the function of a receptionist at a department providing emergency medical care. Responding to requests for information as to the usual system of operation of the A & E department was well within the area of responsibility of the receptionists. The two receptionists on duty at the material time were both aware that the standard procedure was that anyone complaining of a head injury would be seen by a triage nurse and they accepted that the usual practice was that such a patient would be told that they would be seen by a triage nurse within 30 minutes of arrival (Mrs Ashley) or as soon as possible (Mrs Reeves Bristow). No reason has been suggested as to why the appellant was not told of the standard procedure. The hospital was operating within the acceptable range of triage timing agreed by the experts and the actual position was that the appellant, had he remained, would have been seen by a triage nurse within 30 minutes because he was complaining of a head injury. It is not unreasonable to require that patients in the position of the appellant should be provided on arrival, whether orally by a receptionist, by leaflet or prominent notice, with accurate information that they would normally be seen by a triage nurse within 30 minutes. However, instead the appellant was simply told that he would have to wait for up to four or five hours to see a doctor. That information was incomplete and misleading. The Chief Executive of the respondent described it in his letter to the appellant dated 23 March 2011 as completely incorrect. The appellant was misinformed as to the true position and, as a result, misled as to the availability of medical assistance. The trial judge made the critical finding that it was reasonably foreseeable that a person who believes that it may be four or five hours before he will be seen by a doctor may decide to leave. In the light of that finding I have no doubt that the provision of such misleading information by a receptionist as to the time within which medical assistance might be available was negligent. Causation The appellant remained in the waiting area of the A & E department for only 19 minutes before deciding to leave because he felt too unwell to remain. He failed to tell any member of staff of his departure. In the Court of Appeal Jackson LJ concluded, in the alternative, (at para 56) that if he was wrong in his view that the receptionist or the respondent acting by the receptionist was in breach of a duty of care owed to the appellant by giving incorrect information, the claim could still not succeed because the scope of that duty could not extend to liability for the consequences of a patient walking out without telling the staff that he was about to leave. In his view, echoing that of the trial judge, the appellant should accept responsibility for his own actions. Sales LJ agreed with this alternative reason for dismissing the appeal. This reasoning, however, fails to take account of the effect of the misleading information with which the appellant was provided and of three critical findings of fact made by the trial judge. First, the judge found that, if the appellant had been told that he would be seen within 30 minutes, he would have stayed in the waiting area and would have been seen before he left. He would then have been admitted or told to wait. He would have waited and his later collapse would have occurred within a hospital setting. Secondly, the judge found that the appellants decision to leave was made, in part at least, on the basis of information provided to him by the receptionist which was inaccurate or incomplete. Thirdly, the judge found that it was reasonably foreseeable that a person who believes that it may be four or five hours before he will be seen by a doctor may decide to leave, in circumstances where that person would have stayed if he believed he would be seen much sooner by a triage nurse. The conclusion of the majority of the Court of Appeal on this point seems to me to be inconsistent with these findings of fact. Far from constituting a break in the chain of causation, the appellants decision to leave was reasonably foreseeable and was made, at least in part, on the basis of the misleading information that he would have to wait for up to four or five hours before being seen by a doctor. In this regard it is also relevant that the appellant had just sustained what was later discovered to be a very grave head injury. Both the appellant and Mr Tubman had told the receptionist that the appellant was really unwell and needed urgent attention. The appellant told her that he felt as if he was about to collapse. He was in a particularly vulnerable condition and did, in fact, collapse as a result of his injury within an hour of leaving the hospital. In these circumstances, one can readily appreciate how the judge came to his conclusion that the appellants departure was reasonably foreseeable. The trial judge made a further finding of fact that had the appellant suffered the collapse at around 21:30 whilst at the Mayday Hospital, he would have been transferred to St Georges Hospital and would have undergone surgery earlier with the result that he would have made a very near full recovery. In these circumstances, the case that the appellants unannounced departure from the A & E department broke the chain of causation is simply not made out. Conclusion For these reasons I would allow the appeal and remit the case to the Queens Bench Division for the assessment of damages. Finally, the court would like to express its appreciation of the clarity and economy of the written and oral submissions of both parties in this case. They were a model of what can be achieved and without any loss of depth or substance. |
In December 2006, Mrs Staveley died. Shortly before her death, she had transferred funds from her existing pension scheme into a personal pension plan (PPP). She did not take any pension benefits at all during her life and, in those circumstances, a death benefit was payable under the PPP. Mrs Staveley nominated her two sons as beneficiaries of the death benefit, subject to the discretion of the pension scheme administrator and, after her death, the death benefit was paid to them. Her Majestys Revenue and Customs (HMRC) determined that inheritance tax (IHT) was due, on the basis that both the transfer of funds into the PPP, and Mrs Staveleys omission to draw any benefits from the plan before her death, were lifetime transfers of value within section 3 of the Inheritance Tax Act 1984 (IHTA). The issue in this appeal is whether they were right to take that view. The appellants are the three executors of Mrs Staveleys estate (her two sons, and a solicitor, Mr Parry). They appealed to the First tier Tribunal (Tax Chamber) (the FTT) against HMRCs determination. The appeal was partially successful in that the FTT held that the transfer of funds into the PPP (the transfer) was prevented from being a transfer of value by section 10(1) IHTA because, putting it shortly, it was not intended to confer any gratuitous benefit on anyone. However, the FTT dismissed the appeal in relation to Mrs Staveleys omission to draw benefits from the PPP (the omission), holding that the sons estates had been increased by the omission, and section 3(3) required that Mrs Staveley be treated as having made a disposition at the latest time when she could have drawn those benefits. Each side appealed to the Upper Tribunal (Tax and Chancery Chamber) (the Upper Tribunal). The FTTs decision that the transfer into the PPP fell within section 10(1) was affirmed. The FTTs decision in relation to the omission to draw benefits was reversed, on the basis that section 3(3) did not apply because it was not the omission that had increased the sons estates, but the discretionary decision of the pension scheme administrator to pay the death benefits to them. Accordingly, no tax was payable on either transaction. On HMRCs appeal to the Court of Appeal, the court held that both the transfer and the omission gave rise to a charge to tax. The executors now appeal against both of those decisions. The issues that require determination concern (1) (in relation to the transfer) the proper operation of section 10 of the IHTA, and its application to the facts of this case and (2) (in relation to the omission) the proper construction of section 3(3) of the IHTA, and whether, on the facts of this case, there was a material break in the chain of causation between Mrs Staveleys omission and the increase in value in her sons estates, by virtue of the fact that the payment to the sons resulted from the exercise of a discretion by the pension scheme administrator. The difficulty of the points at issue is underlined by the chequered fortunes of the parties arguments: the FTT found tax payable on the omission but not the transfer, the Upper Tribunal found no tax payable at all, and the Court of Appeal held that both the transfer and the omission gave rise to a charge to tax. Legislative provisions (section 1 IHTA). A chargeable transfer is a transfer of value made by an individual which is not an exempt transfer (section 2 IHTA). It is not necessary to go into the concept of an exempt transfer, as it has no relevance to the present appeal. Section 3 IHTA deals with transfers of value. It provides: Inheritance tax is charged on the value transferred by a chargeable transfer 3. Transfers of value (1) Subject to the following provisions of this Part of this Act, a transfer of value is a disposition made by a person (the transferor) as a result of which the value of his estate immediately after the disposition is less than it would be but for the disposition; and the amount by which it is less is the value transferred by the transfer. (2) For the purposes of subsection (1) above no account shall be taken of the value of excluded property which ceases to form part of a persons estate as a result of a disposition. (3) Where the value of a persons estate is diminished, and the value (a) of another persons estate, or (b) of any settled property, other than settled property treated by section 49(1) below as property to which a person is beneficially entitled, is increased by the first mentioned persons omission to exercise a right, he shall be treated for the purposes of this section as having made a disposition at the time (or latest time) when he could have exercised the right, unless it is shown that the omission was not deliberate. (4) Except as otherwise provided, references in this Act to a transfer of value made, or made by any person, include references to events on the happening of which tax is chargeable as if a transfer of value had been made, or, as the case may be, had been made by that person; and transferor shall be construed accordingly. It can be seen that the core provision is contained in section 3(1), which fixes upon dispositions which result in a reduction in the value of the transferors estate. Such a disposition constitutes a transfer of value and, by virtue of sections 1 and 2, potentially attracts inheritance tax on the value transferred, which is the amount of the reduction in value. Section 3(1) focuses on a person making a disposition ie on an action rather than an omission. However, section 3(3) extends the reach of section 3(1) to include an omission to exercise a right in certain circumstances. Unless it is shown that the omission was not deliberate, a person who omits to exercise a right is treated by section 3(3) as having made a disposition if (concentrating on the circumstance that is relevant for this case) the value of that persons estate is diminished and the value of another persons estate is increased by the omission. Section 10 IHTA provides that certain dispositions are not a transfer of value: 10. Dispositions not intended to confer gratuitous benefit (1) A disposition is not a transfer of value if it is shown that it was not intended, and was not made in a transaction intended, to confer any gratuitous benefit on any person and either (a) that it was made in a transaction at arms length between persons not connected with each other, or certain sales of (b) that it was such as might be expected to be made in a transaction at arms length between persons not connected with each other. concerns [not (2) relevant; shares/debentures] In this section (3) disposition includes anything treated as a disposition by virtue of section 3(3) above; transaction includes a series of transactions and any associated operations. As appears, the approach of section 10(1) is to stipulate conditions which, if satisfied, result in a disposition not being a transfer of value. By way of shorthand, it is perhaps convenient to speak in terms of whether the subsection applies (that is to say its conditions are satisfied, the disposition is therefore not a transfer of value, and no tax arises) or does not apply (conditions not satisfied and tax is payable). The present appeal requires particular focus on the condition that the disposition was not intended, and was not made in a transaction intended, to confer any gratuitous benefit on any person. Although section 10(1) is the principal subsection, section 10(3) is important too, because it provides an extended meaning for the concept of a transaction in section 10(1), so that it includes a series of transactions and any associated operations. Section 268 IHTA defines associated operations as follows: 268. Associated operations (1) In this Act associated operations means, subject to subsection (2) below, any two or more operations of any kind, being (a) operations which affect the same property, or one of which affects some property and the other or others of which affect property which represents, whether directly or indirectly, that property, or income arising from that property, or any property representing accumulations of any such income, or (b) any two operations of which one is effected with reference to the other, or with a view to enabling the other to be effected or facilitating its being effected, and any further operation having a like relation to any of those two, and so on. whether those operations are effected by the same person or different persons, and whether or not they are simultaneous; and operation includes an omission. HMRCs Notice of Determination The facts are set out below at para 21 and following. It is helpful to have in mind, when considering them, the terms in which HMRC identified the transfers of value which they said gave rise to charges to IHT. The Notice of Determination, issued in April 2012, recorded that HMRC had determined that there were two transfers of value. The first was the transfer into the PPP. Paragraph 1 of the Notice identified this in the following terms: 1. A Transfer In Application Form for the transfer of pension funds from an AXA Flexible Transfer Plan (a section 32 buyout policy) to an AXA Personal Pension Plan (the new pension scheme) signed by the deceased on 3 November 2006. Referring back to this paragraph, the operative part of the determination then said: A. The transfer at (1) above is a disposition which is a transfer of value having regard to section 3(1) Inheritance Tax Act 1984 (IHTA). The second transfer of value was Mrs Staveleys omission to draw lifetime benefits, which was dealt with as follows in the Notice: C. The deceased omitted to exercise her right to take any benefits from the new pension scheme between the date of commencement of the new pension scheme and the date of her death. The omission at C above is treated as a disposition by the deceased at the latest time when she could have exercised her rights and is a transfer of value having regard to section 3(3) and (1) IHTA. Broad outline of the parties arguments It is also helpful to approach the facts with the broad structure of the parties arguments in mind. It will be necessary to return to the detail of the arguments later, but the essentials are set out in the following four paragraphs. The starting point in relation to the transfer is that it is agreed to constitute a disposition which resulted in a reduction in the value of Mrs Staveleys estate, because she no longer had the right to determine the destination of the death benefits in relation to the pension. The question is whether the disposition is nevertheless not a transfer of value by virtue of section 10. This issue has to be broken down into two parts. First, does the transfer, as a disposition viewed on its own, amount to a transfer of value or does section 10(1) apply? This issue (Transfer Issue 1) turns on whether it has been shown by the appellants that the transfer was not intended to confer any gratuitous benefit on any person. The appellants say that this has been established, and HMRC say not. However, even if the appellants are right and the transfer into the PPP, viewed alone, would escape IHT, it has to be looked at in a wider context, and consideration given to whether section 10(1) still applies (Transfer Issue 2). It is not enough that the disposition itself was not intended to confer any gratuitous benefit; it has to be shown also that it was not made in a transaction intended to confer any gratuitous benefit. In support of their argument that the disposition here was made in such a transaction, HMRC seek to draw in the omission, with its accompanying intention to confer gratuitous benefit on the sons in the form of the resulting death benefit. They point to the definition of transaction in section 10(3) (transaction includes a series of transactions and any associated operations), and the definition in section 268 of associated operations, arguing that the transfer and the omission amount to associated operations, linked by common intent. On this argument, the intention to confer benefit on the sons by not taking lifetime benefits colours the transaction, so that it is not possible to bring the disposition within section 10(1). The appellants resist HMRCs case on Transfer Issue 2 on the basis that there is no relevant series of transactions and any associated operations here, so if the transfer to the PPP is not itself intended to confer gratuitous benefit, section 10(1) applies. On their argument, bundling together the transfer to the PPP and the omission is contrary to the findings of fact made by the FTT, and also a wrong application of the law, including the reasoning of the House of Lords in Inland Revenue Comrs v Macpherson [1989] AC 159 (Macpherson). They rely particularly upon the FTTs findings that the transfer to the PPP was not of itself intended to confer a gratuitous benefit, and that the transfer and the omission were not linked by motive. When it comes to the omission, the sole question is whether, as HMRC say, the terms of section 3(3) are satisfied. If the circumstances fall within the subsection, Mrs Staveley is treated as having made a disposition when she could last have exercised her right to take lifetime benefits under the PPP, and that disposition is conceded to be a transfer of value attracting IHT, the FTT having found that part of Mrs Staveleys motivation in not drawing benefits herself was to confer a benefit on her sons, and there no longer being any argument that section 10(1) applies to the omission. But the appellants say that section 3(3) is not satisfied. Their argument is that (putting it loosely) there is not the necessary connection between Mrs Staveleys omission and an increase in another persons estate, because the payment of the resulting death benefit to her sons depended upon the pension scheme administrator exercising its discretion in their favour, and did not follow the omission sufficiently closely in time. It cannot be said, in the appellants submission, that the value of another persons estate is increased by (my emphasis) the omission to draw lifetime benefits. The facts and the FTT judgment Mrs Staveley was divorced in 2000. The divorce was acrimonious, leaving her feeling bitter towards her ex husband. Whilst together, they had set up a company called Morayford Ltd. She was a director of the company, and employed by it, and she had a large pension fund with its occupational pension scheme. On divorce, her involvement with the company ceased. Putting it in the non technical terms used by the FTT, [t]he ancillary relief order ordered that her share of the company pension scheme be transferred to her. It was put into what was called a section 32 buyout policy (the terminology reflecting that it was a policy to which section 32 of the Finance Act 1981 applied). However, given the level of her salary with the company, the pension was over funded, and, as things stood then, any surplus in the fund on her death would be returned to the company, potentially benefitting her ex husband. This was not acceptable to her at the time of the transfer of her fund into the section 32 policy (FTT judgment, para 12), but she had no alternative option. Thereafter, the FTT found (ibid, para 14), she remained very concerned that her pension fund could in whole or part revert to the benefit of her ex husband and/or his new family. It was a term of the section 32 policy that if Mrs Staveley died without taking lifetime benefits, the trustees of the scheme would pay a lump sum by way of death benefit to her estate. Although she could have chosen to access her pension from its inception, she did not do so at any point during the currency of the policy. In 2004, Mrs Staveley was diagnosed with cancer, which was initially treated successfully. She made a will in 2005, appointing her two sons and Mr Parry as executors and trustees, and leaving her property to the trustees on trust to hold the assets for her sons in equal shares, the income to be paid to each son during his lifetime (and thereafter to his children), but with the trustees having power to advance capital. Mrs Staveleys pension fund was still, at that time, invested in the section 32 policy, and any death benefit payable under it would have gone into her estate and benefitted her sons by virtue of her will, subject to such IHT as would have been chargeable with regard to the sum. In 2006, Mrs Staveleys illness returned and she was treated again, but it became evident that she would not recover. The FTT found that for much of 2006, she refused to accept that her death was inevitable (FTT judgment, para 32). However, by mid October 2006, she had accepted intellectually that she was dying (ibid, para 34). On 30 October 2006, she set in train the transfer of her section 32 policy to the PPP, the new policy commencing on 9 November 2006. A death benefit was payable, under the PPP, to, or for the benefit of, one or more beneficiaries selected, at the discretion of the pension scheme administrator, from a number of specific categories, within which were included persons nominated by the scheme member, and also grandchildren, and legal personal representatives. The scheme member could nominate people for consideration by the pension scheme administrator by completing the Expression of Wish form which formed part of the Transfer in Application Form. Mrs Staveleys application form (dated 3 November 2006) nominated her two sons to be considered as equal recipients of the death benefit. In mid 2007, pursuant to the administrators exercise of discretion, the benefit was paid out in accordance with her wishes. The FTTs critical findings about Mrs Staveleys motivation for the transfer are contained in paras 48 to 55 of the FTT judgment, but para 16 is also important. There, it rejected the view of one of the sons that, although Mrs Staveley wanted the sons to benefit from her pension fund, she would rather they got nothing than that her ex husband benefit from it in any way. It made the general finding that preventing Morayford receiving benefit from her pension fund was very important to her; but it was also very important to her that her sons did benefit from her estate. At paras 48 to 55, the FTT was focusing expressly on whether the transfer from the section 32 policy into the PPP was intended to confer gratuitous benefit within the meaning of section 10(1). The appellants case was that Mrs Staveleys sole intention in transferring the funds was to eliminate any risk that any part of the fund might be returned to Morayford. HMRC put forward a number of arguments against this. They argued that, in the light of changes in the law in April 2006, it should have been obvious that there was no such risk, but that even if she did not know this, Mrs Staveley had at least a dual motive, the second motive being to ensure the death benefits passed to her sons free of IHT. The FTT found that Mrs Staveley was not motivated by IHT considerations and, indeed, that it was more likely than not that she was under the mistaken impression that the transfer would not affect the amount of IHT payable on her death (para 49). It found that her sole motive in making the transfer was to sever all ties with Morayford (para 48). Though the risk that funds would revert to Morayford may by then have been more perceived than real, she had been advised that there was such a risk, and the perceived risk was the reason why she acted as she did. At para 50, the FTT set out a further argument which HMRC advanced as to Mrs Staveleys intention and began to deal with it: 50. HMRC say that, even ignoring the IHT, she clearly had an intent that the death benefits would pass to her sons, and this was an intent to confer a gratuitous benefit. She signed the statement of wishes. However, we do not see how this could be properly described as an intention to confer a gratuitous benefit. Her sons were her beneficiaries named in her will and therefore the persons who had stood to benefit from the death benefits of the section 32 policy (which after April 2006 would have been the whole fund). They were the persons named in her expression of wishes for the PPP. Either way they were the intended beneficiaries so that the transfer did not confer a benefit that was new to them and cannot therefore have been part of the motivation for Mrs Staveley. (Emphasis in the original) As heralded here, and developed in para 52, the FTTs view was that the benefit contemplated by section 10 was a benefit which did not exist before, and was newly conferred. In this case, as the FTT saw it, the only difference between the sons being named in the Expression of Wish form in respect of the PPP, and being Mrs Staveleys residuary legatees in respect of the death benefit arising from the section 32 policy, was that the death benefit could be paid to them directly by the pension administrator under the PPP, rather than coming to them by way of Mrs Staveleys estate (para 53). This did, indeed, produce a very real advantage, in avoiding the IHT which would have been payable had the section 32 policy remained in place, but the FTT recalled that we have already concluded that this IHT advantage was not a benefit which Mrs Staveley intended to confer, even though that was the effect of what she did (para 54, emphasis in the original). It followed (para 55) that the transfer into the PPP was not intended to confer any gratuitous benefit on any person. Turning to what the FTT had to say about Transfer Issue 2 (the transfer taken together with the omission to draw lifetime benefits), it is necessary to look first at the findings that it made about the circumstances of the omission. It examined what Mrs Staveleys thinking was, during 2006, about drawing pension benefits herself. Whilst her funds were still invested in the section 32 policy, she had considered whether to take lifetime benefits. It was not possible to determine the precise date when she decided not to do so, but the Tribunal found that she must have communicated that decision to her financial advisor in about October 2006 (FTT judgment, para 28), having taken it sometime between June and October that year (ibid, para 124). There was no evidence of any change of view up to the date of her death (also para 124). The FTT found (paras 146 to 149) that a number of factors influenced Mrs Staveley in this approach, including that she would confer on her sons a greater financial benefit by not drawing lifetime benefits. That was part of her motivation in June 2006. There being no evidence of any change of mind subsequently (para 143), it must be treated as the position at the moment of her death as well (para 149). It was a continuing decision (para 61), an ongoing choice (para 87). The FTT set out its legal analysis of Transfer Issue 2 between paras 56 and 72 of its judgment, rejecting HMRCs case that the transfer of the funds into the PPP should be taken together with the omission to draw lifetime benefits as a series of transactions and/or associated operations. As it saw it, the transfer and the omission were not linked as a scheme intended to confer gratuitous benefit. It found at para 64 that [w]hatever the intent behind the omission, it was not linked with the transfer to the PPP in Mrs Staveleys mind, her intent with respect to the transfer having been solely to break the connection with Morayford. It reinforced this at para 69 where it said: the transfer to the PPP was not made with the intent of omitting to take lifetime benefits. In so far as Mrs Staveley made any positive decision not to take lifetime benefits, that decision had already been taken and taken independently of the decision to transfer the funds to the PPP. (Emphasis in the original) In relation to the omission to take lifetime benefits, which it found fell within section 3(3) and gave rise to tax, the FTT commented that it would ordinarily regard the voluntary exercise of discretion as breaking the chain of causation from an omission to exercise a right before death to the receipt of the resulting monies, but not so where, as it considered to be the case here, it was virtually inevitable that [the scheme administrator] would honour the deceaseds wishes and pay the money directly to her sons (paras 113 and 114). Section 10 could have no application to the omission because of the FTTs finding that part of Mrs Staveleys motivation was to confer a greater benefit upon her sons. The Upper Tribunal decision The Upper Tribunal agreed with the FTT that the transfer (whether on its own or taken with the omission) was, by virtue of section 10, not a transfer of value for the purposes of section 3 IHTA (para 60 Upper Tribunal judgment). Aspects of its reasoning differed from that of the FTT. In particular, it did not endorse the FTTs interpretation of section 10, agreeing with HMRC that as a matter of law, the mere fact of an existing putative benefit under a will of a person into whose estate certain assets will pass on death cannot prevent a disposition in lifetime from conferring a benefit, even if the benefit is to the same beneficiaries, and is substantially identical to that which would be conferred by the will (para 30 ibid). However, it considered the nature of any benefit and the surrounding circumstances relevant to the question of intention, so saw the fact that the sons would benefit under the will as a relevant factor in assessing Mrs Staveleys true motive in making the transfer (para 31). Normally, by the time an appeal reaches the Supreme Court, the facts are no longer a matter of argument. However, in this case, certain of the facts (particularly concerning Mrs Staveleys intention) have continued to excite debate. It is therefore relevant to note here that HMRC sought to persuade the Upper Tribunal that it had not been open to the FTT, properly interpreting section 10, to find that Mrs Staveleys sole motive in making the transfer was to prevent funds reverting to Morayford and her ex husband, and that it could only have found that Mrs Staveley made the disposition with the intention of doing several things, one of which was to confer a gratuitous benefit on her sons. The Upper Tribunal rejected that challenge. It said (para 32): To the extent that the FTT was in error in deciding that the replacement of the testamentary benefit to the sons by the benefit conferred as beneficial objects of the discretion of the scheme administrator of the AXA PPP could not in law amount to the conferring of a benefit, that was not the basis for the FTTs conclusion as to the sole motive of Mrs Staveley. That was a decision of the FTT on the facts, which properly included the nature of the benefit in question. The FTTs finding that the transfer and the omission were unconnected and not part of any scheme to confer benefit on the sons was also endorsed by the Upper Tribunal (para 55). The Upper Tribunal differed from the FTT on whether the omission was a transfer of value, taking the view that the sons estates were increased not by Mrs Staveleys omission to take lifetime benefits but by the exercise of pension scheme administrators discretion, which, in its view (summarised at paras 86 and 87), broke the chain of causation between the omission and the payment out to the sons. It followed that the omission was not caught by section 3(3) IHTA and did not attract tax. It is material to record that the FTTs finding that it was virtually inevitable that Mrs Staveleys wishes would be honoured by the pension administrator (see para 33 above) came in for criticism. HMRC did not seek to support it and the Upper Tribunal considered (para 72 Upper Tribunal judgment) that the FTT had not been entitled to make it, there being nothing to contradict the evidence that there was a discretion conferred on the administrator. The only finding open to the FTT, the Upper Tribunal said (para 74), was that there was a genuine exercise of discretion and that the most Mrs Staveley could have expected from her completion of the Expression of Wish form was that a diligent administrator would take those wishes into account as a relevant factor in the exercise of its discretion. The Court of Appeal decision: Transfer Issues 1 and 2 By a majority (Newey LJ and Birss J), the Court of Appeal upheld the decision of the lower courts that, standing alone, the transfer from the section 32 policy to the PPP was not a transfer of value, because section 10 applied. In the view of the majority, to ascertain whether the transferor intended to confer a gratuitous benefit, one has to compare the position of the recipient of the benefit before the disposition with his position in light of it, asking whether the overall effect of the disposition was intended to be favourable to, or advantageous to, the recipient of the benefit (paras 86 and 88 of Newey LJs judgment, with which Birss J agreed at para 114). Drawing assistance from the dictionary definitions of confer and benefit, Newey LJ said in para 88: Confer is defined in the Concise Oxford Dictionary as to grant or bestow, benefit as a favourable or helpful factor or circumstance; advantage, profit. In enacting section 10, parliament will, I think, have been concerned to exclude from the crucial exemption for which it provides a disposition which was itself intended to grant or bestow something advantageous gratuitously. Parliament considered that an arms length transaction should not generally give rise to an IHT charge even if it served to diminish the value of the transferors estate, but did not want the exemption to apply if to put matters broadly the disposition was being used to improve someones position on a gratuitous basis. As a matter of language, I do not think that it is appropriate to speak of a disposition having been intended to confer any gratuitous benefit if the recipient of the benefit was intended to receive no more than he would have had in any event. A disposition designed to give a person only what he was to receive anyway or its equivalent, let alone less, cannot fairly be described, in my view, as intended to confer a benefit. In contrast, Lady Arden considered (para 52) that the conferral of a benefit is to be ascertained by a legal analysis of the transaction whereby the beneficiary acquired his rights and without comparison with a prior gift (my emphasis). As HMRC rely upon her approach, I will need to deal with it in some detail in discussing the parties submissions, so will say no more about it at this stage. Applying the majoritys interpretation of section 10 to the facts, Newey LJ acknowledged that, as a matter of fact, the transfer of the pension fund from one scheme to the other would have been advantageous to Mrs Staveleys sons if it enabled them to receive sums free of IHT. However, as he said (para 83), the mere fact that a transaction confers a gratuitous benefit is not enough to remove the protection of section 10. That occurs only if the transferor intends such benefit to be conferred and, here, the FTTs finding was that IHT did not form part of her motivation (FTT, para 49). In contrast to Lady Arden (see below), he did not consider that it was open to the Court of Appeal to find that, IHT saving apart, the interest of the sons under the nomination was a favourable change from their previous position under Mrs Staveleys will. He observed (para 91): It is not apparent to me that HMRC have ever advanced a case to that effect, let alone that the FTT made findings supporting it, and (aside, again, from IHT) I do not regard it as in the least obvious that the sons were in practice any better placed as a result of the transfer. However, even if it were possible to conclude that there was a favourable change other than the saving of IHT, in his view this still would not oust the protection of section 10, because, on the findings of the FTT, Mrs Staveley did not make the transaction intending to improve the sons position in that way (ibid, at paras 89 and 91 in particular). As Newey LJ put it, [s]he did not see the transfer as giving her sons anything better than they would otherwise have received. As Lady Arden analysed the facts, there was a gift of newly created rights, the sons interest under the PPP being very different in law from their position as residuary beneficiaries under Mrs Staveleys will, and therefore the gift was newly conferred (para 45). In her view (para 46), the interest of the sons under the nomination was undoubtedly a favourable change from their previous position under Mrs Staveleys will if regard is had to the legal analysis. The application of section 10 therefore turned on whether Mrs Staveley intended to confer this benefit. As Lady Arden put it at para 52, in order to obtain the benefit of the purchase exemption, the donor, or his personal representatives, has to show that, although the donor intended to make a gift, he did not intend to make a gift of what was in law a newly created right. Lady Ardens view about Mrs Staveleys intention built on her analysis of the factual findings made by the FTT. Her interpretation of the FTT judgment was that, although the FTT had found that the transfer was not made with the intention to confer gratuitous benefit, the motivation being solely to sever all ties with Morayford, there was no equivalent finding in relation to the Expression of Wish form, as to which, she considered, there was a finding, by implication, that by executing the statement of wishes on the occasion of the transfer of funds Mrs Staveley made a disposition with the intention of giving a gratuitous benefit to her sons (see particularly paras 32, 36 and 40 of Lady Ardens judgment). At para 47, she said: it may be said that there was an absence of intention to confer a new benefit. Mrs Staveley was, after all, (it may be said) only giving her sons what she had previously intended to give them under her will. She was (it may be said) just making the same gift in a new way. But what the FTT found was that there was a gratuitous intention in signing the nomination. So, in my judgment, on the facts of this case, the respondents had to show that, even though it was a gratuitous intention to confer what in law was a newly created right, it was not Mrs Staveleys intention to confer such a benefit: see the words if it is shown that it was not intended appearing in section 10(1). An absence of evidence as to whether she intended to make a newly conferred gift is not enough. The respondents needed to show that she mistakenly thought that she was not conferring a newly created right, and the findings of the FTT do not go that far. It followed that, even standing alone, Lady Arden would have found that the transfer to the PPP was a transfer of value. For the majority, however, that position was only reached by taking the transfer together with Mrs Staveleys omission to draw lifetime benefits under the PPP. It will be recalled that section 10 requires that it be shown not only that the disposition itself was not intended to confer gratuitous benefit, but also that it was not made in a transaction intended to confer gratuitous benefit, and a transaction for this purpose includes a series of transactions and any associated operations. The court held that the transfer was, in fact, made in a transaction intended to confer gratuitous benefit, essentially for the reasons set out by Newey LJ in para 103, which I summarise in the rest of this paragraph. The transfer and the omission were operations affecting the same property, so were associated operations as defined in section 268. Attention therefore turned to the issue of whether this transaction was intended to confer gratuitous benefit. As found by the FTT, one of the factors in Mrs Staveleys decision not to access her pension fund was that it would confer a greater benefit on her sons, this being her intention both at the time of the transfer to the PPP and at the time of her death. The omission was therefore intended to confer any gratuitous benefit. On Newey LJs reading of Macpherson, it was immaterial that the transfer was not made with that intention, because a transaction could be intended to confer gratuitous benefit without each of the associated operations being itself made with that intention or actually conferring such benefit. If a scheme of which an operation forms part is intended to confer the benefit, that is enough. The FTT was mistaken in thinking there was no intent linking [the omission to take pension benefits and the transfer to the PPP]. Both were motivated by a desire on Mrs Staveleys part that her sons should have the death benefits that would be payable if she did not draw a lifetime pension. To that end, she named them in her Expression of Wish form. So, Newey LJ said at para 103(v): While, therefore, Mrs Staveley did not see the transfer to the PPP as improving her sons position and she made the transfer out of a desire to sever ties with Morayford, the only reasonable conclusion, as it seems to me, is that she also intended the PPP to be a means by which the death benefits could be passed to her sons. Thus the failure to take pension benefits and the transfer to the PPP were each properly seen as forming part of and contributing to a scheme intended to confer gratuitous benefits. It followed that the protection of section 10 was not available for the transfer to the PPP. Court of Appeal decision: section 3(3) and the omission The court held unanimously that the sons estates had been increased by Mrs Staveleys omission to draw lifetime benefits, notwithstanding the scheme administrators discretion. On this point, there was general agreement with the reasoning of Newey LJ, the core of which is perhaps best encapsulated in this passage from para 109: The sons estates would not, of course, have been increased but for the omission. Moreover, the exercise of discretion in the sons favour by the scheme administrator did not involve any break in the chain of causation. The administrator was, after all, doing no more than it was obliged and could be expected to do in the period immediately following Mrs Staveleys death. It may be that the increase in the sons estates could also be said to have been brought about by the exercise of the administrators discretion, but that by no means makes it inappropriate to see the estates as having been increased by the omission. The one does not preclude the other. In so finding, the court also rejected the argument that the diminution in value of one persons estate and the increase in value of someone elses must occur at the same time for section 3(3) to apply. Transfer Issue 1 (transfer on its own): discussion The appellants support the conclusion of the majority of the Court of Appeal that, standing alone, the transfer of funds to the PPP did not constitute a transfer of value because section 10 applied, and they rely upon the Court of Appeals reasoning on this issue. HMRC, however, contend that Lady Arden correctly concluded, for the reasons she gave at paras 42 to 54, that section 10 was not applicable. They argue that Mrs Staveleys intention in making the disposition was to exclude her ex husband and to confer a benefit on her sons by way of death benefits. On this analysis, in their submission, her intention was to confer a gratuitous benefit. To make this good, they make submissions both as to what is meant in law by intending to confer [a] gratuitous benefit on any person, and as to the factual findings that were/should have been made by the FTT. Miss Wilson, for HMRC, makes the general point that section 10 only comes into play when there has been a disposition which would normally be a transfer of value. She characterises it as a relatively narrow provision, with the taxpayer bearing the burden of justifying why IHT is not payable as it ordinarily would be. She emphasises that, whilst what someone intends is a question of fact, the treatment of that factual intention for the purposes of section 10 is a question of law. She submits that the proper approach, in a case such as this where there is a change in how a gift is made (or, as she also puts it, where rights have been substituted) is to ask three questions, always bearing in mind, of course, that it is the taxpayer who has to show that the disposition was not intended to confer gratuitous benefit. The three questions are: (1) What rights, if any, were created and extinguished? (2) On a detailed legal analysis, did the new rights confer a benefit within the statutory words? (3) Was that situation something that the disponor intended? Of these three questions, only the last is subjective. In HMRCs submission, the majority in the Court of Appeal was wrong to interpret section 10 as requiring an examination of whether the overall effect of the disposition was intended to be favourable to, or advantageous to, the recipient of the benefit (see paras 86 and 88 of Newey LJs judgment, referred to/quoted at para 40 above). This would be uncertain and difficult to adjudicate upon, HMRC say, and would give rise to arbitrary results. Lady Ardens formulation of the law is correct, in HMRCs submission, and leads to a section 10 test which is readily justiciable. Lady Ardens para 46 deals with statutory interpretation. There she observed that, in the absence of a relevant statutory definition of the words in question, resort had to be had to their ordinary meaning, and said: On its ordinary meaning, a benefit involves a net gain or favourable change in a persons position, but the comparison to be made is with his position immediately before the putative benefit was conferred. This is the most natural time to determine the question of benefit and in my judgment there would need to be some mandate in the 1984 Act to do what the FTT did, which was to look at the position in substance before the transfer took place and without reference to its legal analysis. I do not consider that there is any such mandate. The interest of the sons under the nomination was undoubtedly a favourable change from their previous position under Mrs Staveleys will if regard is had to the legal analysis. The interpretation of confers any gratuitous benefit which I prefer gives weight and appropriate meaning to the statutory words. At para 50, Lady Arden said that that the correct approach to section 10 was a technical approach, and not a substantive one. She considered it clear from the wording that the subsection is intended to be narrowly construed, and identified a number of features of the provision which she found influential, including that: There is no limitation on the type of benefit and there is no requirement for the gratuitous benefit to be conferred on the recipient of the property transferred by the disposition. It can be conferred on any person. It must be of some value, but that value need not be the same as the value of the property transferred. Summarising her interpretation at para 52, she said that the conferral of a benefit is to be ascertained by a legal analysis of the transaction whereby the beneficiary acquired his rights and without comparison with a prior gift. Even with the benefit of Lady Ardens analysis, I confess to some difficulty in understanding what, precisely, HMRC consider to be the correct interpretation of section 10. They accept that ordinarily an intent to confer benefit involves an element of intention to improve a persons position but, they say, the important question is Improve the recipients position in comparison to what? In identifying this as the important question, HMRC can be seen to acknowledge that a comparison of some sort is required in order to determine whether relevant benefit has been conferred for section 10 purposes (or putting it more exactly, whether the disposition was intended to confer any gratuitous benefit). However, they seek to confine the exercise to a comparison with the recipients position (i) as it is in law, and (ii) immediately before the disposition. A more generalised consideration of whether the overall effect of the disposition was intended to be favourable to, or advantageous to, the recipient of the benefit is not permitted, on their case. They also assert that a comparison with a prior gift is not permissible. In applying this formulation to the present case, HMRC seem to be adopting what I might call a return to zero approach. It is integral to their argument that there is a moment when rights under the section 32 policy have ended, but rights under the PPP have not yet begun. On their argument, at this point, immediately before rights are acquired under the PPP, the sons have nothing, having lost even the hope of benefitting that they had in relation to the section 32/will arrangement, and are totally reliant on Mrs Staveley making new arrangements to enable them to benefit from her pension fund. They necessarily benefit, therefore, from Mrs Staveley taking out the PPP rather than, for instance, simply divesting herself of the section 32 fund completely in some way, so as to ensure that nothing would find its way to Morayford/her ex husband. I am not sure whether HMRC would say that the return to zero approach applies in every case or whether it depends upon the particular facts of this case, for example upon the fact that, at the point of the transfer, the sons had no legally enforceable right to receive any death benefits via Mrs Staveleys will. There were features of Miss Wilsons submissions which suggested to me that the approach was a response to the particular facts of the case. The first of Miss Wilsons three generic questions draws in a consideration of pre existing rights in asking, What rights were created and extinguished? (my emphasis), and there were other elements in her submissions which also suggested that regard might be had to the prior position. For example she particularly noted that the sons were in no position to barter for their nomination in the Expression of Wish form, suggesting that the legal analysis might have been different if they had had pre existing rights, and that what was important was that they had no rights, only a hope of benefitting from the will. None of this is surprising, as it would surely be difficult to decide, in a complete vacuum, whether or not something is a benefit, and well nigh impossible to decide whether it is a gratuitous benefit. As some sort of comparison with a pre existing position is required in order to determine the gratuitous benefit question, even on HMRCs case, and given that HMRC accept that ordinarily an intent to confer benefit involves an element of intention to improve a persons position, the difference between the parties may not in fact be enormous. The most notable difference is that HMRC contend for a much narrower, and more technical, approach in carrying out the inevitable comparison than do the appellants, rejecting an examination of the position in substance. And of course their application of that approach to these facts produces a radically different result. In interpreting section 10, it is important to keep in mind that the question is not simply, Was a gratuitous benefit conferred on any person? The search is for what the disponor intended, and in particular for whether the disponor intended to confer any gratuitous benefit on any person. If, by the three questions that they say must be asked (see para 51 above), HMRC assert that the relevant intention is merely an intention on the part of the disponor to engage in a transaction which, as a matter of legal analysis, creates new rights which confer a benefit on a person, I cannot accept that that would be correct. It would be surprising if it were, as it would potentially prevent the application of section 10 in the sort of commercial arms length transactions where it would normally have a role. For instance, in a bad commercial bargain where the purchaser quite unknowingly pays more than an item is worth, the purchaser intends to make the purchase and, as a matter of legal analysis, the transaction confers on the vendor the right to keep the overpayment, which is a gratuitous benefit, for which he has not given value. Indeed, had this been all the intention required, it might have been argued by HMRC that there was no need to explore Mrs Staveleys thinking about the potential IHT advantages of the PPP, because the mere fact that she intended to make a disposition which, as a matter of law, carried those advantages took matters outside section 10 without more. The disponors actual intention in making the disposition is, therefore, in point. That militates against an over technical interpretation of what is meant by confer any gratuitous benefit. To my mind, the approach taken by the majority in the Court of Appeal is essentially the correct one. The words confer and benefit have to be given their ordinary meaning, and the dictionary definitions (see Newey LJs para 88, quoted at para 40 above) show that they import the idea of granting or bestowing some advantage on the recipient. Like Newey LJ, I do not think it is appropriate to speak of a disposition having been intended to confer any gratuitous benefit if the recipient of the benefit was intended to receive no more than he would have had in any event. It is necessary, therefore, to ask whether the disponor was intending, by the overall effect of the disposition, to put the recipient in a better position, or, to borrow from what Newey LJ said at para 88, putting things broadly, to ask whether the disposition was being used to improve someones position on a gratuitous basis. The exercise is not, however, simply a matter of asking the disponor whether or not he or she intended to confer benefit, as Miss Wilson submits would be all that was required under the appellants test. I go so far with HMRC as to accept that it is not possible to consider whether a disposition was intended to improve someones position without taking into account what rights the recipient had, in law, before and after the disposition. This legal context will permit a more rigorous evaluation of whether the requisite absence of intention has been shown. But this legal analysis of the rights is a factor in the evaluation, not the be all and end all of the consideration. I do not accept, for example, that the mere fact that the rights are to be enjoyed in a different legal form after the disposition means that they are necessarily a gratuitous benefit. Furthermore, I cannot accept the return to zero analysis, whereby the existing set of rights must necessarily be treated as ending immediately prior to the disposition, with a new set commencing which, in comparison to the void left by the ending of the pre existing rights, can then be described as beneficial. There must, as I see it, be more attention paid to the practical reality of the legal situation than that wholly artificial analysis permits. It would probably be unwise to attempt to define further what is meant by intended to confer any gratuitous benefit, particularly as it is unnecessary to do so to resolve the instant case. Instead, I hope that by turning to the facts of the case, I can demonstrate the way in which it seems to me the section should be interpreted. True it is that as a matter of legal analysis, the position of the sons differed as between the section 32/will arrangement and the PPP but, on its own, that takes matters nowhere. Newey LJ did not regard it as in the least obvious that (IHT apart) the sons were in practice any better placed as a result of the transfer than they had been under the section 32/will arrangement. I would endorse that view. I do not see their position as better under the PPP than previously. Just as they had no right to benefits under the section 32/will arrangement, so they had no right to benefits under the PPP. They had a hope of benefitting under the will from any death benefits, but Mrs Staveley could have changed her will at any time and they would have had no remedy if she had decided to bequeath her estate elsewhere. Similarly, if she had chosen to draw her pension during her lifetime with the result that death benefits ceased to be payable at all, they could have done nothing about it. Under the PPP, they were within the class of those in whose favour the scheme administrator could exercise its discretion, but they could not rely upon the death benefits being paid to them. Not only was there a genuine discretion (as the Upper Tribunal found), Mrs Staveley could have notified AXA of a change to her wishes, or even drawn a lifetime pension herself. The most that the sons could have required, assuming that Mrs Staveleys nomination remained as it was in the original Expression of Wish, was that the scheme administrator give proper consideration to paying the benefits to them. As Mr Rees QC for the appellants said in argument, the only material change was in the identity of the person upon whose decision receipt of the benefits depended, from Mrs Staveley in the case of the will, to the scheme administrator under the PPP. As for HMRCs submission that the sons position was improved because they were better off with the funds in the PPP, which gave them a chance of receiving the death benefits, than if Mrs Staveley had disposed of the funds elsewhere, that ignores the reality of the transfer of the pension funds from one provider to another. Mrs Staveley did not have a free hand with regard to this. There was no moment when, having drawn the funds from the section 32 policy, she was free to do what she wished with them. As Mr Rees put it in oral argument, she never had the right to take the money out of the pension wrapper, at least as the law stood at that time. Upon surrender of the section 32 policy, the policy monies were to be paid directly by the company to the receiving scheme. It is wholly artificial to introduce the return to zero approach in these circumstances. The disposition was, as the Notice of Determination identified, the transfer of funds from the section 32 policy to the PPP. What is crucial, of course, is what Mrs Staveley intended. Given that, even factoring in a legal analysis of the sons position at each stage, the disposition cannot be said to have conferred a gratuitous benefit on them, it would be surprising if it could nonetheless be concluded that there had been a failure to show the requisite absence of intention. The finding of the FTT was that Mrs Staveley did not intend to improve the sons position by transferring the funds. I would not criticise the Court of Appeals conclusion that the FTT impliedly found that, when she signed the Expression of Wish form nominating her sons, Mrs Staveley intended to benefit In the light of the above, the transfer of the funds on its own is not a transfer them (see para 44 above, and also para 103(vi) of Newey LJs judgment). However, this is not relevant to Transfer Issue 1, in my view. In the circumstances of this case, making the nomination does not amount to conferring a relevant benefit, and Mrs Staveleys benign intention in this regard cannot amount to an intention to confer gratuitous benefit. of value because section 10 applies. Transfer Issue 2 (transfer and omission as associated operations): discussion The parties rival arguments on this issue are summarised at paras 18 and 19 above. It is accepted that, as the FTT found (see para 31 above) in omitting to draw lifetime benefits under the PPP, part of Mrs Staveleys intention was to benefit her sons. The question is whether this intention colours the transfer with an intention to confer gratuitous benefit which it would not have on its own. The issue requires close consideration of the decision of the House of Lords in Macpherson, and an examination of the facts found by the FTT as to the lack of a relevant link between the transfer and the omission, the appellants arguing that the Court of Appeal went wrong in law and on the facts when holding that the benefit of section 10 was not available because the transfer and the omission formed a series of transactions and associated operations intended to confer a gratuitous benefit on the sons. In Macpherson, the House of Lords was concerned with section 20(4) of the Finance Act 1975 (FA 1975) which was in effectively identical terms to section 10, as was the FA 1975 definition, in section 44, of associated operations. Macpherson concerned property held in a discretionary settlement, the primary objects of the settlement being Mr Robarts and his family. Valuable pictures were included in the settled property. The trustees had an agreement with Mr Robarts, whereby he undertook the custody, care and insurance of the pictures and agreed to pay 100 a year for his enjoyment of them. The agreement was terminable on three months notice by either side. Some years later, in 1977, the agreement was varied, including by the right of termination on notice being removed and replaced with a fixed date in 1991 for the expiry of the agreement (subject only to the trustees being able to terminate sooner in the event of a serious breach of the agreement by Mr Robarts). The next day the trustees executed a deed of appointment appointing the pictures, subject to and with the benefit of the varied agreement, on trusts under which Mr Robarts son took a protected life interest in possession. The issue was whether capital transfer tax was payable in respect of the 1977 variation which, by deferring the date on which the pictures could be delivered to an open market purchaser, had diminished their value. The transaction would attract capital transfer tax unless it was such that, were the trustees beneficially entitled to the settled property, it would not be a transfer of value. That depended on section 20(4). The evidence was that the trustees had concluded that they ought not to exercise the power of appointment in favour of the son unless the original agreement was first varied, since Mr Robarts was not willing to continue to house the pictures on the original terms after such an appointment. Counsel for the trustees accepted that the variation and the appointment were associated operations but contended that the appointment was nevertheless not a relevant associated operation. Counsel for the Revenue contended that as a matter of law the transaction which had to be looked at in section 20(4) was one which included a series of transactions and associated operations and, as a matter of fact, based on the trustees reason for varying the original agreement, the 1977 agreement was made in such a transaction. Lord Jauncey of Tullichettle noted that the definition of associated operations was capable of covering a multitude of events affecting the same property which might have little or no apparent connection between them, but that counsel for the Revenue rightly accepted that some limitation must be imposed. As it is central to the argument before us, it is necessary to set out in full, the following passage in which Lord Jauncey considered the ambit of section 20(4) (p 175G): If the extended [section 44] meaning of transaction is read into the opening words of section 20(4) the wording becomes: A disposition is not a transfer of value if it is shown that it was not intended, and was not made in a transaction including a series of transactions and any associated operations intended, to confer any gratuitous benefit So read it is clear that the intention to confer gratuitous benefit qualifies both transactions and associated operations. If an associated operation is not intended to confer such a benefit it is not relevant for the purpose of the subsection. That is not to say that it must necessarily per se confer a benefit but it must form a part of and contribute to a scheme which does confer such a benefit. In this case it is common ground that the appointment conferred a gratuitous benefit on [the son]. It is clear that the appointment would not have been made if the 1970 agreement had not been varied by that of 1977. It follows that the 1977 agreement was not only effected with reference to the appointment but was a contributory part of the scheme to confer a benefit on [the son]. So viewed there can be no doubt that the 1977 agreement, being the disposition for the purposes of section 20(4), was made in a transaction, consisting of the agreement and the appointment, intended to confer a gratuitous benefit on [the son]. The trustees had thus failed to satisfy the test in section 20(4) and tax was payable on the variation agreement. It is not suggested that we should do other than adopt Lord Jaunceys interpretation of section 20(4) in our construction of section 10. However, there is a significant difference of opinion between the parties as to what Lord Jaunceys interpretation actually was, and how it should be applied to the present case. For the appellants, Mr Rees accepts that the omission falls within the wide definition of associated operations, but says that it is, nonetheless, not relevant in identifying a transaction in the wider sense for section 10 purposes. To be relevant, in his submission, a step (to adopt an inexact but useful shorthand covering transactions in the narrow sense and associated operations) must not only form part of and contribute to a scheme that confers a gratuitous benefit, but must also, itself, have been intended to confer a gratuitous benefit. That, he submits, is what Lord Jauncey was saying. Miss Wilson, on the other hand, says that there is no need for each individual step to be intended to confer gratuitous benefit. All that is required for a step to be relevant is that it forms part of and contributes to a scheme which confers a gratuitous benefit. Here, in her submission, the scheme is the gift of the death benefits to the sons, to which the investment in the PPP and the omission both contribute. Without the investment of the funds in the PPP, there would have been no death benefit to give to the sons. There might initially appear to be support for the appellants interpretation of Lord Jaunceys speech in the following passage (see para 70 above for the full quotation): the intention to confer gratuitous benefit qualifies both transactions and associated operations. If an associated operation is not intended to confer such a benefit it is not relevant for the purpose of the subsection. (My emphasis) Lord Jauncey might be taken to be saying, here, that each step in any scheme must be intended to confer benefit, otherwise it is irrelevant. However, I do not think that can be what he meant. I agree with Miss Wilson, who submits that to understand Macpherson correctly, one must appreciate that it was there conceded by the Revenue that the variation agreement was not intended to confer gratuitous benefit and was such as might be expected in a commercial transaction (see p 173G). The variation agreement was, of course, the focus of the dispute in that case. Unless it could be linked with the appointment in favour of the son the following day, it would have escaped tax by (putting it loosely) the application of section 20(4). The Revenue, however, satisfied their Lordships that the agreement could be bolted together with the next days appointment, notwithstanding that the variation agreement was not attended by an intention to confer gratuitous benefit. It was held to be part of a scheme which was intended to confer gratuitous benefit, and therefore to be a transfer of value and subject to capital transfer tax. That scheme was made up of one element which was not attended by gratuitous intent (the variation), and one element (the appointment) which was. If Lord Jauncey had intended to say that a scheme can only comprise elements which are, themselves, attended by a gratuitous intent, there would have been no scope for taking the variation and the appointment together in this way. Accordingly, I would reject the argument that a step can only be relevant if it is, itself, taken with an intention to confer gratuitous benefit. Nevertheless, it is clear that Lord Jauncey considered, in line with the Revenues concession, that not everything which could be described as an associated operation would be material for section 20(4) purposes. The fact that the operation did not itself confer a benefit did not rule it out, but, to be relevant, it must form a part of and contribute to a scheme which does confer such a benefit. Lord Jauncey expressed himself here in terms of the scheme conferring a benefit, rather than it also being intended to confer a benefit. However, reading his speech as a whole, I would be inclined to say that he meant that the scheme had to be one actually conferring, and intended to confer, such a benefit. Just before he said this, he had referred to the intention to confer gratuitous benefit qualifying both transactions and associated operations. And though referring here to a scheme which does confer such a benefit, in the next paragraph (quoted at para 70 above), he referred to the conceded fact that the appointment conferred a gratuitous benefit on the son and the fact that that appointment would not have been made without the variation, and then said that it followed that the agreement was not only effected with reference to the appointment but was a contributory part of the scheme to confer a benefit (my emphasis). In my view, this passage, and in particular the reference to a scheme to confer a benefit shows that Lord Jauncey saw it as a necessary feature that the scheme should be one intended to confer a gratuitous benefit. The alternative scenario with which Lord Jauncey dealt in the following paragraph (p 176D) perhaps provides a little further help as to what he had in mind as to the workings of the requirement that the step be a contributory part of the scheme. In the alternative scenario, the agreement took place after the appointment. On Lord Jaunceys analysis, whilst associated with the appointment in accordance with the definition in section 44, it would not have been a relevant associated operation. What he saw as important, in that situation, was that, as a matter of fact, the agreement would have contributed nothing to the conferment of the gratuitous benefit which had already been effected by the appointment. Alternatively, he would have ruled it out on the basis that the transaction which was intended to confer gratuitous benefit had been completed before the agreement had been entered into, so that although it was an associated operation, it could not be said to have been made in that transaction. What remains is to consider how the requirement that associated operations form a part of and contribute to a scheme applies in the present case. It may help to commence that consideration by recalling that the scheme in the Macpherson case involved the variation agreement, on commercial terms, (which might be likened to the transfer to the PPP in this case), and the appointment, which conferred, and was intended to confer, gratuitous benefit (which might be likened to the omission in this case). As in Macpherson, so in the present case, the two steps are potentially relevant associated operations. In Macpherson, they were linked as part of the scheme to benefit the son and therefore reliance could not be placed on the section 20(4) exemption. But do the two steps here form a part of and contribute to a scheme which is intended to confer gratuitous benefit? Before moving to consider this, it might be helpful to look in a bit more detail at the circumstances of the Macpherson case. Paragraph 17 of the affidavit of the trust solicitor played an important part in the resolution of the dispute. Lord Jauncey quoted from it, at p 170H, as follows: It further appears from paragraph 17 of the affidavit of the trust solicitor that for reasons which it is not necessary to consider, the trustees: came to the conclusion that they ought not to exercise their power of appointment so as to give Mr David Robarts eldest son Timothy an interest in possession in the settled pictures unless the terms of the 1970 custody agreement were first reviewed and varied, since Mr David Robarts was not willing to continue, after such an appointment, to house the pictures on the terms of the 1970 custody agreement in its original form. This evidence from the trust solicitor was an important part of the Revenues case, as can be seen from what Lord Jauncey said at p 175C: Counsel for the Crown contended that as a matter of law the transaction which had to be looked at in section 20(4) was one which included a series of transactions and associated operations and that as matter of fact the disposition, being the 1977 agreement, was made in such a transaction. Counsel accepted that the terms of paragraph 17 of the affidavit of the trust solicitor were essential to the factual part of this proposition. As I see it, the crux of paragraph 17 of the affidavit was that the power of appointment would not have been exercised unless the 1970 agreement was first varied. The Revenues contention, as set out by Lord Jauncey, was that as [a] matter of fact, the 1977 agreement (by which that desired variation was achieved) was made in a transaction of the series of transactions and associated operations variety. And the terms of paragraph 17 of the affidavit were accepted to be essential to a conclusion that there was, indeed, in fact, a series comprising the 1977 agreement and the appointment. On the facts of the Macpherson case, it can be seen that the two steps in the series were clearly linked by a common intention. The present case is not so straightforward. Here, the FTT found that whatever the intent behind the omission, it was not linked with the transfer to the PPP in Mrs Staveleys mind (see para 32 above). In part this was because her intent in making the transfer was solely to break the connection with Morayford, and in part it was because her decision not to take lifetime benefits predated, and was independent of, the decision to transfer. The Court of Appeal considered the FTT to be mistaken in so finding (see para 46 above). Its conclusion was that, although Mrs Staveley made the transfer out of a desire to sever ties with Morayford, the only reasonable conclusion was that she also intended it to be the means by which the death benefits could be passed to her sons. The appellants challenge to the Court of Appeals approach to Transfer Issue 2 is put, in significant part, upon the basis that it is necessary for each transaction/associated operation to be qualified by an intent to confer gratuitous benefit, a proposition which I would reject for the reasons I have given earlier. But it is also submitted that, in order to reach its conclusion, the Court of Appeal interfered impermissibly with the FTTs findings of fact, failing to abide by the limitations imposed by Edwards v Bairstow [1956] AC 14. Furthermore, the Court of Appeals reasoning is, the appellants say, impossible to reconcile with its acceptance that the FTT was entitled to conclude that the transfer to the PPP was not of itself intended to confer a gratuitous benefit. In the appellants submission, the FTTs finding that the omission was not linked with the transfer should be restored, and it follows that the transfer was not part of a relevant scheme. HMRC respond with two alternative arguments concerning the FTTs findings of fact. First, they say that the appellants miscast what the FTT found. They point to the FTTs finding at para 16 (see para 26 above) about the importance Mrs Staveley attached to her sons benefitting from her estate. They also point out that the FTT found that the decision not to take lifetime benefits was a continuing decision, intended to benefit the sons, made in June 2006 and unchanged until her death. Whilst Mrs Staveley chose a different mechanism for her gift of death benefit to the sons, moving the funds to the PPP, the PPP was nevertheless intended to be the mechanism for the intended gift and, in their submission, linked with the omission as part of a scheme intended to confer gratuitous benefit. Secondly, and in the alternative, HMRC submit that in so far as the FTT ruled out any relevant link between the transfer and the omission, its finding was wrong, as the only rational conclusion was that in making the transfer into the PPP, as well as seeking to exclude her husband, Mrs Staveley intended to facilitate the gift to her sons of the death benefits. I have not found it at all easy to determine how the law should be applied to the facts in relation to Transfer Issue 2. In part this is because, quite exceptionally, the matter has reached this court with the factual matrix still the subject of significant debate. However, it is also because both sides arguments have force. The result seems to me to depend upon the degree to which one isolates Mrs Staveleys investment in the PPP from its context. Let us suppose that Mrs Staveley was taking out the PPP as her first investment in a pension. The investment was made at a time when (as the FTT found) she held a settled intention that, in order to confer a greater financial benefit on her sons, she would not draw lifetime benefits. The nomination of her sons in the Expression of Wish form shows that this was actively in her mind at the time of the transfer to the PPP. The PPP was the vehicle which would generate death benefits to pass on. It could properly be described, in my view, as a means by which the death benefits could be passed to them (see Newey LJ para 103(v), quoted at para 46 above). The second element in achieving that objective was that Mrs Staveley would not draw lifetime benefits. So far, the analysis supports a finding that the investment in the PPP and the omission to draw lifetime benefits were part of a scheme to confer benefit. But the PPP was not a first investment in a pension scheme. The funds were already invested in the section 32 policy, and Mrs Staveleys essential scheme, of not drawing a lifetime pension in order to benefit her sons by leaving them her death benefits, could have been achieved without any change of pension policy. Leaving to one side inheritance tax saving, upon which HMRC have not sought to rely at this stage of the analysis, and also the vexed question of Morayford, there was no need to transfer the funds at all and no benefit in doing so. The circumstances differ materially, therefore, from those in Macpherson. In Macpherson, the two elements under consideration were linked in the scheme by a common intention the trustees would not have made the appointment if the variation had not taken place and the scheme was one intended to confer, and actually conferring, gratuitous benefit on the son by the appointment of the pictures. The variation agreement therefore satisfied Lord Jaunceys requirements that it form a part of and contribute to a scheme which does confer a [gratuitous] benefit (my emphasis) and is intended to confer a gratuitous benefit. In the present case, the transfer to the PPP and the omission to take lifetime benefits were not, in fact, relevantly linked in a scheme. The omission had already been decided upon whilst the funds were in the section 32 policy and the sons could have benefitted from it without any move to the PPP. Moving the funds from one policy to the other (the transfer, focused upon by the Notice) was not a contributory part of the scheme to confer gratuitous benefit on the sons; it was a step taken solely to ensure that Morayford could not benefit, as the FTT were entitled to find on the very unusual evidence in this case. The omission and the transfer were not therefore, in my view, relevantly associated. I would therefore allow the appeal in relation to Transfer Issue 2. Section 3(3) and the omission: discussion It is common ground that Mrs Staveleys estate was diminished by her omission to exercise her right to lifetime benefits under her pension and that her sons received the resulting death benefits some months after her death. The dispute is as to whether it can be said that the value of another persons estate is increased by her omission, within the meaning of section 3(3) (as amended by section 156 of, and paragraph 8 of Schedule 20 to, the Finance Act 2006). The appellants say that it cannot because there is not a sufficient connection between the omission and the increase in value in the sons estates. They argue that for matters to come within section 3(3) the omission has to be the immediate cause of the increase in the value of anothers estate, with there being immediacy both in terms of timing and in terms of cause and effect. They point to various linguistic features of the section, notably the words increased by, and the use of the present tense (the value of a persons estate is diminished, and the value of another persons estate is increased). On their submission, the section will only apply where the omission directly causes the increase, not where it is purely something but for which the increase would not have taken place. They bolster their argument by referring to potential practical problems if section 3(3) applies in circumstances such as the present, given that it was not until six months after Mrs Staveleys death that the scheme administrator exercised the discretion in the sons favour. This shows, they say, that those who have to deliver an IHT account will not know for an indefinite period whether or not the deceaseds omission is to be treated as a disposition for IHT purposes. Consideration of this issue must proceed upon the basis that there was a genuine discretion to be exercised by the scheme administrator here. It was, of course, a discretion which need not have been exercised in the sons favour, there being others included in the class provided by the scheme rules. Notwithstanding this, I would conclude that the provisions of section 3(3) are satisfied and the omission is therefore a deemed disposition. I do not consider there is any mandate to import a temporal requirement into the subsection, requiring an immediate temporal link between the reduction in one estate and the increase in the other. There is a correlation of substance between the reduction and the increase, in that one results from the other, but they need not occur at precisely the same time. The use of the present tense upon which the appellants rely, does not dictate such a requirement. The present tense is used to identify two separate states of affairs which have to exist (is diminished and is increased by) but it does not follow that they have to exist at the same time or, putting it more exactly, one immediately following the other. That is not to say that questions of timing will be irrelevant to a determination of whether the subsection is satisfied. I agree with HMRCs submission that, as with all questions of causation, the evaluation of whether another persons estate is increased by the omission to exercise a right requires consideration of all the facts and circumstances. I turn therefore to look at the wider causation argument, bringing in the scheme administrators discretion. In this case, the omission yielded the death benefits that, in fact, increased the sons estates and I do not see the limited discretion of the scheme administrator as breaking the chain connecting the two events. To say that it did would be to adopt a narrow and legalistic approach to section 3(3) which does not seem to me to be appropriate. Putting it another way, the omission was the operative cause of the increase. As Newey LJ observed (para 109, see para 47 above), it may be that the increase in the sons estates could also be said to be brought about by the exercise of the administrators discretion, but that does not preclude a finding that they were increased by the omission. My view is reinforced by the fact that section 3(3) requires only that another persons estate is increased. It is not concerned with the identity of the other person. The benefits that were generated by Mrs Staveleys omission to draw her lifetime pension were undoubtedly going to increase another persons estate, even if the scheme administrator had not exercised its discretion in favour of the sons, but I would therefore dismiss the appeal in relation to the omission. instead chosen others from the list within the scheme rules. To my mind, this adds weight to an interpretation of the subsection which results in the omission in this case being deemed to be a disposition, and it deals also with the practical problem which the appellants suggested arose. The persons liable for tax might not have been identifiable, but it would have been clear from the date of Mrs Staveleys death that a charge to tax would arise by virtue of the omission. Overall conclusion It follows from the above that, in my view, the Court of Appeal properly found that Mrs Staveleys omission to draw lifetime benefits under the PPP should be treated as a disposition by virtue of section 3(3) IHTA, but that the transfer of funds from the section 32 policy to the PPP, whether taken alone or in the context of the omission, was not a transfer of value because section 10 IHTA applies. LORD HODGE: (dissenting in part) (with whom Lord Sales agrees) I am very grateful to Lady Black for her clear judgment. I agree with her on Transfer Issue 1 and on the question of section 3(3) of the Inheritance Tax Act 1984 (IHTA) and the omission. I have come to a different conclusion on Transfer Issue 2 and set out briefly the reasons for my view. The parties agreed and I accept that the law had been correctly stated by the House of Lords in Inland Revenue Comrs v Macpherson [1989] AC 159 (Macpherson). The case involved the interpretation and application of sections 20(4) and 44 of the Finance Act 1975 (FA 1975), which were substantially identical to sections 10 and 268 of the IHTA. Like Lady Black, I consider that the decision of the House of Lords requires close consideration. Macpherson was concerned with a discretionary settlement which had as its primary objects Mr Robarts and his family. The settled property came to include valuable pictures which were kept in houses owned by Mr Robarts and his wife. In 1970 the trustees of the settlement entered into an agreement with Mr Robarts (the 1970 agreement) whereby he undertook the custody, care and insurance of the pictures and to pay 100 per year for the enjoyment of them. Either side could terminate the agreement on three months notice. On 29 March 1977 the trustees and Mr Robarts entered into a further agreement (the 1977 agreement) to vary the 1970 agreement by reducing his annual payment and limiting his liability in respect of the insurance and loss of the pictures. The right to terminate the agreement on three months notice was removed and replaced with a provision continuing the 1970 agreement (as so amended) in force until 1 April 1991, unless Mr Robarts committed a serious breach of the agreement. On the following day, the trustees executed a deed of appointment appointing the pictures, subject to the agreements, on trusts under which Mr Robarts son, Timothy, took a protected life interest in possession. The trust solicitor gave evidence by affidavit that the trustees had concluded that they ought not to exercise their power of appointment to give Mr Robarts son an interest in possession in the pictures unless the 1970 agreement was first varied, because Mr Robarts was not willing to continue to house the pictures after such an appointment on the terms set out in the 1970 agreement. The 1977 agreement diminished the value of the pictures because it deferred the date at which they could be delivered to the open market. The Inland Revenue Commissioners (IRC) therefore sought to charge capital transfer tax in respect of the 1977 agreement. The disputed question was whether the 1977 agreement was not a transfer of value because it was a disposition which was not made in a transaction intended, to confer any gratuitous benefit on any person. Section 20(4) of the FA 1975, now section 10(1) of the IHTA, therefore occupied centre stage. Counsel for the trustees accepted that the 1977 agreement and the appointment were associated operations within the wide definition in section 44 of the FA 1975 (section 268 of the IHTA) but submitted that the only transaction was the 1977 agreement itself. The appointment was therefore not a relevant associated operation. Counsel for the IRC contended that a disposition could be made in a transaction which (under section 44 of the FA 1975) included a series of transactions and associated operations. The 1977 agreement was made in such a transaction because of the intention of the trustees recorded in the affidavit of the trust solicitor. The House of Lords did not accept the trustees submission. Lord Jauncey of Tullichettle, who gave the leading judgment, rejected the narrow interpretation of section 20(4). He held that the 1977 agreement was a disposition for the purposes of section 20(2) (now section 3(1) of the IHTA 1984) and section 20(4). He stated (p 174D E) that section 20(4) envisaged: two types of situation in which a disposition may not be a transfer of value, namely: (1) where the disposition stood alone and was not intended to confer any gratuitous benefit, and (2) where the disposition was not made in a transaction intended to confer any gratuitous benefit. He continued (p 174F G): In the second case the disposition would form one of a number of events of which the sum constituted the transaction which was relevant to intent. There is nothing in section 20(4) to require that the event, to use a neutral word, which results in the devaluation of the settled property must be looked at in isolation from all other events for the purposes of the subsection. If an individual took steps which devalued his property on Monday with a view to making a gift thereof on Tuesday he would fail to satisfy the requirements of section 20(4) because the act of devaluation and the gift would be considered together. If trustees in the circumstances envisaged in paragraph 6(3) took steps which devalued the settled property with the object of making subsequent distributions thereof why should the two events be considered as independent of one another? Neither law nor logic would suggest that they should. Lord Jauncey acknowledged that, in order to determine whether the 1977 agreement was made in a transaction, within the extended meaning of section 20(4) (ie a series of transactions and any associated operations), it was necessary to consider what were associated operations in section 44. He noted that the definition in that section was extremely wide and was capable of covering a multitude of events affecting the same property which might have little or no apparent connection between them (p 175D). He then set out how a limitation should be imposed on the concept of associated operations for the purpose of determining what constituted a transaction for the purposes of section 20(4). He stated (p 175G 176C): If the extended meaning of transaction is read into the opening words of section 20(4) the wording becomes: A disposition is not a transfer of value if it is shown that it was not intended, and was not made in a transaction including a series of transactions and any associated operations intended, to confer any gratuitous benefit So read it is clear that the intention to confer gratuitous benefit qualifies both transactions and associated operations. If an associated operation is not intended to confer such a benefit it is not relevant for the purpose of the subsection. That is not to say that it must necessarily per se confer a benefit but it must form a part of and contribute to a scheme which does confer such a benefit. In this case it is common ground that the appointment conferred a gratuitous benefit on Timothy. It is clear that the appointment would not have been made if the 1970 agreement had not been varied by that of 1977. It follows that the 1977 agreement was not only effected with reference to the appointment but was a contributory part of the scheme to confer a benefit on Timothy. So viewed there can be no doubt that the 1977 agreement, being the disposition for the purposes of section 20(4), was made in a transaction, consisting of the agreement and the appointment, intended to confer a gratuitous benefit on Timothy. (Emphasis added) Lord Jauncey then dealt with a submission by counsel for the trustees that it would be anomalous if the 1977 agreement were a relevant associated operation because double taxation would occur if the appointment had preceded the 1977 agreement. He rejected that submission for two reasons (p 176D E): first because the 1977 agreement would have contributed nothing to the conferment of the gratuitous benefit which had already been effected by the appointment, and alternatively, because the transaction intended to confer the gratuitous benefit had already been completed before the agreement was in place. In my view, Lord Jauncey limited the type of transaction or series of transactions and associated operations which were relevant for the purpose of section 20(4) (now section 10(1) of the IHTA) by requiring that the disposition in question formed part of and contributed to the transaction (or in his words the scheme) which conferred a gratuitous benefit. In Macpherson the transaction intended to confer a gratuitous benefit was put into effect when the appointment was made on the day following the execution of the 1977 agreement. On the facts of that case (viz the evidence of the trust solicitor which IRCs counsel accepted was critical to their case and to which Lady Black refers in paras 80 and 81 above), that appointment would not have been made unless the 1970 agreement had been varied. In other words, the intended result of the scheme to benefit Timothy (which I will call B) was achieved by the appointment itself but that appointment would not have happened without the prior step (which I will call A) which was the 1977 agreement. But Lord Jauncey did not set up a requirement that the disposition (A) had to be a necessary component of the scheme to achieve the result (B) but merely that A was effected with reference to the appointment and was a contributory part of the scheme to achieve the result B. In Mrs Staveleys case, she had formed an intention, some time before she decided to instruct the transfer, to use her pension pot in the section 32 policy to confer a gratuitous benefit on her sons by omitting to take lifetime benefits. If she did not take such benefits, the trustees on her death would have paid a lump sum to her estate by way of death benefit. The holding of the section 32 policy and the continued omission to take lifetime benefits were thus a transaction (or scheme) to confer gratuitous benefit on her sons. That transaction (or scheme) would not have been completed until she died: until then, her sons had no benefit. In this context the result of the scheme to confer benefit on her sons (B) would be achieved if she retained the section 32 policy and took no benefits (A). Because she did not wish her ex husband to benefit from the return of any surplus in her pension fund to Morayford Ltd, she instructed the transfer of her pension fund to the PPP and nominated her two sons to be considered by the pension scheme administrator as equal recipients of the death benefit. Before and after the transfer, the pension fund was earmarked to confer benefit on her sons. By so acting she created an alternative mechanism by which to give effect to her intention to confer that gratuitous benefit. Mrs Staveley could have prevented Morayford Ltd from benefitting from the surplus in her fund by other means. But she did not do so. The transfer and the nomination in favour of her sons were, on the FTTs findings of fact, made when Mrs Staveley had a continuing intention to confer that benefit on her sons. In other words, by replacing step A (the combination of the holding of section 32 policy and the intention not to take life benefits) with step C (the combination of the transfer to the PPP, the nomination and the same intention) she created an alternative means of achieving the result B. These circumstances clearly differ from the factual circumstances in Macpherson, as the transfer to the PPP was not a necessary step to achieve the result B because of the pre existence of the section 32 policy. Where I find myself in respectful disagreement with Lady Black is that (in para 88 above) she sees as a critical distinction from Macpherson the fact that in this case the sons could have benefitted from [the section 32 policy] without any move to the PPP. That distinction rests on Mrs Staveleys ability to achieve the result B before the transfer, with the result that the transfer was not necessary. It excludes the possibility of the transfer to the PPP being part of a scheme to achieve result B because it was not needed to achieve that result. That is to impose a test of necessity in relation to step C, which Macpherson does not support. In my view, on the facts found by the FTT, the transfer itself was not motivated by the wish to give gratuitous benefit to her sons but it and the nomination were nonetheless referable to and a contributory part of a substituted scheme to enable them to receive the death benefit. That fails to meet the requirements of section 10(1) of the IHTA. I therefore agree with the reasoning of Newey LJ in para 103 of his judgment. I conclude that the Court of Appeal were correct to find an error of law in the FTTs determination on Transfer Issue 2. I would hold that the transfer and nomination taken with the omission were a transfer of value because they do not meet the requirements of section 10 of the IHTA. I would have dismissed the appeal on the section 10 ground also. |
This is a judgment on (i) an appeal brought by the Secretary of State for Work and Pensions, against the Court of Appeals decision in favour of Ms Caitlin Reilly and Mr Jamieson Wilson, that the Jobseekers Allowance (Employment, Skills and Enterprise Scheme) Regulations (SI 2011/917) (the 2011 Regulations), purportedly made under section 17A of the Jobseekers Act 1995 (the 1995 Act), do not comply with the requirements of that section, and (ii) a cross-appeal brought by Miss Reilly and Mr Wilson against the Court of Appeals rejection of two other attacks they made on the way in which the Secretary of State had caused the Employment, Skills and Enterprise Scheme (the Scheme) to be operated. The Secretary of States appeal is complicated by the fact that, since the Court of Appeals judgment was handed down, (i) the 2011 Regulations have been repealed and replaced by the Jobseekers Allowance (Schemes for Assisting Persons to Obtain Employment) Regulations 2013 (SI 2013/276) (the 2013 Regulations), and (ii) the Jobseekers (Back to Work Schemes) Act 2013 (the 2013 Act) has come into force, and its effect is agreed to be to validate the 2011 Regulations retrospectively. We deal with this aspect in paras 33-41 below. We will begin by describing the relevant statutory and regulatory provisions as they stood in 2011, and will then summarise the relevant facts relating to Miss Reilly and to Mr Wilson; after explaining the effect of the decision of the courts below, we will then turn to the effect of the 2013 Act and Regulations; after that, we will address the four sets of issues in turn, and will end by summarising our conclusions. The relevant statutory and regulatory provisions in 2011 According to its long title, one of the purposes of the 1995 Act was to provide for a jobseeker's allowance and to make other provision to promote the employment of the unemployed. Regulations made in 1996 included (i) provision for the circumstances in which the allowance was to be paid, (ii) requirements as to availability for employment, actively seeking employment, a Jobseekers Agreement, and (iii) sanctions in the event of non-compliance. There were subsequently many amendments to and additions to these Regulations. Section 1 of the 1995 Act provides, so far as material: (1) An allowance, to be known as a jobseekers allowance, shall be payable in accordance with the provisions of this Act. (2) Subject to the provisions of this Act, a claimant is entitled to a jobseeker's allowance if he- (a) is available for employment; (b) has entered into a jobseekers agreement which remains in force; (c) is actively seeking employment; . (e) is not engaged in remunerative work.. Sections 17A and 17B were added to the 1995 Act by section 1(2) of the Welfare Reform Act 2009. Section 17A of the 1995 Act (section 17A) is headed Schemes for assisting persons to obtain employment: work for your benefit schemes etc, and it provides, so far as relevant: (l) Regulations may make provision for or in connection with imposing on claimants in prescribed circumstances a requirement to participate in schemes of any prescribed description that are designed to assist them to obtain employment. (2) Regulations under this section may, in particular, require participants to undertake work, or work-related activity, during any prescribed period with a view to improving their prospects of obtaining employment. (5) Regulations under this section may, in particular, make provision - (a) for notifying participants of the requirement to participate in a scheme within subsection (l); (b) for securing that participants are not required to meet the jobseeking conditions or are not required to meet such of those conditions as are specified in the regulations; (d) for securing that the appropriate consequence follows if a participant has failed to comply with the regulations and it is not shown, within a prescribed period , that the participant had good cause for the failure; (6) In the case of a jobseekers allowance , the appropriate consequence for the purposes of subsection (5)(d) is that the allowance is not payable for such period (of at least one week but not more than 26 weeks) as may be prescribed. Section 17B(1) of the 1995 Act entitles the Secretary of State to do certain things [f]or the purposes of, or in connection with, any scheme under section 17A(1), including (a) mak[ing] arrangements for the provision of facilities and (b) provid[ing] support for arrangements made by other persons for the provision of facilities. Section 35 of the 1995 Act provides that, at least in the context of section 17A, prescribed means specified in or determined in accordance with regulations. The circumstances in which a jobseekers allowance is not payable, include, according to section 19(5), cases where the claimant: (a) has, without good cause, refused or failed to carry out any jobseeker's direction which was reasonable, having regard to his circumstances; (b) has, without good cause (i) neglected to avail himself of a reasonable opportunity of a place on a training scheme or employment programme; (ii) after a place on such a scheme or programme has been notified to him by an employment officer as vacant or about to become vacant, refused or failed to apply for it or to accept it when offered to him; (iii) given up a place on such a scheme or programme; or (iv) failed to attend such a scheme or programme on which he has been given a place... The 2011 Regulations were purportedly made under section 17A, and they came into force in May 2011. Regulation 2 provided that the Scheme means the Employment, Skills and Enterprise Scheme and then went on to state: The Employment, Skills and Enterprise Scheme means a scheme within section 17A (schemes for assisting persons to obtain employment: work for your benefit schemes etc) of the [1995] Act known by that name and provided pursuant to arrangements made by the Secretary of State that is designed to assist claimants to obtain employment or self-employment, and which may include for any individual work-related activity (including work experience or job search). Regulation 3 of the 2011 Regulations provided: The Secretary of State may select a claimant for participation in the Scheme. Regulation 4 of the 2011 Regulations stated: (1) Subject to regulation 5, a claimant (C) selected under regulation 3 is required to participate in the Scheme where the Secretary of State gives C a notice in writing complying with paragraph (2). (2) The notice must specify - (a) that C is required to participate in the Scheme; (b) the day on which C's participation will start; (c) details of what C is required to do by way of participation in the Scheme; (d) that the requirement to participate in the Scheme will continue until C is given notice by the Secretary of State that Cs participation is no longer required ; (e) information about the consequences of failing to participate in the Scheme . Regulation 5 of the 2011 Regulations set out the circumstances in which the requirement to participate in a scheme ceases. Regulation 6 provided: A claimant who fails to comply with any requirement notified under regulation 4 is to be regarded as having failed to participate in the Scheme. Regulation 7 provided an opportunity for a claimant who fails to participate in the Scheme to show good cause for that failure. The consequences of failure to participate in the Scheme were set out in regulation 8, and they are often known as benefits sanctions: (1) Where the Secretary of State determines that a claimant (C) has failed to participate in the Scheme, and C has not shown good cause for the failure in accordance with regulation 7, the appropriate consequence for the purpose of section 17A is as follows. (2) In the case of a jobseeker's allowance . the appropriate consequence is that Cs allowance is not payable for the period specified in paragraphs (4) to (7) (the specified period). (4) The period is 2 weeks in a case which does not fall within paragraph (6) . (6) [T]he period is 26 weeks where - (a) on two or more previous occasions the Secretary of State determined that Cs jobseeker's allowance was not payable or was payable at a lower rate because C failed without good cause to participate in the Scheme, and (b) a subsequent determination is made no more than 12 months after the date on which Cs jobseeker's allowance was not payable or was payable at a lower rate following the most recent previous determination. The facts: general In March 2012, jobseekers allowance was being received by just over 1.6 million people aged over 18, of whom around 357,000 had been in receipt of the allowance for more than a year. About 480,000 were aged under 24, of whom 55,000 had been in receipt of the allowance for more than a year. Forecast expenditure on the allowance in the year 2011/12 was just under 5bn. In a nutshell, the amendments to the 1995 Act effected in 2009, including section 17A, envisaged that regulations would (i) require participants to undertake unpaid work, or work-related activity, during a prescribed period, to improve their prospects of employment and (ii) impose sanctions (in particular, loss of the allowance) on those who without good cause failed to participate in such schemes. Those regulations materialised as the 2011 Regulations, which came into force on 20 May 2011, and, as explained above, provided for the Scheme. A variety of work for your benefit programmes have been made under the 2011 Regulations. The present appeals concern two such schemes. The sector-based work academy scheme (sbwa scheme) was launched in August 2011, and is administered by advisers at social security offices, or Jobcentres, which, until 2011, were run by an executive government agency under the name of Jobcentre Plus. The stated target of the sbwa scheme is those who do not have any serious barriers to finding work, but who would benefit from a short period of work-focused training and work-experience placement linked to a genuine job vacancy. The Community Action Programme (CAP) was launched in November 2011, and its stated aim is to help very long-term unemployed claimants back into work. It provides up to six months work experience, and is administered by private companies, one of which is called Ingeus Ltd (Ingeus), most of whose recruits are referred or identified by Jobcentres. The facts relating to Miss Reilly and Mr Wilson Miss Reilly was born in 1989 and first claimed jobseekers allowance in August 2010. Three months later, she got a paid work experience placement at a museum pursuant to a Government scheme, and was paid the minimum wage subsidised by that scheme. When that placement ended, she continued to work voluntarily at the museum, with a view to pursuing a career in museums. She has always complied with the jobseeking conditions, and has been committed to seeking employment. Miss Reilly is no longer claiming jobseekers allowance as she has obtained paid employment at a supermarket. From 31 October 2011, Miss Reilly participated, albeit unwillingly, in the sbwa scheme. This involved a weeks training, a two-week unpaid work placement at a Poundland store, and a further weeks training. She participated in the scheme because her Jobcentre adviser informed her that her participation in the scheme was mandatory. That was wrong: it is not mandatory to take part in the sbwa scheme, although once a claimant accepts a place, she must complete the scheme. She asserts that had she been correctly informed about the scheme, she would have exercised her right not to participate in it. Contrary to regulation 4 of the 2011 Regulations (regulation 4), Miss Reilly did not receive any written notice concerning her participation in the sbwa scheme. Mr Wilson was born in 1971, and worked as a qualified Heavy Goods Vehicle driver from 1994 to 2008, since when he has been unemployed. Mr Wilson started receiving jobseekers allowance in 2009. In August 2011 his Jobcentre adviser told him that in order for him to continue to receive his jobseekers allowance he had to take part in a new programme that was under trial in his area. He was given a letter stating that if he did not find a job within three months he would be referred to the CAP which would involve up to six months of near full-time work experience with additional weekly job search support requirements. The letter informed him that a refusal to participate could result in the loss of his benefit, and that, if he had any questions, he should ask his personal adviser. At a meeting in September 2011, Mr Wilsons adviser gave him another letter stating that if he had not found a job in two months, the CAP would commence. Again, it informed him that he might lose his benefit if he did not participate in the CAP. In October 2011, at another meeting with his adviser, he was given a letter to similar effect with the period of one month being specified as the deadline. In November 2011, Mr Wilson was selected to participate in the CAP. Once a person is selected in this way, participation in the CAP scheme is mandatory. On 16 November 2011, Mr Wilson received a letter from Jobcentre concerning the CAP scheme, which stated, inter alia: At your interview today, your adviser explained that you had to take part in the [CAP] from 16/11/11. Ingeus will be in touch with you shortly to arrange this. The [CAP] will involve doing up to six months of near fulltime work experience, with some additional weekly job search support The [CAP] is an employment programme established in law under the [2011 Regulations]. To keep getting Jobseekers Allowance, you will need to take part in the [CAP] until you are told otherwise or your award of jobseeker's allowance comes to an end; and complete any activities that Ingeus asks you to do. If you dont take part in the [CAP], under the [2011 Regulations] your jobseekers allowance may be stopped for up to 26 weeks. You could also lose your National Insurance credits. At a subsequent meeting with Ingeuss representative, Mr Wilson was told that his placement was due to begin on 28 November 2011 with an organisation that collects and renovates used furniture and distributes it to needy people, and that his participation was mandatory. He was told he would be required to work for 30 hours a week for 26 weeks or until he found employment of 16 hours a week or more. These details were not set out in writing. Mr Wilson explained that he had strong objections to being required to undertake labour unpaid and therefore was not prepared to work for free, particularly for such a long period of time. As a result of his refusal to participate in the CAP scheme, a two week benefits sanction was imposed on Mr Wilson in early May 2012. Later the same month, it was decided to impose two further benefits sanctions as a result of Mr Wilsons successive failures to attend a job search session with Ingeus on two occasions during April 2012. In total, these second and third benefits sanctions resulted in a cessation of benefit payments for 6 months. These proceedings In early 2012, Miss Reilly and Mr Wilson issued separate claims for judicial review claims challenging the 2011 Regulations, as well as the sbwa scheme and the CAP, on four grounds: i) That the 2011 Regulations are ultra vires section 17A because they fail to prescribe (i) a description of the sbwa scheme or the PAC, (ii) the circumstances in which a person can be required to participate in those schemes, or (iii) the period during which participants are required to undertake work on those schemes; ii) That the requirement that Miss Reilly and Mr Wilson participate in a scheme was unlawful, because the notice provisions contained in regulation 4 were not complied with; iii) That it is unlawful for the Government to enforce the 2011 Regulations in the absence of a published policy as to the nature of the relevant scheme and the circumstances in which individuals could be required to undertake unpaid work; iv) That Miss Reilly had been subjected to forced or compulsory labour contrary to article 4 of the European Convention on Human Rights (the Convention) and/or that the Regulations were contrary to article 4. The Secretary of State challenged each ground (save that he admitted a breach of regulation 4 in relation to Miss Reilly). Foskett J granted each claim on ground (ii) and dismissed them on grounds (i), (iii) and (iv): [2012] EWHC 2292 (Admin). In relation to ground (ii), the judge held that the Secretary of State had breached regulation 4(2), by the failure to provide any written notice to Miss Reilly (such breach being admitted), and regulation 4(2)(e), by failing to provide information about the consequences of failing to participate in the Scheme to Mr Wilson. The judge also held that, the consequence of the breach of regulation 4 was that no sanctions could be lawfully imposed on Miss Reilly or Mr Wilson for failure to participate in the scheme, but the failure did not make it unlawful for the Secretary of State to require an individual to participate in either scheme. Miss Reilly and Mr Wilson appealed against (a) Foskett J's findings on grounds (i), (iii) and (iv), (b) in relation to ground (ii), his rejection of the contention that the written notice supplied to Mr Wilson also breached regulation 4(2)(c), and (c) his rejection of the contention that the consequence of a breach of regulation 4 is that the requirement to participate in the scheme is unlawful. The Secretary of State cross-appealed the finding of a breach of regulation 4 in Mr Wilson's case. The Court of Appeal (a) allowed the appeal of Miss Reilly and Mr Wilson on grounds (i) and (ii), (b) dismissed the Secretary of State's cross-appeal, (c) quashed the 2011 Regulations, (d) declared that the Secretary of State acted unlawfully in requiring Miss Reilly to participate in the sbwa scheme, and (e) dismissed the appeal of Miss Reilly and Mr Wilson on grounds (iii) and (iv) [2013] EWCA Civ 66, [2013] 1 WLR 2239. As decided by the Court of Appeal, a) The 2011 Regulations are ultra vires section 17A, as they contain insufficient details about the sbwa scheme or the CAP, and should be quashed (although the other two grounds of attack described in para 27(i) above were rejected); b) In any event the requirements of regulation 4 were not complied with in relation to Miss Reilly or Mr Wilson; Subject to (a), the Secretary of State was not obliged to publish his c) policy any more extensively than he had done in order to enforce the schemes; and d) The enforcement of the schemes did not involve an infringement of Miss Reillys rights under article 4 of the Convention (article 4). The Secretary of State appeals to this court against conclusion (a) and, in relation to Mr Wilson, against conclusion (b); and Miss Reilly and Mr Wilson cross-appeal against conclusions (c) and (d). The 2013 Regulations and the 2013 Act On 12 February 2013 (the same day as the Court of Appeal handed down judgment in these proceedings), the 2013 Regulations came into force. They were proleptically drafted with a view to addressing the conclusion which was in fact reached by the Court of Appeal, namely that the 2011 Regulations were ultra vires section 17A, and to ensuring that the Government could continue to require claimants to participate in work for your benefit schemes. Regulation 3 of the 2013 Regulations is headed Schemes for Assisting Persons to Obtain Employment, and para (1) states that The schemes described in the following paragraphs are prescribed for the purposes of section 17A(1) (schemes for assisting persons to obtain employment: work for your benefit schemes etc) of the Act. The following seven paragraphs of regulation 3 of the 2013 Regulations describe seven different schemes, which were the schemes which had been brought in purportedly under the 2011 Regulations, and they included: (4) Full-time Training Flexibility is a scheme comprising training of 16 to 30 hours per week, for any claimant who has been receiving jobseekers allowance for a continuous period of not less than 26 weeks ending on the first required entry date to the scheme. (6) The sector-based work academy is a scheme which provides, for a period of up to 6 weeks, training to enable a claimant to gain the skills needed in the work place and a work experience placement for a period to be agreed with the claimant, and either a job interview with an employer or support to help participants through an employers application process. (8) The Work Programme is a scheme designed to assist a claimant at risk of becoming long-term unemployed in which, for a period of up to 2 years, the claimant is given such support as the provider of the Work Programme considers appropriate and reasonable in the claimant's circumstances, subject to minimum levels of support published by the provider, to assist the claimant to obtain and sustain employment which may include work search support, provision of skills training and work placements for the benefit of the community. Regulation 4(1) of the 2013 Regulations provides that [t]he Secretary of State may select a claimant for participation in a scheme described in regulation 3, and regulation 5 mirrors the notice requirements contained in regulation 4 of the 2011 Regulations. On 26 March 2013 (the same day as the Secretary of State sought permission to appeal the decision of the Court of Appeal), the 2013 Act came into force after having been fast-tracked through Parliament. The 2013 Act was plainly intended to undo the decision of the Court of Appeal, in that, pursuant to subsections (2), (3), (4)-(8), and (10)-(12) of section 1, it retrospectively validates (i) the 2011 Regulations, (ii) the programmes listed in regulation 3(2) of the 2013 Regulations, (iii) notices issued under regulation 4 of the 2011 Regulations, and (iv) the benefit sanctions imposed under those regulations in relation to the schemes. Subsection (14) of section 1 provides that the 2011 Regulations are to be treated as having been revoked by the 2013 Regulations on the coming into force of the 2013 Regulations. The 2013 Act is, we were told, currently the subject of a challenge in the Administrative Court on the ground that it does not comply with the Convention. The issues before this Court The substantive issues before us are the same as those before Foskett J and the Court of Appeal; they are set out in para 27 above, and the Court of Appeals conclusion on each issue is as summarised in para 31 above. It is convenient to take each of the four points in turn. However, before doing so, it is necessary to address the effect of the 2013 Regulations and the 2013 Act on this appeal and cross-appeal. On behalf of Miss Reilly and Mr Wilson, Ms Lieven QC submits that we should not consider the Secretary of States appeal on issue (a), as that issue is now academic, because, even if the Court of Appeal was right to hold that, prior to the 2013 Act coming into force, the 2011 Regulations were ultra vires, Parliament has now validated those regulations through the 2013 Act. The submission has obvious force as a matter of principle. This court, like other courts, is normally concerned with stating the law as it is, not as it was. Further, it is rather unattractive for the executive to be taking up court time and public money to establish that a regulation is valid, when it has already taken up Parliamentary time to enact legislation which retrospectively validates the regulation. That very point was made on behalf of Miss Reilly and Mr Wilson in order to oppose the Secretary of States application for permission to appeal to this court, and, at least viewed from our present perspective, we consider that there was considerable force in the point. However, permission to appeal has been given to the Secretary of State, the issue concerned is not the only point at stake in the appeal, the issue may be of some significance to the drafting of regulations generally, and the retrospectively validating legislation is under attack. Bearing in mind those factors, we are of the view that issue (a) should be considered, although the precise formulation of any order that is made will have to be carefully considered, bearing in mind the effect of the 2013 Act. Accordingly, we turn to consider the four issues on which Foskett J and the Court of Appeal ruled, and which were argued before us. The first issue: Were the 2011 Regulations ultra vires? The question to which this first issue gives rise is whether the 2011 Regulations satisfied the requirements of section 17A(1), as expanded by section 35 of the 1995 Act. The principal point in this connection is whether, as the Court of Appeal held, regulation 2 of the 2011 Regulations (regulation 2) contained a sufficiently prescribed description of the sbwa scheme and the CAP. To recapitulate, a) section 17A(1) authorised the making of Regulations which impos[ed] on claimants in prescribed circumstances a requirement to participate in schemes of any prescribed description that are designed to assist them to obtain employment, and, by section 35, prescribed means specified in or determined in accordance with regulations; and b) regulation 2 identified the Employment, Skills and Enterprise Scheme, which means a scheme within section 17A known by that name and provided pursuant to arrangements made by the Secretary of State that is designed to assist claimants to obtain employment or self-employment, and which may include for any individual work-related activity (including work experience or job search). Whether one takes the Employment, Skills and Enterprise Scheme (which is really a group of schemes including the sbwa scheme and the CAP) as a single scheme, or whether, as seems more natural, one takes the sbwa scheme and the CAP as separate schemes, they were undoubtedly schemes which fell within the ambit of regulation 2. However, the question which arises is whether regulation 2 was or contained a prescribed description of the scheme in question. In other words, the question is whether regulation 2 could fairly be said to have been a regulation either (i) which specified a description of (the Employment, Skills and Enterprise Scheme or) the sbwa scheme or the CAP, or (ii) in accordance with which (the Employment, Skills and Enterprise Scheme or) the sbwa scheme or the CAP could be said to have been determined. For the Secretary of State, Mr Eadie QC argued that the self-evident need for flexibility in the precise characteristics of any scheme introduced under section 17A renders it unlikely that Parliament can have intended much, if anything, in the way of specific information about any scheme to be included in any regulation made thereunder. The need for flexibility cannot be doubted. As Pill LJ said in the Court of Appeal, at para 49, [t]he needs of jobseekers will vary infinitely, as will the requirements of providers prepared to participate in arrangements with them. Over and above the question of flexibility, as Ms Lieven QC, for Miss Reilly and Mr Wilson, effectively accepted, once one decides that section 17A(1) requires more specific information about a scheme than what is contained in regulation 2, it is not easy to identify the precise extent of the information required. However, even bearing in mind these points, it appears clear to us that regulation 2 does not satisfy the requirements of section 17A(1). The courts have no more important function than to ensure that the executive complies with the requirements of Parliament as expressed in a statute. Further, particularly where the statute concerned envisages regulations which will have a significant impact on the lives and livelihoods of many people, the importance of legal certainty and the impermissibility of sub-delegation are of crucial importance. The observations of Scott LJ in Blackpool Corporation v Locker [1948] 1 KB 349, 362 are in point: John Citizen should not be in complete ignorance of what rights over him and his property have been secretly conferred by the minister, as otherwise [f]or practical purposes, the rule of law breaks down because the aggrieved subjects legal remedy is gravely impaired. More specifically, in relation to the point at issue, we cannot improve on the reasoning of Sir Stanley Burnton in the Court of Appeal, where he said this: 75. Where Parliament in a statute has required that something be prescribed in delegated legislation, it envisages, and I think requires, that the delegated legislation adds something to what is contained in the primary legislation. There is otherwise no point in the requirement that the matter in question be prescribed in delegated legislation. However, the description of the Employment, Skills and Enterprise Scheme in the 2011 Regulations adds nothing to the description of such schemes in the Act. ... In effect, the Secretary of State contends that any scheme he creates is a scheme within the meaning of section 17A notwithstanding that it is not described in any regulations made under the Act. Furthermore, it is not possible to identify any provision of the Regulations that can be said to satisfy the requirement that the description be determined in accordance with the Regulations. 76 Description of a scheme in regulations is important from the point of view of Parliamentary oversight of the work of the administration. It is also important in enabling those who are required to participate in a scheme, or at least those advising them, to ascertain whether the requirement has been made in accordance with Parliamentary authority. Sir Stanley immediately went on to say, [t]he question as to precisely how much detail must be included in the Regulations in order to comply with the requirements of the Act does not arise for consideration in this appeal, since the Regulations contain none. However, while it is a fundamental duty of the courts to ensure that the executive carries out its functions in accordance with the requirements of Parliament, as expressed in primary legislation, it is also incumbent on courts to be realistic in the standards they set for such compliance. In this case, it is not only self-evident, but it is clear from the contents of regulation 3 of the 2013 Regulations, part of which is set out in para 34 above, that it is not unrealistic to hold that the Secretary of State could have done significantly more than was done in the earlier regulation 2 to describe the individual schemes such as the sbwa scheme and the CAP. It is neither necessary nor appropriate for us to decide whether regulation 3 of the 2013 Regulations complies with the requirements of section 17A: the issue is not before us, and has not been argued, and in any event it may be influenced by the provisions of the 2013 Act. Given the conclusion that the 2011 Regulations are ultra vires because they fail to provide a prescribed description of any scheme, it is strictly unnecessary to consider the further grounds raised by Miss Reilly and Mr Wilson for contending that the 2011 Regulations were invalid, but we will do so briefly. Those grounds are that the Regulations fell foul of the requirements of section 17A that any regulations made thereunder must, under subsection (1), prescribe the circumstances in which, and, under subsection (2), the period for which, claimants may be required to participate in prescribed schemes. The Court of Appeal rejected these two further grounds, and, while accepting that each ground is not without force, we agree with the Court of Appeal. The argument that the 2011 Regulations fail to prescribe the circumstances in which a claimant may be required to participate in a scheme, was largely based on regulation 3 of the 2011 Regulations (set out in para 11 above). It is said that, by merely providing that the Secretary of State may select a claimant for participation in a scheme, it suffers from the same vice as the alleged prescribed description of the schemes, in that it does no more than sub-delegate, in a completely unqualified way, the whole exercise of prescribing the circumstances to the Secretary of State. However, as Pill LJ indicated in para 58 of his judgment, one must also consider regulation 4 in this context. It seems to us that, particularly given the need for flexibility, regulation 4 contains sufficient detail to justify the conclusion that the circumstances in which a claimant can be required to participate in a scheme is to be determined in accordance with the 2011 Regulations. The fact that the regulation is concerned with the contents of a notice is irrelevant to this issue, but the very open-ended nature of what is left to the Secretary of State by regulation 4 could well be a problem in other circumstances where flexibility was not so obviously essential. Substantially the same point can be made about the statutory requirement in section 17A(2) for a period to be prescribed and the terms of regulation 4(2)(d) and 5(2) of the 2011 Regulations. Ms Lieven argued that the regulations thus provide for an open-ended period, but we do not see why that is intrinsically incapable of being a prescribed period. Again, we agree with Pill LJ who said at para 59, that the period is specified by way of events with which it will begin and end, and that, bearing in mind the undoubted need for flexibility where possible, it is a tenable specification. The second issue: Was the notice served on Mr Wilson valid? As described in para 21 above, no written notice was given to Miss Reilly, contrary to regulation 4(1) and 4(2) set out in para 12 above. In relation to Mr Wilson, there is a dispute which falls to be determined, namely whether the letter of 16 November 2011, quoted in para 24 above, complied with regulation 4(2)(c) and regulation 4(2)(e). In agreement with Foskett J, the Court of Appeal held that it did not satisfy the latter provision, but they also found that it did not satisfy regulation 4(2)(c). In our opinion, there was a failure to comply with regulation 4(2)(c). The letter of 16 November 2011 merely informed Mr Wilson that he had to perform any activities requested of him by Ingeus, without giving him any idea of the likely nature of the tasks, the hours of work, or the place or places of work. It seems to us, therefore, that the letter failed to give Mr Wilson details of what [he was] required to do by way of participation. Again, it is necessary to balance practicality, in the form of the need of the Secretary of State and his agents for flexibility, against the need to comply with the statutory requirement, which was plainly included to ensure that the recipient of any such letter should have some idea of where he or she stood. A requirement as general and unspecific as one which stipulates that the recipient must complete any activities that Ingeus asks you to do, coupled with the information that the course will last about six months falls some way short of what is required by the words of regulation 4(2)(c), even bearing in mind the need for practicality. The alleged breach of regulation 4(2)(e) is rather different in nature, and we have concluded that it is not made out. It arises from the fact that the letter of 16 November 2011 states that Mr Wilson would lose his benefits for up to 26 weeks if he did not participate in the CAP. The true position was that he risked losing his jobseekers allowance for two weeks initially, and thereafter for a period of 26 weeks, which could potentially be continued on a rolling basis see regulation 8(4) and (6) of the 2011 Regulations, set out in para 14 above. We see some force in Ms Lievens criticisms of the letter, but the question is whether they are sufficient to provide additional grounds for holding the notice invalid. The crucial issue is not so much one of contractual construction of the letter: it is whether Mr Wilson was (or perhaps whether a reasonable person in Mr Wilsons position would have been) significantly prejudiced or misled by the terms of the letter so far as any sanction was concerned. Regulation 4(2)(e) required the notice to contain information about the consequences of failing to participate, but it did not specify how detailed the information needed to be. If the letter had warned Mr Wilson in general terms that failing to participate might result in loss of benefit, we think that it would have been sufficient. The letter was more specific, in that it said that he risked losing up to 26 weeks loss of benefit, which was the maximum on any one occasion. This would have made it plain to Mr Wilson that he could face a lengthy period of loss of benefit if he failed to participate. Whether the issue is to be judged from the perspective of Mr Wilson or of a reasonable person in his position, we are not persuaded that the imperfections of the warning were sufficiently misleading or prejudicial that the letter should be held invalid on that account . The third issue: The Secretary of States duty to publish information about the schemes As explained above, i) Section 17A empowers the Secretary of State, by regulations, to require a claimant for jobseekers allowance to participate in a scheme of any prescribed description which is designed to assist the claimant to obtain employment, and the required participation may include an obligation to undertake (unpaid) work or work-related activity. ii) Under the 2011 Regulations, the claimant is to be given a written notice which must specify certain particulars - ie the date when he is required to start, details of what he is required to do, information about when the requirement will end and information about the consequences of failing to participate. The question arises whether fairness to a claimant requires any (and, if so, what) other information about a scheme in which he or she may be required to participate should be made publicly available. Ms Lievens submission is that any criteria established by the Secretary of State for the exercise of the power to require a person to engage in unpaid work should be made public as a matter of fairness to individuals and as a safeguard against arbitrariness. In support of that submission, she relies on the decision and reasoning in R (Salih) v Secretary of State for the Home Department [2003] EWHC 2273 (Admin). Salih was concerned with a provision of the Immigration and Asylum Act 1999 which empowered, but did not require, the Secretary of State to provide or arrange support for asylum seekers and their dependants who appeared to him to be destitute or likely to become destitute within 14 days. It was the established practice of the Secretary of State to exercise that power if an application was made by an asylum seeker, and that policy was communicated to the Refugee Council, but not to individual asylum seekers who would qualify to receive benefits under the policy. Having said at para 51 that [m]isery and suffering may be involved and [f]undamental human rights may be engaged, Stanley Burnton J continued in the next paragraph by stating the following principle: These considerations lead me to conclude that it is not open to the Home Secretary to decide to refrain from making known his hard cases policy. On principle a policy such as that should be made known to those who may need to avail themselves of it. Leaving aside contexts such as national security, it is in general inconsistent with the constitutional imperative that statute law be made known for the government to withhold information about its policy relating to the exercise of a power conferred by statute. In R (WL Congo) v Secretary of State for the Home Department, [2012] 1AC 245, para 36, Lord Dyson (with whom a majority of the other members of the Supreme Court agreed) endorsed Stanley Burnton Js statement of general principle. WL was a case of detention and the Court of Appeal had distinguished Stanley Burnton Js statement on that basis, but Lord Dyson did not find that a satisfactory ground for distinction. He considered that a policy relating to a scheme which imposed penalties or other detriments was at least as important as one which conferred benefits. On the question how much detail needed to be conveyed, Lord Dyson said at para 38: The precise extent of how much detail of a policy is required to be disclosed was the subject of some debate before us. It is not practicable to attempt an exhaustive definition. It is common ground that there is no obligation to publish drafts when a policy is evolving and that there might be compelling reasons not to publish some policies, for example, where national security issues are in play. Nor is it necessary to publish details which are irrelevant to the substance of decisions made pursuant to the policy. What must, however, be published is that which a person who is affected by the operation of the policy needs to know in order to make informed and meaningful representations to the decision-maker before a decision is made. (Emphasis added.) By the same token, the administration of a scheme by which a person may be required to engage in unpaid work on pain of discontinuance of benefits is a matter of considerable importance to a claimant for jobseekers allowance. (It is also of significance to the public at large, which has a legitimate interest in the way that public funds are disbursed and in proper steps being taken to encourage and assist such claimants to obtain paid employment.) For the individual, the discontinuance or threat of discontinuance of jobseekers allowance may self- evidently cause significant misery and suffering. The ability to appeal against a notice or a withholding of benefits (to a First-tier Tribunal of the Social Entitlement Chamber under section 12(2) of the Social Security Act 1998) is a form of protection. However, it is necessarily retrospective and, in practice, it may be small comfort to a person who is faced with an immediate termination of benefit. Fairness therefore requires that a claimant should have access to such information about the scheme as he or she may need in order to make informed and meaningful representations to the decision-maker before a decision is made. Such claimants are likely to vary considerably in their levels of education and ability to express themselves in an interview at a Jobcentre at a time when they may be under considerable stress. The principle does not depend on the categorisation of the Secretary of States decision to introduce a particular scheme under statutory powers as a policy: it arises as a matter of fairness from the Secretary of States proposal to invoke a statutory power in a way which will or may involve a requirement to perform work and which may have serious consequences on a claimants ability to meet his or her living needs. Properly informed claimants, with knowledge not merely of the schemes available, but also of the criteria for being placed on such schemes, should be able to explain what would, in their view, be the most reasonable and appropriate scheme for them, in a way which would be unlikely to be possible without such information. Some claimants may have access to information downloadable from a government website, if they knew what to look for, but many will not. For many of those dependent on benefits, voluntary agencies such as Citizens Advice Bureaus play an important role in informing and assisting them in relation to benefits to which they may be entitled, how they should apply, and what matters they should draw to the attention of their Jobcentre adviser. In his evidence, Mr Iain Walsh, a senior civil servant, explains that the main way in which information is provided to claimants about the sbwa scheme and the CAP is through personal meetings with a Jobcentre adviser prior to a referral. In relation to the sbwa scheme, there is a document entitled Sector-based work candidates (SBWA) Adviser Guidance, which, in a section headed Initial discussions with the claimant, sets out a list of matters about which a claimant is to be informed. The section begins with the following instructions: Give the claimant full details of the sbwa. This should include as much information as possible about the course, the employer, the role etc. The customer must be given full information about the sbwa to ensure they can make an informed decision about taking part, especially as there are mandatory elements once the claimant has agreed to participate. Insofar as such information is of a general kind, there can be no doubt that it is in everyones interest that the Jobcentre adviser provides it to a claimant either in written form or via the website, with an explanation (preferably in writing) as to where and how it can be accessed. If that is not done, it may be harder evidentially for the Secretary of State to show that a claimant has been given all the information fairly required in order to be enable him or her to make an informed decision. However, the critical question is whether the claimant is in fact given by one means or another all the information which is fairly and reasonably required. If the Jobcentre adviser does what the sbwa Adviser Guidance requires, the Secretary of States public law duty will have been discharged. On the uncontradicted evidence of Miss Reilly, that did not happen in her case, but the court does not have a basis for concluding that the Adviser Guidance was routinely ignored. In relation to the CAP, there is no comparable evidence about the instructions given to Jobcentre advisers at the pre-referral stage. There is some correspondence between Mr Wilson and the relevant Jobcentre personnel, but it does not take matters very far. Mr Walsh has not set out or produced any document showing what instructions were given to Jobcentre advisers about any information which they were to give to a claimant regarding the CAP before serving a notice requiring him or her to take part in it. The letters produced by Mr Wilson show that he was told on a number of occasions by letter that if he wanted more information he could find it out from the adviser at the Jobcentre. However, his uncontradicted evidence is that on receipt of those letters he asked for further information from the Jobcentre adviser, who said that she was unable to give him any. The nearest document corresponding to the sbwa Adviser Guidance which Mr Walsh has produced is a document issued by the department to CAP providers entitled Community Action Programme (CAP) Provider Guidance. The document goes into considerable detail about the nature of the scheme and the providers duties. It was published on the departments website at www.dwp.gov.uk/supplying-dwp/what-we-buy/welfare-to-work-services/provider- guidance/community-action-programme.shtnl. This document recognises that, in designing a work programme, account must be taken of the personal circumstances of the claimant, such as whether he or she has caring responsibilities; but it is plain that it is left to the provider to decide the details of what the participant is to be required to do after an initial engagement meeting. The inability of the Jobcentre adviser to answer Mr Wilsons questions is readily explained by the sequence of events, whereby the service of the notice under regulation 4, which required details to be given of what a claimant was required to do, occurred at a time when those details remained to be determined by the job provider. For the reasons already explained, the Secretary of State owed a duty as a matter of fairness to see that Miss Reilly and Mr Wilson were respectively provided with sufficient information about the sbwa scheme and the CAP, in order for them to be able to make informed and meaningful representations to the decision-maker before a notice requiring their participation was served on them. However, it would be wrong to be prescriptive as to how that information should be given. It is a proper matter for a court to determine whether, and if so what, information is required to be communicated by the government, and whether a particular means of communication satisfied that requirement. However, it should not, absent unusual circumstances, be for the court to prescribe a specific means of communication. In this case, it would involve the court going too far if it was to rule that descriptions of the schemes must, as a matter of law, be published to the world at large. The desirability of publication in the manner described in para 65 above is obvious, but practical desirability does not equate to legal requirement. Further, as this case illustrates, Mr Wilson was none the wiser for the fact that the CAP Provider Guidance was published on the departments website. A failure to see that a claimant was adequately informed before service of a notice under regulation 4 would be likely to, but would not necessarily, vitiate the service of the notice. That would depend on whether the failure was material. Public law is flexible in dealing with the effects of procedural failures. Ultimately the issue must be determined by reference to the justice of the particular case. If the effect of the lack of information given to a claimant materially affected him or her by removing the opportunity of making representations which could have led to a different outcome, it would normally be unjust to allow the notice to stand. If it was immaterial on the facts, justice would not require the notice to be set aside. The respondents seek a declaration that the Secretary of State was lawfully required to publish and make available to jobseekers the terms of schemes established under section 17A. For the reasons given, that is to state the Secretary of States duty too broadly and prescriptively. We have stated the nature of the Secretary of States duty in para 73 above and do not consider it necessary to grant relief by way of a formal declaration to that effect. On the facts of the present case, there was a failure to provide either Ms Reilly or Mr Wilson with adequate, accurate information about the schemes in relation to themselves before they were informed that their participation was required. This would have been a ground for treating the notice served on Mr Wilson as ineffective if it had otherwise complied with the requirements of the statute, but we have already held that it was ineffective and do not consider that any further relief is required. The fourth issue: Article 4 of the European Convention on Human Rights The final point which needs to be considered is the contention that the 2011 Regulations fell foul of article 4, and that, by requiring Miss Reilly to work pursuant to the 2011 Regulations meant that her article 4 rights were infringed. The Court of Appeal dealt with the point somewhat delphically, essentially on the basis that it took matters no further, in the light of the decisions they had reached on the other points at issue. Article 4 provides: 1. No one shall be held in slavery or servitude. 2 No one shall be required to perform forced or compulsory labour. 3 For the purpose of this article the term forced or compulsory labour shall not include: (a) any work required to be done in the ordinary course of detention imposed according to the provisions of article 5 of this Convention or during conditional release from such detention; (b) any service of a military character or, in the case of conscientious objectors in countries where they are recognised, service exacted instead of compulsory military service; (c) any service exacted in case of an emergency or calamity threatening the life or well-being of the community; (d) any work or service which forms part of normal civic obligations. Ms Lievens case that article 4 has been infringed rests, unsurprisingly, on paragraph 2 of the article, not paragraph 1. Further, the only basis upon which the alleged infringement of article 4 is maintained is that the effect of the 2011 Regulations being invalid (and of her being misinformed as to her rights) is that the requirement that Miss Reilly work for Poundland as a condition of retaining her jobseekers allowance was unlawful, and, as a result, she was unlawfully required to perform forced or compulsory labour. Ms Lievens argument involves two steps. First, Ms Reillys work at Poundland was exactedunder menace of [a] penalty, ie disallowance of jobseekers allowance, and was therefore prima facie forced labour, and for that she relies on the decision of the Strasbourg court in Van Der Mussele v Belgium (1983) 6 EHRR 163, para 34. Secondly, the Secretary of State could not rely on article 4.3(d) because the illegality of the regulations and the notice prevented the Secretary of State being able to argue that the work was part of Ms Reillys normal civic obligations. In our judgment the argument fails at the first step. As the court noted in Van Der Mussele at para 32, article 4 was largely based on Convention 29 of the International Labour Organisation, the main aim of which was to stop exploitation of labour in the colonies. Forced labour is not fully defined and may take various forms, but exploitation is at its heart. Article 4.3 contains particular instances of obligatory labour which are common features of life in democratic societies and do not represent the mischief at which the article is aimed. It is important to understand, as the court explained in Van Der Mussele at paras 37 and 38, that article 4.3 is not intended to limit the exercise of the right guaranteed by article 4.2 (ie provide an exception to a right otherwise conferred by article 4.2), but to delimit (ie show the bounds of) the very content of the right, and it therefore serves as an aid to the interpretation of the whole of article 4.2. The diverse instances identified in article 4.3 are grounded on the governing idea of the general interest, social solidarity and what is in the normal or ordinary course of affairs. Therefore even where there exists a risk comparable to the menace of a penalty, it is necessary to consider, in the light of the underlying objectives of article 4, whether the service required of an individual falls within the prohibition of compulsory labour. The argument advanced by Ms Lieven that any work done under menace of a penalty imposed by the state contravenes the prohibition of forced labour under article 4 unless it comes within one or other of the paragraphs of article 4.3, thus involves a wrong approach to the nature and structure of the article. In the present case we are concerned with a condition imposed for the payment of a claim for a state benefit. Jobseekers allowance, as its name suggests, is a benefit designed for a person seeking work, and the purpose of the condition is directly linked to the purpose of the benefit. The provision of a conditional benefit of that kind comes nowhere close to the type of exploitative conduct at which article 4 is aimed. Nor is it to the point that according to Ms Reilly the work which she did for Poundland was unlikely in fact to advance her employment prospects. Whether the imposition of a work requirement as a condition of a benefit amounts to exacting forced labour within the meaning of article 4 cannot depend on the degree of likelihood of the condition achieving its purpose. Attempts to argue that the attachment of a work condition to the payment of state unemployment benefit contravened article 4 have failed at Strasbourg. There are three reported instances. In X v Netherlands (1976) 7 DR 161, the applicant was a specialised worker in the building industry. He claimed unemployment benefit and was required as a condition of payment to accept work which he considered to be unsuitable for a person with his qualifications and socially demeaning. He refused the offer and brought a complaint of a violation of article 4. The Commission declared the complaint inadmissible, observing that it was open to the claimant to refuse the work and that its acceptance was only a condition for the grant of unemployment benefit. There could therefore be no question of forced or compulsory labour within the meaning of article 4. In Talmon v Netherlands [1997] EHRLR 448 the applicant was a scientist. He claimed unemployment benefit and was required as a condition to accept work which he considered unsuitable. Because of his refusal to do it, his benefit payments were reduced. He complained that by having his benefits reduced he was being forced to do work to which he had a conscientious objection, contrary to article 4. The application was declared manifestly ill-founded and inadmissible. In Schuitemaker v Netherlands (Application No 15906/08) (unreported) 4 May 2010 the applicant was a philosopher by profession. She claimed unemployment benefit and was told that her benefits would be reduced unless she was willing to take up a wider range of employment than she considered suitable. She complained under article 4 that she was being forced to take up labour irrespective of whether it would be suitable for her. The court held that her application was inadmissible. It noted that the obligation of which she complained was in effect a condition for the granting of benefits, and it stated as a general principle that a state which has introduced a system of social security is fully entitled to lay down conditions which have to be met for a person to be eligible for benefits under that system. Van Der Mussele, on which Ms Lieven relies, was a different type of case. The applicant was a trainee advocate. He was required to represent at his own expense some criminal defendants who were entitled to legal aid. The sanction if he refused to do so was that he would not be registered as an advocate. He complained of a violation of article 4. The obvious difference between that case and the present is that it was not a simple case of a conditional benefit, where the purpose of the benefit was intended to be enhanced by the condition. Rather, it was a case of the state fulfilling its legal obligations to third parties at the expense of the applicant. The court accepted, at para 32, that the menace of the penalty and the lack of voluntariness on the part of the applicant met the starting point for considering whether he had been subjected to forced labour in violation of article 4. However, that was only the beginning of the inquiry. To amount to a violation of article 4, the work had to be not only compulsory and involuntary, but the obligation to work, or its performance, must be unjust, oppressive, an avoidable hardship, needlessly distressing or somewhat harassing. As we read the judgment, the court was not there setting out five different categories but was using a variety of expressions to elucidate a single underlying concept, which we have referred to as exploitation. In Van Der Mussele, at para 40, the court concluded for a combination of reasons that there had been no forced labour within the meaning of article 4.2, having regard to the social standards generally obtaining in Belgium and in other democratic societies. The court therefore considered it unnecessary to decide whether the work in question was in any event justified under article 4.3 (d). We do not consider that the imposition of the work condition in this case, intended as it was to support the purpose for which the conditional benefit was provided, met the starting point for a possible contravention of article 4. If it did, we do not consider that it fell within article 4.2, having regard to the Strasbourg guidance and the underlying objective of the article. Does it make a difference to this analysis that what Ms Reilly was told about her obligation to take part in the sbwa scheme, as a condition of receiving jobseekers allowance, was unauthorised and wrong as a matter of domestic law? The answer is No. The fact that the requirement was invalid does not of itself mean that it also fulfilled the characteristics of forced labour within the meaning of article 4.2. The logic of the contrary argument would produce strange results. If, for example, a public sector employee were wrongly directed to do something which was in fact beyond the terms of his contract of employment, and the employee did as he was told from fear of disciplinary action, we do not accept that the invalidity of the order would of itself trigger a violation of article 4. Equally, if the 2011 Regulations had unjustifiably discriminated between jobseekers on the ground of gender, and hence had been unlawful, it cannot be right that anyone required to work pursuant to such regulations would therefore have had their article 4 rights infringed. Whether the requirement was invalid under domestic law and whether it involved a violation of article 4 are different issues, and proof of the former does not of itself determine the latter. Conclusion Accordingly, were it not for the 2013 Act and the 2013 Regulations, we would have affirmed the order of the Court of Appeal. In the light of the 2013 Act and the 2013 Regulations, however, a more subtly expressed form of order will be required, and we would invite counsel to try and agree the appropriate wording. In the light of the 2013 Act and the 2013 Regulations, however, a more subtly expressed form of order will be required, and we would invite counsel to try and agree the appropriate wording. |
This appeal concerns the correct approach in law to a request for environmental information when the public authority holding the information relies upon more than one of the exceptions to the duty to disclose such information. Is each exception to be addressed separately, by considering whether the interest served by it is outweighed by the public interest in disclosure? Or can the interests served by different exceptions be combined and then weighed against the public interest in disclosure? Domestically, the presently relevant exceptions are those provided by regulations 12(5)(a) (public safety) and 12(5)(c) (intellectual property) in The Environmental Information Regulations 2004 (S.I. 2004 no. 3391). However, the Regulations were made under the European Communities Act 1972 to implement the United Kingdoms obligation to give effect to Directive 2003/4/EC of 28 January 2003 on public access to environmental information. In the Directive, the relevant exceptions are found, in only slightly different terms, in article 4(2)(b) and (e). The Directive was intended to be consistent with the Aarhus Convention of 25 June 1998, in which equivalent exceptions appear as article 4(4)(b) and (e). The Directive merely permits exceptions of the nature indicated, and it was open therefore to the United Kingdom to introduce exceptions of a more limited nature (as Mr Lewis QC for the appellant, the Information Commissioner, submits). However, the Supreme Court sees no indication that the Regulations intended to do more than introduce into domestic law exceptions matching in their terms and effect those permitted by the Directive. Accordingly, the answer to the question in this appeal appears to the Court to depend upon the interpretation of the Directive. In the Courts view, the answer is not obvious and is necessary for the Courts decision. On this basis, the Courts duty is to refer the question to the Court of Justice under article 267 Treaty on the Functioning of the European Union (prior to 1 December 2009, article 234 EC). The context The information requested relates to the precise location of mobile phone base stations in the United Kingdom. In 2000, the Report of the Independent Expert Group on Mobile Phones, Mobile Phones and Health (the Stewart Report) concluded that radiation from mobile phones did not constitute a health risk, but that, until much more detailed and robust information was available, a precautionary approach was called for. The Stewart Report identified, as matters of public concern, the location of base stations and the authorisation processes for their erection, and recommended a national database. The Sitefinder website was duly set up by the Government and has been operated since the end of 2003 by the respondent, the Office of Communications (Ofcom). The site is constructed from information voluntarily provided by mobile network operators from their databases. It has enabled individuals, by inputting a postcode, town or street name, to search a map square for information about the base stations within it. The Sitefinder website shows the approximate location in each square of each base station, but does not show either its precise location to within a metre or whether it has been mounted at street level or concealed within or on top of a structure or building. An Information Manager for Health Protection Scotland (a branch of the National Health Service) requested from Ofcom grid references for each base station, as it appears for epidemiological purposes. The Information Managers request was refused by Ofcom, both initially and on review. On application to the appellant, the Information Commissioner, disclosure was ordered. On an appeal by Ofcom, the Information Tribunal upheld the order for disclosure, on different grounds which turned on the two presently relevant exceptions. The Tribunal examined the application of each exception in turn. As to the first exception (public safety), T Mobile (a mobile phone operator joined as a party before the Tribunal) submitted that the release of the precise locations of base stations would assist criminal activities. The Tribunal found that the release of the whole database would provide some assistance to criminals (para. 40). Criminals were more likely to use the Sitefinder website itself for the purpose of trawling valuable sites or disrupting public or police communications. But it was conceivable that data manipulation would enable sophisticated criminals to detect patterns of development in base station construction, which could assist their activities and greater risks might result from the release of the five figure grid reference numbers which would enable criminals to establish the precise location of, and (in an urban environment) the resulting ease of access to, base stations. The disclosure of the requested information would in some degree increase the risk of attacks and in that way may adversely affect public safety (para. 40). However, although the matter fell therefore within the scope of the exception, the Tribunal did not accept that the public interest in maintaining it outweighed the public interest in disclosure (para. 41). The public interest in disclosure arose from the recommendations of the Stewart Report, from the general importance attaching to the dissemination of environmental information and from the particular importance of the particular information for epidemiological purposes to the public, either as individuals or as members of interested groups. As to the second exception (intellectual property rights), Ofcom and T Mobile relied upon database rights under the Copyright and Rights in Database Regulations 1997 (S.I. 1997 no. 3032) implementing Directive 96/9/EC of 11 March 1996 and, if and as necessary, copyright under section 3 of the Copyright Designs and Patents Act 1988. It was, in the Tribunals view, clear that mobile network operators had database rights in respect of the dataset information which they provided to Ofcom from which the Sitefinder website was constructed. It was also conceded by the Information Commissioner, although the Tribunal expressed reservations about the correctness of the concession, that the datasets contributed by mobile network operators also enjoyed copyright protection, and that the Sitefinder website itself enjoyed both dataset right and copyright protection. Ofcom and T Mobile asserted that disclosure of the information requested would affect these intellectual property rights adversely in several respects. The information had commercial value, and they might lose licensing opportunities (para. 50). Although the public would still be bound to respect their intellectual property rights in the information, its public disclosure would make infringement more likely and less easy to detect (para. 51). It could enable competitors to map their network and ascertain their network design a factor which, however, the Tribunal considerably discounted, having regard to the existing feasibility of undertaking such an exercise using the Sitefinder website, and the absence of any sign of any competitor as yet undertaking it (para. 52 54). Landowners might be able to identify land where a mobile network operator would require to place a base station, and to demand a higher rent (para. 55). The Tribunal thought the harm likely to be suffered under this last head minimal. But it thought that the various factors considered together involved sufficient adverse effect to trigger the exception (para. 55). Each represented some degree of interference with a property right, although none had any direct impact on the public (para. 62). The Tribunal also thought it right to take into account, as a potential adverse consequence of disclosure, the possibility (now it appears in many cases a reality) that it might lead mobile network operators to refuse to continue to provide information to update the Sitefinder website. Its conclusion was however that the consequences of the interference with intellectual property rights involved in disclosure were outweighed by the same public interest in disclosure as it had identified when considering the first exception. Ofcom submitted to the Tribunal that it should go further and consider the potential adverse effects identified in respect of public safety and intellectual property rights together and weigh them on that basis against the public interest in disclosure. The Tribunal, in rejecting such an approach as incorrect, said (para 58): We do not accept that the language or structure of EIR regulation 12 permits the public interest factors to be transferred and aggregated in this way. It seems to us that for a factor to carry weight in favour of the maintenance of an exception it must be one that arises naturally from the nature of the exception . not any matter that may generally be said to justify withholding information from release to the public, regardless of content. If that were not the case then we believe that the application of the exceptions would become unworkable. It could certainly produce a strange result on the facts of this case. We have already found that the public interest in withholding information that might be of value to criminals does not justify maintaining the public safety exception. On [Ofcoms] argument it could be supplemented by the public interest in not undermining intellectual property rights, in order to try to tip the scales in favour of maintaining the exception. We think that this would produce a nonsensical outcome and it is not a procedure we propose to adopt. Ofcom appealed to the Administrative Court, which took the same approach as the Tribunal on this last point: [2008] EWHC 1445 (Admin). However, on a further appeal, the Court of Appeal reached the opposite conclusion: [2009] EWCA Civ 90. It started with the domestic principle of statutory construction, according to which the singular includes the plural unless the contrary intention appears. In its view, therefore, references to an exception in e.g. regulation 12(1)(a) were to be read as being to one or more exceptions. It also considered that the language of other regulations and of the Directive supported its conclusion. And it did not agree with the Tribunals view that an aggregate approach to the exceptions would be unworkable or nonsensical. On the contrary, it said that it would consider it surprising if the Directive or EIR required disclosure in a case where the overall public interest favoured non disclosure (para. 42). The proceedings before the Supreme Court The appeal before the Supreme Court concerns the single point described in the previous two paragraphs. In the light of the written and oral submissions on the point, the Court is at present divided in its views about the correct legal answer to this question, by a majority of three to two presently favouring the Court of Appeals approach. But all the Courts members are agreed that, in order to ascertain the answer under domestic law, it is, as stated at the outset of this judgment, necessary to know the answer to the equivalent question posed under Directive 2003/4/EC of 28 January 2003, and accordingly, since this is also not obvious, to refer the matter to the Court. It is unclear whether the Information Tribunal would have arrived at any different conclusion had it thought it feasible and appropriate to combine all the adverse factors under the two relevant exceptions and to weigh them against the public interest in disclosure. The adverse factors identified by the Tribunal were on their face scattered and limited, in comparison with the general presumption and other specific factors favouring disclosure of the relevant environmental information. But the point arises as one of general principle, and has been treated as relevant by the Tribunal and in the courts below. In case it would assist the Court of Justice, the Supreme Court will explain in a little greater detail some of the considerations which have impressed its members thinking. All members take as their approach the general guidance given in recital (16) of the Directive. The restrictive interpretation of exceptions is a general Community law principle, evidenced elsewhere in the field of disclosure of information by Sweden and Turco v Council of the European Union Cases C 39 and 52/05 P and Sweden v Commission Case C 64/05P. Exceptions are set out under individual heads in two parts (article 4(1) and article 4(2)) followed by a general paragraph, which reads: The grounds for refusal mentioned in paragraphs 1 and 2 shall be interpreted in a restrictive way, taking into account for the particular case the public interest served by disclosure. In every particular case, the public interest served by disclosure shall be weighed against the interest served by the refusal. Member States may not, by virtue of paragraph 2(a), (d), (f), (g) and (h), provide for a request to be refused where the request relates to information on emissions into the environment. The majority of the Court point to the references to the particular case (in German im Einzelfall and In jedem Einzelfall or in French dans le cas despce and Dans chaque cas particulire) as emphasising the need, in each case when disclosure is requested and refused, to consider the factors relevant to that case, but not as calling for treatment of each exception separately. They also point to the reference to weighing the public interest served by disclosure against the interest served by the refusal and consider that, since the refusal may be on a number of grounds, the whole of the interest or interests giving rise to adverse effects under any and all grounds must be put into the scales at once when the weighing exercise is undertaken. The majority view is that, since all the facets of the public interest in disclosure go into one side of the scales, it makes sense to put all the aspects of the interests served by refusal to go into the other side. These latter interests may be highly diverse and without any common factor (as in the present case, where the arguments against disclosure under the public safety and intellectual property rights exceptions are separate, one being concerned with public, the other with private protection). But that, in the majority view, can be seen as a positive reason why it is permissible to accumulate them. If, in some future case, it was possible to identify some overlap, then some allowance might perhaps be appropriate to eliminate double counting. The majority further point out that some of the heads of article 4(2), particularly (b), already involve different interests under which different factors could arise which could, they consider, presumably be cumulated. The minority view is that each exception appears as a separate head, serving separate interests and requiring separate consideration. First, the minority observes that this must be the case as regards article 4(1) and 4(2). Factors relevant to an exception in article 4(1) could hardly have been intended to be cumulated with factors relevant to an exception in article 4(2). That would not make sense. Secondly, looking at article 4(1) and article 4(2) separately, the word or in the Aarhus Convention makes clear that the provisions in that Convention equivalent to article 4(1) and 4(2) constitute alternative exceptions; and the Directive was intended to be consistent with the Aarhus Convention. Third, there is no common factor behind the exceptions in article 4(2) which enables any sensible cumulation. The Court of Appeal over looked this factor when it spoke of some overall public interest favour[ing] non disclosure (see para. 9 above). The exceptions serve disparate interests, which can and must each be weighed separately against the public interest in disclosure. A public interest in limiting criminal activities which is itself insufficient to outweigh the public interest in disclosure cannot sensibly be cumulated with a private intellectual property right which is itself again also insufficient to outweigh the public interest in disclosure, in order to thereby arrive at some combined interest in non disclosure which would outweigh the public interest in disclosure. The Information Tribunal was right to consider that cumulation of factors would lead to incongruities, and it is far from clear how it could or would work in practice. Fourth, the minority considers that the natural interpretation of the language of the Directive views each exception as a separate potential reason for refusal. If the interest served by it is outweighed by the public interest in disclosure, it ceases to be relevant. If the interest it serves outweighs the public interest in disclosure, the refusal can and will identify that exception as the reason. On Ofcoms case, however, the reason for refusal could however be that, although no particular exception applies, viewed collectively two (or more) exceptions apply. Reasons for reference The question referred is one of general principle, on which the courts below have expressed, and different members of the Supreme Court hold, different views. If it is answered in the negative, that will resolve this litigation. If it is answered in the affirmative, the matter is likely to have to be referred back to the Information Tribunal for further consideration. The question referred The Supreme Court therefore refers to the Court of Justice this question: Under Council Directive 2003/4/EC, where a public authority holds environmental information, disclosure of which would have some adverse effects on the separate interests served by more than one exception (in casu, the interests of public security served by article 4(2(b) and those of intellectual property rights served by article 4(2)(e)), but it would not do so, in the case of either exception viewed separately, to any extent sufficient to outweigh the public interest in disclosure, does the Directive require a further exercise involving the cumulation of the separate interests served by the two exceptions and their weighing together against the public interest in disclosure? |
The respondent Mr Frank Perry is a retired miner. Like very many of his colleagues he had, by the time he ceased working underground in 1994, been afflicted with a condition known as Vibration White Finger (VWF) , which is a particular type of a wider species of condition affecting the hand and the upper limbs collectively known as Hand Arm Vibration Syndrome (HAVS), caused by excessive exposure to the effects of using vibratory tools. One symptom of these conditions can be a reduction in grip strength and manual dexterity in the fingers. A common although not invariable consequence is that the sufferer from these conditions becomes unable, without assistance, to carry out routine domestic tasks such as gardening, DIY or car maintenance. A group of test cases, representative of some 25,000 similar claims, established that there had been negligence on the part of the National Coal Board, later British Coal, in failing to take reasonable steps to limit the exposure of employed miners to VWF from the excessive use of vibratory tools: see Armstrong v British Coal Corpn [1998] EWCA Civ1359 [1998] CLY 975. As a result, the Department for Trade and Industry (which had by then assumed responsibility for British Coals relevant liabilities) set up a scheme (the Scheme) in 1999 to provide tariff based compensation to miners who had been exposed to excessive vibration and had therefore suffered from VWF. The Scheme was administered pursuant to a Claims Handling Arrangement (CHA) dated 22 January 1999, and made between the DTI and a group of solicitors firms representing claimant miners suffering from VWF. The central objective of the CHA was to enable very large numbers of similar claims, having a common originating cause in British Coals systemic negligence, to be presented, examined and resolved both effectively and at proportionate cost. The Scheme contemplated the making of two main types of compensatory award to miners suffering from VWF, corresponding broadly with general and special damages for personal injuries. Pursuant to a Services Agreement dated 9 May 2000, the special damages could include a Services Award to qualifying miners. This depended upon the claimant establishing what has come to be known as the factual matrix, namely: That before he developed VWF he undertook one or more of six i) routine domestic tasks (the six tasks), without assistance; ii) That he could no longer undertake those tasks without assistance by reason of his VWF; and iii) That he had received the necessary assistance with those tasks from others. The six tasks may be summarised as: 1) Gardening 2) Window cleaning 3) DIY 4) Decorating 5) Car washing 6) Car maintenance Qualification for a general damages award required the claimant miner to undertake a medical interview and examination designed to establish, against an internationally recognised scale, the severity of his VWF. Those shown to be sufferers at certain high levels of severity were then also entitled to a rebuttable presumption, in their favour, that they satisfied the qualifying requirements for a Services Award, but they were required nonetheless to demonstrate, by completion of a standard form questionnaire, which of the six tasks they had undertaken without assistance before developing the VWF, and which of the tasks they were no longer able to undertake without assistance. The Scheme provided for a relatively light touch system of checking claims for Services Awards by the claims handlers, which included questionnaires to be filled in by those assisting the claimant in performing the six tasks and short telephone interviews, usually with one or more of the assistants, rather than with the claimant himself. Compensation was then payable to qualifying claimants in accordance with a detailed index linked tariff. Proportionate deductions from the tariff amounts were also liable to be made if the claimants reduced ability to perform the six tasks unaided was caused in part by other contributory medical conditions. For this purpose, claimants were required to undertake a further medical examination for the purpose of the assessment of co morbidity, as it was described. Again, the amount of the reductions (if any) from the full Services Award was determined in accordance with a tariff based upon the medical examiners certification of relevant co morbid conditions on a scale ranging between nil, material, moderate, serious and complete. Mr Perrys claim Mr Perry retained the appellant solicitors firm Raleys to pursue a VWF claim on his behalf in October 1996, before the setting up of the Scheme. Following the making of the CHA, his claim continued under the Scheme. In October 1997 Professor Kester reported, after an interview and examination of Mr Perry, that he suffered from VWF, with ratings (or stagings in the jargon of the Scheme) of 3V and 3Sn bilaterally (that is, in both hands). Those stagings were sufficient both for Mr Perry to obtain general damages and to have entitled him to a presumption in his favour, of the type described above, in the event that he chose to seek a Services Award. In the event however, Mr Perry settled his claim in November 1999 for payment of general damages only, in the sum of 11,600, and made no claim for a Services Award within the available time frame. Much later, in February 2009, he issued professional negligence proceedings against Raleys, claiming that by reason of their negligent failure to give him appropriate advice, he had lost the opportunity to claim a Services Award, in respect of all of the six tasks, which he quantified in the sum of 17,300.17 plus interest. He asserted that he had performed all the six tasks without assistance before developing VWF, and that he had needed assistance with all those tasks thereafter, which had been provided by his two sons and his wife. In response, Raleys denied a breach of duty and separately denied that any breach (if proved) would have caused Mr Perry any loss. They alleged also that Mr Perrys claim against them was statute barred. Breach of duty was admitted shortly before the trial. The trial judge, Judge Saffman, rejected the limitation defence on its merits. After a two day trial, which included cross examination of Mr Perry, his wife and his two sons, the judge concluded that Mr Perry had failed to prove that Raleys admitted negligent advice had caused him any loss. This was because, in summary, the judge found that the VWF from which Mr Perry was suffering when he settled his claim had not caused him any significant disability in performing any of the six tasks without assistance, sufficient to have enabled him to make an honest claim for a Services Award. He therefore dismissed Mr Perrys claim with costs. In his detailed and lucid reserved judgment (circulated to the parties within ten days of the trial) Judge Saffman explained that it was Mr Perrys complete lack of credibility as a witness that had led to his finding that he would not have been able to make an honest claim for a Services Award. His evidence that he was unable to perform the six domestic tasks without assistance was undermined by his medical records, which showed that he had made no complaint of lack of manual dexterity at the relevant time, by evidence (including photographs) of him engaging in fishing at a time when he said he had given it up due to his manual disability, and by his failure to offer any credible explanation of those disparities between his case and that evidence, when cross examined about them at length. The judge found that the evidence from his family lacked sufficient credibility to rescue Mr Perry from his difficulties, and that the medical evidence, while supportive of his case, was insufficient to swing the balance in Mr Perrys favour. The judge nonetheless thought it appropriate to assist by setting out the findings which he would have made as to the quantum of Mr Perrys claim, if he had been wrong in rejecting his case on causation. He did so, no doubt, with a view to minimising the risk that an expensive re trial would be necessary if an appellate court concluded that causation had been established. A main plank in Raleys defence had been that, even if Mr Perry was to a significant extent incapacitated in performing the six domestic tasks without assistance at the relevant time, this was the result of a chronic back problem, rather than VWF. A single joint medical expert, Mr Tennant, had advised that in his view the contribution made to Mr Perrys relevant disability by back troubles lay between moderate and mild, on the co morbidity scale adopted by the Scheme. On the assumption that he had been wrong in his primary finding that Mr Perry was not hindered by VWF in performing the six tasks unaided, he held that he would not depart from Mr Tennants co morbidity assessment. Finally, and again on the same assumption that he had been wrong about causation, the judge assessed the prospects of success in a Services Award claim, after being discounted by co morbidity in accordance with the Schemes tariff, at 80%. On Mr Perrys appeal the Court of Appeal reversed the trial judge on causation, and concluded that his alternative findings as to quantum were sufficiently reliable to make it unnecessary to direct a re trial: [2017] EWCA Civ 314. Accordingly, they assessed Mr Perrys damages in the same amount as the judge would have assessed them, had he been wrong about causation, namely 14,556.15 plus interest, plus additional amounts pursuant to CPR Part 36. The Court of Appeal reversed the judge on four grounds, two of which amounted in their view to errors of law, and the remaining two to shortcomings in his appraisal of, and conclusions based upon, the evidence. It is convenient to take the errors of law first. The Court of Appeal held first that the judge had, in addressing the issue of causation, wrongly conducted a trial within a trial of the very question which would have arisen if Mr Perry had made a claim for a Services Award, namely whether in fact (after he ceased work as a miner) he needed assistance, due to his VWF, in carrying out the six domestic tasks which he had previously been able to carry out unaided. Secondly, the Court of Appeal concluded that the judge wrongly imposed the burden upon Mr Perry to prove that fact on the balance of probabilities. This approach was, in the view of the Court of Appeal, contrary to well settled authority about the burden upon a claimant in relation to causation, following a breach by a professional person of a duty of care. The Law about Causation in Professional Negligence cases The assessment of causation and loss in cases of professional negligence has given rise to difficult conceptual and practical issues which have troubled the courts on many occasions. The most recent example at the level of this court is Gregg v Scott [2005] UKHL 2; [2005] 2 AC 176 in which the House of Lords had to wrestle with the intractable question whether negligent medical advice, which reduced the patients prospects of long term survival from cancer from 42% to 25%, sounded in damages when, probably, he would have died anyway, even if competently treated. Commonly, the main difficulty arises from the fact that the court is required to assess what if any financial or other benefit the client would have obtained in a counter factual world, the doorway into which assumes that the professional person had complied with, rather than committed a breach of, his duty of care. The everyday task of the court is to determine what, in fact, happened in the real world rather than what probably would have happened in a what if scenario generally labelled the counter factual. Similar difficulties arise where the question of causation or assessment of damage depends upon the court forming a view about the likelihood of a future rather than past event. In both those types of situation (that is the future and the counter factual) the court occasionally departs from the ordinary burden on a claimant to prove facts on the balance or probabilities by having recourse to the concept of loss of opportunity or loss of a chance. Sometimes the court makes such a departure where the strict application of the balance of probability test would produce an absurd result, for example where what has been lost through negligence is a claim with substantial but uncertain prospects of success, where it would be absurd to decide the negligence claim on an all or nothing basis, giving nothing if the prospects of success were 49%, but full damages if they were 51%: see Hanif v Middleweeks (a firm) [2000] Lloyds Rep PN 920 per Mance LJ at para 17. A further reason why this is a generally unrealistic approach is that most claims with evenly balanced prospects of success or failure are turned into money by being settled, rather than pursued to an all or nothing trial. Sometimes it is simply unfair to visit upon the client the same burden of proving the facts in the underlying (lost) claim as part of his claim against the negligent professional. This may be because of the passage of time following the occasion when, with competent advice, the underlying claim would have been pursued. Sometimes it is because it is simply impracticable to prove, in proceedings against the professional, facts which would ordinarily be provable in proceedings against the third party who would be the defendant to the underlying claim. Disclosure and production of relevant documents might be impossible, and the obtaining of relevant evidence from witnesses might be impracticable. The same departure from the practicable likelihood that the underlying claim would have been settled rather than tried is inherent in any such process of trial within a trial. But none of this means that the common law has simply abandoned the basic requirement that a claim in negligence requires proof that loss has been caused by the breach of duty, still less erected as a self standing principle that it is always wrong in a professional negligence claim to investigate, with all the adversarial rigour of a trial, facts relevant to the claim that the client has been caused loss by the breach, which it is fair that the client should have to prove. For present purposes the courts have developed a clear and common sense dividing line between those matters which the client must prove, and those which may better be assessed upon the basis of the evaluation of a lost chance. To the extent (if at all) that the question whether the client would have been better off depends upon what the client would have done upon receipt of competent advice, this must be proved by the claimant upon the balance of probabilities. To the extent that the supposed beneficial outcome depends upon what others would have done, this depends upon a loss of chance evaluation. This sensible, fair and practicable dividing line was laid down by the Court of Appeal in Allied Maples Group Ltd v Simmons & Simmons (a firm) [1995] 1 WLR 1602, a decision which received surprisingly little attention in either of the courts below (although, in fairness, the trial judge cited another authority to similar effect: namely Brown v KMR Services [1995] 4 All ER 598). Allied Maples had made a corporate takeover of assets and businesses within the Gillow group of companies, during which it was negligently advised by the defendant solicitors in relation to seeking protection against contingent liabilities of subsidiaries within the vendors group. Allied Maples would have been better off, competently advised, if, but only if: (a) it had raised the matter with Gillow and sought improved warranties and (b) Gillow had responded by providing them. The Court of Appeal held that Allied Maples had to prove point (a) on a balance of probabilities, but that point (b) should be assessed upon the basis of loss of the chance that Gillow would have responded favourably. The Court of Appeal (Stuart Smith, Hobhouse and Millett LJJ) were unanimous in that statement of legal principle, although they differed as to the outcome of its application to the facts. It was later approved by the House of Lords in Gregg v Scott, at para 11 by Lord Nicholls and para 83 by Lord Hoffmann. The Allied Maples case was about the loss, due to negligence, of the opportunity to achieve a more favourable outcome in a negotiated transaction, rather than about the loss of an opportunity to institute a legal claim. But there is no sensible basis in principle for distinguishing between the two, and none was suggested in argument. In both cases the taking of some positive step by the client, once in receipt of competent advice, is an essential (although not necessarily sufficient) element in the chain of causation. In both cases the client will be best placed to assist the court with the question whether he would have taken the requisite initiating steps. He will not by the defendants breach of duty be unfairly inhibited in proving at a trial against his advisor that he would have done so, save perhaps where there is an unusual combination of passage of time and scarcity of other probative material, beyond his own unaided recollection. Two important consequences flow from the application of this balance of probabilities test to the question what the client would have done, in receipt of competent advice. The first is that it gives rise to an all or nothing outcome, in the usual way. If he proves upon the narrowest balance that he would have brought the relevant claim within time, the client suffers no discount in the value of the claim by reason of the substantial possibility that he might not have done so: see Stuart Smith LJ in the Allied Maples case at [1995] 1 WLR 1602, 1610G H. By the same token, if he fails, however narrowly, to prove that he would have taken the requisite initiating action, the client gets nothing on account of the less than 50% chance that he might have done so. The second consequence flows directly from the first. Since success or failure in proving on the balance of probabilities that he would have taken the necessary initiating step is of such fundamental importance to the clients claim against his advisor, there is no reason in principle or in justice why either party to the negligence proceedings should be deprived of the full benefit of an adversarial trial of that issue. If it can be fairly tried (which this principle assumes) then it must be properly tried. And if (as in this case) the answer to the question whether the client would, properly advised, have taken the requisite initiating step may be illuminated by reference to facts which, if disputed, would have fallen to be investigated in the underlying claim, this cannot of itself be a good reason not to subject them to the forensic rigour of a trial. As will appear, this has an important bearing on the extent of the general rule that, for the purpose of evaluating the loss of a chance, the court does not undertake a trial within a trial. Applied to the present case, the principle that the client must prove on the balance of probabilities that he would have taken any necessary steps required of him to convert the receipt of competent advice into some financial (or financially measurable) advantage to him means that Mr Perry needed to prove that, properly advised by Raleys, he would have made a claim to a Services Award under the Scheme within time. To this the judge added that it would have to have been an honest claim. He made this addition upon the basis of a concession to that effect by counsel on Mr Perrys behalf, from which Mr Watt Pringle QC for Mr Perry (who did not appear at the trial) invited this court to permit him to resile, so that the question whether the honesty of the claim was a requirement of Mr Perrys cause of action could be properly argued. Having heard commendably concise argument on the point, I consider that the concession was rightly and properly made. In Kitchen v Royal Air Force Association [1958] 1 WLR 563 the plaintiffs husband, a member of the RAF, was electrocuted and killed in the kitchen of his house. His widow lost the opportunity to bring a claim under the Fatal Accidents Act in time due to the negligence of the defendant solicitors. In a leading judgment on the evaluation of the loss of a chance, Lord Evershed MR said this, at p 575: I would add, as was conceded by Mr Neil Lawson, that in such a case it is not enough for the plaintiff to say: Though I had no claim in law, still, I had a nuisance value which I could have so utilised as to extract something from the other side and they would have had to pay something to me in order to persuade me to go away. If nuisance value claims fall outside the category of lost claims for which damages may be claimed in negligence against professional advisors, then so, a fortiori, must dishonest claims. That simple conclusion might be thought by many to be too obvious to need further explanation, but it may be fortified in any of the following ways. First, a client honestly describing his condition to his solicitor when considering whether to make a personal injuries claim would not be advised to do so if the facts described did not give rise to a claim. On the contrary, he would be advised not to waste his own money and time upon the pursuit of pointless litigation. Secondly, the court when appraising the assertion that the client would, if properly advised, have made a personal injuries claim, may fairly presume that the client would only make honest claims, and the client would not be permitted to rebut that presumption by a bald assertion of his own propensity for dishonesty. Thirdly, the court simply has no business rewarding dishonest claimants. The extent of dishonest claims for minor personal injuries such as whiplash (which are difficult to disprove) in road traffic accident cases is already such a blot upon civil litigation that Parliament has considered it necessary to intervene to limit that abuse. Applied to the present case, Mr Perry could only have brought an honest claim for a Services Award if he believed that: a) He had, prior to developing VWF, carried out the six tasks, or some of them, without assistance, b) After developing VWF, he needed assistance in carrying out all or some of those tasks, and c) The reason for his need for that assistance was a lack of grip or manual dexterity in his hands, brought on by VWF. While the question whether a perceived lack of grip or manual dexterity on his part was caused by VWF might be said to be a matter of expert medical opinion, the presence or absence of all the other elements necessary for making an honest claim to a Services Award fell squarely within Mr Perrys own knowledge. He would not, for example, need a doctor to tell him whether he needed assistance in changing the sparking plugs on his car engine and, if he did, whether his difficulty arose from lack of ability to grip or manipulate the requisite spanner, or rather from chronic back pain. Simple facts of that kind, plainly relevant to the question whether Mr Perry could have brought an honest claim if competently advised, do not in themselves fall within either of those categories of futurity or counter factuality which have traditionally inclined the court to adopt a loss of a chance type of assessment. They are facts about Mr Perrys actual physical condition at the relevant time (that is when he could have made a claim for a Services Award under the Scheme if properly advised), and about his habitual patterns in going about the six types of domestic task. Furthermore, it is the common understanding of medical experts that VWF, once developed, is a relatively stable condition. It gets neither worse nor better once the miner ceases to use vibrating machinery. If one asks without reference to authority whether there would be any unfairness subjecting his assertion that he would have made a claim for a Services Award to forensic analysis including questions about his then manual grip and dexterity and about the extent to which he was assisted in the performance of the relevant domestic tasks, the answer would be no. Nor would it be, on the face of it, unfair to subject his oral evidence about those matters, and that of his alleged family assistants, to a searching comparison with other evidence about his own concerns about his medical condition at the relevant time, to be derived from GP records. The question remains however whether any of the authorities relied upon by counsel for Mr Perry on this appeal, or by the Court of Appeal in its conclusion that a forensic investigation of that kind at a trial was contrary to principle, really establish any such proposition, where the facts being investigated are relevant to the issue, to be proved by the claimant on the balance of probabilities, whether he would have taken the essential step of bringing an honest claim, upon receipt of competent advice. On analysis, they establish no such proposition. All they do show is that, where the question for the court is one which turns upon the assessment of a lost chance, rather than upon proof upon the balance of probabilities, it is generally inappropriate to conduct a trial within a trial. Taking the cases in chronological order, the earliest relevant decision is the Kitchen case already mentioned. There, the plaintiffs husband had been killed by electrocution and the claim which the solicitors negligence disabled her from making was against the electricity company. It was never suggested that, if properly advised, she could not have made an honest claim. It was clearly more than a nuisance value claim. The precise circumstances which led to the husbands electrocution were, as the Court of Appeal said, shrouded in mystery, and were not within the plaintiffs knowledge. Accordingly, the well known advice of the Court of Appeal, that in those circumstances the court should focus upon the chose in action constituted by the lost claim and determine its value as best it can, without necessarily conducting a trial within a trial, was not directed to the question whether the plaintiff would have brought a claim. Nor indeed had it by then been established, in the Allied Maples case, that such a question required proof on the balance of probabilities. Mount v Barker Austin [1998] PNLR 493 is the first of a series of cases in which the Court of Appeal sought to extract from the Kitchen and Allied Maples cases principles applicable to the determination of negligence claims against solicitors who had through their negligence allowed their clients pending claim to be struck out, either for failure to comply in time with a procedural step, or more generally for want of prosecution. They may all be distinguished from the present case because, by the time when the negligent conduct occurred, the client already had a pending claim which could be treated as something of potential value, thereafter lost because of the solicitors negligence. By contrast with the Allied Maples case and indeed this case, there was nothing which the client had to prove, on the balance of probabilities, that he would have done, had his solicitors acted competently, to bring such a pending claim into existence. Simon Brown LJ sought to lay out the relevant principles at pp 510 511, in four propositions which have been frequently followed and applied. In summary, they require the claimant only to prove that the lost claim had a real and substantial, rather than merely negligible, prospect of success, following which the court was obliged to conduct an evaluation of the prospect of success, rather than a trial within a trial of the underlying claim. But those principles all fall on that side of the dividing line established in the Allied Maples case in which the court is concerned to value the loss of a chance, rather than to enquire whether the client has proved, on the balance of probabilities, that he would have done something relevant to the existence of a chain of causation between the solicitors negligence and the clients loss. The Court of Appeal, and counsel for Mr Perry in his submissions to this court, placed Hanif v Middleweeks (supra) squarely in the forefront of their criticism of the judge in conducting what they described as a trial within a trial. It was a professional negligence action in which the client was the co owner of a nightclub which had been destroyed by fire. The insurers had issued proceedings for a declaration of non liability, on the ground (among others) that the fire had been started deliberately by Mr Hanifs co owner. Mr Hanif counterclaimed for an indemnity under the insurance policy, but his counterclaim was struck out for want of prosecution because of the negligence of the defendant solicitors. The trial judge had assessed the prospects of Mr Hanif resisting the insurers allegation of arson by his co owner at 25% and the Court of Appeal, applying both the Allied Maples and Kitchen cases, held that he had been right to adopt a loss of chance approach, rather than to decide, in a trial within a trial, whether or not the fire had been started deliberately. A submission that, in the light of the 25% finding, the fire probably had been deliberate, so that the claim should have been dismissed as being contrary to public policy was rejected, not least because it had been neither pleaded nor argued in the court below. The Hanif case did not, therefore, involve any question about what the client would have done had he obtained competent advice. He had already given instructions for the making of the counterclaim, and it would have gone to trial but for the solicitors negligence in allowing it to be struck out for want of prosecution. There was, therefore, nothing which Mr Hanif had to prove, on the balance of probabilities, that he would have done in order to have benefitted from a competent discharge by the solicitors of their duty of care. The questions relevant to the lost counterclaim therefore fell squarely within the category identified in the Allied Maples case as calling for an evaluation of a lost chance, rather than proof upon the balance of probabilities. Furthermore, there was no suggestion, at trial or in the Court of Appeal, that Mr Hanif could not honestly have brought or pursued his counterclaim, even though the judge found that he had only a 25% prospect of resisting the allegation of arson by his co owner. In sharp contrast with Mr Perrys knowledge of his own manual grip and dexterity, it was not suggested that Mr Hanif had personal knowledge of the facts relevant to the question whether the fire had been started deliberately. The case is therefore a conventional example of the correct application of the dividing line established in the Allied Maples case between those matters to be proved by the client on the balance of probabilities, and those to be addressed by reference to the assessment of the value of the lost opportunity. But it does not begin to establish some principle that it is always wrong for the court to try an issue relevant to causation in a professional negligence case, merely because that same issue would have fallen for determination in the trial of the underlying claim, lost due to the solicitors negligence. The question whether any given issue should or should not be tried in the negligence proceedings depends upon whether it is one upon which the client must prove his case on the balance of probabilities, or only one which should be subjected to the valuation of a lost chance. Treating the question as determined by asking whether the same issue would fall to be tried in the lost claim puts the cart before the horse. Sharif v Garrett & Co [2001] EWCA Civ 1269; [2002] 1 WLR 3118 is another case in which the negligence in question consisted of solicitors allowing a pending claim to be struck out for want of prosecution. The underlying claim (which had been struck out) was a negligence claim against insurance brokers, following the destruction of the claimants business premises by fire. There was no suggestion that it was a dishonest claim, or indeed a hopeless claim, although there was a wide disagreement about its value. It was also a case in which the reason why the underlying claim had been struck out for want of prosecution was that, because of the inordinate delay, it could no longer be fairly tried. The criticism of the trial judges approach which prevailed in the Court of Appeal was that he should not have conducted a trial of issues which would have arisen in the underlying claim in circumstances where the court had already concluded that no fair trial of that claim was possible, as a result of the solicitors negligence in its prosecution. But the case is, like the Hanif case, another conventional application of the dividing line established in the Allied Maples case. The client had started his claim and needed to prove nothing about what he would have done, on the balance of probabilities, in order to have benefited from his solicitors careful conduct of the proceedings. In Dixon v Clement Jones [2005] PNLR 6, the underlying claim was a negligence action against accountants for failing to advise the claimant against what turned out to be a disastrous transaction, which her solicitors allowed to be struck out for failure to serve Particulars of Claim in time. The solicitors alleged that, even if their client had received competent advice from the accountants, she would still have entered into the disastrous transaction so that she would, applying principles from the Allied Maples case, have failed to prove a necessary element in her case on causation, on the balance of probabilities. The question for the Court of Appeal was whether, in those circumstances, the client was obliged in the negligence claim against the solicitors also to prove, on the balance of probabilities, that aspect of her case on causation in the underlying claim. In agreement with the trial judge, they concluded that she did not, because causation issues in the underlying claim fell to be evaluated on a loss of chance basis in the same way as all other issues in the underlying claim, when considering the value of that claim which had been lost by reason of the solicitors negligence. It is unnecessary to express a concluded view about that analysis. A rigid application of the Allied Maples test, namely whether the fact in issue was something that the claimant rather than a third party would have done, might lead to the opposite conclusion. But the client had already given instructions for the bringing of the underlying claim, so there was nothing which she needed to prove that she would have done, had the solicitors acted competently and served the Particulars of Claim in time, in order to bring into existence a chose in action which the court could value. Nor, unsurprisingly, was it suggested that the underlying claim had not itself been honestly brought. It is sufficient to say that it does not address the question for decision in the present case, namely whether the client must prove, on the balance of probabilities that, competently advised, he would have brought an honest claim so as to establish causation between the solicitors negligence and his alleged loss. The Judges Approach to the Law It was not, therefore, wrong in law or in principle for Judge Saffman to have conducted a trial of the question whether Mr Perry would (or indeed could) have brought an honest claim for a Services Award, if given competent advice by Raleys. That was something which Mr Perry had to prove on the balance of probabilities, and which Raleys were entitled to test with all the forensic tools available at an ordinary civil trial, and by proof or challenge of alleged facts relevant to that question, even if the same facts would have formed part of the matters in issue, either at a trial of the underlying claim, or upon its adjudication or settlement pursuant to the Scheme. But the Court of Appeals criticism of the judges approach to the issue of causation went further. They held that his reserved judgment disclosed that he wrongly imposed upon Mr Perry the burden of proving not merely that he would, properly advised, have brought an honest claim, but also a successful claim. Viewed across the generality of claims that may never be pursued because of a solicitors negligent advice, it may well be that the burden of proving that the claim would have succeeded is higher than the burden of proving that it could or would have been honestly made. That is because, in the ordinary case, success will depend upon a raft of factual and legal matters, all of which are liable to be subjected to full adversarial examination at a trial, or at least to the disclosure and examination by an opponent of the claimants documents before an attempt at settlement. By contrast, claims for Services Awards under the Scheme by persons already in possession of a medical opinion that they suffered from VWF, at a level sufficient to entitle them to general damages, would not under the claims handling processes provided for by the CHA be subject to any such adversarial procedures. As already described, the claimant miner would only have to complete a questionnaire, identify his alleged assistants, and have one or more of them subjected to a short, non adversarial interview on the telephone by a claims handler, and undergo medical examination limited to the question of co morbidity, before his claim would be assessed and, in all probability, made the subject of an offer of an amount sufficient for the claim to be treated as having been successful. As an experienced judge in this specialised field, Judge Saffman may be assumed to have been well aware of this, and the expression in his reserved judgment of the burden which Mr Perry needed to surmount for the purposes of establishing causation needs to the read in that light, in the context of a long and careful reserved judgment, considered as a whole. There are four occasions in the judges judgment where he directly addressed the causation hurdle facing Mr Perry. First, when dealing with the issues for trial, he said, at para 15: In short therefore the issues for determination are; a. Whether the claim is statute barred, b. If not, whether the admitted breach of duty caused or materially contributed to the claimants alleged loss. In the context of this case did the breach cause the claimant to settle his claim at an undervalue because, on balance, if properly advised, and on the assumption that he acted honestly, he would have made a claim for a Services Award? . c. Has the claimant lost something of value in the sense that his prospects of success in a claim for a Services Award were more than negligible? d. If the claimant has lost a claim with more than a negligible prospect of success what is a realistic assessment of what the prospects of success were? e. What is an appropriate assessment of the likely value of the claim having taken account of the prospects of success? Then, at para 88, under the heading Causation: he continued: The onus is on the claimant to establish causation on the balance of probabilities. The claimant therefore must establish on balance that he would have acted differently if properly advised and a lack of opportunity to do so has caused him loss. In other words the claimant must establish that the breach of duty actually caused him loss. Under the heading Other aspects of Causation he continued at para 114: I therefore now turn to the issue of whether the breach caused the claimant to settle his claim at an undervalue because, on balance, if properly advised and on the assumption that he was acting honestly he would have acted differently and made a successful claim for a Services Award. At para 119 the judge said: That is a question of credibility. Am I satisfied that the claimant originally undertook the services but could no longer do so without assistance? As Mr Quiney put it, has the claimant succeeded in persuading the court that he actually suffered sufficient disability that he could honestly say I cannot carry out these services? Finally, he expressed his conclusion at para 133, as follows: I am not satisfied that the evidence of Mrs Perry or Scott Perry is sufficiently cogent to dissuade me from my conclusion that the claimant has not established that he honestly met the factual matrix by reason of his VWF either in respect of what tasks he used to do and those which he could not do without assistance at the time of settlement of his original claim. Indeed I go further, I am satisfied that in so far as the burden is on the defendant to establish its assertion that the claimant did not meet the matrix, it has discharged that burden. The judge was using the phrase the factual matrix in the way described above, namely having a sufficient disability in his hands, caused by VWF, that he could no longer carry out, without assistance, tasks that he had previously carried out on his own. While it is true that, at para 114, the judge did use language which, read on its own, might appear to suggest that he imposed upon Mr Perry the additional burden, beyond proving that he would have made an honest claim, that it would have been successful, his analysis of causation, derived from all the passages quoted above, taken together, and in the context of the judgment as a whole, makes it clear that he was not thereby imposing some additional burden upon Mr Perry, beyond proof, on the balance of probabilities, that he would have brought an honest claim. His reference to a successful claim may have been no more than shorthand for his earlier reference to the requirement upon Mr Perry to show that his claim had a more than negligible prospect of success. Accordingly, and contrary to the view of the Court of Appeal, the judges determination of the case was not vitiated by any error of law. The Judges Determination of the Facts It is necessary therefore also to address the question whether the Court of Appeal was right to conclude that, quite separately from supposed errors of law, the judge went sufficiently wrong in his determination of the facts to enable an appellate court to intervene. The Court of Appeal expressed its positive conclusion on that issue under two headings, at para 26, namely: iii) he demonstrably failed to consider, or misunderstood, relevant evidence, and iv) his decision (that Mr Perry could not honestly have claimed in 1999 and thereafter that he was unable to perform the relevant tasks without assistance) cannot reasonably be explained or justified. Those are strong conclusions about a fact finding exercise at trial by an experienced judge, but the Court of Appeal made them after reminding themselves of the very real constraints facing an appellate court when invited to overturn a judges findings of fact at trial. For that purpose they referred to Grizzly Business Ltd v Stena Drilling Ltd [2017] EWCA Civ 94, Henderson v Foxworth Investments Ltd [2014] UKSC 41; [2014] 1 WLR 2600 and McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477. In the Henderson case the Supreme Court had said, at para 62: It does not matter, with whatever degree of certainty, that the appellate court considers that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached. In the McGraddie case Lord Reed said this, at paras 3 4: The reasons justifying that approach are not limited to the fact, emphasised in Clarkes case and Thomas v Thomas, that the trial judge is in a privileged position to assess the credibility of witnesses evidence. Other relevant considerations were explained by the United States Supreme Court in Anderson v City of Bessemer (1985) 470 US 564 (1985), 574 575: The rationale for deference to the original finder of fact is not limited to the superiority of the trial judges position to make determinations of credibility. The trial judges major role is the determination of fact, and with experience in fulfilling that role comes expertise. Duplication of the trial judges efforts in the court of appeals would very likely contribute only negligibly to the accuracy of fact determination at a huge cost in diversion of judicial resources. In addition, the parties to a case on appeal have already been forced to concentrate their energies and resources on persuading the trial judge that their account of the facts is the correct one: requiring them to persuade three more judges at the appellate level is requiring too much. As the court has stated in a different context, the trial on the merits should be the main event rather than a try out on the road. For these reasons, review of factual findings under the clearly erroneous standard with its deference to the trier of fact is the rule, not the exception. Similar observations were made by Lord Wilson in In re B (a Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 WLR 1911, para 53. 4. Furthermore, as was stated in observations adopted by the majority of the Canadian Supreme Court in Housen v Nikolaisen [2002] 2 SCR 235, para 14: The trial judge has sat through the entire case and his ultimate judgment reflects this total familiarity with the evidence. The insight gained by the trial judge who has lived with the case for several days, weeks or even months may be far deeper than that of the Court of Appeal whose view of the case is much more limited and narrow, often being shaped and distorted by the various orders or rulings being challenged. The Court of Appeal, at para 24, also reminded themselves of the following dicta of Lewison LJ in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5: (iv) In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping. (v) The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence). (vi) Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done. The question in the present case is not whether the Court of Appeal misstated those constraints. They may be summarised as requiring a conclusion either that there was no evidence to support a challenged finding of fact, or that the trial judges finding was one that no reasonable judge could have reached. Rather, the question is whether the Court of Appeal were correct in concluding, as they did, that there were errors in the judges factual determination which satisfied those very stringent requirements. For that purpose it is necessary to address each of the Court of Appeals criticisms in turn, but with the caveat that it is not possible entirely to disentangle some of them from what, for reasons already given, was the Court of Appeals incorrect approach to the burden imposed by the common law upon Mr Perry to prove causation. The Court of Appeals first conclusion was that the judge had failed to appreciate that, on the question whether Mr Perry could have made an honest claim for a Services Award, the burden of proof in relation to any question of dishonesty lay squarely upon Raleys. More importantly, the Court of Appeal concluded that it had not been fairly put to Mr Perry in cross examination at trial that, for him to have instructed Raleys to pursue a claim for a Services Award would have involved dishonesty on his part, in suggesting that he suffered from the requisite underlying manual disability. As to that, for the reasons already given, the burden lay on Mr Perry to prove that he would have made an honest claim. Since his written evidence was that he would indeed have made a claim for a Services Award, it was incumbent upon counsel for Raleys to bring home to Mr Perry in cross examination and by any other relevant means that his honesty in making that assertion was being challenged, and to do so in a way which took properly into account Mr Perrys relative lack of sophistication. The judge reminded himself at some length of the need to take account of Mr Perrys relatively unsophisticated background, at paras 16 18 and 136 of his judgment. He satisfied himself, at paras 74 75, that Mr Perry and his advisors were in no doubt that Raleys were alleging that he was promoting a dishonest claim. At para 133 the judge made it clear that his conclusion that, in asserting that he suffered from the requisite manual disability in carrying out the relevant tasks unaided, Mr Perry was not telling the truth was one which he reached regardless of the incidence of a burden of proof. The question whether it had been sufficiently brought home to Mr Perry, by cross examination or otherwise, that the court was being invited to conclude that he was lying in his evidence about his inability to carry out the domestic tasks without assistance was pre eminently a matter for the trial judge, and it is clear, as noted above, that he concluded, after hearing submissions from counsel on the point, that it had been. The question for an appellate court is therefore whether there was material upon which the judge could reasonably reached that affirmative conclusion. Having read those parts of the cross examination to which this court was directed by counsel, there clearly was such material. It consisted, in the main, of counsel for Raleys putting in considerable detail to Mr Perry aspects of his documented medical history, and evidence (including photographic evidence) of fishing and gardening activities after his retirement as a miner which were, as the judge held, wholly inconsistent with his evidence about his disability in carrying out the relevant tasks. The judge was entitled to conclude that this sufficiently brought home to Mr Perry that he was being accused of lying about it. The fact that an appellate judge might, if trying the case at first instance, have preferred or required the matter to be put to Mr Perry differently or more directly, is, with respect, neither here nor there. Linked to this criticism was the conclusion, at para 46 of the judgment of Gloster LJ, that the judge placed far too much weight on the detail of the inadequate answers which were given by the appellant in this respect . But again, the weight to be given to evidential material in forming a conclusion whether Mr Perrys evidence lacked all credibility (as the judge found) was a matter for the trial judge. The second and main criticism by the Court of Appeal was that the judge had disregarded, without giving proper reasons, the evidence, broadly supportive of Mr Perrys case, from Professor Kester and from the single joint expert Mr Tennant, in particular because the latter was not called to be cross examined. Professor Kesters task, under the Scheme, was to advise whether, and with what degree of severity, Mr Perry suffered from VWF. He noted that Mr Perry reported a loss of manual dexterity and clumsiness of an intermittent nature, but his detailed examination of Mr Perry was directed to the presence or absence of the VWF in his hands rather than to their grip or dexterity. By contrast, Mr Tennants opinion was directed towards Mr Perrys ability to carry out the relevant domestic tasks unaided. Again however, much of his reasoning was based upon information provided to him by Mr Perry during interview, in particular in relation to each of the six relevant tasks, although Mr Tennant appears to have carried out a grip strength test and some simple tests of manual dexterity. The judge did, at paras 116 118 and 122 123 of his judgment, remind himself of the opinions of Professor Kester and Mr Tennant, of their findings as to the severity of Mr Perrys VWF, of the presumption thereby arising in favour of a Services Award, and accepted that Mr Perry suffered from VWF to a high degree. At para 118, he said: I acknowledge that the staging of two doctors supports the view that he has a significant loss of function, but I repeat that the question is whether the claimant has established that in reality any loss of function manifested itself in an inability to carry out the tasks. This was what, in the passage already quoted above, the judge described as a question of credibility. The trial judge was not merely entitled but obliged to weigh in the evidential balance his perception that Mr Perry was lying about his ability to perform, unaided, the relevant tasks against the opinion, in particular of Mr Tennant, that he suffered from shortcomings in manual dexterity which made it likely that he suffered from such a disability. Corroborative expert evidence not infrequently transforms testimony which on its own appears most unlikely into something credible. The judges conclusion that Mr Tennants opinion did not prevail over Mr Perrys thoroughgoing lack of credibility cannot be described as either lacking in reasoning or trespassing beyond the range of reasonable conclusions available to a trial judge. While it might have been better if Mr Tennant had been called for cross examination, the judge was not obliged to prefer the experts opinion, based as it was to a significant extent upon what Mr Perry had told him, to that which the judge was entitled to form, on the basis of the evidence as a whole, about whether Mr Perry was telling the truth about his supposed disability. In the end, the Court of Appeals criticism amounted to a supposed failure to give sufficient weight to the medical evidence: see per Gloster LJ at para 52. But questions as to the weight of competing evidence are pre eminently a matter for the trial judge. The next criticism was that the judge had misunderstood, or failed to apply, a principle fundamental to the Scheme, namely that a claimant did not have to be disabled entirely from carrying out a task in order to be entitled to a Services Award: see per Gloster LJ at para 54. She said that the impression given by the judge was that he wrongly considered that unless Mr Perry could not carry out any aspects of a task without assistance, he was not entitled to claim in respect of that task. No such error appears from perusal of the judges careful judgment. In particular, at para 132, he acknowledged that inability or reduced ability to carry out the services tasks would be sufficient to support a claim to a Services Award. The final criticism made by the Court of Appeal was that the judge could not rationally have reached the conclusion that Mr Perry, his wife and two sons had all given false evidence: see per Gloster LJ at para 55. It is a very strong thing for an appellate court to say, from a review of the paper records of a trial , that the trial judge was irrational in concluding that witnesses were not telling the truth, all the more so when the trial judge gives detailed reasons for that conclusion in a lengthy reserved judgment, and those reasons do not disclose any failure by him to consider relevant materials, or any disabling failure properly to understand them. The credibility (including honesty) of oral testimony is, of all things, a matter for the trial judge. It is unnecessary to address in detail the reasons given by Gloster LJ for that finding of irrationality against the judge. It is sufficient to say that, while they constitute persuasive and forcefully expressed views about why she and her colleagues in the Court of Appeal, faced with the same materials, would have come to a different conclusion, they do not, separately or in conjunction, support a conclusion of irrationality as the only explanation for the judges contrary view. As the judge said, the question whether Mr Perry needed assistance in the performance of the relevant tasks following his retirement from mining was pre eminently a matter to be proved, or not proved, by his oral evidence, with such support as he could muster from the oral evidence of his wife and two sons. It was, as the judge put it, a question of credibility. While there undoubtedly are cases where surviving documents point so clearly to the correct answer to issues of fact that the oral testimony of relevant witnesses is of subordinate importance, this is not one of them. Furthermore the surviving documents were, as was demonstrated during cross examination, generally hostile to Mr Perrys case. Mr Watt Pringle sought to support the Court of Appeals criticisms of the judges findings with specific submissions about aspects of the detail. They did not, separately or together, amount to a case sufficient to support either a conclusion that there was no evidence to support the judges adverse findings about credibility or a conclusion that no reasonable judge could have decided as he did. In particular Mr Watt Pringle pointed to the relative brevity of the cross examination of Mr Perrys wife and two sons, being, he submitted, insufficient to justify the conclusion that any of them was lying. But it is impossible to tell, without having been present at the trial, whether a short or a long cross examination of a witness was necessary in order to undermine his or her credibility. Mr Watt Pringle also pointed to the fact that the central thrust of Raleys case at trial was not so much that Mr Perry suffered from no disability in performing the relevant tasks unaided, (although that was part of Raleys case) but rather that his back problem was the only significant cause of such disability as in fact affected him. He pointed to the fact that, in the concluding part of his judgment, the judge rejected Raleys case that Mr Perrys back problems were of that degree of significance, preferring in that respect the evidence to the contrary of Mr Tennant. But he did so expressly on the conditional basis that he might be wrong in his primary conclusion that Mr Perry was lying about having any relevant inability to perform those tasks unaided: see para 137 of his judgment. In conclusion therefore, none of the grounds upon which the Court of Appeal considered that this was one of those rare cases where it was appropriate to reverse the trial judges findings on issues of fact is established, to the requisite high degree. Accordingly, this appeal should be allowed, and the judges order restored. |
The question raised by this appeal is whether there exists a power under the Immigration Act 1971 (the 1971 Act) to grant immigration bail to a person who can no longer be lawfully detained. Factual Background B has a long and complex immigration history which it is necessary to refer to in some detail. He has been in the United Kingdom since 1993. Between 5 February 2002 and 11 March 2005, he was detained under section 21 of the Anti terrorism, Crime and Security Act 2001. He appealed to the Special Immigration Appeals Commission (SIAC) against that decision using a false identity. The relevant provisions of the 2001 Act were repealed by the Prevention of Terrorism Act 2005 (the 2005 Act) following the decision of the House of Lords in A and others v Secretary of State for the Home Department [2004] UKHL 56; [2005] 2 AC 68. B was then released from detention on 11 March 2005, and made subject to a control order under the 2005 Act. He was admitted to the Royal Free Hospital on the 12 March 2005 as a voluntary psychiatric patient where he remained, save for one night, until 11 August 2005. On 11 August 2005 B was notified, in accordance with regulations under section 105 of the Nationality Immigration and Asylum Act 2002, of the Secretary of States decision to make a deportation order against him on national security grounds, under sections 3(5) and 5(1) of the 1971 Act. B was arrested and detained under immigration powers contained in paragraph 2(2) of Schedule 3 to the 1971 Act pending the making of the deportation order. He was detained at HMP Woodhill and, the following day, transferred to HMP Long Lartin. On 17 August 2005, B appealed to SIAC against that decision, once again using the same false identity. Bs grounds of appeal contended, inter alia, that his removal to Algeria would be in breach of the United Kingdoms obligations under the UN Refugee Convention and unlawful as incompatible with his rights under article 3 of the European Convention on Human Rights and Fundamental Freedoms (ECHR). The Secretary of State has never disputed that, if deported to Algeria, B would be at real risk of treatment incompatible with article 3 ECHR and that only with specific individual assurances from the Algerian government could he be lawfully and safely removed to Algeria. On 11 May 2006, Her Majestys Government informed the Algerian Government that it proposed to deport B and requested certain information about him. On 16 May 2006, specific assurances as to the treatment of B were sought from Algeria. On 10 July 2006, the Algerian authorities confirmed that the details of his identity given by B were those of an individual present in Algeria. On 17 July 2006, SIAC heard the national security case in Bs appeal against the Secretary of States decision to make a deportation order. On 12 January 2007, pursuant to rule 39(1) of the Special Immigration Appeals Commission (Procedure) Rules 2003, SIAC directed B to provide specified particulars of his true identity and to consent to provide a non invasive sample for the purposes of DNA testing. B consented to provide a DNA sample but refused to provide the particulars of his true identity. On 19 July 2007, SIAC ordered B to provide details of his true identity. A penal notice was attached to the order. On 30 July 2008, SIAC gave judgment in the national security case against B, holding that the Secretary of States case on the risk to national security had been made out. SIAC concluded that, notwithstanding his mental health difficulties, B had played a leading role in facilitating communications for Algerian terrorists, as well as being responsible for the procurement of false documentation and high technology equipment. The hearing of the case on safety on return did not take place at that time because of the unresolved question of Bs true identity. On 18 August 2009, the Secretary of State applied to SIAC for an order that B be committed to prison for contempt for disobeying the order of 19 July 2007. Following an adjournment in the hope of resolving the issue of Bs identity, the committal application was eventually heard on 11 October 2010. In its judgment delivered on 26 November 2010 SIAC held that B had deliberately and contumeliously disobeyed its order and, taking into account all the circumstances including that Bs mental illness may have reinforced his decision not to comply with SIACs order, imposed a prison sentence of four months. The operation of the order was suspended until the final determination of any appeal. On 21 July 2011, the Court of Appeal by a majority dismissed his appeal (B (Algeria) v Secretary of State for the Home Department [2011] EWCA Civ 828). B appealed to the Supreme Court which on 30 January 2013 dismissed the appeal (B (Algeria) v Secretary of State for the Home Department [2013] UKSC 4; [2013] 1 WLR 435). B then served his sentence of 4 months imprisonment in HMP Belmarsh and was released on 5 April 2013. On 11 April 2006, SIAC had decided in principle that B could be granted bail. However, save for one night, throughout the period from 11 March 2005 B remained in either prison or hospital until his discharge from hospital to bail accommodation on 18 January 2011. B was voluntarily readmitted to hospital in February 2011 and on further occasions thereafter. Following his release from prison after serving his sentence for contempt, two sets of bail conditions were set by SIAC to run in parallel depending on whether B was an in patient at a psychiatric hospital or residing at his bail accommodation. On 23 January 2014, B applied to vary his bail conditions which, he maintained, constituted an unlawful deprivation of liberty. At a hearing on 28 and 29 January 2014 SIAC considered the application of the Hardial Singh principles (R v Governor of Durham Prison, Ex p Hardial Singh [1984] 1 WLR 704) to the circumstances of Bs case, including the prospect of Bs removal to Algeria. In its judgment of 13 February 2014, SIAC found that in the absence of a change of mind by B there is no reasonable prospect of removing [B] to Algeria and thus the ordinary legal basis for justified detention of B under the Immigration Acts has fallen away. Following this ruling, the Secretary of State did not authorise the further detention of B, although Bs advisers only became aware of this on or about 6 June 2014. In its judgment of 13 February 2014 SIAC also held that the conditions of bail did not constitute a deprivation of liberty. However, it subsequently directed a review of Bs bail conditions, which were relaxed by an order dated 16 May 2014. On 14 May 2014 the Secretary of State applied under rules 11B and 40 of the Special Immigration Appeals Commission (Procedure) Rules 2003 to strike out Bs appeal against the notice of decision to deport him, on the grounds of his continuing refusal to comply with the order of 19 July 2007. On 1 July 2014, in the light of Bs continuing contempt of court, SIAC struck out Bs appeal. B maintained that, following SIACs findings on 13 February 2014, his detention could no longer lawfully be authorised as it would be incompatible with Hardial Singh principles. He contended that if that were so, and he could not lawfully be detained, SIAC no longer had jurisdiction to grant bail to B or to impose bail conditions. In its judgment of 1 July 2014, SIAC rejected these submissions, concluding that it continued to have jurisdiction to impose bail conditions on B. B then applied for permission to apply for judicial review of SIACs decision of 1 July 2014 on its bail jurisdiction, there being no right of appeal against that decision. Irwin J, sitting as a High Court Judge, heard that application by agreement between B and the Secretary of State, and on 14 August 2014 he granted B permission to apply for judicial review of that decision, dismissed the application for judicial review, and granted permission to appeal to the Court of Appeal. B appealed to the Court of Appeal which on 6 May 2015 gave judgment allowing both appeals (B (Algeria) v Secretary of State for the Home Department (No 2) [2015] EWCA Civ 445; [2016] QB 789). (1) The Court of Appeal allowed Bs appeal in relation to SIACs bail jurisdiction on the ground that SIAC had no jurisdiction to impose bail conditions on B if his detention would be unlawful. (2) The Court of Appeal also allowed Bs appeal against the strike out of Bs SIAC appeal and remitted the matter to SIAC. On 15 September 2016 SIAC refused the application to strike out Bs appeal against the decision to make a deportation order against him. The Secretary of State then indicated that she no longer opposed Bs appeal. Accordingly, in a judgment dated 12 December 2016 SIAC confirmed its decision to allow Bs appeal against the notice of intention to deport him. The Secretary of State did not seek permission to appeal. As a result of this ruling allowing the substantive deportation appeal, Bs bail fell away and it is common ground that the immigration bail power is now unavailable. On 9 November 2015, the Supreme Court granted the Secretary of State permission to appeal against the decision of the Court of Appeal on the issue of SIACs bail jurisdiction. Statutory provisions The Secretary of States power to detain or control a person pending deportation is set out in paragraph 2 of Schedule 3 to the 1971 Act which provides in material part, as amended: (2) Where notice has been given to a person in accordance with Regulations under section 105 of the Nationality, Immigration and Asylum Act 2002 (notice of decision) of a decision to make a deportation order against him, and he is not detained in pursuance of the sentence or order of a court, he may be detained under the authority of the Secretary of State pending the making of the deportation order. (3) Where a deportation order is in force against any person, he may be detained under the authority of the Secretary of State pending his removal or departure from the United Kingdom (and if already detained by virtue of sub paragraph (1) or (2) above when the order is made, shall continue to be detained unless he is released on bail or the Secretary of State directs otherwise). (4A) Paragraphs 22 to 25 of Schedule 2 to this Act apply in relation to a person detained under sub paragraph (1), (2) or (3) as they apply in relation to a person detained under paragraph 16 of that Schedule. (5) A person to whom this sub paragraph applies shall be subject to such restrictions as to residence, as to his employment or occupation and as to reporting to the police or an immigration officer as may from time to time be notified to him in writing by the Secretary of State. (6) The persons to whom sub paragraph (5) above applies are (b) a person liable to be detained under sub paragraph (2) or (3) above, while he is not so detained. The power to grant immigration bail and impose bail conditions derives from paragraphs 22 and 29 of Schedule 2 to the 1971 Act so far as relevant, as amended. Paragraph 22 governs bail in general and paragraph 29 governs bail pending appeal. Section 3 of the Special Immigration Appeals Commission Act 1997 (the 1997 Act) extends to SIAC the power to grant bail and impose bail conditions that is conferred on an immigration officer not below the rank of chief immigration officer or the First tier Tribunal (the FTT) by paragraphs 22 and 29 of Schedule 2 to the 1971 Act. Section 3 of the 1997 Act provides in material part: (1) In the case of a person to whom section (2) below applies, the provisions of Schedule 2 to the Immigration Act 1971 specified in Schedule 3 to this Act shall have effect with the modifications set out there. (2) This subsection applies to a person who is detained under the Immigration Act 1971 if the Secretary of State certifies that his detention (a) is necessary in the interests of national security, (b) or (c) he is detained following a decision to make a deportation order against him on the ground that his deportation is in the interests of national security. Paragraphs 1 and 4 of Schedule 3 to the 1997 Act modify paragraphs 22 and 29 of Schedule 2 to the 1971 Act respectively so that, in deportation cases heard in SIAC, they provide as follows: 22. (1) The following, namely a person detained under paragraph 16(1) (a) above pending examination; (aa) a person detained under paragraph 16 (1A) above pending completion of his examination or a decision on whether to cancel his leave to enter; and a person detained under paragraph 16(2) (b) above pending the giving of directions, may be released on bail in accordance with this paragraph. (1A) The Special Immigration Appeals Commission may release a person so detained on his entering into a recognizance or, in Scotland, bail bond conditioned for his appearance before an immigration officer at a time and place named in the recognizance or bail bond or at such other time and place as may in the meantime be notified to him in writing by an immigration officer. (2) The conditions of a recognizance or bail bond taken under this paragraph may include conditions appearing to the Special Immigration Appeals Commission to be likely to result in the appearance of the person bailed at the required time and place; and any recognizance shall be with or without sureties as the Commission may determine. (3) In any case in which the Special Immigration Appeals Commission has power under this paragraph to release a person on bail, the Commission may, instead of taking the bail, fix the amount and conditions of the bail (including the amount in which any sureties are to be bound) with a view to its being taken subsequently by any such person as may be specified by the Commission; and on the recognizance or bail bond being so taken the person to be bailed shall be released. 29(1) Where a person (in the following provisions of this Schedule referred to as an appellant) has an appeal pending under Part 5 of the Nationality, Immigration and Asylum Act 2002 or section 2 of the Special Immigration Appeals Commission Act 1997 or a review pending under section 2E of that Act and is for the time being detained under Part I of this Schedule, he may be released on bail in accordance with this paragraph and paragraph 22 does not apply. (2) The Special Immigration Appeals Commission may release an appellant on his entering into a recognizance or, in Scotland, bail bond conditioned for his appearance before the Commission at a time and place named in the recognizance or bail bond. (5) The conditions of a recognizance or bail bond taken under this paragraph may include conditions appearing to the person fixing the bail to be likely to result in the appearance of the appellant at the time and place named; and any recognizance shall be with or without sureties as that person may determine. The power of arrest and re detention of persons on bail under paragraphs 22 and 29 of Schedule 2 is provided for under paragraph 24 of Schedule 2 to the 1971 Act which provides: 24. (1) An immigration officer or constable may arrest without warrant a person who has been released by virtue of paragraph 22 above (a) if he has reasonable grounds for believing that that person is likely to break the condition of his recognizance or bail bond that he will appear at the time and place required or to break any other condition of it, or has reasonable ground to suspect that that person is breaking or has broken any such other condition; or (b) if, a recognizance with sureties having been taken, he is notified in writing by any surety of the suretys belief that that person is likely to break the first mentioned condition, and of the suretys wish for that reason to be relieved of his obligations as a surety; and paragraph 17(2) above shall apply for the arrest of a person under this paragraph as it applies for the arrest of a person under paragraph 17. (2) A person arrested under this paragraph (a) if not required by a condition on which he was released to appear before an immigration officer within twenty four hours after the time of his arrest, shall as soon as practicable be brought before the First tier Tribunal or, if that is not practicable within those 24 hours, before in England and Wales, a justice of the peace, in Northern Ireland, a justice of the peace acting for the petty sessions area in which he is arrested or, in Scotland, the sheriff; and (b) if required by such a condition to appear within those 24 hours before an immigration officer, shall be brought before that officer. (3) Where a person is brought before the First tier Tribunal, a justice of the peace or the sheriff by virtue of sub paragraph (2)(a), the Tribunal, justice of the peace or sheriff (a) if of the opinion that that person has broken or is likely to break any condition on which he was released, may either (i) direct that he be detained under the authority of the person by whom he was arrested; or (ii) release him, on his original recognizance or on a new recognizance, with or without sureties, or, in Scotland, on his original bail or on new bail; and if not of that opinion, shall release him on (b) his original recognizance or bail. On 12 May 2016 the Immigration Bill 2016 received royal assent. Section 61 of the Immigration Act 2016 provides in material part: (3) A person may be released and remain on bail under paragraph 22 or 29 of Schedule 2 to the Immigration Act 1971 even if the person can no longer be detained under a provision of the Immigration Acts to which that paragraph applies, if the person is liable to detention under such a provision. (4) The reference in subsection (3) to paragraph 22 or 29 of Schedule 2 to the Immigration Act 1971 includes that paragraph as applied by any other provision of the Immigration Acts. (5) Subsections (3) and (4) are to be treated as always having had effect. On 9 November 2015, the Supreme Court granted the Secretary of State permission to appeal on the issue of SIACs bail jurisdiction. The Secretary of State indicated that she did not propose to rely on section 61 of the Immigration Act 2016 on this appeal. The appeal has been heard on the basis of the statutory provisions as they were at the time of the Court of Appeals decision. Hardial Singh principles The Hardial Singh principles form an important part of the background to these proceedings. In Hardial Singh itself Woolf J. laid down the following propositions (at p 706D G): Since 20 July 1983, the applicant has been detained under the power contained in paragraph 2(3) of Schedule 3 to the Immigration Act 1971. Although the power which is given to the Secretary of State in paragraph 2 to detain individuals is not subject to any express limitation of time, I am quite satisfied that it is subject to limitations. First of all, it can only authorise detention if the individual is being detained in one case pending the making of a deportation order and, in the other case, pending his removal. It cannot be used for any other purpose. Secondly, as the power is given in order to enable the machinery of deportation to be carried out, I regard the power of detention as being impliedly limited to a period which is reasonably necessary for that purpose. The period which is reasonable will depend upon the circumstances of the particular case. What is more, if there is a situation where it is apparent to the Secretary of State that he is not going to be able to operate the machinery provided in the Act for removing persons who are intended to be deported within a reasonable period, it seems to me that it would be wrong for the Secretary of State to seek to exercise his power of detention. In addition, I would regard it as implicit that the Secretary of State should exercise all reasonable expedition to ensure that the steps are taken which will be necessary to ensure the removal of the individual within a reasonable time. Over time these principles have been elaborated and refined. In R (WL (Congo)) v Secretary of State for the Home Department [2011] UKSC 12; [2012] 1 AC 245, Lord Dyson JSC summarised them as follows (at para 22): With regard to determining what is a reasonable period Lord Dyson (at para 104) repeated his earlier conclusion in Is case (at para 48): It is common ground that my statement in R (I) v Secretary of State for the Home Department [2003] INLR 196, para 46 correctly encapsulates the principles as follows: (i) the Secretary of State must intend to deport the person and can only use the power to detain for that purpose; (ii) the deportee may only be detained for a period that is reasonable in all the circumstances; (iii) if, before the expiry of the reasonable period, it becomes apparent that the Secretary of State will not be able to effect deportation within a reasonable period, he should not seek to exercise the power of detention; (iv) the Secretary of State should act with reasonable diligence and expedition to effect removal. It is not possible or desirable to produce an exhaustive list of all the circumstances that are or may be relevant to the question of how long it is reasonable for the Secretary of State to detain a person pending deportation pursuant to paragraph 2(3) of Schedule 3 to the Immigration Act 1971. But in my view they include at least: the length of the period of detention; the nature of the obstacles which stand in the path of the Secretary of State preventing a deportation; the diligence, speed and effectiveness of the steps taken by the Secretary of State to surmount such obstacles; the conditions in which the detained person is being kept; the effect of detention on him and his family; the risk that if he is released from detention he will abscond; and the danger that, if released, he will commit criminal offences. Discussion I take as my starting point that adopted by the Court of Appeal at paragraph 23 of the judgment of Lord Dyson MR. It is uncontroversial. On 13 February 2014 SIAC ruled that there was no reasonable prospect of removing [B] to Algeria and thus the ordinary legal basis for justified detention of B under the Immigration Acts has fallen away. The Secretary of State accepts that there was thereafter no further authority for the detention of B under paragraph 2(2) of Schedule 3 to the 1971 Act. It is, therefore, common ground that B could not lawfully be detained following the ruling of 13 February 2014 because to do so would exceed the implied limits on the exercise of administrative power to detain for immigration purposes as determined in Hardial Singh. At the heart of this case lies a dispute between the parties as to the correct approach in principle to the availability of immigration bail when the Hardial Singh limit on actual detention is reached. The Secretary of State submits that at that point the individual can be moved onto or kept on bail as an alternative to detention, as a means of getting or keeping him out of detention that is, or is about to become, or would be unlawful. Moreover, at that point the ability to exercise control over him in the form of bail conditions is retained. Bs position, by contrast, is that bail is predicated on lawful detention with the result that when the Hardial Singh limit on actual detention is reached the ability to grant or maintain bail also simultaneously falls away. On behalf of the Secretary of State, Mr Tam urges the court to adopt a purposive interpretation of the relevant legislation. He submits that it is consistent with the purpose of the bail power for it to be construed so that bail is available regardless of whether the individual is lawfully detained or would hypothetically be lawfully detained. The bail power has been provided in order to remove an individual from detention. That purpose would be served whether the detention is lawful or unlawful at the time that bail is granted and the detention is terminated. The bail power, he submits, constitutes a practical solution which permits the termination of unwanted or unwarranted detention, regardless of the separate question of whether that detention is lawful or unlawful. He then draws attention to the fact that at one end of the spectrum of cases dealt with by the immigration system are those of dangerous criminals and those who pose a risk to national security. It is, he submits, particularly important that bail should be available in such cases. Here he refers to the fact that bail conditions can be of greater stringency than conditions which can be attached to temporary admission or temporary release. The availability of bail, he argues, therefore helps to protect the public from such risks if detention is no longer appropriate. While accepting that practical difficulties may arise in the categories of case referred to by Mr Tam in circumstances where continuing detention becomes unlawful on Hardial Singh grounds, I can see no basis for adopting the purposive approach for which the Secretary of State contends, resting as it does on a disregard of the issue of the lawfulness of any continuing detention. It is a fundamental principle of the common law that in enacting legislation Parliament is presumed not to intend to interfere with the liberty of the subject without making such an intention clear (Tan Te Lam v Superintendent of Tai A Chau Detention Centre [1997] AC 97, 111E; R v Secretary of State for the Home Department, Ex p Khawaja [1984] AC 74, 122E F per Lord Bridge). Thus, in In re Wasfi Suleman Mahmod [1995] Imm AR 311, 314 Laws J, observed: While, of course, Parliament is entitled to confer powers of administrative detention without trial, the courts will see to it that where such a power is conferred the statute that confers it will be strictly and narrowly construed and its operation and effect will be supervised by the court according to high standards. In the present case our particular focus is not on a power of executive detention, but on a power to grant bail. Nevertheless, and despite the fact that the purpose may be to effect a release from detention, I consider that this similarly attracts the presumption of statutory interpretation because the conditions which may be attached to a grant of bail are capable of severely curtailing the liberty of the person concerned. It was common ground before us that bail under the 1971 Act may be subject to conditions which constitute a deprivation of liberty within article 5(1)(f) ECHR. As Mr Tam frankly accepts, the ability to exercise control through the use of what may be stringent conditions of bail in part underlies the purposive interpretation for which he contends. Moreover, this is, to my mind, a situation where the principle of legality is in play. As Lord Hoffmann observed in R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115, 131D G: Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual. In these circumstances, we are required to interpret the statutory provisions strictly and restrictively. It is common ground that being detained is a condition precedent to the exercise of the power to grant bail conferred by paragraphs 22 and 29 of Schedule 2 to the 1971 Act. The power of SIAC to grant bail under section 3, Special Immigration Appeals Commission Act 1997 is similarly based on the person being detained. The Court of Appeal (at para 30) described the bail power as predicated on the individual being detained. Paragraph 22 of Schedule 2 confers a power to release on bail in the case of three categories of person, namely a person detained under paragraph 16(1) pending examination, a person detained under paragraph 16(1A) pending completion of his examination or a decision on whether to cancel his leave to enter, and a person detained under paragraph 16(2) pending the giving of directions. Each category is defined by reference to the person being detained under paragraph 16 of Schedule 2. Similarly, paragraph 29 applies to a person who is for the time being detained under Part I of this Schedule. Applying the strict approach to interpretation which I consider is required here, these provisions must be taken to refer to detention which is lawful. This conclusion is reinforced by the fact that in respect of each category to which it applies paragraph 16 refers to detention under the authority of an immigration officer. This makes clear that the provision is not addressing the mere fact of detention; this must refer to a lawful authorisation for detention. As the Court of Appeal concluded in the present case, it would be extraordinary if Parliament had intended to confer the power to grant bail where a person had been unlawfully detained or could not lawfully be detained. The words employed are certainly not appropriate to refer to a state of purported detention or to embrace both lawful and unlawful detention. I consider that detained in paragraphs 22 and 29 refers to lawfully authorised detention. On behalf of the Secretary of State, Mr Tam submits that detained is used only to define the state of affairs which must exist at the time when the power is first exercised. Clearly the power to grant bail can continue to be exercised after the person has ceased to be detained. However, this fails to address whether there needs to be a continuing power to detain as a pre condition to the grant of bail. Here it seems to me that unless there is a continuing power to detain, the system of bail within Part 1 of Schedule 2 would encounter substantial difficulties in its operation. In this regard, Ms Harrison on behalf of B, draws attention to certain features attending the grant of bail. First, paragraph 22(1A) and paragraph 29(2) require the detained person to enter into a recognizance to appear before an immigration officer at a named time and place. When he does so it is then for the immigration officer to re fix bail if he or she considers it appropriate to do so and to determine any appropriate conditions. (R (AR (Pakistan)) v Secretary of State for the Home Department [2016] EWCA Civ 807, para 26). It is difficult to see how this would operate if there were no continuing power of detention. As Ms Harrison points out, bail could be re fixed but until it is the individual cannot simply be at liberty, neither detained nor granted temporary admission. Secondly, and more fundamentally, Ms Harrison points to a situation in which it becomes necessary to re detain the person on bail, for example because he or she is in breach of the conditions of bail. This would not be possible in the absence of a subsisting lawful power to detain. In the absence of such a power, conditions of bail and recognizances entered into would be unenforceable. In response Mr Tam first places reliance on the breach of bail conditions. However, in such circumstances the legal authority for detention cannot be found in the grant of bail or in the breach of conditions of bail but must be found in an ongoing lawful power to detain, as appears from Stellato v Ministry of Justice [2010] EWCA Civ 1435; [2011] QB 856 and R (Konan) v Secretary of State for the Home Department [2004] EWHC 22 (Admin), authorities to which I shall return later in this judgment. Secondly, he makes the point that under the Hardial Singh principles a power of detention may sometimes revive, for example because of a change of circumstances in the foreign state concerned or because of a change in the risk which the individual presents. While that may well occur from time to time in individual cases, it is no answer to Ms Harrisons objection which is directed at the operation of the system of immigration bail. I note, moreover, that there is no possibility of that occurring in the present case where not only did SIAC conclude on 1 July 2014 that Bs detention could no longer be authorised as it would be incompatible with Hardial Singh principles, but the Secretary of State has not authorised Bs continuing detention since that finding of SIAC. The present case, it appears, falls within the category contemplated by Lord Dyson JSC in WL (Congo) at para 144 where, however grave the risk of absconding or the risk of serious offending, it ceases to be lawful to detain a person pending deportation. Once that position is reached there is, in my view, no longer a power of detention under paragraph 16 and there is therefore no longer a power to grant bail under paragraphs 22 or 29. The Secretary of State next draws attention to paragraph 21 of Schedule 2 which concerns temporary admission or release of persons liable to detention or detained in non deportation cases (ie the equivalent provisions to paragraphs 2(5) and (6) of Schedule 3 of the 1971 Act). Paragraph 21 as amended provides for the release or temporary admission of persons liable to detention or detained: 21. Temporary admission or release of persons liable to detention (1) A person liable to detention or detained under paragraph 16(1), (1A) or (2) above may, under the written authority of an immigration officer, be temporarily admitted to the United Kingdom without being detained or be released from detention; but this shall not prejudice a later exercise of the power to detain him. (2) So long as a person is at large in the United Kingdom by virtue of this paragraph, he shall be subject to such restrictions as to residence, as to his employment or occupation and as to reporting to the police or an immigration officer as may from time to time be notified to him in writing by an immigration officer. Mr Tam submits that the respective structures of the powers to grant temporary admission or release under paragraph 21 and the power to grant bail under paragraph 22 are similar; paragraph 21 refers to a person liable to detention or detained whereas paragraph 22 refers to a person detained. He submits that this difference of wording serves only to identify that bail is available only if the individual is actually detained, while temporary admission is also available if the individual has not been actually detained. Thereafter, he submits, the approach adopted by the House of Lords in R (Khadir) v Secretary of State for the Home Department [2005] UKHL 39; [2006] 1 AC 207 ought to apply equally to both of these ameliorating possibilities. The power to admit temporarily and the power to grant bail should be held to continue so long as the power to detain exists, even if it cannot be lawfully exercised. The approach to which he refers is to be found in the speech of Lord Brown in Khadir at paras 31 33. 31. For my part I have no doubt that Mance LJ was right to recognise a distinction between the circumstances in which a person is potentially liable to detention (and can properly be temporarily admitted) and the circumstances in which the power to detain can in any particular case properly be exercised. It surely goes without saying that the longer the delay in effecting someones removal the more difficult will it be to justify his continued detention meanwhile. But that is by no means to say that he does not remain liable to detention. What I cannot see is how the fact that someone has been temporarily admitted rather than detained can be said to lengthen the period properly to be regarded as pending . his removal. 32. The true position in my judgment is this. Pending in paragraph 16 means no more than until. The word is being used as a preposition, not as an adjective. Paragraph 16 does not say that the removal must be pending, still less that it must be impending. So long as the Secretary of State remains intent upon removing the person and there is some prospect of achieving this, paragraph 16 authorises detention meanwhile. Plainly it may become unreasonable actually to detain the person pending a long delayed removal (ie throughout the whole period until removal is finally achieved). But that does not mean that the power has lapsed. He remains liable to detention and the ameliorating possibility of his temporary admission in lieu of detention arises under paragraph 21. 33. To my mind the Hardial Singh line of cases says everything about the exercise of the power to detain (when properly it can be exercised and when it cannot); nothing about its existence. In its judgment in the present proceedings SIAC drew attention to the distinction drawn by Lord Brown between the existence of a power to detain, which can subsist even where actual detention would be unlawful, and the unlawful exercise of that power. The power to detain continues to exist even if actual detention would be unlawful provided that there is some prospect of removal being effected. It noted that Khadir had not been disapproved by the Supreme Court in WL (Congo). In the present case SIAC considered that there remained some prospect of removal so that the power to detain persisted under paragraph 2 of Schedule 3. The fact that detention today would be unlawful did not necessarily prevent lawful detention in the future. As a result it concluded that the power to grant bail also subsisted and could be exercised. That reasoning was decisively rejected by the Court of Appeal. On this further appeal Mr Tam submits that the value of the decision in Khadir is that its acceptance of the continuing existence of the power to detain and thus the continuing availability of temporary admission or temporary release allows a purposive construction of the three layered mechanism provided by Schedule 2 ie detention, bail, temporary admission or temporary release. In particular, he submits that as both bail and temporary admission or temporary release are ameliorating possibilities of alternatives to detention, it is sensible for both powers to persist for some duration beyond the point at which actual detention can no longer continue. In my view, Khadir provides no assistance to the Secretary of State in the present case, for the reasons given by Lord Dyson MR (at paras 29 31). They may be summarised as follows: (1) Khadir is a decision not on detention or on the power to grant bail under paragraphs 22 or 29, but on the power to grant temporary admission under paragraph 21. (2) There is a material difference between the wording of paragraph 21, on the one hand, and paragraphs 22 and 29 on the other. The distinction between a person detained and a person liable to be detained is clear and must have been deliberate. (3) The House of Lords in Khadir held that the distinction between the existence and the exercise of the power to detain was material to the power to grant temporary admission to a person liable to detention. There is no warrant for applying that distinction to the different question of whether there is a power to grant bail to a person who may not lawfully be detained at the time when it is proposed to grant bail. On behalf of the Secretary of State it is then submitted that the interpretation of paragraphs 22 and 29 favoured by the Court of Appeal would lead to impracticability in their application and that this casts doubt on its reading. First, it is submitted that, if there is no power to grant bail unless there is a power to detain, on an application for bail the FTT or an immigration officer would have to determine Hardial Singh issues as a jurisdictional matter. It is submitted that Parliament could not have intended the FTT or immigration officers to engage in such an exercise which is difficult enough in a case of actual detention but which would be much more difficult or even logically impossible in the hypothetical context required by this reading of paragraphs 22 and 29. As a result bail applications could require two or three days of Hardial Singh enquiry simply to decide whether there is jurisdiction to grant bail. Here Mr Tam further submits that the FTT does not have jurisdiction to decide whether detention is lawful. (See Konan at para 30 and WL (Congo) at para 118.) I consider that there is little or no substance in these contentions for the following reasons: (1) It is unlikely that an applicant for bail will seek to challenge the jurisdiction of the FTT to grant bail. Similarly, the Secretary of State is unlikely to maintain that an applicants detention is unlawful. I accept, however, that, as it is a matter of jurisdiction, there may be cases in which the FTT should properly take the point of its own motion. (2) The power to grant bail is expressly conferred on the FTT or a Chief Immigration Officer by paragraphs 22 and 29 of Schedule 2. If an issue as to the legality of detention were to arise on a bail application, it would fall to be addressed in that context. If the judge concluded that detention was unlawful, the Secretary of State could be expected to direct release of the applicant on temporary admission. If she maintained the view that detention was lawful, the matter could be raised urgently in the Administrative Court. I note that, in the context of SIAC, where an applicant puts the legality of his detention in issue, concurrent judicial review proceedings can be lodged and the Chair of SIAC is able to exercise the jurisdiction of the Administrative Court. That is, in fact, what occurred in the present case. (3) The FTT is clearly entitled to address the Hardial Singh principles. Consideration on a bail application of whether detention was lawful would not, in any event, require the FTT to depart significantly from what is currently required of it. The current guidance (Bail Guidance for Immigration Judges Presiding over Immigration and Asylum Hearing, Presidential Note 1 of 2012, Judge Michael Clements, 11 June 2012 at paras 5,17 and 18) recognises that the lawfulness of detention may be a relevant factor in bail proceedings, as has the High Court in the SIAC jurisdiction (R (Othman) v SIAC [2012] EWHC 2349 (Admin)). Secondly, the Secretary of State submits that it appears from the statutory scheme that the grant of bail was intended to be an exercise conducted by relatively junior immigration officers or even by police officers with less specialist immigration experience and that, accordingly, it is very unlikely that Parliament intended that the lawfulness of detention should be investigated before the grant of bail. This is equally unconvincing. So far as the capabilities of immigration officers are concerned, I agree with the observations of Lord Dyson MR (at para 35). Immigration officers are charged by Parliament with taking many difficult decisions, which require care, individual consideration and the exercise of judgement and which may involve fact finding. These decisions are of enormous consequence to the lives of the persons concerned. In particular, in considering whether to grant temporary admission an immigration officer may have to consider whether a person is liable to detention under paragraph 21. Contrary to the submission of Mr Tam, I cannot see that application of the Khadir test of some prospect of the individuals removal is a significantly less complex exercise than the application of the Hardial Singh principles. Thirdly, the Secretary of State submits that an arrest by a police officer for an actual or apprehended breach of bail would require the officer to consider the Hardial Singh principles and assess whether the prescribed limit of a power to detain had been reached. However, the power of arrest conferred by paragraph 24(1)(a) is exercisable by a police officer if he has reasonable grounds for believing that that person is likely to break the condition of his recognizance or bail bond. Unlike the power to order re detention in paragraph 24(3), it does not depend on a continuing power to exercise immigration detention. Fourthly, the Secretary of State points to the consequences which might follow if detention were unlawful on other grounds. Here, particular reliance is placed on WL (Congo), where detention was unlawful because it was based on an unpublished policy which conflicted with a published policy, and on R (SK (Zimbabwe)) v Secretary of State for the Home Department [2011] UKSC 23; [2011] 1 WLR 1299, where detention was unlawful because of missed detention reviews required by a published policy. It is said that it would be absurd if there were no power to grant bail in such circumstances. In my view, there is no absurdity here. Once detention had been authorised on a lawful basis there would be power to grant bail. Accordingly, I consider that the spectre of impracticability conjured up by Mr Tam is illusory and does not cast any doubt on my reading of paragraphs 22 and 29. There is no reason to conclude that Parliament must have intended to confer a power to grant bail where a person is detained unlawfully. On the contrary, I have no doubt that the statutory provisions with which we are concerned require a lawful power to detain as a pre condition to a grant of bail. In any event, if administrative inconvenience is a consequence the remedy lies with Parliament. For these reasons I agree with the conclusion of Lord Dyson MR that bail may not be granted under paragraphs 22 and 29 of Schedule 2 where a person is unlawfully detained purportedly under paragraph 2(2) of Schedule 3 to the 1971 Act or where a person not currently in detention could not lawfully be detained under that provision. In his judgment in the Court of Appeal in the present case, Lord Dyson MR, having arrived at the conclusion that the word detained in paragraphs 22 and 29 of Schedule 2 should be construed as meaning lawfully detained, advanced a further, independent basis for his conclusion, namely that the power to grant bail presupposes the existence of and the ability to exercise the power to detain lawfully. In support of this conclusion he drew attention to Mitchell v Mitchinham (1823) 2 D & R 722 and In re Amand [1941] 2 KB 239 which, he observed, demonstrate that the writ of habeas corpus can still issue where a person is on bail. As a matter of legal instinct, the proposition that the ability to exercise a lawful power to detain is a precondition to a power to grant bail seems entirely sound. Not only does it seem correct as a matter of principle, but also the lack of a lawful power to detain is likely, without more, to give rise to practical difficulties. As I have explained earlier in this judgment, that would, in my view, be the position in relation to immigration bail if the Secretary of States submissions were accepted in the present case. Although we have been referred on this appeal to a number of authorities relating to the scope and availability of habeas corpus, including those referred to by Lord Dyson MR, I have not found these decisions of any great assistance. Nevertheless, there is a considerable body of modern authority which supports Lord Dysons statement of principle. The decision of the Court of Appeal in Stellato v Ministry of Justice [2011] QB 856 is strongly supportive of this approach. The claimant having been released on licence from a prison sentence refused to comply with the conditions of his licence on the ground that he was entitled to be released unconditionally. He was returned to prison. A Divisional Court of the Queens Bench Division dismissed his claim for judicial review. His appeal was allowed by the Court of Appeal which granted a declaration that he was entitled to immediate release but stayed the declaration to permit a petition to the House of Lords and granted him conditional bail. He refused to comply with the bail conditions and, as a result, was arrested and returned to prison pursuant to an order of a Lord Justice who, the next day, ordered that his bail be revoked and that he remain in custody until the end of the stay granted by the Court of Appeal. Following the dismissal by the House of Lords of the Home Offices appeal, he was released unconditionally and he then brought an action for false imprisonment and breach of his rights under article 5 ECHR against the Ministry of Justice as successor to the Home Office. In those proceedings the question arose whether the stay or the breach of bail conditions provided legal authority for his detention. The Court of Appeal (Maurice Kay, Stanley Burnton and Patten LJJ) held that they did not. Stanley Burnton LJ explained (at para 21) that the only authority for the continued detention was the original sentence of imprisonment and the legislation which was the subject of the courts judgment. He continued: 23. Turning to the effect of the orders of Hughes LJ, I consider that the answer is to be found in the nature of a grant of bail. In principle, a grant of bail is not an order for the detention of the person to whom it is granted. To the contrary, it is a grant of liberty to someone who would otherwise be detained. The legal justification for his detention is to be found elsewhere: in the case of a person suspected of crime, in the powers of arrest of a constable under a warrant issued by a magistrates court (see section 1 of the Magistrates Courts Act 1980), or without a warrant (see section 24 of the Police and Criminal Evidence Act 1984), and powers to remand pending trial or further hearing. Similarly, there is statutory authority for detention in immigration cases: see, for example, paragraph 16 of Schedule 2 to, and paragraph 2 of Schedule 3 to, the Immigration Act 1971. 24. A grant of bail may be conditional or unconditional. A condition of bail does not impose an obligation on the person granted bail. It is a true condition. It qualifies the grant of liberty made by the grant of bail. If the person granted bail does not comply with the conditions of his bail, he is liable to be returned to custody. If so, the legal authority for his detention is not the grant of bail, or his breach of the conditions of his bail, but the authority for his detention apart from the order for bail. All that his breach of the conditions of his bail does is to disentitle him to bail. Similarly, in R (Konan) v Secretary of State for the Home Department [2004] EWHC 22 Admin, where the claimants alleged that their immigration detention had been unlawful, Collins J, in rejecting a submission on behalf of the Secretary of State that bail was an alternative remedy, stated (at para 30): An adjudicator in considering a bail application is not determining (indeed, he has no power to determine) the lawfulness of the detention. The grant of bail presupposes the power to detain since a breach of a bail condition can lead to a reintroduction of the detention. That the grant of bail is not a determination of the legality of detention was emphasised by Lord Dyson JSC in R (WL (Congo)) v Secretary of State for the Home Department [2012] 1 AC 245, para 118, and Hughes LJ in R (Omar Othman) v Special Immigration Appeals Commission [2012] EWHC 2349 (Admin), para 18. I also note that in Ismail v United Kingdom (2014) 58 EHRR SE6, para 16, the United Kingdom expressly submitted, on the authority of Konan and Lumba, that article 5(4) ECHR was not applicable since a bail application was not a procedure under domestic law to challenge the lawfulness of immigration detention and emphasised that, under domestic law as interpreted by the courts, a decision to release a person on bail, subject to conditions designed to ensure his future attendance, presupposed the legality of the power to detain. On behalf of the Secretary of State Mr Tam relies before us on a line of cases concerning foreign national offenders in which bail had been granted to an individual, whose detention had become or was about to become unlawful, as a means of ending the detention and continuing the individuals management whilst he was on bail. These decisions include R (Bashir) v Secretary of State for the Home Department [2007] EWHC 3017 (Admin); R (A, MA, B and E) v Secretary of State for the Home Department [2008] EWHC 142 (Admin); R (O) v Secretary of State for the Home Department [2008] EWHC 2596 (Admin); R (Adewale) v Secretary of State for the Home Department [2009] EWHC 1289 (Admin); R (Wang) v Secretary of State for the Home Department [2009] EWHC 1578 (Admin); R (D) v Secretary of State for the Home Department [2009] EWHC 1655 (Admin); R (Ahmed) v Secretary of State for the Home Department [2010] EWHC 625 (Admin); R (Hussein) v Secretary of State for the Home Department [2010] EWHC 2651 (Admin) and R (HY) v Secretary of State for the Home Department [2010] EWHC 1678 (Admin). On this basis, he submits that the Secretary of States contention in the present proceedings is the conventionally accepted approach to the question of bail and that this includes the imposition of bail conditions as an alternative to detention after actual detention has become unlawful for Hardial Singh reasons. The difficulty with this submission, however, is that in these first instance decisions, which include one of my own, the power to grant bail appears to have been assumed without the present issue having been directly addressed. Nevertheless, the notion that the power to grant bail presupposes the existence and the ability to exercise a power to detain lawfully is not necessarily a principle of universal application. While the clearest possible words would be required to achieve a contrary result, Parliament could do so. It would be a question of construction in each case whether that result had been achieved. Thus in Stellato Stanley Burnton LJ observed (at para 25) that the general principles which he had set out in paragraphs 23 and 24 (quoted above) are subject to any statutory provision. Moreover, following a suggestion by Lord Hughes during the course of argument on this appeal, it became apparent that the provisions governing police bail in sections 34, 37 and 41, Police and Criminal Evidence Act 1984 may be exceptions to the general principle stated by the Court of Appeal. In this regard, I also draw attention to section 61, Immigration Act 2016. In view of such possible statutory inroads into the principle stated by the Court of Appeal, I prefer to found my conclusions in the present case on the interpretation of the provisions of Schedule 2. In the present case it is common ground that B could not lawfully be detained following the ruling of SIAC on 13 February 2014 that there was no reasonable prospect of removing [B] to Algeria and thus the ordinary legal basis for justified detention of B under the Immigration Acts has fallen away. Furthermore, it has not been suggested that this is a case in which, on the application of Hardial Singh principles, a lawful power of detention subsequently revived as a result of a change of circumstances. In these circumstances I conclude, for the reasons set out above, that in the absence of a power of lawful detention there was no power to grant bail to B pursuant to paragraph 22 of Schedule 2 to the 1971 Act. In these circumstances I do not consider it necessary to address the arguments which we have heard on article 5 ECHR which, in my view, adds nothing to the resolution of the issues before the court on this appeal. |
The decision of the Supreme Court in Patel v Mirza [2016] UKSC 42; [2017] AC 467 is a significant development in the law relating to illegality at common law. It has resolved a period of considerable uncertainty during which conflicting views have been expressed in the Supreme Court as to the appropriate approach and the direction the law on the subject should take (Hounga v Allen (Anti Slavery International intervening) [2014] UKSC 47; [2014] 1 WLR 2889; Les Laboratoires Servier v Apotex Inc [2014] UKSC 55; [2015] AC 430; Bilta (UK) Ltd v Nazir (No 2) [2015] UKSC 23; [2016] AC 1). In Patel v Mirza a majority of the Supreme Court rejected the reliance principle as applied in Tinsley v Milligan [1994] 1 AC 340, whereby relief was refused to parties who had to rely on their own illegality to establish their case. In its place, the majority adopted a more flexible approach which openly addresses the underlying policy considerations involved and reaches a balanced judgment in each case, and which also permits account to be taken of the proportionality of the outcome. The present appeal raises issues as to the application of the new policy based approach outlined in Patel v Mirza in the context of a claim for negligent breach by a solicitor of his retainer, a concurrent claim in breach of contract and in tort. Factual background On or about 1 March 2000, Ms Maria Grondona (the respondent) entered into an agreement (the 2000 agreement) with Mr C L Mitchell (Mitchell), with whom she had a business relationship, relating to four properties: 73b Beulah Road; 362 High Road, Tottingham (sic); and 12 and 12A Cator Road. The 2000 agreement provided: I Maria Grondona agree to have in my name mortgage loans in the above mentioned properties with the understanding and agreement that Mr CL Mitchell of Flat 2, 2 Silverdale, London SE26 4SZ will carry out the following tasks: (1) To pay all monthly mortgages on each of the properties as and when they become due (2) Receives from the tenants in these properties the due rents (3) Carry out all repair work on the properties (4) Deals with all the financial matters on these properties (5) Decides when to sell all or any of these properties (6) Mr Mitchell to pay to me 50% of the net profit when any of the above properties are sold. This is a binding agreement enforceable by law between Mr Mitchell and myself. On 27 November 2001 the freehold of 73 Beulah Road, Thornton Heath was purchased by Ms Loretta Hedley for 82,000 with the assistance of finance from BM Samuels Finance Group plc (BM Samuels) which obtained a registered charge in its favour. There was apparently also a subsidiary restriction in favour of Moneypenny Investments Ltd and Gemforce Investments Ltd. In or about July 2002 Mitchell paid the sum of 30,000 to Ms Hedley, for the grant of a 125 year lease of part of the freehold of 73 Beulah Road, which comprised a rear ground floor flat, No 73b (the property). The commencement date for the lease was 24 June 1990. On 26 July 2002 Mitchell entered into a loan facility of 45,000 for a period of six months secured by a legal charge over the property with BM Samuels to enable him to purchase it (the BM Samuels charge). On the same date a leasehold interest in the property was registered in the name of Mitchell at the Land Registry under title number SGL 638702. The BM Samuels charge was also duly registered at the Land Registry. In October 2002 the respondent entered into a form of purchase of the leasehold interest in the property from Mitchell for the sum of 90,000 (ie three times the price paid when the leasehold had been created a few months earlier). She did so with the assistance of a mortgage advance from Birmingham Midshires in the sum of 76,475 with the intention that the advance would be secured by a charge over the property entered into by the respondent on 31 October 2002 (the Birmingham Midshires charge). The mortgage advance was procured by fraud. The respondent dishonestly misrepresented on the mortgage application form that the sale from Mitchell to the respondent was not a private sale, that the deposit moneys were from her own resources and that she was managing the property. The purpose of the fraud, as found by the trial judge, was to raise capital finance for Mitchell from a high street lender which he would not otherwise have been able to obtain, rather than to fund the purchase of the property by the respondent. Stoffel & Co, solicitors, (the appellants) acted for the respondent, for Mitchell and for the chargee, Birmingham Midshires, in connection with the transaction. On or about 31 October 2002 Mr Mitchell executed in favour of the respondent and delivered to the appellants the HM Land Registry Transfer of Whole of Registered Title(s) Form TR1 in relation to the property. On 1 November 2002 the appellants paid the sum of 76,475 received by way of mortgage advance from Birmingham Midshires to BM Samuels, as the existing chargee of the property, in order for the BM Samuels charge to be discharged. BM Samuels duly provided a Form DS1 releasing the BM Samuels charge. However, the appellants failed to register at the Land Registry the Form TR1 transferring the property from Mitchell to the respondent, the Form DS1 releasing the BM Samuels charge or the Birmingham Midshires charge granted by the respondent. The trial judge found that this failure to register was because the Form TR1 submitted by the appellants had not been impressed with stamp duty and the procedural stamp and that it was therefore returned by Croydon District Land Registry on 28 November 2002. The Land Registry wrote again to the appellants on 7 and 13 April 2003. On 14 April 2003 it wrote to the appellants to notify them that the application for registration had been cancelled. A further application for registration was rejected on 2 July 2003 due to errors on the transfer and that application was cancelled on 5 August 2003. As a result of the appellants failure to register the relevant forms, Mitchell remained the registered proprietor of the property and BM Samuels remained the registered proprietor of the BM Samuels charge. On the basis of that charge, further advances were made to Mitchell following the transactions in 2002. The legal proceedings In 2006 the respondent defaulted on payments under the Birmingham Midshires charge and Birmingham Midshires brought proceedings against her in order to obtain a money judgment. The respondent defended the claim and brought proceedings against the appellants by a CPR Part 20 claim for an indemnity and/or a contribution and/or damages for breach of duty and/or breach of contract. The appellants defended the Part 20 claim. Although by the date of trial they admitted that the failure to register the TR1 Form, the DS1 Form and the Birmingham Midshires charge constituted negligence or breach of duty, they contended that damages were not recoverable by the respondent because the purpose of putting the property into her name and obtaining a mortgage from Birmingham Midshires was illegal, in that it was a conspiracy to obtain finance for Mitchell by misrepresentation. They maintained that the purpose of instructing the appellants could only have been to further that fraud and that, accordingly, they were entitled to rely on the defence of illegality. In the alternative, the defendant raised defences relating to quantum. Birmingham Midshires amended its claim in order to claim directly against the appellants, against BM Samuels, the prior chargee, and against Mitchell. The claims brought by Birmingham Midshires against BM Samuels and against the appellants were settled. Summary judgment was obtained by Birmingham Midshires against the respondent on 29 May 2014. That judgment was for 70,000 with the balance to be subject to an account. By the time of the trial before Her Honour Judge Walden Smith in the Central London County Court, which began on 5 January 2016, it appeared that Mitchell had died, although the judge did not see any documentary evidence to that effect. On 22 April 2014 the leasehold interest in 73b Beulah Road was sold by BM Samuels for 110,000 in order to satisfy the sum owed by Mitchell under the BM Samuels charge. In a judgment dated 11 April 2016 the judge held as follows. (1) The respondent had participated with Mitchell in a mortgage fraud to deceive Birmingham Midshires into making an advance to her to purchase the property. (2) The respondent was a knowing and dishonest participant in the mortgage fraud perpetrated to obtain moneys from Birmingham Midshires for Mitchell which he could not obtain himself. (3) The following dishonest misrepresentations had been made by the respondent in the mortgage application form: that the sale from Mitchell to the respondent was not a private a) sale, when in fact it was a private sale; b) the deposit moneys were from her own resources, when in fact they came from the proceeds of a loan to the respondent from BM Samuels; that she was managing the property (and the other properties c) referred to in the mortgage application) herself, when in fact Mitchell was doing so pursuant to the terms of the 2000 agreement and the respondent had had no involvement whatsoever in the collection of rents or any other aspect of the management of the properties. (4) The effect of the 2000 agreement was that Mitchell retained complete control over the properties. Mitchell remained de facto owner of the property. The respondent was not and never was the de facto owner of the property. She had agreed to act as Mitchells nominee and the provision in the agreement that she recover 50% of the net profits from any sale was her payment for having obtained the mortgage advance. (5) The mortgage application was a sham arrangement whereby the respondent lent her good credit history to Mitchell to enable him to obtain finance behind the scenes and out of sight of the potential lender. (6) The respondent had little or no actual involvement in the alleged purchase and it was not a bona fide purchase of a proprietary interest for value. (7) The respondent did, however, undertake legal responsibility for the Birmingham Midshires mortgage which was to be charged over the property. In addressing the defence of illegality, the judge applied the reliance test as she was required to do by Tinsley v Milligan. She concluded that the illegality defence did not apply. She held that the claim against the appellants for failing to register the forms was conceptually separate from the fraud. The claim did not rely on the allegations of illegality and the reason for the conveyance was irrelevant to it. Following a further hearing on quantum, in a further judgment dated 11 May 2016 the judge awarded the respondent damages of 78,000, the value of the property as at November 2009, with interest thereon. The appellants appealed to the Court of Appeal ([2018] EWCA Civ 2031; [2018] PNLR 36). In her judgment with which Flaux LJ agreed, the Vice President Gloster LJ held that the judge had erred in law in concluding that the mortgage transaction was a sham, because as between Birmingham Midshires and the respondent the mortgage was clearly intended to take effect. The respondent had intended to borrow the money secured by way of a legal charge on her registered title and Birmingham Midshires likewise intended to lend the money secured in such a way. Gloster LJ held, further, that the judge had erred in law in holding that there was no intention to transfer the legal title in the property to the respondent because that was the very essence of the transaction between her and Mitchell, the whole purpose of the arrangement between them being, whatever the position in relation to retention of beneficial ownership, that she should be clothed with legal title so as to be able to obtain finance from Birmingham Midshires and grant a charge to secure such finance. The Court of Appeal held, on the basis of the decision of the Supreme Court in Patel v Mirza, which had been handed down since the first instance decision, that the illegality defence did not bar the respondents claim. Gloster LJ considered that, although mortgage fraud was a canker on society, barring the claim against the negligent appellants would not enhance the fight against mortgage fraud. There was a public interest in ensuring that clients who use the services of solicitors are entitled to seek civil remedies for negligence or breach of contract against their solicitors arising from a legitimate and lawful retainer between them, in circumstances where the client was not seeking to profit or gain from her mortgage fraud but merely to ensure that the chargees security was adequately protected by registration. In the view of the Court of Appeal, to deny the claim would also be disproportionate to the wrongdoing involved. It dismissed the appeal and also dismissed a cross appeal on quantum. The appellants sought permission to appeal to the Supreme Court on the following four grounds. (1) The Court of Appeal erred in overturning the finding of the judge that the sale between Mitchell and the respondent was a sham. (2) The Court of Appeal wrongly held that there was an intention to transfer legal title in the property. (3) The Court of Appeal failed to analyse adequately or at all the relevance of the transfer of legal title. (4) The Court of Appeal erred fundamentally in its application of the Patel v Mirza guidelines. On 18 March 2019 the Supreme Court (Lady Hale, Lord Hodge and Lord Briggs) gave permission to appeal, limited to Ground 4 only. The issues on appeal to the Supreme Court It was common ground between the parties to the appeal before us that, subject to the defence of illegality, the respondent had a complete cause of action against the appellants. In particular: (1) Negligence and/or breach of retainer had been conceded by the appellants; (2) The judge held that the loss sustained by the respondent was caused by the negligence and/or breach of duty of the appellants; (3) The parties agreed that loss was to be calculated by reference to the fact that the respondent did not have an unencumbered property which was available to her as the security for the moneys advanced to her by Birmingham Midshires. Had the appellants fulfilled their obligations to her, she would have had an otherwise unencumbered property in about November 2009, when the property would have been sold to meet her arrears. The value of that property was 78,000, so the loss was that sum plus interest from November 2009. On behalf of the appellants Mr Michael Pooles QC submits that the Court of Appeal erred in its analysis and application of the Patel v Mirza guidelines. He submits that the present case is a paradigm case for the refusal of relief on the grounds of illegality. The respondent utilised the services of the appellants in the context of and in order to execute a mortgage fraud which she and Mitchell were practising on Birmingham Midshires. The appellants acted innocently but incompetently in carrying out their instructions and left the respondent without registered title to a property which was only to be transferred to her for the purpose of the mortgage fraud. He submits that if the illegality defence operates to leave the loss to lie where it falls, then the respondent can complain of no injustice. The new approach to the illegality defence: Patel v Mirza It is necessary to examine in a little detail Lord Toulsons exposition in Patel v Mirza of the new approach to the illegality defence at common law. Having referred to the maxims ex turpi causa non oritur actio (no action arises from a disgraceful cause) and in pari delicto potior est conditio defendentis (where both parties are equally in the wrong the position of the defendant is the stronger), Lord Toulson observed: 99. Looking behind the maxims, there are two broad discernible policy reasons for the common law doctrine of illegality as a defence to a civil claim. One is that a person should not be allowed to profit from his own wrongdoing. The other, linked, consideration is that the law should be coherent and not self defeating, condoning illegality by giving with the left hand what it takes with the right hand. 100. Lord Goff observed in the Spycatcher case, Attorney General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109, 286, that the statement that a man shall not be allowed to profit from his own wrong is in very general terms, and does not of itself provide any sure guidance to the solution of a problem in any particular case. In Hall v Hebert [1993] 2 SCR 159 McLachlin J favoured giving a narrow meaning to profit but, more fundamentally, she expressed the view, at pp 175 176, that, as a rationale, the statement that a plaintiff will not be allowed to profit from his or her own wrongdoing does not fully explain why particular claims have been rejected, and that it may have the undesirable effect of tempting judges to focus on whether the plaintiff is getting something out of the wrongdoing, rather than on the question whether allowing recovery for something which was illegal would produce inconsistency and disharmony in the law, and so cause damage to the integrity of the legal system. 101. That is a valuable insight, with which I agree. I agree also with Professor Burrows observation that this expression leaves open what is meant by inconsistency (or disharmony) in a particular case, but I do not see this as a weakness. It is not a matter which can be determined mechanistically. So how is the court to determine the matter if not by some mechanistic process? In answer to that question I would say that one cannot judge whether allowing a claim which is in some way tainted by illegality would be contrary to the public interest, because it would be harmful to the integrity of the legal system, without (a) considering the underlying purpose of the prohibition which has been transgressed, (b) considering conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim, and (c) keeping in mind the possibility of overkill unless the law is applied with a due sense of proportionality. We are, after all, in the area of public policy. That trio of necessary considerations can be found in the case law. This passage makes clear that the evaluation of the factors described in para 101 is directed specifically at determining whether there might be inconsistency damaging to the integrity of the legal system. This is confirmed later in Lord Toulsons judgment where he refers (at para 109) to the need when considering the application of the common law doctrine of illegality to have regard to the policy factors involved and to the nature and circumstances of the illegal conduct in determining whether the public interest in preserving the integrity of the justice system should result in denial of the relief claimed and in the following passage at para 120: The essential rationale of the illegality doctrine is that it would be contrary to the public interest to enforce a claim if to do so would be harmful to the integrity of the legal system (or, possibly, certain aspects of public morality, the boundaries of which have never been made entirely clear and which do not arise for consideration in this case). In assessing whether the public interest would be harmed in that way, it is necessary (a) to consider the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim, (b) to consider any other relevant public policy on which the denial of the claim may have an impact and (c) to consider whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts. Within that framework, various factors may be relevant, but it would be a mistake to suggest that the court is free to decide a case in an undisciplined way. The public interest is best served by a principled and transparent assessment of the considerations identified, rather by than the application of a formal approach capable of producing results which may appear arbitrary, unjust or disproportionate. Earlier in his judgment in Patel (at para 76) Lord Toulson had drawn support from the approach of Lord Wilson in Hounga v Allen [2014] 1 WLR 2889 at para 42 where Lord Wilson had observed that the defence of illegality rests on the foundation of public policy and continued: So it is necessary, first, to ask What is the aspect of public policy which founds the defence? and, second, to ask But is there another aspect of public policy to which the application of the defence would run counter. Lord Wilson had weighed the policy considerations in that case and concluded that in so far as any public policy existed in favour of applying the illegality defence, it should give way to the public policy to which its application would be an affront. A balancing of the policy considerations in either direction is, therefore, an important element of the decision making process. With regard to the third stage of the process, namely the assessment of proportionality, Lord Toulson observed (at para 107): In considering whether it would be disproportionate to refuse relief to which the claimant would otherwise be entitled, as a matter of public policy, various factors may be relevant. Professor Burrows list [set out at para 93 of Lord Toulsons judgment] is helpful but I would not attempt to lay down a prescriptive or definitive list because of the infinite possible variety of cases. Potentially relevant factors include the seriousness of the conduct, its centrality to the contract, whether it was intentional and whether there was marked disparity in the parties respective culpability. It is important to bear in mind when applying the trio of necessary considerations described by Lord Toulson in Patel that they are relevant not because it may be considered desirable that a given policy should be promoted but because of their bearing on determining whether to allow a claim would damage the integrity of the law by permitting incoherent contradictions. Equally such an evaluation of policy considerations, while necessarily structured, must not be permitted to become another mechanistic process. In the application of stages (a) and (b) of this trio a court will be concerned to identify the relevant policy considerations at a relatively high level of generality before considering their application to the situation before the court. In particular, I would not normally expect a court to admit or to address evidence on matters such as the effectiveness of the criminal law in particular situations or the likely social consequences of permitting a claim in specified circumstances. The essential question is whether to allow the claim would damage the integrity of the legal system. The answer will depend on whether it would be inconsistent with the policies to which the legal system gives effect. The court is not concerned here to evaluate the policies in play or to carry out a policy based evaluation of the relevant laws. It is simply seeking to identify the policies to which the law gives effect which are engaged by the question whether to allow the claim, to ascertain whether to allow it would be inconsistent with those policies or, where the policies compete, where the overall balance lies. In considering proportionality at stage (c), by contrast, it is likely that the court will have to give close scrutiny to the detail of the case in hand. Finally, in this regard, since the overriding consideration is the damage that might be done to the integrity of the legal system by its adopting contradictory positions, it may not be necessary in every case to complete an exhaustive examination of all stages of the trio of considerations. If, on an examination of the relevant policy considerations, the clear conclusion emerges that the defence should not be allowed, there will be no need to go on to consider proportionality, because there is no risk of disproportionate harm to the claimant by refusing relief to which he or she would otherwise be entitled. If, on the other hand, a balancing of the policy considerations suggests a denial of the claim, it will be necessary to go on to consider proportionality. (a) Would the underlying purpose of the prohibition which has been transgressed be enhanced by a denial of the claim? On behalf of the appellants, Mr Michael Pooles QC is able to point to the fact that the respondent was knowingly and dishonestly involved in a mortgage fraud to deceive Birmingham Midshires into making the advance to the respondent to purchase the property. She made dishonest misrepresentations to Birmingham Midshires that the sale was not a private sale, that the deposit moneys were from her own resources and that she was managing the property herself. The sale between Mitchell and the respondent was tainted with illegality because it was entered into with the object of deceiving an institutional lender into thinking that the respondent was both the legal and beneficial owner of the property and required mortgage finance for her own business purposes. The respondents conduct would, at that time, have constituted an offence contrary to section 15, Theft Act 1968. The background to the respondents claim against her solicitors is undoubtedly a serious fraud. Moreover, the appellants, who were not a party to and knew nothing about the illegality, were retained by the respondent in order that the mortgage fraud might be facilitated. With regard to the first of the trio of considerations identified by Lord Toulson in Patel, Mr Pooles submits that it is trite that the underlying purpose of the criminalisation and penalisation of mortgage fraud and conspiracies to defraud is to deter such fraud. He submits further that it is equally notorious that mortgage fraud prosecutions are difficult and that therefore the deterrent effect of the prohibition must be seen as limited. In these circumstances, he says, the refusal of relief to someone closely involved in mortgage fraud would enhance the deterrent effect of the prohibition. The operation of the illegality defence would prevent the respondent from recovering damages from her solicitors who were instructed for the purpose of the fraud. It would or should, he submits, deter the use of solicitors as catspaws in mortgage frauds. There clearly exists an important policy that the law should condemn mortgage frauds which are serious criminal offences. The appellants correctly identify deterrence as one underlying policy of the criminal law against fraud. I doubt, however, that permitting a civil remedy to persons in the position of the respondent would undermine that policy to any significant extent. The risk that they may be left without a remedy if their solicitor should prove negligent in registering the transaction is most unlikely to feature in their thinking. A further underlying purpose of the prohibition against mortgage fraud is correctly identified by Mr Andrew Warnock QC on behalf of the respondent as the protection of the public, and in particular mortgagees, from suffering loss. Viewed from this perspective, it is difficult to see how refusing the respondent a civil remedy against her solicitors for their negligence in failing to register the transfer would enhance that protection. Registration of the transactions could only take place after the completion of the conveyance. By the time of the negligent breach of duty the loan had already been advanced by Birmingham Midshires and received by the respondent. The required registration was not a necessary step in perpetrating the fraud and, by the time of the negligent failure to register the transfer, the fraud was complete. In these circumstances, denying a remedy to the respondent in respect of negligence in what occurred subsequently would not afford any protection to Birmingham Midshires. On the contrary, as the respondent points out, not only was the required registration of the transfer to the respondent in the interests of the respondent, but it was also in the interests of the mortgagee, Birmingham Midshires, both during the currency of the mortgage and following its discharge, that the transfer should be registered in addition to the mortgagees charge. The registration of the transfer was necessary in order that Birmingham Midshires charge could be registered. In addition, it was in Birmingham Midshires interest that the respondent should have assets with which to meet her liability if sued on her personal covenant. As matters turned out, the failure to register the transfer to the respondent meant that the property was not available to meet any part of the respondents liability on the discharge of the mortgage. When sued by Birmingham Midshires the respondent, having discovered that she had no registered title, brought Part 20 proceedings against the appellants seeking damages for the loss of her proprietary interest. Were she to recover compensation from the appellants, that could be applied to meet or reduce her liability to Birmingham Midshires on her personal covenant. While Birmingham Midshires had, in these circumstances, an independent claim for negligent breach of duty against the appellants, it can at the very least be said that the denial of such a claim by the respondent against the appellants would not enhance the protection afforded by the law to mortgagees. It was, therefore, in the interests not only of the respondent but also of Birmingham Midshires for the appellants to have complied with their duties to the respondent. I will return to the relationship of the negligent conduct to the mortgage fraud itself when considering centrality in the context of proportionality. Is there any other relevant public policy on which the denial of the claim may (b) have an impact? Important countervailing public policies in play in the present case are that conveyancing solicitors should perform their duties to their clients diligently and without negligence and that, in the event of a negligent breach of duty, those who use their services should be entitled to seek a civil remedy for the loss they have suffered. To permit solicitors to escape liability for negligence in the conduct of their clients affairs when they discover after the event that a misrepresentation was made to a mortgagee would run entirely counter to these policies. While denial of a remedy may sometimes be justified in such circumstances, this should only be on the basis that to afford a remedy would be legally incoherent. Moreover, I agree with the observation of Gloster LJ in the Court of Appeal (at para 37) that there is more likelihood that mortgage fraud would be prevented if solicitors appreciate that they should be alive to, and question, potential irregularities in any particular transaction. In this regard, descending to the facts of the present case, I am unable to accept the submission on behalf of the appellants that there were here no potential irregularities which could have put them on notice of the possibility of fraud. First, it is a striking feature of this case that the appellants acted for both Mitchell and the respondent, in addition to the mortgagee, Birmingham Midshires. Secondly, Mitchell had purchased the property in July 2002 and purported to sell it to the respondent in October 2002. Thirdly, the claimed value of the property had increased greatly over a short period of time. The purchase price on the sale to the respondent was 90,000, three times the price paid when the leasehold had been created three months earlier. (See generally, The Law Society, Practice Note on Mortgage Fraud, 13 January 2020.) A further countervailing public policy which arises here relates to the effect of the transaction on property rights. It is now established that, unless a statute provides otherwise expressly or by necessary implication, property can pass under a contract which is illegal as a contract. Where property is transferred for an illegal purpose the transferee obtains good title both in law and in equity, notwithstanding that the transaction being illegal it would not have been specifically enforced (Tinsley v Milligan per Lord Browne Wilkinson pp 369 371; Patel v Mirza per Lord Toulson at para 110). In the present case the Court of Appeal reversed the conclusions of the trial judge that the mortgage application and agreement constituted a sham and that there was no intention that the respondent would become the legal owner of the property. First, the Court of Appeal considered that the fact that, so far as the respondent and Mitchell were concerned, the mortgage application was fraudulent in that it contained misrepresentations did not as a matter of law result in its being a sham transaction as between the respondent and Birmingham Midshires, the mortgagee. She and Birmingham Midshires intended that the money should be borrowed and secured on her registered legal title to the property. Furthermore, Birmingham Midshires had no knowledge of the misrepresentations or the true intentions of the respondent and Mitchell. Accordingly, the transaction was intended to take effect between the respondent and Birmingham Midshires and was not a sham. (Cf Snook v London and West Riding Investments Ltd [1967] 2 QB 786 at 802 per Diplock LJ.) Secondly, the fact that the sale agreement between Mitchell and the respondent was tainted with illegality because it was entered into with the object of deceiving Birmingham Midshires, did not mean that Mitchell and the respondent did not intend legal title to pass to her. On the contrary, the whole purpose of the arrangement between them (whatever the position in relation to retention of beneficial ownership might be) was that legal title should vest in the respondent so that she could obtain a loan from Birmingham Midshires and grant a charge in favour of Birmingham Midshires to secure the loan. The Supreme Court refused an application by the appellants for permission to appeal on the grounds that the Court of Appeal erred in (1) overturning the judges conclusion that the sale between Mitchell and the respondent was a sham; (2) holding that there was an intention to transfer legal title in the property; and (3) failing to analyse adequately the relevance of the transfer of legal title. Permission to appeal was limited to the issue of the application of the Patel v Mirza guidelines. In my view, this reasoning of the Court of Appeal is clearly correct. The intention of Mitchell and the respondent was that the appellants should register the Form TR1 executed by Mitchell at the Land Registry. Had the appellants done so, in accordance with their retainer, legal title in the property would have passed to the respondent under section 27(1), Land Registration Act 2002. In the event, no legal title passed to the respondent but, as Mitchell had executed and delivered the Form TR1 and had done everything which he could do to effect the legal transfer, the respondent was entitled to an equitable interest in the property, namely an equitable right to be registered as proprietor of the registered legal title. (See section 24(b), Land Registration Act 2002; Mortgage Business plc v OShaughnessy [2012] 1 WLR 1521 per Etherton LJ at para 58.) The fact that the law recognises this equitable property right vested in the respondent gives rise to an important countervailing policy which requires to be brought into consideration. Once an equitable interest in the property has passed to the respondent, she should have available to her as the holder of that interest the remedies provided by law for its protection. It would, in my view, be incoherent for the law to accept on the one hand that an equitable interest in the property passed to the respondent, notwithstanding that the agreement for sale was tainted with illegality, while on the other refusing, on the basis of the same illegality, to permit proceedings against a third party in respect of their failure to protect that equitable interest by registering the Form TR1 at the Land Registry. I pause at this point in the process of addressing Lord Toulsons trio of relevant considerations. To permit the respondents claim in the particular circumstances of this case would not undermine the public policies underlying the criminalisation of mortgage fraud and could, indeed, operate in a way which would protect the interests of the victim of the fraud, ie the mortgagee. Furthermore, to deny the respondents claim would run counter to other important public policies. It would be inconsistent with the policy that the victims of solicitors negligence should be compensated for their loss. It would be a disincentive to the diligent performance by solicitors of their duties. It would also result in an incoherent contradiction given the laws acknowledgment that an equitable property right vested in the respondent. In these circumstances, it is not strictly necessary to go on to consider the third of the trio of considerations, namely whether denial of the claim would be a proportionate response to the illegality, but I shall nevertheless do so. (c) Proportionality of the response to the illegality On behalf of the respondent Mr Warnock draws attention to a series of features of the present case which the Court of Appeal (at para 39) considered represented the reality of the situation and which it accepted would make it entirely disproportionate to deny the respondents claim. First, it is submitted that, while the victim of the fraudulent misrepresentations was Birmingham Midshires and not the appellants, Birmingham Midshires has made no complaint of this against the respondent in its recovery proceedings or otherwise. In the view of the Court of Appeal, Birmingham Midshires adopted the transaction. It is, however, difficult to attach any significant weight to this consideration. Even if it was aware of the fraud at any material time, which is unclear, Birmingham Midshires had no need to complain of the fraud in order to recover its money as it could simply rely on its entitlement to arrears and its right to payment under the respondents personal covenant. To have pleaded fraud in its claim against the respondent would have been an unnecessary complication. In any event, the respondents central role in the fraud was clearly established. Secondly, it is submitted that it is surprising that the conveyancing solicitor who acted for Mitchell and the respondent did not address the issue of fraud at all in any statement of evidence, given that the appellants now maintain that his role was essential to the fraud and that his retainer was not legitimate and proper. In my view, Mr Warnock was right not to press this point. It was accepted by the respondent and the Court of Appeal that the solicitor was not aware of the fraud at the time of the transaction. Moreover, the respondents part in the fraud was established on the objective evidence at the trial. Thirdly, Mr Warnock submits that this was not a case where, money having been obtained by fraud, there was never any intention to repay it. On the contrary, payments were made under the mortgage for some years. Once again, this submission does not assist the respondent because this does not detract from the fraudulent nature of the mortgage transaction. There is, however, much more substance in Mr Warnocks fourth submission which relates to the centrality of the respondents illegal conduct. It is undoubtedly the case that it was necessary to retain a solicitor in order to maintain the dishonest pretence that the respondent was borrowing to purchase the property and in order to obtain a loan secured by a mortgage. However, this simply provides the background to the claim by the respondent against her solicitors for negligent breach of their retainer. The appellants breach of duty related to the registration of title and the way in which the respondent had procured the finance to obtain that title was irrelevant to the appellants obligation to register the title. Two features of the present case, to which reference has already been made, demonstrate the lack of centrality of the illegality to the breach of duty of which the respondent complains. First, by the time the appellants were required to register the transactions the loan had been advanced and used to discharge the pre existing BM Samuels charge. The defrauding of Birmingham Midshires had been achieved. Secondly, by that time equitable title to the property had already passed to the respondent. Although legal title could pass to her only on registration of the transfer, she was already the owner in equity because once Mitchell had executed and delivered the Form TR1 he had done everything which he could do in order to effect the transfer of legal title. These matters serve to distance the appellants negligence from the respondents fraud. Some light is cast on the issue of centrality by the decision of the Court of Appeal (Schiemann, Waller and Dyson LJJ) in Sweetman v Nathan [2003] EWCA Civ 1115; [2004] PNLR 7. For present purposes the facts may be summarised as follows. Sweetman borrowed 1.6m from Coutts Bank in order to purchase property. He subsequently induced Coutts Bank to make a second loan to him by a fraudulent misrepresentation that the full amount of the second loan was needed to discharge an existing claim against the property which Sweetman proposed to sell to an identified purchaser. In fact, only a smaller sum was required for that purpose. Sweetman instructed his solicitor, Nathan, to carry out the necessary conveyancing on the sale of the property. The purchaser proved to be a worthless shell company with the result that Sweetman could not repay either of the loans to the bank. Sweetman sued Nathan and his firm for their negligence in failing to discover this. Sweetman contended that if Nathan had not been negligent Sweetman would not have taken out the second loan because he would have known that there was no genuine purchaser. Moreover, he had been prevented from repaying the second loan with the purchase price from the resale of the land and had made payments which were irrecoverable. Nathan contended that all of the losses claimed had been caused by the deception of the bank by Sweetman, alternatively that he was a party to a deliberate deception and that the claim was barred by illegality. The Court of Appeal declined to strike out the claim on this ground. In its view the claim by Sweetman against Nathan was conceptually entirely separate from the fraud against the bank. Schiemann LJ asked (at para 60) whether Sweetman would have any prospect of successfully suing Nathan for his assumed negligence in carrying out the conveyancing. Proceeding on the assumptions that Nathan and Sweetman were jointly engaged in falsely representing to the bank that Sweetman was going to use the second loan to pay off a prior interest in the property and that there was some prospect of Sweetman showing that he had suffered substantial damage as a result of the negligence, Schiemann LJ observed: What remains is a pure question of public policy. Should the courts refuse in principle to lend Mr Sweetman their assistance in suing Nathan when they were jointly engaged on a fraud? If Mr Sweetman were suing Coutts for, say, failing to transfer the money to him, one could see a strong case for refusing him the courts aid. However he is suing his fellow fraudster. If he were suing him for writing such an incompetent letter that Coutts had grasped in time that there was a fraud going on and had therefore refused to lend the money and that therefore a profitable deal had fallen through, again one could see a strong case for refusing him the courts aid. He is however not doing this. He is suing his solicitor for negligence which is conceptually entirely separate from the fraud upon which both of them are engaged. (paras 62 63) As an authority Sweetman v Nathan has its shortcomings. It concerned an application to strike out the claim and the decision was that the claim should not be struck out as it could not be said that it had no serious prospect of success. Furthermore, it was decided on the basis of the law as it existed before Patel with its emphasis on reliance on illegality. Nevertheless, the factual situation addressed is very much in point as is the following situation posited by counsel for the defendants in that case to which Schiemann LJ referred (at paras 42 and 65). A purchaser of a house instructs a solicitor who negligently fails to discover a covenant which renders it worthless. The purchaser, in ignorance of this, obtains a mortgage by false representations as to the level of his income. Before the fraud comes to light the mortgagee is repaid. Counsel submitted that these facts would not prevent the purchaser from suing his solicitor, as the loss was properly described as flowing from the solicitors negligence and not from the purchasers fraud. Schiemann LJ found that this analogy had force. I respectfully agree and find his reasoning on this point convincing. The purchaser had suffered a genuine wrong to which the allegedly unlawful conduct was incidental. As a result of the change in the law brought about by Patel v Mirza, the question whether a claimant must rely upon illegal conduct to establish a cause of action is no longer determinative of an illegality defence. Nevertheless, the question of reliance may have a bearing on the issue of centrality. In the present case it is significant that, as the decision at first instance on the basis of Tinsley v Milligan demonstrates, the essential facts founding the claim can be established without reference to the illegality. The respondents claim for breach of duty against her solicitors is conceptually entirely separate from her fraud on the mortgagee. Profiting from ones own wrongdoing For one branch of the law to enable a person to profit from behaviour which another branch of the law treats as criminal or otherwise unlawful would tend to produce inconsistency and disharmony in the law and so cause damage to the integrity of the legal system. In the present case it is not suggested by either party that by suing the appellants the respondent is seeking to profit from her wrongdoing. The parties, as I understand them, here use profit in the narrow sense of a direct pecuniary reward for an act of wrongdoing. (See Hall v Hebert, supra, per McLachlin J at p 172.) In their application for permission to appeal the appellants expressly accepted that the respondents claim was in respect of losses suffered rather than to enforce an illegitimate gain. In May 2014 the Bank of Scotland (as successor to Birmingham Midshires) obtained summary judgment against the respondent for 70,000 with the balance subject to an account. The Bank of Scotland also settled claims against BM Samuels and the appellants, but the amount of the settlements is not known. At the trial of the present action the respondent was awarded damages of 78,000 plus interest and that award was upheld by the Court of Appeal. The sum of 78,000 represented the value of the property at November 2009. In her judgment, the trial judge noted that it was impossible to say what, beyond the 70,000, the Bank of Scotland was seeking against the respondent and noted that the amount outstanding to the Bank of Scotland included a large amount by way of legal fees. The Court of Appeal proceeded on the basis that the respondents intention in pursuing the claim was not to profit but to obtain funds to reduce or discharge her liability under the Birmingham Midshires charge. In their written cases and in their oral submissions in the present appeal, both parties proceeded on this basis. Mr Pooles, on behalf of the appellants, makes a rather different point, however. He submits that, while the claim is to reduce or avoid a loss rather than to enforce an illegitimate gain, there is no difference as to the intention and that underlying the fraud into which the respondent willingly entered was the prospect of recovering 50% of the net profits on the sale of the property. He submits that the loss results from the respondents wrongdoing and that the policy consideration that a person should not be allowed to profit from her own wrongdoing applies equally in these circumstances. No doubt, the respondents motive in entering into the illegal transaction was to make a profit. That is likely to be the motive behind most illegal agreements and the same could be said of many such claimants including Mr Patel and Miss Milligan. The motive for the wrongdoing which forms the background to this claim must, however, be distinguished from enlisting the courts assistance to make a profit from that wrongdoing. The relief sought from the court will be important here. (See Patel v Mirza per Lord Toulson at para 109.) Clearly, it would be objectionable for the court to lend its processes to recovery of an award calculated by reference to the profits which would have been obtained had the illegal scheme succeeded. This, however, is not a claim to recover a profit but a claim for compensation for property lost by the negligence of the appellants. The award of damages made by the trial judge and upheld by the Court of Appeal was the value of the property as at November 2009 with interest thereon until the date of payment. This represented the loss to the respondent arising from the fact that at the date of default she was, as a result of the appellants negligence, unable to provide Birmingham Midshires with an unencumbered registered title to the property in reduction or discharge of the loan to her. This is not a case of the court assisting a wrongdoer to profit from her own wrongdoing. There is, however, a more fundamental answer to Mr Pooles submission. The respondent can indeed be considered to have got something out of her fraudulent transaction; she has an equity of redemption in the property of uncertain value and, if her claim is permitted to succeed, she will acquire the means of meeting a substantial judgment against her. However, even if this could properly be considered profiting from ones own wrong, which in my view it cannot, while profiting from ones own wrong remains a relevant consideration it is no longer the true focus of the inquiry. As Lord Toulson explained in Patel at paras 99 101 (cited at para 22 above), adopting the reasoning of McLachlin J in Hall v Hebert supra, at pp 175 176, the notion that persons should not be permitted to profit from their own wrongdoing is unsatisfactory as a rationale of the illegality defence. It does not fully explain why particular claims have been rejected and it leads judges to focus on the question whether a claimant is getting something out of the wrongdoing, rather than on the question whether to permit recovery would produce inconsistency damaging to the integrity of the legal system. The true rationale of the illegality defence, as explained in Patel and in the judgment of McLachlin J in Hall v Hebert, is that recovery should not be permitted where to do so would result in an incoherent contradiction damaging to the integrity of the legal system. In the present case, to allow the respondents claim to proceed would not involve any such contradiction, for the reasons I have given. Conclusion For these reasons, I consider that the Court of Appeal correctly followed the policy based approach adopted by the Supreme Court in Patel v Mirza and was correct in its conclusion that a defence of illegality should not bar the present claim. I would, accordingly, dismiss the appeal. |
On 26 October 2010 this Court issued its judgment in Cadder v HM Advocate [2010] UKSC 43, 2010 SLT 1125. It held that the Crowns reliance on admissions made by an accused without legal advice when detained under section 14 of the Criminal Procedure (Scotland) Act 1995 gave rise to a breach of his right to a fair trial, having regard to the decision of the European Court of Human Rights in Salduz v Turkey (2008) 49 EHRR 421. This was because the leading and relying on the evidence of the appellants interview by the police was a violation of his rights under article 6(3)(c) read in conjunction with article 6(1) of the European Convention on Human Rights: see Cadder v HM Advocate, para 63. The evidence that was in question in Cadder had been obtained when the appellant was being questioned while in detention at a police station. The applicant in Salduz too had been taken into custody before he was interrogated during his detention by police officers of the anti terrorism branch of the Izmir Security Directorate. But the facts of those cases by no means exhaust the situations in which the prosecution may seek to rely on answers to questions that have been put to the accused by the police. The Court now has before it four references by judges of the High Court of Justiciary which have been required by the Lord Advocate under paragraph 33 of Schedule 6 to the Scotland Act 1998. Common to them all is the fact that incriminating answers were given to questions put by the police when the accused did not have access to legal advice. In three of them the evidence that is objected to was obtained by the police otherwise than by questioning at a police station following detention under section 14 of the 1995 Act. They can be grouped together and are the subject of this judgment. The fourth is concerned with the question whether the ratio of the decision in Salduz extends to lines of enquiry to which the accuseds answers to questions while in detention have given rise. That reference is dealt with in a separate judgment: P v HM Advocate [2011] UKSC 44. The issues that the first three references raise are (1) whether the right of access to a lawyer prior to police questioning, which was established by Salduz, applies only to questioning which takes place when the person has been taken into police custody; and (2) if the rule applies at some earlier stage, from what moment does it apply. The first reference is of a case which is the subject of an appeal against conviction. The second is of a case which is before the Appeal Court in an appeal against a ruling by a sheriff on the admissibility of evidence. The third is of case which is the subject of a devolution minute which was referred by the trial judge to the Appeal Court under paragraph 9 of Schedule 6 to the Scotland Act 1998. The cases that are the subject of the second and third references that have Page2 not yet gone to trial, so the names of the parties involved have been anonymised. In each case the reference has been made by the Appeal Court at the request of the Lord Advocate. The first reference The appellant in the first case, John Paul Ambrose, was prosecuted on summary complaint at Oban Sheriff Court on a charge of contravening section 5(1)(b) of the Road Traffic Act 1988 as being in charge of a motor vehicle whilst having consumed a level of alcohol in excess of the prescribed limit. He had been found by two police officers sitting in the passenger seat of a car parked by the roadside. A female was sitting in the drivers seat. A member of the public had expressed concerns to the police about them because they were thought to be drunk. As there was vomit beside the drivers door and the female was seen to be upset, the police officers decided to speak to the appellant. Having formed the view that he had been drinking, one of the police officers cautioned the appellant but did not give him any specification about the offence which he was suspected of having committed. The appellant made no reply when cautioned. He was then asked three questions, to which he gave answers, by the police. They were as follows: Q Where are the keys for the vehicle? A In my pocket. Q Do you drive the car? A Yes. Q Are you going to drive the car? A Ah, well she wisnae well or Aye, well she wisnae well. The appellant then removed the car keys from his trouser pocket. He was asked whether he had anything to drink in the last 20 minutes and replied that he had not. He was then given a roadside breath test which he failed. He was taken to Oban police station where he gave a breath/alcohol reading that was well in excess of the prescribed limit. The appellant pled not guilty to the complaint. He went to trial before a Sheriff on 31 May 2010 and 2 July 2010. The evidence of the questions and answers was led without objection from his solicitor. After the Crown had closed its case the appellants solicitor challenged the admissibility of this evidence on the ground that the police had not informed the appellant of the offence of which he was suspected before he was questioned. The sheriff repelled this submission. After hearing evidence from the appellant and a defence witness, he found the appellant guilty. He was fined 375, was disqualified from driving for two years and had his licence endorsed. The appellant then lodged an appeal against his conviction. Among the grounds on which he applied for a stated case was the submission that the act of the Lord Advocate in seeking a conviction in reliance on the evidence of the police interview was incompatible with his right to a fair trial under article 6(1). Leave to appeal having been refused at the first sift, he appealed to the second sift and then lodged a devolution minute in which it was stated that for the Lord Advocate to support the conviction would be incompatible with his rights under article 6(1) and article 6(3)(c). In a note which he lodged on 12 October 2010 in support of the appeal he submitted, with reference to the decision in Salduz, that the use of the evidence of the interview was unfair as he did not have access to legal representation before or during the police interview. On 3 November 2010 leave to appeal was granted at the second sift. Following a procedural hearing on 26 January 2011 and at the request of the Lord Advocate, the Appeal Court referred the following question to this court: Whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the appellant conducted under common law caution at the roadside and without the appellant having had access to legal advice was incompatible with the appellants rights under article 6(1) and 6(3)(c) of the European Convention on Human Rights, having regard in particular to the decision of the Supreme Court of the United Kingdom in Cadder v HM Advocate 2010 SLT 1125. The second reference The accused in the second case, referred to as M, has been indicted in the sheriff court on a charge of assault to severe injury, permanent disfigurement and permanent impairment. Shortly after the assault took place on 30 August 2008, in the course of initial inquiries, the police took the accuseds details from him but allowed him to leave the locus. On 4 September 2008 however he was traced to his home address where, after administering a common law caution to the effect that he was not required to say anything but that anything he did say might be used in Page4 evidence, a police officer asked a total of seven questions, each of which was answered by the accused. They were as follows: Q I am investigating a serious assault which happened on Saturday night there, within a bar named [X]. There was a large disturbance in there too. Were you there? A Yes, aye. Q Were you involved in the fight? A Aye. Q Who were you with? A My dad and just boys fae [Y] where I used to work. Q Were they involved too? A I think so, the other boys started it. I got punched a couple of times on the eyebrow. Its still sair. Q OK, what were you wearing? A Pale blue t shirt, jeans, trainers. Q OK [M], I will stop there. I need to speak to you further except it will be recorded in a taped interview format. Can you be at [Z] Police Office tomorrow night at 8 pm? A Yes. Q I need to take your t shirt you had on, is that OK? A Aye. At this point the police officer concluded his questions because he felt that it had become obvious that the accused had some involvement on the incident and that it was not appropriate to carry out an interview there. The accused attended the police office the next day. He was then detained and interviewed under section 14 of the 1995 Act, in the course of which he made further admissions. The accused was indicted for trial, and after sundry procedure he lodged a minute raising the issue whether the Crown had power to lead evidence of the admissions which he had made. When the minute was argued before the sheriff on 9 November 2010 the Crown conceded that the evidence of the admissions made during the section 14 interview was inadmissible. But the sheriff ruled that evidence relating to the questions and answers at the accuseds home on 4 September 2008 was admissible. The accused appealed against that decision to the High Court of Justiciary, contending that by failing to allow him access to legal advice prior to interview and there being no compelling reasons to justify this, his admissions allegedly obtained under caution had been unfairly obtained and were therefore inadmissible. Following a procedural hearing on 26 January 2011 and at the request of the Lord Advocate, the Appeal Court referred the following question to this court: Whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the accused, conducted under common law caution at his home address and without the accused having had access to legal advice would be incompatible with the accuseds rights under article 6(1) and 6(3)(c) of the European Convention on Human Rights, having regard in particular to the decision of the Supreme Court of the United Kingdom in Cadder v HM Advocate 2010 SLT 1125. The third reference The accused in the third case, referred to as G, has been indicted in the High Court of Justiciary with offences including the possession of controlled drugs under the Misuse of Drugs Act 1971 and possession of prohibited firearms and ammunition under the Firearms Act 1968. The police had obtained a search warrant under the 1971 Act for the search of a flat where on 4 June 2008, having forced entry, they found the accused. Before commencing the search in terms of the warrant the accused, who had been handcuffed following a struggle, was cautioned in these terms: A systematic search will be carried out in your presence. I must caution that you are not obliged to say anything or make any comment regarding any article that may be found, but anything you do say will be noted and may be used in evidence. The accused was then detained and searched. Prior to being searched he admitted to having drugs in his jeans pocket, from which a bag of brown powder was recovered that was later found to be heroin. He was then arrested for contravention of section 23(4) of the 1971 Act. He was not arrested or charged with any other offence in the course of the search of the premises. During the search he was asked questions about the items which were found. He was not offered access to legal advice or to a solicitor before being asked these questions. After the search was concluded he was removed to a police station where he was detained under section 14 of the 1995 Act and again interviewed by the police in connection with alleged offences involving controlled drugs and firearms. He was not allowed access to legal advice before or during this interview. The Crown does not seek to rely on answers which the accused gave while he was being interviewed in the police station, but it seeks to rely on the statements and answers which he made at the premises in the course of the search. They are set out in a schedule which was completed as the search of the flat was carried out. Without that evidence there would not be sufficient evidence to convict the accused. The accused has lodged a devolution minute in which he contends that the leading of evidence of the statements and answers which he made at the premises would be incompatible with his Convention right to a fair trial. The trial judge decided to refer this issue to the Appeal Court under paragraph 9 of Schedule 6 to the Scotland Act 1998. On 18 January 2011 at the request of the Lord Advocate the Appeal Court referred the following question to this court: Is it incompatible with the Panels Convention rights for the Lord Advocate to lead evidence of his statements and answers made during the course of the search conducted under warrant granted in terms of section 23(3) of the Misuse of Drugs Act 1971 as recorded in the Search Production Schedule? In each of these three cases the circumstances differ from those that were before the court in Cadder and before the Grand Chamber in Salduz. The evidence that is objected to was obtained, in Ambroses case before he was taken to the police station for further procedures to be carried out under section 7 of the Road Traffic Act 1988 following his failure of a road side breath test, and in the cases of M and G before they were detained and questioned at a police station under section 14 of the 1995 Act. It is precisely because the issue that the references raise was not the subject of decision in either case that the courts guidance is now sought by the Lord Advocate. His position is that three features determine whether an individual has a right to legal advice under article 6 in accordance with the principle in Salduz. These features are all taken from words used by the Grand Chambers judgment in that case: see paras 55 and 56. First, he must be a suspect. Second, he must be in police custody. Third, he must be the subject of police interrogation. Unless all three features are present, he has no right of access to legal advice under article 6. These propositions all assume, of course, that the court finds that article 6(1) was engaged when the incriminating statements were made. This is because the protection of articles 6(1) and 6(3)(c) is afforded only to those who have been charged, as that word has been interpreted by the Strasbourg court. Each of these expressions will need to be analysed in the discussion that follows. Background Two very important points need, however, to be made at the outset. The first is that the jurisdiction of this court is limited to a consideration of the devolution issue which is raised by each of these references. That is plain from the wording of paragraph 33 of Schedule 6 to the Scotland Act 1998 under which the references have been made, but it needs to be emphasised yet again. The High Court of Justiciary is the court of last resort in all criminal matters in Scotland: see section 124(2) of the Criminal Procedure (Scotland) Act 1995; McInnes v HM Advocate [2010] UKSC 7, 2010 SLT 266, para 5, Fraser v HM Advocate [2011] UKSC 24, 2011 SLT 515, para 11. It is not our function to rule on how the circumstances referred to in each case would fall to be dealt with under domestic law, although this does form part of the background. The second point is that a decision by this court that there is a rule that a person who is suspected of an offence but is not yet in custody has a right of access to a lawyer before being questioned by the police unless there are compelling reasons to restrict that right would have far reaching consequences. There is no such rule in domestic law: see para 22, below. If that is what Strasbourg requires, then it would be difficult for us to avoid holding that to deny such a person access to a lawyer would be a breach of his rights under articles 6(1) and 6(3)(c) of the Convention. But the consequences of such a ruling would be profound, as the answers to police questioning in such circumstances would always have to be held in the absence of compelling reasons for restricting access to a lawyer to be inadmissible. The effect of section 57(2) of the Scotland Act 1998 would be that the Lord Advocate would have no power to lead that evidence. I agree with Lord Matthew Clarke that this would have serious implications for the investigation of crime by the authorities: see para 116, below. This suggests that a judgment pointing unequivocally to that conclusion would be required to justify taking that step. If Strasbourg has not yet spoken clearly enough on this issue, the wiser course must surely be to wait until it has done so. Section 126(1) of the Scotland Act 1998 provides that the Convention rights has the same meaning as in the Human Rights Act 1998. Section 2(1) of the Human Rights Act requires this court in determining any question which has arisen in connection with a Convention right to take into account any relevant Strasbourg case law. In R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] UKHL 23, [2003] 2 AC 295, para 26 Lord Slynn of Hadley said that, although the Human Rights Act did not provide that a national court is bound by these decisions, it is obliged to take account of them so far as they are relevant: In the absence of some special circumstances it seems to me that the court should follow any clear and constant jurisprudence of the European Court of Human Rights. If it does not do so there is at least a possibility that the case will go to that court, which is likely in the ordinary case to follow its own constant jurisprudence. In R (Ullah) v Special Adjudicator [2004] UKHL 26, [2004] 2 AC 323, para 20 Lord Bingham of Cornhill said that Lord Slynns observations in that case reflected the fact that the Convention is an international instrument, the correct interpretation of which can be expounded only by the Strasbourg court. From that it followed that a national court should not without strong reason dilute or weaken the effect of the Strasbourg case law. It was its duty to keep pace with it as it evolved over time. There is, on the other hand, no obligation on the national court to do more than that. As Lord Bingham observed, it is open to member states to provide for rights more generous than those guaranteed by the Convention. But such provision should not be the product of interpretation of the Convention by national courts. Lord Kerr says that it would be wrong to shelter behind the fact that Strasbourg has not so far spoken and use that as a pretext for refusing to give effect to a right if the right in question is otherwise undeniable: para 130, below. For reasons that I shall explain later, I do not think that it is undeniable that Strasbourg would hold that any questions put to a person by the police from the moment he becomes a suspect constitute interrogation which cannot lawfully be carried out unless he has access to a lawyer, which is the principle that Lord Kerr derives from his consideration of the mainstream jurisprudence: see para 146, below. But his suggestion that there is something wrong with what he calls an Ullah type reticence raises an important issue of principle. It is worth recalling that Lord Binghams observations in Ullah were not his first pronouncements on the approach which he believed should be taken to the Convention. In Brown v Stott 2001 SC (PC) 43, 59 he said: In interpreting the Convention, as any other treaty, it is generally to be assumed that the parties have included the terms which they wished to include and on which they were able to agree, omitting other terms which they did not wish to include or on which they were not able to agree. Thus particular regard must be had and reliance placed on the express terms of the Convention, which define the rights and freedoms which the contracting parties have undertaken to secure. This does not mean that nothing can be implied into the Convention. The language of the Convention is for the most part so general that some implication of terms is necessary, and the case law of the European Court shows that the court has been willing to imply terms into the Convention when it was judged necessary or plainly right to do so. But the process of implication is one to be carried out with caution, if the risk is to be averted that the contracting parties may, by judicial interpretation, become bound by obligations which they did not expressly accept and might not have been willing to accept. As an important constitutional instrument the Convention is to be seen as a living tree capable of growth and expansion within its natural limits (Edwards v Attorney General for Canada ([1930] AC 124) at p 136 per Lord Sankey LC), but those limits will often call for very careful consideration. The consistency between this passage and what he said in Ullah shows that Lord Bingham saw this as fundamental to a proper understanding of the extent of the jurisdiction given to the domestic courts by Parliament. Lord Kerr doubts whether Lord Bingham intended that his discussion of the issue should have the effect of acting as an inhibitor on courts of this country giving full effect to Convention rights unless they had been pronounced upon by Strasbourg: para 128, below. I, for my part, would hesitate to attribute to him an approach to the issue which he did not himself ever express and which, moreover, would be at variance with what he himself actually said. Lord Binghams point, with which I respectfully agree, was that Parliament never intended to give the courts of this country the power to give a more generous scope to those rights than that which was to be found in the jurisprudence of the Strasbourg court. To do so would have the effect of changing them from Convention rights, based on the treaty obligation, into free standing rights of the courts own creation. That is why, the courts task in this case, as I see it, is to identify as best it can where the jurisprudence of the Strasbourg court clearly shows that it stands on this issue. It is not for this court to expand the scope of the Convention right further than the jurisprudence of the Strasbourg court justifies. The background in domestic law The powers of the police to detain a person and to subject him to questioning depend on the category into which the person falls at the time these powers are being exercised. They differ according to whether the person is a witness, a suspect or an accused. Where a person is not under suspicion, the police have no power to take him into custody or to compel him to submit to police questioning. Such a person is classified, at most, as a witness. A person who is in that category can be asked to provide personal information, such as his name and address. Further questions may be put as part of a routine investigation into the events that have happened. So long as he is being questioned as a potential witness rather than as a suspect, the right to protection against self incrimination is not in play. There is no obligation to advise him of his rights, such as the right to silence or his right to seek legal advice. As Lord Justice Clerk Thomson said in Chalmers v HM Advocate 1954 JC 66, 81, a person ultimately accused may be interviewed as part of the ordinary routine investigation of the police into the circumstances of the crime. It would unduly hamper the investigation of crime if the threat of inadmissibility were to tie the hands of the police in asking questions at this stage. The position changes if the stage is reached when suspicion begins to fall on the person who is being questioned. Once suspicion has begun to fall on him the need to protect him against self incrimination comes into play. As Lord Justice General Cooper explained in Chalmers v HM Advocate 1954 JC 66, 78: The theory of our law is that at the stage of initial investigation the police may question anyone with a view to acquiring information which may lead to the detection of the criminal; but that, when the stage has been reached at which suspicion, or more than suspicion, has in their view centred upon some person as the likely perpetrator of the crime, further interrogation of that person becomes very dangerous, and, if carried too far, eg to the point of extracting a confession by what amounts to cross examination, the evidence of that confession will almost certainly be excluded. It was for a time thought that this passage was to be taken to establish that answers by suspects to police questioning were inadmissible by virtue of the persons position as a person under serious consideration as the perpetrator of the crime. But, as the law has developed, the position is less easy to define: see Renton and Brown, Criminal Procedure, 6th ed looseleaf (1996), para 24 38. In Miln v Cullen 1967 JC 21 it was held that the incriminating answers which the driver of a car gave when questioned by police officers who had formed the opinion that he was under the influence of drink were admissible in evidence. Lord Justice Clerk Grant said at p 25 that the constable, in asking the simple question whether he was the driver, was not merely acting reasonably, properly and fairly but was acting in accordance with the duties incumbent upon him. Lord Wheatley said at pp 30 31 that it was difficult to define with exactitude when a person becomes a suspect in the eyes of a police officer, as it may vary from a very slight suspicion to a clearly informed one, and that what happened after that had to be judged by the test of fairness. In Lord Advocates Reference (No 1 of 1983) 1984 JC 52, 58 Lord Justice General Emslie said that Lord Wheatleys statement in Miln v Cullen, at p 31 that in each case the issue is whether the question was in the circumstances a fair one was a sound statement of the law: A suspects self incriminating answers to police questioning will indeed be admissible in evidence unless it can be affirmed that they have been extracted from him by unfair means. The simple and intelligible test which has worked well in practice is whether what has taken place has been fair or not? (see the opinion of the Lord Justice General (Clyde) in Brown v HM Advocate 1966 SLT 105 at 107). In each case where the admissibility of answers by a suspect to police questioning becomes an issue it will be necessary to consider the whole relevant circumstances in order to discover whether or not there has been unfairness on the part of the police resulting in the extraction from the suspect of the answers in question. He went on to say that, where the words interrogation and cross examination were used in the decided cases in discussing unfair tactics on the part of the police, they were to be understood to refer only to improper forms of questioning tainted with an element of bullying or pressure designed to break the will of the suspect or to force from him a confession against his will. The current position as described in Renton and Brown, para 24 39 is therefore that the fact that the accused was at the time under suspicion or even under arrest is not in itself crucial. It is merely a circumstance like any other to be taken into account in assessing the fairness of the police questioning. The legal basis for detaining and questioning a suspect was clarified by section 2 of the Criminal Justice (Scotland) Act 1980 which was consolidated as section 14 of the Criminal Procedure (Scotland) Act 1995. The background to the legislation was described with characteristic skill and attention to detail by Lord Rodger in Cadder, para 74 86. As he explained in para 86, one aim was to put an end to the doubts about the legal basis for holding suspects for questioning when they had not been arrested. Another was to clarify the law as to the power of the police to question suspects and as to the admissibility of any answers that the suspects gave to such questions. A person may be detained for the purpose of carrying out investigations where a constable has reasonable grounds for suspecting that he has committed or is committing an offence punishable by imprisonment: section 14(1). Where a person has been detained under section 14(1) a constable may, without prejudice to any relevant rule of law as regards the admissibility in evidence of any answer given, put questions to him in relation to the suspected offence: section 14(7). The effect of the decision in Cadder is that the Lord Advocate has no power to lead and rely on answers by a detainee who was subjected to questioning by the police while he was without access to legal advice. In none of the situations described in each of the references was the person who was being questioned a detainee under section 14 of the 1995 Act. The domestic law test for the admissibility of the answers that were given to the questions put by the police is whether or not there was unfairness on the part of the police. The fact that the person did not have access to legal advice when being questioned is a circumstance to which the court may have regard in applying the test of fairness, but it is no more than that. There is no rule in domestic law that says that police questioning of a person without access to legal advice who is suspected of an offence but is not in custody must always be regarded as unfair. The question is whether a rule to that effect is to be found, with a sufficient degree of clarity, in the jurisprudence of the Strasbourg court. The reasoning in Salduz The starting point for an examination of this question must be the reasoning of the Grand Chamber in Salduz. Some of the propositions that are set out in its judgment are expressed in a way that might suggest that the right of access to a lawyer is not confined to persons who are subjected to police questioning while they are in custody. Para 55 of the judgment is in these terms: Against this background, the Court finds that in order for the right to a fair trial to remain sufficiently practical and effective article 6(1) requires that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police, unless it is demonstrated in the light of the particular circumstances of each case that there are compelling reasons to restrict this right. Even where compelling reasons may exceptionally justify denial of access to a lawyer, such restriction whatever its justification must not unduly prejudice the rights of the accused under article 6. The rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction. Read on its own, and without taking full account of the context in which these sentences were written, that paragraph suggests that the features which determine whether access to legal advice is to be provided are (a) that the person is a suspect, and (b) that he is subject to police interrogation. No mention is made in this paragraph of his being in police custody. The fact is, however, that the applicant was in police custody when he was interrogated by the police. The narrative of the facts in paras 12 14 shows that it was not until after he had been taken into custody by police officers from the Anti Terrorism Branch of the Izmir Security Directorate that he was interrogated. That being so, it is necessary to look elsewhere in the judgment to see whether the court was contemplating anything other than an interrogation in police custody when it came to set out what it did in para 55 of the judgment. In Part II A of the judgment, under the heading Domestic law, the court referred to legislation in force at the time of the application which provided that anyone suspected or accused of a criminal offence had a right of access to a lawyer from the moment they were taken into police custody. The reason why this had not been provided to the applicant was that the legislation did not apply to persons accused of offences falling within the jurisdiction of the state security courts, which his offence did. The challenge, therefore, was to a systematic departure from the right of access to a lawyer which the law gave to everyone else. In its examination of recent amendments in paras 29 31 of the judgment too its focus was on provisions that deal with juveniles taken into police custody. That continued to be its focus in its examination of the relevant international law materials in Part IIB. Chapter 1 of that Part refers to materials from the Council of Europe and the United Nations dealing with procedure in juvenile cases where the child had been deprived of his liberty by means of pre trial detention. The heading of Chapter 2 is Right of access to a lawyer during police custody. Reference is made in para 37 of the judgment to rule 93 of the Standard Minimum Rules for the Treatment of Prisoners adopted by the Council of Europe Ministers, which states that an untried prisoner shall be entitled as soon as he is imprisoned to choose his legal representatives and to receive visits from his legal adviser, and, in para 38, to a recommendation of the Committee of Ministers to Member States of the Council of Europe dealing with the right of prisoners to legal advice. There is no sign here or in its examination of the United Nations materials in paras 41 42 that the Grand Chamber was interested in the position of suspects who were questioned by the police when not in custody. Nor is there any sign of an international consensus that there is a right of access to a lawyer at that stage. The part of the judgment which deals with the alleged violation of article 6 of the Convention begins at para 45. The first section, which is headed Access to a lawyer during police custody, continues to para 63. It includes para 55, which I have already quoted: see para 26, above. In para 45 it is stated that the applicants allegation was that his defence rights had been violated as he had been denied access to a lawyer during his police custody. The parties submissions, as narrated in paras 47 49 were directed to this issue. There then follows a discussion of the general principles which were applicable to the case: paras 50 55. In this passage, to which I will return, the court does not, at least in so many words, limit its scrutiny of the principles to what they require in cases where the person concerned is in police custody. But in the next section, where it applies the principles to the case of applicant, the fact that he was in police custody lies at the heart of the discussion; paras 56 62. The holding in para 80 states that there had been a violation of the applicants rights under article 6(1) in conjunction with article 6(3)(c) on account of the lack of legal assistance while he was in police custody. But for the discussion of the relevant principles in paras 50 55, which is not so limited, there would be no doubt at all that the Grand Chambers declaration in the last sentence of para 55 that the rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction was directed to the situation where that interrogation took place while the person was in police custody. That is the conclusion that one would naturally draw from the context. The concurring opinions of Judge Bratza and Judge Zagrebelsky lend further support to this conclusion. Judge Bratza said in para O I2 that, like Judge Zagrebelsky, he thought that the court should have used the opportunity to state in clear terms that the fairness of criminal proceedings under article 6 required that, as a rule, a suspect should be granted legal advice from the moment he is taken into police custody or pre trial detention. No mention is made in either of these opinions of any rule to the effect that the suspect should be granted legal advice at any earlier stage. It may be, as Lord Rodger suggested in Cadder, para 70, that what these judges were contemplating was legal assistance for other purposes such as support for an accused who was distressed or to check on the conditions of detention. Whatever the reason, they were plainly not addressing their remarks to situations such as those described in the references where the questioning took place before the suspect was taken into police custody. The discussion of the general principles in paras 50 55 is not limited in this way. As para 50 makes clear, the fact that the applicants case was concerned with pre trial proceedings did not mean that article 6 had no application. The point is made that the fairness of a trial may be seriously prejudiced by an initial failure to comply with its provisions. In para 51 reference is made to the right of everyone charged with a criminal offence to be effectively defended by a lawyer, the choice of means of ensuring this being left to the contracting states. The paragraph ends with a warning that assigning counsel does not in itself ensure the effectiveness of the assistance he may afford an accused. So far there is nothing to suggest that the Grand Chamber was searching for a basis for a ruling that the right of access to a lawyer arose at a stage before the suspect was taken into police custody. In para 52 reference is made for the first time to the attitude of the accused at the initial stages of police interrogation and to the fact that article 6 will normally require that the accused be allowed to benefit from the assistance of a lawyer at this stage. No mention is made of where he was assumed to be when he is being questioned, but the cases referred to in the footnote to this paragraph are all cases where the applicant was in custody when he was subjected to interrogation by the police: Murray v United Kingdom (1996) 22 EHRR 29, Brennan v United Kingdom (2001) 34 EHRR 507 and Magee v United Kingdom (2000) 31 EHRR 822. In para 53 it is stated that the principles outlined in the previous paragraph are also in line with the generally accepted international human rights standards which, as the footnote to this paragraph indicates, are those set out in Part B of the judgment: see para 28, above. These are said to be at the core of the concept of a fair trial. Their rationale relates in particular to the protection of an accused against abusive coercion on the part of the authorities. The language used and the international materials referred to suggest that what the Grand Chamber had in mind here was the need for protection of the accused against abusive coercion while he was in custody. In para 54 it underlined the importance of the investigation stage for the preparation of criminal proceedings and referred to the fact that the accused often finds himself in a particularly vulnerable position at that stage of the proceedings and to the fact that early access to a lawyer was part of the procedural safeguards to which the court will have particular regard. The stage in the proceedings that the court had in mind is not specified other than by reference to the accuseds vulnerability. This is said to be amplified by the fact that legislation in criminal procedure tends to become increasingly complex. It seems that what the Grand Chamber had in mind here was a stage when the accused was being subjected to detailed questioning of the kind that, under the inquisitorial systems, will invariably take place after the accused has been taken into custody. This impression is reinforced by the reference in the third last sentence of the paragraph to the recommendations of the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment about the right of a detainee to have access to legal advice as a fundamental safeguard against ill treatment to which, I would infer, it was thought a detainee might be vulnerable. This analysis of the reasoning of the Grand Chamber in Salduz suggests that the judgment was concerned only with establishing a rule that there was a right of access to a lawyer where the person being interrogated was in police custody. The alternative view is that in para 55 it recognised a broader principle that the rule applies as soon as the person has been charged so that article 6 is engaged. This alternative has a certain logical appeal for the reasons that Lord Kerr has identified. The prejudice suffered by the accused is the same irrespective of the stage at which an incriminating statement is made in answer to questions put by the police. But the base on which this proposition rests is not that the Convention prohibits absolutely any reliance on incriminating statements. The privilege against self incrimination is not an absolute right: Murray v United Kingdom (1996) 22 EHRR 29, para 47. It is primarily concerned with respecting the will of the person to remain silent: Saunders v United Kingdom (1996) 23 EHRR 313, para 68. Everyone is entitled to respect for the right not to incriminate himself, irrespective of whether or not he is in police custody. Nevertheless a person can confess if he is willing to do so, and his confession will be admissible if it is truly voluntary. The underlying principle therefore is that there is a right against self incrimination which in some circumstances must be protected by special measures to protect the person against the risk that a confession may be obtained from him against his will by unfair tactics by the police. That is why the court recognised in its application of those principles to Salduzs case, as it had already done in para 54, that an interview which takes place in police custody has particular features which require the provision of an especially strong protection to protect the rights of the defence against a forced confession. It is that aspect of Salduzs case which seems to have informed the whole of the courts judgment. It seems to me that the Grand Chambers judgment, when taken as a whole, does not indicate with a sufficient degree of clarity or indeed, I would suggest, in any way at all that the ruling in para 55 about incriminating statements made without access to a lawyer applies to questions put by the police before the accused is taken into custody. The context would have required this to be stated expressly if it was what was intended, as the rule which the judgment laid down can be departed from only where there are compelling reasons to justify its restriction. It would have had to have been stated precisely to what situations outside police custody the rule was to apply, and it was not. The jurisprudence since Salduz The Grand Chambers judgment has, not surprisingly, been referred to many times by the Strasbourg court since the judgment in that case was delivered. The question is whether there is an indication in any of the cases that the right of access to a lawyer arises, as a rule, as soon as a person whose rights under article 6 are engaged is subject to questioning by the police. There are passages in some of the cases which indicate that Salduz is regarded as having been concerned only with the need for legal advice while the person was in custody. In Dayanan v Turkey (application no 7377/03) (unreported) given on 13 October 2009, which is a decision of the Second Section and is available only in French, the applicant was arrested and detained as part of an operation against the Hizbullah. He was informed of his right to silence and exercised it, as he refused to answer the questions put to him by the police. It was held nevertheless that there had been a breach of article 6(3)(c) in conjunction with article 6(1) because he did not have access to a lawyer while he was being interrogated. The court said: 31. Elle estime que lquit dune procdure pnale requiert dune manire gnrale, aux fins de larticle 6 de la Convention, que le suspect jouisse de la possibilit de se faire assister par un avocat ds le moment de son placement en garde vue ou en dtention provisoire. 32. Comme le souligne les normes internationales gnralement reconnues, que la Cour accepte et qui encadrent sa jurisprudence, un accus doit, ds quil est priv de libert, pouvoir bnficier de lassistance dun avocat et cela indpendamment des interrogatoires quil subit (pour les textes de droit international pertinents en la matire, voir Salduz, prcit, paras 37 44) The proposition in para 32 that an accused must have access to a lawyer from the moment he is deprived of his liberty (un accus doit, ds quil est priv de libert, pouvoir bnficier de lassistance dun avocat) seems to go further than what the Grand Chamber itself said in Salduz. It is more in keeping with the concurring opinions of Judge Bratza and Judge Zagrebelesky. However that may be, the passages which I have quoted indicate the importance that appears to have been attached by Strasbourg to the fact that the person was in police custody when he was being interrogated. It is especially significant that this is what the court saw the international consensus (les normes internationales gnralement reconnues) to be on this issue. Three other cases from Turkey are to the same effect. In Arzu v Turkey (application no 1915/03) (unreported) given on 15 September 2009 the applicant, who was arrested and placed in custody, complained that he had been denied access to a lawyer during the initial stages of the criminal proceedings against him. The court said that Salduz had considered the grievance of a lack of access to a lawyer whilst in police custody: para 46. In Duman v Turkey (application no 28439/03) (unreported) given on 23 March 2010 the court said in para 46 that the use of statements obtained at the stage of the police inquiry and the judicial investigation is not inconsistent with article 6(1), provided that the rights of the defence are respected. On that point the court said that it relied on the basic principles laid down in its judgments, including Salduz, para 55, concerning the notion of a fair procedure. In Takin v Turkey (application no 5289/06) (unreported) given on 1 February 2011 the applicant complained that he had had no legal assistance before he made his police statement or during his interrogation before the public prosecutor while in custody. The court observed that it had already examined the issue concerning the lack of legal assistance in police custody in Salduz, paras 56 62. In all these cases, as in Salduz itself, there was a systemic restriction on access to legal advice by anyone held in police custody in connection with proceedings that were to be taken in the state security courts. In Pishchalnikov v Russia (application no 7025/04) (unreported) given on 24 September 2009 the applicant, who had been arrested, was interrogated while he was in police custody. The pattern of the First Sections judgment followed that of the Grand Chamber in Salduz. It repeated many of the propositions in paras 50 55 of Salduz in its assessment of the case under the heading Restrictions on access to a lawyer in the police custody, and referred in para 71 to the fact that the right to silence and the right not to incriminate oneself are generally recognised international standards which lie at the heart of a fair procedure under article 6. But, as it was a custody case, it does not examine the question whether these propositions require access to a lawyer at any earlier stage. In Sharkunov and Mezentsev v Russia (application no 75330/01) (unreported) given on 10 June 2010 the question before the court was again directed to the lack of legal assistance while in police custody and the use at the trial of incriminating statements that had been made at that stage. In para 97 the court repeated the proposition that was first stated in Salduz, para 55 that the rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction. But once again the police interrogation in the course of which these statements were made took place while the applicant was in police custody. In Borotyuk v Ukraine (application no 33579/04) (unreported) given on 16 December 2010 the applicant was, once again, in police custody during the pre trial investigation. Here too the propositions on which the court based its judgment are closely modelled on what the Grand Chamber said in para 55 of Salduz. In para 79 it summarised the general principles that are to be found there. It stated that, as a rule, access to a lawyer must be provided as from the first questioning of a suspect by the police, unless it can be demonstrated in the light of the particular circumstances that there are compelling reasons to restrict that right. As in para 55 of Salduz, no indication is given that the principles are restricted to cases where the accused was in police custody. But, as in Salduz, that was the background against which the case was heard. Once again it is unclear whether the general propositions on which the judgment was based must equally be applied, as a rule, to cases where the accused was not in custody when the questioning took place. Zaichenko v Russia The First Section had the opportunity to clarify where the court stood on this issue in Zaichenko v Russia (application no 39660/02) (unreported) given on 18 February 2010. This appears to have been the only case to date in which the complaint was of lack of legal assistance during questioning by the police when the applicant was not in custody. He was stopped while he was driving home from work and his car was inspected by the police as there had been reports of workers stealing diesel from their service vehicles. Two cans of diesel were discovered in the car. The applicant made self incriminating statements in reply to questions put to him by the police at the roadside. He was charged with stealing the cans, and he was convicted. His complaint was that he had not been advised of the privilege against self incrimination when he made his admission to the police. His position at the trial was that he had purchased the diesel at a petrol station and that he did not give this explanation to the police because he felt intimidated and did not have a receipt to prove the purchase. In its assessment the court set out the general principles that are relevant to a consideration of whether there has been a violation of the right to a fair trial. It noted that article 6(3)(c) especially might be relevant before a case is sent to trial if and in so far as the fairness of the trial is likely to be seriously prejudiced by a initial failure to comply with its requirements. In para 36 it recalled, as the Grand Chamber did in Salduz, the proposition that the court set out in Imbrioscia v Switzerland (1993) 17 EHRR 441, para 38 that the manner in which articles 6(1) and 6(3)(c) were to be applied during the preliminary investigation depended on the special features of the proceedings and on the circumstances of the case. Account was taken in para 37 of the principles set out in Salduz, para 55 and in para 38 of the fact that the right to silence and the right not to incriminate oneself are generally recognised standards which lie at the heart of the notion of a fair procedure. Para 38 then contains these important propositions which did not receive the same attention in Salduz: The right not to incriminate oneself presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused (see, inter alia, J B v Switzerland, no 31827/96, para 64, ECHR 2001 III). In this sense the right is closely linked to the presumption of innocence contained in article 6(2) of the Convention. In examining whether a procedure has extinguished the very essence of the privilege against self incrimination, the Court must examine the nature and degree of the compulsion, the existence of any relevant safeguards in the procedures and the use to which any material so obtained is put (ibid). Applying these propositions to the applicants case, the court noted in para 42 that in criminal matters article 6 comes into play as soon as a person is charged and that this may occur on a date prior to the case coming before the trial court, such as the date of arrest, the date when the person concerned was officially notified that he would be prosecuted or the date when the preliminary investigations were opened. Eckle v Germany (1982) 5 EHRR 1, para 73 was referred to, which includes the proposition taken from cases such as Deweer v Belgium (1980) 2 EHRR 439, para 46 that the test as to whether a person has been charged for the purposes of article 6(1) is whether the situation of the person has been substantially affected. The court concluded that, given the context of the road check and the applicants inability to produce any proof of the diesel purchase at the moment of his questioning by the police, there was a suspicion of theft against him from that moment and that, although he was not yet accused of any criminal offence, his situation in the proceedings at the roadside was substantially affected. So article 6(1) was engaged at that point. But the fact that article 6(1) was engaged did not mean that a right of access to a lawyer arose at that point. The court observed in para 47 that the case was different from previous cases concerning the right to legal assistance in pre trial proceedings. This was because the applicant was not formally arrested or in police custody but was stopped for a roadside check which was carried out in the presence of two attesting witnesses. In para 48 it said: Although the applicant in the present case was not free to leave, the Court considers that the circumstances of the case as presented by the parties, and established by the Court, disclose no significant curtailment of the applicants freedom of action, which could be sufficient for activating a requirement for legal assistance already at this stage of the proceedings. In para 49 it noted that the role of the police in such a situation was to draw up an inspection record and receive the applicants explanation as to the origin of the cans in his car. Having done so, the police transferred the documents to the inquirer who submitted a report to his superior which prompted him to open a criminal case against the applicant. In para 51 it held that the absence of legal representation at the roadside check did not violate his right to legal assistance under article 6(3)(c). In a partly dissenting opinion Judge Spielmann said that the interview took place in circumstances that could in no way be compared to those normally observed during routine road checks and he could not agree that the circumstances of the case disclosed no significant curtailment of the applicants freedom of action such as to require legal assistance. He did not take issue with the principle formulated in para 48. His dissent was as to its application to the facts of the case. Mr Scott for Ambrose submitted that it was wrong to look at the courts reasoning in Salduz through what it decided in Zaichenko. Mr Shead for M submitted that Zaichenko was so out of line with the other cases, and so hard to reconcile with the basic principles that were stated in Salduz, that it should be regarded as having been wrongly decided. I would reject these arguments. The President of the Court, Judge Rozakis, was a member of the Grand Chamber in Salduz, as was Judge Spielmann. The importance of the question that the case raised, which was whether the ruling in Salduz applied to questioning where the applicant was not in police custody, would not have been overlooked. The reasoning shows that the reasoning in Salduz was fully taken into account. The finding in para 48 that the circumstances did not disclose a sufficient curtailment of the applicants freedom of action which could be sufficient for activating a requirement for legal assistance indicates that the court was well aware that it had to give reasons for reaching a different result. That it did so in the way that it did shows that this is a judgment which must be taken into account in the search for an answer to the question where the jurisprudence of the Strasbourg court stands on the question we have to decide. Abdurahman v United Kingdom The question whether the right of access to a lawyer applies at a stage before the person is taken into custody is now before the Strasbourg court in an application by Ismail Abdurahman, application no 40351/09. He was questioned by the police as a witness in connection with the attempt to detonate four bombs at separate points in the London public transport system two weeks after the bombings that took place on 7 July 2005. He had been approached by two police officers who took him to a police station. According to their evidence at the voir dire at the applicants trial, this was with a view to his assisting the police as a potential witness. They began interviewing him, but after about 45 minutes of questioning they considered that, as a result of the answers that he was giving, he was in danger of incriminating himself and should be cautioned. On instructions from a senior officer they continued nevertheless to interview him as if he were a witness. It was not until after he had completed and signed his witness statement, which contained statements that were incriminating and was made without access to legal assistance, that they were told to arrest him and he was then taken into custody. This case is still awaiting a hearing in Strasbourg. It has reached the stage of the court posing questions to the parties, which are whether there has been a violation of article 6(1) together with article 6(3)(c) arising from (a) the failure to caution the applicant before he gave his witness statement (Aleksandr Zaichenko v Russia, no 39660/02, 18 February 2010); and/or (b) the failure to provide him with legal assistance before he gave the witness statement? In particular, were the rights of the defence irretrievably prejudiced by the use of the witness statement at trial (Salduz v Turkey [GC], no 36391/02, para 55, 27 November 2008)? It is, of course, too early to say what view will be taken of this case when the facts have been assessed by the court in the light of the relevant principles. But it is at least likely that its judgment will provide some useful guidance as to the approach that is to be taken to a persons rights under article 6(1) together with article 6(3)(c) where the prosecution seeks to rely on answers given to questions by the police before he is formally taken into custody. The key issue, so far as the references that are before the court in this case are concerned, is whether, as a rule, access to a lawyer must always be provided when a person is questioned at any stage in the proceedings after he has become a suspect and must be taken to have been charged for the purposes of article 6 (see paras 62 63, below), or whether access to a lawyer is required, as a rule, only where the person has been taken into custody or his freedom of action has been significantly curtailed. The fact that this application is still pending suggests that, if there was any doubt as to where the jurisprudence of the Strasbourg court stands, it would have been wise to wait for its judgment in Abdurahman before holding that there is a rule that access must be provided in any situation that is not analogous on its facts to that which was before the court in Salduz. But that is for another day, as the delivery of the judgment in that case cannot be taken to be imminent. Miranda v Arizona The Lord Advocate placed considerable weight in support of his argument on the judgment of the Supreme Court of the United States in Miranda v Arizona 384 US 436 (1966). In that case the Supreme Court held that the prosecution may not use statements, whether incriminatory or exculpatory, stemming from custodial interrogation of a defendant unless it demonstrated the use of procedural safeguards which were sufficient to secure the privilege against self incrimination. These safeguards require that, unless other fully effective means are devised to inform the accused person of the right to silence and to assure continuous opportunity to exercise it, he must be warned that he has a right to remain silent, that any statement that he does make may be used as evidence against him, that he has the right to consult with an attorney and that, if he cannot afford one, a lawyer will be appointed to represent him. Custodial interrogation for the purposes of this rule means questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way: p 444. Miranda has been referred to in a number of individual opinions given by judges of the Strasbourg court. Judge De Meyer referred to it in his dissenting opinion in Imbrioscia v Switzerland (1993) 17 EHRR 441. The applicant in Imbrioscia had been questioned several times without access to a lawyer while he was in police custody but the court held, considering the proceedings as a whole, that there had been no breach of article 6(1) read with article 6(3)(c). Judge De Meyer said that the court had failed to recognise the rules governing the right to legal advice during custodial interrogation which the Supreme Court has summarised in its Miranda judgment and which he said belonged to the very essence of fair trial. In Murray v United Kingdom (1996) 22 EHRR 29 the applicant had been denied legal advice for 48 hours after he had been taken into custody. The court held that there had been a violation of article 6(1) read with article 6(3)(c). The partly dissenting judges, Judge Pettiti, joined by Judge Valticos, and Judge Walsh, joined by Judges Makarczyk and Lhmus, also referred to the Miranda judgment in this context. Judge Walsh pointed out that the Supreme Court had affirmed that the constitutional protection against self incrimination contained in the Fifth Amendment guarantees to the individual the right to remain silent unless he chooses to speak in the unfettered exercise of his own free will whether during custodial interrogation or in court. Much more recently, but prior to the Grand Chambers decision in Salduz, Judge Fura Sandstrm joined by Judge Zupani referred to Miranda in Galstyan v Armenia (2007) 50 EHRR 618 when, in para 0 I5, she described the right to be assisted by a lawyer as a bright line rule which nobody should cross and said that its purpose was to neutralise the distinct psychological disadvantage that suspects are under while dealing with the police. The Strasbourg court has not referred to Miranda in any of its judgments, and Imbrioscia, Murray and Galstyan are the only cases where it has been referred to in a dissenting opinion in the context of what is described in Miranda as custodial interrogation. But it can be assumed that the court will not have overlooked it in its search for generally accepted international human rights standards. The dissenting judgments in Imbrioscia and Murray which drew attention to it were given before the Grand Chamber considered the issue in Salduz, and those cases were cited to it in that case. As T A H M van der Laar and R L de Graaf, Salduz and Miranda: is the US Supreme Court pointing the way? [2011] 3 EHRLR 304, 315 have pointed out, the test that the Strasbourg court described in paras 47 and 48 of Zaichenko when it considered that the applicant was neither formally arrested nor interrogated in police custody and that there was no significant curtailment of his freedom of action echoes the statement in Miranda, p 477 that the rule of access to a lawyer that it describes applies when the suspect is subjected to police interrogation while in custody or otherwise deprived of his freedom of action in any significant way. It is not unreasonable to think that Miranda and subsequent cases that the ruling in that case have given rise to in the United States will influence the thinking of the Strasbourg court as it develops the principles described in Salduz. The significance of Miranda is that it follows the custodial approach to the question as to when access to a lawyer is required. The core of that decision, as der Laar and de Graaf have described it in [2011] EHRLR 304, 310, is that a suspects statement made as a result of interrogation initiated by the interrogating authorities while he is in custody cannot be used in evidence unless the prosecutor can prove that the procedural safeguards that were used were effective enough to secure the suspects right not to incriminate himself. The underlying reason is that the circumstances in which such an interrogation takes place are inherently intimidating. As Chief Justice Warren explained at p 445, an understanding of the nature and setting of the in custody interrogation was essential to the courts decision: incommunicado interrogation in a police dominated atmosphere. But it was noted that an interpretation of the requirement that the right to legal advice arose at an earlier stage would hamper the traditional function of the police in investigating crime. General on the scene questioning as to facts surrounding the crime or other general questioning of citizens was not affected. The right to legal advice was held not to extend that far because the compelling atmosphere inherent in the process of in custody interrogation was not necessarily present: Miranda, pp 477 478. The accused in that position is protected by the rule that only statements voluntarily made are admissible. I think that there is an indication here about the way the Strasbourg courts jurisprudence may develop, if there are doubts as to the significance of the courts decision in Zaichenko. Miranda shows that reasons can be given which, at the very least, the court has not yet said are irrelevant for thinking that it would be going too far to hold that there is a rule that there must be access to a lawyer irrespective of whether the person who is being questioned by the police is being held in custody. The basis for the ruling in Miranda is that police custody or its equivalent creates particular pressures which mean that the persons will is more likely to be overcome when he is being questioned under conditions of that kind. The observation in Salduz, para 53 that the rationale of the generally recognised international human rights standards relates in particular to the protection of the accused against abusive coercion on the part of the authorities fits in with this line of reasoning. This feature is likely to be absent when questions are being put at the locus or in the persons home simply with a view to deciding whether the person being questioned is to be treated as a suspect and, as such, to be subjected to further procedures. The case for police custody or its equivalent I should like, before stating my conclusions, to say a bit more about why I would hold that in principle the line as to when access to legal advice must be provided before the person is questioned should be drawn as from the moment that he has been taken into police custody, or his freedom of action has been significantly curtailed as it was put in Zaichenko, para 48. I return to the points I made in para 34, above. The privilege against self incrimination is not an absolute right: Murray v United Kingdom (1996) 22 EHRR 29, para 47; Brown v Stott 2001 SC (PC) 43, 64, per Lord Steyn. At p 60 Lord Bingham said that while it could not be doubted that such a right must be implied, there is no treaty provision which expressly governs the effect or extent of what is to be implied. At p 74 I said that implied rights are open, in principle, to modification or restriction so long as this is not incompatible with the right to a fair trial. We do know however that the right is primarily concerned with respecting the will of the person to remain silent: see Saunders v United Kingdom (1996) 23 EHRR 313, para 68. A person is therefore free to speak to the police and to answer questions if he is willing to do so, even after he has been cautioned. He can provide them with self incriminating answers if he is willing to do this, and his answers will be admissible if they are truly voluntary. This approach to the problem is familiar in domestic law: see para 22, above. So long as it is applied the fundamental right under article 6 to a fair trial will be guaranteed. The test is whether the will of the person to remain silent, if that is his will, has been respected. Answers cannot be extracted from him by unfair means, and he must be protected against the risk that they may be forced out of him. It is well understood that in some circumstances merely to caution the person that he has the right to remain silent will not be enough to protect him against the risk of a forced confession. The paradigm case is where he is in police custody. In such a situation the circumstances surrounding his questioning are likely to be oppressive and intimidating. The questioning is likely to be prolonged, and the atmosphere is likely to be coercive. In such circumstances it is reasonable to assume that he will be vulnerable to having a confession extracted from him against his will and to insist that special measures are needed to ensure that his rights are respected. As Lord Kerr points out, common experience tells us that a coercive atmosphere can exist independently of custody: para 147, below. That is why it was recognised in Miranda and in Zaichenko that a persons freedom of action to act as he wishes may be significantly impaired in other circumstances. But it does not follow that this will be so in every case when the police engage in conversation with a suspect. Circumstances will vary, and questioning which may become objectionable as the process continues may not be so during its initial stages. That is why I believe that a more flexible approach to the problem is called for than the rigid principle that Lord Kerr would adopt, which would involve laying down a rule that access to lawyer must always be provided before any police questioning can take place: see para 146, below. Lord Kerr says in para 148 that there is no reason to suppose that a person questioned by the police while not in detention would not experience the same need to acquiesce in the power of the police to require answers to potentially highly incriminating questions. The important question, he says, is whether the questions asked are liable to be productive of incriminating answers, not the circumstances in which they are being asked. That leads him to say that whenever questions of that kind are being put to a suspect they must be asked in the presence of a lawyer. I do not think that there is any support in the Strasbourg cases, or in such international authorities as we have been shown, for that proposition. The point that was being made in the Canadian case of R v Grant 2009 SCC 32; [2009] 2 SCR 353 to which he refers in para 147 was that there are situations in which psychological constraint amounting to detention have been recognised: the majority judgment of McLachlin CJ and LeBel, Fish, Abella and Charron JJ at para 30. These are where the subject is legally required to comply with a direction or command and where there is no such obligation but a reasonable person in the subjects position would feel so obligated. Not every conversation that takes place between the police and a suspect in which questions are asked is of that character. A demand or direction by a police officer is one thing. Questioning under caution is another. It is understandable that a person who is confronted by a direction or a demand by a police officer to provide information will feel that he has to comply with it. It is understandable too if the circumstances are such that he feels that he has no real choice in the matter. That is why the law requires that before questions are put to him by the police the suspect must be cautioned. In that way a fair balance is struck between the interests of the individual and the public interest in the detection and suppression of crime. The search for that balance is inherent in the whole of the Convention: Sporrong and Lnnroth v Sweden (1982) 5 EHRR 35, para 69. The whole point of the caution is to make it clear to the person that he is under no obligation to answer the questions that are being put to him. The requirement would be pointless if it is to be assumed that he will nevertheless feel, whatever the circumstances, that he has no alternative but to answer them. Whether the caution is enough to ensure that the person will have a fair trial will depend on the circumstances. Conclusion I return to the Lord Advocates submission that three features determine whether an individual has a right to legal advice under article 6 in accordance with the principle in Salduz. First, he must be a suspect. Second, he must be in police custody. Third, he must be the subject of police interrogation. The submission is that, unless all three features are present, he has no right of access to legal advice under article 6. The correct starting point, when one is considering whether the persons Convention rights have been breached, is to identify the moment as from which he was charged for the purposes of article 6(1). The guidance as to when this occurs is well known. The test is whether the situation of the individual was substantially affected: Deweer v Belgium (1980) 2 EHRR 439, para 46; Eckle v Germany (1982) 5 EHRR 1, para 73. His position will have been substantially affected as soon as the suspicion against him is being seriously investigated and the prosecution case compiled: Shabelnik v Ukraine (application no 16404/03) (unreported) given on 19 February 2009, para 57. In Corigliano v Italy (1982) 5 EHRR 334, para 34 the court said that, whilst charge for the purposes of article 6(1) might in general be defined as the official notification given to the individual by the competent authority of an allegation that he has committed an criminal offence, as it was put in Eckle, para 73, it may in some instances take the form of other measures which carry the implication of such an allegation. In ubinski v Slovenia (application no 19611/04) (unreported) given on 18 January 2007, paras 62 63 the court said that a substantive approach, rather than a formal approach, should be adopted. It should look behind the appearances and investigate the realities of the procedure in question. This suggests that the words official notification should not be taken literally, and that events that happened after the moment when the test is to be taken to have been satisfied may inform the answer to the question whether the position of the individual has been substantially affected. It is obvious that the test will have been satisfied when the individual has been detained and taken into custody. It must be taken to have been satisfied too where he is subjected to what Salduz, para 52 refers to as the initial stages of police interrogation. This is because an initial failure to comply with the provisions of article 6 at that stage may seriously prejudice his right to a fair trial. The moment at which article 6 is engaged when the individual is questioned by the police requires very sensitive handling if protection is to be given to the right not to incriminate oneself. The mere fact that the individual has been cautioned will not carry the necessary implication. But, when the surrounding circumstances or the actions that follow immediately afterwards are taken into account, it may well do so. The moment at which the individual is no longer a potential witness but has become a suspect provides as good a guide as any as to when he should be taken to have been charged for the purposes of article 6(1): Shabelnik v Ukraine, para 57. The Lord Advocate submitted that the protection of article 6(3)(c) was not engaged until the individual was actually taken into custody. But this cannot withstand the emphasis that the Strasbourg court puts on the consequences of an initial failure to comply with its provisions, as in Salduz, para 50; see also Zaichenko v Russia, para 42. As for the requirement that the individual must be in police custody, I would hold that the Strasbourg court has not said, or at least has not said with a sufficient degree of clarity, that a person who has become a suspect and is not in custody must, as a rule, have access to a lawyer while he is being questioned. I would attach particular importance to the judgment in Zaichenko v Russia, for the reasons given in para 46, above. That is not to say that the fact that the individual had no access to legal advice in that situation is of no consequence. If it was practicable for access to legal advice to be offered, this will be one of the circumstances that should be taken into account in the assessment as to whether the accused was deprived of a fair hearing, as he is entitled to respect for the right not to incriminate himself. But it is no more than that. The fact that the incriminating statements were made without access to a lawyer does not of itself mean that the rights of the defence are irretrievably prejudiced, as was held to be the case in Salduz on account of the lack of legal assistance while the applicant was in custody. The phrase police interrogation appears frequently in the cases where the applicant was detained in custody. It was suggested that, for the purposes of the rule about access to a lawyer, it means something more than just asking questions of an individual. These words are, however, extremely fact sensitive. Any questioning of an individual who has been detained in custody by persons who are referred to in the Strasbourg cases as representing the investigating authorities with the aim of extracting admissions on which proceedings could be founded will amount to interrogation for the purposes of the rule: for a statement to that effect in England, see R v Absolam (1989) 88 Cr App R 332, 336, per Bingham LJ. The same could be said of questioning that takes place at the roadside or in the persons home, depending on the circumstances. It is not necessary, if access to a lawyer is needed for the right to a fair trial to remain practical and effective (see Salduz, para 55), that the questioning should amount to an interrogation in the formal sense. It need not be a detailed and sustained course of questioning. Questions that the police need to put simply in order to decide what action to take with respect to the person whom they are interviewing are unlikely to fall into this category. But they are likely to do so when the police have reason to think that they may well elicit an incriminating response from him. With that introduction, I now turn to the questions that have been referred to this court. As I understand them, they invite us not only to deal with the situations that they describe as raising issues of principle but also to express our own view as to the answers that the Appeal Court should give on the facts as presented to us in each case. The answers to the questions referred The question in Ambroses case is whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the appellant conducted under common law caution at the roadside and without the appellant having had access to legal advice was incompatible with the appellants rights under article 6(1) and 6(3)(c). I would answer this question in the negative. Applying the test that I have described in para 62, above, I would hold that Ambrose was charged for the purposes of article 6 when he was cautioned and that the police officer had reason to think that the second and third questions were likely to elicit an incriminating response from him. This conclusion is supported by the way the question whether the applicant was charged was dealt with in Zaichenko v Russia, para 41, where the court said that, given the context of the road check and the applicants inability to produce proof that he had purchased the diesel, there should have been a suspicion of theft against the applicant at the moment of his questioning by the police. The context in Ambroses case was that, when he was approached by the police, he was drunk and sitting in the car. Suspicion that he was committing an offence fell on him as soon as he told the police that the keys were in his pocket. But I would hold it would be to go further than Strasbourg has gone to hold that the appellant is entitled to a finding that this evidence is inadmissible because, as a rule, access to a lawyer should have been provided to him when he was being subjected to this form of questioning at the roadside. This leaves open the question whether taking all the circumstances into account it was fair to admit the whole or any part of this evidence. There may, perhaps, still be room for argument on this point. So I would leave the decision as to how that question should be answered to the Appeal Court. The question in Ms case is whether the act of the Lord Advocate in leading and relying on evidence obtained in response to police questioning of the accused, conducted under common law caution at his home address and without the accused having had access to legal advice was incompatible with the accuseds rights under article 6(1) and 6(3)(c). I would hold that M was charged for the purposes of article 6 when he was cautioned by the police officer at his home address. Although he did yet not have enough information as that stage to detain him as a suspect under section 14 of the 1995 Act, his actions were sufficient to carry the implication that the purpose of his visit was to establish whether M was in that category. Even if that was not so at the moment when M was cautioned, the first question which the police officer put to him carried that implication. I also think that the police officer had reason to think that the second question that he asked (Were you involved in the fight?) was likely to elicit an incriminating response from him. But I would answer the question in this reference also in the negative, as it would be to go further than Strasbourg has gone to hold that the accused is entitled to a ruling that this evidence is inadmissible because, as a rule, access to a lawyer should have been provided to him when he was being asked these preliminary questions in his own home with a view to determining what further steps should be taken to deal with him in connection with the offence. As in Ambroses case, this leaves open the question whether, taking all the circumstances into account, it would be fair to admit the whole or any part of this evidence. I would leave it to the sheriff to answer that question. The question in Gs case is whether it is incompatible with the Panels Convention rights for the Lord Advocate to lead evidence of his statements and answers made during the course of the search conducted under warrant granted in terms of section 23(3) of the Misuse of Drugs Act 1971 as recorded in the Search Production Schedule. The Lord Advocate conceded that G was a suspect from the time of his first admission to possession of a quantity of heroin in his jeans. In must follow that he had been charged for the purposes of article 6 by the time the police began their search. The feature of this case which distinguishes it from the other two is that, although G had not yet been formally arrested and or taken into police custody, there was a significant curtailment of his freedom of action. He was detained and he had been handcuffed. He was, in effect, in police custody from that moment onwards. So I would answer the question in the affirmative. The circumstances were sufficiently coercive for the incriminating answers that he gave to the questions that were put to him without access to legal advice about the items to be found to be inadmissible. I would hold however that the same result need not follow in every case where questions are put during a police search to a person who is to be taken to have been charged for the purposes of article 6. It would be to go further than Strasbourg has gone to hold that a person has, as a rule, a Convention right of access to a lawyer before answering any questions put to him in the course of a police search. It is not because there is a rule to this effect that I would answer the question in the affirmative. Rather it is because it is plain from the particular circumstances of the case that G was, in effect, a detainee when he was being questioned by the police. In the absence of such indications of coercion the question, as in the other cases, will be whether, taking all the circumstances into account, it would be fair to admit the whole or any part of the evidence. I am in full agreement with Lord Hopes judgment in this case and there is LORD BROWN comparatively little that I want to say in addition. Cadder is authority for an absolute rule, derived from the European Court of Human Rightss decision in Salduz v Turkey (2008) 49 EHRR 421, that the Crown cannot lead and rely upon evidence of anything said by an accused without the benefit of legal advice during questioning under detention at a police station. For convenience I call this the Cadder rule and refer to it as absolute notwithstanding the Courts recognition in Salduz itself (at para 55) that compelling reasons may exceptionally justify denial of access to a lawyer (providing always that such a restriction does not unduly prejudice the defence) since for present purposes those possible exceptional cases can safely be ignored. The critical issue arising for our determination on these references is whether the Cadder rule applies equally to anything said by an accused in answer to police questioning even before he is detained at a police station, providing only that at the time of such questioning he is already a suspect and charged within the meaning of article 6(1) of the Convention (his situation substantially affected as explained by Lord Hope at para 39). Although these are, of course, Scottish references and, rather to my regret, we have not had the benefit of any intervention on behalf of English and Welsh prosecuting authorities to assist us as to the legal position south of the border, I cannot but notice that on their face the statutory provisions governing the position in England and Wales sit a little uneasily even with the absolute rule in Cadder, let alone with the substantial extension to that rule now proposed by the respective accused in these references. Section 76(2) of the Police and Criminal Evidence Act 1984 (PACE) provides: If, in any proceedings where the prosecution proposes to give in evidence a confession made by an accused person, it is represented to the court that the confession was or may have been obtained (a) by oppression of the person who made it; or (b) in consequence of anything said or done which was likely, in the circumstances existing at the time, to render unreliable any confession which might be made by him in consequence thereof, the court shall not allow the confession to be given in evidence against him except in so far as the prosecution proves to the court beyond reasonable doubt that the confession (notwithstanding that it may be true) was not obtained as aforesaid. By section 82(1) of PACE, confession is defined to include any statement wholly or partly adverse to the person who made it and by section 76(8) oppression is defined to include torture, inhuman or degrading treatment, and the use or threat of violence (whether or not amounting to torture). The only absolute statutory rule, therefore, is that confessions are inadmissible under PACE if obtained by oppression or in consequence of anything said or done likely to render them unreliable. Generally speaking the court would not regard a confession elicited during questioning under detention at a police station as unreliable merely because the suspect had not at the time had the benefit of legal advice (unless, of course, by reason of youth or mental frailty or for any other reason the suspect may be regarded as having been particularly vulnerable to such questioning see, for example, R v McGovern (1990) 92 Cr App R 228). Nevertheless the principle established in Salduz that underlies the Cadder rule is, I apprehend, properly given effect in England and Wales by the appropriate application of sections 58 and 78 of PACE which provide respectively: 58(1) A person arrested and held in custody in a police station or other premises shall be entitled, if he so requests, to consult a solicitor privately at any time. 78(1) In any proceedings the court may refuse to allow evidence on which the prosecution proposes to rely to be given if it appears to the court that, having regard to all the circumstances, including the circumstances in which the evidence was obtained, the admission of the evidence would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it. Consistently, therefore, with the operation of the Cadder rule in Scotland, the discretion to exclude evidence under section 78(1) is, I apprehend, routinely exercised in England and Wales in the case of significant and substantial breaches of the right to legal advice conferred by section 58 and the related rights arising under Code C of the Codes of Practice established under PACE. In England and Wales, however, suspects do not, as I understand it, have a right to free legal advice before their arrest and admission into custody. The polices only obligation at this earlier stage is to caution the suspect before questioning begins. Once, however, a decision to arrest is made and once grounds for arrest exist it cannot then be delayed so as to defer the suspects right to legal advice the police are required to stop the questioning and to resume it only at the police station. On arrival at the police station the detainee must be advised about his right to free legal advice, including a right to speak to a solicitor on the telephone, and he must be asked if he wishes to do so. Once the interview begins he must again be reminded of his right to free legal advice. So much for the position obtaining under English law. Somewhat to my surprise, my own brief judgment in Cadder is sought to be prayed in aid in support of the respondents contention on these references that the principle against self incrimination requires a suspect to be given access to legal advice before he is first questioned whatever may be the circumstances of that questioning providing only that article 6(1) is engaged (as indeed it was held to be engaged even in the situation that arose in Zaichenko v Russia (application no 39660/02) (unreported) (judgment given 18 February 2010) see paras 41 44 of Lord Hopes judgment). With the best will in the world, however, I cannot recognise my judgment in Cadder as offering the least support for any such contention. On the contrary, the whole context of that judgment was interrogation in a police station and in the last sentence I was endeavouring to explain the principal considerations which seem to me to underlie the principle against self incrimination, namely the importance of guarding against both inadequate police investigation and the exploitation of vulnerable suspects. Strasbourgs evident core concern in Salduz (see in particular para 53 of the Courts judgment) is that suspects should be protected against abusive coercion and that miscarriages of justice should be prevented. Quintessentially such risks arise in the very situation under consideration in Salduz: the interrogation of a terrorist suspect in police custody. Small wonder that the court (at para 53) saw its decision as in line with the generally recognised international human rights standards, standards which may be seen from the instruments referred to in the footnotes to relate specifically to rights of access to a lawyer during, rather than before, suspects are taken into police custody. Another decision relied upon by the respondents is that of the Supreme Court of Canada in R v Grant [2009] 2 SCR 353 and true it is that the court there, having given a wide meaning to the concept of detention, concluded on the particular facts of that case (which involved the kerbside questioning of a suspect leading to his being searched and found to be carrying a loaded firearm) that the police had breached section 10(b) of the Canadian Charter of Rights and Freedoms by failing before questioning the suspect to advise him of his right to speak to a lawyer. Section 10(b) provides: Everyone has the right on arrest or detention . (b) to retain and instruct counsel without delay and to be informed of that right . Importantly, however, the Supreme Court concluded that, the breach of section 10(b) notwithstanding, the trial judge had been entitled pursuant to section 24(2) of the Charter to admit the incriminating evidence and in the result upheld the conviction. Section 24(2) provides: Where . a court concludes that evidence was obtained in a manner that infringed or denied any rights or freedoms guaranteed by this Charter, the evidence shall be excluded if it is established that, having regard to all the circumstances, the admission of it in the proceedings would bring the administration of justice into disrepute. For present purposes, two paragraphs only from the head note to the courts immensely long judgments must suffice: When faced with an application for exclusion under section 24(2), a court must assess and balance the effect of admitting the evidence on societys confidence in the justice system having regard to: (1) the seriousness of the Charter infringing state conduct, (2) the impact of the breach on the Charter protected interests of the accused, and (3) societys interest in the adjudication of the case on its merits. At the first stage, the court considers the nature of the police conduct that infringed the Charter and led to the discovery of the evidence. The more severe or deliberate the state conduct that led to the Charter violation, the greater the need for the courts to dissociate themselves from that conduct, by excluding evidence linked to that conduct, in order to preserve public confidence in and ensure state adherence to the rule of law. The second stage of the inquiry calls for an evaluation of the extent to which the breach actually undermined the interests protected by the infringed right. The more serious the incursion on these interests, the greater the risk that admission of the evidence would bring the administration of justice into disrepute. At the third stage, a court asks whether the truth seeking function of the criminal trial process would be better served by admission of the evidence or by its exclusion. Factors such as the reliability of the evidence and its importance to the Crowns case should be considered at this stage. The weighing process and the balancing of these concerns is a matter for the trial judge in each case. Where the trial judge has considered the proper factors, appellate courts should accord considerable deference to his or her ultimate determination. Here, the gun was discovered as a result of the accuseds statements taken in breach of the Charter. When the three stage inquiry is applied to the facts of this case, a balancing of the factors favours the admission of the derivative evidence. The Charter infringing police conduct was neither deliberate nor egregious and there was no suggestion that the accused was the target of racial profiling or other discriminatory police practices. The officers went too far in detaining the accused and asking him questions, but the point at which an encounter becomes a detention is not always clear and the officers mistake in this case was an understandable one. Although the impact of the Charter breach on the accuseds protected interests was significant, it was not at the most serious end of the scale. Finally, the gun was highly reliable evidence and was essential to a determination on the merits. The balancing mandated by section 24(2) is qualitative in nature and therefore not capable of mathematical precision. However, when all these concerns are weighed, the courts below did not err in concluding that the admission of the gun into evidence would not, on balance, bring the administration of justice into disrepute. The significant impact of the breach on the accuseds Charter protected rights weighs strongly in favour of excluding the gun, while the public interest in the adjudication of the case on its merits weighs strongly in favour of its admission. However, the police officers were operating in circumstances of considerable legal uncertainty, and this tips the balance in favour of admission. In short, the position in Canada, just as in England and Wales, is that no absolute rule applies to exclude incriminating evidence obtained in breach of a constitutional right to legal advice although it may be supposed that in flagrant cases equivalent to those where the Cadder rule itself would apply directly (where a suspect in police custody is denied access to a lawyer during interrogation) the Canadian courts would invariably strike the section 24(2) balance in the accuseds favour. It follows from all this that I share Lord Hopes view that the court in Salduz ought not to be understood to be laying down an absolute rule of exclusion with regard to admissions made without the opportunity to take legal advice irrespective of whether or not the suspect was at the time actually in police custody. The contention that Salduz requires the Cadder rule to be extended in this way to my mind founders on a proper understanding both of what the Strasbourg Court was there saying in the particular factual context of that case, and of the recognised international human rights standards underlying that decision. It also seems to me inconsistent both with the terms of Judge Bratzas concurring opinion in that case (implicit in which was a recognition that under the majority judgment the very earliest time at which a suspect could be found entitled to legal advice is when he is taken into police custody or pre trial detention) and with Strasbourgs post Salduz jurisprudence (helpfully analysed by Lord Hope in great detail), most notably the judgment in Zaichenko v Russia itself. Also like Lord Hope (see paras 50 53 above) I find some assistance here in the decision of the Supreme Court of the United States in Miranda v Arizona 384 US 436 (1966). As Lord Hope observes (at para 53), the significance of Miranda is that it adopts a custodial approach to the question as to when access to a lawyer is required, the fundamental reason being that it is at that point that the circumstances in which [the suspects] interrogation takes place are inherently intimidating, because [of] the compelling atmosphere inherent in the process of in custody interrogation. As, however, Lord Hope also observes: It was noted that an interpretation of the requirement that the right to legal advice arose at an earlier stage would hamper the traditional function of the police in investigating crime. I have already indicated (at para 80 above) my own understanding of the central considerations underlying the principle against self incrimination: the importance of guarding against the exploitation of vulnerable suspects and also against inadequate police investigation. In the intimidating circumstances of custodial interrogation there are undoubtedly some suspects who confess to crimes of which in truth they are innocent. And undoubtedly too, once a suspect has confessed, the police are likely to become less inclined to pursue other useful avenues of investigation that may identify the actual offender. Thus it is that miscarriages of justice can occur. As Miranda suggests, however, the introduction of a right to legal advice (and what, of course, is being contended for here is an absolute right to free legal advice) at some pre custodial stage, so far from encouraging proper police investigation into crime, would in fact tend to inhibit it. It is, in short, one thing to require of the police that they caution a suspect before questioning him, quite another to require that he be provided with legal assistance as a precondition of any self incriminating answers later becoming admissible in evidence against him. This is the critical distinction which Zaichenko v Russia so clearly illustrates. The Court there considered quite separately the applicants article 6 complaints as to (i) legal assistance and (ii) the privilege against self incrimination and the right to remain silent and in the event it found no violation of article 6 (3)(c) in respect of the former but a violation of article 6(1) in respect of the latter (the applicants self incriminatory answers to the polices roadside questioning having been elicited without his first being cautioned). Like Lord Hope, I too would in the present context give full weight to what has come to be known as the Ullah principle see para 20 of Lord Binghams judgment in R (Ullah) v Special Adjudicator [2004] 2 AC 323. It would seem to me quite wrong for this court now to interpret article 6 of the Convention as laying down an absolute exclusory rule of evidence that goes any wider than Strasbourg has already clearly decided to be the case. And whatever else one may say about the Strasbourg jurisprudence, it can hardly be regarded as deciding the present issue clearly in the respondents favour. In the result I agree with the answers proposed by Lord Hope to the questions posed in the respective references. Essentially it comes to this. In the cases of Ambrose and M there is no absolute rule such as that laid down in Cadder which precludes reliance on the evidence in question. Rather it must be for the trial court to decide just as an English court must decide under section 78(1) of PACE whether the evidence ought fairly to be admitted or excluded. In Gs case, however, because he was, as Lord Hope puts it (para 71), in effect, in police custody from the time when, following his arrest, he was handcuffed and detained, the Cadder rule should be held to apply to his questioning during the subsequent search. That said, I also agree with Lord Hope (para 72) that the Cadder rule would by no means routinely apply to exclude answers to questions put to a suspect without his having been given the opportunity to seek legal advice during a search. That too would be to go further than Strasbourg has yet gone. LORD DYSON I agree with the answers proposed by Lord Hope for the reasons that he gives as well as those given by Lord Brown. In Salduz v Turkey (2008) 49 EHRR 421 (applied by this court in Cadder v HM Advocate [2010] UKSC 43, [2010] SLT 1125), the ECtHR decided that article 6 of the European Convention on Human Rights (the Convention) requires that, as a rule, access to a lawyer should be provided to a suspect when he is interrogated by the police while he is in detention; and that there will usually be a violation of article 6 if incriminating statements made by a suspect during a police interrogation in such circumstances are relied on to secure a conviction. I shall refer to this as the Salduz principle. The central question that arises in the present proceedings is whether the Salduz principle also applies to interrogations of a suspect that are conducted before he is placed in detention. Lord Hope says that there is no sufficiently clear indication in the Strasbourg jurisprudence of how the ECtHR would resolve this question and that we should not apply the Salduz principle to situations to which the ECtHR has not clearly stated that it applies. Lord Kerr says that (i) even if the ECtHR has not clearly decided whether article 6 requires the Salduz principle to be applied to statements obtained from a suspect when he is not in detention, that is not a sufficient reason for this court to refuse to do so (paras 126 to 130); (ii) to draw a distinction between evidence obtained before and after a suspect is detained is not only arbitrary, it is illogical (para 136); and (iii) in any event, an analysis of the Strasbourg jurisprudence clearly shows that it draws no distinction between the two cases (paras 146 and 148). It is convenient to start with explaining why I cannot accept Lord Kerrs third proposition, since, if it is clear from the Strasbourg jurisprudence that the Salduz principle applies whether or not the evidence is obtained from the suspect while he is in detention, then the premise on which the judgments of Lord Hope and Lord Brown are based falls away. As Lord Hope explains at paras 26 to 33, the judgment in Salduz was concerned with whether there was or should be a rule that there was a right of access to a lawyer where the person being interrogated was in police custody. On its facts, it was a case about a suspect who had been interrogated by the police while he was in custody. The references in para 53 to generally recognised international human rights standards (which are concerned with the position of suspects who are in custody) and to abusive coercion strongly suggest that the court was only considering the position of suspects who are in custody. Paras 37 to 44 contains a discussion of the international law materials relating to a suspects right of access to a lawyer during police custody. Unsurprisingly, the judgment says nothing explicitly about the position of a suspect who is not in custody. I agree with Lord Hope that the concurring opinions of Judge Bratza and Judge Zagrebelski lend further support to the conclusion that the court was only considering the position of suspects who are in custody. Lord Kerr says that Salduz is authority for the broad proposition that a suspect is entitled to have access to a lawyer at the investigation stage (because he is in a particularly vulnerable position at that stage of the proceedings) and that there is nothing in the reasoning of the decision to indicate that the investigation stage only begins after the suspect has been detained. But the judgment should be read as a whole. In my view, the better interpretation is that, for the reasons I have already given, the court was only addressing the issue of police interrogation of a suspect in custody. It was making the point that for such a suspect the investigation stage takes place while he is in custody, where there is the risk of abusive coercion and he is in a particularly vulnerable position of making self incriminating statements. Further, the decision of the First Section in Zaichenko provides clear support for the view that the Strasbourg jurisprudence draws a distinction between the fruits of police questioning of a suspect who is in detention and one who is not. I agree with the reasons given by Lord Hope at para 46 for rejecting the arguments that Zaichenko was wrongly decided. I note that Lord Kerr does not suggest that it was wrongly decided. He analyses the reasoning of Zaichenko closely at paras 24 to 40. He says that the basis for the courts decision that there had not been a violation of article 6(3)(c) is the cumulative effect of a number of factors (which he identifies at para 33) and that none of them, if taken in isolation, would have been sufficient to support the courts conclusion. I cannot accept this interpretation of the courts reasoning in Zaichenko. It is true that at para 46, the court notes at the outset that the applicant waived his right to a lawyer. But the court went on to give other reasons for its decision at para 47. It said that the present case is different from previous cases concerning the right to legal assistance in pre trial proceedings (see Salduz. .) because the applicant was not formally arrested or interrogated in police custody. He was stopped for a roadcheck. (emphasis added). The court was, therefore, fully alive to the difference between police questioning of a suspect at the roadside and police questioning of a suspect who has been taken into custody. It was in the context of this difference that the court made express reference to Salduz. Plainly and explicitly it did not apply the Salduz principle and it gave its reasons for not doing so. The principal reason was given at para 48 which Lord Kerr has set out at para 160 below. I agree with Lord Kerr that this paragraph is not easy to follow. But what is clear is that the court considered that, whatever restrictions faced the suspect when he was being questioned at the roadside, they did not amount to a significant curtailment of [his] freedom of action sufficient to entitle him to legal assistance at this early stage of the proceedings. This is an essential part of the courts reasoning. It is clear that the court considered that the fact that the questioning took place before the suspect had been formally arrested or detained was critical. I conclude, therefore, that the Strasbourg jurisprudence does not clearly show that the Salduz principle applies to statements made by a suspect who is not in detention when he is questioned by the police. The only case to which our attention has been drawn in which the Salduz principle has been considered in relation to statements made by a suspect who is not in detention is Zaichenko. For the reasons that I have given, Zaichenko strongly suggests that the Salduz principle does not apply in that situation. I turn to Lord Kerrs second proposition. He says that the animation of the right under article 6(1) cannot be determined in terms of geography (para 133) and that it is arbitrary and illogical to hold that a suspect has no right to access to a lawyer if he is questioned by the police until he is taken into custody: the suspect is as likely to make incriminating statements outside as inside a police station and is therefore in equal need of the protection of article 6(3)(c) in both situations. The essential question is at what stage of the proceedings access to a lawyer should be provided in order to ensure that the right to a fair trial is sufficiently practical and effective for the purposes of article 6(1). What fairness requires is, to some extent, a matter of judgment. I accept that opinions may reasonably differ on whether the line for providing a suspect with access to a lawyer should be drawn at the point when the person being questioned becomes a suspect or at the point when he is taken into custody. I do not doubt that being interrogated by the police anywhere can be an intimidating experience and that a person may make incriminating statements to the police wherever the interrogation takes place. This can occur in a situation of what the majority of the Canadian Supreme Court described as psychological detention in R v Grant 2009 SCC 32 ; [2009] 2 SCR 353, at para 30. On the other hand, the arresting of a suspect and placing him in custody is a highly significant step in a criminal investigation. The suspect cannot now simply walk away from the interrogator. For most suspects, being questioned after arrest and detention is more intimidating than being questioned in their home or at the roadside. The weight of the power of the police is more keenly felt inside than outside the police station. As was said in Miranda v Arizona 384 US 436 (1966) at p 478, there is a compelling atmosphere inherent in the process of in custody interrogation. No doubt, it is also present to the mind of the suspect that the possibility of abusive coercion is greater inside than outside the police station. Whether the difference between interrogation inside and outside the police station is sufficient to justify according the suspect access to a lawyer in one situation but not the other is a matter on which opinions may differ. But I do not see how it can be said to be arbitrary or illogical to recognise that there is a material difference between the two situations. I can agree with Lord Kerr (para 167) that one should be careful about making assumptions about the Miranda experience or believing that it can be readily transplanted into European jurisprudence. But this counsel of caution is hardly consistent with the assertion that the adoption of the distinction made in Miranda is arbitrary and illogical. So what should this court do in these circumstances? This brings me to Lord Kerrs first proposition. As I have said, to the extent that the ECtHR has spoken on the question at all, Zaichenko contains a clear statement that the Salduz principle does not apply to statements made by a suspect during police questioning while the suspect (i) is not in custody or (ii) is not deprived of his freedom of action in any significant way. I derive (ii) from para 48. That paragraph echoes the language of p 477 of Miranda: The principles announced today deal with the protection which must be given to the privilege against self incrimination when the individual is first subjected to police interrogation while in custody at the station or otherwise deprived of his freedom of action in any significant way (emphasis added). I accept, however, that there is no clear and constant Strasbourg jurisprudence on the point. So the obligation in section 2 of the Human Rights Act 1998 to take account of judgments of the ECtHR does not compel a decision one way or the other: see R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] UKHL 23; [2003] 2 AC 295 para 26. Nor is this a case where, although Strasbourg has not expressly decided the point, it can nevertheless clearly be deduced or inferred from decisions of the ECtHR how the court will decide the point if and when it falls to be determined. Lord Kerr has referred to para 20 of Lord Binghams speech in R (Ullah) v Special Adjudicator [2004] 2 AC 323 and the dictum that the duty of national courts is to keep pace with the Strasbourg jurisprudence as it evolves over time: no more, but certainly no less. Lord Brown extended this in R (Al Skeini and others) v Secretary of State for Defence [2008] 1 AC 153 at para 106 by saying that Lord Binghams dictum could as well have ended: no less, but certainly no more. At para 107 Lord Brown said that the Convention should not be construed as reaching any further than the existing Strasbourg jurisprudence clearly shows it to reach. Lady Hale said much the same at para 90. This approach was explicitly endorsed in R (Smith) v Oxfordshire Assistant Deputy Coroner [2010] UKSC 29; [2011] 1 AC 1 by Lord Phillips at para 60, Lord Hope at para 93 and Lord Brown at para 147. But these statements are not entirely apposite where Strasbourg has spoken on an issue, but there is no clear and constant line of authority. That is the case here because there is only one case in which the ECtHR has expressly decided that the Salduz principle does not apply in relation to the interrogation of a suspect who is not in detention (Zaichenko). Moreover, despite the view I have expressed earlier in this judgment, I accept that it is arguable that the language of para 55 of the judgment in Salduz can and should be interpreted as holding that the Salduz principle does apply in such circumstances. So what should a domestic court do in this situation? Recognising that it is our duty to give effect to the domestically enacted Convention rights, I think that the correct approach was suggested at para 199 of the judgment of Lord Mance in Smith: However, it is our duty to give effect to the domestically enacted Convention rights, while taking account of Strasbourg jurisprudence, although caution is particularly apposite where Strasbourg has decided a case directly in point or, perhaps, where there are mixed messages in the existing Strasbourg case law and, as a result, a real judicial choice to be made there about the scope or application of the Convention. The position here is that Strasbourg has decided a case which is directly in point (Zaichenko). The most that can be said on behalf of the accused in these three cases is that by reason of (i) the broad terms in which para 55 of the judgment in Salduz is expressed and (ii) the decision in Zaichenko, it is arguable that there are mixed messages in the Strasbourg case law as to whether the Salduz principle applies to evidence obtained from a suspect who has been interrogated without access to a lawyer outside the police station. To use the words of Lord Mance, it follows that there is a real judicial choice to be made. Whether fairness requires the Salduz principle to apply in both situations raises questions of policy and judgment on which opinions may reasonably differ and as to which there is no inevitable answer. To demonstrate this, it is sufficient to contrast the approach of the US Supreme Court in Miranda with that of the Canadian Supreme Court in Grant. In these circumstances, I consider that caution is particularly apposite and that the domestic court should remind itself that there exists a supranational court whose purpose is to give authoritative and Europe wide rulings on the Convention. If it were clear, whether from a consideration of the Strasbourg jurisprudence or otherwise, that the Salduz principle applies to statements made by suspects who are not detained or otherwise deprived of their freedom of action in any significant way, then it would be our duty so to hold. But for the reasons that I have given, it is not clear that this is the case. In these circumstances, we should hold that the Salduz principle is confined to statements made by suspects who are detained or otherwise deprived of their freedom in any significant way. LORD MATTHEW CLARKE I refer to Lord Hopes judgment for his detailed description of the references and the background to them which I gratefully adopt. In R v Samuel [1988] QB 615 at p 630 Hodgson J, delivering the judgment of the Court of Appeal, described the right of a suspect to consult and instruct a lawyer as one of the most important and fundamental rights of a citizen. His Lordship did so in the context of section 58(1) of the Police and Criminal Evidence Act 1984 (PACE). The present references have raised the question as to when, and in what circumstances, such a right emerges as part of Scots law by virtue of the application of Article 6 ECHR. The Grand Chamber of the European Court of Human Rights in Salduz v Turkey (2008) 49 EHRR 421 held that the rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police interrogation without access to a lawyer are used for a conviction (para 55). In Cadder v HM Advocate 2010 SLT 1125 this court applied that decision to the existing law of Scotland and, in particular, to the operation of the powers of detention of persons then contained in sections 14 and 15 of the Criminal Procedure (Scotland) Act 1995. As a result of the courts decision in Cadder the Scottish Parliament enacted certain provisions in the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010. In particular a new section 15A to the 1995 Act was enacted which is in the following terms: 15A Right of suspects to have access to a solicitor (c) (a) (a) (b) (1) This section applies to a person (the suspect) who is detained under section 14 of this Act, attends voluntarily at a police station or other premises or place for the purpose of being questioned by a constable on suspicion of having committed an offence, or is (i) arrested (but not charged) in connection with an offence, and (ii) being detained at a police station or other premises or place for the purpose of being questioned by a constable in connection with the offence. (2) The suspect has the right to have intimation sent to a solicitor of any or all of the following the fact of the suspects (i) detention (ii) attendance at the police station or other premises or place, or (iii) arrest (as the case may be), (b) the police station or other premises or place where the suspect is being detained or is attending, and (c) that the solicitors professional assistance is required by the suspect. (3) The suspect also has the right to have a private consultation with a solicitor (a) before any questioning of the suspect by a constable begins, and (b) at any other time during such questioning. (4) Subsection (3) is subject to subsections (8) and (9). (5) In subsection (3), consultation means consultation by such means as may be appropriate in the circumstances, and includes, for example, consultation by means of telephone. (6) The suspect must be informed of the rights under subsections (2) and (3) (a) without delay, or (b) (a) on arrival at the police station or other premises or place, and (b) in the case where the suspect is detained as mentioned in subsection (1)(a), or arrested as mentioned in subsection (1)(c), after such arrival on detention or arrest, (whether or not, in either case, the suspect has previously been informed of the rights by virtue of this subsection). (7) Where the suspect wishes to exercise a right to have intimation sent under subsection (2), the intimation must be sent by a constable if some delay is necessary in the interest of the investigation or the prevention of crime or the apprehension of offenders, with no more delay than is necessary. (8) In exceptional circumstances, a constable may delay the suspects exercise of the right under subsection (3) so far as it is necessary in the interest of the investigation or the prevention of crime or the apprehension of offenders that the questioning of the suspect by a constable begins or continues without the suspect having had a private consultation with a solicitor. (9) Subsection (3) does not apply in relation to the questioning of the suspect by a constable for the purpose of obtaining the information mentioned in section 14(10) of this Act. Prior to that enactment, and the decision in Cadder, the position was that the courts in Scotland had never recognised a suspects right to have access to a solicitor before or during questioning of him by the police. The position was, as stated in pre Cadder versions of Renton and Browns Criminal Procedure, 6th edition at para 24 39 as follows: any statement by a suspect in answer to police questions will be inadmissible in evidence at the subsequent trial of that suspect unless it has been obtained fairly, and that all the circumstances of the questioning (apart from whether or not a caution was given to a person accused of a crime) are relevant in so far, and only in so far, as they indicate the presence or absence of unfairness. That passage continued later: The current situation is that the fact that the accused was at the same time under suspicion or even under arrest is not in itself crucial, but is merely a circumstance like any other to be taken into account in assessing the fairness of the police, in the same way as the fact that he.did not have the services of a solicitor Reference was made to, inter alia, Law v McNicol 1965 JC 32, HM Advocate v Whitelaw 1980 SLT (Notes) 25 and HM Advocate v Anderson 1980 SLT (Notes) 104. As was also noted in Renton and Brown at para 24 39 There are no legal rules in Scotland governing the questioning of a suspect such as the Judges Rules and Administrative Directions issued by the Home Office. Nor were there, until the 2010 Act, any provisions similar to those provided in England and Wales under PACE. In HM Advocate v Cunningham 1939 JC 61 Lord Moncrieff at page 65 noted that after the accused had been charged and had replied, he subsequently received an incidental intimation that he might, if he so desired, require and obtain the assistance of a law agent. His Lordship continued: I think it would have been desirable that that intimation should have been made formally and should have been made at the very outset before the making of any charge, but I am satisfied that, in not making it, the police officers followed their usual practice and acted with an intention of complete fairness. Nonetheless, any such practice, in my opinion, ought to be reformed The later full bench decision in Chalmers v HM Advocate 1954 JC 66 gave some support for the view that all answers given by a suspect to a police officer were inadmissible and nothing was said about a suspects right to have a solicitor present when he was being questioned. Although that decision was never over ruled its influence was considered to have been virtually removed by subsequent case law, concerned, it seems, with rising crime rates, which made the criterion of admissibility, fairness see Lord Advocates Reference (no. 1 of 1983), 1984 JC 52. The decision in the case of Cadder, in applying the law as set out in Salduz, can be seen as truly innovative as regards what had been understood to be the domestic law of Scotland up until that time. The present references raise, in the first place, the question as to how far the innovation goes having regard to the relevant Strasbourg jurisprudence. The focus of the hearing before this court was concerned, to a significant extent, with how the suspects right to access to a lawyer has been defined to date by the Strasbourg court, either expressly, or by necessary implication, whatever other arguments there may be in principle, or policy, for defining it otherwise. The defence in the cases before us sought to take from the language of the ECtHR, in discussing the right in the decided cases on the topic, a broad approach to its nature and its extent. They had some basis for doing so having regard to how the court expressed itself in Salduz at para 55 where the Grand Chamber was to the effect Article 6(1) requires that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police. At para 52 of the judgment one finds the following Article 6 will normally require that the accused be allowed to benefit from the assistance of a lawyer already at the initial stages of police interrogation. That language, it was submitted, focused on the status of the person as a suspect when determining his rights rather than his position being that of a person in custody. Similar language can be seen in previous judgments of the Court. For example in Panovits v Cyprus (Application No 4268/04) (unreported) given 11 December 2008 the Court, at para 66, observed that the concept of fairness enshrined in Article 6 requires that the accused be given the benefit of the assistance of a lawyer already at the initial stages of police interrogation see also Borotyuk v Ukraine (Application No 33579/04) (unreported) given 16 December 2010 at para 79. It should, however, be noted that Panovits was a case which concerned the questioning of a child when the child had gone to the police station with his father, as requested by the police, and was thereafter arrested. Borotyuk was also a custody case. In Panovits, at para 65, the court, having said that it was reiterating that the right to silence and the right not to incriminate oneself were generally recognised international standards, which lay at the heart of the notion of a fair procedure under Article 6, went on to say: Their rationale lies, inter alia, in the protection of the accused against improper compulsion by the authorities, thereby contributing to the avoidance of miscarriages of justice and to the fulfilment of the aims of Article 6. In Salduz similar remarks were made by the court at paragraph 53: These principles, outlined at para 52 above, are also in line with the generally recognised international human rights standards which are at the core of the concept of a fair trial and whose rationale relates in particular to the protection of the accused against abusive coercion on the part of the authorities. They also contribute to the prevention of miscarriages of justice and the fulfilment of the aims of Article 6, notably equality of arms between the investigating or prosecuting authorities and the accused. Those remarks would tend, in my judgement, to support the contention that the focus of the courts concern in Salduz, and other cases, has been in relation to those situations where methods of coercion or oppression might be more readily, and effectively, employed upon a suspect person, namely when his liberty has been curtailed by the authority detaining him. Significant support for that being the focus of such a rule is to be found in the jurisprudence of the United States, and particularly the seminal decision of the US Supreme Court in Miranda v State of Arizona 384 US 436 (1966), where at p 467, para 23 the court said: Today, then, there can be no doubt that the Fifth Amendment privilege is available outside of criminal court proceedings and serves to protect persons in all settings in which their freedom of action is curtailed in any significant way from being compelled to incriminate themselves. We have concluded that without proper safeguards the process of in custody interrogation of persons suspected or accused of crime contains inherently compelling pressures which work to undermine the individuals will to resist and to compel him to speak where he would not otherwise do so freely. In order to combat these pressures and to permit a full opportunity to exercise the privilege against self incrimination, the accused must be adequately and effectively apprised of his rights and the exercise of those rights must be fully honoured. The court then at pp 478 479, paras 66, 67 defined the right and its extent, together with its rationale in the following way: To summarise, we hold that when an individual is taken into custody or otherwise deprived of his freedom by the authorities in any significant way and is subjected to questioning the privilege against self incrimination is jeopardised. Procedural safeguards must be employed to protect the privilege and unless other fully effective means are adopted to notify the person of his right of silence and to assure that the exercise of the right will be scrupulously honoured, the following measures are required. He must be warned prior to any questioning that he has the right to remain silent, that anything he says can be used against him in a court of law, that he has the right to the presence of an attorney, and that if he cannot afford an attorney one will be appointed for him prior to any questioning if he so desires. Opportunity to exercise these rights must be afforded to him throughout the interrogation. After such warnings have been given, and such opportunity afforded him, the individual may knowingly and intelligently waive these rights and agree to answer questions or make a statement. But unless and until such warnings and waiver are demonstrated by the prosecution at trial, no evidence obtained as a result of interrogation can be used against him. The Miranda decision has informed international legal discussion of the right of the suspect to have access to a lawyer, since the decision was given. Another factor pointing towards the more restrictive extent of the right in question is that the Strasbourg court, in defining it, has done so by referring to the context of what are described as pre trial proceedings, see para 50 of the Salduz judgment. The person taken into detention who, in due course, may face being tried for a crime, might well be said to be involved, at the stage of any questioning, while detained, to be in pre trial proceedings for the purposes of Article 6. That that is the context in which the Strasbourg court has been considering the right in question under Article 6 is, I think, supported by what the court had to say recently in Affaire Brusco c France (Requete No 1466/07) (unreported) given 14 October 2010, at para 45: La Cour rappelle galement que la personne place en garde vue a le droit dtre assiste dun avocat ds le dbut de cette mesure ainsi que pendant les interrogatoires, et ce a fortiori lorsquelle na pas t nforme par les autorits de son droit de se taire. That passage also, to my mind, points to the phrases in Salduz early access to a lawyer and from the first interrogation of a suspect by the police as being references to the earliest point in time after the person is taken into custody with his liberty having been restricted by the investigating authorities. The reference by the Strasbourg court to equality of arms, at para 53 of its judgment in Salduz, also, in my opinion, supports that approach. Once a persons liberty is curtailed by the authorities, the balance of power between him and the representatives of the state shifts significantly and, it might be said, requires to be redressed by his having access to a lawyer. All of these considerations, taken together, with what Lord Hope has to say in his analysis of the Salduz decision, and other Strasbourg jurisprudence, ultimately persuades me that the proper understanding of those decisions is that the right to have access to a lawyer emerges at the point when the suspect is deprived of his liberty of movement, to any material extent, by the investigating authorities and is to be questioned by them. It follows that I am in agreement with Lord Hope that the Strasbourg jurisprudence, to date, does not support the defence contention in these references that the ECtHR has gone as far as to say that the right emerges as soon as a suspect is to be questioned by the police in whatever circumstances. As to whether this court should go further than the ECtHR seems to have gone so far, certain important considerations lead me to the conclusion that it should not. The first is the difficulty that can arise in relation to defining precisely at what point in time someone becomes a suspect, as opposed to being a witness or a detained person. The second is that the broader version of the right, contended for by the defence in these cases, could have serious implications for the proper investigation of crime by the authorities. If the police are to be required to ensure that a person who they wish to question about the commission of a crime (in a situation where the circumstances point to the person being a possible suspect) should have access to a lawyer, if he so wishes, then such a requirement could hamper proper and effective investigations in situations which are often dynamic, fast moving and confused. The unfortunately regular street brawls in city and town centres, or disturbances in crowded places like night clubs, which, on occasions, result in homicide, are simply examples of situations which highlight the problems that might be involved. In relation to the first of these considerations I note that the limits of the Miranda rights have been, very recently, (16 June 2011) re visited by the US Supreme Court in JDB v North Carolina 564 US 2011. That case involved the questioning of a 13 year old. The majority of the court held that the childs age was a relevant factor to be taken into account in addressing the question as to whether he had been in custody at the time of questioning. The majority did not depart from the test being whether or not the person was in custody at the relevant time and at page 18 of the opinion of the court they directed the state court to address that question, taking account of all of the relevant circumstances of the interrogation, including the childs age at the time. The disagreement between the majority and minority was with regard to the relevance of the childs age in judging of the question as to whether or not he was in custody at the relevant time. In giving the dissenting judgment, with which the rest of the minority concurred, Alito J at pp 1 2 said Mirandas custody requirement is based on the proposition that the risk of unconstitutional coercion is heightened when a suspect is placed under formal arrest or is subjected to some functionally equivalent limitation on freedom of movement. Alito J, then, at page 8 of his judgment, under reference to previous authorities remarked that a core virtue of the Miranda rule has been the clarity and precision of its guidance to police and courts. Again at page 13 he remarked that a core virtue of Miranda was the ease and clarity of its application. I am persuaded that the value of clarity and certainty in this area are relevant factors in deciding the extent of the right. As to the second consideration, I recall what was said by Lord Wheatley in Miln v Cullen 1967 JC 21 at pp 29 30: While the law of Scotland has always very properly regarded fairness to an accused person as being an integral part of the administration of justice, fairness is not a unilateral consideration. Fairness to the public is also a legitimate consideration, and in so far as police officers in the exercise of their duties are prosecuting and protecting the public interest, it is the function of the Court to seek to provide a proper balance to secure that the rights of individuals are properly preserved, while not hamstringing the police in their investigation of crime with a series of academic vetoes which ignore the realities and practicalities of the situation and discount completely the public interest. That dictum is, of course, of its time and pre dates the experience of examples of convictions obtained on false confessions which have caused justifiable public concern. Nevertheless it is difficult, even now, to contradict the substance of what his Lordship said. As was said by Binnie J in the Canadian case of R v Grant 2009 SCC 32 [2009] 2 SSC 353 at para 180 It is not controversial that in the early stages of a criminal investigation the police must be afforded some flexibility before the lawyers get involved. The police do have the right to ask questions and they need to seek the co operation of members of the public, including those who turn out to be miscreants. It seems to me that the balancing of legitimate interests referred to by Lord Wheatley is a further justification for restricting the right to have access to a lawyer to situations in which the suspect is in custody. The law in formulating a right designed to protect and support a legitimate interest, such as the right to silence, should seek to avoid defining that right in such a way, as to damage, or unduly inhibit another legitimate interest such as the efficient investigation of crime. The task, which may be a delicate and difficult one, is to produce a result which strikes a rational balance between the two interests. I consider the balance struck in the US Miranda jurisprudence achieves that end. For the foregoing reasons I agree entirely with Lord Hope as to the way in which references in the cases of Ambrose and M should be answered. In relation to these two cases the admissibility or otherwise of the replies to questioning will fall to be determined by the Appeal Court and the trial judge respectively in accordance with the rules as to fairness. In the passage in his judgment in Miln v Cullen, cited above, Lord Wheatley continued: Even at the stage of routine investigations, where much greater latitude is allowed, fairness is still the test, and that is always a question of circumstances. As regards Gs case I consider that the right to access to a lawyer, before questioning, arises not only when the suspect is taken into the physical surroundings of a police station. The focus should be on whether, at the commencement of the proposed questioning, the individuals liberty is significantly restricted by the police. The location where that occurs is not in itself conclusive. In relation to rights of this kind matters should be judged in accordance with what the substance of the position is rather than its form. It follows that I, therefore, also agree with Lord Hope in the way in which the reference in Gs case should be answered. I also agree with Lord Hope, for the reasons given by him, that the Cadder rule would not necessarily routinely apply to exclude answers to questions, put to a suspect, without his having been given the opportunity to seek legal advice, during a search. There is no justification in the Strasbourg jurisprudence, as I read it, for the right to be so interpreted. By way of a footnote I would add this. Our attention was drawn by the defence, in support of their position, to a Proposal for a Directive of the European Parliament and of the Council on the right of access to a lawyer in criminal proceedings and on the right to communicate upon arrest recently published by the European Commission Brussels, XXX COM (2011) 326/3. Article 3(1) of the draft of the proposed Directive, attached to that document is in the following terms: 1. Member States shall ensure that suspects and accused persons are granted access to a lawyer as soon as possible and in any event: (a) before the start of any questioning by the police or other law enforcement authorities; (b) upon carrying out any procedural or evidence gathering act at which the persons presence is required or permitted as a right in accordance with national law, unless this would prejudice the acquisition of evidence; (c) from the outset of deprivation of liberty. The proposed Article 3 appears to envisage three discrete situations where the right of access to a lawyer should arise. The authors of the proposal appear to believe that those draft provisions reflect the settled jurisprudence of the Strasbourg court see para 13. It follows from what I have said above that their apparent understanding of the Strasbourg jurisprudence does not coincide with my own. LORD KERR Introduction The well known aphorism of Lord Bingham in para 20 of R (Ullah) v Special Adjudicator [2004] UKHL 26, [2004] 2 AC 323 that the duty of national courts is to keep pace with the Strasbourg jurisprudence as it evolves over time: no more, but certainly no less has been given a characteristically stylish twist by Lord Brown in R (Al Skeini and others) v Secretary of State for Defence [2007] UKHL 26; [2008] 1 AC 153 at para 106 where he said that the sentence could as well have ended: no less, but certainly no more. In keeping with this theme, some judges in this country have evinced what might be described as an Ullah type reticence. On the basis of this, it is not only considered wrong to attempt to anticipate developments at the supra national level of the Strasbourg court, but there is also the view that we should not go where Strasbourg has not yet gone. Thus, in the present case Lord Hope says that this courts task is to identify where the jurisprudence of the Strasbourg court clearly shows that it currently stands and that we should not expand the scope of the Convention right further than the current jurisprudence of that court justifies. Lord Binghams formulation of the principle expressed in para 20 of Ullah was prompted by his consideration of the effect of section 2 of the Human Rights Act 1998 by which the courts of this country are enjoined to take into account Strasbourg case law. Therefore, said Lord Bingham, although such case law was not strictly binding, where a clear and constant theme of jurisprudence could be detected, it should be followed because the Convention, being an international instrument, had as the authoritative source of its correct interpretation the Strasbourg court. A refusal to follow this would dilute or weaken the effect of the Strasbourg case law. I greatly doubt that Lord Bingham contemplated much less intended that his discussion of this issue should have the effect of acting as an inhibitor on courts of this country giving full effect to Convention rights unless they have been pronounced upon by Strasbourg. I believe that, in the absence of a declaration by the European Court of Human Rights as to the validity of a claim to a Convention right, it is not open to courts of this country to adopt an attitude of agnosticism and refrain from recognising such a right simply because Strasbourg has not spoken. There are three reasons for this, the first practical, the second a matter of principle and the third the requirement of statute. It is to be expected, indeed it is to be hoped, that not all debates about the extent of Convention rights will be resolved by Strasbourg. As a matter of practical reality, it is inevitable that many claims to Convention rights will have to be determined by courts at every level in the United Kingdom without the benefit of unequivocal jurisprudence from ECtHR. Moreover, as a matter of elementary principle, it is the courts duty to address those issues when they arise, whether or not authoritative guidance from Strasbourg is available. The great advantage of the Human Rights Act is that it gives citizens of this country direct access to the rights which the Convention enshrines through their enforcement by the courts of this country. It is therefore the duty of this and every court not only to ascertain where the jurisprudence of the Strasbourg court clearly shows that it currently stands but to resolve the question of whether a claim to a Convention right is viable or not, even where the jurisprudence of the Strasbourg court does not disclose a clear current view. Finally, section 6 of the Human Rights Act leaves no alternative to courts when called upon to adjudicate on claims made by litigants to a Convention right. This section makes it unlawful for a public authority, including a court, to act in a way which is incompatible with a Convention right. That statutory obligation, to be effective, must carry with it the requirement that the court determine if the Convention right has the effect claimed for, whether or not Strasbourg has pronounced upon it. In this context, it would be particularly unsatisfactory, I believe, if, because of an Ullah type reticence, we should feel constrained not to reach a decision on the arguments advanced by the respondents to these references just because those very arguments are likely to be ventilated on behalf of the applicant in ECtHR in Abdurahman v United Kingdom application no 40351/09 and we cannot say how Strasbourg will react to them. If the much vaunted dialogue between national courts and Strasbourg is to mean anything, we should surely not feel inhibited from saying what we believe Strasbourg ought to find in relation to those arguments. Better that than shelter behind the fact that Strasbourg has so far not spoken and use it as a pretext for refusing to give effect to a right that is otherwise undeniable. I consider that not only is it open to this court to address and deal with those arguments on their merits, it is our duty to do so. The nature of the right under article 6(1) taken in conjunction with article 6(3)(c) The true nature of the right under article 6(1), taken in conjunction with article 6(3) (c), can only be ascertained by reference to its underlying purpose. What is its purpose? The respondents argue that its purpose is that when a person becomes a suspect, because of the significant change in his status that this entails; because of the potential that then arises for him to incriminate himself or to deal with questions in a way that would create disadvantage for him on a subsequent trial; and because of the importance of these considerations in terms of his liability to conviction, the essential protection that professional advice can provide must be available to him. The right, it is argued, should not be viewed solely as a measure for the protection of the individuals interests. It is in the interests of society as a whole that those whose guilt or innocence may be determined by reference to admissions that they have made in moments of vulnerability are sufficiently protected so as to allow confidence to be reposed in the reliability of those confessions. For reasons that I will develop, I consider that these arguments should prevail. If it has taught us nothing else, recent experience of miscarriage of justice cases has surely alerted us to the potentially decisive importance of evidence about suspects reactions to police questioning, whether it is in what they have said or in what they have failed to say, and to the real risk that convictions based on admissions made without the benefit of legal advice may prove, in the final result, to be wholly unsafe. The role that a lawyer plays when the suspect is participating in what may be a pivotal moment in the process that ultimately determines his or her guilt is critical. Thus understood, the animation of the right under article 6(1) cannot be determined in terms of geography. It does not matter, surely, whether someone is over the threshold of a police station door or just outside it when the critical questions are asked and answered. And it likewise does not matter whether, at the precise moment that a question is posed, the suspect can be said to be technically in the custody of the police or not. If that were so, the answer to a question which proved to be the sole basis for his conviction would be efficacious to secure that result if posed an instant after he was taken into custody but not so an instant before. That seems to me to be a situation too ludicrous to contemplate, much less countenance. Two supremely relevant, so far as these appeals are concerned, themes run through the jurisprudence of Strasbourg in this area. The first is that, in assessing whether a trial is fair, regard must be had to the entirety of the proceedings including the questioning of the suspect before trial see, for instance, Imbrioscia v Switzerland (1993) 17 E.H.R.R. 441, Murray v United Kingdom (1996) 22 E.H.R.R. 29; Averill v United Kingdom (2000) 31 E.H.R.R. 839; Magee v United Kingdom (2000) 31 E.H.R.R. 822; and Brennan v United Kingdom (2001) 34 E.H.R.R. 507. The second theme is that, although not absolute, the right of everyone charged with a criminal offence to be effectively defended by a lawyer, assigned officially if need be, is one of the fundamental features of a fair trial Poitrimol v France (1993) 18 E.H.R.R. 130 and Demebukov v Bulgaria (Application No 68020/01) (unreported) given 28 February 2008 at para 50. Taken, as they must be, in combination, these features of a fair trial lead inexorably to the conclusion that where an aspect of the proceedings which may be crucial to their outcome is taking place, effective defence by a lawyer is indispensable. When one recognises, as Strasbourg jurisprudence has recognised for quite some time, that the entirety of the trial includes that which has gone before the actual proceedings in court, if what has gone before is going to have a determinative influence on the result of the proceedings, it becomes easy to understand why a lawyer is required at the earlier stage. There is no warrant for the belief that vulnerability descends at the moment that one is taken into custody and that it is absent until that vital moment. The selection of that moment as the first occasion on which legal representation becomes necessary is not only arbitrary, it is illogical. The need to have a lawyer is not to be determined on a geographical or temporal basis but according to the significance of what is taking place when the later to be relied on admissions are made. This much, I believe, is clear from paras 54 and 55 of the judgment in Salduz v Turkey (2008) 49 EHRR 421. It is worth setting out para 54 to examine its constituent parts and in order to draw together the various strands of guidance that it contains. This is what the court said in that para: the Court underlines the importance of the investigation stage for the preparation of the criminal proceedings, as the evidence obtained during this stage determines the framework in which the offence charged will be considered at the tria1. At the same time, an accused often finds himself in a particularly vulnerable position at that stage of the proceedings, the effect of which is amplified by the fact that legislation on criminal procedure tends to become increasingly complex, notably with respect to the rules governing the gathering and use of evidence. In most cases, this particular vulnerability can only be properly compensated for by the assistance of a lawyer whose task it is, among other things, to help to ensure respect of the right of an accused not to incriminate himself. This right indeed presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. Early access to a lawyer is part of the procedural safeguards to which the Court will have particular regard when examining whether a procedure has extinguished the very essence of the privilege against self incrimination. In this connection, the Court also notes the recommendations of the CPT [European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment], in which the committee repeatedly stated that the right of a detainee to have access to legal advice is a fundamental safeguard against ill treatment. Any exception to the enjoyment of this right should be clearly circumscribed and its application strictly limited in time. These principles are particularly called for in the case of serious charges, for it is in the face of the heaviest penalties that respect for the right to a fair trial is to be ensured to the highest possible degree by democratic societies. The first question that arises from this passage concerns the meaning of the investigation stage. That stage is stated to be particularly important for two related reasons. The first is that evidence obtained at that stage determines the framework in which the offence with which the defendant is charged will be considered at trial. In other words, evidence obtained during the investigation stage can significantly influence the outcome of the proceedings and on that account it requires close attention as to its reliability. The second reason is that at that very time (viz when evidence capable of influencing the trials outcome is being obtained) the accused finds himself in a vulnerable position. It may seem trite to ask why he should be vulnerable at that time but the answer, it seems to me, is both plain and significant. He is vulnerable because at this investigation stage, evidence which may be instrumental in securing a finding of guilt against him is being obtained and collated. The way that he reacts during the collection of that evidence may prove to be of critical importance in his subsequent trial. His vulnerability may be enhanced, moreover, because increasingly complex legislation permits the evidence to be obtained and used in ways that were not previously possible. I return then to the anterior question. What is meant by the investigation stage? It must surely include any point or juncture at which evidence which is potentially inculpatory of an accused is being obtained. This is of especial importance when the investigation stage provides the setting for a statement by the accused person that might incriminate him. ECtHR recognised in para 54 of Salduz that an incriminating statement might occur at an early stage of the investigation and it was for this reason that early access to a lawyer was considered to be necessary. That early access is expressly required so that the very essence of the right not to incriminate oneself is not destroyed. But extinction of the essence of the right, it seems to me, is precisely what may happen if statements tending to incriminate, made without the benefit of legal advice, are admitted in evidence against their maker on his or her trial. And that conclusion reinforces my view that it is not the place at which admissions are made nor whether the individual making the statements has been detained that is important. What is important is the use to which such statements may subsequently be put. The same message is provided by the opening words of para 55 of Salduz: Against this background, the Court finds that in order for the right to a fair trial to remain sufficiently practical and effective" article 6(1) requires that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police, unless it is demonstrated in the light of the particular circumstances of each case that there are compelling reasons to restrict this right. Once more, it is noteworthy that the court here does not refer to the place at which the first interrogation takes place nor whether the person who is answering questions has been detained. It is from the moment of the first interrogation that the need for the presence of a lawyer is deemed to be required and that point is chosen because that is precisely when self incriminating statements may begin to be made. In this connection I should say that I do not construe the judgments of Judge Bratza and Judge Zagrebelsky in Salduz as seeking to link the need for a lawyers presence inextricably with the moment that a suspect is taken into custody. At O I2 Judge Bratza said: At para 55 of the judgment, the Court states as a general principle that in order for the right to a fair trial to remain sufficiently, practical and effective, article 6 requires that, as a rule, access to a lawyer should be provided, as from the first interrogation of a suspect by the police. This principle is consistent with the Court's earlier case law and is clearly sufficient to enable the Court to reach a finding of a violation of article 6 on the facts of the present case. However, I share the doubts of Judge Zagrebelsky as to whether in appearing to hold that the right of access to a lawyer only arises at the moment of first interrogation, the statement of principle goes far enough. Like Judge Zagrebelsky, I consider that the Court should have used the opportunity to state in clear terms that the fairness of criminal proceedings under article 6 requires that, as a rule, a suspect should be granted access to legal advice from the moment he is taken into police custody or pre trial detention. It would be regrettable if the impression were to be left by the judgment that no issue could arise under article 6 as long as a suspect was given access to a lawyer at the point when his interrogation began or that article 6 was engaged only where the denial of access affected the fairness of the interrogation of the suspect. The denial of access to a lawyer from the outset of the detention of a suspect which, in a particular case, results in prejudice to the rights of the defence may violate article 6 of the Convention whether or not such prejudice stems from the interrogation of the suspect. It is immediately obvious from this passage that Judge Bratzas concern was that the judgment of the court did not go far enough. It is clear that his assumption was that the first interrogation of a suspect would normally take place after he had been taken into custody. He felt that to prescribe that the presence of a lawyer was only then required might not be sufficient. Statements could be made or events could occur which might prove incriminating after the suspect was taken into custody but before the first formal interrogation began. That was why Judge Bratza suggested that a lawyer was required when the accused was taken into custody. But his statement to that effect does not betoken a view that the moment that custody begins should be invested with some special significance. On the contrary, it reflects concern that the suspects vulnerability and his need for a lawyer should not be seen as inevitably coincident with the opening of the formal interview. Statements made or events occurring before that time are just as likely to require the presence of a lawyer if the fairness of the trial is to be assured. The cases decided in Strasbourg post Salduz and discussed by Lord Hope in paras 36 40 of his judgment do not appear to me, with respect, to contribute much to the debate except for the case of Borotyuk v Ukraine (Application no. 33579/04). All of the cases concerned suspects who were already in custody when the questioning began. Lord Hope has suggested that importance was attached by Strasbourg in some of these cases to the fact that the person was in custody when he was being interrogated. I do not so read them. It seems to me that the cases are at least as consistent with the view that the important factor in play was that the interrogation was the occasion when inculpatory statements might be made and on that account a lawyers presence was considered an indispensable concomitant of a fair trial. In Borotyuk an interesting passage appears at para 79. There the court said: The Court emphasises that although not absolute, the right of everyone charged with a criminal offence to be effectively defended by a lawyer, assigned officially if need be, is one of the fundamental features of fair trial (see Poitrimol, cited above, para 34). As a rule, access to a lawyer should be provided as from the first questioning of a suspect by the police, unless it can be demonstrated in the light of the particular circumstances of each case that there are compelling reasons to restrict this right. The rights of the defence will in principle be irretrievably prejudiced when incriminating statements made during police questioning without access to a lawyer are used to secure a conviction (see Salduz vs Turkey [(2008) 49 EHRR 421], para 55. Quite apart from the observation that access to a lawyer was deemed necessary as from the first questioning of a suspect, the emphasis in this passage seems to be on the inevitable prejudice that will occur if questioning takes place at a time and in circumstances where incriminating statements might be made. This, as it seems to me, is entirely consonant with the underlying philosophy of article 6(1) taken in conjunction with article 6(3)(c). The essential question is: when the questioning is taking place, is the suspect in a position where the advice of a lawyer is essential if a fair trial is to occur. If he is liable to incriminate himself at that time, a lawyers presence is required so that he may be fully advised as to how he may or should respond to the interrogation. Likewise, if he requires advice as to how he should react to questioning, for example by giving information that may subsequently emerge at the trial, he needs to have proper guidance. Remaining silent when a perfectly innocent explanation is available may fatally undermine a subsequently proffered defence. I would therefore express the principle, to be derived from a consideration of the mainstream Strasbourg jurisprudence, in this way: where a person becomes a suspect, questions thereafter put to him or her that are capable of producing inculpatory evidence constitute interrogation. Before such interrogation may be lawfully undertaken, the suspect must be informed of his or her right to legal representation and if he or she wishes to have a lawyer present, questions must be asked of the suspect, whether or not he or she is in custody, in the presence of a lawyer. The Lord Advocate in the present appeal submitted that the touchstone should be the taking into custody of the individual because this marked the start of the coercive atmosphere in which the vulnerability of the suspect was aroused. I cannot accept that argument. Common experience tells us that a coercive atmosphere can exist independently of custody. The subject was also helpfully considered, albeit in a different context, in the Canadian case of R v Grant 2009 SCC 32; [2009] 2 S.C.R. 353. In that case the Supreme Court of Canada held that what it described as psychological detention such as to give rise to rights under section 9 of the Canadian Charter of Rights and Freedoms was established where an individual has a legal obligation to comply with a restrictive request or demand, or where a reasonable person would conclude by reason of the state conduct that he or she had no choice but to comply. Although the right under section 9 of the Charter is one that entitles an individual not to be arbitrarily detained or imprisoned, as opposed to the right not to incriminate oneself, the relevance of the decision to the present appeal lies in the courts analysis of when the interaction between a police officer and the person he has stopped and questioned assumes a coercive quality. At para 30 of the majority judgment of McLachlin CJ and LeBel, Fish, Abella and Charron JJ it was stated: we find that psychological constraint amounting to detention has been recognized in two situations. The first is where the subject is legally required to comply with a direction or demand, as in the case of a roadside breath sample. The second is where there is no legal obligation to comply with a restrictive or coercive demand, but a reasonable person in the subject's position would feel so obligated. The rationale for this second form of psychological detention was explained by Le Dain J. in [R v Therens [1985] 1 SCR 613, 644] as follows: In my opinion, it is not realistic, as a general rule, to regard compliance with a demand or direction by a police officer as truly voluntary, in the sense that the citizen feels that he or she has the choice to obey or not, even where there is in fact a lack of statutory or common law authority for the demand or direction and therefore an absence of criminal liability for failure to comply with it. Most citizens are not aware of the precise legal limits of police authority. Rather than risk the application of physical force or prosecution for wilful obstruction, the reasonable person is likely to err on the side of caution, assume lawful authority and comply with the demand. The element of psychological compulsion, in the form of a reasonable perception of suspension of freedom of choice, is enough to make the restraint of liberty involuntary. Detention may be effected without the application or threat of application of physical restraint if the person concerned submits or acquiesces in the deprivation of liberty and reasonably believes that the choice to do otherwise does not exist. There is no reason to suppose that a person questioned by police while not in detention would not experience the same need to acquiesce in the power of the police to require answers to potentially highly incriminating questions. In as much, therefore, as a coercive atmosphere is required in order to stimulate the need for the protection that a lawyers presence brings, I consider that it is just as likely that this will occur outside a police station as within. As I have said, the important question is whether the circumstances in which questions are asked are liable to be productive of incriminating answers, not whether those questions are being asked in a police station or whether the suspected person can be said to be in custody. Zaichenko v Russia This decision needs to be examined because of the possibly discordant note that it strikes in what I consider to be the clear message of what I have described as the mainstream European jurisprudence on the subject. The applicant had been stopped by police when driving away from his place of work on 21 February 2001. He was asked to account for two cans of diesel that were discovered in his car. He replied that he had poured the fuel from the tank of a service vehicle that he drove as an employee into the containers that the police had found in his car. He said that he intended to use it for his own personal purposes in other words, he admitted to having stolen it. A vehicle inspection record was prepared by a police officer at the scene in which it was stated that the applicant had explained that he had poured out the fuel from the company premises. The applicant signed that document. He also signed another document entitled explanations in which his statement to the following effect was recorded: Since 1997 I have been employed as a driver by a private company. On 21 February 2001 I arrived to my workplace at 9 am. During the day I was repairing my service vehicle. In the evening I poured out thirty litres of fuel from the tank of my service vehicle. I have previously brought the cans, ten and twenty litres each, from home. After work, at around 8 pm, I was driving home in my car and was stopped by the police. The car was inspected in the presence of the attesting witnesses. I poured out the fuel for personal use. On 2 March 2001 an official known as an inquirer compiled a report on the events of 21 February 2001. It was recorded that the applicant had intentionally stolen thirty litres of diesel from his service vehicle. The report was stated to have been based on, among other things, the inspection record compiled by the police at the scene and the applicant's written statement. The accusation section of this statement read, At 8 pm on 21 February 2001 [the applicant] . being at work intentionally stole from his service vehicle the diesel in the amount of thirty litres. Thereby, he caused to the company pecuniary damage in the amount of 279 roubles. The applicant appended his signature to the following certificates that appeared at the foot of the statement: I have been informed of the nature of the accusation, the right to have access to the case file, the right to legal representation, the right to make requests and challenge the inquiring authorities' actions. and I have studied the case file and have read this document. I have no requests or motions. I do not require legal assistance; this decision is based on reasons unrelated to lack of means. I will defend myself at the trial. At his trial the applicant retracted the confession and instead advanced a defence that he had purchased the fuel. He maintained that evidence of his admissions to police officers when his car was stopped should not have been admitted because he had not been informed of his right against self incrimination. At para 19 of ECtHRs judgment it is recorded that the appeal court in Russia had decided that the applicant's allegation of self incrimination had been rightly rejected by the trial court as unfounded. At paras 42 and 43 of its judgment, ECtHR dealt with the question of whether the applicant had been charged during the events of 21 February 2001. As to that the court said this: 42. The Court reiterates that in criminal matters, Article 6 of the Convention comes into play as soon as a person is charged; this may occur on a date prior to the case coming before the trial court, such as the date of arrest, the date when the person concerned was officially notified that he would be prosecuted or the date when preliminary investigations were opened (see Eckle vs Germany, 15 July 1982, 73, Series A no. 51, and more recently, O'Halloran and Francis vs the United Kingdom [GC], nos. 15809/02 and 25624/02, 35, ECHR 2007. ). Charge, for the purposes of Article 6 1, may be defined as the official notification given to an individual by the competent authority of an allegation that he has committed a criminal offence, a definition that also corresponds to the test whether the situation of the [person] has been substantially affected (see Shabelnik vs Ukraine, no. 16404/03, 57, 19 February 2009; Deweer vs Belgium, 27 February 1980, 46, Series A no. 35; and Saunders vs the United Kingdom, 17 December 1996, 67 and 74, Reports of Judgments and Decisions 1996 VI). Given the context of the road check and the applicant's inability to produce any proof of the diesel purchase at the moment of his questioning by the police, the Court considers that there should have been a suspicion of theft against the applicant at that moment. 43. Applying these principles to the facts of the case, the Court notes that the trial court's use made of the admissions made on 21 February 2001, which led to the institution of criminal proceedings against the applicant and then served for convicting him of theft, is at the heart of the applicant's complaints under Article 6 of the Convention (compare Saunders, cited above, 67 and 74; and Allen vs the United Kingdom (dec.), no. 76574/01, 10 September 2002). It is also noted that the inspection record itself indicated Article 178 of the RSFSR Code of Criminal Procedure as the legal basis for the inspection (see paragraph 26 above). Thus, although the applicant was not accused of any criminal offence on 21 February 2001, the proceedings on that date "substantially affected" his situation. The Court accepts that Article 6 of the Convention was engaged in the present case. Nor was there any disagreement on this point between the parties. The substantial effect which prompted the finding that article 6 was engaged appears to comprise the suspicion which the court felt the police must have had that the applicant had been guilty of theft and the fact that the events that occurred at the roadside check led to his subsequent prosecution and conviction. On that basis the same conclusion (that article 6 is engaged) is irresistible in the three cases involved in these references. In each of the cases it is clear that, at the time that the relevant admissions were made, the police either did have or should have had a suspicion that the persons to whom they were posing questions were guilty of the offences that were under investigation and that the statements made in answer to those questions were or were likely to be highly incriminating of all three. But why in Zaichenko, if article 6 was engaged, was the applicant not entitled to the protection of article 6(3)(c), taken in conjunction with article 6(1)? For an answer to this, one must conduct a probe of the later passages of the judgment which, I should confess in advance, has not led me to an entirely clear understanding of the rationale underlying the courts conclusion on the issue. At para 46 the court said this: 46. The Court notes at the outset that the applicant only complained that he had not been afforded enough time to contact a lawyer in a nearby town. The Court cannot but note that, as confirmed by the applicant's representative in his letter to the European Court dated 26 July 2002, both on 21 February and 2 March 2001 the applicant chose not to exercise his right to legal representation with the hope that the court would give him a fair trial even without counsel. It is difficult to be sure that, in using the phrase, the court cannot but note, the judgment at this point was indicating that, because the applicant had elected not to have legal representation, this was a basis on which it could be concluded that there had not been a violation of article 6(3)(c). Observations that appear later in the judgment would tend to support that view, however. In the first instance, the para following (para 47) opens with the word moreover which suggests that the decision of the applicant not to seek legal representation was, at least, one of a number of reasons for the finding that article 6(3)(c) had not been breached. Secondly, at para 50 of the judgment, the court refers to the applicants election not to seek legal assistance either on 21 February or on 2 March 2001 as a waiver of his right to legal assistance. Some of the other reasons for finding that there had not been a violation of article 6(3)(c) appear in para 47: 47. Moreover, the Court observes that the present case is different from previous cases concerning the right to legal assistance in pre trial proceedings because the applicant was not formally arrested or interrogated in police custody. He was stopped for a road check. This check and the applicant's self incriminating statements were both carried out and made in public in the presence of two attesting witnesses. It is true that the trial record contains a statement by the applicant suggesting that the writing down of the inspection record and/or his subsequent statement were started on the spot but were completed in the village of Birofeld. Nevertheless, the Court concludes on the basis of the materials in the case file that the relevant events, namely the drawing of the inspection record and the taking of the applicant's explanation, were carried out in a direct sequence of events. The distinction between Zaichenkos case and earlier decisions that is highlighted here viz that the applicant had not been arrested or interrogated while in police custody is not expressly stated to be a reason that alone would warrant a finding that there had not been a violation of article 6(3)(c) taken in conjunction with article 6(1). It seems to me impossible to say, on the basis of the statements in this paragraph, that ECtHR has concluded that formal arrest and interrogation in custody are essential prerequisites to the invocation of the right. Rather, it appears that the court treated the cumulative effect of factors that were peculiar to this particular case as the basis for the finding that there had not been a violation of article 6(3)(c). These factors can be enumerated as follows: (1) the applicant had waived his right to a lawyer and had explicitly stated that he did not want a lawyer to represent him despite having been told on 2 March 2001 that he was entitled to legal representation; (2) he had not been formally arrested or interrogated in police custody; (3) the initial questioning of the applicant took place at a road check and not in any formal setting; (4) the applicant was questioned in a public place with other witnesses present who could attest to a lack of coercion on the part of the police; and (5) the checking of the applicants car and his questioning as to the source of the diesel all occurred as part of a seamless process. I do not believe that any one of these factors can be elevated to a position of pre eminence nor does it appear to me that it can be said with confidence that any single factor, taken in isolation, would be sufficient to support the finding that there had not been a breach of article 6(3)(c). The succeeding paragraphs in the judgment repeat the matters dealt with in paras 46 and 47 or expand on them to some extent. It is not necessary to consider these in any detail but I should mention para 48, if only to say that I have had a little difficulty in following the reasoning that it contains. It reads: Although the applicant in the present case was not free to leave, the Court considers that the circumstances of the case as presented by the parties, and established by the Court, disclose no significant curtailment of the applicant's freedom of action, which could be sufficient for activating a requirement for legal assistance already at this stage of the proceedings. It is not immediately clear why someone who was not free to leave the scene could be said not to have had any significant curtailment of his freedom of action. Be that as it may, it appears to be the case that if the court had found that there had been a significant curtailment of the applicants freedom of action, it would have regarded this as a sufficient basis for a finding of a violation of article 6(3)(c). What would constitute such a curtailment of freedom of action has not been made clear, however. Altogether, it is not easy to distil any obvious principle from this paragraph and I would be reluctant to ascribe to it any significance beyond that relevant to the circumstances of the case of Zaichenko itself. Although ECtHR concluded that Mr Zaichenko had waived his right to legal assistance, it decided that there had not been a waiver of his right not to incriminate himself. At para 52 the court held that it was incumbent on the police to inform the applicant of the privilege against self incrimination and the right to remain silent. Their failure to do so at the roadside check before putting questions to him constituted a violation of article 6(1), therefore. In a partly dissenting opinion, Judge Spielmann (who, as Lord Hope pointed out in para 46 of his judgment, was a member of the Grand Chamber in Salduz) addressed forthrightly the question of when the right to legal representation arose and, relating it directly to the decision in Salduz, came down firmly in favour of what I believe to be the logical position, namely, that it began when police questioning started. In para 3 of his opinion, Judge Spielmann said: 3. In Salduz vs Turkey the Court held that as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police (see Salduz vs Turkey [GC], no. 36391/02, 55, ECHR 2008 . ). The Court also held that the lack of legal assistance during a suspect's interrogation would constitute a restriction of his defence rights and that these rights would in principle be irretrievably prejudiced when incriminating statements, made during police interrogation without access to a lawyer, were used for a conviction. The Court took a similar approach in the equally important judgment in Panovits (Panovits vs Cyprus, no. 4268/04, 66 and 70 73, 11 December 2008). (original emphasis) Judge Spielmann also questioned the reasoning of the majority that is contained in para 48 of the courts judgment. At para 6 he said: 6. Contrary to what is said in para 48 of the judgment, I cannot agree that the circumstances of the case disclose no significant curtailment of the applicant's freedom of action. I am of the opinion that those circumstances were sufficient to activate a requirement for legal assistance. I do not understand Judge Spielmanns dissent necessarily to indicate that there was a divergence of views between him and the majority about the nature of the principle at stake. The principle which I believe can be said to be common to both is that when a suspect is interrogated by police he is entitled to legal assistance. Where Judge Spielmann parted company with the majority was in its conclusion as to whether the principle applied. Because of the accumulation of factors that the court had identified (see para 158 above) and because it concluded that there had not been a curtailment of Mr Zaichenkos freedom of action, it held that the principle did not apply. Judge Spielmann, by contrast, did not attach the weight to the factors that the majority had considered militated against a finding of violation of article 6(3)(c) and he disagreed (in my view, quite properly) with the suggestion that someone who was not free to leave the scene nevertheless had not suffered any curtailment of his freedom of action. Miranda v Arizona As Lord Hope has said in para 52, curtailment of freedom of action carries echoes from Miranda v Arizona 384 US 436 (1966). And as Lord Hope suggests, it may well be that Miranda will influence the thinking of Strasbourg, it having featured in a number of prominent dissenting judgments in that court already. But I question whether this will lead to the adoption of the custodial approach to the question as to when access to a lawyer is required. Curtailment of an individuals freedom of action can arise even when he has not been taken into custody. The important question must surely be whether the suspect feels constrained to answer the questions posed to him by the police officer. As the Grant case illustrates, this can arise either because of the manner in which the police officer manages the exchange with the suspect or because of the latters belief that he has no option but to answer the questions put to him. Quite apart from these considerations, however, I believe that one must be careful about making assumptions about the Miranda experience or believing that it can be readily transplanted into European jurisprudence in any wholesale way. The implications of that decision must be considered in the context of police practice in the United States of America. Nothing that has been put before this court establishes that it is common practice in America to ask incriminating questions of persons suspected of a crime other than in custody. Indeed, it is my understanding that as soon as a person is identified as a suspect, police are trained that they should not ask that person any questions until he or she has been given the Miranda warnings. Custody was identified in Miranda as one of the features necessary to activate the need for legal representation but custody has been held to mean either that the suspect was under arrest or that his freedom of movement was restrained to an extent associated with a formal arrest Stansbury vs California, 511 US 318 (1994); New York vs Quarles, 467 U.S. 649, 655 (1984). So it is clear that the rule that custody is required before entitlement to legal representation arises is not inflexible or static and that its underlying rationale is closely associated with the question whether the person questioned feels under constraint to respond. Hampering police investigation One of the principal practical arguments advanced against the requirement that a suspect be informed that he is entitled to legal representation before incriminating questions are put to him is that this will hamper police investigations. The argument is a venerable one. It has been deployed in reaction to various proposals for safeguards intended to protect suspects rights including the right to have a solicitor present during interviews and the audio recording or the videotaping of interviews. There is no evidence that the introduction of those measures brought about any widespread impediment to police investigations nor is there, in my view, any convincing evidence that this would be the result of recognising the right of a suspect to be informed that he or she is entitled to legal representation before being required to provide potentially incriminating answers to police questioning. As the respondents have pointed out, in the final analysis, these cases are about the admissibility of evidence. There is no legal prohibition on police asking questions of a suspect that may produce incriminating answers. The legal consequence of doing so without first informing the suspect of his or her right to be legally represented will be, in my opinion, that the answers produced will be inadmissible in evidence unless compelling reasons such as were discussed in para 55 of Salduz exceptionally justify denial of access to a lawyer. One can anticipate, therefore, that police may decide in appropriate circumstances to proceed with questions in order to further the investigation but have to accept that if they are capable of producing incriminating answers from someone who is a suspect, the replies will be inadmissible. A balance will always have to be struck between unfettered police investigatory powers and the complete safeguarding of suspects rights. The history of criminal jurisprudence shows how that balance has been struck in different ways and at different times, reflecting, no doubt, changing attitudes as to what properly reflects contemporary standards. It is my belief that the proper balance to strike for our times is the one that I have suggested in para 146 above. Conclusions For the reasons given in para 153 above, I consider that article 6 of ECHR was engaged in each of the respondents cases at the time that the relevant questions were asked. I have no doubt that when they were asked those questions each of them was suspected of having committed an offence. I agree with Lord Hope that the administration of a caution is not necessarily determinative of this issue but, in the particular circumstances of these cases, I do not believe that any other conclusion is possible. The second and third questions that were put to the respondent, Ambrose, were clearly capable of producing incriminating responses. In fact they did so and it is evident that the answers have been relied on in order to establish his guilt, (although that might well have been possible simply by proving that he was in the car and in possession of the keys). In these circumstances, I am of the view that he had a right under article 6(3)(c) taken in conjunction with article 6(1) of ECHR to be informed, after his reply to the first question, that he was entitled to legal representation before answering further questions, and that, absent such a warning, the incriminating answers given by him to the second and third questions were not admissible. The questions put to the respondent who has been referred to as M, apart from the first question, were also clearly capable of producing incriminatory replies although whether they would in fact be probative of guilt would be a matter for trial, if indeed the answers were held to be admissible. Since they clearly had the capacity of producing inculpatory responses, however, I consider that the questions put to M at his home, apart from the first question, are inadmissible. In the case of the respondent referred to as G, for the reasons given by Lord Hope (with which I agree), it is indisputable that, at the time the impugned questions were put to him, he was in custody and, whatever view one takes of the effect of the European jurisprudence, the incriminating answers that he gave are inadmissible. But, for the same reasons that I have given in the cases of Ambrose and M, I would have held that they were inadmissible, regardless of whether G was in custody at the time that the answers were given. |
The respondent, Mrs Sumithra Hewage, was born in Sri Lanka. She has been a British citizen since 1998. She has devoted her professional career to the practice of dentistry. Her speciality is orthodontics. On 1 December 1993 she commenced employment with Grampian Health Board (the Board) at Aberdeen Royal Infirmary as a consultant orthodontist. In 1996 she became Head of Service for the Orthodontics Department. She resigned from that position on 30 November 2003. On 24 December 2004 she resigned from her employment with the Board with effect from 31 March 2005. In September 2005 she commenced proceedings against the Board in which she claimed under section 94(1) of the Employment Rights Act 1996 that she had been unfairly dismissed from that employment. She also claimed under the Sex Discrimination Act 1975 and the Race Relations Act 1976 that she had been discriminated against on the grounds of her sex and race. Mrs Hewages claims came before an employment tribunal sitting in Aberdeen. On the penultimate day of the hearing, which took place on various dates between January and June 2007, it was conceded by counsel for the Board that Mrs Hewage had been constructively and unfairly dismissed. In a judgment which was delivered on 4 December 2007 the employment tribunal held that she had been unlawfully discriminated against on a number of grounds of both sex and race. By a majority decision issued on 15 April 2009 the Employment Appeal Tribunal upheld an appeal by the Board against the decision of the employment tribunal and dismissed Mrs Hewages claims of discrimination. She appealed against that decision to the Inner House of the Court of Session. On 14 January 2011 the Second Division (Lord Justice Clerk Gill, Lord Bonomy and Lord Nimmo Smith) allowed her appeal and quashed the decision of the Employment Appeal Tribunal: [2011] CSIH 4, 2011 SLT 319. It remitted the case to the employment tribunal to decide whether, if it had had regard to the only issues which the court considered to be relevant to the claims of discrimination, it would have come to the same or a different conclusion. The Board has now appealed against the decision of the Inner House of the Court of Session to this Court. In the meantime the employment tribunal, having considered the matter that was remitted to it by the Inner House, has affirmed its decision to uphold Mrs Hewages claims of discrimination. The facts The complaints have their source in allegations by Mrs Hewage that she was bullied and harassed by employees of the Board. When she held the position of Head of Service of the Orthodontics Department Mrs Hewage attended regular monthly management meetings to discuss how her department was functioning. These meetings were normally attended by Mrs Helen Strachan, who was the service manager for surgical specialities, and Mrs Edith Munro, who was the clinical nurse manager. One of these meetings took place in Mrs Strachans office on 9 September 2003. Mrs Hewage alleged that Mrs Strachan and Mrs Munro were verbally abusive, hostile and aggressive towards her. She was very upset by their conduct and could not bring herself to talk to anyone about the way she had been treated. So she decided to consult an occupational health doctor, who wrote on her behalf to the Boards Chief Executive, Mr Alex Cumming. Mrs Hewage met Mr Cumming on 7 October 2003. She told him about the difficulties that she had been having with Mrs Strachan and Mrs Munro. She said that it would be very difficult for her to continue to work with them and that she would be considering her position. His response did not satisfy her, so she resigned from her position as Head of the Department. Mrs Hewages complaint about Mrs Strachans conduct was not the first to have been brought to the attention of the Boards senior management. Professor John Forrester had experienced difficulty with Mrs Strachan when he was Head of Service for the Department of Ophthalmology. On 4 April 2002 she accused him of having deliberately manipulated his waiting list the previous morning to engineer the cancellation of day case cataracts booked for that day and told him that she would never allow that to happen again. When asked to explain herself, she said that her accusation was based on remarks by one of his consultant colleagues. Professor Forrester was taken aback by her challenge to his clinical judgment that the operations should be cancelled, and by the fact that one of his consultant colleagues had apparently spoken to her in those terms. He decided that he could no longer work with her and that his position as Head of Service for his department was untenable. Professor Forrester wrote to the Chief Executive, Mr Cumming, on 5 April 2002 making it clear that he would not be willing to return to the position of Head of Service if Mrs Strachan continued to have responsibilities in his department. His resignation led to a review of the department. It was reorganised so as to provide its Head of Service with a deputy who would be responsible for its day to day running rather than having Mrs Strachan as its service manager. The position of Head of Service was advertised, and Professor Forrester was the only applicant. He was re appointed, and the plan for the departments reorganisation was implemented. When Mrs Hewage resigned as Head of Service in the Orthodontics Department Mr Colin Larmour, a consultant orthodontist, took over from her in November 2003, initially on a temporary basis. Prior to his appointment Mrs Hewage had made it known repeatedly that she was of the view that there should be a consultant on the interview panel for the appointment of dental nurses. This was a matter about which she felt very strongly. But her requests that she should sit on this panel, which were made over a period of about two years to Mrs Edith Munro and Sister Moira Munro, always met with resistance and they refused to agree to them. Within days of Mr Larmours appointment, however, a meeting took place on 12 December 2003 at Sister Munros suggestion to discuss the issue. Mr Larmour then spoke to a consultant in the Restorative Dentistry Department, who agreed with Mr Larmour that a consultant should be on the interview panel. He reported this conversation to Mrs Munro and Sister Munro, who agreed immediately that a consultant should be present. Their recommendation was then put in place. When Mr Larmour was appointed as Head of Service in the Orthodontics Department in April 2004, both Mr Alisdair Chisholm, the Boards General Manager, and Mr Kenneth McLay, its Associate Medical Director, assured him of their support. He told Mrs Hewage that Mr Chisholm told him that if he had any problems with Mrs Strachan he should let him know immediately. He also told her that Mr McLay had advised him to be friends with the service manager and youll get anything signed. In December 2003 Mrs Hewage wrote to Mr McLay to complain about the way she had been treated by Mrs Strachan and Mrs Munro at the meeting on 9 September 2003. Her complaint was referred to Dr Dijkhuizen, the Boards Medical Director. In March 2004 Dr Dijkhuizen wrote to Mrs Hewage advising her that he had decided to proceed with a formal investigation by a panel under the Boards Dignity at Work Policy. On 15 June 2004 a copy of the main body of the report of the investigation was sent to Mrs Hewage. She considered it to be full of inaccuracies and omissions, and it did not reach any conclusions or make any recommendations. It contained an allegation by Mrs Strachan that Mrs Hewages conduct had led to Mrs Gillian Cartwright having to go on sick leave suffering from work related stress caused by Mrs Hewages conduct. This was later shown to be a false allegation. In her evidence to the employment tribunal Miss Cartwright called it a blatant lie, the truth being that her stress had been caused by Mrs Strachan herself. On 24 June 2004 Mrs Hewage, who was distressed by the report, met Mr Chisholm and asked him to relieve Mrs Strachan of any responsibilities that she had in her department. He did not do this. The Dignity at Work panel issued its final report on 6 August 2004. It contained some recommendations, but for the most part it simply repeated the stated positions of Mrs Hewage, Mrs Strachan and Mrs Munro. On 20 August 2004 Mrs Hewage met Dr Dijkhuizen to discuss it. She again asked him to remove Mrs Strachan from duty as service manager for her department. He replied that there was no basis for doing this in the report, which both Mrs Strachan and Mrs Munro considered to be totally unsatisfactory. They had told him that they were seeking an apology from Mrs Hewage for making the complaint. On 26 August 2004 Dr Dijkhuizen wrote to Mrs Hewage, Mrs Strachan and Mrs Munro saying that he would write to them again in September to indicate how the report would be taken forward. But when he wrote to them again on 15 September 2004 he told them that he had decided to not to recommend that any action should be taken. On 25 November 2004 he wrote to the appellant to inform her that no action would be taken against Mrs Strachan regarding her false accusation about Miss Cartwright. On 30 November 2004 Mrs Hewage wrote to Mr Chisholm applying for a review of the outcome of the report. On 24 December 2004, having still not received a reply to her application, she submitted her resignation from her employment with the Board with effect from 31 March 2005. The proceedings Mrs Hewage intimated her intention to raise a grievance by a letter to the Boards human resources manager, Miss Ashley Catto, dated 10 April 2005. She gave details of her grievance in a letter dated 18 May 2005, and by letters dated 30 June 2005 and 22 August 2005 the British Medical Association amplified her grievance on her behalf. Her allegation at this stage was based on one specific comparison, which was the case of Professor Forrester. The Board appointed a panel to consider her grievance, and an investigation was carried out. When the panel reported on 22 March 2006 it held that Mrs Hewages grievance was partly justified in relation to the Boards delay in dealing with it. But it rejected her allegations of bullying and harassment and of discrimination on grounds of sex and race. In her application form ET/1, in which she alleged that she had been unfairly dismissed, Mrs Hewage gave details of her complaint of bullying and harassment at the hands of Mrs Strachan. It also contained this statement: The claimant submits that other white male consultants were not subjected to the same bullying and harassing treatment that she suffered and that she would not have been treated in the way in which she was were it not for her sex and race. Accordingly, she submits that she was subjected to less favourable treatment on the grounds of her sex and race contrary to the Sex Discrimination Act 1975 and the Race Relations Act 1976. [Emphasis added.] In its reply form ET/3 the Board denied that Mrs Hewage had been constructively dismissed. It did not respond to the allegation of discrimination, nor did it call for further particulars as it could have done under the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861), Schedule 1. During the hearing before the employment tribunal Mrs Hewages evidence of discrimination was led without objection. Moreover, as the Lord Justice Clerk observed in para 30 of his opinion, the Board chose not to call Mr McLay, Mr Chisholm or Miss Catto to give evidence on its behalf. As it was conceded that Mrs Hewage had been constructively and unfairly dismissed, the employment tribunal concentrated on her complaints of discrimination. It considered the Boards treatment of Professor Forrester, the change of attitude as to the presence of a consultant on the interview panel and its treatment of Mr Larmour. It found that there was both sex and race discrimination in each of these three respects. It also dealt with a number of other matters that had been referred to in evidence, for which counsel for Mrs Hewage conceded in the Inner House no foundation had been laid in the form ET/1. It held that the cumulative effect of this less favourable discriminatory treatment was the reason for her resignation and her constructive unfair dismissal: para 132. The criticism that was advanced in the Inner House that it erred in basing this conclusion on the cumulative effect of all the matters referred to in evidence has been met by its determination on the remit that it would have come to the same conclusion if it had had regard only to the three respects mentioned above. The Employment Appeal Tribunal held by a majority (Lady Smith and Miss Ayre, Mr Thomson dissenting) that Mrs Hewage had not given fair notice of a claim of discriminatory dismissal, and that she had not given fair notice of any allegation of discrimination beyond that which involved comparing her with Professor Forrester: paras 37 and 38. It was not for the tribunal to extend the range of complaints of its own motion, which was what it appeared to have done. The EAT also held that the employment tribunal had misapplied the test laid down by the Court of Appeal in Igen Ltd (formerly Leeds Career Guidance) v Wong [2005] ICR 931 as to how to apply section 63A of the Sex Discrimination Act 1975 (inserted by the Sex Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001 (SI 2001/2660)) and section 54A of the Race Relations Act 1976 (inserted by the Race Relations Act 1976 (Amendment) Regulations 2003 (SI 2003/1626)). Giving the judgment of the Court of Appeal in that case, Peter Gibson LJ said in para 17: The statutory amendments clearly require the employment tribunal to go through a two stage process if the complaint of the complainant is to be upheld. The first stage requires the complainant to prove facts from which the tribunal could, apart from the section, conclude in the absence of an adequate explanation that the respondent has committed, or is to be treated as having committed, the unlawful act of discrimination against the complainant. The second stage, which only comes into effect if the complainant has proved those facts, requires the respondent to prove that he did not commit or is not to be treated as having committed the unlawful act, if the complaint is not to be upheld. The majority held that, to discharge the burden of proof that the provisions of the statutes placed on her, Mrs Hewage was required to establish facts from which the employment tribunal could properly infer that she had been the victim of discrimination. If it did not do this, there could be no question of its going on to ask whether the Board had proved that it did not commit an act of discrimination. That question did not arise if there was no prima facie case of discrimination to answer. The employment tribunal had fallen into error because it said in para 107 of its decision that it was required at the first stage to make an assumption in order to shift the burden of proof at the second stage, and because it looked at only limited aspects of the evidence where Mrs Hewage and the comparators had received different treatment. It had closed its mind to the evidence relied on by the Board as showing that Professor Forrester and Mr Larmour were not appropriate like for like comparators: paras 73 and 74. Mrs Hewage had confined herself to a case that she should be compared to actual comparators, but the actual comparators that she had chosen did not suffice for the purpose of discharging the burden of proof that lay on her: para 82. Mr Thomson disagreed with the majority. In his opinion the employment tribunal were entitled to treat the comparators that Mrs Hewage had chosen as valid comparators and, as the decision of the employment tribunal could not be said to be perverse, it should not be interfered with. In the Inner House, giving the opinion of the court, the Lord Justice Clerk said on the issue of fair notice that on a fair and reasonable reading of the ET/1 it was clear that Mrs Hewage had given notice that she sought a remedy in respect of a dismissal that was both unfair and discriminatory. She had also given notice that the comparators on which she relied were white male consultants. She had specifically mentioned Professor Forrester, and it was obvious that the only other white male consultant who could be a relevant comparator was Mr Larmour: para 38 and 39. On the issue of onus of proof, the Lord Justice Clerk said that the approach of the employment tribunal was correct. It was plain, reading its decision as a whole, that it had decided that a conclusion was there to be drawn that the Board had treated Mrs Hewage differently from the two comparators and to her detriment and that, in light of its handling of the appellants complaints, the difference of treatment justified a prima facie inference of discrimination which it was for the Board to rebut. In his view, in considering what inferences or conclusions could be drawn from the primary facts, the employment tribunal had to assume that there was no adequate explanation for them. It was sufficient for it to decide whether, on the primary facts, it could conclude in the absence of an adequate explanation that the Board had committed an act of discrimination. If it so decided, the burden of proof shifted to the Board: para 41. As for the choice of comparators, the EAT had simply substituted its own judgment on the point on a consideration of the findings of fact. Unless the employment tribunals judgment on a question of that kind was absurd or perverse, it was not for the EAT to impose its own judgment on the point. It was entitled to conclude that Professor Forrester and Mr Larmour were appropriate comparators: para 43. The issues in this appeal Mr Truscott QC for the Board directed his argument to the process of legal reasoning which the employment tribunal adopted in determining that Mrs Hewage had been discriminated against on grounds of both sex and race. He accepted that both Professor Forrester and Mr Larmour were properly before the employment tribunal as comparators. I think that he was not only right but bound to do so, in view of the wording of Mrs Hewages ET/1 and the fact that her evidence about the treatment which Mr Larmour received was led without objection. The key issue, therefore, was the question of comparison. He submitted that the employment tribunal could only conclude that there was a prima facie case of discrimination if there was a like for like comparison. In this case it was not comparing like with like. It had misconstrued the approach that was to be taken. It had left out of account material parts of the evidence that would have shown that the situations in the cases of Professor Forrester and Mr Larmour that Mrs Hewage was relying on were entirely different. There were so many differences between these situations that it was not open to the tribunal to draw the conclusion that it did. It determined the issue of discriminatory dismissal without any reasoning at all. These were errors of law which the EAT was entitled to correct. Mr Truscott also submitted that the way the employment tribunal had approached the issues in this case showed that further guidance was needed as to the process of reasoning that should be adopted. In every case the tribunal should approach the issue of discrimination by asking the question why: Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] UKHL 11, [2003] ICR 337, per Lord Nicholls at para 7. The mental process of the alleged discriminator must be examined in every case. That had not been done here. He accepted that it was open to a tribunal to draw inferences. But the burden of proof was on the claimant to show that there had been treatment which was discriminatory. The Inner House had been wrong to reverse the EAT on this point. His primary submission was that Mrs Hewages discrimination claim should be dismissed. If the appeal were to be dismissed, however, he said that the question which the Inner House had remitted to the employment tribunal should be remitted to a differently constituted tribunal because the original tribunals jurisdiction was spent. The Board had appealed against its decision on the remit to keep this point open. Discussion (a) was there an error of law? The submission that the Inner House erred in holding that the employment tribunal was entitled to hold that Professor Forrester and Mr Larmour were appropriate comparators is, I think, unsustainable. It is true that the situations which were being compared in each case were not precisely the same. Professor Forresters circumstances were different. His was a much larger department. He resigned in anger immediately on hearing of Mrs Strachans unfounded allegations against him, the decision to remove her from her position as service manager was taken by three people two of whom were not involved when Mrs Hewage complained, he made it clear that he would not return to his position unless she was removed and no one else applied for it. The proposal that there should be a consultant on the interview panel was dealt with on an inter departmental basis following a meeting with Mr Larmour that took place at Sister Munros suggestion. As for the supportive comments that were made to Mr Larmour on his appointment, there was no evidence as to what was said to Mrs Hewage when she took up her position as Head of Service in the same department seven years earlier. The question whether the situations were comparable is, however, a question of fact and degree, and there was a good deal of evidence the other way. In the case of Professor Forrester the employment tribunal summarised various reasons that had been put forward by counsel for the Board for holding that he was not an appropriate comparator. Its assessment, however, was that the manner in which the Board dealt with his complaint about his service manager was in marked contrast to the manner in which it dealt with Mrs Hewages complaint: see paras 108 109. This was because Mrs Strachan was removed from her position as service manager not for any organisational reasons but solely because of the deterioration of her relationship with Professor Forrester. It had broken down due to her behaviour, as it had between her and Mrs Hewage. The Board addressed this inter personal problem by replacing Mrs Strachan in his case but not hers, despite her complaints. When Mrs Hewage made her requests that she should be on the interview panel, Mrs Munro and Sister Munro appeared to the employment tribunal to regard it as a matter of principle that this was their role, not hers. Yet within a matter of days following her resignation Mr Larmour was able to reach agreement with them on this point without any apparent difficulty. In its view the change in attitude on their part was astounding and inexplicable: see paras 111 113. The treatment of Mr Larmour by senior officials on his appointment was quite different from the way Mrs Hewage had been treated by them over a prolonged period after she had told the Board that she could no longer work with Mrs Strachan and had sought their support. There was evidence, which the employment tribunal accepted, that Mr McLay was dismissive and sarcastic when Mrs Hewage discussed her problems with him, and she received nothing like the immediate support that was offered to Mr Larmour in the way her complaint was dealt with under the Dignity at Work Policy: para 114. The majority in the EAT were of the opinion that the employment tribunal failed to work through stage one of the stages referred to in Igen v Wong adequately or sufficiently: paras 73 75. They criticised its reasoning as to what it was required to do at the first stage. In para 107 of its judgment the tribunal said that it was mindful that it was required to make an assumption at that stage, the purpose being to shift the burden of proof at the second stage so that, unless the respondent provided an adequate explanation, the claimant would succeed. The majority thought that the tribunal was wrong to say that it was required to make an assumption at the first stage for the purpose of shifting the burden of proof. They thought that this meant that it had decided to look only at limited aspects of the relevant evidence. So it failed to ask itself whether, bearing in mind all the evidence and the submissions of the parties on the like for like comparison, Mrs Hewage had discharged the initial burden of proof. The Lord Justice Clerk said in para 41 of his opinion that the majoritys strictures on this point were not well founded, and I respectfully agree with that assessment. In the sentence which the majority criticised the employment tribunal was simply following the guidance in Igen v Wong, where the court said that, in considering what inferences or conclusions can be drawn from the primary facts, the tribunal must assume that there is no adequate explanation for those facts: see paras 21 and 22 and para (6) of the Annex to the Court of Appeals judgment. As these passages make clear, the purpose of that assumption is to shift the burden of proof at the second stage. It does not diminish in any way the burden of proof at the first stage, when the tribunal is looking at the primary facts that must be established. As Peter Gibson LJ said in para 17 of his judgment in that case, the first stage requires the complainant to prove the facts from which the tribunal could, apart from the section, conclude in the absence of an adequate explanation that the respondent has committed, or is to be treated as having committed, the unlawful act of discrimination against the complainant. It is well established, and has been said many times, that one ought not to take too technical a view of the way an employment tribunal expresses itself, that a generous interpretation ought to be given to its reasoning and that it ought not to be subjected to an unduly critical analysis. But I do not think that it is necessary to rely on that principle in this case. It is perfectly clear from the reasoning which follows its preliminary observation that the tribunal then proceeded to examine the evidence in order to decide what, in the absence of an adequate explanation, it could hold had been proved. It was careful to explain, step by step in each case, what it saw as lying at the core of Mrs Hewages complaint. It addressed the central issue, which was whether these were like for like comparisons. Having done that, it found that differences of treatment had been proved for which, in its judgment, there appeared to be no adequate explanation. It expressed its findings as to each case in a way that made it plain that it felt itself entitled in these circumstances to draw a prima facie inference of sex and race discrimination in Mrs Hewages favour, which it was for the Board to rebut and it failed to do. I do not think that there is any substance in the suggestion that the tribunal misdirected itself or that it considered only part of the evidence that it was required to examine at the first stage. For these reasons Mr Truscotts primary submission that the employment tribunal misdirected itself as to the onus of proof and failed to apply its mind properly to the evidence must be rejected. (b) guidance Mr Truscott submitted that there was a need for guidance to be given by this court as to how cases should be approached under section 63A(2) of the 1975 Act and section 54A(2) of the 1976 Act. Section 63A(2) provides: Where, on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent (a) has committed an act of discrimination against the complainant which is unlawful by virtue of Part 2 . or (b) is by virtue of section 41 or 42 to be treated as having committed such an act of discrimination . the tribunal shall uphold the complaint unless the respondent proves that he did not commit, or, as the case may be, is not to be treated as having committed, that Act. Section 54A(2) is, mutatis mutandis, in the same terms. In Igen v Wong, para 16, Peter Gibson LJ said that, while it was possible to offer practical help (as to which see para 17 of his judgment quoted in para 14, above), there was no substitute for the statutory language. And in Madarassy v Nomura International plc [2007] ICR 867, para 9 Mummery LJ emphasised that the Court of Appeal had gone out of its way in Igen to say that its guidance was not a substitute for statute. As he put it, Courts do not supplant statutes. Judicial guidance is only guidance. In para 11 he said that there was really no need for another judgment giving general guidance: Repetition is superfluous, qualification is unnecessary and contradiction is confusing. And in para 12: Most cases turn on the accumulation of multiple findings of primary fact, from which the court or tribunal is invited to draw an inference of a discriminatory explanation of those facts. It is vital that, as far as possible, the law on the burden of proof applied by the fact finding body is clear and certain. The guidance in Igen Ltd v Wong meets these criteria. It does not need to be amended to make it work better. Nevertheless Mummery LJ went on in paras 56 and following of his judgment in Madarassy to offer his own comments as to how the guidance in Igen v Wong ought to be interpreted, which I would respectfully endorse. In para 70, having re stated what the tribunal should and should not do at each stage in the two stage process, he pointed out that from a practical point of view, although the statute involved a two stage analysis, the tribunal does not in practice hear the evidence and the argument in two stages: The employment tribunal will have heard all the evidence in the case before it embarks on the two stage analysis in order to decide, first, whether the burden of proof has moved to the respondent and, if so, secondly, whether the respondent has discharged the burden of proof. In para 77, in a passage which is particularly in point in this case in view of the employment tribunals reference in para 107 to its being required to make an assumption, he said: In my judgment, it is unhelpful to introduce words like presume into the first stage of establishing a prima facie case. Section 63A(2) makes no mention of any presumption. In the relevant passage in Igen Ltd v Wong the court explained why the court does not, at the first stage, consider the absence of an adequate explanation. The tribunal is told by the section to assume the absence of an adequate explanation. The absence of an adequate explanation only becomes relevant to the burden of proof at the second stage when the respondent has to prove that he did not commit an unlawful act of discrimination. The assumption at that stage, in other words, is simply that there is no adequate explanation. There is no assumption as to whether or not a prima facie case has been established. The wording of sections 63A(2) and 54A(2) is quite explicit on this point. The complainant must prove facts from which the tribunal could conclude, in the absence of an adequate explanation, that the respondent has committed an act of discrimination against the complainant which is unlawful. So the prima facie case must be proved, and it is for the claimant to discharge that burden. The points made by the Court of Appeal about the effect of the statute in these two cases could not be more clearly expressed, and I see no need for any further guidance. Furthermore, as Underhill J pointed out in Martin v Devonshires Solicitors [2011] ICR 352, para 39, it is important not to make too much of the role of the burden of proof provisions. They will require careful attention where there is room for doubt as to the facts necessary to establish discrimination. But they have nothing to offer where the tribunal is in a position to make positive findings on the evidence one way or the other. That was the position that the tribunal found itself in in this case. It is regrettable that a final resolution of this case has been so long delayed by arguments about onus of proof which, on a fair reading of the judgment of the employment tribunal, were in the end of no real importance. (c) the remit I cannot accept Mr Truscotts submission that the question which was remitted to the employment tribunal by the Inner House should have been remitted by it to a differently constituted tribunal. It remained open to the original tribunal to re examine the issues that were before it if directed to do so by an appellate court. There was an obvious advantage in remitting the matter to the original tribunal rather than a tribunal which was differently constituted as it had already heard and been able to assess the evidence. This was pre eminently a matter for the Inner House, and there are no grounds for thinking that it made the wrong choice. The matter was properly remitted, and happily it has now been dealt with promptly thus eliminating the possibility of any further delay in the final resolution of Mrs Hewages claim. Conclusion I would dismiss the appeal. I would affirm that part of the Second Divisions interlocutor in which it allowed the appeal to the Inner House and quashed the decision of the EAT. The Board must pay the costs of the appeal to the Supreme Court. |
The four respondents to these appeals have all been convicted or received cautions or reprimands in respect of comparatively minor offending. The disclosure of their criminal records to potential employers has made it more difficult for them to obtain jobs, or may make it more difficult in future. In each case, the relevant convictions and cautions were spent under the legislation designed to enable ex offenders to put their past behind them. They had to be disclosed only if the respondents applied for employment involving contact with children or vulnerable adults. In all four of these appeals, the respondents challenge the statutory rules under which disclosure of their records was required as being incompatible with the European Human Rights Convention. Such cases raise problems of great difficulty and sensitivity. They turn on two competing public interests. One is the rehabilitation of ex offenders. The other is the protection of the public against people whose past record suggests that there may be unacceptable risks in appointing them to certain sensitive occupations. The importance of both public interests needs no emphasis. The ability of ex offenders to obtain employment is often an essential condition of their successful reintegration into law abiding society at what, especially in the case of young offenders, may be a critical period of their lives. On the other hand, in some employment sectors a more cautious approach is indispensable. The Bichard Inquiry (2004) (HC 653) into child protection procedures and vetting practices was a stark reminder of the importance of ensuring that the rehabilitation of offenders does not undermine proper standards of public protection when those with criminal records apply for jobs involving contact with children. The Inquiry had been set up after two young girls had been murdered by a caretaker employed at their school, about whom there had been substantial intelligence in police files, not retained or disclosed to the school, suggesting a pattern of sexual interference with women and young girls. The essential facts P received a caution on 26 July 1999 for the theft of a sandwich from a shop. Three months later, on 1 November 1999, she was convicted at Oxford Magistrates Court of the theft of a book worth 99p and of failing to surrender to the bail granted to her after her arrest for that offence. She received a conditional discharge for both offences. At the time of the offences she was 28 years old, homeless and suffering from undiagnosed schizophrenia which is now under control. She has committed no further offences. P is qualified to work as a teaching assistant but has not been able to find employment. She believes that this is because she has been obliged to disclose her convictions on each job application. W was convicted by Dewsbury Magistrates Court on 26 November 1982 of assault occasioning actual bodily harm contrary to section 47 of the Offences against the Person Act 1861. At the time of the offence he was 16 years old. The assault had occurred in the course of a fight between a number of boys on their way home from school. He received a conditional discharge, and has not offended since. In 2013, when he was 47, he began a course to obtain a certificate in teaching English to adults. His conviction has not been disclosed, but he believes that he would need to disclose it and obtain a criminal record certificate if he were to apply for a job as a teacher, and that this will prejudice his chances of obtaining employment. On 1 August 2006, when he was 13 years old, G was arrested for sexually assaulting two younger boys, contrary to section 13 of the Sexual Offences Act 2003. The offences involved sexual touching and attempted anal intercourse. These were potentially serious offences, but the mitigation was exceptional. The police record indicates that the sexual activity was consensual and seems to have been in the form of dares and is believed to have been a case of sexual curiosity and experimentation of the part of all three boys. The Crown Prosecution Service decided that it was not in the public interest to prosecute, but suggested a reprimand under section 65 of the Crime and Disorder Act 1998. On 5 September 2006 G received two police reprimands, one in respect of each of the younger boys. He has not offended since. In 2011, when he was working as a library assistant in a local college, he was required to apply for an enhanced criminal record check because his work involved contact with children. After the application was made, he was told by the police that they proposed to disclose the reprimand, together with an account of the mitigating circumstances. As a result, G withdrew the application and lost his job. He has since felt unable to apply for any job for which a standard or enhanced criminal record check would be required. Lorraine Gallagher was convicted on 24 July 1996 at Londonderry Magistrates Court of one count of driving without wearing a seatbelt, for which she was fined 10, and three counts of carrying a child under 14 years old without a seatbelt, for which she was fined 25 on each count. All four counts related to the same occasion. On 17 June 1998, she was convicted at the same court on two counts of carrying a child under 14 years old in a car without a seatbelt. She was fined 40 on each count. Again, both counts related to the same occasion. She had been carrying two of her children in the back of her car. Their seatbelts had been attached, but not properly because, unbeknown to her (she says), they had placed the shoulder straps under their arms. Ms Gallagher has no other convictions. In 2013, having qualified as a social carer, she was admitted to the Northern Ireland Social Care Council Register of Social Care Workers. In 2014, she applied for a permanent position at a day centre for adults with learning difficulties and received a conditional offer of employment. In response to a request to disclose whether she had been convicted at any time of a criminal offence she disclosed Yes and carrying child without seatbelt in 1996, but she did not disclose the conviction in relation to herself. She did not disclose the 1998 convictions at all. When the enhanced criminal record certificate disclosed all the convictions, the job offer was withdrawn on the ground that her failure to disclose them called her honesty and integrity into question. The statutory schemes The disclosure of criminal convictions, cautions and reprimands is governed by two related statutory schemes. Disclosure by the ex offender himself is governed by the Rehabilitation of Offenders Act 1974 in England and Wales and the corresponding provisions of the Rehabilitation of Offenders (Northern Ireland) Order 1978 (SI 1978/1908) in Northern Ireland. There is no material difference between the Act and the Northern Ireland Order. I shall therefore refer in this judgment to the provisions of the 1974 Act. Section 1 of that Act provides that, subject to conditions none of which is material, where a person has been convicted of an offence which is not excluded from rehabilitation, that person shall be treated as rehabilitated after the expiry of the rehabilitation period and the conviction shall be treated as spent. Sections 8A and 8AA make corresponding provision for cautions. The rehabilitation period is defined by section 5, and varies according to the sentence of the court and the age of the offender. Section 4 determines the effect of rehabilitation. By section 4(1), the ex offender is to be treated for all legal purposes as a person who has not committed or been charged or prosecuted or convicted of the offence. For present purposes, the critical provisions of the Act are sections 4(2) and (3). Their effect is that where a question is put to an ex offender about his previous convictions, offences, conduct or circumstances (other than in judicial proceedings), the question shall not be treated as relating to spent convictions and may be answered accordingly. In other words, the ex offender is under no obligation to disclose it, and indeed may lawfully deny it. He is not to be subjected to any liability or prejudice in consequence. Section 4(4) provides that the Secretary of State may by order provide for exceptions to sections 4(2) and (3). The Secretary of State exercised this power for England and Wales by the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (SI 1975/1023) (as amended); and for Northern Ireland by the Rehabilitation of Offenders (Exceptions) Order (Northern Ireland) 1979 (SR(NI) 1979/195). The effect of the Orders is that an ex offenders right not to disclose a conviction or caution does not apply if the question is asked in order to assess his or her suitability for any of 13 specified purposes. These include his or her suitability for admission to certain professions or certain kinds of employment; or for his or her assignment to work with children or vulnerable adults in specified circumstances; or for the provision of day care; or for the adoption of a child. Disclosure of criminal records by the Disclosure and Barring Service in England and Wales or AccessNI in Northern Ireland is governed in both jurisdictions by a distinct but closely related statutory scheme under Part V of the Police Act 1997 (as amended). Sections 113A and 113B of the 1997 Act (as inserted) deal, respectively, with criminal record certificates (CRCs) and enhanced criminal record certificates (ECRCs) recording a persons convictions and cautions, including spent convictions and cautions. Applications for a certificate are made by the ex offender himself and countersigned by a registered person, namely a person registered as having a proper interest in the information. In R (T) v Chief Constable of Greater Manchester Police (Liberty intervening) [2015] AC 49, paras 10 12, Lord Wilson concisely summarised the scheme of disclosure under the Police Act 1997, as it stood before the scheme was amended in March 2014: 10. Sections 113A and 113B of the 1997 Act identify the circumstances in which the DBS must issue a CRC and an ECRC respectively. The only substantive difference between the two certificates is that an ECRC must include not only, as must a CRC, relevant matters recorded on the Police National Computer but also, by way of enhancement, information about the person on local police records which they reasonably believe to be relevant and ought to be included (conveniently described as soft intelligence): contrast section 113A(3)(a) with section 113B(3)(a)(4). It is only where the certificate is required for the purposes of an exempted question asked for a prescribed purpose that an ECRC, rather than a CRC, is available 11. In summary, section 113B provides that an ECRC must be issued in the following circumstances: (a) The application for it is made by the person who is to be the subject of it: subsection (1)(a). (b) The application is countersigned by a person listed in a register, maintained by the DBS, of persons likely to ask exempted questions: subsection (2)(a), read with section 120. (c) The application is accompanied by a statement by the registered person that the certificate is required for the purposes of an exempted question asked for a prescribed purpose: subsection (2)(b). (d) An exempted question is a question to which exemption from protection arises under the 1975 Order: subsection (9) and section 113A(6). (e) A prescribed purpose is a purpose prescribed in regulation 5A of the Police Act 1997 (Criminal Records) Regulations 2002 (SI 2002/233) (as inserted by paragraph 1 of Schedule 1 to the Police Act 1997 (Criminal Records) (Amendment) Regulations 2006 (SI 2006/748)) which sets out a list overlapping with, but not co extensive with, the list in article 3 of the 1975 Order, of situations in which the registered person proposes to consider the applicants suitability for a specified position of trust or sensitivity. 12. [It is] convenient to regard both the exceptional obligation of a person to disclose a spent conviction or a caution under the 1975 Order and the obligation of the DBS to make disclosure of it by an ECRC under the 1997 Act as running in parallel. But the parallel is not exact. For the obligation of the DBS to make disclosure under an ECRC is, at the same time, both wider than the obligation of the person in terms of its inclusion of soft intelligence and yet narrower in that it arises only in circumstances in which the application is countersigned by a registered person who states that the certificate is required for a prescribed purpose. There will therefore be cases in which, although the questioned person is not exempt from a duty of disclosure, the questioner is not entitled to call for an ECRC. Nevertheless, the shape of the 1975 Order is certainly reflected in the 1997 Act: for, if the prescribed circumstances surrounding the application for the ECRC are present, the duty of the DBS is to disclose even spent convictions and cautions irrespective of the circumstances in which they arose. In summary, the 1997 Act provided for the mandatory disclosure of all convictions and cautions on a persons record if the conditions for the issue of a certificate were satisfied. Section 113A(7) empowered the Secretary of State to amend by Order the definition of relevant matters falling to be disclosed. With effect from March 2014, this power was exercised so as to introduce a more selective system for disclosure by the Disclosure and Barring Service: Police Act 1997 (Criminal Record Certificates: Relevant Matters) (Amendment) (England and Wales) Order 2013 (SI 2013/1200). Similar changes were made in Northern Ireland with effect from April 2014 by the Police Act 1997 (Criminal Record Certificates: Relevant Matters) (Amendment) Order (Northern Ireland) 2014 (SI 2014/100). The effect of the amendments was to limit the disclosure of convictions and cautions under sections 113A and 113B of the Police Act to (i) convictions and cautions for any of a list of more serious offences, generally violent or sexual, contained in section 113A(6D); (ii) convictions which resulted in a custodial sentence; (iii) other convictions or cautions if they were still current, ie had occurred within a specified period before the issue of the certificate, viz 11 years in the case of an adult and five and a half years in the case of a minor; and (iv) all convictions and cautions where the person has more than one conviction. Broadly corresponding limitations were imposed on the convictions and cautions which had to be disclosed under the Rehabilitation of Offenders Act 1974: see Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (Amendment) (England and Wales) Order 2013 (SI 2013/1198), and Rehabilitation of Offenders (Exceptions) (Amendment) Order (Northern Ireland) 2014 (SI 2014/27). Section 4(2) and (3) of the Rehabilitation of Offenders Act 1974 are not in terms confined to disclosures in the course of job applications. These are, however, much the most significant occasions on which the disclosure of a criminal record is likely to be required, and it is clear that it was primarily with that context in mind that Parliament enacted section 4. It follows that in conferring power on the Secretary of State, by section 4(4), to exclude the operation of sections 4(2) and 4(3) in specified circumstances, Parliament envisaged that there would be occupations in respect of which convictions should be disclosed to a potential employer, professional body or appointing authority notwithstanding that they were spent and notwithstanding that the convicted person might be prejudiced by their disclosure. The scheme for the disclosure of criminal records by the Disclosure and Barring Service (or AccessNI in Northern Ireland) under the Police Act 1997 is carefully tailored to match the disclosure obligations of the person whose record is in question. Under sections 113A(6) and 113B(9) of the Police Act 1997, where the question is asked in circumstances excluded from the operation of the Rehabilitation of Offenders Act 1974 under section 4(4) of the latter Act, it will fall to be disclosed by the Disclosure and Barring Service (or AccessNI in Northern Ireland) notwithstanding that it is spent. This is a coherent scheme of legislation which acknowledges both of the competing public interests to which I have referred, and seeks to achieve a balance between them. Those interests are not only competing but incommensurate. In the nature of things, wherever the line is drawn, it will not be satisfactory from every point of view. The whole issue raises classic policy dilemmas. The underlying policy is precautionary, in line with strong public expectations. The question is whether in adopting that approach the appellants contravened the European Convention on Human Rights. Article 8 of the Human Rights Convention Article 8 provides: Right to respect for private and family life (1) Everyone has the right to respect for his private and family life, his home and his correspondence. (2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. It is not disputed that article 8 is engaged. It confers a qualified right of privacy, subject to important exceptions for measures which are (i) in accordance with the law, and (ii) necessary in a democratic society in the interests of public safety for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights of others. Conditions (i) and (ii) impose tests of a very different character, with very different consequences. Condition (i) is concerned with the legal basis for any measure which interferes with the right of privacy. Any such measure must not only have some legal basis in domestic law, but must be authorised by something which can properly be characterised as law. This is an absolute requirement. In meeting it, Convention states have no margin of appreciation under the Convention, and the executive and the legislature have no margin of discretion or judgment under domestic public law. Only if the test of legality is satisfied does the question arise whether the measures in question are necessary for some legitimate purpose and represent a proportionate means of achieving that purpose. The Court of Appeal in England in R (P) v Secretary of State for Justice, R (G) v Chief Constable of Surrey Police and R (W) v Comr of Police of the Metropolis [2018] 1 WLR 3281, and the Court of Appeal in Northern Ireland in In re Gallaghers Application [2016] NICA 42, upheld the respondents cases. Although the reasons of both courts were substantially the same, the fullest analysis of the law is to be found in the judgment of Sir Brian Leveson P in the English cases. He rejected the submission that the Convention required a system of review that would enable each case to be assessed on its own facts. But he held, first, that the legislation was not in accordance with the law because, although it discriminated between different categories of offence and convictions, the categories were still too broad. They embraced offences of widely differing relevance, and were therefore liable to operate arbitrarily in a significant number of cases. In particular, he regarded as inconsistent with the legality test: (i) the rule which made all convictions disclosable if there was more than one, because it failed to distinguish between cases which disclosed a relevant pattern of offending and those which did not; and (ii) the rule that required the disclosure of specified serious offences, because it was insufficiently calibrated so as to ensure that the proportionality of the interference is adequately examined: [2018] 1 WLR 3281, para 45. Even if the legislation had passed the legality test, the scheme would have been disproportionate to its objective because it was insufficiently granular in distinguishing between convictions and cautions of varying degrees of relevance. It will be seen that the reasons why, in his view, the legislation failed the legality and proportionality tests were substantially the same. The scheme was more discriminating than its predecessor, but not discriminating enough. In accordance with the law The respondents submit that because the categories of disclosable conviction or caution are (they say) too wide, and not subject to individual review, the legislation does not have the quality of law. Before I examine this submission in the light of the authorities, it is right to draw attention to some of its more far reaching consequences if it is correct. In the first place, it means that the legislation is incompatible with article 8, however legitimate its purpose, and however necessary or proportionate it may be to deal with the problem in this particular way. That conclusion would plainly have significant implications for the protective functions of the state, especially in relation to children and vulnerable adults. Secondly, it must be remembered that the condition of legality is not a question of degree. The measure either has the quality of law or it does not. It is a binary test. This is because it relates to the characteristics of the legislation itself, and not just to its application in any particular case: see Kruslin v France (1990) 12 EHRR 547, paras 31 32. It follows that if the legislation fails the test of legality, it is incompatible with the Convention not just as applied to those convicted of minor offences like these respondents, but to the entire range of ex offenders including, for example, convicted child molesters, rapists and murderers. Thirdly, this consequence cannot be confined to the right of privacy. Most Convention rights are qualified by reference to various countervailing public interests. These qualifications are fundamental to the scheme of the Convention. They are what makes it possible to combine a high level of protection of human rights with legitimate measures for the protection of the public against real threats to their welfare and security. For that reason, exceptions corresponding to those in article 8 attach to a number of other Convention rights. They too must also have a proper basis in law. It is fair to say that the jurisprudence of the Strasbourg court has been especially sensitive to the keeping of files on individuals by the state, a practice which was gravely abused by the authoritarian regimes of the 20th century in most of continental Europe. This sensitivity explains why the right of privacy has been extended from covert and intrusive surveillance to the recording of things which would not be regarded as private in any other context, for example participation in demonstrations in public places (Segerstedt Wiberg v Sweden (2007) 44 EHRR 2, para 72) and even public acts of the state itself, such as criminal convictions in an open court of law (MM v United Kingdom (Application 24029/07), 29 April 2013, at para 188). But the question what constitutes law is the same whatever the subject matter. Neither the Strasbourg court nor the courts of the United Kingdom have ever suggested that the condition of legality applies in any different way in article 8 as compared with other articles. In principle, therefore, whatever conclusion we reach in this case about the scope of the condition of legality must apply equally to the exceptions to article 5 (right to liberty and security), article 9 (freedom of thought, conscience and religion), article 10 (freedom of expression), and article 11 (freedom of assembly and association). In none of these articles would there be any scope for distinctions based on judgment or discretion or weighing of broader public interests, even on the most compelling grounds, once the relevant measure failed the respondents exacting test of legality. Nonetheless, the respondents submit that the issue was resolved in their favour by the decision of this court in R (T) v Chief Constable of Greater Manchester Police [2015] AC 49, and that submission was accepted by the courts below. The argument is that, as applied to legislation which applies indiscriminately to a wide range of potentially very different circumstances, T is authority for the proposition that the test of legality requires that the legislation should include safeguards against its arbitrary application, by which is meant the disclosure of matters manifestly irrelevant to an ex offenders suitability for employment. T is a recent and considered decision of this court about an earlier version of the statutory scheme before us now. If it means what the respondents submit that it means, it is our duty to follow it unless (which is not suggested) Practice Statement (Judicial Precedent) [1966] 1 WLR 1234 applies. The decision, however, needs to be properly understood in the light of the substantial body of Strasbourg case law on which it was expressly based and the particular domestic legislation with which it was concerned. It is well established that law in the Human Rights Convention has an extended meaning. In two judgments delivered on the same day, Huvig v France (1990) 12 EHRR 528, at para 26, and Kruslin v France (1990) 12 EHRR 547, para 27, the European Court of Human Rights set out what has become the classic definition of law in this context: The expression in accordance with the law, within the meaning of article 8.2, requires firstly that the impugned measure should have some basis in domestic law; it also refers to the quality of the law in question, requiring that it should be accessible to the person concerned, who must moreover be able to foresee its consequences for him, and compatible with the rule of law. Huvig and Kruslin established a dual test of accessibility and foreseeability for any measure which is required to have the quality of law. That test has continued to be cited by the Strasbourg court as the authoritative statement of the meaning of law in very many subsequent cases: see, for example, most recently, Catt v United Kingdom (Application No 43514/15, 24 January 2019). The accessibility test speaks for itself. For a measure to have the quality of law, it must be possible to discover, if necessary with the aid of professional advice, what its provisions are. In other words, it must be published and comprehensible. The requirement of foreseeability, so far as it adds to the requirement of accessibility, is essentially concerned with the principle summed up in the adage of the American founding father John Adams, a government of laws and not of men. A measure is not in accordance with the law if it purports to authorise an exercise of power unconstrained by law. The measure must not therefore confer a discretion so broad that its scope is in practice dependent on the will of those who apply it, rather than on the law itself. Nor should it be couched in terms so vague or so general as to produce substantially the same effect in practice. The breadth of a measure and the absence of safeguards for the rights of individuals are relevant to its quality as law where the measure confers discretions, in terms or in practice, which make its effects insufficiently foreseeable. Thus a power whose exercise is dependent on the judgment of an official as to when, in what circumstances or against whom to apply it, must be sufficiently constrained by some legal rule governing the principles on which that decision is to be made. But a legal rule imposing a duty to take some action in every case to which the rule applies does not necessarily give rise to the same problem. It may give rise to a different problem when it comes to necessity and proportionality, but that is another issue. If the question is how much discretion is too much, the only legal tool available for resolving it is a proportionality test which, unlike the test of legality, is a question of degree. This much is clear not only from the Huvig and Kruslin judgments themselves, but from the three leading decisions on the principle of legality on which the Strasbourg courts statement of principle in those cases was founded, namely Sunday Times v United Kingdom (1979 80) 2 EHRR 245, Silver v United Kingdom (1983) 5 EHRR 347 and Malone v United Kingdom (1985) 7 EHRR 14. Sunday Times v United Kingdom (1979 80) 2 EHRR 245 was the first occasion on which the Strasbourg court addressed the test of legality. It was not a privacy case, but a case about freedom of expression in the context of the English law of contempt of court. The requirement of foreseeability was summarised by the court as follows at para 49: A norm cannot be regarded as a law unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able if need be with appropriate advice to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. In Silver v United Kingdom (1983) 5 EHRR 347, para 85, the Strasbourg court adopted this definition and applied it to a complaint of interference with prisoners correspondence, contrary to article 8. The court observed at para 88 that the need for precision in the Sunday Times case meant that a law which confers a discretion must indicate the scope of that discretion. It was in that context that the court addressed the question of safeguards, at para 90: The applicants further contended that the law itself must provide safeguards against abuse. The Government recognised that the correspondence control system must itself be subject to control and the court finds it evident that some form of safeguards must exist. One of the principles underlying the Convention is the rule of law, which implies that an interference by the authorities with an individuals rights should be subject to effective control. This is especially so where, as in the present case, the law bestows on the executive wide discretionary powers, the application whereof is a matter of practice which is susceptible to modification but not to any Parliamentary scrutiny. In Silver, interference with prisoners correspondence was authorised as a matter of domestic law by the Prison Rules, a statutory instrument which conferred an unlimited discretion on the Secretary of State to impose restrictions on prisoners correspondence for certain broadly stated purposes. It also required the Secretary of States consent to correspondence with anyone other than a close relative and empowered the prison governor to at his discretion, stop any letter or communication on the ground that its contents are objectionable or that it is of inordinate length. These discretions were regulated by internal administrative instructions which, however, were neither published nor available to prisoners. The relevant restrictions were held not to be in accordance with the law because in some cases the actual measure of interference complained of was not foreseeable and in others the rule under which the stopping was effected could not itself be foreseen. A fuller statement of the same principle appeared in the important judgment in Malone v United Kingdom (1985) 7 EHRR 14. The context was telephone tapping, which under the system then in operation in the United Kingdom was authorised by warrants of the Home Secretary under purely administrative powers with no statutory basis. The power exercisable by the Home Secretary was agreed to be lawful as a matter of domestic law, but no law constrained or limited his discretion. After reciting the Sunday Times test, the court continued at para 67: The court would reiterate its opinion that the phrase in accordance with the law does not merely refer back to domestic law but also relates to the quality of the law, requiring it to be compatible with the rule of law, which is expressly mentioned in the preamble to the Convention. The phrase thus implies and this follows from the object and purpose of article 8 that there must be a measure of legal protection in domestic law against arbitrary interferences by public authorities with the rights safeguarded by paragraph (1). Especially where a power of the executive is exercised in secret, the risks of arbitrariness are evident. the law must be sufficiently clear in its terms to give citizens an adequate indication as to the circumstances in which and the conditions on which public authorities are empowered to resort to this secret and potentially dangerous interference with the right to respect for private life and correspondence. The court then referred to its earlier observations in Silver about unconstrained discretion. At para 68, it observed: The degree of precision required of the law in this connection will depend upon the particular subject matter. Since the implementation in practice of measures of secret surveillance of communications is not open to scrutiny by the individuals concerned or the public at large, it would be contrary to the rule of law for the legal discretion granted to the executive to be expressed in terms of an unfettered power. Consequently, the law must indicate the scope of any such discretion conferred on the competent authorities and the manner of its exercise with sufficient clarity, having regard to the legitimate aim of the measure in question, to give the individual adequate protection against arbitrary interference. Accordingly, at para 70, the court identified the issue before them as being whether, under domestic law, the essential elements of the power to intercept communications were laid down with reasonable precision in accessible legal rules that sufficiently indicated the scope and manner of exercise of the discretion conferred on the relevant authorities. This issue was considered under two heads in the pleadings: firstly whether the law was such that a communication passing through the services of the Post Office might be intercepted, for police purposes, only pursuant to a valid warrant issued by the Secretary of State and, secondly, to what extent the circumstances in which a warrant might be issued and implemented were themselves circumscribed by law. The system was held not to be in accordance with the law because it failed the second of these tests. The circumstances in which the Home Secretary might issue a warrant were not sufficiently defined. The court summarised the reasons at para 79: in its present state the law in England and Wales governing interception of communications for police purposes is somewhat obscure and open to differing interpretations. it cannot be said with any reasonable certainty what elements of the powers to intercept are incorporated in legal rules and what elements remain within the discretion of the executive. In the opinion of the court, the law of England and Wales does not indicate with reasonable clarity the scope and manner of exercise of the relevant discretion conferred on the public authorities. To that extent, the minimum degree of legal protection to which citizens are entitled under the rule of law in a democratic society is lacking. Later, at para 87, the court made a similar criticism of the practice of metering, ie the recording of numbers dialled and the duration of calls, but not their content: there would appear to be no legal rules concerning the scope and manner of exercise of the discretion enjoyed by the public authorities. Consequently, although lawful in terms of domestic law, the interference resulting from the existence of the practice in question was not in accordance with the law, within the meaning of article 8(2). The French system for tapping telephones was criticised on broadly similar grounds in Huvig and Kruslin. In the latter case, at paras 35 36, the court observed: 35. Above all, the system does not for the time being afford adequate safeguards against various possible abuses. For example, the categories of people liable to have their telephones tapped by judicial order and the nature of the offences which may give rise to such an order are nowhere defined. Nothing obliges a judge to set a limit on the duration of telephone tapping. Similarly unspecified are the procedure for drawing up the summary reports containing intercepted conversations; the precautions to be taken in order to communicate the recordings intact and in their entirety for possible inspection by the judge (who can hardly verify the number and length of the original tapes on the spot) and by the defence; and the circumstances in which recordings may or must be erased or the tapes be destroyed, in particular where an accused has been discharged by an investigating judge or acquitted by a court. The information provided by the Government on these various points shows at best the existence of a practice, but a practice lacking the necessary regulatory control in the absence of legislation or case law. 36. In short, French law, written and unwritten, does not indicate with reasonable clarity the scope and manner of exercise of the relevant discretion conferred on the public authorities. This was truer still at the material time, so that Mr Kruslin did not enjoy the minimum degree of protection to which citizens are entitled under the rule of law in a democratic society (see the Malone judgment previously cited, Series A no 82, p 36, para 79). There has therefore been a breach of article 8 of the Convention. In three notable later cases, Amann v Switzerland (2000) 30 EHRR 843, Rotaru v Romania (2000) 8 BHRC 449 and S v United Kingdom (2009) 48 EHRR 50, the same principles were applied to the retention in police records of personal information. Amann was another case about phone tapping. The court held that the retention of the fruits of a tap in police files did not satisfy the legality test even on the footing that the tap itself was in accordance with law. The decision was expressed to be based on the statement of principle in Malone (para 56), and on a finding (para 62) that Swiss law does not indicate with sufficient clarity the scope and conditions of exercise of the authorities discretionary power in the area under consideration. In Rotaru, the applicant objected to the retention on the files of the Romanian state security service of information, some of it false, about his dissident activities in the early years of the post war communist regime nearly half a century before. His case (see para 50), which was upheld by the Grand Chamber, was that this was not in accordance with the law, since domestic law was not sufficiently precise to indicate to citizens in what circumstances and on what terms the public authorities were empowered to file information on their private life and make use of it. Furthermore, domestic law did not define with sufficient precision the manner of exercise of those powers and did not contain any safeguards against abuses. The judgment is of particular interest because it addresses the requirement that there should be safeguards established by law which apply to the supervision of the relevant services activities (para 59). After examining the relevant domestic law, which conferred broad discretionary powers on the security service, and concluding that there were no safeguards, the court stated its conclusion as follows at para 61: That being so, the court considers that domestic law does not indicate with reasonable clarity the scope and manner of exercise of the relevant discretion conferred on the public authorities. Finally, in S, the complaint was about the retention of DNA samples taken from suspects who had subsequently been acquitted. At para 95, the court observed: The court recalls its well established case law that the wording in accordance with the law requires the impugned measure both to have some basis in domestic law and to be compatible with the rule of law, which is expressly mentioned in the Preamble to the Convention and inherent in the object and purpose of article 8. The law must thus be adequately accessible and foreseeable, that is, formulated with sufficient precision to enable the individual if need be with appropriate advice to regulate his conduct. For domestic law to meet these requirements, it must afford adequate legal protection against arbitrariness and accordingly indicate with sufficient clarity the scope of discretion conferred on the competent authorities and the manner of its exercise (see Malone v United Kingdom (1985) 7 EHRR 14, paras 66 68; Rotaru v Romania (2000) 8 BHRR 449, para 55; and Amann v Switzerland (2000) 30 EHRR 843, para 56). (See also Kvasnica v Slovakia (Application No 72094/01), 9 June 2009, para 79 and Dragojevi v Croatia (Application No 68955/11), 15 Jan 2015, at paras 80 83.) As can be seen from these citations, from the outset the Strasbourg court has treated the need for safeguards as part of the requirement of foreseeability. It has applied it as part of the principle of legality in cases where a discretionary power would otherwise be unconstrained and lack certainty of application. This may be illustrated by reference to the subsequent decisions in Liberty v United Kingdom (2009) 48 EHRR 1 and Gillan v United Kingdom (2010) 50 EHRR 45. Liberty concerned the bulk interception of telephone communications passing through submarine cables terminating in the United Kingdom. There was statutory authority for the interception, but as the court pointed out at para 69, the legal framework did not have the quality of law. This was because the court does not consider that the domestic law at the relevant time indicated with sufficient clarity, so as to provide adequate protection against abuse of power, the scope or manner of exercise of the very wide discretion conferred on the state to intercept and examine external communications. In particular, it did not, as required by the courts case law, set out in a form accessible to the public any indication of the procedure to be followed for selecting for examination, sharing, storing and destroying intercepted material. Similarly, in Gillan, at para 77, the connection between the principle of legality and the existence of unconstrained discretion was reasserted in the context of stop and search powers. The court observed of the dual test of accessibility and foreseeability at para 77: For domestic law to meet these requirements it must afford a measure of legal protection against arbitrary interferences by public authorities with the rights safeguarded by the Convention. In matters affecting fundamental rights it would be contrary to the rule of law, one of the basic principles of a democratic society enshrined in the Convention, for a legal discretion granted to the executive to be expressed in terms of an unfettered power. Consequently, the law must indicate with sufficient clarity the scope of any such discretion conferred on the competent authorities and the manner of its exercise. The level of precision required of domestic legislation which cannot in any case provide for every eventuality depends to a considerable degree on the content of the instrument in question, the field it is designed to cover and the number and status of those to whom it is addressed. MM v United Kingdom It is against that background that one must approach the decision in MM v United Kingdom (Application No 24029/07), 29 April 2013. The case concerned the retention and disclosure by the police of records of cautions in Northern Ireland. The applicant had received a caution for child abduction in 2000 in unusual circumstances which provided very strong mitigation. Its disclosure had nevertheless resulted in the failure of two applications for jobs involving care work. She had accepted the caution on an assurance that it would be deleted from police records after five years, which was the practice at the time. But the practice subsequently changed, and her attempts in 2006 and 2007 to have the caution deleted were unsuccessful. The gravamen of her complaint was not about the past disclosures, but about the retention of the caution on police files, which exposed her to the risk of disclosure in future whenever she applied for a job requiring a criminal record certificate. Much of the analysis of the Strasbourg court needs to be understood in that light. The Strasbourg court examined in detail the complex and changing legal basis on which criminal records were handled in Northern Ireland. There were three stages of the process to be considered, namely (i) collection of data, (ii) its retention in the records of the authorities, and (iii) its disclosure to third parties. At the time when the caution was given, convictions in Northern Ireland were recorded under statutory regulations but the record was retained and disclosed under common law powers. The regime governing cautions was different. They were recorded as well as retained and disclosed under common law powers. The only legal limitation on the exercise of these powers was the Data Protection Act 1998. On 1 April 2008, the system was changed when Part V of the Police Act 1997 was brought into force in Northern Ireland by the Police Act 1997 (Commencement No 11) Order (SI 2008/692). This introduced to Northern Ireland the system (already in force in England and Wales) under which the disclosure of all recorded and retained convictions and cautions, including warnings and reprimands, was mandatory. It did not affect the recording or retention of cautions, which continued to be governed by common law powers. The new regime in Northern Ireland was relevant to MMs case because the Police Act would thereafter have applied to the disclosure of her caution in connection with any fresh job application after April 2008. The Strasbourg court was invited by the United Kingdom government to treat as part of the legal framework governing collection and retention of data the statutory Code of Practice for the Management of Police Information, issued by the Secretary of State in 2005 under section 39A of the Police Act 1996. This established general standards for the management of police information, and provided for the issue of Guidance by the Association of Chief Police Officers (ACPO) in 2006 and 2010 which police forces were required to comply with. These documents, however, applied directly only in England and Wales. As the court noted at para 33, although the statutory Code of Practice was available for adoption by police forces elsewhere, it was not clear that it had been adopted in Northern Ireland. (In any event, since section 39A of the Police Act 1996 did not extend to Northern Ireland, it could have had only administrative and not statutory force there.) The court held that the scheme did not have the quality of law, either before or after April 2008. The principle on which it proceeded was stated at the outset of its analysis, at para 193, by reference to the dual requirements of accessibility and foreseeability derived from its earlier case law, including Malone and Liberty: The law must thus be adequately accessible and foreseeable, that is, formulated with sufficient precision to enable the individual if need be with appropriate advice to regulate his conduct. For domestic law to meet these requirements, it must afford adequate legal protection against arbitrariness and accordingly indicate with sufficient clarity the scope of discretion conferred on the competent authorities and the manner of its exercise. The pre 2008 position in Northern Ireland as regards cautions was an obvious example of unconstrained discretionary power. For present purposes, however, the judgment is mainly of interest for its treatment of the position in Northern Ireland after April 2008 under the Police Act 1997. MM contended that the caution should have been deleted so as not to be available for disclosure under the new regime. The court recorded (para 195) its view that article 8 was engaged by the whole process of collection, retention, use and disclosure of data on police files. It recognised (para 199) that there may be a need for a comprehensive record of all cautions, conviction, warnings, reprimands, acquittals and even other information of the nature currently disclosed pursuant to section 113B(4) of the 1997 Act. However, as the court went on to observe at para 200: the greater the scope of the recording system, and thus the greater the amount and sensitivity of data held and available for disclosure, the more important the content of the safeguards to be applied at the various crucial stages in the subsequent processing of the data. In other words, the considerations that were relevant to each of the three stages were interrelated, because the greater the volume or significance of the data retained, the more important it was to restrict its disclosure. It followed that for the statutory scheme to have the quality of law, it was not enough that the circumstances in which disclosure was authorised were sufficiently defined by law. This merely pushed the issue back to the earlier stages of collection and storage of data. In R (Catt) v Association of Chief Police Officers of England and Wales and Northern Ireland [2015] AC 1065, para 15, I suggested that the Strasbourg court in MM had found disclosure of convictions under sections 113A and 113B not to be in accordance with law because it was mandatory. It would have been more accurate to say that it was because its mandatory disclosure meant that the scheme as a whole was not in accordance with law, which is the third point made at para 16. If collection and retention continued to be subject to an unconstrained discretion, the result was that the bank of data available for mandatory disclosure was variable according to the judgment of the police and did not have the necessary quality of foreseeability. In MM, the court regarded the system of recording and retention of criminal convictions in Northern Ireland as indiscriminate and open ended: see para 199. It went on to say that such a system is unlikely to comply with the requirements of article 8 in the absence of clear and detailed statutory regulations clarifying the safeguards applicable and setting out the rules governing, inter alia, the circumstances in which data can be collected, the duration of their storage, the use to which they can be put and the circumstances in which they may be destroyed. The problem, as the court pointed out at para 202, was that both before and after April 2008, there was no legislation, primary or secondary, governing the collection and retention of cautions, apart from the Data Protection Act. In the view of the court, the guidance of the ACPO, which had no statutory basis in Northern Ireland, did not sufficiently fill the gap. The courts conclusion was stated at paras 206 207: 206. In the present case, the court highlights the absence of a clear legislative framework for the collection and storage of data, and the lack of clarity as to the scope, extent and restrictions of the common law powers of the police to retain and disclose caution data. It further refers to the absence of any mechanism for independent review of a decision to retain or disclose data, either under common law police powers or pursuant to Part V of the 1997 Act. Finally, the court notes the limited filtering arrangements in respect of disclosures made under the provisions of the 1997 Act: as regards mandatory disclosure under section 113A, no distinction is made on the basis of the nature of the offence, the disposal in the case, the time which has elapsed since the offence took place or the relevance of the data to the employment sought. 207. The cumulative effect of these shortcomings is that the court is not satisfied that there were, and are, sufficient safeguards in the system for retention and disclosure of criminal record data to ensure that data relating to the applicants private life have not been, and will not be, disclosed in violation of her right to respect for her private life. The retention and disclosure of the applicants caution data accordingly cannot be regarded as being in accordance with the law. In the most recent decision of the Strasbourg court, Catt v United Kingdom (Application No 43514/15), MM was treated at para 94 as authority for the following proposition: 94. As the court has recalled the expression in accordance with the law not only requires the impugned measure to have some basis in domestic law, but also refers to the quality of the law in question, requiring that it should be accessible to the person concerned and foreseeable as to its effects. For domestic law to meet these requirements, it must afford adequate legal protection against arbitrariness and accordingly indicate with sufficient clarity the scope and discretion conferred on the competent authorities and the manner of its exercise (see, among other authorities, MM v United Kingdom, no 24029/07, para 193, 13 November 2012 with further references). In other words, an excessively broad discretion in the application of a measure infringing the right of privacy is likely to amount to an exercise of power unconstrained by law. It cannot therefore be in accordance with law unless there are sufficient safeguards, exercised on known legal principles, against the arbitrary exercise of that discretion, so as to make its application reasonably foreseeable. Domestic case law This is, moreover, the analysis which the English courts have given the Strasbourg case law. Lord Bingham put the matter in this way: In R (Gillan) v Comr of Police for the Metropolis [2006] 2 AC 307, para 34, The lawfulness requirement in the Convention addresses supremely important features of the rule of law. The exercise of power by public officials, as it affects members of the public, must be governed by clear and publicly accessible rules of law. The public must not be vulnerable to interference by public officials acting on any personal whim, caprice, malice, predilection or purpose other than that for which the power was conferred. This is what, in this context, is meant by arbitrariness, which is the antithesis of legality. Lord Hope observed that the Conventions concept of law In R (Purdy) v Director of Public Prosecutions [2010] 1 AC 345, at para 41, implies qualitative requirements, including those of accessibility and foreseeability. Accessibility means that an individual must know from the wording of the relevant provision and, if need be, with the assistance of the courts interpretation of it what acts and omissions will make him criminally liable: see also Glmez v Turkey (Application No 16330/02) (unreported) given 20 May 2008, para 49. The requirement of foreseeability will be satisfied where the person concerned is able to foresee, if need be with appropriate legal advice, the consequences which a given action may entail. A law which confers a discretion is not in itself inconsistent with this requirement, provided the scope of the discretion and the manner of its exercise are indicated with sufficient clarity to give the individual protection against interference which is arbitrary: Goodwin v United Kingdom (1996) 22 EHRR 123, para 31; Sorvisto v Finland, para 112. He went on to point out that by this test the Suicide Act 1961, which indiscriminately criminalised aiding and abetting, counselling or procuring the suicide of another in all circumstances without exception was in accordance with law because the statute sufficiently disclosed what a person had to do to comply with it. R (T) v Chief Constable of Greater Manchester Police R (T) v Chief Constable of Greater Manchester Police [2015] AC 49 concerned the regime governing disclosure of criminal records in England as it stood before the changes introduced with effect from March 2014. This court held that that regime lacked the quality of law. The leading judgment on this point was delivered by Lord Reed, with whom Lord Neuberger, Baroness Hale and Lord Clarke agreed. There was very little discussion of the Northern Ireland system for managing criminal records considered in MM, because Lord Reed proceeded on the basis that the English legislation under consideration was indistinguishable from it: see paras 100, 119. This was not entirely correct. As I have explained, the Code of Practice and associated ACPO Guidance governing the management of police information in England had statutory force in England but not in Northern Ireland. But for reasons which will appear, I do not think that that difference was critical to the outcome, either in MM or in T. The essence of Lord Reeds reasoning appears at paras 113, 114 and 119 of the judgment: 113. As long ago as 1984, the court said in Malone v United Kingdom 7 EHRR 14, in the context of surveillance measures, that the phrase in accordance with the law implies that the law must give the individual adequate protection against arbitrary interference: para 68. In Kopp v Switzerland (1998) 27 EHRR 91, para 72, it stated that since the surveillance constituted a serious interference with private life and correspondence, it must be based on a law that was particularly precise: It is essential to have clear, detailed rules on the subject, especially as the technology available for use is continually becoming more sophisticated. These statements were reiterated in Amann v Switzerland 30 EHRR 843. As I have explained, that approach to the question whether the measure provides sufficient protection against arbitrary interference was applied, in the context of criminal records and other intelligence, in Rotaru v Romania, where the finding that the interference was not in accordance with the law was based on the absence from the national law of adequate safeguards. The condemnation of Part V of the 1997 Act in MM v United Kingdom is based on an application of the same approach. Put shortly, legislation which requires the indiscriminate disclosure by the state of personal data which it has collected and stored does not contain adequate safeguards against arbitrary interferences with article 8 rights. 114. This issue may appear to overlap with the question whether the interference is necessary in a democratic society: a question which requires an assessment of the proportionality of the interference. These two issues are indeed inter linked, as I shall explain, but their focus is different. Determination of whether the collection and use by the state of personal data was necessary in a particular case involves an assessment of the relevancy and sufficiency of the reasons given by the national authorities. In making that assessment, in a context where the aim pursued is likely to be the protection of national security or public safety, or the prevention of disorder or crime, the court allows a margin of appreciation to the national authorities, recognising that they are often in the best position to determine the necessity for the interference. As I have explained, the courts focus tends to be on whether there were adequate safeguards against abuse, since the existence of such safeguards should ensure that the national authorities have addressed the issue of the necessity for the interference in a manner which is capable of satisfying the requirements of the Convention. In other words, in order for the interference to be in accordance with the law, there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined. Whether the interference in a given case was in fact proportionate is a separate question. 119. In the light of the judgment in MM v United Kingdom, it is plain that the disclosure of the data relating to the respondents cautions is an interference with the right protected by article 8.1. The legislation governing the disclosure of the data, in the version with which these appeals are concerned, is indistinguishable from the version of Part V of the 1997 Act which was considered in MM. That judgment establishes, in my opinion persuasively, that the legislation fails to meet the requirements for disclosure to constitute an interference in accordance with the law. That is so, as the court explained in MM, because of the cumulative effect of the failure to draw any distinction on the basis of the nature of the offence, the disposal in the case, the time which has elapsed since the offence took place or the relevance of the data to the employment sought, and the absence of any mechanism for independent review of a decision to disclose data under section 113A. This decision is treated by the respondents as authority for the proposition that a measure may lack the quality of law even where there is no relevant discretion and the relevant rules are precise and entirely clear, if the categories requiring to be disclosed are simply too broad or insufficiently filtered. I do not accept this submission. In the first place, it is hardly conceivable that Lord Reed intended to effect a revolution in this branch law the law, with such far reaching results, and without acknowledging the fact. On the contrary, it is clear that he did not. He regarded himself as applying the established case law of the Strasbourg court. All of the Strasbourg decisions on which he based his analysis, notably Kopp, Malone, Rotaru, Amann and MM, had been expressly based on the classic dual test of accessibility and foreseeability. In particular, Lord Reed regarded the decision in MM as reflecting the earlier jurisprudence. In all of these cases, safeguards were said to be required in order to constrain administrative discretions which, unless constrained, undermined the foreseeability of the relevant measures. Lord Reeds reference to the need for precision if something is to have the character of law shows that he had the foreseeability test well in mind. He is echoing the observations in Sunday Times, (para 49), Silver (para 88) and Malone (para 70), that a person must be able to discover from the law itself precisely what effect, in the circumstances of his case, its application will have upon him. Secondly, in distinguishing between the legality test and the proportionality test, Lord Reed pointed out at para 114 that: in order for the interference to be in accordance with the law, there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined. I agree. This paragraph is part of Lord Reeds defence of the decision in MM against the criticisms of counsel for the Secretary of State. The point which he is making is that the principle of legality is concerned with the quality of the domestic measure whereas the proportionality test is usually concerned with its application in particular cases. Unless the domestic measure has sufficient clarity and precision for its effect to be foreseeable from its terms, it is impossible for the court to assess its proportionality as applied to particular cases. But if the effect of the measure in particular cases is clear from its terms, there is no problem in assessing its proportionality. Thirdly, at para 119, where Lord Reed explains his disposal of the appeal, he is expressly applying MM. That decision, as I have pointed out, had been based on the perceived absence of a clear legislative framework for the collection and storage of data (emphasis supplied) which would fall to be mandatorily disclosed under sections 113A and 113B of the Police Act 1997. The absence of any clear legislative framework for the recording and retention of criminal records meant that the body of data falling to be mandatorily disclosed was of uncertain content. The uncertain character of the system for retaining criminal records affected the lawfulness of their disclosure. Hence the relevance of the indiscriminate character of the disclosure which Lord Reed criticises at para 119. In a precedent based system, the reasoning of judges has to be approached in the light of the particular problem which was before them. There is a danger in treating a judges analysis of that problem as a general statement of principle applicable to a whole area of law. Lord Reeds observations in T cannot in my opinion be applied generally to the whole relationship between legality and proportionality in the Convention, even in cases where the relevant domestic rule satisfied the tests of accessibility and foreseeability. It is noticeable that the principle of legality was stated in narrower terms by Baroness Hale, Lord Reed and Lord Hodge in their joint judgment in Christian Institute v Lord Advocate [2016] UKSC 51. They put it in this way at paras 79 80: 79. In order to be in accordance with the law under article 8(2) of the ECHR, the measure must not only have some basis in domestic law which it has in the provisions of the Act of the Scottish Parliament but also be accessible to the person concerned and foreseeable as to its effects. These qualitative requirements of accessibility and foreseeability have two elements. First, a rule must be formulated with sufficient precision to enable any individual if need be with appropriate advice to regulate his or her conduct (The Sunday Times v United Kingdom, para 49; Gillan v United Kingdom, para 76). Secondly, it must be sufficiently precise to give legal protection against arbitrariness: [I]t must afford a measure of legal protection against arbitrary interferences by public authorities with the rights safeguarded by the Convention. In matters affecting fundamental rights it would be contrary to the rule of law . for a legal discretion granted to the executive to be expressed in terms of an unfettered power. Consequently, the law must indicate with sufficient clarity the scope of any discretion conferred on the competent authorities and the manner of its exercise. The level of precision required of domestic legislation which cannot in any case provide for every eventuality depends to a considerable degree on the content of the instrument in question, the field it is designed to cover and the number and status of those to whom it is addressed. (Gillan, para 77; Peruzzo v Germany, para 35) 80. Recently, in R (T) v Chief Constable, Greater Manchester Police, this court has explained that the obligation to give protection against arbitrary interference requires that there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined. This is an issue of the rule of law and is not a matter on which national authorities are given a margin of appreciation. On this analysis, with which I agree, the statements in T about the need for safeguards against arbitrary interference with Convention rights, are firmly placed in their proper context as referring to safeguards essential to the rule of law because they protect against the abuse of imprecise rules or unfettered discretionary powers. Application to the present appeals The rules governing the disclosure of criminal records, both by ex offenders themselves under the Rehabilitation of Offenders Act 1974 and by the Disclosure and Barring Service and AccessNI under the Police Act 1997, are highly prescriptive. The categories of disclosable convictions and cautions are exactly defined, and disclosure in these categories is mandatory. Within any category, there is no discretion governing what is disclosable. There is no difficulty at all in assessing the proportionality of these measures because, subject to one reservation (see the following paragraph), their impact on those affected is wholly foreseeable. The one reservation arises from a submission made to us that on an application for an enhanced criminal record certificate under section 113B of the Police Act, it would be open to a chief officer of police, if he thought that it ought to be included, to call for the inclusion in the certificate of a conviction or caution which was not a relevant matter because it did not fall within any of the defined categories of disclosable conviction under section 113A(6). I assume (without deciding) that this course was open to the chief officer. But it would not deprive the legislation of the quality of law, because section 113B(4A) requires chief officers to exercise this function having regard to statutory guidance published by the Secretary of State. This provision was inserted by the Protection of Freedoms Act 2012, which was shortly followed by the publication of detailed guidance in July of that year. It is well established that guidance provided for by statute may constitute law for the purpose of the Convention: R (Purdy) v Director of Public Prosecutions [2010] AC 345, para 47 (Lord Hope). The judgment of the chief officer is subjected to carefully drawn constraints that themselves have the quality of law. In these circumstances, the only basis on which it could be said that the legislation lacks the quality of law is that the content of the classes of criminal record available for mandatory disclosure is itself uncertain, because of the uncertain or discretionary character of the rules governing their retention in the Police National Computer, or the Causeway System which serves the same purpose in Northern Ireland. This was, as we have seen, the criticism made of the earlier version of the legislation as it applied in Northern Ireland, by the Strasbourg court in MM. In the three English cases it was argued in the Court of Appeal that the retention of their records on the Police National Computer was itself a breach of article 8 of the Convention. The argument was rejected and has not been repeated before us. It would not in any event have affected the legality of the system of disclosure for the following reason. As I have pointed out above (para 26), what is consistent with the legality test at the stages of collection and retention, may depend on how much of it is liable to be disclosed under the Police Act. The reason why the uncertain content of the criminal record database was so significant in MM was that at the relevant time any conviction or caution on the database was liable to indiscriminate disclosure, without exception. That has not been the case either in England and Wales or in Northern Ireland since 2014. It is no longer correct to say, as Lord Reed quite rightly did about the unamended scheme considered in T (para 119), that the statutory scheme fails to draw distinctions by reference to the nature of the offence, the disposal of the case or the time which has elapsed since the offence took place. It is still the case that it fails to draw distinctions based on the relevance of the conviction to a potential employer on more general grounds; and it still does not provide a mechanism for the independent review of disclosure. However, even on the most expansive view of what was decided in T, nothing in that case suggests that these two factors are on their own enough to deprive the legislation of the quality of law. The current legislation distinguishes, for the purpose of disclosure, between different categories of conviction or caution, depending on the gravity of the offence, the age of the offender at the time and the number of years which have passed. Of course, there may be arguments for more or fewer, or wider or narrower categories, but the legality test is a fundamentally unsuitable instrument for assessing differences of degree of this kind. A decision that the current regime governing retention and disclosure of criminal records lacked the quality of law would mean that it would be incompatible with the Convention even if, hypothetically, it could be shown that nothing short of it would sufficiently protect children and vulnerable adults from substantial risks of abuse or protect the public interest in the appointment of suitable people to highly sensitive positions. I decline to accept that proposition. It would have the practical effect of equating the right of privacy with such absolute provisions of the Convention as the prohibition of torture and slavery, when the terms of article 8 show that the right of privacy is qualified. I conclude that the current scheme of disclosure under the Rehabilitation of Offenders Act 1974 (as amended) and the Police Act 1997 (as amended), and the corresponding legislation in Northern Ireland, are in accordance with the law for the purposes of article 8 of the Convention. Proportionality There are, as it seems to me, only three ways in which the question of disclosing criminal records of candidates for sensitive occupations could have been addressed: (i) by legislating for disclosure by reference to the pre defined categories of offence, offender or sentence in the legislation as it stands; (ii) by legislating for disclosure by reference to some differently drawn categories of offence, offender or sentence; or (iii) by legislating for disclosure by reference to the circumstances of individual cases, as ascertained by some process of administrative review. Accordingly, two questions fall to be decided. The first is whether the legislation can legitimately require disclosure by reference to pre defined categories at all, as opposed to providing for a review of the circumstances of individual cases. If it can, then the second question is whether the boundaries of these categories are currently drawn in an acceptable place. It is common ground that, for the purpose of assessing the proportionality of the scheme, the legislature and ministers exercising statutory powers have a margin of judgment, within limits. I shall deal first with the question whether the legislation can legitimately require disclosure by reference to pre defined categories at all, rather than the circumstances of each case. If not, then manifestly the present legislative scheme will not pass muster. In principle, the legitimacy of legislating by reference to pre defined categories in appropriate cases has been recognised by the Strasbourg court for many years. The fullest modern statement of the law is to be found in its decision in Animal Defenders International v United Kingdom (2013) 57 EHRR 21, where the court summarised the effect of a substantial body of earlier case law. At paras 106 110, the court observed: 106. It is recalled that a state can, consistently with the Convention, adopt general measures which apply to pre defined situations regardless of the individual facts of each case even if this might result in individual hard cases 107. The necessity for a general measure has been examined by the court in a variety of contexts such as economic and social policy and welfare and pensions. It has also been examined in the context of electoral laws; prisoner voting; artificial insemination for prisoners; the destruction of frozen embryos; and assisted suicide; as well as in the context of a prohibition on religious advertising. 108. It emerges from that case law that, in order to determine the proportionality of a general measure, the court must primarily assess the legislative choices underlying it. The quality of the parliamentary and judicial review of the necessity of the measure is of particular importance in this respect, including to the operation of the relevant margin of appreciation. It is also relevant to take into account the risk of abuse if a general measure were to be relaxed, that being a risk which is primarily for the state to assess. A general measure has been found to be a more feasible means of achieving the legitimate aim than a provision allowing a case by case examination, when the latter would give rise to a risk of significant uncertainty, of litigation, expense and delay as well as of discrimination and arbitrariness. The application of the general measure to the facts of the case remains, however, illustrative of its impact in practice and is thus material to its proportionality. 109. It follows that the more convincing the general justifications for the general measure are, the less importance the court will attach to its impact in the particular case 110. The central question as regards such measures is not, as the applicant suggested, whether less restrictive rules should have been adopted or, indeed, whether the state could prove that, without the prohibition, the legitimate aim would not be achieved. Rather the core issue is whether, in adopting the general measure and striking the balance it did, the legislature acted within the margin of appreciation afforded to it. The courts reference in para 108 to the risk of uncertainty is supported by a footnote citation of its earlier decision in Evans v United Kingdom (2008) 46 EHRR 34. In that case, it held that the absence of any provision for individual scrutiny in legislation requiring the consent of both parties to the implantation of stored embryos was consistent with article 8 of the Convention. The Grand Chamber found (para 60) that strong policy considerations underlay the decision of the legislature to favour a clear or bright line rule which would serve both to produce legal certainty and to maintain public confidence in the law in a sensitive field. It went on to observe, at para 89: While the applicant criticised the national rules on consent for the fact that they could not be disapplied in any circumstances, the court does not find that the absolute nature of the law is, in itself, necessarily inconsistent with article 8. Respect for human dignity and free will, as well as a desire to ensure a fair balance between the parties to IVF treatment, underlay the legislatures decision to enact provisions permitting of no exception to ensure that every person donating gametes for the purpose of IVF treatment would know in advance that no use could be made of his or her genetic material without his or her continuing consent. In addition to the principle at stake, the absolute nature of the rule served to promote legal certainty and to avoid the problems of arbitrariness and inconsistency inherent in weighing, on a case by case basis, what the Court of Appeal described as entirely incommensurable interests. In the courts view, these general interests pursued by the legislation are legitimate and consistent with article 8. In those cases where legislation by pre defined categories is legitimate, two consequences follow. First, there will inevitably be hard cases which would be regarded as disproportionate in a system based on case by case examination. As Baroness Hale observed in R (Tigere) v Secretary of State for Business, Innovation and Skills [2015] 1 WLR 3820, para 36, the Strasbourg courts jurisprudence recognises that sometimes lines have to be drawn, even though there may be hard cases which sit just on the wrong side of it. Secondly, the task of the court in such cases is to assess the proportionality of the categorisation and not of its impact on individual cases. The impact on individual cases is no more than illustrative of the impact of the scheme as a whole. Indeed, as the Strasbourg court pointed out at para 109 of Animal Defenders, the stronger the justification for legislating by reference to pre defined categories, the less the weight to be attached to any particular illustration of its prejudicial impact in individual cases. In my judgment, the legislative schemes governing the disclosure of criminal records in England and Wales and Northern Ireland provide as good an example as one could find of a case where legislation by reference to pre defined categories is justified. I reach that view for four main reasons. First, it is entirely appropriate that the final decision about the relevance of a conviction to an individuals suitability for some occupations should be that of the employer. Only the employer can judge whether the particular characteristics of the particular job make it inappropriate to employ the particular ex offender. Very often, this will be a judgment that the employer makes in the course of discussion with the candidate in the light of what is disclosed. The employer will bear the responsibility for the consequences of its choice, and in sensitive appointments the responsibility may be a heavy one. In order to discharge that responsibility with the thoroughness that the public interest requires, the employer must have access to potentially relevant information about a candidates past. He may end up by disregarding some or all of it as irrelevant or insufficiently weighty. But unless the decision is to be taken out of his hands, he must be told about any criminal record which might reasonably influence him, even if further consideration or discussion of the circumstances with the candidate may ultimately cause him to disregard or attach limited weight to it. By comparison, the administrative authorities responsible for disclosure know only (i) the job title, which usually gives only the most general notion of what the job entails; and (ii) the broad category of offence for which the candidate was convicted or cautioned, the implications of which may be affected by a wide variety of mitigating or aggravating circumstances that are not apparent from the criminal record database. A system of administrative review on the application of the candidate may be possible. It has existed in Northern Ireland since 2016. Such a system enables the disclosure authority to take into account the candidates representations. But it cannot enable the authority to take over the employers function of assessing the candidates suitability for the particular employment. It might be possible to design a system under which rather more information about the job was supplied to the disclosure authority than is provided for under the forms currently prescribed. It might be possible to design a system under which the disclosure authority could call for further information from the employer, but that would give the game away. The employer would know that there was something there, and the consequence for the candidate would in many cases be worse than disclosure of what might turn out to be a very minor offence. None of these possibilities can realistically be thought to displace the employers judgment of the candidates suitability. It follows that it cannot be right to say that as a matter of law the United Kingdom must have a scheme of disclosure which depends on an examination of the circumstances of individual cases by someone other the employer. Secondly, the objection to disclosure by category is based on the argument that employers cannot be trusted to take an objective view of the true relevance of a conviction. But the material available to support that objection is distinctly thin. There is some survey evidence which is said to support it, although the generality and hypothetical character of the questions and the very summary form of the answers make it hard to attach much weight to it. Lord Neuberger suggested in R (L) v Comr of Police of the Metropolis (Secretary of State for the Home Department intervening) [2010] 1 AC 410 at para 75 that in the majority of cases the disclosure of any criminal record would be something close to a killer blow. However, as this court recently pointed out in R (AR) v Chief Constable of Greater Manchester Police [2018] 1 WLR 4079, para 75, it is far from clear on what if any empirical evidence Lord Neubergers observation was made. Realistically, it must be assumed that some employers will take the line of least risk, and decline to employ ex offenders on principle, especially if there is an alternative candidate without a criminal record. But the evidence before us does not bear out the suggestion that this is the norm. Under sections 113A(2) and 113B(2), applications for criminal record certificates must be made or countersigned by a registered body. Employers and the registered bodies who sponsor their applications are required to comply with a Code of Practice issued by the Secretary of State under section 122 of the Police Act 1997. Registered bodies may lose their registration if they fail to do this themselves and to enforce the code on employers. The Code of Practice requires employers, among other things, to have a written policy, available to candidates on request, concerning the suitability of ex offenders, to notify candidates of the potential impact of a criminal record and to discuss with candidates the content of any disclosure before withdrawing an offer of employment. There is no evidence before us that the Code of Practice is ignored on a significant scale, either in letter or in spirit. A high proportion of employers in cases where criminal record certificates are required will in any event be in the public sector, and they are particularly likely to comply. But, be all that as it may, for as long as the employer has the ultimate right to decide and the legal responsibility to decide carefully, and is the only person in a practical position to do so, the risk that some employers may take too absolute a line is inescapable. Thirdly, in this context, the value of certainty is particularly high. The regimes governing disclosure by the candidate under the Rehabilitation of Offenders Act and by the Disclosure and Barring Service or AccessNI under the Police Act are carefully aligned. Any legislation governing disclosure under the Police Act must take account of the fact that the candidate for sensitive positions will generally have been asked to disclose past convictions and cautions voluntarily. Section 4 of the 1974 Act entitles the candidate to treat that request as not relating to spent convictions, subject to exceptions identified in subordinate legislation. Those spent convictions which are excluded from section 4 and therefore disclosable by the candidate himself must necessarily be identified by category. There is no room for a case by case review of the particular facts in that context, because candidates must know where they stand at the time when they complete the application form, ie before any application is made for disclosure under the Police Act. The offences falling to be disclosed under the Police Act must substantially correspond to those disclosable by the candidate under the Rehabilitation of Offenders Act. A regime for disclosure by the Disclosure and Barring Service or AccessNI which allowed for discretionary exceptions dependent on the facts of the case would not help the candidate if he has already had to disclose all convictions in the relevant category himself. What this suggests is that any advantages of an administrative review of the circumstances of individual cases will have been gained at the expense of foreseeability. This has a significant cost to the candidate himself. It will be apparent that the justification for legislating by reference to categories of offence or offender is much more than a question of administrative convenience or practicality. It goes to the whole purpose of the scheme, which is to enable employers properly to perform their function of vetting candidates for sensitive occupations, and to enable candidates themselves to know what is disclosable, in the first instance by themselves. There are, however, and this is the fourth reason, important issues of practicality involved. Some four million applications for criminal record certificates are made every year in England and Wales. They have to be dealt with promptly, because a conditional offer of employment will commonly have been made to the candidate. A system of individual assessment would require an assessment to be made or reviewed according to, among other things, the circumstances of the offence, the sentencing remarks of the judge, any relevant mitigating or aggravating factors, and presumably any representations of the candidate. The evidence on behalf of the Secretary of State is that this is not a practical proposition in the case of a volume of disclosure applications as large as that in England and Wales. The view taken by ministers was therefore that a mechanical process of disclosure by category was the only one consistent with basic levels of efficiency. Of course, beyond a certain point, administrative efficiency cannot justify visiting an injustice upon candidates. But it is particularly difficult for a court to determine where that point lies. It is true that any administrative problems appear to have been overcome in Northern Ireland. But Northern Ireland is a much smaller jurisdiction. Taking these considerations together, they suggest that although it may be possible to abandon category based disclosure in favour of a system which allowed for the examination of the facts of particular cases, there would be a cost in terms of protection of children and vulnerable adults, foreseeability of outcome by candidates, consistency of treatment, practicality of application, and delay and expense, without necessarily achieving much more for ex offenders than the current system. Once it is accepted that a category based scheme of disclosure is justifiable, it must inevitably follow that some candidates will find themselves in a category apparently more serious than the facts of their particular case really warrant. The cases which have given rise to these appeals illustrate the point. G was reprimanded at the age of 13 for offences of sexual activity with a child. P received a caution for theft and was convicted shortly afterwards of another offence of theft. W was convicted of assault occasioning actual bodily harm. These are all, in the generality of cases, serious offences which in a category based system would rightly be disclosable in connection with a sensitive occupation, especially one involving contact with children or vulnerable adults. In each case, it is only the detailed circumstances that show that the actual offence was very minor. Conversely, Ms Gallagher was convicted of carrying children under 14 without a seatbelt, and convicted again of the same offences two years later. This is a minor offence, but if the job for which Ms Gallagher had applied had involved driving children it would have been difficult to justify withholding these convictions from a potential employer. Some employers might legitimately be concerned that her record disclosed a more general lack of concern with safety which was unacceptable to them. Against that background, I turn to the next question, which is whether the legislation before us draws the boundaries of the relevant categories in an acceptable place. As it stood at the relevant time, the statutory schemes in both England and Wales and Northern Ireland substantially reflected the recommendations of Ms Sunita Mason. She was an experienced district judge, a former chair of the Law Societys Family Law Committee and the Governments Independent Adviser for Criminality Information Management. Ms Mason was asked in 2009 to conduct a review of the retention and disclosure of criminal records held on the Police National Computer. Her report, A Balanced Approach, was published in March 2010. It recommended that disclosures to employers should be filtered and that a panel representing the various interested parties should advise on the filtering rules. The Secretary of State subsequently established the Criminal Records Review to make proposals on the balance between respecting civil liberties and protecting the public. That review was also conducted by Ms Mason, in conjunction with the Independent Advisory Panel for the Disclosure of Criminal Records. Her two reports, published in February and December 2011, took account of the views of a broad range of experts and consultees drawn from the criminal justice system, the police and the judiciary, the teaching profession, and NGOs involved with children, vulnerable adults and ex offenders. It was also informed by summaries of the disclosure systems operating in 26 other countries. Ms Mason made proposals for removing old and minor offences from the scope of disclosable convictions and cautions. The Panel recommended that spent convictions and cautions should be filtered by category, according to the period of time which had elapsed, that particular care should be taken before considering any sexual, drug related or violent offence type for filtering, that where a person has received a conviction or caution for any offence which is not categorised as minor, all his convictions and cautions (including minor ones) should be disclosed, and that the filtering rules should be both simple and understandable to individuals who are users and/or customers of the disclosure service. The Panel thought that extra consideration should be given to minor offences committed by persons under the age of 18. Although agreed on the principles, however, the Independent Advisory Panel did not agree on the criteria. The recommendations concerning these were accordingly Ms Masons. She proposed the disclosure of all convictions categorised as not being minor, all convictions where there was more than one, and the filtering out of single minor spent convictions by adults after three years and by persons under the age of 18 after six months. She proposed that further consideration should be given to the problems of defining minor offences. The problems of defining minor offences are described in a witness statement of Mr John Woodcock, then Head of Criminal Records Policy within the Safeguarding and Public Protection Unit of the Home Office. In summary, the two main criteria available were the character of the offence as defined by law and the severity of the sentence, or some combination of the two. Each of these criteria was liable to produce capricious results at the margins, as Mr Woodcock demonstrates. I have already referred to those associated with the character of the offence. The use of sentencing as a criterion was also problematic. This was because mitigating factors affecting sentence will not necessarily be relevant to the assessment of the risks associated with sensitive employments. Moreover, every additional refinement added to the system to make it more accurate, was liable also to make it more complex and less easy for candidates to understand. The filtering criteria proposed by Ms Mason were adopted by ministers in framing the amendments to the scheme in 2013, except that the periods of currency adopted for single minor offences were longer. I have summarised the criteria on which minor offences were filtered out of criminal records at para 9 above. It was based on a combination of (i) the sentence (all offences resulting in a custodial sentence were disclosable), (ii) the legal definition of the offence (the sexual and violent offences listed in section 113A(6D) and in Schedule 15 to the Criminal Justice Act 2003 were disclosable in all cases), (iii) the period which had elapsed since the conviction or caution and (iv) the age of the offender at the time of the disposal. In this form, the statutory orders were approved by Parliament under the positive resolution procedure, with bipartisan support. As the Strasbourg court pointed out in Animal Defenders (para 108), the assessment of the defining factors in a category based scheme is a matter for the state, and the quality of the examination of the options is likely to be important. I have summarised the history of the process which led to the current legislative scheme in order to make two points. First the scheme is the result of substantial research and intensive consultation with a wide range of interested and expert groups and individuals. Secondly, it is apparent that while there is broad agreement on the need for a category based system of disclosure and the basic principles which should govern it, there is no consensus about where the lines should be drawn. This is not particularly surprising, because there is no solution which could satisfy all of the main desiderata in the design of such a system. No one suggests that the courts can or should design the system themselves in proceedings for judicial review. The function of the courts is an essentially negative one, namely to identify which schemes are incompatible with the Convention. At the same time, a court can only be satisfied that a particular scheme is incompatible with the Convention if it is in a position to say what is wrong with it. What is wrong with the design of the categories employed in the legislative scheme before us? On the footing that disclosure by categories is justified in principle, the respondents objections to the current system really amount to saying that the balance between the risk of blighting the prospects of ex offenders and the risk of appointing unsuitable persons to sensitive positions has been drawn in a place which puts too much emphasis on the latter and not enough on the former. They also say that the balance has been drawn in a different way in Northern Ireland and Scotland. Yet a balance of this kind necessarily involves a difficult value judgment. All that a judge can say is that he or she would have drawn it in a different place. But that, with respect, is not the test. We may think that a better scheme could have been devised or that the categories could have been differently drawn, or that too much weight has been given to the risk of unsuitable appointments and not enough to the rehabilitation of offenders. A more granular categorisation has been applied in Scotland to cases involving risks to vulnerable groups since 2007, and a system of administrative review on the application of an ex offender has existed in Northern Ireland since 2016. There may be lessons to learn from their experience. But none of this means that the scheme lies outside the margin of judgment properly allowed to the legislator or the Secretary of State on whom the legislator has laid the task of defining the exceptions to the rehabilitation regime. In my judgment it is not possible for us to say, consistently with the proper role of a court of review, that the carefully drawn categories employed in this scheme are disproportionate. To this analysis, I would make two exceptions. The first concerns the multiple conviction rule. Sections 113A(3) and (6)(b) and 113B(3) and (9)(b) of the Police Act 1997 provide that where a person has more than one conviction of whatever nature, any conviction of whatever nature is a relevant matter falling to be disclosed in a criminal record certificate. Unlike the other relevant matters calling for disclosure, the multiple conviction rule does not, properly speaking, define a category of offence or offender. It is in reality an aggravating factor affecting the significance of an offence. Its rationale is that the criminal record of a serial offender is more likely to be relevant to his suitability for a sensitive occupation, because the multiplicity of convictions may indicate a criminal propensity. In itself, that is an entirely legitimate objective of a legislative provision of this kind. The rule as framed is, however, a particularly perverse way of trying to achieve it. It applies irrespective of the nature of the offences, of their similarity, of the number of occasions involved or of the intervals of time separating them. As framed, therefore, the rule is incapable of indicating a propensity. It may coincidentally do so in some cases, but probably does not in a great many more. Its eccentric consequences may be illustrated by the facts of the two appeals in which the multiple conviction rule was the basis on which disclosure was required, those of P and Lorraine Gallagher. In Ps case the two minor thefts for which she received a caution and a conviction were only disclosable because she had also failed on the second occasion to surrender to her bail. These offences were not only too minor but too disparate to suggest a propensity to even the most suspicious mind. As to Ms Gallagher, I have already observed that her failure on two occasions to secure children in the back of her car might have been relevant to her proposed employment if it had involved driving children about. But, even if she had not committed a further offence in 1998, her convictions of 1996 would have been disclosable simply because there were four unsecured persons in the car at the time, each of whom gave rise to a distinct conviction. A rule whose impact on individuals is as capricious as this cannot be regarded as a necessary or proportionate way of disclosing to potential employers criminal records indicating a propensity to offend. The second exception concerns warnings and reprimands administered to young offenders under sections 65 and 66 of the Crime and Disorder Act 1998 replaced, since 2013, by youth cautions under section 66ZA. Warnings and reprimands were not a penal procedure. As Lord Bingham put it in relation to warnings in R (R) v Durham Constabulary [2005] 1 WLR 1184 (HL), although they required the offender to have admitted the offence, they constituted a preventative, curative, rehabilitative or welfare promoting disposal: see paras 14 15. A caution administered to an adult requires consent. However, a warning or reprimand given to a young offender whose moral bearings are still in the course of formation, requires no consent and does not involve the determination of a criminal charge. Its purpose is wholly instructive, and its use as an alternative to prosecution is designed to avoid any deleterious effect on his subsequent life. Its disclosure to a potential employer would be directly inconsistent with that purpose. In my view the inclusion of warnings and reprimands administered to a young offender among offences which must be disclosed is a category error, and as such an error of principle. I would expect the same to be true of the current regime governing youth cautions, but we were not addressed on that question and it is neither necessary nor appropriate to decide it on this appeal. Application to the present appeals and disposal Ps convictions and caution were disclosable only by virtue of the multiple conviction rule. In England and Wales, the rule requiring disclosure of the entire record where there are multiple convictions is embodied in primary legislation, namely section 113A(6)(b) of the Police Act 1997 (as amended). The Divisional Court made a declaration of incompatibility in respect of that provision, which was affirmed by the Court of Appeal. The Secretary of States appeal against that order must be dismissed, albeit on grounds narrower than those of the Court of Appeal. That leaves to be considered in the case of P the corresponding exclusion from section 4 of the Rehabilitation of Offenders Act 1974, which is contained in article 2A(3)(c) of the Rehabilitation of Offenders Act 1974 (Exceptions) Order (SI 1975/1023), as amended with effect from 2014. Since the multiple conviction rule depends on subordinate legislation, it was open to the Divisional Court to quash article 2A(3)(c) as an unlawful act, and it was invited to do so. The Divisional Court declined the invitation and contented themselves with a declaration that the amended 1975 Order could not be read down so as to be compatible with article 8. The Court of Appeal dismissed Ps cross appeal on that point. In both cases, the reason was that while the amendment was incompatible with article 8 so far as it was applied to P, it would not be so in all cases. Mr Southey QC, who appeared for P, has pursued his cross appeal before us. The reasoning of the Divisional Court and the Court of Appeal gives rise to difficulty on the footing (accepted by them) that the whole legislative scheme lacks the quality of law, for as I have explained that is an all or nothing question. However, I have concluded that it does have the quality of law, and that the only objection to article 2A(3)(c) of the amended 1975 Order is that it is disproportionate. In a case where legislation by category is appropriate, as I have held it to be in this case, the fact that the categorisation may bear disproportionately on the complainant is not decisive: see para 49 above. What is disproportionate is the creation by article 2A(3)(c) of the amended 1975 Order of a category of disclosable convictions and cautions which depends on the multiple conviction rule. On that footing it would be open to this court to quash that article. Nonetheless, the making of such an order is discretionary, and I would decline to make it in this case. The reason is that it would introduce a discrepancy between the disclosures required of the Disclosure and Barring Service under the Police Act 1997 (the relevant provisions of which must stand unless and until amended or repealed by Parliament) and the disclosure required of the ex offender under the Rehabilitation of Offenders Act 1974. This would authorise the ex offender to withhold disclosure of something that would then have to be disclosed in a certificate issued by the Disclosure and Barring Service. In the circumstances, the appropriate course would be simply to vary the order of the Divisional Court by adding a declaration that article 2A(3)(c) is incompatible with article 8 of the Convention. Lorraine Gallaghers case also turns on the multiple convictions rule. As it happens, the disclosure made no difference to the fate of her job application in 2014, because it is clear from the uncontentious facts that the job offer was withdrawn because of the concealment of the 1998 convictions and not because of the criminality disclosed in the certificate. She is, however, entitled to relief, because no disclosure would have been made but for section 113A(6)(b) of the Police Act 1997 (as amended) and article 1A(2)(c) of the Rehabilitation of Offenders (Exceptions) Order (Northern Ireland) 1979 (SR(NI) 1979/195) (as amended) (which corresponds to article 2A(3)(c) of the 1975 Order in England and Wales). Treacy J in the High Court in Northern Ireland made two orders. The first order dealt only with Ms Gallaghers application for judicial review of the automatic disclosure of her record under the Police Act 1997 (as amended). It simply allowed the application without any further relief. The second order dealt in addition with the position under the Rehabilitation of Offenders (Exceptions) Order (Northern Ireland) 1979 (as amended). It declared in paragraph (a) that the 1979 Order violated Ms Gallaghers rights under article 8 because it fails the test of necessity; and in paragraph (b) that both the 1979 Order (as amended) and Part V of the Police Act 1997 (as amended) violated Ms Gallaghers rights under article 8 for the additional reason that they lacked the quality of law. The Court of Appeal of Northern Ireland dismissed the Secretary of States appeal. There is no cross appeal in Ms Gallaghers case. It follows from the conclusions that I have reached that I would vary Treacy Js second order so as to limit paragraph (a) of his declaration to article 1A(2)(c) of the 1979 Order (the only provision relevant to her case); and to delete paragraph (b). In Gs case, Blake J declared (a) that Part V of the Police Act 1997 (as amended) was incompatible with article 8 of the Convention to the extent that it required the mandatory disclosure of his reprimand for offences contrary to section 13 of the Sexual Offences Act 2003; and (b) that regulations made under the Rehabilitation of Offenders Act 1974 required amendment in the light of (a). The Court of Appeal affirmed declaration (a) and set aside declaration (b). There is no cross appeal. For the reasons which I have given, which are narrower than those of the Court of Appeal, I would dismiss the Secretary of States appeal. In Ws case, his conviction for assault occasioning actual bodily harm has not been disclosed. His concern is with its prospective disclosure were he to apply for a teaching job. Assault occasioning actual bodily harm is an offence specified in Schedule 15 to the Criminal Justice Act 2003. As such it is excluded from section 4 of the Rehabilitation of Offenders Act 1974 (as amended), by article 2A(5)(d) of the 1979 Order, and falls to be disclosed in a Criminal Record Certificate under the corresponding provision of the Police Act 1997 (as amended). Simon J, who heard Ws application for judicial review in the High Court, dismissed it, but the Court of Appeal allowed the appeal on proportionality (as well as legality) on the ground that it was difficult to see how publication of this detail, 31 years on, is relevant to the risk to the public, or proportionate and necessary in a democratic society. I regret that I am unable to agree, essentially for the reason given by Simon J. Once it is accepted (as I have accepted) that disclosure may properly be required by categories, the question is whether the choice of category is proportionate, not whether it impacted disproportionately on particular cases. Disclosure by categories must inevitably produce a disproportionate impact in some cases. In my opinion, it was legitimate to include assault occasioning actual bodily harm among the offences which were sufficiently serious to require disclosure. It is a violent offence which may be extremely serious. As Simon J pointed out, it may attract an extended sentence of imprisonment. It was also legitimate not to include a temporal limit in the definition of the category of violent or sexual offences requiring disclosure. Any temporal limit would have risked the non disclosure of the worst cases in the category. The limit would presumably have had to vary with the offence. There would be complex additional problems of definition, thereby making the scheme notably more complex than it already is. For example, a provision imposing a temporal limit on serious offences would presumably have had to differentiate between cases where the offender went on to commit further such offences and cases where (like W) he did not. I cannot regard the existing categorisation as illegitimate, or as notably more problematical than any other categorisation. Hard cases like Ws must ultimately be left to the judgment of employers. I have given my reasons for believing that in the generality of cases they can and must be trusted to exercise that judgment responsibly and in accordance with the statutory guidance given to the registered persons who sponsor them. LADY HALE: (with whom Lord Carnwath agrees) This is a very troubling case. In R (T) v Chief Constable of Greater Manchester Police (Liberty intervening); R (B) v Secretary of State for the Home Department (Liberty intervening) [2014] UKSC 35; [2015] AC 49 (hereafter T), the majority of this court held that the statutory scheme for the disclosure of convictions, cautions and reprimands under sections 113A and 113B of the Police Act 1997 constituted an interference with the right to respect for private life, protected by article 8.1 of the European Convention on Human Rights, which was not in accordance with the law, as an interference is required to be before it can be justified under article 8.2 (set out in full in para 11 by Lord Sumption). It followed that those sections had to be declared incompatible with the Convention rights, under section 4 of the Human Rights Act 1998. The court was unanimously of the view that those sections were also incompatible because, in the cases before the court and in many other cases, the interference was disproportionate that is, not necessary in a democratic society, although its aims were legitimate. Both the Court of Appeal in Northern Ireland, in the case of Lorraine Gallagher, and the Court of Appeal of England and Wales, in the cases of P, G and W, took the view that it followed from this courts decision in T that the amended schemes (described by Lord Sumption in para 9) also failed the requirement that they be in accordance with the law in certain respects. No party to this appeal has invited this court to depart from the ratio of the decision in T: indeed, as Lord Sumption points out in para 15, it is our duty to follow it unless (which is not suggested) the Practice Direction of 1966 applies. There is no doubt that the ratio of T is that the scheme as it then stood was not in accordance with the law. The question which divides this court is whether it follows that the scheme as it now stands also fails that test. This is no easy question. The scheme as it stood in T gave the authorities responsible for providing criminal record certificates under section 113A and enhanced criminal record certificates under section 113B of the 1997 Act no discretion: all convictions, cautions, warnings and reprimands recorded on the Police National Computer had to be disclosed (there was and is a discretion as to the additional material which may be disclosed in an enhanced certificate). The schemes as they now stand also give the authorities no discretion as to what has to be disclosed: but they contain more nuanced rules, devised after a careful process described in detail by Lord Kerr in paras 117 to 142, as to what has to be disclosed, supplemented, in the case of Northern Ireland, by the possibility of independent review of the decision to disclose in individual cases, described by Lord Kerr in paras 143 to 146. Is this sufficient to invest the scheme with the quality of legality required by the Convention? I am persuaded that it is. The principles to be derived from the Strasbourg cases were to my mind accurately summarised in the joint judgment of Lord Reed, Lord Hodge and myself in Christian Institute v Lord Advocate [2016] UKSC 51; 2017 SC (UKSC) 29, at paras 79 80, cited and agreed with by Lord Sumption at para 41. The foundation of the principle of legality is the rule of law itself that people are to be governed by laws not men. They must not be subjected to the arbitrary that is, the unprincipled, whimsical or inconsistent decisions of those in power. This means, first, that the law must be adequately accessible and ascertainable, so that people can know what it is; and second, that it must be sufficiently precise to enable a person with legal advice if necessary to regulate his conduct accordingly. The law will not be sufficiently predictable if it is too broad, too imprecise or confers an unfettered discretion on those in power. This is a separate question from whether the law in question constitutes a disproportionate interference with a Convention right but the law in question must contain safeguards which enable the proportionality of the interference to be adequately examined. This does not mean that the law in question has to contain a mechanism for the review of decisions in every individual case: it means only that it has to be possible to examine both the law itself and the decisions made under it, to see whether they pass the test of being necessary in a democratic society. I do not believe that (cf Lord Kerr at para 153), when applying these principles in T, at para 119, quoted by Lord Sumption in para 36, Lord Reed was holding that for the disclosure rules to meet the requirement of legality they must always draw distinctions on the basis of the nature of the offence, the disposal in the case, the time which has elapsed since the offence took place or the relevance of the data to the employment sought and that there must always be a mechanism for independent review of a decision to disclose. He was pointing to the cumulative effect of all those deficiencies in the scheme as it then stood. Furthermore, he was relying on the judgment in MM v United Kingdom (Application No 24029/07), judgment of 29 April 2013, where, at para 206, the shortcomings whose cumulative effect led to the finding of a violation included the absence of a clear legislative framework for the collection and storage of data, and the lack of clarity as to the scope, extent and restrictions of the common law powers of the police to retain and disclose caution data, in addition to the absence of any mechanism for independent review of a decision to retain or disclose data and the limited filtering arrangements in respect of disclosures. He was drawing attention to the indiscriminate nature of the scheme as it then stood. The scheme as it now stands does not have that indiscriminate nature. It has been carefully devised with a view to balancing the important public interests involved. In my view there are at least three of these. There is, of course, the importance of enabling people who have committed offences, and suffered the consequences of doing so, to put their past behind them and lead happy, productive and law abiding lives. The full account of the facts of the four cases before us, given by Lord Kerr, is ample illustration of the importance of this aim, and of the devastating effect that disclosure of past offending can have upon it. There is, on the other hand, the importance of safeguarding children and vulnerable adults from people who might cause them harm, as well as ensuring the integrity of the practice of certain occupations and activities. No one who has read Sir Michael Bichards Report, prompted by the murder of two Soham school girls by their school caretaker (The Bichard Inquiry Report (2004) HC 653), can be in any doubt of that. There is also, in my view, a public interest in devising a scheme which is practicable and works well for the great majority of people seeking positions for which a criminal record certificate is required. Neither they nor their prospective employers should have to wait too long for the results of their enquiry. It is for that last reason that I am persuaded that it cannot be a pre requisite of any proportionate scheme that it seeks to assess the relevance of the data to be disclosed to the employment or activity in question. There may be other contexts involving interference with article 8 rights where this would be both practicable and necessary. But this is a scheme catering for a very large number of inquiries (four million a year in England and Wales) and a substantial number (nearly 300,000) of positive responses. Devising a coding mechanism for the type of position applied for and then a scheme for correlating the relevance of particular offending to each position would be extremely difficult, if not impossible. It must be borne in mind that we are by definition concerned with people who are applying for positions where such a certificate is required. No one has suggested to us that the categories of people required to get such certificates are over broad. Leaving it to the prospective employer to judge the relevance of the particular offending to the particular post is probably the only practicable solution, although of course I accept that employers are likely to take a precautionary approach if they have more applicants than posts available. I am also persuaded that the only practicable and proportionate solution is to legislate by reference to pre defined categories or, as these are sometimes pejoratively described, bright line rules. For me, the most important of the four reasons given by Lord Sumption is his third, the need for certainty (Lord Sumption at para 53). The scheme for disclosing data held on the Police National Computer mirrors closely the scheme for requiring applicants for particular positions to disclose their convictions, cautions, warnings and reprimands, although these would otherwise be spent under the Rehabilitation of Offenders Act. They have to know what they must disclose if they are asked. And as a general rule they will have to do this before any application for a Criminal Record Certificate is made. There is no room for case by case consideration unless this is open to the prospective employer at this stage. And it would make no sense for the applicant to have to make disclosure only to find that the authorities have decided that disclosure is not warranted. The question therefore becomes whether the categories which have in fact been chosen are themselves a proportionate response to the legitimate aims of the scheme. For the reasons given by Lord Sumption, at para 63, I agree that the rule relating to multiple convictions, at least as currently framed, is not apt to achieve its aim of detecting a relevant propensity to commit crimes. It is not rationally connected to the aim it is trying to achieve. For the reasons he gives, at para 64, I also agree the inclusion of reprimands or warnings given to young offenders, even where the offending is of some seriousness, is wrong in principle. appeals and of the cross appeal in Ps case. LORD KERR: (dissenting) Introduction P Lord Sumption has outlined what he has described as the essential facts in each of these appeals. I agree with his account but consider that some further detail of the predicament that each of the appellants has faced is necessary in order to I would therefore agree with Lord Sumptions proposed disposal of these demonstrate in a concrete way the considerable impact that the operation of the disclosure regimes in England and Wales and Northern Ireland has had and will continue to have, as a result of the decision of the majority in this case, on their lives. As Lord Sumption has said, the woman who has been referred to as P has had two encounters with the criminal law. Both occurred in 1999. Before considering the circumstances which gave rise to these, it is necessary to say something of Ps background. She has a degree in education studies and languages and has obtained a certificate to teach English as a foreign language. She has worked in Spain and Greece, teaching English. In 1997, while teaching in Spain, P began to feel unwell. She returned to the United Kingdom in March of that year. On her return to this country, Ps condition worsened. She began to hear voices and became delusional. At first, she lived in accommodation which she described as insecure. Over time she became homeless. Because of her condition, she found it difficult to keep medical appointments. While homeless, she was the victim of physical and sexual abuse and she often had money stolen from her. Eventually, in November 2000, she was admitted to hospital and there she was diagnosed as suffering from schizophrenia. In hospital P was prescribed medication for her condition. When she was discharged, she had a social worker assigned to her. She was helped to obtain self contained housing on a secure tenancy. The social worker ensured that P received the welfare benefits to which she was entitled. She had regular visits from a psychiatric nurse and attended appointments with a consultant psychiatrist. As a result of all this and of her own efforts, Ps condition has been under control since 2003. She does not need to attend a psychiatrist now. But she sees her general medical practitioner and continues to take her medication. She considers that she has a much greater awareness and understanding of [her] illness and treatment, and [is] able effectively to control it. Before her admission to hospital, P was involved in two episodes of criminal activity. On 26 July 1999, a caution was administered to her for the theft of a sandwich. On 13 August 1999, she was arrested on a charge of shoplifting. She had stolen a book. P now explains this as having been prompted by her deluded belief that the books title was sending her a message. The book, as Lord Sumption has said, cost 99p. P was charged with the offence of theft and was due to appear at Oxford Magistrates Court on 20 September. She did not appear and was arrested at emergency accommodation for the homeless on 1 November. On her subsequent appearance before the court, she pleaded guilty to theft and for failing to surrender to custody in answer to the bail that had been granted on the first court appearance. She was given a conditional discharge on each of the two offences, ordered to run concurrently for a period of six months. P has committed no further offences. But when she has applied for employment (paid or unpaid) she has had to produce an enhanced criminal record certificate (ECRC). She has also felt it necessary to disclose her medical history, in order to explain her circumstances at the time that the offences occurred. She is qualified to work as a teaching assistant but has not been able to secure a position. Not unreasonably, she is convinced that this is because she has had to reveal her convictions and her medical background. P is therefore a young woman who, but for the requirement that she disclose her criminal record, could be expected to contribute significantly to society and to enjoy a happy, fulfilled life. Those opportunities are now denied her. There is no reason to suppose that the requirement that she continue to disclose her criminal record when she applies for employment in the future will not lead to the same outcome for those applications as occurred in the past. She is thus condemned to an indefinite period quite possibly a lifetime of disadvantage. And for what? Because she was convicted of the most trivial of offences, committed at a time when she was seriously ill with an undiagnosed condition. Despite Ps concerted efforts to rehabilitate and to reintegrate into society, the fact that she must reveal her previous convictions will act as a perennial inhibition on the reward that she is due for the efforts that she has made. Her case is a classic example of the phenomenon described by Lord Wilson in para 45 of his judgment in R (T) v Chief Constable of Greater Manchester Police (Liberty intervening), R (B) v Secretary of State for the Home Department (Liberty intervening) [2015] AC 49 (hereafter referred to as T) see para 167 below. Thus, this young woman, with so much to offer and who has overcome grievous difficulties, may forever be shut out from achieving her potential or from making the valuable contribution to society that her talents and education so clearly equip her for. A disclosure scheme which has that effect faces significant questions as to its efficacy and proportionality. When he was 11 years old, G engaged in what was described by the Court of Appeal as consensual [sexual activity] appearing to be a form of dares with two younger boys. Specifically, this involved sexual touching and attempted anal intercourse. This happened over a period of months; the other boys were then nine and eight years old. After an inquiry by the Crown Prosecution Service and social services, G was reprimanded by Surrey police. In 2011 G was working in a local college as a library assistant. He was told by his employment agency that he had to undertake an enhanced Criminal Records Bureau (CRB) check because his work involved some contact with children. At that time, he believed that the reprimand was spent. (His mother had been given a Surrey police leaflet at the time that G was reprimanded which suggested that the reprimand would be expunged from his record after he reached the age of 18 or within five years of the reprimands issue. This was incorrect.) G proceeded to apply for the check. In February 2012 G received a letter from the Data Bureau Supervisor for Surrey Police. The letter informed him that the reprimand for two counts of sexual assault on a male under the age of 13 was to be disclosed as part of the enhanced CRB checking process. The data supervisor offered to include additional information on the enhanced CRB certificate. This would be to the effect that G was 12 at the time that the events which led to the reprimand took place (he was, in fact, 11); that the activity was consensual; that it was in the nature of dares; and was motivated by sexual curiosity and experimentation by the children. The data supervisor followed up this letter with a further communication which acknowledged that disclosure of the reprimand was likely to cause an employer unwarranted concern. It was hoped that the background information might allay that concern. G decided to withdraw his application for a CRB check. As a result, he lost his job. He appealed under the Surrey Polices exceptional case procedure to have the reprimand deleted for the purposes of any future CRB check. That appeal was unsuccessful. G decided therefore not to apply for employment which required such a check to be undertaken. It is clear that the data supervisor was fully alive to the likely impact that disclosure of Gs reprimand would have. Obviously, he was also aware of the iniquity of that situation. G lost a useful and fulfilling job as a result of episodes of juvenile misbehaviour. That is indeed iniquitous. The respondent known as W is 52 years old. When he was 16 he was convicted of assault occasioning actual bodily harm. He was given a conditional discharge for two years and bound over to keep the peace and be of good behaviour for a period of 12 months. The incident in which the offence was committed involved a fight with another boy after school. In the 32 years that have elapsed since then, W has not been convicted of any further offence and, according to the Court of Appeal, has made a success of his life. In 2013 W began a course to obtain a certificate in English language teaching to adults. He had to get a criminal record certificate. This disclosed his conviction. It did not prevent him from undertaking the course, but it is stated to be highly likely to prejudice his prospects of employment. This contention is not disputed by the appellants. Again, the prospect of his making a useful contribution to society has been blighted. The loss to his community and the frustration of his worthy ambition, having applied himself to the task of acquiring qualifications at the age of 47, must again raise questions about the operation of the scheme which has brought about this unfortunate state of affairs. This is particularly so because, as we shall see, modifications to the scheme could readily and relatively simply avoid the consequence that has accrued in his case. Indeed, Sir James Eadie QC, for the appellants, invited this court to give its opinion on how that might be achieved see para 165 below. For reasons that I will discuss, reasonably simple and straightforward amendments to the schemes, without in any way destroying their core purpose, can, and in my view, should be effected. Lorraine Gallagher Mrs Gallagher is 54 years old. On 4 May 1996 she was driving her car the short distance from her home to a post office. Her three children were also in the car. None of them was wearing a seatbelt. The car was stopped by police and Mrs Gallagher was prosecuted for her failure to wear a seatbelt and for failing to ensure that her children were wearing theirs. She was fined a total of 85. On 17 June 1998 Mrs Gallagher had collected her children from school and was driving home. According to her, she and one of her children were wearing their seatbelts in the correct fashion. Although her two sons in the rear of the car had attached their seatbelts, (unbeknownst to Mrs Gallagher, she claims) they had placed the shoulder straps of the seatbelts under their arms and this did not constitute a proper attachment. Mrs Gallagher was again prosecuted for allowing children to be carried without properly fastened seatbelts and was fined 80. In 2010 Mrs Gallagher started a course to obtain qualification in social care. She successfully completed the course. She was then employed in various capacities as an agency worker by the Western Health and Social Care Trust and registered with the Northern Ireland Social Care Council. With the encouragement of one of her supervisors she applied for a permanent position with the Trust. She was required to complete an application form which stipulated that she disclose all convictions and cautions that she had received. Mrs Gallagher revealed that she had been convicted of carrying a child without a seatbelt in 1996 and fined 25. She did not refer to the convictions in 1998, subsequently explaining that she had believed that they had been wiped and that it was not major. An offer of a position with the trust was made to Mrs Gallagher subject to pre employment checks. An Enhanced Disclosure Certificate (EDC) issued by AccessNI (a statutory body created to facilitate such disclosures) revealed the full extent of Mrs Gallaghers criminal convictions and the offer of employment was withdrawn by the trust in a letter dated 23 October 2014. This made it clear that the offer was withdrawn because Mrs Gallagher had failed fully to disclose her previous convictions. CRCs, ECRCs and EDCs before 2013/2014 The Disclosure and Barring Service (DBS) is the agency responsible for the issue of certificates under the Police Act 1997 (the 1997 Act). Part V of that Act, together with the Rehabilitation of Offenders Act 1974 (the 1974 Act) and the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (the 1975 Order), contains the criminal records disclosure scheme. According to the appellants, the Secretary of State for the Home Department (SSHD) and the Secretary of State for Justice (SSJ) (together the SoSs), the scheme seeks to safeguard the vulnerable and help ensure that employments, offices and licences which require a particularly high level of trust continue to command public confidence. These aims are achieved, it is said, by providing potentially relevant criminal conviction information to prospective employers and appointing bodies. It is a significant feature of the scheme, the SoSs claim, that it is then for those employers and appointing bodies to consider the relevance of the material by reference to the employment, licence or office that has been applied for. Section 4(2) (3)(b) of the 1974 Act applies to such convictions as are to be treated as spent under the Act; and paragraph 3(3) (5) of Schedule 2 to the Act applies in similar fashion to cautions. In broad summary they provide that, where a question is asked of a person about his or her criminal record, they are not required to disclose convictions which are spent and he or she is not liable for failure to do so. These provisions also stipulate that a persons spent conviction or his caution or a failure to disclose it, cannot justify his exclusion or dismissal from a profession or employment or any action prejudicial to him in the course of his employment. The 1975 Order created exceptions to these provisions. Article 3 of this Order, as amended by article 4 of the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) Order 2001 and article 4 of the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2008 provides that a persons entitlement not to disclose either spent convictions or cautions in answer to questions does not apply to situations in which the questions are asked in order to assess his or her suitability in any one of 13 specified respects. These include his or her suitability for admission to certain professions and for engagement on certain types of employment; his or her assignment to work with children in particular circumstances; his or her assignment to work which involves national security; or a proposed adoption of a child; and for assignment to the provision of day care. As Lord Wilson pointed out in para 9 of his judgment in In re T (see para 147 et seq below) the shape of the 1975 Order is clear. The circumstances in which information is sought dictate whether an exception from protection under the 1974 Act arises. When it arises, the duty to disclose in response to the request and the entitlement of the person who has made the request to act in reliance on the disclosure or on a failure to do so are both absolute. They are unrelated to the circumstances in which the spent conviction or the caution arose. As Lord Sumption has pointed out (in para 8), paras 10 to 12 of Lord Wilsons judgment contain a concise and useful summary of the effect of the 1997 Act on the disclosure regime. I do not repeat them here because they are fully quoted by Lord Sumption. Until 29 May 2013, therefore, the scheme for the disclosure of criminal records established by Part V of the 1997 Act provided that, where an individual requested a Criminal Record Certificate (CRC) under section 113A or an Enhanced Criminal Record Certificate (ECRC) under section 113B, so long as the requirements of the legislation were met, such certificates would contain details of all convictions and cautions held on the police national computer against an individual, including those that would otherwise be spent under the 1974 Act. As Lord Wilson pointed out, ECRCs are the subject of separate provision because they can contain what is described as non conviction information, described as soft intelligence section 113B(4) of the 1997 Act. In Northern Ireland, before April 2014, all convictions were recorded on an EDC. Those applying for employment for posts where an EDC was required had to self declare where an employer asked for that information. In other words, if you applied for a post where an EDC was compulsory, you had to make a declaration about all your convictions. Where an employer applied for information about the convictions of a prospective employee, details of all convictions and cautions were supplied. The position in Northern Ireland is helpfully set out by Gillen LJ in his judgment in that case ([2016] NICA 42). At para 7 he provided a short summary of the scheme that applied at the time Mrs Gallagher made her application for employment, with some passing allusions to reforms brought about in 2014: On 1 April 2008, a statutory scheme for disclosure of criminal record information had entered into force in Northern Ireland. In April 2014, shortly after the respondent applied to the Trust, this statutory scheme was amended in light of changes to the same scheme in England and Wales. Under the scheme, AccessNI, a branch within the appellant Department, is responsible for carrying out checks on criminal records and police information on individuals who wish to work in certain types of jobs to enable employers to make safer recruitment decisions. The checks are carried out under Part V of the Police Act 1997 and AccessNI will then produce a Disclosure Certificate. There are three levels of check: basic, standard and enhanced. Enhanced checks, required for those working closely with unsupervised children and vulnerable adults, make disclosure of the full criminal history including spent and unspent convictions (subject to the filtering scheme created by the 2014 statutory reform). In para 10, Gillen LJ observed that the parties were agreed that the key issue in the case was whether the statutory requirement that, in the case of an EDC and its parallel requirement for self disclosure, the existence of more than one conviction required the disclosure of all convictions, irrespective of their vintage or the circumstances in which they occurred, is lawful. As Gillen LJ explained in para 11, two statutory schemes were relevant in Mrs Gallaghers case. First, the provisions of Part V of the Police Act 1997 which (as in England and Wales) provided for the disclosure on a CRC of any conviction where the person concerned had more than one criminal conviction of any kind. Secondly, the self disclosure arrangements under the Rehabilitation of Offenders (Exceptions) Order (Northern Ireland) 1979 (SR(NI) 1979/195) (the equivalent of the 1975 Order in England and Wales) which enabled an employer to seek information from an applicant in respect of convictions that otherwise would be regarded as spent under the Rehabilitation of Offenders (Northern Ireland) Order 1978 (SI 1978/1908) (the equivalent of the 1974 Act). R (T) in the Court of Appeal On 29 January 2013 in R (T) v Chief Constable of Greater Manchester Police [2013] EWCA Civ 25; [2013] 1 WLR 2515 the Court of Appeal held that the statutory regime under section 113B of the 1997 Act was disproportionate to the general legitimate aim of protecting the rights of employers and of the children and vulnerable adults for whom they were responsible. It was also disproportionate to the particular legitimate aim of enabling employers to assess an individuals suitability for a particular kind of work. Blanket disclosure went beyond what was necessary to achieve those aims. It did not seek to control the disclosure of information by reference to whether it was relevant to the particular aim. Relevance in this context depended, the Court of Appeal held, on a number of factors. These included the seriousness of the offence, the offenders age at the time of the offence, the sentence imposed or other manner of disposal, the time lapse since the commission of the offence, whether the offender had subsequently reoffended and the nature of the work which he wished to do. The Court of Appeal further held that a blanket requirement of disclosure was inimical to the 1974 Act and its obvious aims. If previous convictions or cautions were irrelevant or only marginally relevant to an assessment of the suitability of an applicant for a particular post, the requirement that there be disclosure of all recordable convictions or cautions went against the interests of re integrating ex offenders into society to enable them to lead positive and law abiding lives. The court considered that it should be possible for the legislature to produce a proportionate scheme which did not insist on an examination of the facts of every case. In light of the failure to devise such a scheme, the regime which was then in force could not be saved merely because it provided a bright line rule which had the merit of simplicity and ease of administration. A number of themes can be detected in the Court of Appeals judgment. These include: (1) The disproportionality of the policy of blanket disclosure in relation to what are described as its general and particular aims; (2) The importance of connecting disclosure to the aim which the policy sought to achieve; (3) The need for the policy to be tailored to the realisation of the aim hence, the requirement to take into account factors such as the seriousness of the offence, the offenders age, the vintage of the offence, whether there had been further offences and the nature of the work applied for; (4) Regard must be had to the rehabilitative aims of the 1974 Act and the possibility that a too widely drawn system of disclosure might undermine these; and (5) The impact of a bright line rule on individual cases must be carefully assessed, notwithstanding its advantages of simplicity of application. The respondents in the T case appealed to this court. Before that appeal was heard, however, the SoSs laid draft orders before Parliament to amend the 1997 Act and the 1975 Order. They were passed by both Houses by affirmative resolution, following debates on the proposed amendments and became the Police Act 1997 (Criminal Record Certificates: Relevant Matters) (Amendment) (England and Wales) Order 2013 (the 2013 Order) and the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (Amendment) (England and Wales) Order 2013. Before dealing with the content of the amendments, it is necessary to say something about the circumstances in which they came to be made. The background to the reforms in 2013 A review of the circumstances in which the reforms in 2013 took place must begin at a time well before the judgment of the Court of Appeal in the T case was given. Alison Foulds, a policy official in the Sentencing Unit in the Ministry of Justice, is what is described as the Policy Lead on the Rehabilitation of Offenders Act 1974, and the leader of policy on adult custodial sentencing policy. In witness statements produced in these proceedings, she acknowledged that the starting point was the protection which the 1974 Act provides to rehabilitated offenders from having to reveal certain past convictions and cautions once a specified period of time has passed. She accepted that the overall purpose of the Act was to assist the reintegration and resettlement of ex offenders into employment by not requiring them or any other person to answer questions regarding their spent convictions. As discussed above, the 1975 Order created exceptions to the Act so that, in some circumstances, spent, as well as unspent, convictions and cautions must be disclosed and may be taken into account when assessing a persons suitability for certain positions. This is said to reflect that, while it is generally desirable to help ex offenders to obtain employment, the public must remain adequately protected. As noted above, an application under section 113A or section 113B of the 1997 Act resulted in the issue of certificates containing details of all convictions and cautions held on the police national computer, including those that would otherwise be spent under the 1974 Act. It was against this background that on 7 September 2009 SSHD appointed Sunita Mason as the Independent Adviser for Criminality Information Management. As Lord Sumption has said (in para 57) she was asked to conduct a review of the retention and disclosure of records held on the police national computer. It is important to note that this was for the express purpose of providing an impartial perspective on whether a more proportionate approach could be taken. Her appointment had been prompted by a Court of Appeal judgment in the case of the Chief Constable of Humberside Police v Information Comr [2009] EWCA Civ 1079; [2010] 1 WLR 1136. As Lord Sumption has said (also in para 57) Mrs Masons first report, A Balanced Approach was published in March 2010. It recommended that information provided from the police national computer in relation to employment checks should be filtered, using specific business rules. Specifically, however, Mrs Mason stated that the purpose of this was to ensure that employers were not given every item of criminal record information. This advice was accepted, and Mrs Mason was appointed to chair an independent advisory panel for the disclosure of criminal records. The panel was to provide support and expert advice to Mrs Mason with a view to improving the arrangements for disclosing criminal records, with particular emphasis on the filtering of old and minor records. On 22 October 2010, SSHD established the Criminal Records Review whose terms of reference were to examine whether the criminal records regime strikes the right balance between respecting civil liberties and protecting the public. It is expected to make proposals to scale back the use of systems involving criminal records to common sense levels. Mrs Mason conducted the review. Her report on its first phase was published on 11 February 2011. In it she said that she was keen to ensure that the government implemented an appropriate form of filtering in the CRB process that removes conviction information that is undeniably minor, and which cannot be classed as anything other than old. She noted that the review team was considering a mechanism to prevent old and minor convictions from being disclosed through criminal record checks and recommended that the government should introduce a filter to remove old and minor conviction information (including caution, warning and reprimand information) from criminal records checks. She identified a number of what she described as conviction types which should always be disclosed and gave a list of examples of these. They included: (a) assault and violence against the person; (b) affray, riot and violent disorder; (c) aggravated criminal damage; (d) arson; (e) drink and drug driving; (f) drug offences; (g) robbery; and (h) sexual offences. In her report Mrs Mason also observed that there were a number of important opinions and views around what constitutes serious. She gave the example of possession of a quantity of cannabis which may be considered by some as not serious but more serious by others, where individuals have regular access to controlled drugs. She also said that it could be argued that low level convictions for violence such as common assault may become more important where the individual works with children or vulnerable adults. The report on the second phase of the review was published on 6 December 2011, at the same time as the governments response to the review teams recommendations. In that response, the government indicated that it would continue to consider whether to introduce a filter for old and minor conviction information from CRB checks. On 16 December 2011 Mrs Mason made a further report to the SoSs. She said that the review team had agreed a number of principles. These were: (1) Filtering should include convictions, cautions, warnings and reprimands, aligned to the conviction type; (2) There should be a consultation process before a particular conviction type can be subject to filtering; (3) Extra consideration should be given to convictions, cautions, warnings and reprimands defined as minor received by individuals before their 18th birthday; (4) There should be a defined period of time after which minor convictions, cautions, warnings and reprimands are not disclosed. This would cover the old element of the proposal; (5) The rules should ensure that no conviction is filtered out if it is not spent under the provisions of the Rehabilitation of Offenders Act; (6) Particular care should be taken before considering any sexual, drug related or violent offence type for filtering; (7) Where any conviction, caution, warning or reprimand recorded against an individual falls outside the minor definition then all convictions should be disclosed, even if they would otherwise be considered as minor; (8) The filtering rules should be both simple and understandable to individuals who are users and/or customers of the disclosure service. So far as the implementation of those principles was concerned, however, there was no consensus among the members of the review group. The recommendation as to the criteria to be used in applying the principles was that of Mrs Mason alone. The criteria were: Is the conviction defined as minor? If not, then disclose; (1) (2) Does the individual have a single minor conviction? If not, then disclose; (3) Was the single minor conviction received before the person was 18? If yes, then the conviction will not be disclosed if it is spent and more than six months old; (4) Was the single minor conviction received after the person was 18? If yes, the conviction can be filtered out if it is spent and it is more than three years old. Mrs Mason referred again to the debate as to what could properly be described as a minor offence and said this: The Group felt that any definition of minor should be set by the Government and [be] subject to a full consultation process. However, the following small number of [conviction] types are provided as working examples of what might constitute a minor offence (subject, of course to further debate and consultation): Drunk and disorderly Offence against property; Failing to report an accident. This rider to Mrs Masons advice was added: There will always be exceptional cases where a conviction filtered out using the standard rules is, nevertheless relevant for inclusion in a disclosure because of the particular circumstances of the post being applied for. For that reason, it would be important to retain the capacity for the police to add such convictions back into disclosures as part of local police information. Various possible approaches to the matter of filtering out old and minor convictions and cautions were discussed in the report. These included linking the filtering mechanism to the seriousness of the penalty imposed for a particular offence; placing the onus on the criminal courts to decide at the point of sentencing whether or not a conviction would fall to be disclosed in a criminal records check; and leaving the decision to the police in every case, thereby harmonising the position vis a vis convictions with that under section 113B(4) of the Police Act 1997 in relation to police intelligence information. The appellants assert that, after receiving this report, careful consideration was given to the question of how best to devise a mechanism for filtering out offences which were undeniably minor, and which could not be classified as other than old. It is claimed that this question gives rise to serious practical difficulties. Some of these difficulties were discussed in a witness statement of John Woodcock, then Head of Criminal Records Policy within the Safeguarding and Public Protection Unit of the Home Office, filed in the case of T. Lord Sumption has referred to this in para 58. Mr Woodcock made the unexceptionable claim that deciding which offences were minor was not easy. He accepted that there were good arguments in favour of recognising a connection between the vintage of the offence and its seriousness in deciding what to filter out. Minor offences could be weeded out after five years and intermediate offences after ten years, but the exercise which this would involve added an unwelcome layer of complexity. Mr Woodcock considered that disposal (ie the sentence imposed) rather than the type of offence committed could be used as a more reliable indicator as to whether a particular form of offending should be filtered out. A possible model was that all cautions could be filtered out after three years, fines after five years and sentences of up to three years after seven years. Operated inflexibly, however, such a scheme would give rise to difficulty. There were risks of filtering out specific cases, details of which ought to be disclosed. Mr Woodcock instanced some sexual or violent offences where, by reason of their particular circumstances, relatively light sentences might have been imposed. One solution, he suggested, might be to exclude all offences which had a sexual or violent element. Another option was to make the decision whether to disclose entirely discretionary. The police could be asked to decide on a case by case basis whether a specific conviction, caution, reprimand or warning was sufficiently relevant to include in a disclosure. In Mr Woodcocks estimation, this carried a risk of inconsistency and he thought that there would be significant resource implications for the police. Moreover, he said, it was important that any filtering system should be reasonably straightforward and easy to understand, both for applicants and for those using disclosures as part of recruitment processes. In one of her witness statements, Ms Foulds described the scale of the operation that would be required if police were required to deal with applications to disclose on a case by case basis. In the year ending in August 2014, of the almost four million applications for record certificates received, 329,891 involved data contained on the police computer. Almost 330,000 applications would have to be considered individually, therefore, if a case by case assessment of these was undertaken. The circumstances described in paras 113 to 126 above formed a crucial part of the background to the reforms of the scheme proposed in 2013. The other vital element of that background was, of course, the decision of the Court of Appeal in R (T). As I have said, judgment in that case was given on 29 January 2013 and Ms Foulds has said that it informed the final policy. The reforms effected by the 2013 Order The essence of the proposed reforms is perhaps best captured in the statement made by the minister for the Home Department in the House of Lords. The relevant parts of that statement are these: all cautions and convictions for serious violent and sexual offences and for certain other offences specified in the orders, such as those directly relevant to the safeguarding of vulnerable groups including children, will continue to be disclosed, as will all convictions resulting in a custodial sentence. For all other offences, the orders provide for the following filtering rules to be applied: cautions. and equivalents, administered to a young offender will not be disclosed after a period of two years; adult cautions will not be disclosed after a period of six years; a conviction received as a young offender resulting in a non custodial sentence will not be disclosed after a period of five and a half years; and an adult conviction resulting in a non custodial sentence will not be disclosed after a period of 11 years; but all convictions will continue to be disclosed where an individual has more than one conviction recorded. In her discussion of the impact of the proposed reforms Ms Foulds claimed that the draft Orders took into account the issues raised in the Court of Appeal judgment in T, instancing the following aspects: the disposal made; the offence committed; the age of the offenders; and the period which had elapsed between caution or conviction and the application for a CRC. The duty facing the SoSs in devising a scheme to accommodate the decision of the Court of Appeal in T was described by Ms Foulds in the following paragraphs of her first witness statement: 37. The task for the SSHD and the SSJ was to come up with a workable scheme, which was sufficiently nuanced and also sufficiently certain. The scheme had to be readily understood and certain so that individuals would know what was protected from disclosure, and so that the DBS system could be changed, and certificates could still be issued automatically. Any system has, of course, to have bright lines and it is not workable to have any discretion in relation to individual eases, or different disclosure criteria for different occupations, not least because of the sheer number of applications. I understand that the DBS system works by automatically recognising offence codes and other information provided from the PNC. The automated solution does not provide any mechanism to identify the specific circumstances of individual offences and this would require significant manual intervention. 38. In relation to the amount of time which has to elapse before a caution or conviction may be protected from disclosure, we had regard to the Court of Appeals judgment. The Court of Appeal found in one case that it was disproportionate to disclose a caution received as an adult after a period of seven years, although it did not specify what might be a reasonable period. The filtering policy therefore allows an adult caution (for a non specified offence) to be protected from disclosure after a period of six years and after two years for a caution received as a young offender. For convictions we added six years to the then longest rehabilitation period for a non custodial disposal which was five years, giving us a period of 11 years which had to elapse from the date of conviction before it could be protected from disclosure. This means that, as with a caution, a period of six years has to elapse after the disposal is spent before it can be filtered out. The period was halved for convictions received as a young offender in line with the general policy on rehabilitation periods. The technical detail of the reforms, as enacted in the 2013 Order, is well summarised in para 11 of the judgment ([2017] EWCA Civ 321; [2018] 1 WLR 3281) of Sir Brian Leveson, the President of the Queens Bench Division, in the Court of Appeal: The revised scheme no longer requires disclosure of every spent conviction and caution but, from 29 May 2013, requires disclosure only in the following circumstances. Any current conviction or caution, currency depending upon the period which has elapsed since the date of the conviction or caution and which differs, as a consequence of the operation of the 1974 and 1997 Acts, depending on whether, at the time of the conviction or caution, the person concerned was under 18 years of age or aged 18 or over: see the definition of relevant matter in section 113A(6)(a)(iii) and (d), a current conviction in section 113A(6E)(c) and a current caution in section 113A(6E)(d) of the 1997 Act and articles 2A(l) and 2A(2) of the 1975 Order. Any spent conviction or caution in respect of certain specified offences (including a number of identified offences but, of more significance, all offences specified in Schedule 15 [to] the Criminal Justice Act 2003 which includes, for example, assault occasioning actual bodily harm): see the definition of relevant matter in section 113A(6)(a)(i) and (c) and the list of specified offences in section 113A(6D) of the 1997 Act and articles 2A(l), (2) and (3)(a) read together with article 2A(5) of the 1975 Order (the serious offence rule). Any spent conviction in respect of which a custodial sentence or sentence of service detention was imposed: see the definition of relevant matter in section 113A(6)(a)(ii) of the 1997 Act, of conviction in section 113A(6E)(a), caution in section 113A(6E)(b) and custodial sentence and sentence of service detention in section 113A(6E)(e) and articles 2A(2), 2A(3)(b) and 2A(4) of the 1975 Order. Any spent conviction where the person has more than one conviction: see the definition of relevant matter in section 113A(6)(b) of the 1997 Act and articles 2A(2) and 2A(3)(c) of the 1975 Order (the multiple conviction rule). The operation of the changes was described by McCombe LJ in paras 14 16 of his judgment in the first of the cases under appeal to the Court of Appeal, R (P and A) v Secretary of State for Justice [2016] EWHC 89 (Admin); [2016] 1 WLR 2009. These paras were quoted by Sir Brian Leveson in para 12 of his judgment: 14. The effect is that where there are two or more convictions, they are always disclosable on a CRC or an ECRC. Further, where a conviction is of a specified kind or resulted in a custodial sentence or is current (ie for an adult within the last 11 years and for a minor within the last five years and six months), then it will always be disclosable. 15. The offences listed in subsection (6D) are extensive, and include murder and offences specified under Schedule 15 to the Criminal Justice Act 2003, ie more serious offences of violence (including assault occasioning actual bodily harm) and all sexual offences, but not, for example theft or common assault. 16. The primary feature of this new scheme which catches the claimants in the present case is that where there is more than one conviction all of them are disclosable throughout the subjects lifetime. However, in the case of one of the claimants (P) one matter is not disclosable; that is, the theft which resulted in a caution alone and no conviction. That flows from the fact that that offence is neither a subsection (6D) offence and is not current. The reforms in Northern Ireland The reforms in Northern Ireland are described by Gillen LJ in paras 16 18 of his judgment: 16. The Rehabilitation of Offenders (Exceptions) (Amendment) Order (NI) 2014 changed its predecessor the 1979 Order in that it re instated protection in the case of what it named as protected caution and protected conviction. A caution is protected if it was given otherwise than for any of 14 listed categories of offence and if at least six years have passed since the date of the caution (or two years if the person was then a minor): article 4. A conviction is protected if it was imposed otherwise than for any of the listed categories; if it did not result in a custodial sentence; if the person has not been convicted of any other offence; and if at least 11 years have passed since the date of the conviction (or five and a half years if he was then a minor). 17. The Police Act 1997 (Criminal Records Certificates: Relevant Matters) (Amendment) Order (Northern Ireland) 2014 amended its predecessor narrowing the content of the Criminal Record Certificate and the Enhanced Criminal Record Certificate analogously. The obligation is to include in the certificate details of every relevant matter. Whereas the definition of relevant matter originally included all convictions including all spent convictions, the new Order amends the definition so as to render the obligation to make disclosure of spent convictions and of cautions under the 1997 Act broadly co extensive with the new narrower obligation of the person to make disclosure under the amended 1979 Order. 18. These recent amended Orders therefore represent a departure from the former regime under which disclosure of all spent and unspent convictions and all cautions was required of the question that was put or the application for a certificate made, in the specified circumstances. Even in those circumstances certain spent convictions and cautions, identified by their subject matter and in the case of a conviction also by the sentence, and also by the number and age of them, are no longer required to be disclosed. (See In re T per Lord Wilson at paras 13 15.) Significantly they would not have made any difference to her obligation to disclose her convictions. As Gillen LJ pointed out in para 19, a person such as she, having more than one conviction, would still have to disclose all her convictions to the employer. All her convictions would be set out in the ECRC by AccessNI notwithstanding that none of her offences was a specified offence; did not result in a custodial sentence; and was more than 11 years old. Further scheme changes were introduced by Schedule 4 to the Justice Act (Northern Ireland) 2015. This inserted a new Schedule 8A to the Police Act 1997 which significantly altered the position about data disclosure in Northern Ireland. An independent review mechanism has been introduced to deal with criminal record disclosures. Information which is eligible for review (in broad terms, spent convictions) will not be disclosed where the independent reviewer is satisfied, first, that disclosure would be disproportionate and, second, that non disclosure would not undermine the safeguarding or protection of children and vulnerable adults, or pose a risk of harm to the public. The factors that the independent reviewer must take into account are: (i) The nature of the position being applied for; (ii) The seriousness of the offence(s); (iii) How long ago the offence(s) occurred; (iv) How many offences are being disclosed and, if more than one, whether they arose out of a single court hearing; (v) When the information would fall to be considered for filtering; and (vi) The age of the applicant at the time of the offence(s), including, in those cases where the applicant was under the age of 18 years, the need to have the best interests of children as a primary consideration. R (T) in the Supreme Court In R (T) v Chief Constable of Greater Manchester Police (Liberty intervening), R (B) v Secretary of State for the Home Department (Liberty intervening) [2015] AC 49, (the appeal before this court from the decision of the Court of Appeal), there were, at least so far as concerns the present case, two principal issues. The first was whether disclosure of confidential information regarding an individuals criminal history, constituting, as it did, an interference with the respondents right under article 8.1 of the European Convention on Human Rights and Fundamental Freedoms (ECHR) to respect for a private life met the requirements in article 8.2 of being in accordance with the law and necessary in a democratic society. The second issue was whether, if the legislation could be said to pursue a legitimate aim and was in accordance with law, it was justified. By a majority (Lord Wilson dissenting) this court held that Part V of the 1997 Act was in breach of the requirement of legality because it contained no safeguards against arbitrary interference with the article 8 right. There was no clear legislative framework for the collection and storage of data, no clarity as to the scope, extent and restrictions of the common law powers of the police to retain and disclose caution data; no mechanism for independent review of a decision to retain or disclose data; and no means by which the proportionality of the decision to disclose could be assessed. Although it was necessary to check that persons wishing to work with children or the elderly did not present an unacceptable risk to them, the disclosures required by Part V of the 1997 Act were not based on any rational assessment of risk. They therefore failed the test of being necessary in a democratic society. The most important element of the judgments (for the purposes of the present case) is that there must be adequate safeguards built into a scheme for data disclosure which will allow for a proper evaluation of the proportionality of the interference with article 8 rights. The condemnation of the provisions for the lack of any mechanism for independent review of a decision to disclose data is also important. In fact, of course, the disclosure of data under the current arrangements is entirely automatic, conducted without any regard to the individual circumstances of particular cases within the defined categories. However compelling those circumstances might be, they can never be called into account to displace the disclosure, if the case falls on the wrong side of the so called bright line rule. And therefore, in my view, this is not in any sense merely a bright line rule; it is a rule of inevitably automatic and universal application. It admits of no possible exceptions, if the case comes within one of the categories in which disclosure is preordained. The case of the respondent G graphically illustrates this. Although the data supervisor was anxious to mitigate the effect of the release of information, knowing full well its likely impact, he was powerless to withhold it. On the second issue, this court unanimously held that laws requiring a person to disclose previous convictions or cautions to a potential employer, which affected his or her ability to pursue a chosen career, constituted an interference with their right under article 8.1 of ECHR and thus required justification under article 8.2. While the avowed reason for such disclosure requirements, namely the protection of vulnerable groups of person, was a legitimate aim within article 8.2, there was no rational connection between minor dishonesty as a child and the question whether, as an adult, that person might pose a threat to the safety of children with whom he or she came into contact. The requirement to disclose had not been shown to satisfy the test of necessity and the interference with the article 8 right was therefore not justified. The requirement of legality Article 8 of ECHR provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. On what the requirement of in accordance with the law in article 8.2 demands, Lord Reed gave the principal judgment for the majority in T. He explained the conceptual approach to this requirement in paras 113 119 of his judgment. It is unnecessary to set out those paras verbatim, but I consider that a number of central precepts can be gleaned from them: (1) Any law interfering with a persons article 8 rights must ensure that there is adequate protection against arbitrary interference Malone v United Kingdom (1985) 7 EHRR 14; para 113 of Lord Reeds judgment. (2) To escape the charge of the interference being arbitrary, there must be clear, detailed rules on the circumstances in which it may take place Kopp v Switzerland (1999) 27 EHRR 91 and Amann v Switzerland (2000) 30 EHRR 843; again, para 113 of Lord Reeds judgment. (3) The decision as to whether disclosure is to be made should involve consideration of the nature of the offence; the disposal in the case; the time which has elapsed since the offence took place; and the relevance of the data to the employment sought MM v United Kingdom (Application No 24029/07, decision 29 April 2013) para 119 of Lord Reeds judgment. (4) To be in accordance with the law, there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined para 114 of Lord Reeds judgment. (5) There should be a mechanism for independent review of a decision to retain or disclose data, either under common law police powers or pursuant to Part V of the 1997 Act para 206 of MM; para 119 of Lord Reeds judgment. Lord Wilson, in paras 35 39 of his judgment, set out the criticisms made by the SoSs of the judgment in MM and expressed the view that these raise a legitimate concern. His principal reservation about the correctness of the MM decision was that matters which properly fell within the requirement of necessity (in other words, whether the interference was necessary in a democratic society) were being considered as relevant to the question as to whether the interference was in accordance with law. He pointed out (in para 37) that the European Court of Human Rights (ECtHR) had relied on a decision of this court in R (F) (A Child) v Secretary of State for Justice (Lord Advocate intervening) [2011] 1 AC 331 in support of its conclusion that the absence of a mechanism for independent review constituted a failure to observe the legality requirement in article 8.2. In F (A Child), Lord Wilson observed, this courts analysis was specifically conducted in terms of necessity rather than legality. In so far as Lord Wilson might be taken to suggest that a factor relevant to the question of necessity could not also be considered on the issue of legality, I would, with respect, disagree. A factor is either relevant to one of the issues that arise under article 8.2 or it is not. Thus, for instance, the question of the need for a mechanism of independent review is either intrinsically relevant to the issue of legality or is wholly immaterial to that issue. But, if it is relevant, it does not lose that quality simply because it may also affect the judgment as to necessity. As Lord Reed put it in para 114 of his judgment, the question whether the disclosure by the state of personal data is accompanied by adequate safeguards against arbitrary interferences can overlap with the question whether the interference is necessary in a democratic society. Indeed, he accepted that the two issues were interlinked but pointed out that the focus of each was different. He accepted that [d]etermination of whether the collection and use by the state of personal data was necessary in a particular case involves an assessment of the relevancy and sufficiency of the reasons given by the national authorities. But, as he then explained, the other focus, in the context of legality, was on whether there were adequate safeguards against abuse. This is how he put it: As I have explained, the courts focus tends to be on whether there were adequate safeguards against abuse, since the existence of such safeguards should ensure that the national authorities have addressed the issue of the necessity for the interference in a manner which is capable of satisfying the requirements of the Convention. In other words, in order for the interference to be in accordance with the law, there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined. Whether the interference in a given case was in fact proportionate is a separate question. The questions of necessity and legality do not merely overlap, therefore, they are interlinked. In order to determine whether the interference is proportionate, safeguards have to be in place which demonstrate that the authorities have addressed the issue of necessity and to enable their content to be examined as to their adequacy in satisfying the requirement of proportionality. It is essential that the various elements of the legality analysis be clearly recognised and evaluated. I have set these out at para 148 above and have expressed the view that, for the purposes of this case, the fourth and fifth of these, viz that there must be safeguards which enable the proportionality of the interference to be adequately examined; and that there be a mechanism for independent review of a decision to release data, are the most important see para 149 above. The third element is also significant that there should be consideration of the nature of the offence; the disposal in the case; the time which has elapsed since the offence took place; and the relevance of the data to the employment sought. For reasons that I will discuss, the presence of all of these elements in every scheme for data disclosure is not a prerequisite to the scheme satisfying the requirement that it be in accordance with the law. But the fundamental requirement is that the operation of the safeguards must permit a proper assessment of the proportionality of the interference with the article 8 right. If proportionality cannot be confidently judged, the measure cannot be said to be in accordance with the law. The application of the legality elements to the present case The rules challenged in the cases of P, G and W are the multiple conviction rule and the serious offence rule. These are set out in paras 11(iv) and 11(ii) of Sir Brian Levesons judgment, quoted at para 141 above. In the case of Lorraine Gallagher, the challenge is to the requirement to self declare convictions. Although, as I have said, not every element of the conventional features of a legal interference with a Convention right need be present in order for the requirement of legality to be met, it is essential that, in the final analysis, safeguards intrinsic to the scheme will allow for a proper assessment of proportionality. It is against this critical yardstick that the legality of any scheme must be measured. The other elements in the legality equation can be regarded as a sub set of this basic concept. In my view, neither the scheme in England and Wales introduced by the 2013 reforms nor that in Northern Ireland brought about by the 2014 amendments meets this fundamental requirement. It is not possible to judge whether the operation of either scheme would be proportionate in cases which fall into the categories where disclosure is mandated. In some instances, disclosure might well be proportionate; in others it might be wildly disproportionate. There is simply no way of assessing this if the scheme in England and Wales continues in its present form. Leaving aside the question whether there needs to be individual consideration of particular cases, there is no way of calculating whether the scheme as a whole works in a proportionate way. It is unquestionably true, as the appellants submit, that the examples which these particular cases provide should not be taken as generally representative of the effect of the scheme. But it is equally true that one has no means of knowing that they are not. What the cases show is that there is at least the potential for widespread disproportionate outcomes in the disclosure of data if the present system continues. For that reason, it cannot be said that there are safeguards to the scheme which allow its proportionality to be adequately examined. It is no answer to this central flaw in the scheme to say that it is the inevitable consequence of a bright line rule. That argument might have force if it were possible for the appellants to show that, in general, the scheme operates in a proportionate way and that cases at the margins should not detract from its overall effect. In this instance, the appellants cannot make that claim. It is clear from the deliberations which preceded the introduction of the 2013 reforms (described in paras 117 137 above) that the question of how the scheme could be framed so that the safeguards which it contained would allow for an adequate examination of its proportionality was not addressed. This is perhaps not surprising. Mrs Masons task was to come up with a suggested classification of types of offence rather than to propose how the overall scheme might contain safeguards that would illuminate its proportionality. Moreover, the 2013 reforms were considered before Lord Reeds clear statement on what role safeguards had to play in the assessment of proportionality. That statement now provides authoritative and recent guidance on how the question should be approached. Although there was debate as to its significance, there was no suggestion that we should depart from it. For my part, I consider that its meaning and import are clear. What safeguards might be incorporated into the disclosure scheme which would allow its proportionality to be examined? Sir James Eadie QC, appearing for the SoSs, invited this court, in the event that it dismissed the appeal, to indicate what modifications to the scheme in England and Wales might be made. While it is, of course, not for this court to propose specific changes to legislation (and Sir James did not suggest otherwise), it seems to me that a provision which linked the relevance of the data to be disclosed to the nature of the employment sought might go some way to achieving that goal. At present the scheme makes no provision for consideration of the propriety of disclosing information according to the type of post for which the individual has applied. Two objections to this proposed modification are raised. First, it is suggested that employers are in the best position to make a judgment about the relevance of convictions to the prospective employment and that disclosure should be made so that they can make that judgment. It would be wrong, so the argument goes, to pre empt their consideration of possibly relevant material. Second, it is claimed that to impose such a requirement on DBS would unwarrantably increase its burden in having to evaluate individual cases. The argument that employers are in the best position to make a judgment about the relevance of convictions addresses the question from a single perspective that the standard position should be that disclosure be made of all material that might remotely, even unexpectedly, be relevant. Lord Sumption has said that the evidence available to support the argument that employers cannot be trusted to take an objective view of the true relevance of a conviction, is distinctly thin. Well, the evidence of the four cases involved in this appeal must go some considerable way to support the assertion. And there is certainly no evidence to sustain the notion that these cases are in any sense untypical. It would surely be impossible to quarrel with what Lord Wilson said in T at para 45: In these days of keen competition and defensive decision making will the candidate with the clean record not be placed ahead of the other, however apparently irrelevant his offence and even if otherwise evenly matched? The notion of a killer blow to the prospects of employment resulting from the disclosure of even minor and unrelated offences (cf Lord Neuberger in R (L) v Comr of Police of the Metropolis [2010] 1 AC 410, at para 75 and referred to in para 52 by Lord Sumption) can be overstated. But, in my view, it is wholly unrealistic not to recognise that many employers, faced with a choice of candidates of roughly similar potential, would automatically rule out the one with a criminal record. That consideration simply cannot be ignored by the disclosure authority. Indeed, Lord Sumption accepts as much in the final sentence of para 52. It is, thus, incumbent on those responsible for devising a scheme of disclosure to be aware that at least some employers will regard the existence of a criminal record as an automatic bar to choosing the candidate with the record. Where, therefore, it is abundantly obvious, as in many cases it will be, that the criminal record of an individual could have no conceivable relevance to the position for which he or she applies, a system in which disclosure is not made is not only feasible but essential. As to the second objection, there is no reason to suppose that a system could not be devised whereby a correlation (or, more importantly, the lack of one) between the criminal record and the position applied for could be identified. This would obviate the need for individual consideration of every case. Thus, by way of example, if the position applied for did not involve contact with vulnerable adults or children and the criminal record of the person applying consisted of two convictions for shoplifting, both committed when the applicant for employment was considerably younger, it would undoubtedly be disproportionate to disclose his or her record. Although this is a specific example, a code could surely be devised that would cater for that type of case. As it is, under the present system, more than one conviction will, automatically and unavoidably, require disclosure. Indeed, the current process does not reflect some of the recommendations made by Mrs Mason and her team. As recorded in para 124 above, in her report of 11 February 2011 she said that the government should implement an appropriate form of filtering in the CRB process that removes conviction information that is undeniably minor, and which cannot be classed as anything other than old. This does not happen, as the case of P exemplifies. It is true, of course, that Mrs Mason considered that where there was more than one, even minor, conviction, there should be disclosure. But this was because she felt that more than one conviction might be an indicator of a pattern of offending. The case of P clearly demonstrates that more than one conviction does not, of itself, indicate a pattern of criminal behaviour. Again, without requiring individual examination of every case, it should surely be possible to come up with a system which more reliably tests whether a person who has been found guilty of more than one offence should be considered to have displayed a pattern of offending. Thus, for instance, the age of the offences and/or their wholly disparate nature could act as a filter. If two offences of wholly different character were committed several years before the question of disclosure arose and if neither was remotely relevant to the position that had been applied for, could it possibly be said to be proportionate to disclose them? To exclude such offences as a matter of general filtering, rather than consideration of the individual circumstances of the case would be a sensible, workable system. The suggestion that such offences be included in the disclosure package places far too high a premium on the prospect of an adventitious outcome to the disclosure of material which has no obvious or ready connection with the post that has been applied for. Disclosing apparently irrelevant and ancient criminal convictions comes at a price. That is the undermining of the aims of the 1974 Act. In his judgment in the Court of Appeal in the T case, Lord Dyson MR in para 39 explained why this was so: The disclosure regime was introduced in order to protect children and vulnerable adults. That objective is not furthered by the indiscriminate disclosure of all convictions and cautions to a potential employer, regardless of the circumstances. A blanket requirement of disclosure is inimical to the 1974 Act and the important rehabilitative aims of that legislation. Disclosure that is irrelevant (or at best of marginal relevance) is counter to the interests of re integrating ex offenders into society so that they can lead positive and law abiding lives: see Mrs Masons Phase 2 report, at p 19 Although the reforms of 2013 (in England and Wales) and 2014 (in Northern Ireland) have reduced the categories in which automatic disclosure will be made, the blanket requirement of disclosure within the remaining categories endures. There is no reason to suppose that disclosure that is irrelevant or of marginal relevance will not continue to occur within the fewer categories that are the result of the reforms. The reduction of the number of categories does not eliminate the essential problem. For this reason, the other possible safeguard which might enhance the opportunity for a proper investigation of the proportionality of the interference with article 8 rights is a review mechanism such as that introduced in Northern Ireland in 2016. It has been suggested that this would create an impossible logistical burden for the authorities and, in this regard, reference has been made to the statistics produced by Ms Foulds (referred to at para 136 above). Those statistics were produced to indicate the scale of operation that would be required if every application for data disclosure had to be examined in detail as to its particular circumstances. The experience of the working of the Northern Irish model does not indicate that a substantial percentage of proposed disclosures will prompt applications to the reviewer. At present, therefore, there is no evidence that this is not a perfectly viable option for England and Wales. It is important to point out that I do not propose that every application should be subject to individual review. I accept the reservations expressed by Mr Woodcock (see para 135 above) that to require the authorities to examine every case for its particular circumstances could lead to inconsistency of treatment and be a considerable charge on available resources. The modifications to the present system which I propose do not involve a requirement that every application be considered individually. Lord Sumptions judgment on the question of legality In para 10, Lord Sumption says that the risk of impeding the prospects of employment of ex offenders and the risk that unsuitable persons may be allowed to occupy sensitive positions are not only competing factors, they are incommensurate. Quite so. But this does not relieve the court of its obligation to confront the question whether the interference with citizens article 8 rights which the current system entails is in accordance with the law. The examination of that issue should be no less rigorous on account of the difficulty and sensitivity of the competing factors. It is true that a great deal of thought and expert advice went into the design of the current system. But, for the reasons given above (see para 164) all of that careful preparation did not include consideration of the critical question as to how the safeguards built into the scheme would allow for a proper vouching of its proportionality. As Lord Sumption said in para 13, Sir Brian Leveson P held that the legislation was not in accordance with the law because, although it discriminated between different categories of offence and convictions, the categories were still too broad. In my view, however, the principal reason for finding that the legislation is not in accordance with the law is not because of the width of the categories but because of its inscrutability in terms of assessing the proportionality of the measures which it prescribes. In para 14 Lord Sumption states that the condition of legality relates to the characteristics of the legislation itself, and not just to its application in the present case, citing Kruslin v France (1990) 12 EHRR 547, paras 31 32. And that the declarations which are proposed will mean that, while the current legislation will remain in force as a matter of domestic law until it is amended, it is nevertheless to be regarded as incompatible with article 8, not just as applied to minor offenders like the respondents, but to the entire range of ex offenders including, for example, convicted child molesters, rapists and murderers. Inevitably, reference to serious offenders such as are included in Lord Sumptions account sparks concern. But, as he acknowledges, the legislation remains in force until Parliament, if it decides to, chooses to amend it. There is no realistic prospect of serious offending such as Lord Sumption has instanced coming within the purview of a regime forbidding the disclosure of criminal records. The declarations which have been made by the Courts of Appeal in England and Wales and Northern Ireland, and which I propose should be upheld, do not portend the extension of exemption from the scheme of disclosure to offenders such as these. Quite clearly, under a revised scheme such as is envisaged by this judgment, there is no question that offences such as Lord Sumption has described would continue to be included in the disclosure regime. The proportionality of a scheme requiring offences such as these to be disclosed would not be open to doubt. The prospect of the principle that safeguards sufficient to allow an examination of the proportionality of an interference with an article 8 right being applied to other qualified rights has been raised by Lord Sumption in para 12. I consider that this is a prospect which can be faced with sanguinity. The articles referred to by Lord Sumption, article 5 (right to liberty and security), article 9 (freedom of thought, conscience and religion), article 10 (freedom of expression), and article 11 (freedom of assembly and association), if interfered with by domestic legislation are just as amenable to the incorporation of safeguards capable of establishing their proportionality as is article 8. Lord Sumption suggests that in none of these articles would there be any scope for distinctions based on judgment or discretion or weighing of broader public interests, even on the most compelling grounds, once the relevant measure failed the majoritys exacting test of legality. This, with respect, misses the point. Provided there is a sufficient basis on which the proportionality of the measure can be judged, the debate as to its propriety remains entirely open. It is only where the reason for the interference is unexplained and indiscernible that the exacting test of legality is failed. In paras 16 22 Lord Sumption has traced what he considers to be the contours of Strasbourg jurisprudence in relation to what the expression in accordance with law means. He suggests that in Huvig v France (1990) 12 EHRR 528, para 26 and Kruslin v France (1990) 12 EHRR 547, para 27, the ECtHR has set out the classic definition of law in this context and that a dual test of accessibility and foreseeability for any measure which is required to have the quality of law was established. Accessibility and foreseeability are undoubtedly aspects of the requirement that an intrusive measure be in accordance with law. But they are not comprehensive of that concept. An intervention with a qualified right which cannot on its face be examined for its purpose and proportionality will be equally objectionable to one which cannot be readily accessible or whose application cannot readily be foreseen. At para 37 Lord Sumption expresses the view that the decision in T is treated by the respondents as authority for the proposition that a measure may lack the quality of law even where there is no relevant discretion and the relevant rules are precise and entirely clear, if the categories requiring to be disclosed are simply too broad or insufficiently filtered. This is wrong. The reason for considering that the current legislation is not in accordance with the law is not because the categories are too broad or insufficiently filtered; it is because they do not permit an adequate examination of their proportionality. The requirement that the safeguards provide an opportunity for examination of the proportionality of the interference with a Convention right adds a further dimension to the dual test of accessibility and foreseeability. Lord Sumptions analysis dismisses this essential extra dimension. At para 31 of his judgment, Lord Sumption quotes para 94 of the recent decision of ECtHR in Catt v United Kingdom (Application 43514/15). It should be noted, however, that the Strasbourg court in that case (in paras 106 and 107) made it clear that it did not consider it necessary to decide whether the interference was in accordance with law within the meaning of article 8.2. Moreover, Judge Koskelo, in a separate judgment which concurs with the majority as to outcome, expresses misgivings as to the propriety of that course. At paras 1 4 of Judge Koskelos judgment she said: I agree with the outcome of this case, namely that there 1. has been a violation of the applicants rights under article 8 of the Convention. The majority in the Chamber have reached this conclusion following an analysis as to whether the impugned interference was necessary within the meaning of article 8.2 of the Convention. I do not have any major objections to the essence of that analysis as such. The misgivings I have are in relation to the preceding analysis of whether the interference with the applicants rights under article 8 was in accordance with the law. On this point, the majority do identify a number of concerns but consider that it is not necessary in the present case to reach any firm conclusion as to whether the requirement of lawfulness has been met. Regrettably, I find the approach adopted in this respect lacking in firmness as well as in consistency with existing case law. 2. According to the courts well established case law, the phrase in accordance with the law in article 8.2 of the Convention requires not only that the impugned measure must have a basis in domestic law but that it must also be compatible with the rule of law, which is expressly mentioned in the preamble to the Convention and is inherent in the object and purpose of article 8. Thus, the requirement of lawfulness also refers to the quality of the law in question. This entails that the law should be adequately accessible and foreseeable as to its effects, that is to say formulated with sufficient precision to enable any individual if need be with appropriate advice to regulate his conduct (see, for instance, S and Marper v United Kingdom [GC], nos 30562/04 and 30566/04, para 95, ECHR 2008) 3. For domestic law to meet these requirements, it must afford adequate legal protection against arbitrariness and, accordingly, indicate with sufficient clarity the scope of discretion conferred on the competent authorities and the manner of its exercise. The level of precision required of the domestic law which cannot provide for every eventuality depends to a considerable degree on the context and content of the law in question, such as the field it is designed to cover (ibid para 96). 4. In the field of data protection, the court has considered it essential for the applicable law to provide clear, detailed rules governing the scope and application of the relevant measures as well as sufficient guarantees against the risk of abuse and arbitrariness at each stage of the processing of personal data (see MM v United Kingdom, no 24029/07, para 195, 13 November 2012, and Surikov v Ukraine, no 42788/06, para 74, 26 January 2017; both with further references). These are indeed crucial requirements It is clear that, in Judge Koskelos view, that there must be unambiguous rules which govern the application of the measures under challenge and sufficient guarantees against the risk of abuse and arbitrariness in their application. Even where there is no relevant discretion and the rules are clear, if the categories requiring to be disclosed are too broad or insufficiently filtered (cf Lord Sumptions judgment at para 37), the question remains whether there are sufficient guarantees in place. For the reasons which I have given, I do not consider that there were. On that account Catt does not represent an endorsement of the majoritys position in the present case. In paras 38 40, Lord Sumption seeks to confine the judgment of Lord Reed in T to what he describes as the classic dual test of accessibility and foreseeability. This, I am afraid, cannot be accepted. It is abundantly clear from Lord Reeds judgment in T that he went beyond this dual test by articulating a requirement that the safeguards inherent in the scheme of disclosure should be sufficiently transparent as to allow a judgment as to the proportionality of any interference with a qualified Convention right to be assessed. And I do not consider that Lord Sumptions reference to the judgment in Christian Institute v Lord Advocate [2016] UKSC 51 assists his thesis. In para 80 of that judgment, it is firmly stated that there must be safeguards which have the effect of enabling the proportionality of the interference to be adequately examined. That is a requirement which is quite independent of the need for accessibility and foreseeability. Proportionality It is common case that, if the current scheme in England and Wales can be regarded as in accordance with law, it nevertheless constitutes an interference with the article 8 rights of the respondents and therefore calls for justification under article 8.2 of ECHR. The claimed justification rests primarily on the assertion that a bright line rule, drawn on the lines of the current policy, is warranted and required. The appeals in this case expose the poverty of that argument. How can it possibly be said that it is necessary to reveal to prospective employers that someone engaged in sexual experimentation at the age of 11, when he has an unblemished record in the many years since? Or that someone was convicted of assault occasioning actual bodily harm at the age of 16, who has led a blameless life since then? Likewise, in the cases of P and Mrs Gallagher. These cases should not be consigned to the category of unfortunate casualties at the margins. They represent the significant impact that the current policy choice has on a potentially substantial number of individuals. It is entirely possible to draw the boundaries for disclosable information at a level that would exclude persons such as the respondents in this case. I consider, therefore, that the disclosure of the criminal records of the four respondents is plainly disproportionate. Conclusion I would dismiss the appeals and affirm the declarations of incompatibility which both Courts of Appeal propose. |
The distinct legal personality of companies has been a fundamental feature of English commercial law for a century and a half, but that has never stopped businessmen from treating their companies as indistinguishable from themselves. Mr Michael Hunt is not the first businessman to make that mistake, and doubtless he will not be the last. Mr Hunt is a wealthy investor. The judge found that at the relevant time one of his preferred methods of investment was to lend money to companies whose business was too risky for them to be able to borrow on normal terms from banks. For this he would charge a substantial arrangement fee and interest at a relatively high rate. Swynson Ltd was a company controlled and beneficially owned by Mr Hunt which was used as a vehicle for such transactions, including the one which has given rise to these proceedings. On 31 October 2006, Mr Hunt caused Swynson to lend 15m to Evo Medical Solutions Ltd (or EMSL) for a period of a year. The purpose of the loan was to enable EMSL to finance the management buy out of an American company called Medical Industries America Inc, trading as Evo, which distributed medical equipment in the United States. Shorn of peripheral detail, the result of the buy out was that the 15m was spent on buying out the existing owners of Evo. Evo then became a wholly owned subsidiary of EMSL, whose shares were owned 71.4% by Evos management, 25% by Mr Hunt and 3.6% by an associate of Mr Hunt who joined its board. Swynsons loan to EMSL was secured by charges over Evos assets and limited personal guarantees by the management. Before entering into this transaction, Swynson and EMSL jointly instructed a firm of accountants, Hurst, Morrison Thomson, to carry out due diligence on Evo. They subsequently changed their name to Lowick Rose LLP, but I shall refer to them throughout as HMT. They are now in liquidation. Their report failed to draw attention to some fundamental problems about the companys finances, in particular the insufficiency of its working capital. It is now common ground that that failure was negligent, and that if HMT had carried out their task properly they would have reported the problem and the transaction would not have gone ahead. In the course of 2007, Evo began to experience severe cash flow problems and EMSL began to default on its interest payments. In July 2007, Mr Hunt was told that Evo was at risk of collapse without a substantial cash injection. He decided that the only way of recovering his money would be to provide further funding until Evo was restored to financial health, when it could either be floated or sold. To that end he caused Swynson to lend a further 1.75m to EMSL in 2007. A yet further loan of 3m was made in July 2008, as part of a larger transaction, under which Mr Hunt became the controlling shareholder of EMSL with 85% of the equity, leaving 15% in the hands of the management. Evos financial position did not improve, however, and neither the original nor the further loans were repaid. On 31 December 2008, rather more than two years after the original transaction, the 2006 and 2007 loans were refinanced. Mr Hunt and EMSL entered into a loan agreement under which Mr Hunt personally made a short term loan of 18.663m to EMSL, secured by fixed and floating charges over its assets and undertaking. The loan was interest free, although there was a provision for default interest. It was a term of the agreement that EMSL would apply the loan moneys in satisfaction of the outstanding balance of the 2006 and 2007 loans. EMSL duly did this. There were two reasons for these transactions. The first was that under UK tax legislation governing close companies, once Mr Hunt, who already controlled Swynson, acquired control of EMSL in July 2008, Swynson became assessable to tax on the interest payments due from EMSL notwithstanding that those payments were not being made. The second was that Mr Hunt took the view that it was disadvantageous for Swynson to have a large non performing loan on its books. The result was that the 2006 and 2007 loans were discharged, as Mr Hunt intended. Only the 2008 loan of 3m remained outstanding on Swynsons books. In October 2012 Swynson and Mr Hunt brought the present proceedings in support of a claim against HMT for damages of 16.157m, being the principal amount of all the loans of 19.75m, less sums received under the managements personal guarantees and the value of recoveries from cash and assets in the hands of Evo. The matter came on for trial before Rose J. Liability was conceded in the course of the trial, and by the time that the judge came to give judgment the only outstanding issues related to damages. She found that only the 2006 loan had been made on the strength of HMTs report, but that losses arising from the 2007 and 2008 loans were in principle recoverable as the cost of reasonable steps taken in mitigation, subject to an overall cap of 15m agreed in the letter of engagement. That left for decision the main point taken on damages, and the only one which is presently before this court, which concerned the effect of the discharge of the 2006 and 2007 loans as a result of the refinancing of December 2008. HMT submitted that EMSL having repaid these loans to Swynson, albeit with money borrowed from Mr Hunt personally, Swynson had suffered no loss in respect of them which could be recovered by way of damages. In response, Swynson and Mr Hunt argued four points: (i) that the December 2008 refinancing was res inter alios acta and did not affect the amount of Swynsons recoverable loss; (ii) that if the loss was not recoverable by Swynson it was recoverable by Mr Hunt, on the footing that HMT owed him a duty of care; (iii) that Swynson was entitled to recover on the principle of transferred loss; and (iv) that HMT having been unjustly enriched by Mr Hunts provision of funds to EMSL to repay Swynson, Mr Hunt was subrogated to Swynsons claims against them. The judge accepted point (i) and awarded damages of 15m on that basis. On point (ii) she held that no duty of care was owed to Mr Hunt personally. Points (iii) and (iv) did not arise having regard to her conclusion on point (i) and she did not deal with them. In the Court of Appeal, Mr Hunt abandoned the argument that a duty of care was owed to him personally. But the other three points remained in issue. The Court of Appeal held by a majority (Longmore and Sales LJJ) that the judge had been right about point (i) (res inter alios acta) and dismissed the appeal on that basis. The majority disagreed about point (iv) (unjust enrichment and equitable subrogation). Longmore LJ would have rejected it, while Sales LJ would have accepted it. Davis LJ rejected all three points and would have allowed the appeal. The issues before this court stand as they did in the Court of Appeal. There is, as will be apparent, a measure of overlap between them. Res inter alios acta The general rule is that loss which has been avoided is not recoverable as damages, although expense reasonably incurred in avoiding it may be recoverable as costs of mitigation. To this there is an exception for collateral payments (res inter alios acta), which the law treats as not making good the claimants loss. It is difficult to identify a single principle underlying every case. In spite of what the latin tag might lead one to expect, the critical factor is not the source of the benefit in a third party but its character. Broadly speaking, collateral benefits are those whose receipt arose independently of the circumstances giving rise to the loss. Thus a gift received by the claimant, even if occasioned by his loss, is regarded as independent of the loss because its gratuitous character means that there is no causal relationship between them. The same is true of a benefit received by right from a third party in respect of the loss, but for which the claimant has given a consideration independent of the legal relationship with the defendant from which the loss arose. Classic cases include loss payments under an indemnity insurance: Bradburn v Great Western Railway Co (1874 5) LR 10 Ex 1. Or disability pensions under a contributory scheme: Parry v Cleaver [1970] AC 1. In cases such as these, as between the claimant and the wrongdoer, the law treats the receipt of the benefit as tantamount to the claimant making good the loss from his own resources, because they are attributable to his premiums, his contributions or his work. The position may be different if the benefits are not collateral because they are derived from a contract (say, an insurance policy) made for the benefit of the wrongdoer: Arab Bank Plc v John D Wood Commercial Ltd [2000] 1 WLR 857 (CA), at paras 92 93 (Mance LJ). Or because the benefit is derived from steps taken by the Claimant in consequence of the breach, which mitigated his loss: British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Ltd [1912] AC 673, 689, 691 (Viscount Haldane LC). These principles represent a coherent approach to avoided loss. In Parry v Cleaver, at p 13, Lord Reid derived them from considerations of justice, reasonableness and public policy. Justice, reasonableness and public policy are, however, the basis on which the law has arrived at the relevant principles. They are not a licence for discarding those principles and deciding each case on what may be regarded as its broader commercial merits. On the judges findings, the loss recoverable by Swynson from HMT was that which arose from its inability to recover (i) the 2006 loan which it had made to EMSL on the strength of HMTs reports about Evos financial strength, and (ii) the 2007 and 2008 loans which it made in a reasonable but unsuccessful attempt to mitigate the loss arising from the 2006 loan. So far as the 2006 and 2007 loans were concerned, that loss was made good when EMSL repaid them. The fact that the money with which it did so was borrowed from Mr Hunt was no more relevant than it would have been if it had been borrowed from a bank or obtained from some other unconnected third party. There was nothing special about the fact that Mr Hunt provided the funds, once one discards the idea that HMT owed any relevant duty to him. The short point is that the repayment of the 2006 and 2007 loans cannot be treated as discharging them as between Swynson and EMSL, but not as between Swynson and HMT. If, in December 2008, Mr Hunt had lent the money to Swynson to strengthen its financial position in the light of EMSLs default, the payment would indeed have had no effect on the damages recoverable from HMT. The payment would not have discharged EMSLs debt. It would also have been collateral. But the payments made by Mr Hunt to EMSL and by EMSL to Swynson to pay off the 2006 and 2007 loans could not possibly be regarded as collateral. In the first place, the transaction discharged the very liability whose existence represented Swynsons loss. Secondly, the money which Mr Hunt lent to EMSL in December 2008 was not an indirect payment to Swynson, even though it ultimately reached them, as the terms of the loan required. Mr Hunts agreement to make that loan and the earlier agreements of Swynson to lend money to EMSL were distinct transactions between different parties, each of which was made for valuable consideration in the form of the respective covenants to repay. Thirdly, as the Court of Appeal correctly held, the consequences of the refinancing could not be recoverable as the cost of mitigation, because the loan to EMSL was not an act of Swynson and was not attributable to HMTs breach of duty. Transferred loss The principle of transferred loss is a limited exception to the general rule that a claimant can recover only loss which he has himself suffered. It applies where the known object of a transaction is to benefit a third party or a class of persons to which a third party belongs, and the anticipated effect of a breach of duty will be to cause loss to that third party. It has hitherto been recognised only in cases where the third party suffers loss as the intended transferee of the property affected by the breach. The paradigm case is the rule which has applied in the law of carriage of goods by sea ever since the decision of the House of Lords in Dunlop v Lambert (1839) 2 Cl & F 626, that the shipper may sue the shipowner for loss of or damage to the cargo notwithstanding that the loss has been suffered by the consignee to whom property and risk (but not the rights under the contract of carriage) have passed. In Albacruz (Cargo Owners) v Albazero (Owners) [1977] AC 774, 847 Lord Diplock, with whom the rest of the Appellate Committee agreed, expressed the rationale of the carriage of goods rule as being that: in a commercial contract concerning goods where it is in the contemplation of the parties that the proprietary interests in the goods may be transferred from one owner to another after the contract has been entered into and before the breach which causes loss or damage to the goods, an original party to the contract, if such be the intention of them both, is to be treated in law as having entered into the contract for the benefit of all persons who have or may acquire an interest in the goods before they are lost or damaged, and is entitled to recover by way of damages for breach of contract the actual loss sustained by those for whose benefit the contract is entered into. The party recovering is accountable to the third party for any damages recovered: ibid, p 844. In Linden Gardens Trust v Lenesta Sludge Disposals Ltd [1994] 1 AC 85, this rationale was extended to contracts generally. A contractor had done defective work in breach of a building contract with the developer but the loss was suffered by a third party who had by then purchased the development. The developer recovered the loss suffered by the purchaser. Lord Griffiths, however, suggested (at p 97) that the result could be justified on what has become known as the broader ground. This is that the developer had himself suffered the loss because he had his own interest in being able to give the third party the benefit that the third party was intended to have. He could recover the cost of rectifying the defects because it represented what the developer would have to spend to give the third party that benefit, even though he had no legal liability to spend it. On the broader ground, the principle would not be limited to cases where the loss related to transferred property. It is, however, important to remember that the principle of transferred loss, whether in its broader or narrower form, is an exception to a fundamental principle of the law of obligations and not an alternative to that principle. All of the modern case law on the subject emphasises that it is driven by legal necessity. It is therefore an essential feature of the principle that the recognition of a right in the contracting party to recover the third partys loss should be necessary to give effect to the object of the transaction and to avoid a legal black hole, in which in the anticipated course of events the only party entitled to recover would be different from the only party which could be treated as suffering loss: see Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518, 547 548 (Lord Goff), 568 (Lord Jauncey), 577 578 (Lord Browne Wilkinson), 582 583 (Lord Millett). That is why, as the House of Lords held in this last case, it is not available if the third party has a direct right of action for the same loss, on whatever basis. In the present case the relevant duty was owed to Swynson but the loss has in the event been suffered by Mr Hunt. Since Mr Hunt did not suffer his loss in his capacity as the owner of property, only the broader principle of transferred loss could be relevant to his case. Like others before me, I consider that there is much to be said for the broader principle. But it is not necessary to decide the point on this appeal because it is plain that the principle cannot apply in either form to the present facts. The reason is that it was no part of the object of the engagement of HMT or indeed of any other aspect of the 2006 transaction to benefit Mr Hunt. That is the main reason why no duty of care was owed to him. It is also one reason why the engagement letter was unassignable without consent. Mr Hunts loss arises out of the refinancing of December 2008, which had nothing to do with HMT and did not arise out of their breach of duty. Equitable subrogation as a remedy for unjust enrichment Equitable subrogation is a remedy available to give effect to a proprietary right or in some cases to a cause of action. This is not a case where subrogation is invoked to give effect to a proprietary right. It belongs to an established category of cases in which the claimant discharges the defendants debt on the basis of some agreement or expectation of benefit which fails. The rule was stated by Walton J stated in Burston Finance Ltd v Speirway Ltd (in liquidation) [1974] 1 WLR 1648, 1652 as follows: [W]here As money is used to pay off the claim of B, who is a secured creditor, A is entitled to be regarded in equity as having had an assignment to him of Bs rights as a secured creditor It finds one of its chief uses in the situation where one person advances money on the understanding that he is to have certain security for the money he has advanced, and for one reason or another, he does not receive the promised security. In such a case he is nevertheless to be subrogated to the rights of any other person who at the relevant time had any security over the same property and whose debts have been discharged in whole or in part by the money so provided by him. Most of the cases are indeed about subrogation to securities, but the principle applies equally to allow subrogation to personal rights: Cheltenham & Gloucester Plc v Appleyard [2004] EWCA Civ 291, at para 36; Commissioners for HM Revenue and Customs v Investment Trust Companies (In Liquidation) [2017] UKSC 29. In Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221 the House of Lords reinterpreted the existing authorities so as to recognise that, subject to special defences, equitable subrogation served to prevent or reverse the unjust enrichment of the defendant at the plaintiffs expense. The argument for Mr Hunt is that HMT has been unjustly enriched at his expense by virtue of the discharge of the 2006 and 2007 loans, the loss on which would otherwise have been recoverable from them by way of damages. Equitable subrogation is invoked as the appropriate remedy to reverse that enrichment. I am prepared to assume for the sake of argument that HMT was enriched, although I regard it as rather contrived to treat someone as enriched simply because a contractual counterparty has suffered no loss by his breaches of duty. I am also prepared to assume that if they have been unjustly enriched it was at Mr Hunts expense, although that is also an odd assumption to make on the facts of this case. Although Mr Hunt lent EMSL the money which was used to pay off the debt, his loss was not attributable to the benefit thereby conferred on HMT. It was purely incidental, for Mr Hunt had no claim against HMT and was not affected by the reduction of their liability. He was affected only by the eventual insolvency of the borrower. Nonetheless, I make both of these assumptions in order to focus attention on what seems to me to be the critical questions, namely whether the enrichment was unjust and if so whether subrogation is an appropriate way of addressing the fact. As I shall show, these two questions are closely related. Mr Hunt says that it was unjust because he entered into the December 2008 refinancing under a mistake. The mistake in question has been identified on this appeal by reference to a passage from his witness statement which the Judge accepted: It should be obvious from what I have said that there was no intention on my part or Swynsons part to relieve HMT from any liability due to the refinancing exercise. As far as I was concerned the claim against HMT remained unaffected by this refinancing and was of no concern of theirs. As between me and Swynson the consideration of who technically would be entitled to recover the money from HMT did not matter as I was the owner of Swynson, but it was implicitly understood that the recovery would be held pro rata according to the unpaid lending advanced. In fact, no case of mistake was ever pleaded or advanced at trial. This evidence appears to have been given by Mr Hunt and accepted by the judge in support of the argument that she accepted, namely that the repayment of the loan by EMSL to Swynson was collateral (no concern of theirs). It is therefore not entirely fair to deploy it in a very different legal context. But I will put aside my reservations on that score and approach the matter as if mistake had been an issue at the trial and this finding had been addressed to it. As with any novel application of the relevant principles, it is necessary to remind oneself at the outset that the law of unjust enrichment is part of the law of obligations. It is not a matter of judicial discretion. As Lord Reed points out in Investment Trust Companies (para 39) it does not create a judicial licence to meet the perceived requirements of fairness on a case by case basis: legal rights arising from unjust enrichment should be determined by rules of law which are ascertainable and consistently applied. English law does not have a universal theory to explain all the cases in which restitution is available. It recognises a number of discrete factual situations in which enrichment is treated as vitiated by some unjust factor. These factual situations are not, however, random illustrations of the Courts indulgence to litigants. They have the common feature that some legal norm or some legally recognised expectation of the claimant falling short of a legal right has been disrupted or disappointed. Leaving aside cases of illegality, legal compulsion or necessity, which give rise to special considerations irrelevant to the present case, the defendants enrichment at the claimants expense is unjust because, in the words of Professor Burrows Restatement (2012) at Section 3(2)(a), the claimants consent to the defendants enrichment was impaired, qualified or absent. As Lord Reed puts it in Investment Trust Companies (para 42), the purpose of the law of unjust enrichment is to correct normatively defective transfers of value by restoring the parties to their pre transfer positions. It reflects an Aristotelian conception of justice as the restoration of a balance or equilibrium which has been disrupted. In Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221, Parc had borrowed money from R on the security of a first legal charge over property, and from an associated company, OOL, on the security of a second legal charge. The plaintiff bank partially refinanced the borrowing from R. For regulatory reasons the refinancing was structured as a loan to the general manager of the group holding company, who in turn lent it to Parc who used it to pay off part of the loan from R. The plaintiffs loan was made on the strength of an undertaking by the general manager that intra group loans to Parc would be postponed to the plaintiffs loan. The undertaking was intended to bind all the companies of the group, but in fact bound only the holding company because it was given without the subsidiaries knowledge or authority. OOL accordingly sought to enforce its second charge ahead of the plaintiff. The plaintiff sought to defeat this attempt by claiming to be subrogated to Rs first charge. This depended on the contention that OOL would otherwise be unjustly enriched by the indirect use of the plaintiffs money to discharge indebtedness which ranked ahead of theirs. The House of Lords accepted that contention, holding that the plaintiffs were subrogated to Rs first charge, but only as against intra group creditors who would have been postponed had the general managers undertaking been binding on them. Lord Hoffmann, with whom the rest of the Appellate Committee agreed, distinguished, at p 231H G, between contractual subrogation (as in the case of indemnity insurance or guarantee) and equitable subrogation, which was an equitable remedy to reverse or prevent unjust enrichment which is not based upon any agreement or common intention of the party enriched and the party deprived. He identified as the unjust factor in OOLs enrichment the defeat of the plaintiffs expectation of priority over intra group loans which was the basis on which it had advanced the money. This was so, notwithstanding that that expectation was not shared by OOL who had nothing to do with the transaction and was unaware of it. Lord Hoffmann cited in support of this proposition a number of earlier cases in which a right of subrogation had been held to arise when the expectations of the person paying the money (whether or not shared by the party enriched) were defeated because something went wrong with the transaction. Thus in Chetwynd v Allen [1899] 1 Ch 353 and Butler v Rice [1910] 2 Ch 277, the plaintiff lent money to pay off a prior loan secured by a mortgage on property. The plaintiffs expectation that he would obtain a charge to secure his own loan was based on an agreement with the debtor, but was defeated because unbeknown to him the property in question belonged to the debtors wife. The plaintiff was subrogated to the prior mortgage because otherwise the wife would have been unjustly enriched by the discharge of the debt which it secured. In Ghana Commercial Bank v Chandiram [1960] AC 732, the plaintiff bank lent money to the debtor to pay off an existing loan from another bank secured by an equitable mortgage on property. It did this on the footing that it would obtain a legal mortgage over the property. That expectation was defeated because although the legal mortgage was executed it was invalidated by a prior attachment of the property in favour of a judgment creditor. The plaintiff bank was subrogated to the judgment creditors attachment because otherwise the judgment creditor would have been unjustly enriched by the discharge of the debt which the equitable mortgage secured. In Boscawen v Bajwa [1996] 1 WLR 328, the plaintiff Building Society agreed to lend money on mortgage for the purchase of a property. It paid the loan moneys to the solicitors acting for them and the purchaser, to be held on its behalf until paid over against a first legal charge on the property. The solicitors paid it over to the vendors solicitors to be held to their order pending completion. The plaintiffs expectations were defeated because the vendors solicitors used it without authority to pay off the vendors mortgage before completion and the purchase subsequently fell through so that completion never occurred. The plaintiff was subrogated to the vendors mortgage because otherwise the vendor would have been unjustly enriched by the discharge of the debt which it secured. Likewise, in Banque Financire itself, the plaintiffs expectation of priority over intra group loans was defeated by the general managers absence of authority to bind the subsidiaries. In the absence of subrogation, OOL would have been unjustly enriched because Parcs debt to R, which would otherwise have ranked ahead of its debt to OOL, was discharged at the plaintiffs expense without the plaintiffs effective consent. As Lord Hoffman observed, at p 235A B, the plaintiff failed to obtain that priority over intra group indebtedness which was an essential part of the transaction under which it paid the money. Where the basic conditions for equitable subrogation apply, the fact that the legal right to which the Claimant is subrogated has been discharged is irrelevant. This is because, as Lord Hoffmann explained at p 236, subrogation operates on a fictionalised basis: In a case in which the whole of the secured debt is repaid, the charge is not kept alive at all. It is discharged and ceases to exist It is important to remember that subrogation is not a right or a cause of action but an equitable remedy against a party who would otherwise be unjustly enriched. It is a means by which the court regulates the legal relationships between a plaintiff and a defendant or defendants in order to prevent unjust enrichment. When judges say that the charge is kept alive for the benefit of the plaintiff, what they mean is that his legal relations with a defendant who would otherwise be unjustly enriched are regulated as if the benefit of the charge had been assigned to him. It does not by any means follow that the plaintiff must for all purposes be treated as an actual assignee of the benefit of the charge and, in particular, that he would be so treated in relation to someone who would not be unjustly enriched. In Cheltenham & Gloucester Plc v Appleyard [2004] EWCA Civ 291, the Plaintiff Building Society lent money to Mr and Mrs Appleyard to refinance debts owed to the Bradford & Bingley Building Society secured by a first charge on their home, and to BCCI secured by a second charge. The plaintiff put its solicitors in funds and the solicitors paid the outstanding balance of both debts to the respective creditors. The Appleyards executed a legal charge over the property in favour of the plaintiff. But the charge could not be registered as a legal charge at HM Land Registry because BCCI (which was in liquidation) refused to recognise that it had received the money or to consent to the discharge of its own security, and the terms of that security prohibited any charge subsequent to its own. The plaintiffs were held entitled to be subrogated to the legal charge of Bradford & Bingley to the extent of the value of the Bradford & Bingley mortgage at the time it was paid off. This was because otherwise the Appleyards would be unjustly enriched to the extent that their property was burdened with a lesser security. In Banque Financire and the earlier cases cited by Lord Hoffmann the defendants did not share the expectation of the claimant, whereas in Cheltenham & Gloucester they did. But in either case the intentions of the defendants were beside the point. The reason was that the claimant had bargained for the benefit which failed, whereas from the defendants point of view the discharge of the prior indebtedness was a windfall for which they had not bargained. If they had given consideration for it the result would have been different. This point may be illustrated by the other leading modern case, Bank of Cyprus UK Ltd v Menelaou [2016] AC 176. The decision is authority for the proposition that a third party who pays the purchase price of property may be subrogated to the vendors lien for the purchase price, if the purchaser would otherwise have been unjustly enriched. The Menelaou parents proposed to sell the family home to release capital to be spent on (among other things) buying a house for their daughter. To enable this to happen, the claimant bank, to whom the family home was mortgaged, agreed to release its charges on condition that it would receive a charge over the house to be acquired for the daughter. This expectation was defeated because she was unaware of the arrangement and the signature on the charge was not hers. The daughter was enriched, not by the mere fact of acquiring a house, which she owed to the benevolence of her parents, but by the fact that she acquired it free of the charge which the bank expected to have and without which the transaction should not have proceeded. The main issue on the appeal was whether that enrichment occurred at the banks expense, given that the money to pay the purchase price had come from her parents out of the proceeds of sale of the family home, and not directly from the bank. Once that question was answered in the banks favour, it was held that the enrichment was unjust. This was because the banks consent to the use of the proceeds of the family home to buy the daughter a house had been conditional on it obtaining a charge. That condition had failed and the daughter had consequently been enriched. To reverse the enrichment, the bank was subrogated to the vendors lien, on the footing that the purchase price secured by that lien had in substance been paid with the banks money. The daughters intentions were irrelevant because the absence of a valid charge had been a windfall for her. As Lord Neuberger pointed out (para 70), this was because she did not pay for it. If she had been a bona fide purchaser for full value it might well have been impossible to characterise any enrichment arising from the absence of the intended charge as unjust. The cases on the use of equitable subrogation to prevent or reverse unjust enrichment are all cases of defective transactions. They were defective in the sense that the claimant paid money on the basis of an expectation which failed. Many of them may broadly be said to arise from a mistake on the part of the claimant. For example, he may wrongly have assumed that the benefit in question was available or enforceable or that his stipulation was valid, when it was not. However, it would be unwise to draw too close an analogy with the role of mistake in other legal contexts or to try to fit the subrogation cases into any broader category of unjust enrichment. It is in many ways sui generis. In the first place, except in the case of voluntary dispositions, the law does not normally attach legal consequences to a unilateral mistake unless it is known to or was induced by the other party. But it does so in the subrogation cases. This is, as I have explained, because the windfall character of the benefit conferred on the defendant means that it is not unjust to give effect to the unilateral expectation of the claimant. Secondly, where money is paid under a contract, restitution is normally available only if the contract can be and is rescinded or is otherwise at an end without performance (eg by frustration). This is because the law of unjust enrichment is generally concerned to restore the parties to a normatively defective transfer to their pre transfer position. Subrogation, however, does not restore the parties to their pre transfer position. It effectively operates to specifically enforce a defeated expectation. Thirdly, as Lord Clarke suggested in Menelaou (para 21), the rule may be equally capable of analysis in terms of failure of basis for the transfer. Restitution on that ground ordinarily requires that the expectation should be mutual, whereas this is not a requirement for equitable subrogation. But some cases, such as Boscawen v Bajwa and Cheltenham & Gloucester v Appleyard, cannot without artifice be analysed in any other way, since the payer does not seem to have been mistaken about anything. His expectation was simply defeated by some subsequent external event. What this suggests is that the real basis of the rule is the defeat of an expectation of benefit which was the basis of the payers consent to the payment of the money for the relevant purpose. Mistake is not the critical element. It is only one, admittedly common, explanation of how that expectation came to be disappointed. Two things, however, are clear. The first is that the role of the law of unjust enrichment in such cases is to characterise the resultant enrichment of the defendant as unjust, because the absence of the stipulated benefit disrupted a relevant expectation about the transaction under which the money was paid. The second is that the role of equitable subrogation is to replicate as far as possible that element of the transaction whose absence made it defective. This is why subrogation cannot be allowed to confer a greater benefit on the claimants than he has bargained for: see Paul v Speirway Ltd [1976] Ch 220, 232 (Oliver J), Banque Financire, at pp 236 237 (Lord Hoffmann), and Cheltenham & Gloucester v Appleyard, at paras 38, 41 42 (Neuberger LJ). It can be seen that the fact that all the cases relate to defective transactions is not just an adventitious feature of the disputes that happen to have come before the courts. It is fundamental to the principle on which they were decided. The present case is entirely different from the kind of case with which equitable subrogation is properly concerned. The December 2008 refinancing was not a defective transaction. Mr Hunt intended to discharge EMSLs debt to Swynson. Otherwise he would not have achieved his objective of cleaning up Swynsons balance sheet and reducing its liability to tax. He received the whole of the benefit from the transaction for which he had stipulated: the covenant to repay, the security over EMSLs assets, the tax advantage and the presentational advantage of removing a large non performing debt from Swynsons books. It is of course true that he did not receive repayment of his loan, because EMSL was (or became) insolvent and its assets were worth much less than the debt. But that was a commercial risk that he took with his eyes open, and it was not what enriched HMT. In these circumstances, subrogation is not being invoked for its proper purpose, namely to replicate some element of the transaction which was expected but failed. It is being invoked so as to enable Mr Hunt to exercise for his own benefit the claims of Swynson in respect of an unconnected breach of duty under a different transaction between different parties more than two years earlier. Mr Hunts alleged mistake contributes nothing to this analysis. I need not enter into the long standing controversy about whether a transaction may be set aside on account of a mistake relating to the consequences or advantages of a transaction as opposed to its terms or character, or whether any causative mistake of sufficient importance will do. That issue is discussed by Lord Walker in Pitt v Holt [2013] 2 AC 108 at paras 114 123 and by the editors of Goff & Jones, The Law of Unjust Enrichment, 9th ed (2016), paras 9 135 9 142. But it does not arise here. Mr Hunt is not seeking to set aside the December 2008 refinancing and would not be entitled to do so. He is trying to invoke a remedy which the law provides for a specific purpose, and to deploy it for a different one. When Mr Hunt entered into the December 2008 refinancing, he did not in any sense bargain for a right to recover substantial damages from HMT. Nor was he mistaken about what he was going to get out of the refinancing. At best, he was mistaken about the effect that the discharge of EMSLs debt to Swynson would have on the latters claims under the very different transaction which it had entered into in 2006 when it engaged HMT to carry out the due diligence. In fact, however, his evidence does not even go that far. What it shows is that he wrongly believed that he had already bargained for a right to substantial damages from HMT back in 2006. This was because he considered that as the owner of Swynson he was as much entitled under Swynsons contract with HMT as Swynson was. As between me and Swynson, he wrote in the passage from his witness statement cited by the judge, the consideration of who technically would be entitled to recover the money from HMT did not matter as I was the owner of Swynson. As a result, he did not think that by discharging EMSLs debt to Swynson two years later he would diminish his own entitlement. As between Swynson and himself, it was implicitly understood that whichever of them made the recovery it would be shared between them pro rata according to the unpaid lending advanced. This was an error, but it does not follow that its consequences constitute an injustice which falls to be corrected by the law of equitable subrogation. Unless the claimant has been defeated in his expectation of some feature of the transaction for which he may be said to have bargained, he does not suffer an injustice recognised by law simply because in law he has no right. Failure to recognise these limitations would transform the law of equitable subrogation into a general escape route from any principle of law which the claimant overlooked or misunderstood when he arranged his affairs as he did. The consequence of a rule as broad as that can be seen by supposing that after Mr Hunt has recovered damages from HMT by way of subrogation, the fortunes of Evo turn and EMSL is in a position to repay the December 2008 loan. It does not matter for present purposes whether or not this was a realistic prospect in December 2008, although the judges findings on mitigation suggest that it was not unrealistic. If Mr Hunts argument is correct, the transfer which enriched HMT at his expense was the payment of the loan moneys to EMSL and which EMSL then paid to Swynson. His right of subrogation is said to have arisen from the discharge of the debt which EMSL owed to Swynson. It did not depend on whether or not he was able to recover the money he lent to EMSL. If EMSL were restored to financial health, there would be nothing to stop him from obtaining repayment of EMSLs debt under the December 2008 loan agreement. Subrogation on these facts would then have served to give Mr Hunt an additional right on top of everything the he bargained for in December 2008. This result would hardly do credit to the law. But it is the natural consequence of allowing subrogation to rights arising under a different transaction from the one which gave rise to the enrichment, instead of confining it to cases where it serves to replicate a missing element of the same transaction. Conclusion appropriate order. In the result I would allow the appeal. The parties are invited to agree an LORD MANCE: Introduction This appeal arises from an unsuccessful management buyout of Medical Industries America Inc, trading as Evo Medical Solutions (Evo), made through Evo Medical Solutions Ltd (EMSL) in 2006. EMSL was set up for the purpose and was owned as to 25% by Mr Michael Hunt through nominees, as to 3.6% by a colleague of his and as to the remaining 71.4% by the management team proposing the buyout. Mr Hunt has at all material times owned and controlled the respondent to this appeal, Swynson Ltd (Swynson). The management buyout was enabled by an interest bearing loan of 15m made on 31 October 2006 by Swynson to EMSL, secured by charges over EMSLs and Evos assets and repayable on 31 October 2007. As from 28 February 2007, this loan was financed by Swynson by borrowing from Credit Suisse guaranteed by Mr Hunt and secured on his assets. By July 2007 it appeared that Evo was at risk of financial collapse, and on 13 August 2007 Swynson granted a further facility of 1.75m to EMSL, which was fully drawn down by 1 October 2007 and repayable on 31 October 2007. Evos finances failed to improve and on 4 June 2008 Swynson made a third loan of 3m to EMSL. At or about the same date, Mr Hunt acquired the majority beneficial ownership of EMSL. The appellants, Hurst Morrison Thomson LLP (now known as Lowick Rose LLP) (HMT) through their partner, Mr Morrison, introduced the management buyout to Mr Hunt in mid 2006, by a proposal letter dated 12 July 2006 followed by a meeting the next day. They undertook by formal engagement letter dated 30 September 2006 to act as Swynsons reporting accountants in the same context and provided a final due diligence report on 31 October 2006. The engagement letter provided that HMTs maximum liability for advice given in respect of this matter was limited to 15m in aggregate in respect of any claim or claims that Swynson might have against HMT arising out of this engagement. It is conceded that HMTs advice was negligent and that their negligence caused Swynsons decision to enter into the 2006 loan. During the first half of 2008 Mr Morrison asked Mr Hunt if he was contemplating legal action against HMT. Mr Hunt replied that he would find that most unpalatable and said that they should wait and see how things developed following the additional funding provided in October 2007. By 1 July 2008 it was clear that matters had further deteriorated, and Mr Hunt drafted a letter of claim, and disclosed that he had done so to Mr Morrison and had, as an alternative to forcing Evo into liquidation, made the third investment in June 2008. Mr Morrison asked him not to send the letter as it would cause great concern with HMTs insurers, and Mr Hunt refrained from taking any such step until 24 August 2010, when he wrote referring to the earlier letter and conversation, stated that Evo had from the outset been a pig in a poke, and and made a formal claim. That claim led in due course to the commencement on 30 October 2012 of the present proceedings, in which Swynson and Mr Hunt were both claimants and sought to recover damages for losses resulting from the management buyout and the making of all three loans in 2006, 2007 and 2008. The losses claimed at trial consisted of the total of the funding provided (19.75m) less moneys and assets recovered, making a net claim of $16.157m (over HMTs limit of liability under the engagement letter), plus interest. In the meantime, however, the consequence of Mr Hunts acquiring of majority ownership of EMSL in addition to his ownership of Swynson had been that Her Majestys Revenue and Customs began to treat Swynson as receiving the interest which EMSL should have paid, but was not in fact paying, to Swynson. At the Revenues official interest rate of 6.25% pa and the corporation tax rate of 28% applicable at the time, the resulting tax charge on the 2006 and 2007 loans was some 293,125 per annum. Swynson also remained exposed on its borrowings from Credit Suisse. In these circumstances, on the advice, it appears, of his accountant, Mr Hunt determined to lend EMSL the money to pay off Swynson. He did so under a loan agreement dated 31 December 2008, which recited that, due to the financial circumstances of the borrower the loan was to be non interest bearing, and clause 3.2 of which provided that: The Borrower shall use all money borrowed under this agreement (i) To pay certain of the Borrowers existing loans to Swynson Limited (but for the avoidance of doubt not the Second Additional Loan made available on 4 June 2008); (ii) To pay for costs incurred in connection with the repayment of this agreement and (iii) for general working capital purposes and not for any other purpose. On this basis, EMSL was able to and did pay Swynson the sums due in respect of the 2006 and 2007 loans. In the courts below, Mr Hunts claim against HMT failed, on the ground that HMT undertook and owed no duty to him personally. There is no appeal against that conclusion. In relation to Swynson, HMT unquestionably owed and breached duties in both contract and tort. But HMT submit that the effect of the transaction of 31 December 2008 was and is to repay the loans given by Swynson to fund and support the management buyout. So no loss has, in the event, been suffered by Swynson, and Swynson can have no claim against HMT with regard to them. That is the submission. (a) Mitigation and res inter alios acta? HMTs submission failed at first instance before Rose J and in the Court of Appeal before Longmore and Sales LJJ, with Davis LJ dissenting. Rose J and the majority in the Court of Appeal held that the transaction effected on 31 December 2008 fell to be regarded as res inter alios acta, as between Swynson and HMT. They considered, clearly correctly, that the transaction did not constitute mitigation by Swynson of its damage, since Swynson was in no position to, and did not effect, the transaction itself. But they regarded the transaction as in fact avoiding loss in a way which should only be brought into account, if it arose out of HMTs breach of duty and in the ordinary course of business. They cited in this connection from Viscount Haldane LCs speech in British Westinghouse Co Ltd v Underground Electric Railways Co Ltd [1912] AC 673, 690. It can readily be accepted that there was a causal link between Mr Hunts action in funding EMSL to repay Swynson and HMTs negligence, and also that Mr Hunt was not acting in the ordinary course of business, but in the grip of a continuing and somewhat disastrous course of events brought about by that negligence. But, as has been held, Mr Hunt himself has no claim against HMT for negligence, and his action brought about the repayment of the loan granted to Swynson independently of any action by Swynson itself. In the passages cited, Viscount Haldane LC was speaking of loss mitigated by the claimant him or itself in circumstances where there was no obligation to mitigate loss. Here, the payment off of the indebtedness was not undertaken by or at the request of Swynson. It was initiated by Mr Hunt in his personal capacity deciding that it would suit Swynsons and his own interests to procure repayment by EMSL of its indebtedness to Swynson. Swynson and Mr Hunt are distinct legal personalities, and Mr Hunts conduct cannot be attributed to Swynson. The majority in the Court of Appeal also sought to support its reasoning by reference to the principle recognised in cases such as Parry v Cleaver [1970] AC 1 as governing collateral receipts, such as the proceeds of insurance, benevolent payments, disablement and pension payments. Whether such receipts should be brought into account was there said by Lord Reid, at p 13H, to depend on justice, reasonableness and public policy, and to involve a distinction which in his view at p 15E depended not on their source but on their intrinsic nature. In some cases, such payments can be seen to have been effectively purchased or paid for by the claimant, so that it would be unfair to deprive him of their benefit. In other cases, such as insurance, whosoever has paid the premium, it is clear that insurers liability is intended to be secondary, and subrogation will ensure that any recovery flows back to compensate the insurer. None of such cases resembles the present, where it is suggested that the court can ignore what is, in its intrinsic nature, a repayment of the loan under and by virtue of which the loss has been incurred. Longmore LJ noted that, if Mr Hunt had simply given Swynson the amounts of the outstanding 2006 and 2007 loans, no one could have suggested that HMT would have benefitted by this. That is clear. But the reason is that the gift would not have discharged the outstanding loans, and would have been a purely gratuitous or benevolent addition to Swynsons assets which was clearly not intended or apt to discharge HMT. Longmore LJ said it would be a triumph of form over substance if a different result occurred merely because the payment is made through EMSL. But the difference is in the nature of the payment, to which Lord Reid referred in Parry v Cleaver. Mr Hunts loan to EMSL was intended to and did lead to actual payment off of the first two loans which Swynson had made to EMSL. Sales LJ, agreeing on this point with Davis LJ, also accepted (para 55) that, if EMSL had suddenly become able to repay and had repaid as a result of winning the lottery or being left a large sum in a will, then Swynson could to that extent no longer have a claim against HMT. But he considered that considerations of justice, reasonableness and public policy made the present case different. This was because HMTs negligence had put Swynson and Mr Hunt in an invidious position, in which Mr Hunt had felt he had to provide funding to shore up Swynsons position on uncommercial terms which were not in the ordinary course of business. So, although Mr Hunt did not act out of pure benevolence, the position was analogous to cases of benevolence reviewed in Parry v Cleaver. Again, however, there is all the difference between a benevolent act which benefits a claimant (here Swynson) collaterally in an amount equivalent to a loss which it has incurred and satisfaction of the claimant Swynsons loss, by Mr Hunts funding of EMSL to repay Swynson. For these reasons, I do not consider that the result reached by Rose J and by the majority of the Court of Appeal can be justified by reference to the primary ground on which they put it. This conclusion is also consistent, in my opinion, with the Court of Appeals reasoning and conclusion in Preferred Mortgages Ltd v Bradford & Bingley Estate Agencies Ltd [2002] EWCA Civ 336; [2002] PNLR 35, and with the reasoning of, in particular, Stephenson LJ in London and South of England Building Society v Stone [1983] 1 WLR 1242; 1261D 1262A. The latter case involved a claim by lenders against negligent valuers (who had failed to spot subsidence) for the difference of 11,880 between the amount advanced and the amount which would have been lent upon a proper valuation. The borrowers ultimate repayment of the original advance out of the proceeds of the eventual sale of the house was ignored in the latter case by concession (per OConnor LJ at p 1248H), the rationale being (per OConnor LJ at p 1249E F) that the repayment had in effect only been achieved out of the lenders own further advances totalling 29,000, made to cover repairs necessary to make good the subsidence which the valuers had negligently failed to spot. The lenders therefore continued to suffer, and to be entitled to recover, loss up to the cap imposed by the difference between the amount advanced and the amount which would have been advanced on a proper valuation. The Court of Appeals reasoning and decision in that very different factual situation do not affect the present, where Swynsons loss as lender has been fully extinguished by the repayment which Mr Hunt procured of the first two EMSL loans. Swynsons alternative grounds: (b) transferred loss and (c) unjust enrichment There are however two further grounds on which Swynson submits that the result reached below can and should be upheld. One is unjust enrichment, which, it is submitted, operates by preserving Swynsons rights against HMT for the benefit of Mr Hunt as subrogee to the extent necessary to indemnify him against his outlay paying off Swynsons loan. This basis was accepted in the Court of Appeal by Sales LJ, but would not have been accepted by Longmore and Davis LJJ, as an alternative basis for the result reached. The other, transferred loss, was mentioned in, but not considered in depth by any member of, the Court of Appeal. (b) Transferred loss Recovery for transferred loss can, in my view, be addressed quite briefly. The normal principle is that a claimant in an action for breach of contract cannot recover damages in respect of loss caused by the breach to some third person not party to the contract: see The Albazero [1977] AC 774, 846 B C per Lord Diplock. But there are, as Lord Diplock went on to say, exceptions. One exception, recognised and applied in Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd and St Martins Property Corp Ltd v Sir Robert McAlpine Ltd (St Martins) [1994] 1 AC 85 exists where it was in the contemplation of the parties when the contract was made that the property, the subject of the contract and the breach, would be transferred to or occupied by a third party, who would in consequence suffer the loss arising from its breach: see Darlington Borough Council v Wiltshier Northern Ltd [1995] 1 WLR 68 and the narrow ground of decision expressed by Lord Browne Wilkinson at p 114G H in St Martins, in which all members of the House joined. In such a situation, the claimant is seen as suing on behalf of and for the benefit of the injured third party and is bound to account accordingly: see St Martins, per Lord Browne Wilkinson at p 115A B and McAlpine Construction Ltd v Panatown Ltd (Panatown) [2001] 1 AC 518, per Lord Clyde, at pp 530E F and 532D E. Another broader principle was suggested by Lord Griffiths in St Martins, at p 96F 97D and reviewed inconclusively by Lord Browne Wilkinson at pp 111F 112F as well as by the members of the House in Panatown. This is that a contracting party might itself have an interest in performance enabling it to claim damages without proving actual loss. In both cases the principle was being suggested in the context of contracts for supply, whether of goods or services. In St Martins the suggestion was made in circumstances where the claimant had actually incurred costs of repair, but was entitled to recover them from the associated company to which the building had been transferred before the breach. In Panatown the property was from the outset owned by an associated company of the company which contracted for its construction, and the construction defects which emerged did not lead to the latter company incurring any outlay. The reason why, in the majority view, the latter company was not entitled to recover damages was not that it had incurred no outlay, but was that there existed a deed of care deed entitling the owning company to make a direct claim against the contractors. Potential difficulties about the theory of performance interest are that it cannot prima facie embrace consequential losses suffered by the company actually (as opposed to contractually) interested in the quality of the property or services and that it is not clear whether or on what basis the company contractually entitled may be liable to account to the company actually interested: see on this latter point per Lord Clyde in Panatown at pp 532E F, 534B C and 535F. Neither the narrow or the broad version of the transferred loss principle is in my view of assistance to Swynson. As to the narrow principle, it is clear that Swynson did not contract with HMT on behalf of or for the benefit of Mr Hunt. As to the broad principle, even if accepted, I do not see how it can apply in circumstances where Swynson itself suffered loss through being induced to support the management buyout by lending to EMSL, but the loan was ultimately repaid by EMSL. This is not a case where Swynson had any performance interest other than being indemnified in respect of the loss which it incurred in lending moneys to support the management buyout. That performance interest has been satisfied. The fact that it was satisfied by Mr Hunt making moneys available to EMSL to repay Swynson does not bear on or expand Swynsons performance interest. (c) Unjust enrichment I turn then to unjust enrichment. Swynsons and Mr Hunts submission is that relief by way of unjust enrichment is available to preserve Swynsons otherwise discharged claim against HMT for the benefit of Mr Hunt to the extent necessary to meet what are, it is submitted, the imperatives of the circumstances in which Mr Hunt effectively enriched HMT by arranging the repayment of the sums outstanding under the first two loans made by Swynson to EMSL, by reference to which sums HMTs liability would, otherwise, have fallen to be measured. Longmore and Davis LJJ were not prepared to accept this as a potential basis of recovery for two reasons. The first was difficulty in seeing how subrogation could arise in favour of Mr Hunt in respect of a claim by Swynson which had been discharged, unless, Longmore LJ relevantly added, the theory of fictionalised assignment expounded by Lord Hoftmann in Banque Financiere (see para 20 below) at p 236E solves this particular problem. The second was doubt whether any mistake had been sufficiently demonstrated. Both Longmore and Davis LJ saw the case as involving causative ignorance, rather than any incorrect conscious belief or incorrect tacit assumption, referring for this distinction to Pitt v Hunt [2013] 2 AC 108. Sales LJ took a different view and would, if necessary, have recognised Mr Hunt as enjoying a right of subrogation to Swynsons discharged claim against HMT. The basic questions in a claim in unjust enrichment were summarised by Lord Steyn in Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221, 227A C in terms recently adopted by the Supreme Court in the judgment delivered by Lord Reed in Commissioners for Her Majestys Revenue and Customs v The Investment Trust Companies (In Liquidation) (ITC) [2017] UKSC 29. The four questions are: (1) Has the defendant benefited or been enriched? (2) Was the enrichment at the expense of the claimant? (3) Was the enrichment unjust? (4) Are there any defences? More detailed examination and application of these questions in particular cases has proved controversial: see in particular Menelaou v Bank of Cyprus [2014] 1 WLR 854 and its academic aftermath. However, the comprehensive review of their significance in Lord Reeds judgment in ITC now provides the essential basis for further consideration and application of the questions. As to the first, there is, in the light of my conclusions on the issue of res inter alios acta, no doubt that HMT were, indirectly, enriched by the discharge by EMSL of the loan due to Swynson. The discharge had the immediate effect of reducing (in this case to nil) the damages in respect of the 2006 and 2007 loans which (subject to the overall 15m cap) Swynson could otherwise have recovered from HMT on account of HMTs negligence. A relevant benefit for the purposes of unjust enrichment can consist in the discharge of a debt or (as in Banque Financire) of the promotion of a second charge due to the discharge of part of a prior secured debt. In principle, it seems to me that it can consist in the reduction of a loss, which would otherwise be recoverable by way of a claim for damages for breach of contract and/or duty. The second question raises the issue what counts as enrichment at the expense of the claimant. That this issue can prove less straightforward is evident from the examination of its conceptual base in paras 37 to 63 in ITC. Usually, as Lord Reed points out (paras 46 50) the parties will have dealt directly with one another, but there are situations which are legally equivalent to direct provision and there may be other apparent exceptions or possible approaches, which it is not intended to rule out. The claimant must incur a loss by conferring a benefit on the defendant, but economic reality is not the test (paras 59 60). However, the reality, rather than the formal shape, of a transaction, or of a co ordinated series of transactions, can show that the claimant has conferred a benefit on the defendant, despite the absence of a direct relationship between them. Thus, in Banque Financire itself, the transaction was structured so that Banque Financire (BFC) advanced the relevant moneys to Mr Herzig who on lent on different terms to Parc; the purpose was to reduce Parcs borrowing from Royal Trust Bank (Switzerland) (RTB), which had a first charge over Parcs assets; the moneys was actually remitted directly by BFC to RTB; and BFC believed, on the basis of a postponement letter written by Mr Herzig, that there had been agreement by all relevant companies in the Parc group that the advance made to Parc would have priority over other inter group lending to Parc, including by OOL. In fact Mr Herzig had no authority to write the letter and so there had been no such agreement. The unintended effect of the advances paying off RTB was therefore to promote OOLs second charge on Parcs assets pro tanto. In these circumstances, BFC was treated, as against OOL, as subrogated to RTBs (otherwise discharged) secured debt to the extent necessary to cover the advance which it had made. BFCs failure to take proper precautions to ensure that Mr Herzig had authority to write the postponement letter was no ground for holding that the enrichment was not unjust: see per Lord Hoffmann at p 235F G. In reaching this conclusion, all five members of the House held that, despite Mr Herzigs interposition, OOL was enriched at the expense of BFC. Lord Steyn (p 227B E), Lord Clyde (p 238B C) and Lord Hutton (p 239E G) each referred to this as the reality. Lord Hoffmann (p 235C E) with whose reasons Lord Steyn (p 228F), Lord Griffiths (p 228F G) and Lord Clyde (p 238D E) also agreed, gave as the reason that there was no difficulty in tracing BFCs money into the discharge of the debt due to RTB; the payment to RTB was direct. In this respect, the case is stronger than in Boscawen v Bajwa [1996] 1 WLR 328. In Boscawen v Bajwa, money was advanced by a building society for the purchase of a property and was to be secured by a first charge. The purchasers solicitors passed the money on to the vendors solicitors, who, in circumstances not involving any want of probity but to some extent contributed to by the purchasers solicitors issue of a dishonoured cheque, used it to discharge a mortgage on the property without any transfer of the property to the intended purchaser ever occurring. The building society was held entitled to be subrogated to the discharged mortgage to the extent of its outlay, on the basis that the moneys were traceable into the discharged mortgage debt. Where claimants property is traceable into a receipt or property held by the defendant, there is the equivalent of a direct transfer. In the present case, there is also no difficulty in tracing the advance made by Mr Hunt to EMSL into the discharge of Swynsons borrowing from EMSL. It was a term of Mr Hunts loan to EMSL that it should be used for such discharge: para 7 above. Without more, this discharge would have been a benefit to Swynson alone, and that was no doubt how Mr Hunt saw it at the time. In fact, as I have held, the discharge of EMSLs indebtedness to Swynson had the unforeseen consequence of eliminating any loss which Swynson would be able to show in respect of the 2006 and 2007 loans if it pursued a claim for damages against HMT, and did so moreover in circumstances in which Mr Hunt himself might (as proved to be the case) have no personal claim himself against HMT. But the transfers which Mr Hunt arranged cannot be regarded as received by HMT, or as traceable into any sort of discharge of HMTs liability to Swynson. It can however be argued that, even in Banque Financire, the transfers made by Banque Financire were not actually received, or converted into property held, by OOL. OOL was simply enriched by the promotion of its charge, which occurred due to BFCs payment off of RTBs loan. So here, it may be argued, HMT was enriched at Mr Hunts expense by the payment off through EMSL of Swynsons loan. This is however to over simplify and there are a number of potentially significant points that need to be considered. First and most importantly, in Banque Financire BFC bargained for, and mistakenly believed it was obtaining, priority over other group claims when it provided the moneys to discharge RTBs loan. In the present case, Mr Hunt was not dealing with HMT, or addressing or discharging, or bargaining either to preserve or to step into the shoes of Swynson for the purposes of, any contractual or tortious claim which Swynson had against HMT. Second, HMT submits that there can be no relevant benefit if all that can be shown is that the defendant is not liable because a fundamental component of the cause of action against him (namely loss) is missing. But subrogation by virtue of unjust enrichment is an equitable remedy which operates by adjusting relationships on a fictionalised basis. Thus, in Banque Financire, part of RTBs secured claim was treated as alive, as against OOL only, as if it had not been discharged by payment by BFC, but had been assigned to BFC (see per Lord Hoffmann, p 236E F). So, here, it seems to me that it could be possible, if the other ingredients of subrogation were all present, to treat Swynsons claim against HMT as alive as if Swynsons loss had not been discharged by the payment arranged by Mr Hunt through EMSL, and as if Swynsons claim had been assigned to Mr Hunt. Longmore LJs qualification recognising the potential relevance of this fictionalised basis of subrogation was to that extent well founded. Third, Mr Hunt, when advancing to EMSL the money necessary to repay the first and second loans made by Swynson, acquired a countervailing right in law to repayment of those loans by EMSL. The value of that right depended on Evo and its future performance. The December 2008 refinancing was made on the basis that the EMSL loan was impaired (see per Rose J, paras 47 48 and Longmore LJ, para 7). Mr Hunts letter of claim of 24 August 2010 stated that Evo had long been in desperate straits and that it had never in Mr Hunts view been more than a pig in a poke. But the management accounts, summarised in the expert report of Ian Robinson produced at the request of Swynson and Mr Hunt for use before Rose J, indicate that there still existed hope that Evo might return to profitable trading in and after 2010. Mr Robinsons opinion was also that as at December 2008 Evo had a net asset value in the order of USD 8m or a value on an earnings basis in the order of USD 4 to 5m. Evo did ultimately yield some realisations (para 42 above), though this fell far short of covering Mr Hunts loan and the interest on it. In summary, it would seem unrealistic to regard Mr Hunt as suffering no loss at all in December 2008, as a result of advancing the money he did to EMSL to pay off Swynson. With the benefit of hindsight, it seems clear that his loss increased thereafter, as Evos position continued, despite his efforts, to deteriorate. However, this analysis highlights a feature of Mr Hunts claim that HMT has been unjustly enriched at his expense. The existence and extent of any enrichment could not be determined by simple reference to the amount that Mr Hunt lent to EMSL in December 2008. They would depend on Evos and EMSLs subsequent fortunes. A fourth point, arising from some observations of the Supreme Court in ITC, concerns the significance of the limited benefits intended and obtained from the repayment of the first and second loans made by Swynson to EMSL. These consisted in a tax saving (para 43 above) and the removal of the perceived disadvantage to Swynson of having an impaired debt on its books: see Rose Js judgment, para 47. In different ways, the existence of a tax liability without receipt of any corresponding income and the impaired debt were both disadvantages resulting from the original management buyout on the basis of HMTs original negligent advice. Their elimination was a step taken by Mr Hunt in the course of dealing with that disastrous investment. But it was a step taken by him personally, albeit in order to benefit his company Swynson. The difficulties on this appeal arise because (a) the step he took had the unforeseen, consequential effect of depriving Swynson of any claim against HMT and (b) the highest that Mr Hunt can put the matter is to say that he himself thereby suffered loss in his capacity as owner of Swynson, in circumstances where, as has been held, he himself had no direct right of action against HMT. A fifth point, which I mention in passing, is that, had Swynsons loan to EMSL been good, the same tax liability would have been incurred but in respect of moneys actually received, while the impairment would have been avoided. Apart from the repayment of the EMSL loan procured by Mr Hunt on 31 December 2008, Swynsons damages claim against HMT could have included the full amount of the interest which EMSL had failed to pay to Swynson (which would no doubt have been taxable in Swynsons hands as a business receipt, even if EMSL had paid it). Swynson having in fact been repaid by EMSL, Mr Hunt, if he were to have any subrogation claim against HMT, would probably have to give credit, against his gross loss for the purposes of that claim, for the amount of the tax on interest in respect of which he in effect indemnified Swynson (any subrogation recovery by him from HMT in respect of such interest not presumably being taxable). I understood Mr Sims QC for Mr Hunt to accept as much (transcript, 22 November 2016, p 125 ll.22 23.) But, in any event, as Mr Sims went on to point out, this would be likely to be irrelevant, as any such reduction in Mr Hunts gross claim for subrogation purposes would not reduce it below HMTs maximum liability of 15m as at 31 December 2008, plus interest since then. Turning to the significance of these points for Mr Hunts claim to be subrogated to Swynsons claim against HMT, in ITC, paras 52 to 58, Lord Reed noted that, where the provision of a benefit to a third party is incidental to work done or expenditure incurred in pursuit of a persons own interests, any enrichment may either not be regarded as being at the expense of the person doing the work or incurring the expenditure or may not be regarded as unjust. One man heats his house, and his neighbour gets a great deal of benefit the classic example given by Lord President Dunedin in Edinburgh and District Tramways Co Ltd v Courtenay 1909 SC 99, 105 clearly involves circumstances in which it would be absurd, as the Lord President said, to suppose that the former could claim a contribution from the latter. The case of TFL Mangement Services v Lloyds Bank plc [2013] EWCA Civ 1415 was wrongly decided for this reason, as the Court held in ITC and as the Scottish jurisprudence cited by Lord Reed at para 55 in ITC presciently suggested nearly two centuries ago. In such situations, the questions whether a benefit was obtained at the expense of the claimant and whether it would be unjust for the defendant to retain it are likely to be difficult to separate. If a person with a view to obtaining a small benefit for himself at the same time unintentionally and by mistake incurs a much larger loss in conferring a much larger benefit on a third party, the picture changes, and one is again potentially in the field of unjust enrichment. The particular features of the present appeal, on which attention must necessarily focus, are that it concerns deliberately structured transfers (by Mr Hunt to EMSL and EMSL to Swynson) which had unforeseen, consequential effects on Swynsons separate relationship with a third party, HMT, and/or on Mr Hunt, as noted, particularly, in paras 62 and 65 above. In these circumstances, I turn to consider whether there is here an unjust factor, which may make it appropriate to recognise the benefit conferred on HMT by the repayment of the first and second Swynson loans as giving rise to a claim by Mr Hunt. The primary case now sought to be advanced is that Mr Hunt was labouring under a mistake when he advanced the money to EMSL to pay off the loans. In the alternative, it is submitted that the unjust factor can be found in the failure of the basis on which Mr Hunt made such advance, or, in the further alternative, upon a more general policy based approach recognising the suggested unfairness of what has happened. I do not see these two alternative submissions as adding in the present case to the primary submission or offering any real prospect of success if it fails. In the present case, the basis of the advance could hardly be said to fail, if there was no relevant mistake. Likewise, it is difficult to see any reason why Mr Hunt should have a remedy in respect of an advance if he made it without any mistake, particularly when it offered his company, Swynson, some advantage. Having said that, there are cases which can be analysed as accepting such a subrogation claim simply in order to redress the defeat by unforeseen events of an expectation of benefit on the basis of which the claimant made a payment: see eg Banque Finanire and Cheltenham & Gloucester plc v Appleyard [2004] EWCA Civ 291. The underlying rationale of subrogation to redress unjust enrichment may well be to redress the defeat of such an expectation, mistake being only one context in which this can occur. But in each case, the nature of the expectation or mistake is also critical in determining whether there exists a subrogation claim to redress any enrichment. This brings one back to the closeness of its relationship with the right to which the subrogation claim relates. The first problem which arises on this appeal regarding mistake is that it was not explicitly pleaded, leading to a submission by HMT that it would be unfair to treat it as a basis on which this appeal could or should be decided against them. This makes it necessary to examine the way in which the case was put and has developed. The first relevant reference in the pleadings is in the reply dated 14 June 2013, where in para 35d the defence plea that HMT owed no separate duty to Mr Hunt was addressed, and Swynson advanced three heads of positive case: in summary, res inter alios acta, equitable subrogation and transferred loss. The second was put simply on the basis that Swynson suffered the losses claimed herein before any refinancing and is entitled to recover the same for itself and Mr Hunt on the basis that Mr Hunt should be treated in equity, by way of equitable subrogation or otherwise, as entitled to his pro rata share. Then, in its skeleton argument dated 8 May 2014 for the trial which began on 14 and continued to 23 May 2014, Swynson gave notice that it relied in support of its claim of subrogation on both Banque Financire and Menelaou. At trial, Mr Hunt gave apparently uncontradicted evidence, which Rose J in any event expressly accepted to the following effect: It should be obvious from what I have said that there was no intention on my part or Swynsons part to relieve HMT from any liability due to the refinancing exercise. As far as I was concerned the claim against HMT remained unaffected by this refinancing and was of no concern of theirs. As between me and Swynson the consideration of who technically would be entitled to recover the money from HMT did not matter as I was the owner of Swynson, but it was implicitly understood that the recovery would be held pro rata according to the unpaid lending advanced. In written closing submissions dated 21 May 2014, Swynson submitted (para 27) that: Mr Hunt should be entitled to a subrogation remedy, having regard to the implied common intention of Hunt & Swynson [viz that after what was called the refinancing any recoveries would be shared as them in accordance with their outstanding and unpaid lending], on the principles analogous to the insurance cases, or to the remedy on the equitable principles of unjust enrichment as set out in Banque Financire [1999] AC 221; see as to the former at 231E, and as to the latter 234G H, 227B C &228D E. As for the latter basis for the remedy, Mr Hunts decision to step in and take over some of the lending to EMSL was not intended to give HMT (or more substantially its insurer) a windfall. No one could possibly suggest there was any discussion, intention or agreement that HMT would benefit by reason of Mr Hunts desire to give Evo an interest free loan and save Swynson from paying deemed interest. In these circumstances HMT would be unjustly enriched at his expense if it was held that any claim against it should be reduced by the extent to which he took over the lending previously owed to Swynson. Rose J recited the three heads of case which were advanced, decided the case on the basis of res inter alios acta, and did not need to consider the other two heads: see paras 49 and 55 of her judgment. In the Court of Appeal the matter was put squarely on the basis that it had been a mistake to make the 2008 Partial Refinance in order to relieve HMT of liability (skeleton dated 11 May 2015, para 29) and that Mr Hunt made a mistake in the way he structured this back in 2008 (transcript of opening, p 55B C). In response on this head of claim, counsel for HMT submitted that there had been no pleading of mistake and that Mr Hunts evidence, accepted by the judge (para 68 above), did not establish a mistake. Asked directly by Sales LJ at this point whether she was saying that the argument was not available, counsel replied that HMT did not have to put it that high, but yes (transcript, p 67D F). So HMT were, if necessary, taking a point on admissibility. In further submissions about the case of subrogation based on unjust enrichment, which it was accepted was before the judge, counsel submitted that there was lacking that missing right which required subrogation in order to fix the gap. When Sales LJ suggested that the missing right is Mr Hunt thought that he was going to make this loan but there would still be the benefit of the cause of action against HMT, the reply was that that was not enough for subrogation. For subrogation, there needs to have been a right bargained for and not achieved. The Court of Appeal did not deal formally with the admissibility of the case based on mistake. But, having heard these submissions, it gave a judgment on 25 June 2015 in which all three members of the Court dealt on the merits with the issue of unjust enrichment based on the case of mistake which Swynson had advanced before it. Longmore and Davis LJJ rejected that case on its merits, for reasons summarised in para 55 above, while Sales LJ would have accepted it. In these circumstances, I conclude that the Court of Appeal determined that the case based on mistake was fairly open to Swynson, and should be addressed on its merits, although the majority concluded that it should fail on the evidence. I see no basis on which to reach a different conclusion on the question whether the case was and is open. Indeed, I would myself have reached the same conclusion. The case on mistake needs to be addressed on its merits accordingly. In my opinion it is clear that Mr Hunt was labouring under a form of mistake when he was advised to and did arrange to fund EMSL to pay off Swynsons first and second loans. Not only did he have no intention thereby to relieve HMT of any liability, he gave positive evidence which Rose J accepted that As far as I was concerned the claim against HMT remained unaffected by this refinancing and [the refinancing] was of no concern of theirs (para 72 above). The fact that he did not think it important whether the claim against HMT was Swynsons or his does not seem to me to matter in assessing whether he was acting under a mistake. It clearly belonged to one or other. What matters is that he mistook the significance of payment off of the Swynson loans. In Pitt v Holt [2013] 2 AC 108, Lord Walker, in a judgment with which all members of the Supreme Court agreed, addressed suggestions in prior caselaw that a line fell to be drawn between mere causative forgetfulness or ignorance and a mistaken conscious belief or mistaken tacit assumption, concluding as follows in para 108: I would hold that mere ignorance, even if causative, is insufficient, but that the court, in carrying out its task of finding the facts, should not shrink from drawing the inference of conscious belief or tacit assumption when there is evidence to support such an inference. In the present case, I consider that, contrary to the view taken by the majority of the Court of Appeal, the accepted evidence, recited in paras 71 and 78 above, is of a conscious belief on Mr Hunts part that funding the repayment of the Swynson loans would have no effect on any claim against HMT. At the very least, however, it establishes a tacit assumption. This belief (or assumption) has been shown to be mistaken (a) as regards a negligence claim by Mr Hunt personally against HMT, by Rose Js judgment and (b) as regards a claim by Swynson against HMT, by the Supreme Courts present judgment. As to (a), if he had had a claim in his own name, then he would have been able to recover in full from HMT. His repayment of the Swynson loans would in this context have constituted a step taken in continuing mitigation of the effects of HMTs breach of duty towards him. As to (b), if Swynson had retained a claim against HMT, Mr Hunt would, as Swynsons owner, have been covered indirectly in respect of any loss arising to him from the December 2008 arrangements. How far Mr Hunt was acting under advice in the arrangements he made is not known. It is certainly possible to suggest that it was in a general sense careless to make them without considering their implications. At least in so far as his mistake was to think that Swynson would, if necessary, retain its claim against HMT despite the December 2008 arrangements, it could be said in response that the mistake was understandable, since the Supreme Court has concluded that it was shared by both courts below. But, even if it were right to conclude that any mistake by Mr Hunt involved carelessness, that by itself is no bar to equitable relief, unless the circumstances show that Mr Hunt deliberately ran, or must be taken to have run, the risk of being wrong: see Banque Financire, 235E G per Lord Hoffmann (cited in para 58 above) and Pitt v Holt [2013] 2 AC 108, 114, per Lord Walker. It seems clear that Mr Hunt did not intend to run or believe that he was running any such risk. Nonetheless, the arrangements he in fact made did involve the risk that he might himself have no direct claim, while paying off EMSLs debt to Swynson meant that Swynson could no longer claim to have suffered loss recoverable from HMT, with the result that there was no basis on which either Swynson or Mr Hunt could claim any substantial damages from HMT. Was any mistake causative? Like Sales LJ (para 59), I do not think that there is any chance that Mr Hunt would have made the payments in the way he did had he thought that they might have the effect of eliminating the liability of HMT in respect of the 2006 and 2007 loans. The advantages for Swynson in terms of tax and standing (para 43 above) would have been dwarfed by the loss of a claim for 15m (plus interest) against HMT. He could not conceivably have allowed any claim by Swynson to be fatally undermined in this way. Was Mr Hunts mistake one in respect of which equity should grant relief, by way of subrogation keeping alive for that purpose Swynsons claim against HMT to the extent that it was discharged by the payment off of the two Swynson loans? It is necessary to consider, first, in respect of what type of mistake such relief may be available. In this connection, Lord Walker in Pitt v Holt, paras 114 145, addressed a distinction suggested in prior authority between a mistake about the nature or characteristics of a transaction and the consequences or advantages to be gained by entering into it. After close analysis of authority, he concluded (para 122): I can see no reason why a mistake of law which is basic to the transaction (but is not a mistake as to the transactions legal character or nature) should not also be included, even though such cases would probably be rare. I would provisionally conclude that the true requirement is simply for there to be a causative mistake of sufficient gravity; and, as additional guidance to judges in finding and evaluating the facts of any particular case, that the test will normally be satisfied only when there is a mistake either as to the legal character or nature of a transaction, or as to some matter of fact or law which is basic to the transaction. Lord Walker was speaking in the particular context of the equitable jurisdiction to set aside a transfer for mistake. Mr Hunt has no possible claim to set aside the transfers which he arranged. If one takes Lord Walkers approach, admittedly out of context, and applies it to the present context, it highlights a difficulty which Mr Hunt faces in showing any sufficient connection between the transfers to which he directed his attention and the relationship between Swynson and HMT under which HMT benefitted as a result of those transfers. That brings one back to the submission on which HMT focused in the Court of Appeal (para 75 above), that a mistake relating to the effect on third party rights (Swynsons against HMT) is not enough, because For subrogation, there needs to have been a right bargained for and not achieved. Before the Court of Appeal, this was developed more specifically as follows (transcript, p 70G H): this is critical a lender cannot claim subrogation if he obtains all security which he bargains for or where he has specifically bargained on the basis that he would receive no security. Now, the bargain that Mr Hunt made in this case was a bargain with EMSL that he would make them a loan and EMSL would repay it. He did not make a bargain with Swynson to take an assignment of Swynsons rights. He did not make a bargain with HMT. There was not even any clause in his bargain with EMSL that asked EMSL to acquire an assignment of Swynsons rights against HMT. There was nothing missing. There is nothing in the contract between Mr Hunt and EMSL, which gives rise to the whole base of this claim. There is nothing missing that he bargained for and did not get. Reference was made in this context before the Court of Appeal to Banque Finanire and Cheltenham & Gloucester plc v Appleyard [2004] EWCA Civ 291. In neither case, was there of course a bargain in the sense of any enforceable right or binding obligation. Otherwise, cadit quaestio. But in Banque Financire, BFC thought, however carelessly, that it had arranged priority for its loan. And in Appleyard, the lender, C & G, obtained what it thought and intended should be a first charge, but one of two prior chargees did not accept that it had been repaid and C & Gs charge was as a result purely equitable and was recorded as such at the Land Registry (see para 7 in the judgment). In giving the judgment of the court in Appleyard, Neuberger LJ identified 13 propositions of law, of which the tenth, relied on by HMT in the present case in the Court of Appeal, read: Tenthly, subrogation cannot be invoked so as to put the lender in a better position than that in which [he] would have been if he had obtained all the rights for which he bargained: see Banque Financire at 235D and 236G 273B per Lord Hoffmann. This point was also made by Lindley MR in Wrexham [re Wrexham Mold and Connahs Quay Railway Co [1899] 1 Ch 440] at 447. The message here, and in the passages cited, is that subrogation cannot improve a lenders position, by giving him more than he expected to get. The lender need not actually to have contracted for or agreed some benefit which he did not obtain. Thus, it was enough in Banque Financire that BFC thought, however carelessly, that it had obtained such a benefit by virtue of the postponement letter. But any transfer of value must have been on the mistaken basis that it would yield a benefit which did not materialise. Subrogation can redress the position where a claimant has bargained for a benefit which does not materialise, by putting the claimant in the position which he expected. Here, Mr Hunt bargained for nothing in relation to Swynsons claim against HMT. The most that he can say is that there was an indirect transfer of value by him to HMT, as the unforeseen and indirect result of the directly intended effects of the actual arrangements he made on a separate relationship pre dating those arrangements by over two years. That is in my opinion the crux of this appeal. Mr Hunts loan to EMSL and EMSLs consequent discharge of Swynsons loan were exactly as Mr Hunt specified and intended. They had indirect consequences, evidently overlooked by Mr Hunt or his advisers, for Swynson, for Swynsons separate relationship with HMT, and so indirectly for both Swynson and Mr Hunt: see, in particular, paras 62, 65 and 68 above. These circumstances do not establish any normative or basic defect in the arrangements which Mr Hunt made. In so far as Mr Hunt thought that he might, as owner of Swynson, himself have a claim for breach of contract and/or duty against HMT, he was not mistaken in any way which concerned the relationship between Swynson and HMT or which could give him any arguable claim to be subrogated to a claim by Swynson against HMT. In law, however, the only person with a claim against HMT was Swynson, as Rose J held. Again, the arrangements he made for EMSL to pay off Swynson did not address or concern the relationship between Swynson and HMT, or the consequences of such arrangements for any claim which Swynson might have against HMT. Again, Mr Hunt never envisaged obtaining any sort of direct interest in any such claim. Further (although I should not be taken as suggesting this is critical to the outcome of the issue of unjust enrichment), the arrangements which Mr Hunt made were not by way of gift, but by way of a loan to EMSL, which in December 2008 had at least some prospect, however remote, of being repaid. What matters is that any transfer of value by Mr Hunt to HMT was not just unintended, it was incidental and indirect and arose from the consequences of Mr Hunts deliberately structured arrangements on a relationship quite separate from that which the arrangements addressed in exactly their intended way. In these circumstances, I do not consider that Mr Hunt can establish a basis for being subrogated to any claim which Swynson would have had against HMT, had its loss in respect of the 2006 and 2007 loans not been reduced to nil. In a very general sense, I can understand it being said that it is an injustice to Swynson or Mr Hunt and a pure windfall for HMT, if HMT benefits by avoiding paying damages. This is particularly so, when (as I believe to be the case) Mr Hunt made a mistake which was causative in the but for sense, that, apart from the mistake, he would not have structured the arrangements in the way he did. But mere but for causation is not sufficient: see ITC, para 52. Any benefit which HMT has from Mr Hunts mistake is no more than an indirect and incidental consequence of those arrangements on Swynsons separate and pre existing relationship with HMT. This is too remote to be the basis for a claim that HMT has been unjustly enriched at Mr Hunts expense, or for reversal of the consequences of Mr Hunts arrangements by treating him as having a (fictionalised) interest which he never expected, in respect of a claim by Swynson to recover from HMT a loss otherwise reduced to nil by the arrangements he made. This conclusion can be explained under the scheme indicated in Banque Financire either on the basis that there was no sufficiently direct transfer of value from Mr Hunt to HMT, or on the basis that there is no relevant unjust factor, or both. More generally, this conclusion underlines the fact that it is not the role of the law of unjust enrichment to provide persons finding to their cost that they have made a mistake with recourse by way of subrogation against those who may indirectly have benefitted by such a mistake under separate relationships which those making the mistake were not addressing. For these reasons, I have, not without some sympathy for Mr Hunts position, come to the conclusion that Mr Hunt has no right by way of unjust enrichment as against HMT or by way of subrogation in respect of any claim for damages that Swynson would have had against HMT apart from EMSLs discharge of its indebtedness to Swynson. Conclusion It follows that I would allow HMTs appeal against the judgment of the Court of Appeal upholding Rose Js judgment in favour of Swynson. The parties should have 21 days in which to make submissions on the form of any order and declarations to give effect to these conclusions and on costs. LORD NEUBERGER: (with whom Lord Clarke agrees) The background HMT admit that they were negligently in breach of their professional duty as accountants when advising Swynson in connection with its decision in October 2006 to advance a substantial loan (the original loan) to EMSL. At that time, EMSLs financial position was significantly worse than HMT had reported it to be, and thereafter it deteriorated further, and EMSL eventually ceased business, and was unable to meet its liabilities. HMT nonetheless contend that they have no liability for damages on the ground that Swynson has suffered no loss, because EMSL repaid Swynson the whole of the original loan in December 2008. On the face of it at any rate, it is hard to see any answer to HMTs contention, which amounts to the simple point that this is a case of avoided loss. The arguments to the contrary are based on the circumstances in which the original loan was repaid. Given that EMSLs finances were in a parlous state at the time, the repayment was only possible because Mr Hunt, the controlling shareholder of Swynson, advanced a new, short term, non interest bearing loan (the new loan) to EMSL for the specific purpose of enabling EMSL to repay Swynson the original loan. Mr Hunt did this for two reasons, namely (i) so long as the original loan was outstanding, Swynson was treated for tax purposes as if it was receiving interest on the original loan, even though no interest was being paid, and (ii) Mr Hunt did not want Swynson to have a non performing loan on its books. It is also Mr Hunts contention that he did not appreciate that, as a result of his providing the funds to enable EMSL repay the original loan, Swynson lost the right to recover substantial damages from HMT for their breach of duty without his ever having had a similar right or obtaining such a right. Based on those facts, Swynson and Mr Hunt dispute HMTs contention that it has no liability for their breach of duty on three separate grounds. Those grounds are (i) the repayment of the original loan should be treated as res inter alios acta, and should therefore be disregarded when assessing Swynsons claim against HMT; (ii) despite the repayment of the loan, Swynson should be entitled to recover I shall consider these three grounds in turn. damages on the basis of the principle of transferred loss, namely the loss which Mr Hunt suffered as a result of making the new loan; and (iii) HMT have been unjustly enriched as a result of the repayment of the original loan, the enrichment was at Mr Hunts expense, and he therefore should be treated as subrogated to Swynsons claim against HMT. Res inter alios acta Swynsons argument based on res inter alios acta was accepted by Rose J at first instance and by Longmore and Sales LJJ in the Court of Appeal. Nonetheless, in agreement with Davis LJ, I consider that this argument should be rejected. Mr Hunt did not advance the new loan in order to mitigate any loss which Swynson was suffering: the new loan was advanced for commercial reasons. Although those reasons would not have existed if the original loan had not been in difficulties, Davis LJ was right when he said at [2016] 1 WLR 1045, para 33, that the argument in this case revolves around avoidance of loss, not mitigation. Therefore, the reasoning in British Westinghouse Co Ltd v Underground Electric Railways Co Ltd [1912] AC 673, which was relied on by both Rose J and Longmore LJ, is simply not in point. Further, I do not consider that the reasoning in Parry v Cleaver [1970] AC 1 assists Swynsons first argument. In Parry, the House of Lords addressed the question whether a plaintiff was bound to bring into account insurance payments, charitable payments, pension payments and the like, which were payable owing to the injury suffered as a result of the defendants tort, when assessing the damages which could be recovered from the defendant. Lord Reid stated at [1970] AC 1, 13 that the answer should depend on justice, reasonableness and public policy; however, this should not be treated by judges as a green light for doing whatever seems fair on the facts of the particular case. Ignoring cases of mitigation, and while it would be wrong to pretend that there could never be any exceptions, it seems to me that the effect of the reasoning in Parry is that the types of payments to a claimant which are not to be taken into account when assessing damages, are either those which are effectively paid out of his own pocket (such as insurance which he has taken out, whether through his employer, an insurance company or the government), or which are the result of benevolence (whether from the government, a charity, or family and friends), all of which can be characterised as essentially collateral in nature. In this case, the payment in question was the repayment to Swynson of the original loan by EMSL. Even though that repayment was only effected as a result of the new loan, I rather doubt that it would be appropriate for the purposes of this first argument to look more widely and address the basis upon which Mr Hunt provided the new loan to EMSL. But, even if it is appropriate to look more widely, the new loan was not a gift, but a short term repayable loan, albeit carrying no interest. If such a loan had been provided by someone other than Mr Hunt, the consequent repayment of the original loan would plainly not have been res inter alios acta, and, as Lord Reid said in Parry [1970] AC 1, 15, the question whether such a transaction should be ignored should depend on its intrinsic nature rather than on the identity of the source of the payment. It is true that the money provided in the form of the new loan to EMSL could have been made available to Swynson (or even possibly to EMSL) by Mr Hunt in a way which would not have resulted in Swynsons loss being avoided, but that cannot possibly justify the conclusion that it must therefore be treated as if it had that effect. The fact that a transaction could have been differently arranged does not mean that it must have the same consequences as if it had been differently arranged. As a matter of logic, such a proposition would lead to an impossible situation, and as a matter of experience, it is by no means unusual to encounter cases where a transaction could be structured in two (or more) different ways, each of which would have different consequences both in law and in commercial reality. Transferred loss The second argument raised by Swynson is based on the principle of transferred loss; it was expressly not considered by Rose J and all three members of the Court of Appeal rejected it. I think that they were right to do so. The principle of transferred loss applies where there is a contract between A and B relating to As property which is subsequently acquired by C, and the principle enables A to recover damages for Bs breach of contract which injures the property, even though the loss flowing from that injury is suffered by C and not by A. Self evidently, it is an anomalous principle bearing in mind the well established conventional rules relating to recovery of damages for breach of contract, namely that, subject to the terms of the contract, scope of duty, foreseeability and mitigation, A can only recover damages in respect of loss which A suffers as a result of Bs breach of contract. For that reason, the principle should only apply in defined and limited circumstances. Examples of such circumstances are described in two decisions of the House of Lords. In Albacruz (Cargo Owners) v Albazero (Owners) [1977] AC 774, 847, following a number of earlier cases starting with Dunlop v Lambert (1839) 2 Cl & F 626, Lord Diplock held that the principle applied where it is in the contemplation of the parties that cargo may be transferred from the contracting shipper to a third party, and it is the intention of both the shipper and the contracting shipowner that the contract of carriage is treated as entered into for the benefit of such a third party as well as the shipper. In Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85, it was held that the principle applied where a contractors construction of a building had been defectively in breach of its contact with the developer, but the loss had been suffered by a purchaser of the building from the developer. Lord Browne Wilkinson explained that at the time of the contract both contractor and developer knew the building was going to be occupied, and possibly purchased, by third parties and not by [the developer] itself and that any loss from defective construction work would be likely to be suffered by a future purchaser, not the developer. There is force in the proposition that these two decisions suggest that the law has moved to the point where it is possible to identify the circumstances in which the courts will accept that the principle of transferred loss can be invoked in order to avoid a black hole into which what would otherwise be a valid claim for damages has disappeared, to use the metaphor first judicially articulated in this context by Lord Stewart in J Dykes Ltd v Littlewoods Mail Stores Ltd 1982 SLT 50, 54 (col 2). The circumstances in which the principle summarised in para 102 above can apply are where (a) at the time of making the contract with A, B would reasonably have anticipated that A would transfer the property to a person such as C and that that person would suffer loss if B breached the contract, so that the contract can be seen as having been entered into by B partly for Cs benefit, and (b) there is nothing in the contract or the surrounding circumstances which negatives the conclusion that the principle should apply. The subsequent decision of the House of Lords in Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518 appears to me to support the notion that the scope of the principle is as I have suggested. In that case, it was decided, albeit by a bare majority, that one circumstance which would negative the application of the principle can be where the third party, C, had his own contractual rights against the contract breaker. It is fair to say that the Panatown decision leaves a number of points open in this difficult area. One of those points is the correctness of another version of the principle, which was first articulated by Lord Griffiths in Lenesta Sludge, namely that B could be liable if A retains an interest in B performing his obligations, even though A has transferred away the property. However, it is unnecessary to address that point in this case, because it plainly could not apply in this appeal: following repayment of the original loan, Swynson cannot sensibly claim to have retained an interest in the performance of HMTs duties. I consider that the transferred loss argument on this appeal suffers from two defects. First, this cannot be said to be a case of injury to an asset or property which came into the hands of Mr Hunt, because the loss suffered by Mr Hunt is not the same as the loss which would have been suffered by Swynson if the new loan had not led to the original loan being redeemed. The losses may be very similar in nature (non repayment of a loan made to EMSL), in cause (EMSLs financial problems), and in quantum (as the new loan was very similar in amount to the original loan and identical to the extent that it was used to pay off the original loan). However, Mr Hunt has suffered loss in relation to the new loan whereas Swynson would have suffered a loss in relation to the original loan. Secondly, the principle cannot apply because, at the time HMT were advising Swynson, it was not reasonably foreseeable that Swynson would have the original loan repaid through the medium of a fresh loan made to EMSL by a third party. Of course, as with most financing arrangements, it was reasonably foreseeable that some sort of subsequent re financing of EMSL might happen one day, but that is not enough in order for the principle to apply. If it is to apply, Swynson would have to go further and demonstrate that it was anticipated that some such refinancing would occur, so that a person such as Mr Hunt, the new lender, can fairly be said to have been an intended beneficiary of Swynsons contractual rights against HMT. That seems to me to be an untenable proposition in this case. Unjust enrichment A claim in unjust enrichment based on mistake was not raised on behalf of Swynson or Mr Hunt in front of Rose J, but it was raised in the Court of Appeal, where it was rejected by Longmore and Davis LJJ, but accepted by Sales LJ. I have concerns about a claim based on mistake being raised for the first time on appeal, particularly as the issue of mistake did not play a significant part in the argument or evidence before Rose J, and only assumed importance once the unjust enrichment claim was raised. However, for the reasons given by Lord Mance, I think that it is open to Mr Hunt to advance his unjust enrichment case in this Court, However, I consider that his unjust enrichment claim must fail. As has been stated in a number of cases, most recently by Lord Reed in Commissioners for HM Revenue and Customs v The Investment Trust Companies (in liquidation) [2017] UKSC 29, para 24, an unjust enrichment claim can usefully be analysed by reference to four sequential questions, namely: i) Has the defendant benefitted in the sense of being enriched? ii) Was the enrichment at the claimants expense? iii) Was the enrichment unjust? iv) Are there any defences? In effect, the claimant in unjust enrichment has to satisfy the first three questions, and, if they are satisfied, it is then for the defendant to invoke the fourth question. When considering these questions, indeed when considering claims based on unjust enrichment generally, there is an inevitable tension between the desire to achieve justice or fairness in the individual case and the need to adopt or apply an approach which is principled and predictable. Concepts such as enrichment and expense may appear to be relatively uncontroversial, but even those concepts, particularly expense, can raise problems (as in Bank of Cyprus v Menelaou [2016] 1 AC 176, paras 69 73 and the Investment Trusts case at paras 32 74). And the question whether enrichment is unjust can often lead to the risk of unpredictable value judgments unless a relatively structured approach is adopted. Lord Goff made this point in the first case in which the House of Lords accepted the doctrine of unjust enrichment, Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548, 578. And, more recently, Lord Reed made the same point very clearly in the Investment Trusts case, para 39. It is also important to remember that the four questions are not statutory or contractual requirements which have to be satisfied before an unjust enrichment claim can succeed. They constitute a useful, summarily expressed, and practical approach to be adopted to an unjust enrichment claim. Further, although they may appear to be self contained, there can often be a degree of overlap between some of the four questions when applied to a particular set of facts. With that, I turn to consider whether the first three questions set out above are satisfied by Mr Hunt. I consider that Mr Hunt can succeed on the first question. At any rate it is arguable that it is not a natural use of colloquial language to describe HMT as enriched because they have (subject to the unjust enrichment claim) been effectively released from a very substantial potential liability for damages for professional negligence. However, in economic terms they have undoubtedly been enriched, and in my view, avoidance of a pre existing liability must be capable of being enrichment for present purposes. It is also true that the enrichment in this case can be described as incidental or collateral, but I think that that is a point better considered in relation to the second and third questions. Turning to the second question, I do not have any difficulty with the fact that there were two stages by which Mr Hunts money got to Swynson, in that Mr Hunt made the new loan to EMSL and then EMSL used the loan to pay off the original loan made by Swynson. I accept that the normal rule is that the defendant must be directly enriched by the claimant at whose expense the enrichment is said to have occurred, but there can be exceptional cases. It would be inappropriate to discuss this further in the light of Lord Reeds clear analysis in the passages in the Investment Trusts case referred to above. However, I consider that in this case, as in Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221 and in Menelaou [2016] 1 AC 176, the fact that the money passed from Mr Hunt to EMSL and then from EMSL to Swynson does not present a problem for an unjust enrichment claim. The new loan was advanced not merely on the basis that it was expected to be used to pay off the original loan: it was required to be used for that purpose. However, the fact that Mr Hunt can be treated as having incurred expense of paying off the original loan is not enough to dispose of the second question in his favour. What Mr Hunt has to establish is that the enrichment of HMT, not the enrichment of Swynson, was at his expense. While the repayment of Swynsons original loan can be said to have be at the expense of Mr Hunt because it was funded by his new loan, and while HMT were enriched, I am unconvinced that HMT were enriched at Mr Hunts expense. I do not find it easy to reconcile the reasoning of Lord Reed in the Investment Trusts case with the notion that the enrichment of HMT was sufficiently directly effected by Mr Hunts advance of the new loan (even treating it as incorporating the repayment of the original loan) to satisfy the second question. As Lord Reed said in para 52, a claimant is not normally treated as having incurred a relevant loss where the provision of the benefit was merely an incidental or collateral result of his expenditure. But, even assuming that this is one of those exceptional cases where the second question is satisfied by an indirect payment, I do not consider that Mr Hunt can satisfy the third question. Of course, in the broadest sense, on the facts of this case, it can be argued that it would be unjust if HMT could be relieved of a substantial liability and that Mr Hunt and his companies (to treat them as a single entity) could lose a valuable claim. This would be on the basis that this is a result of Mr Hunt deciding to restructure the financing of EMSL as between him and one of his companies, and the benefit to HMT is wholly adventitious and the loss to Mr Hunt and his companies was due to an oversight on the part of Mr Hunt and/or his advisers. But unjustness in the context of unjust enrichment is not, in my view, of the palm tree variety. It must be based on some principle. As Lord Reed explains in para 52 of the Investment Trusts case, situations where the defendant has received a benefit merely as an incidental consequence of the claimants pursuit of some other objective are often situations where the enrichment of the defendant is not unjust. It is true that in this case Mr Hunt made a mistake in that he assumed that the effect of making the new loan and repaying the original loan would not affect the claim which he and/or Swynson had against HMT. However, while I see the attraction of the contrary view, in my opinion, that is not the sort of mistake which renders it unjust for HMT to escape liability for their negligence in the context of an unjust enrichment claim. The purpose of unjust enrichment is to correct normatively defective transfers of value usually by restoring the parties to their pre transfer positions, as Lord Reed pithily put it in para 42 of the Investment Trusts case. Thus, in the context of an unjust enrichment claim arising out of a transaction, there must, in my view, at least normally (and quite possibly always), be some defect in the transaction itself for the doctrine of unjust enrichment to come into play. In other words, for some reason, including but not limited to a mistake on his part, the claimant must be able to show that he did not get all that he expected or thought that he had bargained for. As Lord Sumption shows in paras 21 29, that analysis is consistent with Banque Financire [1999] 1 AC 221 and Menelaou [2016] 1 AC 176, and the cases referred to in the judgments in those decisions. In this case, Mr Hunt got precisely what he thought he was getting from the transaction in question, namely repayment to Swynson of the original loan, and a right to recover the new loan from EMSL. It is of course true that he did not appreciate that he was indirectly relieving HMT of a substantial liability to Swynson (without replacing it with some equivalent claim in his favour against HMT), but that cannot be characterised as a defect in the transaction. Unless we were to hold that the facts of this case justify a departure from the normal scope of unjust enrichment cases as described by Lord Reed in the Investment Trusts case, para 42, it must follow that Mr Hunts unjust enrichment claim fails. I can see no good reason for upholding the present unjust enrichment claim given that it is not within the normal scope of such claims. On the contrary: given the absence of any telling reasons justifying such a course, if we held that the claim in this case succeeded, we would risk throwing the law on unjust enrichment claims into serious uncertainty, particularly bearing in mind that we have only very recently confirmed the scope of such claims in the Investment Trusts case. Conclusion For these reasons, and for the reasons given by Lord Sumption and Lord Mance (in relation to res inter alios acta and transferred loss) and by Lord Sumption (in relation to unjust enrichment), I consider that neither Mr Hunt nor Swynson has a claim which can be maintained against HMT, and I would therefore allow HMTs appeal. It is only fair to add that I do not see any significant variation in the reasoning of Lord Sumption and Lord Mance on the unjust enrichment issue. However, given the ability of ingenious lawyers to identify possible differences between concurring judgments, I consider that it is safer to take a course which minimises the risk of such an occurrence in this area of law, given its current stage of jurisprudential development. |
Cigarettes attract smokers, smugglers and thieves. In the two appeals now before the court, one container load was allegedly hi-jacked in Belgium en route between Switzerland and The Netherlands in September 2011, while another allegedly lost 756 of its original 1386 cartons while parked overnight contrary to express instructions near Copenhagen en route between Hungary and Vallensbaek, Denmark. The consignors are claiming against English main contractors who undertook responsibility for the carriage and against sub-contractors in whose hands the cigarettes were when the alleged losses occurred. The carriage was subject to the Convention on the Contract for the International Carriage of Goods by Road 1956 (CMR), given the force of law in the United Kingdom by the Carriage of Goods by Road Act 1965. Although the Act only incorporates the English language version, CMR was agreed at an international level in English and French, each text being equally authentic. Lord Wilberforce said this about the proper approach to its interpretation in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd [1978] AC 141, 152D-F: I think that the correct approach is to interpret the English text, which after all is likely to be used by many others than British businessmen, in a normal manner, appropriate for the interpretation of an international convention, unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation: Stag Line Ltd v Foscolo, Mango and Co Ltd[1932] AC 328, per Lord Macmillan, at p 350. Moreover, it is perfectly legitimate in my opinion to look for assistance, if assistance is needed, to the French text. This is often put in the form that resort may be had to the foreign text if (and only if) the English text is ambiguous, but I think this states the rule too technically. As Lord Diplock recently said in this House the inherent flexibility of the English (and, one may add, any) language may make it necessary for the interpreter to have recourse to a variety of aids: Carter v Bradbeer [1975] 1 WLR 1204, 1206. There is no need to impose a preliminary test of ambiguity. It appears that some 55 states have ratified, or acceded or succeeded to participation in CMR, of which half are states not members of the European Union, including states as wide-spread as Azerbaijan, Kazakhstan, Kyrgystan, Jordan, Mongolia, Moldova, Morocco, Syria, Tajikistan, the former Yugoslav Republic of Macedonia and Uzbekistan. There is no international court to which national courts may refer issues of interpretation of CMR. The present appeals each involve the issue whether the consignors can found jurisdiction in England not only against the main contractors but also against sub- contractors as successive carriers within the meaning of CMR, by relying on the presence here of, and the proceedings brought against, the main contractors and/or upon a provision in the main contract for English jurisdiction. The goods had a high value, put in the case of the first container at 624,000 plus 2.9m duty and/or taxes demanded by Belgian Customs, and in the case of the cartons missing from the second container at 30,000 plus over 500,000m duty and/or taxes. English law and English jurisdiction are said to offer the advantage that such duty and/or taxes are recoverable in a CMR claim against carriers, which is not the case in some other jurisdictions. Joinder of all carriers in English proceedings is said to have the advantage that it will ensure that all parties concerned and their witnesses will be involved in the same proceedings, in which the consignors intend to seek to establish wilful misconduct, so preventing any carrier liable from availing itself of the limit of liability otherwise provided under Chapter IV of CMR (see articles 23 and 29). In a clearly reasoned judgment, given on 23 March 2012 within a week of the hearing before him, the judge (Cooke J) held that the consignors could not succeed in doing this, and set aside the proceedings against the sub-contractors: [2010] EWHC 694 (Comm); [2013] 1 WLR 397. The Court of Appeal (McFarlane LJ, Sir Bernard Rix and Sir Timothy Lloyd) heard argument over two days on 5-6 February 2013, and in a detailed judgment given by Sir Bernard Rix on 30 October 2013 reached the opposite conclusion: [2013] EWCA Civ 1319; [2014] 1 WLR 4526. The matter now comes to this court with our permission. The circumstances in greater detail The two consignors were companies in the British American Tobacco group. They are respondents on the appeal and have been referred to together as BAT. The transport of the container loads took place under a framework agreement made by British American Tobacco (Supply Chain WE) Ltd (BAT SCWE) and a local agreement made by British American Tobacco (Holdings) Ltd (BAT Holdings) with the first defendants Exel Europe Ltd (Exel), who have played no part on these appeals. The appellants are in the first appeal H Essers Security Logistics BV (Essers Security) and H Essers Transport Co Nederland BV (Essers Transport), referred to collectively as Essers, and in the second appeal Kazemier Transport BV (Kazemier). All the appellants are ordinarily resident in and have their principal place of business in the Netherlands. Essers Security was engaged by Exel to carry the first container, and maintains that it in turn engaged Essers Transport to do this. Kazemier was engaged by Exel to carry the second container. Two CMR consignment notes are before the court. In relation to the first container, we have the consignors copy issued in Switzerland on 2 September 2011, showing the relevant BAT company as consignor and Maersk Shipping Lines as intended consignee and signed simply by Essers as carriers. In relation to the second container, we have the carriers copy issued in Hungary on 15 September 2011 showing the relevant BAT company as consignor, an associated Danish company as consignee and Kazemier as carrier. It is signed by a chauffeur, presumably Kazemiers driver, and, on receipt of the container at destination on 20 September 2011, by the Danish company with a notation regarding the missing cartons. The common ground about the CMR position There is much common ground between the parties. First, the two BAT companies who are consignors have been treated as parties to the framework and/or local agreement, each of which provides that it is governed by English law, and that each party irrevocably submits to the exclusive jurisdiction of the English courts in relation to all matters arising out of or in connection with it. I note in parenthesis that the sub-contracts made by Exel with respectively Essers Security and Kazemier also contained identical provisions, regarding choice of law and court. Second, the arrangements between each BAT consignor and Exel constituted a contract for carriage by Exel within the meaning of CMR. Third, under the provisions of Chapter VI of the Convention relating to carriage performed by successive carriers, Exel was the first carrier, while one or other of the Essers companies was the last carrier and the carrier performing the carriage at the time of the loss of the first container, and Kazemier was the last carrier and the carrier performing the carriage at the time of the loss of the second container. Chapter VI of the Convention commences with article 34, providing: If carriage governed by a single contract is performed by successive road carriers, each of them shall be responsible for the performance of the whole operation, the second carrier and each succeeding carrier becoming a party to the contract of carriage, under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note. In the French version (equally authentic at an international level), that reads: Si un transport rgi par un contrat unique est execut par des transporteurs routiers successifs, chacun de ceux-ci assume la responsabilit de excution du transport total, le second transporteur et chacun des transporteurs suivants devenant, de par leur acceptation de la marchandise et de la lettre de voiture, parties au contrat, aux conditions de la lettre de voiture. Article 35 gives a further indication as to how this system is envisaged as working. It provides: 1. A carrier accepting the goods from a previous carrier shall give the latter a dated and signed receipt. He shall enter his name and address on the second copy of the consignment note. Where applicable, he shall enter on the second copy of the consignment note and on the receipt reservations of the kind provided for in article 8, paragraph 2. 2. The provisions of article 9 shall apply to the relations between successive carriers. The common ground between the parties in the present case involves necessarily their acceptance that one or other of the Essers companies in the case of the first container and Kazemier in the case of the second was a successive carrier within article 34. In this connection, the present parties are content to proceed on the basis, said in Professor Malcolm Clarkes work International Carriage of Goods by Road: CMR, 6th ed (2014), para 50a(i) to be disputed but accepted by both Donaldson J and the Court of Appeal in Ulster-Swift v Taunton Meat Haulage [1975] 2 Lloyds Rep 502, 507 and [1977] 1 Lloyds Rep 346, 358-361 and by other national courts, that, where (as here) a company contracts to carry goods, but sub- contracts the whole performance, the first company is for CMR purposes the first carrier, while the second becomes a successive carrier. Further, although article 4 of CMR provides that The contract of carriage shall be confirmed by the making out of a consignment note, it continues by saying that The absence, irregularity or loss of the consignment note shall not affect the existence or the validity of the contract of carriage which shall remain subject to the provisions of this Convention. However, article 34 provides that a second or succeeding carrier only becomes a successive carrier by becoming a party to the contract of carriage, under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note. At this point, therefore, it might seem that the existence of a CMR note was of importance, and Professor Loewe, in a Commentary on the Convention of 19 May 1956 on the Contract for the International Carriage of Goods by Road (CMR), prepared for the United Nations in 1975 and expressed at paragraph 16 to be based on the preparatory work, on personal notes and recollections of the negotiations, and on the logic and spirit of the Convention itself, indicates at paragraph 275 that the language of article 34 was directed to ensuring that successive carriers were made aware through the consignment note that the carriage which they were undertaking (perhaps only for one part, and possibly even within only one countrys territory) was international carriage subject to the provisions of CMR. There appears in the present cases at least a real possibility that the two CMR consignment notes only came into existence at the time when the relevant Essers company and Kazemier collected the respective consignments and signed the relevant CMR consignment notes. Whether article 34 can apply to such a case is a point which we can however leave open, since the parties are prepared without further examination to proceed on the basis that these appeals both concern successive carriage, by the relevant Essers company or companies and by Kazemier, within the terms of article 34. Further provisions of CMR The appeals raise a number of particular issues, to address which it is necessary to set out further provisions of CMR: CHAPTER II PERSONS FOR WHOM THE CARRIER IS RESPONSIBLE Article 3. For the purposes of this Convention the carrier shall be responsible for the acts and omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own. CHAPTER III CONCLUSION AND PERFORMANCE OF THE CONTRACT OF CARRIAGE Article 4. [See above, para 12] Article 5. The consignment note shall be made out in three original copies signed by the sender and the carrier. Article 6.1. The consignment note shall contain the following particulars: (a) the date of the consignment note and the place at which it is made out; the name and address of the sender; the name and address of the carrier; the place and the date of taking over of the goods and the place designated for delivery; the name and address of the consignee; the description in common use of the nature of the goods and the method of packing, and, in the case of dangerous goods, their generally recognised description; the number of packages and their special marks and numbers; the gross weight of the goods or their quantity otherwise expressed; (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) charges relating to the carriage (carriage charges, supplementary charges, customs duties and other charges incurred from the making of the contract to the time of delivery); the requisite instructions for Customs and other formalities; a statement that the carriage is subject, notwithstanding any clause to the contrary, to the provisions of this Convention. 2 Where applicable, the consignment note shall also contain the following particulars: (a) (b) (c) (d) a statement that transhipment is not allowed; the charges which the sender undertakes to pay; the amount of cash on delivery charges; a declaration of the value of the goods and the amount representing special interest in delivery; the senders instructions to the carrier regarding insurance of the goods; the agreed time-limit within which the carriage is to be carried out; a list of the documents handed to the carrier. (e) (f) (g) 3. The parties may enter in the consignment note any other particulars which they may deem useful. Article 8.1. On taking over the goods, the carrier shall check: (a) (b) the accuracy of the statements in the consignment note as to the number of packages and their marks and numbers, and the apparent condition of the goods and their packaging. 2 Where the carrier has no reasonable means of checking the accuracy of the statements referred to in paragraph l(a) of this article, he shall enter his reservations in the consignment note together with the grounds on which they are based. He shall likewise specify the grounds for any reservations which he makes with regard to the apparent condition of the goods and their packaging. Such reservations shall not bind the sender unless he has expressly agreed to be bound by them in the consignment note. Article 9.1. The consignment note shall be prima facie evidence of the making of the contract of carriage, the conditions of the contract and the receipt of the goods by the carrier. Article 13.1. After arrival of the goods at the place designated for delivery, the consignee shall be entitled to require the carrier to deliver to him, against a receipt, the second copy of the consignment note and the goods. If the loss of the goods is established or if the goods have not arrived after the expiry of the period provided for in article 19, the consignee shall be entitled to enforce in his own name against the carrier any rights arising from the contract of carriage. CHAPTER V CLAIMS AND ACTIONS Article 30.1 [Deals with checking of the goods by the consignee] 30.2. When the condition of the goods has been duly checked by the consignee and the carrier, evidence contradicting the result of this checking shall only be admissible in the case of loss or damage which is not apparent and provided that the consignee has duly sent reservations in writing to the carrier within seven days, Sundays and public holidays excepted, from the date of checking. 3 No compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within 21 days from the time that the goods were placed at the disposal of the consignee. 5 The carrier and the consignee shall give each other every reasonable facility for making the requisite investigations and checks. Article 31.1 1. In legal proceedings arising out of carriage under this Convention, the plaintiff may bring an action in any court or tribunal of a contracting country designated by agreement between the parties and in addition, in the courts or tribunals of a country within whose territory (a) the defendant is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made, or the place where the goods were taken over by the carrier or the place designated for delivery is situated, (b) and in no other courts or tribunals. 2 Where in respect of a claim referred to in paragraph 1 of this article an action is pending before a court or tribunal competent under that paragraph, or where in respect of such a claim a judgment has been entered by such a court or tribunal no new action shall be started between the same parties on the same grounds unless the judgment of the court or tribunal before which the first action was brought is not enforceable in the country in which the fresh proceedings are brought. Article 32: The period of limitation for an action arising out of carriage under this Convention shall be one year. Nevertheless, in the case of wilful misconduct, or such default as in accordance with the law of the court or tribunal seised of the case, is considered as equivalent to wilful misconduct, the period of limitation shall be three years. Article 33. The contract of carriage may contain a clause conferring competence on an arbitration tribunal if the clause conferring competence on the tribunal provides that the tribunal shall apply this Convention. CHAPTER VI PROVISIONS RELATING TO CARRIAGE PERFORMED BY SUCCESSIVE CARRIERS Articles 34 and 35 [See above, paras 10 and 11] Article 36. Except in the case of a counter-claim or a set-off raised in an action concerning a claim based on the same contract of carriage, legal proceedings in respect of liability for loss, damage or delay may only be brought against the first carrier, the last carrier or the carrier who was performing that portion of the carriage during which the event causing the loss, damage or delay occurred; an action may be brought at the same time against several of these carriers. Article 37. A carrier who has paid compensation in compliance with the provisions of this Convention, shall be entitled to recover such compensation, together with interest thereon and all costs and expenses incurred by reason of the claim, from the other carriers who have taken part in the carriage, subject to the following provisions: the carrier responsible for the loss or damage shall be solely liable for the compensation whether paid by himself or by another carrier; (a) (b) when the loss or damage has been caused by the action of two or more carriers, each of them shall pay an amount proportionate to his share of liability; should it be impossible to apportion the liability, each carrier shall be liable in proportion to the share of the payment for the carriage which is due to him; if it cannot be ascertained to which carriers liability is attributable for the loss or damage, the amount of the compensation shall be apportioned between all the carriers as laid down in (b) above. (c) Article 38. If one of the carriers is insolvent, the share of the compensation due from him and unpaid by him shall be divided among the other carriers in proportion to the share of the payment for the carriage due to them. Article 39.1. No carrier against whom a claim is made under articles 37 and 38 shall be entitled to dispute the validity of the payment made by the carrier making the claim if the amount of the compensation was determined by judicial authority after the first mentioned carrier had been given due notice of the proceedings and afforded an opportunity of entering an appearance. 2 A carrier wishing to take proceedings to enforce his right of recovery may make his claim before the competent court or tribunal of the country in which one of the carriers concerned is ordinarily resident, or has his principal place of business or the branch or agency through which the contract of carriage was made. All the carriers concerned may be made defendants in the same action. The issues The following particular issues arise: (i) First, can article 31 and 36 be read together, so that, once a claimant has established jurisdiction against one defendant under article 31.1(a), it can then bring into that jurisdiction any other successive carrier potentially liable under article 36? (ii) Second, is it under article 31 sufficient to enable the BAT companies to sue Essers and Kazemier as successive carriers in England that the English courts were designated by agreement in the carriage contracts made between such BAT companies and Exel? (iii) Third, can the BAT companies sue Essers and Kazemier in the English courts, on the basis that the branch or agency through which the contract of carriage was made was in England? (iv) Fourth, do the provisions or principles of the Brussels I Convention on Civil Jurisdiction and Judgments, Council Regulation (EC) No 44/2001 of 22 December 2000 (OJ 2001 L12, p 1) either enable jurisdiction to be established over Essers and Kazemier or inform or dictate the answer to any of the previous questions? The answers to the first three questions all require a proper understanding of the significance of article 31, in a context where there are successive carriers. Each side has also submitted that the fourth question may bear on jurisdiction generally or at least on the first two questions. I will therefore start by outlining how they have submitted that this may be so. Article 6(1) of the Brussels Regulation provides: A person domiciled in a member state may also be sued: where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings; A similar provision exists, of course, in a non-Union context in Practice Direction 6B para 3.1(3) governing the heads of English and Welsh jurisdiction. BAT submit that this reflects a principle of general international acceptance that should inform the interpretation of articles 31 and 36 of CMR, and so the answer to the first question. Alternatively, they submit that, if CMR has otherwise no like provision, there is a lacuna, which falls to be filled by article 6(1) of the Brussels Regulation. In Frans Maas Logistics (UK) Ltd v CDR Trucking BV [1999] 1 All ER (Comm) 737; [1999] 2 Lloyds Rep 179, Colman J held article 31.2 of CMR to be limited to proceedings brought by same claimant against the same defendant, and that, on that basis, the lis pendens provisions of articles 21 and 22 of the Brussels Convention should be applied to preclude a mirror image claim in England raising the same issues, but with the parties positions as claimant and defendant reversed, to those raised in prior Dutch proceedings. Colman Js decision limiting article 31.2 to claims by the same claimant against the same defendant was overruled by the Court of Appeal in Andrea Merzario Ltd v Internationale Spedition Leitner Gesellschaft GmbH [2001] 1 AER (Comm) 883; [2001] 1 Lloyds Rep 490, though this does not of itself necessarily mean that Colman J was wrong to identify as a possibility gap- filling, by reference to for example article 22 of the Brussels Regulation. As to the second question, Essers and Kazemier rely on the principle, which I have no difficulty in accepting, that jurisdiction clauses generally derive their validity from agreement between the parties (or their privies). This principle is clearly enshrined in article 25 of the recast Brussels Regulation ((EU) No 1215/2012 of 12 December 2012) (OJ 2012 L351, p 1): 1. If the parties, regardless of their domicile, have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that member state. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either: (a) (b) in writing or evidenced in writing; in a form which accords with practices which the parties have established between themselves; or (c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned. Accordingly, Essers and Kazemier submit that, in so far as the BAT companies seek to rely against them upon jurisdiction clauses which were contained in the contract between BAT and Exel and to which they did not agree, CMR cannot and should not be interpreted as binding them by such clauses. The fact that, as it happened, the sub-contracts made by Exel with Essers Security and Kazemier were also subject to English choice of law and court clauses must, I accept, be legally irrelevant in this connection, however much it might be thought to diminish the attractiveness in non- legal terms of Essers and Kazemiers position. In the further alternative, BAT submit that, if CMR positively precludes the recognition or application of article 6(1) or of a similar principle, then CMR would lead to results which are less favourable for achieving sound operation of the internal market than those resulting from the provisions of the Brussels Regulation, and in particular inconsistent with observance of the aim of minimising the risk of concurrent proceedings which is one of the objectives and principles which underlie judicial cooperation in civil and commercial matters in the European Union, and that its provisions must to that extent be over-ridden by the provisions of, or the principle behind, article 6(1). The quotations are from the Court of Justices judgments in Nipponkoa Insurance Co (Europe) Ltd v Inter-Zuid Transport BV (DTC Surhuisterveen BV intervening) (Case C-452/12) EU:C:2013:858; [2014] 1 All ER (Comm) 288, paras 37 and 44; see also TNT Express Nederland BV v Axa Versicherung AG (Case C-533/08) EU:C:2010:243; [2011] RTR 136, paras 51 and 53. Article 31.1 general I turn to consider article 31.1. A significant element of the Court of Appeals reasoning was that, looking at the overall structure of CMR, article 31 was primarily concerned only with, on the one side, cargo interests in the form of the sender or consignee, and, on the other side, the carrier and [p]rima facie, therefore, in its place, is not addressed to the position of a successive carrier, who only becomes a party to the single contract of carriage by accepting the goods and the consignment note (article 34) under what has been called a special statutory contract (para 61). On that basis, the Court of Appeal approached article 31 as not addressing the possibility of multiple carrier defendants, successive carriers being only introduced in the later Chapter VI (para 62). Article 31.1 thus balanced the interests of cargo interests and the original CMR carrier, by providing in paragraph (a) for jurisdictions looking to the interests of defendants and in paragraph (b) for jurisdictions looking to the interests of claimants (para 63). The Court of Appeals approach in this regard led into its view that it was natural to treat the last sentence of article 36 as a further jurisdictional provision directed to the position of successive carriers who had only been introduced in article 34. The difficulty I have with this approach is that, firstly, CMR must have been conceived as a whole and cannot be read as a series of sequential provisions, each unconscious of what was to follow. Even the Court of Appeals use of words primarily and prima facie contain a limited recognition of that truth. Secondly, the provisions of Chapter V, including article 31, must, on analysis, apply not only to disputes arising between cargo interests and the original CMR carrier, but also to situations where a successive carrier is involved. That is clearly true of article 30, dealing with checking and time limits for making reservations. It is also true of article 32 dealing with the one-year limitation period for actions. It must also be true of the provisions regarding lis pendens, enforceability, and security for costs in paras 2-5 of article 31. Article 31.1 must equally apply and have been envisaged as covering cases of successive carriage. Mr Charles Priday in his submissions for BAT recognised this by his submission that what article 31 envisaged in such a case was that the claimant would establish jurisdiction against at least one of the relevant carriers identified in article 36 (ie the first or last carrier or the carrier performing the carriage at the time of the loss, damage of delay) whereupon the last sentence of article 36 would give jurisdiction over the other relevant carrier[s]. Mr John Passmore QCs response for Essers and Kazemier is that this analysis effectively undermines and opens up the careful scheme of article 31. Article 31.1 jurisdiction designated by agreement Rather than take the questions which the parties have identified in the order they have addressed them, I think that it is helpful to go through the various heads of jurisdiction contained in article 31 in the order in which they appear. The opening provision of article 31.1 is that the plaintiff may bring an action in any court or tribunal of a contracting country designated by agreement between the parties. It is unnecessary on these appeals to decide whether that means between the parties to the carriage contract or the parties to the litigation. But I am of the view that it should be interpreted as meaning the latter. Article 31.1 is a provision dealing with jurisdiction to bring legal proceedings. Any agreement on jurisdiction between the parties to such proceedings is one for which one would naturally expect a Convention like CMR to cater. When article 31.2 goes on to preclude any new action between the same parties, it is also referring to the parties to the litigation. On this point, therefore, I would endorse Rix LJs view in Hatzl v XL Insurance Co Ltd [2009] EWCA Civ 223, [2010] 1 WLR 470, para 64. Whatever the position in that respect, however, the opening provision of article 31.1 clearly applies as between BAT and Exel. It provides one ground of jurisdiction for suing Exel in England (at least one other being, under paragraph (a), that Exels principal place of business is here). The words and, in addition in article 31 qualify the operation of the jurisdiction clause agreed between BAT and Exel only to the extent that the clause is not under CMR exclusive. So BAT could, if they had wished, have sued in one of the other jurisdictions provided by paragraphs (a) and (b) of article 31.1. But it is common ground that they were as against Exel entitled to take advantage of the English jurisdiction clause. Since it is also common ground on these appeals that Essers Security and/or Essers Transport in respect of the first container and Kazemier in respect of the second were successive carriers, it follows that they must, under article 34, have become party to the respective contract or contracts of carriage made between BAT and Exel. If the matter stopped there, that would on the face of it mean party to those contracts whatever their terms. But article 34 qualifies the position, by adding that a successive carrier becomes party to the contract of carriage under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note, or in French becomes par leur acceptation de la marchandise et de la lettre de voiture, parties au contrat, aux conditions de la lettre de voiture. These references to the terms or conditions of the consignment note are general. They clearly refer to something different from any reservations which the first carrier may have entered regarding the number, marks, numbers, condition or packaging of the goods taken over under article 8.1, or which a successive carrier may have entered on his acceptance of the goods under article 35.1. Such reservations are not terms or conditions by which anyone is bound. Equally, since the consignment note is intended to confirm the contract of carriage (article 4) and is prima facie evidence of both its making and its conditions (article 9.1), it is difficult to understand the purpose of the reference to terms or conditions in article 34, unless it is intended to mean that a successive carrier is bound by the original contract in so far as its terms or conditions are set out in the consignment note. CMR in a number of places refers to carriage, liability or conduct under the terms of or in accordance with a Convention, contract, article or law, and these also envisage that the former will be measured or controlled by reference to the latter. Article 6 contains a full list of particulars which are required to appear in a consignment note and by their nature will disclose core terms of the main carriage contract. But neither article 6 nor the present consignment notes make mention of any choice of law or court clause or agreement. Particulars of any such clause or agreement might have been added as contemplated by article 6.3 of CMR in the boxes entitled Conventions particulires or Besondere Vereinbarungen on the consignment note. But these boxes were in each case left empty. There is of course nothing unusual about either a choice of law and court clause, or a clause providing for dispute resolution before an arbitration tribunal. Both are common enough in international trade. Article 31 contemplates that a contract of carriage may contain either, and the latter is for good measure also expressly permitted by article 33. But that does not mean that CMR necessarily intended that a successive carrier should become party to such a clause, without having any notice of it or the express opportunity to decline to carry on its terms. BAT rely on the fact that neither article 6.1 nor article 6.2 of CMR requires a CMR consignment note to state the existence of a choice of law or court clause. But that to my mind tends to confirm that the transposition of application of such a clause to the relationship between the consignor or consignee and a successive carrier depends on agreement, and here in particular upon the use of the boxes provided pursuant to article 6.3. Had it been contemplated that a successive carrier would automatically be bound by such a clause, one would have expected the existence of such a clause to have been among the particulars required by these paragraphs to appear in the consignment note for the very purpose of giving the successive carrier notice of them. That is one obvious reason why, alongside basic details relating to the parties, the carriage and the goods (including in the case of dangerous goods their generally recognised description), the consignment note is required also to include for example, a statement that the carriage is subject to CMR, and further details such as any cash on delivery charges, any special interest in delivery, and instructions regarding insurance, and any agreed time-limit for the carriage. These are all matters in relation to which a successive carrier would be expected to be bound and would accordingly need to know. A choice of court clause is, on the contrary, a particular which the parties to a consignment note (particularly the consignors as the most likely claimant against a successive carrier) might consider it appropriate to identify in the relevant box, Conventions particulires, if they wished to bind a successive carrier by it. It would fall within article 6.3. But there is no reason why they should be bound to do this. At a more fundamental level, I am now also persuaded that it would be contrary to general principle to hold a successive carrier bound by a choice of court clause, or any other contractual clause not evidenced by the consignment note, of which he had no express notice. To do so would involve an unfamiliar and undesirable invasion of the general principle that contract depends on agreement. It is true that CMR itself provides that a successive carrier becomes a party to the original carriage contract by acceptance of the goods and the consignment note. But that is the published and, by now at least, familiar scheme of CMR, which any road carrier carrying on business within the CMR states may be taken to know, and of which the consignment note is also required to give express notice. To hold a successive carrier liable by reference to terms or conditions not mentioned in the consignment note would be a quite different matter. The consignor and a first carrier may have agreed all sorts of onerous obligations by which it would be most unfair to hold a successive carrier bound. In the present case, it is alleged that Exel had been specifically instructed not to park the second container overnight. No such instruction was recorded on the consignment note. While we heard no argument on this specific point, it seems difficult to suggest that any such instruction could bind anyone contractually other than Exel. To attempt to distinguish between specific instructions of a usual and an unusual nature would, in my view, be to make bricks without straw. CMR neither contains nor hints at any such distinction. Article 34 makes the straightforward point that successive carriers take over the goods and become parties to the original contract on the terms or conditions of the consignment note. On that basis, I have ultimately reached the clear conclusion that there is no basis upon which Essers or Kazemier can have become bound by an English jurisdiction clause in the original contract or contracts to which they became party, but which was not identified in the terms or conditions of the CMR consignment note. I note that Professor Loewe takes a different view in para 282 of the paper to which I have already referred, considering that a successive carrier who on his view becomes bound by a jurisdiction clause of which he had no notice in the consignment note could bring an action for damages against the first carrier. This view is not based on any reference to negotiations preceding CMR, and is stated in simple conclusionary terms. Why and how a successive carrier could or would have any claim for damages against a first carrier, who had no duty to identify the jurisdiction clause on the consignment note, is also unexplained. Other commentators have not accepted Professor Loewes view on this point, though their reasoning varies. In Hill and Messents CMR: Contracts for the International Carriage of Goods by Road 3rd ed (2000), paras 11.37 and 11.67 take the view which I have expressed. At the same time, paras 10.27 and 10.28 suggest that a consignee may (like a privy or assignee) be bound by a jurisdiction clause, even though it is not mentioned in the consignment note. But, if that is correct (on which I need express no concluded view), it does not undermine paras 11.37 and 11.67; rather it is because under article 13 a consignee stands, without more, in the same position as the consignor with regard to the enforcement of any rights arising from the contract of carriage, and, unlike the position under article 34, there is no qualification that the consignee is only entitled or bound under the terms or conditions of the consignment note. In contrast, Professor Malcolm Clarke in his work, cited above, para 46c suggests that the designation of a court or tribunal by agreement between sender and carrier will not bind the consignee or a successive carrier unless the latter [sic] has notice of the designation. But he does so on a basis which makes no reference to the language of article 34 and relies on two French decisions: one by the Court of Appeal of Paris dated 14 November 1969, the other by the Court of Appeal of Colmar dated 26 November 2001. In the former, a French consignee suing in France was held not bound by any German jurisdiction clause, firstly because none had been proved even between the German consignor and the carrier, and secondly because the only document of a contractual nature evidencing the carriage terms which the consignee ever saw and accepted was a receipt which (it appears) made no mention of any jurisdiction clause. In the latter case, the French consignor (Amural) was claiming, firstly, against the German buyer/consignee (Neuendorf) of frozen duck fillets for withholding 15% of the invoice amount on account of the high temperature of the fillets on arrival and, secondly or alternatively, against the carriers (TAC Transports) and sub-carriers (Transport Michel) for having caused any damage. There was clearly French jurisdiction against both carriers under article 31.1(a) and (b), but there was an internal issue as to whether the Regional Court of Mulhouse had been chosen by agreement between Amural and TAC Transports or whether, failing such choice and as the court held, the Commercial Court of Meaux was the court assigned by the New French Code of Civil Procedure. Neuendorf as buyer/consignee accepted that CMR governed his relationship with Amural. This seems very strange in respect of a claim by Amural which appears to have been, as against Neuendorf, for the balance of the unpaid price of goods. But, on the basis that CMR applied, Neuendorf contended that he could only be sued in Bochum, Germany as the place where he resided and the place of delivery. This suggestion was summarily rejected by the court on the ground that article 31 conferred jurisdiction on France. As against Neuendorf, and on the apparently odd assumption that CMR regulated its sale of goods relationship with Amural, this was presumably on the basis that France was where the goods were taken over for carriage. Neither of the French cases cited by Professor Clarke seems to me therefore to offer any real guidance as to the proper approach to the application of an agreed jurisdiction clause as against a successive carrier. However, in the light of the other considerations which I have set out, and contrary to my initial reaction, I have come the clear conclusion that the qualifying phrase in article 34 has the effect that a successive carrier will not be bound by a jurisdiction clause agreed between the consignor and the first carrier unless it is identified in the consignment note (or unless of course the successive carrier binds himself to it by agreement in some other way). Article 31.1 further provisions I move accordingly to the further provisions of article 31.1. It is common ground, and in any event clearly correct, that paragraph (b) refers to the places of taking over by the carrier and designated for delivery under the CMR contract made between the consignor and the first carrier. The only caveat that may be appropriate is that, as regards a successive carrier, the position could (again in the light of article 34) be different if the CMR consignment note failed correctly to reflect the place of taking over or the place designated for delivery actually agreed between the consignor and first carrier. That, hopefully rare, case does not require further consideration here. The effect of paragraph (b) is that any carrier against whom proceedings can be brought under article 36 can be sued in either the place where the goods were taken over or the place designated for their delivery. Paragraph (a) of article 31.1 is on the other hand concerned with the position of the particular defendant under consideration, whether or not there are other co- defendants. In so far as it refers to the country where that defendant is ordinarily resident, or has his principal place of business, it is capable of applying in relation to any successive carrier, or, indeed, in the case of an action by a carrier in relation to any consignor or consignee sued by such a carrier. But the reference to the branch or agency through which the contract of carriage was made is much less obviously apt to apply as against anyone other than one of the original parties to the carriage contract, that is basically the consignor (and perhaps the consignee, if the consignor was acting as his agent) and the first carrier. Mr Priday submits that that is wrong, and that, as successive carriers, Essers and Kazemier can be regarded as having contracted through the branch or agency of Exel because Exel made the framework and local agreement with BAT, to which Essers and Kazemier became parties under article 34. That I regard as distorting the plain purpose and effect of the relevant provisions of CMR. Essers and Kazemier are as successive carriers party to the original carriage contract under the terms of the consignment note not because anyone made a contract with them through any branch or agency, but simply because CMR makes them a party by statute in consequence of their accepting the goods and the consignment note. It follows that article 31.1 contains a variety of provisions: (i) a provision enabling the enforcement of any jurisdiction clause in favour of the court or tribunal of a contracting state which was (a) agreed between the parties to the original carriage contract, or (b) to be taken, in the light of article 34, to be agreed as between the original goods interests and any successive carrier becoming party to that original contract on terms in the consignment note incorporating the jurisdiction clause, or (d) agreed in some other way between the parties to the litigation. (ii) provisions in paragraph (a) regarding ordinary residence and a principal place of business which can be relied upon as against any carrier or successive carrier liable to suit under article 36, as well as by a carrier bringing proceedings arising out of carriage under CMR against a consignor or consignee, (iii) a further provision in paragraph (a) which can only sensibly apply in (iv) proceedings between original parties to the carriage contract, further provisions in paragraph (b) which open up jurisdiction in any claim arising out of CMR carriage to cover the courts or tribunals of the place of taking over or designated for delivery of the goods. The important corollary of these provisions is that, under the final words of article 31.1, a claimant may not bring an action arising out of carriage under CMR in any other courts or tribunals. The relationship of articles 31.1, 36 and 39 BATs case is that, once jurisdiction is established over one carrier under article 31.1 in any of the jurisdictions provided by that article, then the last sentence of article 36 opens up the further possibility of joining in the same proceedings any other carrier or carriers potentially liable under article 36, even though proceedings against them, viewed by themselves, cannot be brought within article 31.1. The alternative view of the last sentence of article 36, advocated by Essers and Kazemier, is that it is there to make clear that the liability of the first, last carrier and performing carriers under article 36 is joint and several, and not alternative as might otherwise have been capable of being suggested in view of article 36s reference to proceedings being brought against the first carrier, the last carrier or the [performing] carrier. The provision that an action may be brought against several of these carriers at the same time, or in the French la fois, is on this alternative view merely confirming or emphasising that there is no need to pursue them sequentially. On BATs case, a jurisdiction clause agreed between the consignor and first carrier, but not mentioned in the CMR consignment note accepted by a successive carrier, would nonetheless enable the successive carrier to be added to the proceedings commenced against the first carrier in the court or tribunal of the place assigned by the jurisdiction clause. Likewise, the ability to rely on any of the heads of jurisdiction provided by paragraph (a) of article 31.1 as against any relevant carrier (first, last or performing) would open up the same jurisdiction against any other of such carriers in relation to whom article 31.1 would not otherwise provide any ground of jurisdiction. As BAT contend on the present appeals, the principal place of business of any carrier (even though it was outside any contracting state) would suffice to ground jurisdiction against all relevant carriers, even though it has no connection with the physical carriage. On the face of it, such extensions of the carefully delineated jurisdiction provided by article 31.1 seem unlikely to have been intended. The interests of claimants are, as the Court of Appeal observed at para 63, served by paragraph (b). That paragraph enables all carriers potentially liable under article 36 to be joined in one forum. The opening up of the heads of jurisdiction specified in article 31.1 which on BATs case follows from the last sentence of article 36 sits uneasily with the final words of article 31.1 and in no other courts or tribunals. BAT submit that the interpretation of the last sentence of article 36 which they advance brings symmetry and order to CMRs treatment of claims involving multiple defendants. In a cargo claim, jurisdiction can be achieved against all by establishing it against one. That they submit is also what article 39.2 provides. The problem with this submission is that article 39.2 states this explicitly, by providing that a carrier who has paid compensation may seek recourse by making his claim before the competent court or tribunal of the country in which one of the carriers concerned is ordinarily resident, or has his principal place of business or the branch or agency through which the contract of carriage was made and that all the carriers concerned may be made defendants in the same action. In contrast, article 31.1(a) in terms only confers jurisdiction against the individual defendant whose ordinary residence, principal place of business or branch or agency is relied upon. As to BATs submission that the last sentence of article 39.2 deals, as between carriers, with jurisdiction, and must have been seen as paralleling, also in relation to jurisdiction but here as between cargo interests and carriers, the last sentence of article 36, I do not consider that either sentence necessarily or clearly refers to jurisdiction. Both are well capable of being read as emphasising or confirming no more than that all or several carriers liable may be sued at the same time. BATs submission regarding symmetry also faces the objection that the claims covered by article 39.2 differ significantly in content and structure from those covered by article 31.1: (i) Article 31.1 does not only offer a claimant the jurisdiction of any individual defendants ordinary residence, principal place of business or branch or agency. It offers the additional advantage of jurisdiction against all carriers potentially liable under article 36 (the first, the last and the performing carriers) in the place either of taking over or designated for delivery of the goods. No such jurisdiction is available under article 39.2 to a carrier seeking recourse from another carrier. (ii) Article 39.2 concerns recourse claims which fall under articles 37 and 38 to be divided pro rata, potentially between all carriers and not just the first, last or performing carrier. This is so, having regard to the specific provisions covering cases where more than one carrier was responsible for the loss or damage, or where it cannot be ascertained who was responsible or where a carrier otherwise liable to contribute is insolvent. There is an obvious imperative under article 39.2 to enable a claimant to bring all such claims in one jurisdiction. The same imperative does not exist under article 31.1, since cargo interests are under article 36 entitled to look to any one of the relevant carriers (first, last or performing) to meet their full claim, each being liable 100%. Further, in so far as cargo interests do wish to pursue all such relevant carriers together, they are able to do so in the place either of taking over or designated for delivery as stated in point (i). BAT rely on dicta in two Court of Appeal cases: Cummins Engine Co Ltd v Davis Freight Forwarding (Hull) Ltd [1981] 1 WLR 1363 and ITT Schaub-Lorenz Vertriebsgesellschaft mbH v Birkart Johann lnternationale Spedition GmbH & Co KG [1988] 1 Lloyds Rep 487. Both cases concerned recourse claims between carriers. In Cummins, Cummins as consignor had contracted with Davis, another English company, for the carriage of engines from England to Amsterdam. Davis instructed Charterway to undertake the leg from Rotterdam to Amsterdam, and Charterway in turn asked Graaf, who asked Boers to do this. Charterway, Graaf and Boers were all Dutch firms and all successive carriers under CMR. Cummins issued a writ in England against all four, but served only Davis. Davis issued third party proceedings to join and seek recourse from Charterway, Graaf and Boers, who applied, successfully, to have the third party proceedings set aside on the basis that under article 39.2 any recourse proceedings against them could only be in Holland. But at p 1371 Brandon LJ made the following general statement regarding jurisdiction in the main proceedings: It is clear from the provisions of CMR contained in Chapters V and VI that it contemplates two kinds of legal proceedings arising out of a contract of carriage. The first kind of legal proceedings which it contemplates are actions brought by a sender or consignee of goods against one or more carriers. Where successive carriers are involved, the effect of article 31, paragraph 1, combined with article 34, is that the plaintiff can bring a single action against one, more than one, or all the carriers concerned. Article 31, paragraph 1, further requires him to bring his action in certain courts only. These courts are, first, any court of a contracting state which has been agreed between the parties; secondly, the courts of the country where any of the carriers sued is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made; and, thirdly, the courts of the place where the goods were taken over for the carriage or the place where they were to be delivered. It is on the basis of these provisions that, in the present case, Cummins issued a writ against four parties, Davis, Charterway, Graaf and Boers, although they have only served such writ on Davis. Brandon LJ went on specifically to address the recourse claims. In ITT Schaub-Lorenz, at p 494, Bingham LJ quoted the above passage and its continuation, and said that, although it could not be regarded as having more than persuasive authority, I think (with respect) that it is plainly right. Neither Cummins nor ITT Schaub-Lorenz required any precise examination of the accuracy of Brandon LJs statement that article 31.1 combined with article 34 allows a plaintiff to bring a single action against one, more than one, or all the carriers concerned in the courts of the country where any of the carriers concerned is ordinarily resident or has his principal place of business or the branch or agency through which the carriage contract was made. Further, it is unclear by what reasoning Brandon LJ derived his summary from articles 31 and 34, the only articles which he cited. Article 31.1(a) does not on any view confer jurisdiction over one carrier concerned, simply because any of the other carriers concerned is ordinarily resident or has his principal place of business or relevant branch or agency in the country where proceedings are brought. It confers jurisdiction against a carrier who has such residence, place or branch or agency. It is only the last sentence of article 36 - which Brandon LJ did not mention at all - that arguably extends this jurisdiction to enable other carriers to be added to the proceedings against the carrier defendant who satisfies article 31.1(a). Further, in Cummins at pp 1374-1375 OConnor LJ also described the scheme of CMR in terms which were, I think, both more specific on the present issue and significantly different in effect from those used by Brandon LJ. He said: It will be seen that the scheme of the Convention, starting in article 31, is that normally, unless the parties otherwise agree, any legal proceedings are to be originated in the jurisdiction of the defendant (article 31, paragraph 1(a)), and I am content, under the ordinary rules of interpretation, to read defendant for defendants. The only alternative there given is the place where the goods were taken over or the place designated for delivery. The place where the goods were taken over by the carrier, in my judgment, refers to the place where the contract of carriage commenced (see article 1 of the Convention) and cannot be repeated down the line where successive carriers have participated in the carriage at various stages. That in the present case was Scotland and the place of delivery was Holland. Therefore, Cummins were limited to bringing the action, as far as the jurisdiction of the defendant was concerned, either in England (Davis) or in Holland the other three. It is clear from this passage that OConnor LJ did not accept that Cummins could under CMR properly bring English proceedings against any defendant other than Davis, which alone fell within article 31.1(a). That corresponds with the case advanced by Essers and Kazemier on these appeals. Academic commentary also supports Essers and Kazemiers position on this point: see Professor Loewes paper, para 281, Hill & Messent, para 11.67 and KF Haak in The Liability of the Carrier under the CMR (Stichting Vervoeradres The Hague 1986), p 114, para 2, where the requirement to bring each successive carrier held liable under article 36 within the scope of article 31.1 is explained as a practical restriction on the severity of the joint and several liability imposed by the last sentence of article 36 on, in particular, the last carrier. The desirability of joining all possible defendants This brings me to a fundamental element of BATs case, the desirability of, and suggested imperative to arrive at, an interpretation or solution enabling all claims by goods interests against all carriers to be resolved in one place and one set of proceedings. That this can be a relevant approach is certainly borne out by article 6(1) of the Brussels Regulation, as well as, domestically, by Practice Direction 6B para 3.1(3): see para 16 above. But it is not an invariable approach, and it is not the approach taken in the Warsaw Convention 1929 (for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on 12 October 1929), the language of which the relevant provisions of CMR to a large degree reflect. The Warsaw Convention provided: Article 28.1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the court having jurisdiction at the place of destination. Article 30.1. In the case of carriage to be performed by various successive carriers and falling within the definition set out in the third paragraph of article 1, each carrier who accepts passengers, luggage or goods is subjected to the rules set out in this Convention, and is deemed to be one of the contracting parties to the contract of carriage in so far as the contract deals with that part of the carriage which is performed under his supervision. 3 As regards luggage or goods, the passenger or consignor will have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and further, each may take action against the carrier who performed the carriage during which the destruction, loss, damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the consignor or consignee. Under the Warsaw Convention, it is clear that article 28 defines jurisdiction, while the last sentence of article 30.3 deals, like the rest of that article, with liability by emphasising that all potentially liable carriers are jointly and severally liable for loss, damage or delay in respect of goods and luggage. CMR rephrases the last sentence of article 36, but not in a way which suggests that it is now intended to have the fundamentally different purpose of addressing not liability (like the rest of article 36), but jurisdiction. Viewing the position more generally, article 31.1 of CMR affords clearly defined heads of jurisdiction additional to those provided by the Warsaw Convention in particular jurisdiction based on any agreement between the parties to a court or tribunal in a contracting state, and jurisdiction at the place of taking over of the goods (and not merely at the place designated for their delivery). As to the Brussels Regulation, there are, unsurprisingly, parallels between some of its provisions and those of CMR. A defendants domicile in a member state is the general head of jurisdiction under article 2.1 of the Brussels Regulation, while article 5.5 provides a special head as regards disputes arising out of the operations of a branch or agency. These heads broadly parallel the heads found in article 31.1(a) of CMR. In other respects, there are however differences in both directions in the jurisdictions available under CMR and the Brussels Regulation. Article 5.1 of the Brussels Regulation offers as special heads the place of performance of the obligation in question in a contract claim or the place where the harmful event occurred in a tort claim. Article 31.1(b) of CMR offers in contrast the place designated for delivery, which may correspond with the place for performance of the obligation in question, if the relevant law enables suit against a carrier on the basis of a failure to deliver or to deliver in good condition at destination. Finally, the Brussels Regulation does not offer any general head of jurisdiction paralleling the right to sue at the place of taking over the goods conferred by article 31.1(b). On the other hand, coming to the nub of BATs case on this point, the Brussels Regulation contains the further special head that: A person domiciled in a member state may also be sued, where he is one of a number of defendants, in the courts for the place where any one of them is domiciled . On Essers and Kazemiers case, CMR contains no such provision. On BATs case, the last sentence of article 36 of CMR has an effect which is similar - similar, but necessarily wider since it would expose any successive carrier potentially liable under article 36 to being sued by cargo interests in any jurisdiction anywhere in the world which happened to be that of the principal place of business of any other such successive carrier, or which happened to be that of the branch or agency through which the first carrier happened to make the carriage contract. A lesser point, not without all practical relevance, is that BATs reading of the last sentence of article 36 would also provide an automatic ground of jurisdiction against any such carrier without the qualifying condition inserted into article 6.1 of the Brussels Regulation, that the claims should be so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. The absence of such a qualification could be significant if, for example, a claim was brought against a first carrier based on a special term included in the original carriage contract, but not binding on a successive carrier because it was not included in the consignment note. In these circumstances, I do not consider that the desirability in some contexts of a provision such as article 6.1 of the Brussels Regulation or Practice Direction 6B para 3.1(1) can affect or impact on the interpretation of articles 31, 34 and 36 of CMR in any significant way. Equally, I do not see how it can be said that there is any gap that article 6.1 should be called upon to fill, even assuming that gap-filling by reference to the Brussels Regulation is admissible and required, in a European Union context, as Colman J thought in Frans Maas Logistics. The scheme of CMR appears to me to be deliberate and comprehensive. For better or for worse, and starting with the model of the Warsaw Convention, it elected for a generous range of heads of jurisdiction. There is no gap in it, as a matter of construction, merely a considered decision that the heads provided would reflect an appropriate balance between the interests of all concerned, potential claimants and potential defendants. Does article 6.1 of the Brussels Regulation prevail over article 31.1 of CMR? That leaves BATs last and perhaps most far-reaching submission, that, if all else fails, European Union law, in particular article 6.1 of the Brussels Regulation or the principle behind it, must prevail over the scheme of CMR to enable the joinder of all carriers potentially liable under article 36 in any court or tribunal in which jurisdiction can be established under article 31.1(a) on the basis of any one of such carriers principal place of business or branch or agency. I have already outlined statements of principle made by the Court of Justice on which BAT rely (para 18 above). The starting point, however, must be the European Treaties. CMR was concluded before 1 January 1958 between states half of which are, even today, not member states of the European Union. Article 351 TFEU provides: The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding states, before the date of their accession, between one or more member states on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties. To the extent that such agreements are not compatible with the Treaties, the member state or states concerned shall take all appropriate steps to eliminate the incompatibilities established. Member states shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude. In applying the agreements referred to in the first paragraph, member states shall take into account the fact that the advantages accorded under the Treaties by each member state form an integral part of the establishment of the Union and are thereby inseparably linked with the creation of common institutions, the conferring of powers upon them and the granting of the same advantages by all the other member states. Reflecting article 351 TFEU, article 71 of the Brussels Regulation provides: 1. This Regulation shall not affect any conventions to which the member states are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments. 2 With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner: (a) this Regulation shall not prevent a court of a member state, which is a party to a convention on a particular matter, from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in another member state which is not a party to that convention. The court hearing the action shall, in any event, apply article 26 of this Regulation; (b) judgments given in a member state by a court in the exercise of jurisdiction provided for in a convention on a particular matter shall be recognised and enforced in the other member states in accordance with this Regulation. Where a convention on a particular matter to which both the member state of origin and the member state addressed are parties lays down conditions for the recognition or enforcement of judgments, those conditions shall apply. In any event, the provisions of this Regulation which concern the procedure for recognition and enforcement of judgments may be applied. On the face of it, article 351 establishes a clear position. The Court of Justice has, however, interpreted article 315. In its famous decision in Kadi v Council of the European Union (Joined Cases C-402/05P and C-415/05P) [2009] AC 1225, the court in considering the relationship between a European sanctions measure and the obligations imposed on member states under the United Nations Charter and general international law to give effect to UN Security Council asset freezing orders under Chapter VII of the UN Charter, said this: 300. What is more, such immunity from jurisdiction for a Community measure like the contested regulation, as a corollary of the principle of the primacy at the level of international law of obligations under the Charter of the United Nations, especially those relating to the implementation of resolutions of the Security Council adopted under Chapter VII of the Charter, cannot find a basis in the EC Treaty. 301 Admittedly, the court has previously recognised that article 234 of the EC Treaty (now, after amendment, article 307EC) could, if the conditions for application have been satisfied, allow derogations even from primary law, for example from article 113 of the EC Treaty on the common commercial policy: see, to that effect, the Centro-Com case [1997] QB 683, paras 56-61). 302 It is true also that article 297EC implicitly permits obstacles to the operation of the common market when they are caused by measures taken by a member state to carry out the international obligations it has accepted for the purpose of maintaining international peace and security. 303 Those provisions cannot, however, be understood to authorise any derogation from the principles of liberty, democracy and respect for human rights and fundamental freedoms enshrined in article 6(1) EU as a foundation of the Union. 304 Article 307EC may in no circumstances permit any challenge to the principles that form part of the very foundations of the Community legal order, one of which is the protection of fundamental rights, including the review by the Community judicature of the lawfulness of Community measures as regards their consistency with those fundamental rights. Article 351 TFEU is the successor to article 307EC. Kadi was a decision at a high level of importance for individual freedoms. It is, in one sense, a surprise to find its thinking extended to the tarmacadam of the worlds roads. But in TNT Express para 51, and Nipponkoa, para 37, referred to in para 18 above, the court stated that: Article 71 of Regulation 44/2001 cannot have a purport that conflicts with the principles underlying the legislation of which it is part. Accordingly, that article cannot be interpreted as meaning that, in a field covered by the Regulation, such as the carriage of goods by road, a specialised convention, such as the CMR, may lead to results which are less favourable for achieving sound operation of the internal market than the results to which the Regulations provisions lead. The court did not refer to article 307EC or article 351 TFEU, and the courts reasoning is essentially circular. It is the purpose of article 307EC, now 351 TFEU, to derogate from not only Regulations such as (EC) 44/2001, but also from the Treaties themselves. As Judge Allan Rosas, not a member of the court in TNT or Nipponkoa, explained extra-judicially in The Status in EU Law of International Agreements Concluded by EU member states (Fordham International Law Journal vol 34, Issue 5 (2011) article 7), at p 1321: Article 351(1) TFEU allows a derogation from the principle of primacy of EU law but only in relation to agreements concluded prior to EU membership and, in principle, only to treaty relations between member states and third states (category 1 above). According to settled case law, the purpose of the provision is to establish that the application of EU law does not affect the duty of the member state concerned to respect the rights of non-member countries under a prior agreement and to perform its obligations thereunder. The court has also recognized that article 351(1) TFEU may allow derogations from not only Unions secondary law but also its primary law, such as provisions of the TEU and the TFEU. The court has added that the provision would not achieve its purpose if it did not imply a duty on the part of the Union institutions not to impede the performance of the obligations of member states that stem from a prior agreement. These propositions are borne out by the prior authorities which Judge Rosas cited in their support, particularly Attorney General v Burgoa (Case C-812/79) [1980] ECR 2787, para 8 et seq. At a high level, preservation of the internal market is of course fundamental to the Union. But the court in both TNT para 49 and Nipponkoa para 36 endorsed the more detailed statements that, although article 71 of Regulation 44/2001 provides, in relation to matters governed by specialised conventions such as CMR, for the application of those conventions: the fact remains that their application cannot compromise the principles which underlie judicial cooperation in civil and commercial matters in the European Union, such as the principles, recalled in recitals 6, 11, 12 and 15 to 17 in the preamble to Regulation 44/2001, of free movement of judgments in civil and commercial matters, predictability as to the courts having jurisdiction and therefore legal certainty for litigants, sound administration of justice, minimisation of the risk of concurrent proceedings, and mutual trust in the administration of justice in the European Union. In TNT the court added: 50. Observance of each of those principles is necessary for the sound operation of the internal market, which, as is apparent from recital 1 in the preamble, constitutes the raison dtre of Regulation 44/2001. The context in which these statements were made and applied is however important. Both cases concerned competing proceedings between the same parties in different member states. Both concerned the free movement of judgments and mutual trust in the administration of justice. In TNT, AXA as cargo-insurer was seeking to enforce in the Netherlands a German judgment obtained against TNT, the CMR carriers, who were seeking in the Netherlands to contest the German courts jurisdiction to give the German judgment on the basis that there existed prior Netherlands proceedings in which TNT were seeking a declaration of non-liability. The Hoge Raad referred the matter to the Court of Justice, which, after citing its familiar case law on mutual trust (including West Tankers Inc v Allianz SpA (formerly RAS Riunione Adriatica di Sicurt SpA) (Case C-185/07) EU:C:2009:69; [2009] AC 1138, para 24) held: Having regard to the principle of mutual trust referred to above, the court has stated that the court of the state addressed is never in a better position than the court of the state of origin to determine whether the latter has jurisdiction. Accordingly, Regulation 44/2001, apart from a few limited exceptions, does not authorise the jurisdiction of a court of a member state to be reviewed by a court in another member state (Allianz SpA, at para 29 and the case law cited). Therefore, article 31(3) of the CMR can be applied in the European Union only if it enables the objectives of the free movement of judgments in civil and commercial matters and of mutual trust in the administration of justice in the European Union to be achieved under conditions at least as favourable as those resulting from the application of Regulation 44/2001. 55. Nipponkoa also concerned competing sets of proceedings. These were Dutch proceedings in which the carriers had successfully limited their liability to the CMR limit and German proceedings in which cargo insurers were seeking to establish wilful misconduct. On a reference by the Landgericht Krefeld, the Court of Justice held that article 71 of the Brussels Regulation precluded an interpretation of article 31(2) of CMR whereby an action for a declaration of non- or limited liability did not involve the same cause of action as a positive claim for damages in respect of the same alleged loss. This slightly surprising way of putting the matter (in terms of the proper interpretation of CMR) contrasts with the courts confirmation in TNT, paras 58-63, that it has no jurisdiction under article 267 TFEU to interpret international agreements concluded between member states and non-member countries or, specifically, to interpret article 31 of CMR. It is however possible to understand the decision in Nipponkoa on the basis that what the court was really doing was treating Union law in the relevant area, particularly that covered by article 29.1 of the Brussels Regulation and Owners of cargo lately laden on board the ship Tatry v Owners of the ship Maciej Rataj (Case C-406/92) (Note) EU:C:1994:400; [1999] QB 515; [1995] 1 Lloyds Rep 302, as over-riding any different regime contained in CMR. How close such reasoning and decisions may be to the thinking of the European legislators when they agreed article 351 TFEU and article 71 of the Brussels Regulation is a different matter. The present case does not concern or present any risk of competing judgments involving the same parties. BAT is under CMR unquestionably entitled to look to Exel for the whole of any loss which BAT can prove. At highest, BAT may have to pursue Essers and Kazemier in different jurisdictions, if they continue to wish to expand their target beyond Exel. In so far as BATs wish to do this is based on a belief that their evidential position, in seeking to show wilful misconduct, may be improved if they can join Essers and Kazemier, I cannot associate an evidential aim of this nature with any fundamental principle of Union law in the field of jurisdiction or justice. I add that, in so far as BAT suggest that it may not be possible to sue Essers and Kazemier elsewhere on the same basis as here, since the courts in the Netherlands would decline to recognise Exel as first carrier (since it did not actually carry the goods anywhere), the point cuts both ways, as well as leaving open both a possibility that Essers and Kazemier should then themselves be regarded as first carriers and that if, on its face surprisingly, the Dutch courts would not regard the carriage as subject to CMR at all, Essers and Kazemier would be liable under the general law. More fundamentally, as discussed in paras 44-47 above, CMR represents a balanced jurisdictional rgime adopted across a wide-range of some 55 states, only half of which are Union member states. I cannot regard its tailored balance as impinging on any of the principles of Union law which have been explained by the Court of Justice in the authorities discussed above, and which it is for us to apply. I conclude that nothing in Union law prevents effect being given to article 31.1 of CMR, under which it is clear that neither Essers nor Kazemier can be sued here. I add, though it is unnecessary for my decision, that I cannot believe that it is wholly inadmissible under Union law to bear in mind the interests of those third party states in a rgime which operates with some certain degree of consistency across all member states. Restrictions under Union law on the ordinary application of an international convention like CMR potentially undermine the uniformity and predictability that are the aim of such conventions. This tends to suggest that any over-riding interests of Union law should be relatively narrowly confined. Conclusion Js order setting aside the service of the claim forms on Essers and Kazemier. It follows from the above that I would allow this appeal, and restore Cooke LORD SUMPTION: (with whom Lord Neuberger, Lord Clarke and Lord Reed agree) Article 34 of the CMR provides that where a single contract of carriage is performed by successive carriers, each of them is to be responsible for the performance of the whole operation. Under article 36, cargo interests are entitled to claim under the contract against the first and last carriers and the carrier in possession of the goods when the loss, damage or delay occurred. The commercial logic of these provisions points towards recognising a jurisdiction to receive claims against all three in one set of proceedings. Sir Bernard Rix makes a strong case for this outcome in the present case in his judgment in the Court of Appeal. Nevertheless, in agreement with Lord Mance, I think that the language of the CMR points clearly in the other direction. In the light of the Lord Mances very full analysis of the Convention, I can state my reasons quite shortly. Chapter V deals with Claims and Actions. Article 31.1 provides for legal proceedings arising out of carriage under this Convention to be brought in: any court or tribunal of a contracting country designated by agreement between the parties and in addition in the courts or tribunals of a country within whose territory, (a) the defendant is ordinarily resident, or has his principal place of business. or the branch or agency through which the contract of carriage was made, or (b) the place where the goods were taken over by the carrier or the place designated for delivery is situated, and in no other courts or tribunals. This provision cannot be limited to claims against the first or primary carrier. It is in terms directed to claims arising out of carriage under this Convention. It must therefore apply to any carrier whom the Convention makes potentially liable. I find it impossible to attach any importance to the fact that it appears earlier in the text than the provisions regulating the liability of second or subsequent carriers. As applied to actions arising out of carriage under the Convention, article 31.1 is in terms a complete code. It confers jurisdiction on the courts or tribunals of the jurisdiction (i) which has been designated by agreement between the parties, or (ii) where the defendant is present in one or other of the ways envisaged by sub- paragraph (a), or (iii) where the place of consignment or the contractual place of delivery are situated (see sub-paragraph (b)), and in no other courts and tribunals. The courts and tribunals of the place of consignment or the contractual place of delivery (case (iii) in my categorisation) have jurisdiction over all carriers who are potentially liable. This is because these are jurisdictions identified by reference to the transportation operation and not some circumstance specific to the proposed defendant. They are also identifiable from the consignment note. The Convention envisages that in these jurisdictions all such carriers may be sued together. So far, therefore, as there is a commercial imperative to have a jurisdiction in which all carriers potentially liable may be sued, that imperative is satisfied by the existence of jurisdiction at the place of consignment or the contractual place of delivery. Cases (i) and (ii) are different. In these cases, jurisdiction depends on something specific to the particular defendant, ie he has entered into a jurisdiction agreement with the claimant or is present within the relevant jurisdiction. Jurisdiction may be established under one of these two heads only against defendants who fulfil the stated criteria. There is no provision for jurisdiction to be exercisable against necessary or proper parties who do not fulfil them. Since in this case, England was neither the place of consignment nor the contractual place of delivery, BAT must rely on one or other of the heads of jurisdiction specific to defendants satisfying particular criteria, ie cases (i) or (ii). The only way in which they could claim to have agreed with Essers or Kazemier upon English jurisdiction is by showing that those companies acceded to the contracts between BAT and Exel which contained the relevant jurisdiction clause. The agreements between BAT and Exel are framework agreements containing the terms of the relevant contract of carriage. The consignment note is not itself the contract of carriage. It is only prima facie evidence of its existence and terms: see article 9. But under article 34, a succeeding carrier becomes a party to the contract of carriage only under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note. It follows that the only terms to which a successive carrier accedes by accepting the goods with the consignment note are those recorded in the consignment note. These are terms of the Convention itself and any additional terms specified in Box 20 (Conditions Particulires Besondere Vereinbarungen). This is a wholly rational result. Those are the only terms of which the successive carrier was necessarily aware or to which he can be said to have consented. That leaves only the argument that when Essers and Kazemier acceded to the contract of carriage by accepting the goods and the consignment note from Exel, they did so through a branch or agency, namely Exel, which was located in England. This is, to my mind, an impossible argument. As the context shows, the branch or agency referred to in sub-paragraph (a) of article 31.1 is relevant as one of a number of indicia of the defendants presence in the jurisdiction in which the claimant wishes to sue. It means a branch or agency of the relevant defendant (Essers or Kazemier). The conditions are, first, that it should be located in the jurisdiction (England) where the claimant wishes to sue and, secondly, that the contract of carriage should have been made through it. It is not suggested that Essers or Kazemier has a branch or agency in England. Even if they did, they did not accede to the contract of carriage through that branch or agency but by accepting the goods and the consignment note in Switzerland and Hungary respectively. The fact that the place at which a successive carrier accedes to the contract under article 34 will necessarily be the place of consignment, which is already a relevant jurisdiction by virtue of sub-paragraph (b), indicates that paragraph (a) is in fact referring to the branch or agency through which the contract of carriage was originally made between the consignor and the first or primary carrier as principals. It is not referring to the branch or agency (if any) through which a successive carrier acceded to it. The final words of article 36 ( an action may be brought at the same time against several of these carriers) authorise proceedings at the same time against any or all carriers who are liable under the Convention. The effect of these words is simply that there is no prescribed order in which cargo interests must have recourse to the various parties made concurrently liable. The draftsman has no doubt assumed that proceedings will be brought in a court which has jurisdiction, but the article is not concerned with jurisdiction. It certainly does not confer jurisdiction if it does not otherwise exist. This analysis is supported by articles 37-39, which deal with claims for indemnity by a carrier who has paid compensation to cargo interests, against the carrier or carriers actually responsible (or deemed to be responsible). Claims for an indemnity may be brought by the carrier who has paid against the carriers concerned (ie the carriers responsible or deemed to be responsible for the loss) in a jurisdiction where any one of them is present: see article 39.2. Two points may be made about this. First, it applies only to actions among carriers. There is no equivalent provision available to found jurisdiction for claims brought by cargo interests under cases (i) or (ii). Secondly, the technique used by the Convention for avoiding inconsistent findings in actions by cargo interests and subsequent actions by carriers among themselves is not to provide for them to be litigated in the same proceedings. It is to provide for the validity of the payment of damages previously made to cargo interests to be incapable of challenge in subsequent proceedings for an indemnity, provided that the amount was determined by judicial authority after the [carrier against whom indemnity is claimed] had been given due notice of the proceedings and afforded an opportunity of entering an appearance: see article 39.1. At the conclusion of the argument in this appeal I was persuaded that this appeal should be dismissed for the reasons given by Sir Bernard Rix in the Court of Appeal. I remained of that view until I received a copy of the draft judgment of Lord Mance. I am now entirely persuaded by his reasoning that Cooke J was correct at first instance and that this appeal should be allowed and his order restored. Since then I have read in draft the judgment of Lord Sumption giving his reasons for agreeing with Lord Mance. In all the circumstances, for the reasons which they give I would allow the appeal. I do so with some misgivings because I agree with Lord Sumption that the commercial logic of articles 34 and 36 points towards the recognition of a jurisdiction to receive claims against all three carriers in one set of proceedings. However, I agree with him that Lord Mances analysis has shown that the language of the CMR points clearly in the other direction. At the conclusion of the argument in this appeal I was persuaded that this appeal should be dismissed for the reasons given by Sir Bernard Rix in the Court of Appeal. I remained of that view until I received a copy of the draft judgment of Lord Mance. I am now entirely persuaded by his reasoning that Cooke J was correct at first instance and that this appeal should be allowed and his order restored. Since then I have read in draft the judgment of Lord Sumption giving his reasons for agreeing with Lord Mance. In all the circumstances, for the reasons which they give I would allow the appeal. I do so with some misgivings because I agree with Lord Sumption that the commercial logic of articles 34 and 36 points towards the recognition of a jurisdiction to receive claims against all three carriers in one set of proceedings. However, I agree with him that Lord Mances analysis has shown that the language of the CMR points clearly in the other direction. |
London Clubs Management Ltd (LCM) operates casinos where games such as blackjack, punto banco and American roulette are played. The questions to which this appeal gives rise concern the correct treatment for gaming duty purposes of non negotiable gaming chips and free bet vouchers which are provided free of charge by LCM and some other casino operators to selected gamblers to encourage them to gamble in their casinos. Gaming duty is an excise duty which was introduced by the Finance Act 1997 (the FA 1997). Section 10(1) provides that the duty is charged in accordance with section 11 on any premises where dutiable gaming takes place. It is accepted that the gaming at issue in this appeal is dutiable gaming for which LCM, as the provider of the casino premises where it takes place, is liable. The amount of gaming duty payable is calculated by applying the relevant rate of gaming duty to the gross gaming yield from the casino premises during a specified accounting period. Section 11(8) provides that the gross gaming yield consists of the aggregate of gaming receipts and bankers profits for that period: the gaming receipts for that period from those premises; (a) and (b) where a provider of the premises (or a person acting on his behalf) is banker in relation to any dutiable gaming taking place on those premises in that period, the bankers profits for that period from that gaming. Gaming receipts are defined by section 11(9), which reads, so far as relevant: For the purposes of subsection (8) above the gaming receipts for an accounting period from any premises are the receipts in that period from charges made in connection with any dutiable gaming which has taken place on the premises other than (b) any charge the payment of which confers no more than an entitlement to admission to the premises. Bankers profits were, at the relevant time, 1 October 2008 to 30 September 2012, defined by section 11(10) as the amount by which the value in money or moneys worth of the stakes staked exceeded the value of the prizes provided by the banker: In subsection (8) above the reference to the bankers profits from any gaming is a reference to the amount (if any) by which the value specified in paragraph (a) below exceeds the value specified in paragraph (b) below, that is to say (a) the value, in money or moneys worth, of the stakes staked with the banker in any such gaming; and the value of the prizes provided by the banker to (b) those taking part in such gaming otherwise than on behalf of a provider of the premises. Section 11(10A), which has had effect since 1 September 2007, addresses the valuation of prizes: Subsections (2) to (6)(a) of section 20 of the Betting and Gaming Duties Act 1981 (expenditure on bingo winnings: valuation of prizes) apply, with any necessary modifications, for the purposes of gaming duty as they apply for the purposes of bingo duty. Section 20 of the Betting and Gaming Duties Act 1981 (the BGDA) says, so far as relevant: (2) Where a prize is obtained by the promoter from a person not connected with him, the cost to the promoter shall be treated as the value of the prize for the purpose of subsection (1). (3) Where a prize is a voucher which (a) may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person, (b) in place of which the voucher may be used, and (c) does not fall within subsection (2), specifies an amount as the sum or maximum sum the specified amount is the value of the voucher for the purpose of subsection (1). (4) Where a prize is a voucher (whether or not it falls within subsection (2)) it shall be treated as having no value for the purpose of subsection (1) if (a) it does not satisfy subsection (3)(a) and (b), or (b) its use as described in subsection (3)(a) is subject to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount mentioned in subsection (3)(b). The facts The relevant facts are not in dispute and are very straightforward. Normal cash chips are either purchased by gamblers for cash or won on a winning bet. They are replayable at the gaming tables until they are lost, or they may be used to buy goods or services, or they may be encashed. Non negotiable chips are provided to selected gamblers as a promotional tool. They have some of the characteristics of normal cash chips. In particular, they may be used to place bets at the gaming tables and they are replayable until they are lost. If the gambler wins, the banker pays out the winnings in cash chips and the gambler retains the non negotiable chips and may use them to place further bets. There are important differences between non negotiable chips and cash chips, however. First and as I have mentioned, they are not purchased for cash but are provided free of charge. Secondly, they cannot be used to buy goods or services, nor can they be encashed. They can be used to place bets and that is all. Thirdly, when a gambler loses a bet placed with non negotiable chips, the banker places them in the tables drop box which is a secure box under the gaming table. In contrast (with the exception of tips), cash chips are not placed in the drop box. Rather, when a gambler loses a bet placed with cash chips, the chips are placed in the chip float, a tray which rests in front of the banker and contains the casinos chips. Fourthly, non negotiable chips are physically distinguishable from cash chips. The face of each non negotiable chip is clearly marked non negotiable. Free bet vouchers are printed paper vouchers which are also provided to selected gamblers as a promotional tool. There are several different types. Free play vouchers or replayable vouchers can be used in just the same way as non negotiable chips. If the gambler loses the bet, they are placed in the drop box. If the gambler wins the bet, the winnings are paid to him in cash chips and the voucher is returned to him and may be used to place further bets. One hit vouchers can only be used to place a single bet, regardless of whether the gambler wins or loses. Once the voucher has been played, the dealer puts it in the drop box. If the gambler has won the bet, his winnings are paid in the form of cash chips. If he loses the bet, he receives nothing. Cash match vouchers operate in a similar way to one hit vouchers, except that a gambler must first place a bet with cash chips in order to use a cash match voucher of the same value. Finally, there are free gaming chips vouchers. They may be exchanged for non negotiable chips at the casinos cash desk without charge. These non negotiable chips can then be used in just the same way as other non negotiable chips. Non negotiable chips have no printed terms and conditions. Free bet vouchers, on the other hand, are subject to terms and conditions which may limit the games in which they may be played (for example, blackjack or punto banco), the bets for which they may be placed (for example, even money bets) or the time at which they may be used (for example, between particular dates). In these proceedings non negotiable chips and all free bet vouchers have been referred to collectively as Non Negs and I too will use that terminology. No one has suggested that, for tax purposes, the various kinds of Non Negs should be treated differently from one another. But I should observe that the Upper Tribunal pointed out, entirely correctly in my view, that free gaming chips vouchers should not have been included in the same category as other Non Negs because they are not used in the game itself, nor do they end up in the drop box; it is only the Non Negs into which they may be exchanged which are placed as bets. Clearly this can have no effect on the outcome of this appeal, however. LCM introduced Non Negs in 2008 and from that time it included the face value of all the Non Negs played by gamblers and retained by its casinos in their drop boxes in the calculation of its bankers profits. However, following a review of that approach, it considered that it had made an error in so doing and that, in consequence, it had over declared its payable gaming duty. In October 2012 LCM therefore wrote to the Commissioners for Her Majestys Revenue and Customs (HMRC) and requested repayment of 1,973,376.97 of gaming duty which it said had been overpaid in the period from 1 October 2008 to 30 September 2012. The request was made under section 137A of the Customs and Excise Management Act 1979. On 13 March 2013, HMRC rejected that claim. LCM appealed against that decision. The proceedings The First tier Tribunal (FTT) (Judge Sinfield) [2014] UKFTT 1060 (TC) dismissed LCMs appeal. The FTT rejected LCMs argument that Non Negs did not have any value in money or moneys worth within the meaning of section 11(10)(a) of the FA 1997 because they were provided to the gambler free of charge and so the gambler did not risk anything of value when he placed them as a bet. It accepted instead the argument advanced on behalf of HMRC that the value in money or moneys worth of the Non Negs was their monetary face value on the basis that the face value would be used to calculate the winnings in cash chips and on a losing bet the gambler would no longer have the right to bet the monetary value of the Non Negs for free. On appeal by LCM, the Upper Tribunal (Tax and Chancery Chamber) (UT) (Henderson J and Judge Roger Berner), [2016] UKUT 0259 (TCC) allowed the appeal. It held that the FTT failed to have proper regard to the requirement that the value of the stakes staked in section 11(10)(a) of the FA 1997 must be the value of those stakes in money or moneys worth. However, Non Negs did not represent any money paid or deposited with LCM, nor did they have any value in moneys worth by reason of being redeemable for cash or for goods or services. Further, there was no evidence and there were no findings of fact either that Non Negs were transferable or, if they were, as to the monetary value that they might realise upon any transfer. The UT also addressed the position of Non Negs as prizes under section 11(10)(b) of the FA 1997. It considered that this was not an issue which needed to be resolved to dispose of the appeal but it was desirable that it should express a view upon it because the system of valuation for gaming duty purposes of chips and vouchers for free bets should be regarded as a whole, taking into account the positive and negative elements of the calculation of the bankers profits. On this issue, the parties took the position that Non Negs should be treated in the same way for the purposes of section 11(10)(a) and (b). Hence LCMs case was that Non Negs were to be treated as having no value for the purposes of section 11(10)(a) and (b). HMRC, on the other hand, argued that Non Negs were to be treated as having their face value for the purposes of section 11(10)(a) and (b), with the result that only when a Non Neg was not returned to or retained by the gambler would its value contribute to bankers profits. The UT observed that it was not part of LCMs claim or its case on appeal that if Non Negs had no value for the purposes of section 11(10)(a) they could nevertheless have a value for the purposes of section 11(10)(b). Correspondingly but not surprisingly, LCM did not dispute HMRCs analysis of the position as to the value of Non Negs as prizes were HMRCs argument as to the value of Non Negs for the purposes of section 11(10)(a) to have prevailed. The UT accepted LCMs contentions on this issue. It held that Non Negs which were returned to or retained by the gambler fell within section 20(4)(a) and (b) of the BGDA and therefore must be regarded as having no value. They fell within section 20(4)(a) because they failed to satisfy section 20(3)(a) and (b). They could be used to play a game but that did not mean they were used in place of money as payment for benefits. They fell within section 20(4)(b) because their use was restricted to the same use as any other Non Neg and therefore could not have any different value in money or in moneys worth. The Court of Appeal (Flaux, Leggatt LJJ, Dame Elizabeth Gloster) [2018] EWCA Civ 2210; [2019] 1 WLR 1 dismissed HMRCs further appeal. It held that a Non Neg was not a stake staked for the purposes of section 11(10)(a) of the FA 1997; and, if a Non Neg was a stake staked, that stake had no value in money or moneys worth. Dame Elizabeth Gloster, with whom Leggatt and Flaux LJJ agreed, reasoned that the assessment of stakes staked under section 11(10), in context, involved a conventional arithmetical calculation of real world stakes received from players which, if necessary, could feature as revenue figures in a set of accounts and contribute to the casinos gross profits. It did not include artificial or notional values placed on tokens given to the gambler by the casino as a promotional exercise which intrinsically had no value and were non negotiable, or at best had an economic value to the player equivalent to their face value multiplied by the chance of winning. In no sense could the face value of a Non Neg, or even the value calculated by reference to the chance of winning, feature as a receipt in a casinos accounts or be said to contribute to its gross profits. Further, when a gambler used a Non Neg, he was not using his own money or putting his own money at risk. When a gambler lost a Non Neg and it was placed in the casinos drop box, he was not losing cash but the right to use that Non Neg to place a bet. On an objective assessment of value, a Non Neg had no value in money or moneys worth for the purposes of section 11(10)(a). HMRC also asked the Court of Appeal to consider the value of Non Negs as prizes provided on the basis that, although a finding on this issue was not necessary to dispose of the appeal, there should, so far as possible, be consistency between the value of Non Negs as stakes staked and as prizes provided. The Court of Appeal duly did so and, once again, agreed with the reasoning of the UT. The benefit which a retained Non Neg provided was no different from that referable to the original Non Neg. As no payment was required for the original Non Neg, there was no payment in money which the Non Neg could replace. Nor did staking a Non Neg in a casino game entail payment in return for a benefit. Moreover, the use of a Non Neg was restricted, since it could only be used as a stake, and its use as such had no value. The UT was therefore right to conclude that the effect of either section 20(4)(a) or (b) of the BGDA was that a Non Neg retained as a prize had no value for the purposes of section 11(10)(b) of the FA 1997. This appeal Upon this further appeal, HMRC contend that the Court of Appeal fell into error on each of the issues it decided. It is therefore necessary to consider: i) whether, in calculating bankers profits, Non Negs are stakes for the purposes of section 11(10)(a) of the FA 1997; ii) what value, in money or moneys worth (if any) Non Negs have for the purposes of section 11(10)(a); and iii) what value (if any) should be given to Non Negs for the purposes of section 11(10)(b). Issues (i) and (ii) Non Negs as stakes staked It is convenient to address these issues together, for they are closely related. HMRCs case is clear and straightforward. They contend that for the purposes of section 11(10)(a) Non Negs are stakes staked when they are played in a game and that their value in money or moneys worth is their face value because that is the value which is attached to them in the game. Non Negs are to be treated as a stake for the purposes of section 11(10)(a) because they are treated as a stake under the rules of the game in which they are played, and are to be valued by reference to their value in money as a stake under those rules. This approach is, they say, focused on the treatment of the Non Negs in the game but also reflects the commercial reality that it is only because they can be staked at their face value and confer an entitlement to cash winnings if the play is successful that they act, as intended, as incentives or rewards. HMRC recognise that one of two other approaches might be adopted. The first is that section 11(10)(a) is concerned with stakes which consist of cash or which can be encashed or converted to cash, in which case Non Negs, which cannot be encashed, have a zero value or are not stakes at all. The second is that this provision is concerned with stakes which have a real world value to the gambler, and that this is their value under the provision. HMRC continue that this value will generally not be zero because a gambler can, by using cautious strategies, convert a Non Neg into cash chips. Further, if the Non Neg is assignable, it will have a value in an arms length transaction between its holder and another gambler. HMRC accept that it is not open to them on this appeal to argue that, on this approach, the market value of the Non Negs in issue was not zero but say that, were this court to find this is the correct approach, it would be open to them to do so in other cases, and to argue that the market value is substantial. It is contended by HMRC that their preferred approach is the correct one. Section 11(10)(a) is concerned with the existence and value of the stake being placed as a stake in the casino game, and not its value in any other context, such as its value when encashed or when sold or assigned to another gambler. They continue that this is why, when ordinary cash chips are given by casinos to favoured gamblers and are used to place bets in a game, these chips count as stakes staked in the game for duty purposes. It is also why a cash incentive given to a gambler, such as a promise of a 50 cash back if 1,000 worth of ordinary cash chips are bought and staked, has no effect on the value of those cash chips as stakes staked in the calculation required by section 11(10). The promise does not affect the treatment or value of the stakes staked in the game under the rules of the game. LCM contends that HMRCs approach accords with neither the wording of the legislation nor the judicial guidance in this area. Playing a casino game with a Non Neg does not involve staking a stake with the banker. Further, if and in so far as playing with a Non Neg does involve staking a stake, the value of the stake in money or moneys worth is nil. The case advanced by LCM therefore has two elements. In support of the first, namely that a Non Neg is not a stake staked within the meaning of section 11(10)(a), it argues that it is inherent in the concept of staking a stake that a gambler is putting something of value at risk. However, a Non Neg has no value and it represents nothing of value. A gambler risks nothing when he plays a game with a Non Neg and the banker gains nothing if the player loses his bet. Much the same reasoning underpins the second limb of LCMs case. It argues that if a Non Neg is a stake then it has no value in money or moneys worth. Assessment of whether a Non Neg has a value in money or moneys worth requires a consideration of the economic substance which underpins its use as a stake in a game. As a matter of substance, the gambler is not placing anything of value at risk. The Non Neg is a token which allows him to play the game for free. I should add one further point at this stage. The parties remain in agreement that there should, so far as possible, be consistency in approach between the value of Non Negs as stakes staked under section 11(10)(a) and as prizes provided under section 11(10)(b). This is a matter to which I must return in considering issue (iii). Discussion Before addressing these rival arguments and the proper interpretation of the legislation, I must say a little about the nature of a cash chip and what it represents. This was explored by the House of Lords in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548. The case concerned the misappropriation by a solicitor of money from his firms client account. The solicitor exchanged that money for cash chips which he gambled away at the respondents club. In these proceedings the firm sought to recover from the respondents the money lost by the solicitor as money had and received. One of the issues which arose was whether the respondents had given, in good faith, good consideration for the money. At that time gaming contracts were void under section 18 of the Gaming Act 1845 (the 1845 Act) but the respondents nevertheless claimed they had given good consideration for two reasons: first, each time the solicitor placed a bet at the club, he obtained in exchange the chance of winning and thus of being paid; and secondly, the chips were supplied to the solicitor in exchange for money, and this constituted a separate contract, independent of the contracts under which bets were placed at the club and it was not void under the 1845 Act. The House of Lords had no difficulty rejecting the first of these arguments. Each time the solicitor placed a bet he received nothing in return which constituted valuable consideration. The gaming contract was void and, if the solicitor won his bet, he had no right to any winnings, though he might have had a confident expectation that the club would pay. Were it otherwise, the club would soon have gone out of business. The second argument ultimately fared no better. In the course of his reasoning, Lord Goff of Chieveley said this at p 575F H: In common sense terms, those who gambled at the club were not gambling for chips: they were gambling for money. As Davies LJ said in CHT Ltd v Ward [1965] 2 QB 63, 79: People do not game in order to win chips; they game in order to win money. The chips are not money or moneys worth; they are mere counters or symbols used for the convenience of all concerned in the gaming. The convenience is manifest, especially from the point of view of the club. The club has the gamblers money up front, and large sums of cash are not floating around at the gaming tables. The chips are simply a convenient mechanism for facilitating gambling with money. The property in the chips as such remains in the club, so that there is no question of a gambler buying the chips from the club when he obtains them for cash. Lord Goff went on to explain that if gaming contracts were not void under English law there would be a contract in respect of the chips under which the club would accept the deposit of money by the gambler and provide him with chips which he could use to place bets or redeem; and separate contracts would be made when each bet was placed, at which point in time part or all of the money so deposited would be appropriated to the bet. As it was, however, each time the gambler placed a bet, the agreement between the gambler and the club was an agreement by way of gaming and so was null and void. The club, by accepting the bets, had not given valuable consideration for the money wagered by the gambler because the club was under no legal obligation to honour those bets. It follows that when a gambler plays with cash chips in a casino, he is not staking the chips but the money those cash chips represent which he has deposited with the casino. When the gambler uses the chips to make a bet in a game, the money those chips represent is appropriated to the bet the gambler is making. If the gambler loses the bet, the right to the money those chips represent passes to the casino. If, on the other hand, the gambler wins the bet, then, depending on the rules of the game, the gambler will be entitled to a prize comprising the money he has bet and a further monetary prize, the size of which will usually be related to the size of the bet the gambler has made and the odds of him winning. The gambler will be given cash chips which represent the money he has won and he can use those chips and the money they represent to place further bets or he may encash the chips. I can now turn to the legislation and would make three points at the outset. First, the assessment of the gross gaming yield from any premises requires a focus upon the activity of gaming and not the provision of other goods or services on the premises. As I have explained, section 11(8) of the FA 1997 provides that the gross gaming yield consists of the aggregate of the gaming receipts from the premises and, where the provider of the premises (or a person acting on his behalf) is banker in relation to dutiable gaming taking place on the premises, the bankers profits. Gaming receipts, as defined in section 11(9), comprise, subject to section 11(9)(b), receipts from charges made in relation to dutiable gaming such as fees to participate in a particular dutiable game. Similarly, bankers profits are those profits derived from the activity of gaming and not any wider activities or services provided at the premises at which the gaming takes place. The second point concerns the nature of bankers profits and the perspective from which they must be considered. As defined in section 11(10), bankers profits from gaming are the value in money or moneys worth of the stakes staked with the banker in any such gaming, less the value of the prizes provided by the banker to the gamblers taking part in the gaming (excluding anyone who takes part on behalf of a provider of the premises). This assessment must, so it seems to me, be carried out from the perspective of the banker for it is the bankers profits which must be brought into account in calculating the gross gaming yield from the premises. The third point concerns the nature of the valuation that must be conducted. In my view, the expression money or moneys worth in section 11(10)(a) emphasises that in determining the value of the stakes staked it is the actual and real world value of the stakes in the hands of the banker which matters. Section 11(10)(a) is concerned with stakes which are or represent money (as cash chips do) or which can be converted into money. Similarly, in working out the value of the prizes provided by the banker, it is the actual or real world cost to the banker of providing the prizes that must be brought into account, subject to the operation of section 20 of the BGDA. I would reject the submission made by HMRC that section 11(10)(a) is concerned with the role the stake plays in the game and the value it carries for that purpose. In my view, the UT was right to say that this goes too far and attaches insufficient weight to the expression money or moneys worth and the context, which requires a focus on the economic substance of the stake and the real financial contribution that stake makes to the bankers profits from gaming and in turn to the gross gaming yield from the premises. So too, the Court of Appeal was correct to say that the calculation of stakes staked involves a conventional accounting of the real world value of the stakes which have been staked in any given accounting period. Aspects of this approach to the legislation are reflected in the decision of the Court of Appeal in Aspinalls Club Ltd v Revenue and Customs Comrs [2013] EWCA Civ 1464; [2015] Ch 79. There Aspinalls Club Ltd, the operator of a well known gaming casino, offered various incentive schemes to wealthy gamblers whom it wished to encourage. These took the form of commissions or rebates provided to the gambler based on the amount of chips played or losses incurred by him over the term of the agreement. Under one of these schemes, the cash chip agreement, Aspinalls agreed to pay to the gambler a commission based on the total amount of cash chips staked during the course of the agreement providing the gambler had staked enough to meet a turnover requirement. One issue to which the appeal gave rise was whether, as Aspinalls argued, the value of the stake staked had to be determined by reference to the agreement between Aspinalls and the gambler under the cash chip agreement. Hence, Aspinalls argued, the value of the stake staked was the value of the stake less any commission due under the agreement. The Court of Appeal rejected that argument for reasons given by Moses LJ, with whom Black and Gloster LJJ agreed, at para 8: Section 11(10)(a) of the 1997 Act is clear. The value in money or moneys worth of the stakes staked is the face value of the chip. Staking a chip is the same as staking money and the value in money of the chip is its face value: see Davis LJ in CHT Ltd v Ward [1965] 2 QB 63, 79 and Lord Goff of Chieveley in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, 575, cited [2011] UKFTT 325 (TC) at para 30; [2012] STC 2124, para 35. The stake is the amount risked in connection with the game; it is the value of that stake which is put at risk in the game. The value put at risk in the game is not altered by reference to any commission the player receives under the cash chip agreement. The Court of Appeal was right to reach this conclusion. Section 11(10)(a) is concerned with the value of the stakes staked in the game, not any wider consideration such as the payment of commissions. The value of the stakes staked by a high value gambler with the benefit of the cash chip agreement was the face value of the chips used by that gambler to place the bet. That was the amount of money the gambler put at risk. The Court of Appeal went on to find, again rightly in my view, that the commissions were not prizes either. Section 11(10)(b) is concerned with the prizes provided by the banker in the game in the event the gambler wins the bet. The focus throughout is on the game itself, not the wider activities of the casino or the expenses it has incurred or its overall profitability. That brings me to Non Negs and how they are to be treated under this statutory scheme. I would acknowledge at the outset that Non Negs do have a real world value to the gambler. They confer on the gambler a right to make a bet in a game without placing any of his own money at risk, and with the bet comes the opportunity of winning. To this extent, therefore, I agree with HMRCs submissions. Non Negs operate as incentives or rewards because they have a real world value to the gamblers to whom they are provided and by whom they may be used to place bets in a game. So too I would reject LCMs submission that a gambler risks nothing when he uses a Non Neg to make a bet. He risks losing the Non Neg and with it the opportunity to win a prize by using it to make a bet. Nevertheless, Non Negs are very different from cash chips which represent money deposited by the gambler, or money which he has won or been given to encourage him to bet. Non Negs do not represent money to which the gambler is entitled and, unlike cash chips, they cannot be encashed or exchanged for goods or services. Further, when a gambler places a bet using a Non Neg, no money is appropriated to the bet. If the gambler loses, the Non Neg is placed in the drop box but no right to money passes to the casino. When the casino allows a gambler to bet with a Non Neg, it is, in a sense, allowing the gambler to bet with the casinos own money. Put another way, from the point of view of the casino, a Non Neg amounts to a free bet. As such, a Non Neg has no real world value to the casino when the gambler loses it in a bet save in so far as it may be said that a contingent liability of the casino to pay out according to the rules of the game in which it is played is eliminated. But in my view, this does not instil in the Non Neg a value, in money or moneys worth within the meaning of section 11(10)(a). Nor does it render it a stake staked within the meaning of that provision. Furthermore, a Non Neg does not make a contribution to the bankers profits within the meaning of section 11(10) or to the bankers gross gaming yield within the meaning of section 11(8). This is so whether the Non Neg is assignable or not. The assignability of the Non Neg cannot and does not affect its value to the casino. The diamond necklace This approach also yields the answer to a question which animated submissions at the hearing of this appeal. It arises from an illustration used by HMRC. Suppose, say HMRC, a gambler stakes a diamond necklace with an uncertain market value lying somewhere in the range of 15,000 to 35,000. HMRC submit that section 11(10) of the FA 1997 deals with this uncertainty by treating the value of the necklace (and so the stake) as the value that it is given in the game. So, if the casino and the gambler agree that the value of the necklace is to be treated for the purposes of the game as 10,000 then that is its value for the purposes of section 11(10) when it is placed as a stake. The casino cannot argue later that the true value of the necklace is less than 10,000, nor can HMRC argue that the true value is more than 10,000. This, HMRC continue, is the position in relation to Non Negs too. The casino and the gambler have agreed that Non Negs shall be treated as having their face value for the purposes of the game, and that is the value they must have when placed as a stake under section 11(10). This approach produces certainty. LCM agrees that, in this example, the necklace is to be treated as having a value of 10,000 for the purposes of calculating the bankers profits but says that this is consistent with its case rather than that of HMRC. Its case, it continues, focuses on the contract between the parties in order to determine whether there is a stake and, if there is a stake, what its value is. Non Negs allow a gambler to play for free. He places nothing at risk. So, a Non Neg has no value and is not a stake. I would not accept the arguments of either party in relation to this example for they both seem to me to ignore the need to assess the value in money or moneys worth of the stakes staked in calculating the bankers profits from gaming under section 11(10). The need to assess the value in money or moneys worth emphasises the need to ascertain the real objective value, that is to say, the real world value of a stake staked. If the casino and the gambler have agreed a value of 10,000 for a necklace which is staked in a game but the casino later finds that the necklace is made of paste and worthless, then it will contribute nothing to the bankers profits. Conversely, if the casino discovers that it has made a good bargain and that the necklace is worth more than 10,000, then that is the contribution it will make to the bankers profits. Of course the fact that the casino and the gambler have agreed a value of 10,000 for the necklace may be powerful evidence of its true value but it may not be determinative, and where it is not I can see no reason why HMRC, which are not party to the agreement between the casino and the gambler, should be bound by its terms. For all of these reasons, I would conclude that Non Negs are not stakes staked within the meaning of section 11(10)(a) of the FA 1997, nor do they have any value in money or moneys worth within the meaning of that provision. Issue (iii) Non Negs as prizes I agree with the UT and the Court of Appeal that any discussion of how Non Negs are to be valued in a game ought also to consider their value when returned by the casino to the gambler who has won his bet. As I have said, HMRC and LCM agree that Non Negs which are returned to the gambler in that way are prizes within the meaning of section 11(10)(b) of the FA 1997. They also agree that, so far as possible, there should be a consistency in approach as to the value of Non Negs as stakes staked under section 11(10)(a) and as prizes provided under section 11(10)(b). Hence HMRC say that they should be treated as having their face value for the purposes of section 11(10)(a) and (b) whereas LCM argues, and the UT and the Court of Appeal agreed, that they have no value. So too it formed no part of the submissions of either party that Non Negs should be treated differently for the purposes of section 11(10)(a) and (b). I would emphasise, therefore, that HMRC do not contend that, were this court to hold that Non Negs are not stakes staked or that they do not have a value, in money or moneys worth equal to their nominal face value when assessing the value of the stakes staked in a given accounting period, they nonetheless have their face value when returned to gamblers as prizes by application of section 20 BGDA. Nor, I would add, did LCM make such a submission. Nevertheless, it seems to me to be desirable that I should address, on their merits, HMRCs arguments concerning the value of Non Negs as prizes, albeit that these arguments have only been advanced as the counterpart of their case that Non Negs have their face value as stakes staked. HMRC have developed their case on this aspect of the appeal in the following way. They say that, as a matter of ordinary language, a Non Neg may be used in place of money as payment for benefits of a specified kind, namely the benefit in the course of a game of cash equivalent to the face value of the Non Neg. In the game, the Non Neg is as good as cash, and a gambler who uses the Non Neg is in the same position as a gambler who uses cash. Accordingly, section 20(3)(a) and (b) of the BGDA are satisfied and in so far as the UT and the Court of Appeal found to the contrary, they fell into error and misunderstood the statutory language and the underlying economic reality. They also say that section 20(3)(c) is satisfied, about which there has been no dispute. Turning now to paragraph (b) of section 20(4) of the BGDA, HMRC say this must be read with section 20(3)(a) and (b) and that, in referring to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount specified in subsection (3)(b), the paragraph must be referring to a restriction, condition or limitation on the use of the voucher beyond the fact that it can only be used as payment for benefits of a specified kind obtained from a specified person. Were it otherwise, any voucher which satisfied the requirements of section 20(3)(a) would also fall within section 20(4)(b) and that cannot have been the intention of the legislature. As for Non Negs, HMRC say that there is no restriction on their use beyond the limitation that they can be used for the purpose of playing particular games in LCMs casino. In summary, HMRC continue, Non Negs are vouchers which satisfy section 20(3)(a), (b) and (c) of the BGDA. Further, Non Negs do not satisfy section 20(4)(b). It follows that Non Negs are to be treated as having their face value as prizes for the purposes of section 11(10)(b) of the FA 1997. In my judgment Non Negs do not satisfy section 20(3)(a) of the BGDA. As I have explained, gamblers gamble with money. When a casino issues cash chips, the property in those chips remains the property of the casino. The cash chips are simply a convenient way of facilitating gambling with money. A gambler who places a bet using cash chips is not purchasing goods or services or any other benefits with the chips or with the money those chips represent. He is placing his money at risk under the terms of an agreement he makes with the casino to play a game of chance. Similarly, when a gambler uses a Non Neg to place a bet he is playing a game of chance in which the casino treats him as having put money to the value of the Non Neg at risk. If the gambler loses, the casino retains the Non Neg. If the gambler wins, the Non Neg is returned to him together with any other prize he has won. But in neither case has the gambler used the Non Neg in place of money as whole or partial payment for benefits of a specified kind obtained from the casino or banker. In these circumstances it is not necessary to express a final view on the proper interpretation and application of section 20(4)(b). Nevertheless, I would be minded to reject one aspect of the submissions of HMRC here too. In particular I would not accept that section 20(4)(b) must be referring to restrictions, conditions or limitations on the use of the vouchers concerning matters other than the kinds of benefits for which they can be used as payment or the persons from whom those benefits can be obtained. To my mind a critical feature of section 20(4)(b) is the requirement for its application that the restriction, condition or limitation may make the value of the voucher to the recipient significantly less than its face value. Some vouchers will satisfy this condition and others will not. Whether a Non Neg does so or not will depend upon the restrictions, conditions or limitations imposed by the casino on its use and the impact those restrictions, conditions or limitations have upon the value of the Non Neg to the gambler. I am confirmed in these views because, on the interpretation of section 20(3) of the BGDA which I would hold to be correct, the outcome is a coherent scheme for the treatment of Non Negs whether used by gamblers to place bets or when returned to gamblers as prizes. Were it otherwise, the legislation would have the consequence that Non Negs would not contribute to bankers profits when gamblers lost their bets but would reduce those profits when gamblers won and had their Non Negs returned to them as prizes. It would mean that if, for example, a gambler, who places as a bet a Non Neg with a face value of 100, wins three times in a row before losing, and each time he wins has his Non Neg returned to him together with any other prize, the casino can say that, simply by returning the Non Neg, it has incurred a cost of 300 in prizes and reduce its profits accordingly. That would produce an incoherent scheme which would be unduly favourable to casinos and in my view that cannot have been Parliaments intention. Conclusion For all of these reasons, I would dismiss this appeal. LADY ARDEN: Bankers profits for gaming duty purposes This appeal concerns gaming duty, which is chargeable on premises such as casinos in the United Kingdom where dutiable gaming, including casino games, takes place. The respondent at its casinos provides to selected customers Non Negs, that is, non negotiable vouchers for gaming conferring the right to place free bets in order to induce those customers to visit its casinos and engage in gaming. The vouchers can only be used for that purpose and they are non negotiable in that they cannot be exchanged for cash or used to pay for goods or services such as food and drink, but, if the customer using Non Negs wins, he receives redeemable cash chips and is given back his Non Negs. Non Negs are not subject to any restriction on transfer. They bear a face value amount which is the amount for which they can be wagered. The key question at the heart of this appeal is whether the Non Negs should be taken into account as part of the bankers profits for the purposes of section 11(8)(b) read with section 11(10) of the Finance Act 1997 (the FA 1997), which are set out in paras 3 and 5 above. Gaming duty in this case is charged on gross gaming yield from the relevant premises (section 11(8) of the FA 1997, para 3 above). Where there is a banker for gaming purposes, the gross gaming yield means both the gaming receipts and the bankers profits. These are defined in section 11(10) as follows: In subsection (8) above the reference to the bankers profits from any gaming is a reference to the amount (if any) by which the value specified in paragraph (a) below exceeds the value specified in paragraph (b) below, that is to say (a) the value, in money or moneys worth, of the stakes staked with the banker in any such gaming; and (b) the value of the prizes provided by the banker to those taking part in such gaming otherwise than on behalf of a provider of the premises. Value of stakes is value at large It is clear that Parliament in enacting this provision is requiring there to be brought into account for the purposes of gaming duty not the receipts of gaming (which are covered by section 11(8)(a)) but the value of stakes staked less the value of prizes paid. It is, therefore, not determinative that the stake might have been issued as a free bet by the casino, or that the receipt was less than its perceived value as where the customer puts down a stake in the form of an IOU but then fails to pay. The key is the value of whatever has generated the gaming activity. Value is not restricted to the amount for which the stake is bet In my judgment, the term value in section 11(10)(a) is value at large in that it is determined by open market valuation, that is what a person would pay for it in the open market, and that person could include the casino. In its primary case HMRC adopt a game based approach to valuation and submits that the value of the stakes staked is the value which the stake is given for the purposes of the relevant gaming, as opposed its value to any particular person or in the market. HMRC point out that the term banker is used in this subsection in its gaming connotation. The term value of the stakes staked is not, however defined and it seems to me that that it must bear its ordinary meaning. The expression stake staked are an unusual collocation of words, and it has not been suggested that the combined phrase is a term of article The word staked seems to mean which has been staked, meaning actual staking and constituting a form of condition subsequent to the identification of a stake. I do not think it can be read as in the amount that it has been staked. Even if it did, it could be liable to circumvention where stakes were accepted, for instance, in ounces of silver. I therefore join with the majority in rejecting HMRCs primary case. Of course, it is consistent with HMRCs case that, as the majority hold and I agree, the diamond necklace of uncertain value is to be taken to have a value equal to the amount for which the casino allows it to be staked, no more and no less. This is also consistent with my approach. As I see it, that limitation is achieved by the word staked. The only value which is relevant is that which has been wagered or staked, and the rest falls outside gaming duty. I can see that it would be easier to administer the duty (which is self assessed in the first place) if the person liable to gaming duty had to take only the face value of the voucher, but we have to interpret the words that Parliament has used. This to me is more important than the fact that the object of section 11(10) is to ascertain the bankers profits because section 11(10) does not have as its purpose the presentation of a true and fair view of a bankers profits, as would the statutory accounts of a registered company. Section 11(10) is an artificial sectoral formula which has left matters of deduction out of account and which can equally bring matters into account even if they would not fall to be included under conventional accounting principles (cf para 38, last sentence of Lord Kitchins judgment). Aspinalls (paras 39 to 41 above) shows that the formula is not based on conventional accounting principles of admitting the deduction of all costs incurred in making a particular profit. Market value is in issue on this appeal An alternative case put by HMRC is market valuation. This does not arise on the facts in this case as found by the tribunals. It arises only because the majority has adopted the approach to value of valuation from the perspective of the banker alone. This excludes market valuation. Therefore it seems to me incumbent to deal with the issue of market valuation on this appeal. If market value is the value of the stake, and a stake has a market value, that stake would, to the extent of that value, form part of the bankers profits once the stake had been staked. Contrary to the majoritys conclusion, value of a stake is not restricted to the perspective of the banker In my judgment, the majority make a critical error in interpreting value as the value from the perspective of the banker without any legislative direction to that effect (see para 37 above). This appears, in the opinion of the majority, to make irrelevant any market value: see para 44 above (The assignability of a Non Neg cannot and does not affect its value to the casino). That means that, if the banker issues a free bet and can then say, when the free bet is staked, that there is no contribution to its tangible assets, the free bet is outside the scope of gaming duty. In my judgment this is contrary to the statutory direction in section 11(10) to ascertain the value of the stakes staked because value is, as explained above, unqualified. The bankers perspective approach fails to take account of the fact that the free bet is staked and leads to gaming activity at the premises which are subject to gaming duty. A nil value is still a value. An objective value is a real world value. Profits can be bankers profits without the elements used to calculate those profits having to be valued from the perspective of the banker. Moreover, if Lord Sales is right in his interpretation of section 20 of the BGDA (dealing with the valuation of prizes), the further asymmetric and anomalous result is reached under section 11(10A) that the casino can not only exclude the free bets from bankers profits but also deduct the amount of prizes in the form of free bets from other stakes and reduce its other bankers profits accordingly. In any event, if there is a market value, it is as open to the banker as anyone else to make an offer to acquire the Non Neg. It is wrong to conclude that market value is not available to the casino. The casino could offer to acquire the Non Neg when the holder arrives at the casino, perhaps by offering him a free drink in exchange or a cash chip of a reduced amount. If the banker modelled the risk of a holder of a Non Neg winning, it would no doubt be in its interests to make such an offer at the appropriate amount to avoid a loss. When the player loses his bet, the right to stake the Non Neg is lost and the paper voucher is taken out of play. So, in my respectful judgment it is not open to the casino to say that nothing passes to it: it has extinguished the liability on the Non Neg. There cannot be read into the statute a requirement that this benefit is acquired by way of assignment or transfer. HMRCs failure to lead evidence of market value HMRC made an error of law at the start of this case which was corrected by the Tribunals. HMRC contended that the value of a Non Neg was its face value. The First tier Tribunal (Judge Greg Sinfield) rejected that method of valuation and found that the value was the chance of winning. The Upper Tribunal (UT) (Henderson J and Judge Roger Berner) corrected that by pointing out that the value had to be value in money or moneys worth, and there was no evidence to support any valuation. Therefore, HMRC failed on the facts, but non constat that it could not be shown on other evidence that objectively speaking the Non Neg had value. The UT explained the position as follows: 33. We do not regard as anything to the point that the Non Neg might provide the player with a right to play a game, or a right to have the chance to win, or a promise from the club in those respects, which Ms Wilson argued was a valuable right. The mere fact that such a right might subjectively be regarded by the holder of the Non Neg as a valuable right, in the sense that it would enable that holder to play a game without putting money at risk, is not material to an objective valuation, in money or moneys worth, of the stake staked. 34. On the other hand, the objective valuation of a stake would, in our view, have to have regard to the monetary value, if any, that could be obtained on an arms length assignment to a third party of the right to place that stake, in the same way that it would if the Non Neg was redeemable for cash or for goods and services. That would be moneys worth for the purpose of section 11(10)(a). It was not, however, HMRCs case that the stakes of the Non Negs should have any value other than the face value of the Non Negs, and there were no findings of fact either that the Non Negs were transferable or, if they were, what value might be realisable on a transfer. Furthermore as section 11(10)(a) requires the individual stake to be valued, there would have to be evidence of a value generally obtainable in a market in Non Negs or evidence that a particular Non Neg could have been, at the time it was staked, assigned for money or moneys worth. In the absence of such evidence, it is not possible to ascribe any moneys worth to the stake by reference to any assignable right. 35. It follows, in our judgment, that the FTT erred in law when it concluded, at para 27, that the value, in money or moneys worth, of a Non Neg was its monetary face value, on the basis that the face value would be used to calculate winnings in cash chips and on a losing bet the player would no longer have the right to bet that monetary value for free. In our view, the FTT failed to have proper regard to the requirement that the value in section 11(10)(a) must be a value in money or moneys worth The Court of Appeal (as referred at [2019] 1 WLR 1) agreed with this passage from the judgment of the UT (paras 36, 51 and 52). Mechanics of objective valuation Objective valuation permits the possibility that the parties will adduce evidence as to whether another person in the open market would buy the voucher and if so at what price. In the hands of an experienced player, it might be that the Non Negs could be turned into winnings, paid in cash chips, which the player could then encash. In those circumstances the Non Neg may have some value in the open market, even if small. The objective valuation of the stake permits the stake to be taken into account at an appropriate value as directed by Parliament if it has generated gaming activity, which is the trigger for the charge to gaming duty. The voucher serves the function of a gaming chip. In the normal way the customer obtains a gaming chip by placing a deposit of cash with the banker. Lord Kitchin refers to the speech of Lord Goff in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 in which this point is made. But with free bets there is no deposit of cash: although there are different types of voucher in this case as Lord Kitchin explains, this feature is a constant. In short, the Non Negs are all free bets issued by the casino itself as a promotional tool. The fact that they are not issued for cash does not in my judgment prevent it from being a stake or having an objective value for the purposes of section 11(10). Furthermore, the majority accept that the Non Neg has a real world value to the gambler and thus, I assume, a value might be realisable on the open market: see para 42 of the judgment of Lord Kitchin. Subjective ideas of value play no part in the process of valuing a stake. I therefore agree with Lord Kitchin in rejecting the argument to that effect that a diamond necklace of uncertain value offered and accepted as a stake for a specified amount is to be valued by reference to what the parties or at least the banker thought was its value. It is irrelevant if the banker or the player wrongly thought that the necklace was paste and therefore much less than it turned out to be. As I have said, it is inherently unlikely, given that Parliament would be concerned with the fair and equal allocation of tax burdens, that it was intended that the value of a stake should depend on anything other than its objective market valuation. That leaves the question of exactly what must be valued. As I have explained, one function of the word staked in the expression of the value of the stakes staked is to limit the stake to that part of, or that part of the value of whatever is staked, or what is used in the game. Why a Non Neg is a stake for the purposes of section 11(10)(a) of the FA 1997 In my judgment, a Non Neg is a stake and the Court of Appeal fell into error in holding otherwise. Dame Elizabeth Gloster, with whom Leggatt and Flaux LJJ agreed, reasoned on this issue as follows: 29. The calculation of stakes staked under section 11(10)(b), to my mind, in context, involves a conventional arithmetical calculation of real world stakes received from players, which, if necessary, could feature as actual receipt or revenue figures in a set of accounts; it does not on any natural reading include artificial or notional values placed on tokens given to the player by the casino, as part of a promotional or marketing exercise, which intrinsically have no value and are non negotiable, or at best have an economic value to the player equivalent to their face value multiplied by the chances of winning. In real terms, when the casino gives out Non Negs to favoured players, it is allowing the player to bet with its (the casinos) own money. There is no receipt by the casino contributing to its gross profits; on the contrary, in permitting the player to gamble with a Non Neg, what the casino is actually doing is incurring a contingent (non enforceable) liability to pay out, according to the relevant odds of the game, in respect of the face value of the Non Neg in the event that the chip is placed as a winning bet. It is, in my judgment, counter intuitive in such circumstances to characterise what is essentially an item of the casinos own expenditure as part of the bankers profits or as a stake having a value in money or moneys worth. In no sense could the face value of a Non Neg, or even the value to the player calculated by reference to the chances of winning, feature as a receipt in a casinos accounts or be said to contribute to its gross profits. 30. For that reason taken on its own, I would not regard a Non Neg as being a stake which was required to be taken into account in the calculation of gross gaming yield as defined under section 11(8) or of bankers profits as referred to or defined under section 11(8)(b) or section 11(10). In particular, I do not consider that the amplified definition of bankers profits in section 11(10) requires one artificially to include the Non Negs (which are clearly not items of receipt directly contributing to profit, but rather items of expenditure) in the statutory profit calculation. In other words, in construing the relevant provisions one has to have regard to the relevant context. Although the phrase in section 11(10)(a) the stakes staked with the banker could arguably be said, linguistically, to be broad enough to include a Non Neg (simply because a Non Neg chip is placed on the gaming table by a favoured recipient as a stake), in my judgment, the phrase, construed in its actual context ie the ascertainment of gross gaming yield and bankers profits does not permit the artificial inclusion, as an item of stake under section 11(10)(a), of an amount of the casinos promotional marketing expenditure given to the player by the casino. Only in the most general and indirect sense could such a stake be said to be contributing to profit; and it could not be said in any real sense to constitute part of the gross gaming yield of the casino. I do not agree with this analysis. This reasoning with respect confuses the stake staked with its value. A stake is an ordinary English word meaning: That which is placed at hazard; esp a sum of money or other valuable commodity deposited or guaranteed, to be taken by the winner of a game, race, contest, etc. (Oxford English Dictionary, 2nd ed (1989)) The word staked enables stakes which are not used in gaming to be left out of account and so Non Negs which are issued but never used may be excluded from the calculation of bankers profits. But a stake can on an assessment of its market value be worthless, as in the case of forged cheques (see Lydiashourne Ltd v Revenue and Customs Comrs (Decision E00092), 13 August 1998 explained by the UT at para 42). This is an important point in the statutory scheme. Stakes and prizes are not, moreover, the same as assets and liabilities in accounting generally. Parliament has required a specific account to be taken of stakes staked and prizes paid, and the fact that a stake might in some circumstances for accounting purposes be treated as a conditional liability or expenditure of the casino rather than as a receipt is not relevant. As stated above, a nil value is still a value. A stake does not cease to be a stake because it is of nil value. Does statute require the method of valuing Non Negs as stakes and Non Negs as prizes to be consistent? The valuation of Non Negs as prizes which can be deducted from the value of stakes staked is governed by section 11(10A) (para 6 above) which incorporates by reference subsections (2) to (6)(a) of section 20 of the BGDA (as amended by the Finance Act 2003) (the relevant parts of section 20 are set out in para 7 above). Section 11(10A) is not as such a deeming provision, but one which requires modifications to be made to the incorporated provisions. Where, as here, such a provision does not spell out the modifications which can be made, it may give rise to some exacting interpretation issues, and there should in my view be no expectation or anticipation that such a provision when carefully analysed should have rough edges or worse. It is, in my judgment, more important to approach those provisions in their application to gaming duty on the basis of the principle of statutory construction that it should be presumed that Parliament intended the statutes in pari materia (as here) to constitute a harmonious whole. On that basis, if I am right that the value of the Non Neg falls into the definition of the bankers profits I would as a matter of first impression expect the basic rules of debit and credit to apply and therefore, that if the value of stakes is credited on one basis, that, when Non Negs form part of a prize, they will be debited on the basis of a similar valuation method. On that last point, the views of the majority and my own coincide. On the other hand it is noticeable that subsections (3) and (4) of section 20 BGDA are expressly drafted so as to achieve HMRCs primary case on section 11(10) of the FA 1997 that the relevant value (in that case, a Non Neg) is the face value amount of the voucher, an argument which all members of the Court have rejected, and so some differences may in fact be unavoidable. HMRCs arguments of the parties are set out in paras 51 to 53 above. I approach the submissions on the hypothesis that it has been shown that the Non Negs have a market value as a stake. As to section 20(3)(a) I agree with Lord Sales. The majority do not explain what is meant by in place of money and in my judgment it must include instead of money. On that basis the prize of a Non Neg plainly satisfies section 20(3)(a). (No issue arises on section 20(3)(b) or (c)). As to section 20(4)(b), the UT held that the prize was not to be treated as valueless because of its restrictions under section 20(4) but in this the Upper Tribunal failed to give weight to the direction to find the value to the recipient. The recipient was a player, and the value of a free bet to someone who wants to gamble is not obviously significantly less than the face value of the voucher (and the majority accept the real world value of a free bet to the player: para 42 above). The question whether section 20(4)(b) is satisfied will depend on a consideration of the restriction in question. It is capable of being satisfied as where, for instance, the voucher contains some unreasonable condition as to the time of use of the voucher. I agree with Lord Sales that it must be a restriction on the use not of the prize but of the voucher in place of money as described in section 20(3)(a). The point is that, if the condition in section 20(4)(b) is met, it would be unreasonable to afford the casino the deduction of the face value of the prize to which it would otherwise be entitled to under section 20(3). This is consistent with the fact that, if section 20(4)(b) is met, it would be unlikely that the Non Neg would have any market value as a stake. If it is not met in any case, the banker would, on the face of it, be entitled to a deduction for the amount specified in the voucher. I do not propose to express a final view on this because the Court has heard no argument on whether, as authorised in principle by the terms of section 11(10A), in these circumstances section 20(3) must necessarily be modified to achieve parity between the credit to profits and the deduction of prizes where Non Negs are involved. That question must remain open. Conclusion On the facts of this case, but for reasons materially differing from the majority and the Court of Appeal, I would dismiss this appeal. LORD SALES: I agree with Lord Kitchins judgment in respect issues (i) and (ii), regarding the proper interpretation of section 11(10)(a) of the Finance Act 1997 (as amended). That is all that is necessary to dispose of the appeal. However, the UT and the Court of Appeal also expressed views in respect of issue (iii), regarding the proper interpretation of section 20 of the BGDA, as it applies by virtue of section 11(10A) of the FA 1997 in relation to the valuation of prizes for the purposes of section 11(10)(b), and we were invited to do the same. On that issue, I have come to a different conclusion from Lord Kitchin. As regards section 11(10)(a), I agree with Lord Kitchin that the subparagraph is concerned with the value to the banker of the stake staked. Although section 11(10) is focused just on the game (rather than the bankers income or profits in the wider sense), it imposes a tax on the banker. Accordingly, it is appropriate to construe it as applying in relation to real economic gains which the banker receives in the context of the game. This is borne out by the fact that what is taxed under section 11 is the gross gaming yield (section 11(2)(a)), which is calculated, according to section 11(8), by adding together gaming receipts and the bankers profits from the gaming. This language strongly suggests that what is in contemplation is receipts in the sense of real sums received by the banker (and section 11(9), which explains how they are to be calculated, reinforces this point) and profits in the sense of real profits realised by the banker from the gaming. In my view, this context informs the construction to be given to section 11(10), which explains how bankers profits are to be calculated. Further, as the UT emphasised (para 27), the reference in section 11(10)(a) to money or moneys worth indicates that the calculation is concerned with real world value. I would add that the context shows that it is real world value available to the banker which is significant. As Lord Kitchin points out, from the point of view of the gambler a Non Neg does have a real economic value (para 42); but from the point of view of the banker, as a contribution to its receipts and profits, it has none it simply represents a free bet (para 44). I agree with him that in the context of section 11(10)(a), the relevant concept of real economic worth is that given from the bankers perspective, not from that of the gambler. This view is supported by the points made in para 89 above. Therefore HMRCs submissions regarding the interpretation of section 11(10)(a), to say that under that provision either a Non Neg should be given its face value or should be given the notional market value it might have if it is assignable by the gambler, must be rejected. Moneys worth in section 11(10)(a) refers to real economic value to which the banker has access and which therefore can add to his profits. It does not include value to which only the gambler has access. Hence, it does not include the putative exchange value for the gambler of selling a Non Neg to a third party who wants to gamble. Even if the Non Neg is assignable, this is not value to which the banker has access in any real sense. If the banker wants to sell chips to another gambler, he will sell him regular chips. The application of section 11(10)(a) does not depend on the happenstance whether a Non Neg is assignable or not. Parliament intended that the application of the tax should be uniform as between different bankers and that it should not depend upon such matters, which are of no economic consequence from the bankers point of view. It should be emphasised that this is to give section 11(10)(a) a different construction from that arrived at by the UT, as endorsed by the Court of Appeal. Although the UT dismissed HMRCs contention that a Non Neg should be given a value under section 11(10)(a) equal to its face value, the UT considered (para 34) that this provision required a notional objective value to be given to a Non Neg in the gamblers hands, and it was only because HMRC had not introduced any evidence as to what that value might be that in this case the Non Negs should be treated as having nil value for the purposes of section 11(10)(a). By contrast, on Lord Kitchins interpretation of section 11(10)(a), with which I agree, the focus is firmly on the value of a stake for the banker in the context of the game. This means that issues which would affect the value of a Non Neg from the point of view of the gambler, but not the banker, such as whether it is assignable or not, are irrelevant. In my view, this approach to the proper interpretation of section 11(10), rooted in economic reality so far as concerns the bankers position and the calculation of his profits from the game, also means that the premise for the submissions made both by HMRC and LCM namely that Non Negs must be given the same value in subsection 11(10)(a) (the plus side of the calculation of the bankers profits) and in subsection 11(10)(b) (the minus side of that calculation, based on the prizes given in the game) breaks down. It is agreed that when a gambler plays a game with a Non Neg and wins, so that the Non Neg is returned to him with his winnings, the Non Neg so returned constitutes part of the prize given in the game. (Of course, one might have Non Negs the terms of which only allowed them to be played once and excluded them from being returned if the gambler wins a game using them, but that is not true of the Non Negs in issue on this appeal.) There is a real cost to the banker in providing a Non Neg as a prize, equal to the percentage chance the gambler has of winning real money from the banker when using the Non Neg to bet in the next game. Accordingly, the value of a Non Neg is different in the two elements of the calculation. The value of a Non Neg is nil from the point of view of the banker as regards section 11(10)(a), but when awarded as a prize it represents a real cost to the banker which ought in principle to be brought into account under section 11(10)(b), since section 11(10) is concerned with economic reality in relation to the bankers position. It is unfortunate that the submissions of the parties on issue (iii) were not entirely helpful or well directed, because they proceeded on the false premise that the approach to valuing a Non Neg should be the same for both sides of the equation. Before the amendment of section 11 of the FA 1997 by the addition of subsection (10A) in 2007, in calculating his profits from the gaming under section 11(10) the banker was entitled to bring the real cost of providing a Non Neg as a prize into account under subparagraph (b). Section 20 of the BGDA, to which section 11(10A) of the FA 1997 refers, deals with the valuation of non cash prizes in bingo gaming (see subsection (1): A persons expenditure on bingo winnings for an accounting period is the aggregate of the values of prizes provided by him in that period by way of winnings at bingo promoted by him). I do not consider that the amendment of the FA 1997 in 2007 to cross refer to section 20(2) (6)(a) of the BGDA to govern the calculation of the value of prizes given by the banker was intended to change the fundamental scheme of section 11(10) so as to disable the banker from bringing into account the value of Non Negs as prizes, even though they represent a real economic cost in the game for the banker. Yet this is the consequence which Lord Kitchins interpretation of section 20 produces. Rather, in my opinion, the cross reference to section 20 was intended to simplify and make uniform across the gambling industry and across different games of chance the calculation of the value of the cost to the banker or game organiser of vouchers (including Non Negs) given as prizes, for the purposes of calculating their income or profits from the game. In my view, on a straightforward reading of section 20(3) and (4) of the BGDA (set out at para 7 above), a Non Neg given as a prize satisfies the conditions in subsection (3) and does not fall within subsection (4), with the result that the Non Neg is treated for the purpose of section 11(10)(b) of the FA 1997 as having its face value. This is somewhat generous to the banker, as the true economic cost of the Non Neg will be less than this. But it only applies in relation to those Non Negs which are played and then returned to the gambler when he wins, which will be a very small subset of Non Negs. In relation to Non Negs which are played and lost, the banker cannot bring their cost to him into account at all. I consider that the interpretation of section 20 which I prefer respects the basic structure of section 11(10), in that it does give a value to what is a real cost to the banker in providing Non Negs as prizes. The application of deeming provisions in tax legislation, like section 20 of the BGDA, inevitably involves some rough edges, which may somewhat benefit the taxpayer or HMRC depending on the particular context. Such rough edges are the price paid for securing simplicity, uniformity and equality of treatment across a range of situations. In any event, it seems to me that the application of section 20(3) and (4), respectively, is clear in the present context. I do not think it is possible to depart from the clear wording of the provision as legislated by Parliament in order to address the sort of situation identified by Lord Kitchin at para 56 above. It is common ground that a Non Neg qualifies as a voucher for the purposes of section 20(3). Section 20 involves a degree of departure from the focus in section 11(10) of the FA 1997 on the economic position of the banker, in that section 20 focuses on the economic benefit of the voucher to the gambler: see section 20(3)(a), which focuses on how the gambler is able to make use of the voucher, and section 20(4)(b), which also focuses on the value of the voucher to the recipient. Therefore, in my opinion, one cannot say that just because a Non Neg does not qualify as a stake under section 11(10)(a) because it has no economic value for the banker, the same conclusion must follow when applying section 20. For present purposes, the starting point in applying section 20 is subsection (3). That provides that where the prize is a voucher which satisfies the conditions in subparagraphs (a) to (c), the specified amount is the value of the voucher for the purpose of the calculation of the cost to the banker of the provision of the voucher as a prize. In the present case, it is agreed that the condition in subparagraph (c) is satisfied. The application of section 20(3) therefore turns on subparagraphs (a) and (b). In my view, in respectful disagreement with Lord Kitchin, as regards subparagraph (a), a Non Neg given as a prize may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person. The gambler is entitled to use a Non Neg in place of an ordinary chip, representing money, as payment for a benefit of a specified kind, namely participation in a game of chance, obtained from a specified person, namely the banker. It seems to me that the condition in subparagraph (a) clearly is satisfied in relation to a Non Neg. I do not understand it to be in dispute that the condition in subparagraph (b) is satisfied: a Non Neg clearly specifies the amount of money which it represents in the game. Therefore, according to section 20(3) and subject to section 20(4), the relevant amount to be brought into account as the cost of the prize in section 11(10)(b) of the FA 1997, as amended, is the value which the Non Neg is specified to have. A Non Neg with a face value of, say, 5 for use in a game will have that value for the purposes of section 11(10)(b). I turn then to section 20(4), to see whether it has the effect that the Non Neg given as a prize should be treated as having no value for the purposes of section 11(10)(b) of the FA 1997. In my view, the precondition for the operation of section 20(4) set out in subparagraph (a) is not satisfied. For the reasons given above, a Non Neg given as a prize satisfies section 20(3)(a) and (b). That leaves the alternative precondition for the operation of section 20(4) set out in subparagraph (b). In my view, normally this precondition is not satisfied either. A paradigm case for application of section 20(4)(b) would be a prize in a bingo game or other game of chance in the form of a voucher redeemable for a weeks holiday worth a specified amount at a specified resort, but where the fine print stated that it could only be used in one specified and unattractive week of the year. In such a case, the value of the voucher to the recipient, who in practice might not be able or might not wish to use the voucher, might well be significantly less than its apparent face value. What is significant about such a case is that the use of the voucher as described in subsection (3)(a) (ie to obtain the benefits of a specified kind from the holiday resort) is subject to a relevant restriction, condition or limitation in relation to using it to obtain that benefit. However, assuming that one is concerned with a Non Neg in simple form, that is not the position in the present case. (I leave aside cases which might arise in theory, in which a Non Neg is subject to conditions which mean that the gambler cannot simply use it at will in a game, but, say, could only so use it at particular times of day which were inconvenient: such conditions would give rise to a potential issue regarding the application of section 20(4)(b) similar to that referred to in para 103 above). The use of a simple form Non Neg as described in subsection (3)(a) (ie to stand in place of money in payment for participation of a game of chance with the banker) is not limited in any way. When used for that purpose, the Non Neg is used in place of money at the full face value of the Non Neg. It is irrelevant that it cannot be used in place of money for any other purpose. For the reasons I have given, under issue (iii) I consider that section 20 of the BGDA as applied to section 11(10)(b) of the FA 1997, as amended, has the effect that a Non Neg given as a prize should be brought into account at the full face value of the Non Neg. |
The appellant, Ms Samuels, was an assured shorthold tenant of 18 Dagger Lane, West Bromwich, Birmingham, where she lived with four children. In July 2011, having fallen into rent arrears, she was given notice to leave. She later applied to the respondent council as homeless under Part VII of the Housing Act 1996. But it was decided that she was intentionally homeless, on the ground that the accommodation at Dagger Lane was affordable and reasonable for her to continue to occupy, and that its loss was the result of her deliberate act in failing to pay the rent. That decision was ultimately confirmed on review by the council in a letter dated 11 December 2013. The central issue in this appeal is whether the council adopted the correct approach in determining that the accommodation was affordable for those purposes. Ms Samuelss appeal to the County Court against the councils decision was dismissed by H H Judge Worster on 10 June 2014, and her further appeal was dismissed by the Court of Appeal (Richards, Floyd, and Sales LJJ) [2016] PTSR 558 on 27 October 2015. She appeals to this court with permission granted by the court on 19 February 2018. (The notice of appeal recorded that the very substantial delay in bringing the case to this court was caused by funding problems, related to the refusal of legal aid, and the need to proceed by way of conditional fee agreement. Legal Aid was reinstated after permission to appeal had been granted by this court. We were told that in the meantime she and her family have been living in temporary accommodation provided by the council.) The statutory framework The relevant statutory provisions are in Part VII of the 1996 Act. The authority becomes under a full duty to secure accommodation to a person found homeless, if they find certain conditions satisfied, one of which is that they are not satisfied that she became homeless intentionally (section 193(1)). That in turn depends on whether she deliberately did or failed to do anything in consequence of which she ceased to occupy accommodation which was available for her occupation and which it would have been reasonable for [her] to continue to occupy (section 191(1)). The initial decision is made under section 184 of the 1996 Act; section 202 confers a right to request a review by the authority itself; section 204 confers a right of appeal to the County Court on a point of law. Section 177(3) enables the Secretary of State by order to specify matters to be taken into account or disregarded in determining the question under section 191(1). The Homelessness (Suitability of Accommodation) Order 1996 (SI 1996/3204) (the 1996 Order), made in the exercise of that power, provided: 2. Matters to be taken into account In determining whether it would be, or would have been, reasonable for a person to continue to occupy accommodation there shall be taken into account whether or not the accommodation is affordable for that person and, in particular, the following matters the financial resources available to that person, (a) including, but not limited to, salary, fees and other remuneration; social security benefits; (i) (ii) the costs in respect of the accommodation, (b) including, but not limited to, (i) payments of, or by way of, rent; (d) that persons other reasonable living expenses. Section 182(1) requires the authority to have regard to guidance given by the Secretary of State. The relevant guidance at the time was the Homelessness Code of Guidance for Local Authorities (the Code). It was issued in 2006, replacing earlier versions dated 1999 and 2002. Paragraph 17.39 of the Code set out article 2 of the 1996 Order, with additional italicised comments. It stated inter alia that account must be taken of: the financial resources available to him or her (ie all (a) forms of income), including, but not limited to: (i) salary, fees and other remuneration (from such sources as investments, grants, pensions, tax credits etc); social security benefits (such as housing benefit, (ii) income support, income based Jobseekers Allowances or Council Tax benefit etc) On the expenses side, the reference to rent was expanded: payments of, or by way of, rent (including rent default/property damage deposits). There were no italicised additions to the reference to that persons other reasonable living expenses. Paragraph 17.40 read: In considering an applicants residual income after meeting the costs of the accommodation, the Secretary of State recommends that housing authorities regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income based jobseekers allowance that is applicable in respect of the applicant, or would be applicable if he or she was entitled to claim such benefit. This amount will vary from case to case, according to the circumstances and composition of the applicants household. A current tariff of applicable amounts in respect of such benefits should be available within the authoritys housing benefit section. Housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials (Emphasis added) As will be seen, an important issue in the appeal is whether the reference to use of income support as a guide is to be treated as extending also to benefits in respect of children, in particular child tax credit. It is helpful in this context to refer to Humphreys v Revenue and Customs Comrs [2012] UKSC 18; [2012] 1 WLR 1545, where Lady Hale explained the change. Having noted that income support was a means tested benefit at the officially prescribed subsistence level, she described the introduction of child tax credit (CTC): Child tax credit and working tax credit were introduced by the Tax Credits Act 2002. Child tax credit replaced the separate systems for taking account of childrens needs in the tax and benefits systems. Previously, people in work (or otherwise liable to pay income tax) might claim the childrens tax credit to set off against their income. This was administered by the tax authorities. People out of work (or otherwise claiming means tested benefits) might claim additions to their income support or income based jobseekers allowance to meet their childrens needs. This was administered by the benefits authorities. Under the new system, a single tax credit is payable in respect of each child, irrespective of whether the claimant is in or out of work, and is administered by Her Majestys Revenue and Customs. Child tax credit is like income support and jobseekers allowance, in that it is a benefit rather than a disregard and it is means tested, so that the higher ones income the less the benefit, until eventually it tapers out altogether. (paras 3 4) Ms Samuels income and expenditure For the purpose of comparing her income and expenditure at the relevant time, the evidence provided to the authority, and recorded by the county court judge (paras 15ff), presented a somewhat confusing picture, not assisted by the varying estimates presented by or on behalf of Ms Samuels. On the income side, at the time that she left 18 Dagger Lane Ms Samuels was dependent entirely on social security benefits, amounting in total to a monthly income of 1,897.84, made up of: i) housing benefit (548.51) ii) income support (290.33); iii) child tax credit (819.00); iv) child benefit (240.00). Excluding housing benefit, therefore, the total available for other living expenses was 1,349.33. On the expenses side, her rent was 700 per month, leaving a shortfall compared to her housing benefit taken alone of 151.49. Her estimates of her non housing expenses had varied in the course of her exchanges with the council. Her initial estimate had been only 380 per month (including 150 food/household items). By the time of the review decision, a revised schedule had been submitted by her solicitors on 1 November 2013, giving a total estimate of 1,234.99, consisting of: i) 750 food/household items; ii) 80 electricity; iii) 100 gas; iv) 50 clothes; v) 43.33 TV licence; vi) 43.33 school meals; vii) 108.33 travel; viii) 20 telephone; ix) 40 daughters gymnastics. No supporting information was provided. The accompanying letter said: It is impossible for our client, who as you are aware has learning difficulties to remember precise details, we are confident that these figures are reasonably accurate. It will be seen that, on an overall view (including housing benefit and rent), her monthly income amounted to 1,897.84 entirely from benefits, and her expenses amounted to 1,934.99, giving a shortfall of about 37 per month. According to the authoritys inquiries of her landlords, she also had arrears of rent of 1,600, although she claimed it was only one months rent (700). This difference was left unresolved by the judge (para 23). Although these figures were accepted as common ground in the lower courts, Ms Garnham for the Child Poverty Action Group (CPAG) has pointed to some apparent discrepancies in respect of benefits. She explains in her witness statement of 11 January 2019, para 68: I note that in para 11 of the judgment of the Court of Appeal the appellant gives her income at the relevant time as child tax credits of 189 a week (ie 819 a month), income support of 67 a week (ie 290.33 a month) and child benefit of 240 a month. The correct amount of child tax credits would in fact be 206.15 a week. Assuming the figures given by the appellant are correct, it is likely that the tax credit award was in fact being paid at a lower rate to recover a previous overpayment. The other figures given for income support are out by 0.50 per week (so monthly should be 292.50) and for child benefit the figure given is a four weekly figure rather than the calendar month figure of 262.16. I record this evidence for completeness and in case the differences may become material hereafter. However, it is not directly relevant to the appeal, which is in principle limited to points of law arising from the original decision of the council, and taking into account the information then before it. The councils decision The councils final position on affordability in the present case appears from their review decision letter dated 11 December 2013. The letter, written by the case officer, was long and detailed, and dealt with other issues which are no longer in dispute. It began by referring in general terms to various sources considered, including the Code of Guidance (see para 6 above), but there was no specific reference to the paragraphs dealing with affordability. The officer first addressed, and rejected, a suggestion that her last settled accommodation should be treated as her ex partners address, where she went for a period after leaving 18 Dagger Lane. The officer then turned to the treatment of affordability, which was dealt with relatively briefly. He referred to the shortfall in respect of monthly rent (151.49), and the monthly income, apart from housing benefit, of 1,349.33 (see above). He noted that on the expenditure figures originally submitted there would have been a significant amount of disposable income from which to fund your shortfall. Referring to the amended figures, he commented: It is now asserted that contrary to the provided figure of 150 for housekeeping, the actual figure was 750 per month, or 173 per week. This figure seems to me to be excessive for a family of your size, given that this is purported to only account for food and household items, with utilities and travel expenses accounted for elsewhere. I accept that a figure of 150 per month for food and household bills for a family of your size is equally likely to be inaccurate, but I consider that it is a matter of normal household budgeting that you would manage your household finances in such a way to ensure that you were able to meet your rental obligation. I cannot accept that there was not sufficient flexibility in your overall household income of in excess of 311 per week to meet a weekly shortfall in rent of 34. [The figures of household income (311) and shortfall in rent (34) given in the letter appear to be the (rounded) weekly equivalents of the monthly figures given earlier in the letter (1,349.33 and 151.49 respectively).] The officer noted that, in spite of some learning difficulties, she had confirmed her ability to pay her bills on time and manage her finances. It was concluded accordingly that the accommodation at 18 Dagger Lane was affordable for her. The appeal In the County Court counsel for Ms Samuels raised a number of grounds of appeal, including the alleged failure of the reviewing officer to have regard to paragraph 17.40 of the Code of Guidance. The Judge rejected this submission (para 54). He referred to Balog v Birmingham City Council [2013] EWCA Civ 1582; [2014] HLR 14, in which a similar submission had been rejected by the Court of Appeal. He accepted counsels submission for the authority that the Code was a recommendation; the Code had been referred to in the letter, and it was reasonable to assume that the decision was made having considered its provisions. He added that if paragraph 17.40 was not fully considered, it was an error which does not invalidate the decision. The reasons did not need to set out every aspect of the decision making process. The appeal was dismissed by the Court of Appeal. Giving the sole judgment, Richards LJ noted the submission by Mr Stark for Ms Samuels that when an applicant is reliant entirely on benefits, regard should be had to the fact that such benefits are set at subsistence level and are not designed to give a level of income that allows flexibility to spend outside maintaining a very basic standard of living, and that income support, child tax credits and child benefit are not intended to cover housing costs; it is the purpose of housing benefit to cover those costs (para 24). He did not accept that there was such a necessary starting point: The 1996 Order and the guidance make clear that account should be taken of all forms of income (including social security benefits of all kinds) and of relevant expenses (including rent and other reasonable living expenses). This suggests that a judgment has to be made on the basis of income and relevant expenses as a whole. It does not suggest that benefits income is to have any special status or treatment in that exercise, let alone that one should adopt the starting point formulated by Mr Stark. (para 25) With regard to the alleged failure to have regard to paragraph 17.40, he noted (para 34) the comment of Kitchin LJ in Balog v Birmingham City Council [2014] HLR 14, para 49 that review officers are not obliged to identify each and every paragraph of the guidance which bears upon the decision they have to make. Referring to the comparison with income support he said: It is true that the review decision did not address that point in terms. It did, however, take into account the payment of income support, and on the face of it the appellants residual income after the cost of her accommodation (ie after deduction of the shortfall in her rent) was well in excess of the level of her income support. At the hearing of the appeal Mr Stark did not suggest otherwise He did submit that the child tax credits should also be taken into account in this part of the exercise, but that is not what paragraph 17.40 says (para 36) He also referred to a new point which Mr Stark had sought to introduce in post hearing written submissions related to changes in the relative treatment of income support and child tax credit. So far as he understood it, this seemed to him to depend on a strained and implausible construction of the guidance itself, but in any event he accepted the authoritys submission that it was too late to raise it (para 37). The submissions in this court For the appellant, Mr Stark, with the support of Mr Westgate QC for the interveners, asks the court to look at the issues in this case against a background in which shortfalls between contractual rent and maximum levels of housing benefit have become common for a number of reasons, in both the private and social rented sectors, because of developments in social security policy. These include the local housing allowance size criteria and the social sector size criteria (the spare room subsidy / bedroom tax rules); contractual rent exceeding local broad rent levels for local housing allowance, originally set at the 50th centile of local reference rents but reduced to the 30th centile in 2011; the freezing of local reference rent rates from 2012 to 2013, and 2016 to 2020; and the benefit cap. He refers to evidence of the increasing incidence of homelessness linked to inability to afford rents. For example, the National Audit Office report, Homelessness (HC 308, 2017) identified a threefold increase since 2010 2011 in the number of applicants as a result of the ending of an assured shorthold tenancy. The report observed: 1.16. In all cases front line staff said that the key reason why people were presenting as homeless was the end of tenancies in the private rented sector. They said that this was due to increases in rents in the private sector, and a decline in peoples ability to pay these rents. This decline in ability to pay was said to be partly due to welfare reforms. Against this background, although he makes a number of related points, Mr Starks underlying submission is that it was wrong in principle for the council to treat Ms Samuels non housing benefit as containing a surplus which could be treated as available to make up shortfalls in housing benefits. More specifically he submits (in the words of his written case): The respondent failed to correctly apply the 1996 Order. Rather than add all income and subtract all reasonable expenditure, it treated the appellants housing benefit as hypothecated for rent, then asked whether the gap between housing benefit and rent could be bridged from other income Linked to this was a submission (supported by the interveners) that the council had failed to pay regard to paragraph 17.40, as correctly interpreted. It was submitted that the reference to a residual income less than the level of income support must be taken as not limited to income support in the strict sense, but as including amounts available in respect of the children, by way of child benefit or child tax credit. This, he says, is necessary to give effect to the obvious policy of the guidance, which is apparent also from the reference to the amount varying according to the composition of the applicants household. It would make no sense to recommend the use of her income support on its own, as a recommended guide to the reasonable family expenditure which must take account of the needs of the children. This interpretation is also necessary, it is said, to avoid arbitrary differences between different claimants. In this respect paragraph 17.40 must be understood against the background of changes in the treatment of benefits for claimants with children such as Ms Samuels. These changes occurred since the Code was first issued in 1999, and re issued in 2002, with paragraph 17.40 in substantially the same form. (The only change from 2002 was the omission of the word significantly before the words less than the level of income support). The changes are described in detail in the evidence of Ms Garnham, Chief Executive of CPAG. I can conveniently take the summary from Mr Westgate QCs submission for the interveners: Prior to April 2004, income support recipients with children would have received family premiums and dependent child additions as part of their claim (old style support). After April 2004, new income support recipients with children would no longer receive these additional payments in respect of children as part of their income support award but would instead have received Child Tax Credit instead (new style support). It was stated Government policy that there should be an equivalence between old style income support rates for children and child tax credit rates. The shift was not intended to disadvantage families who receive new style support, ie income support for the parent and child tax credit for each of the children. This change did not affect those who had been continuously receiving income support. According to the official statistics cited by Mr Stark, in 2006 when the Code was issued, the majority of claimants were still receiving income support including amounts for children. For that group, it would have been clear that the full amount of income support, including the amounts for children, would be taken into account. Although the proportion of claimants on the old arrangements had reduced to 1 in 20 by 2011, the wording of paragraph 17.40 remained the same. But it cannot have been intended that the advice in the paragraph should apply in a different way to the two groups, simply because of a change in the way their benefits were presented. Indeed to do so would be both irrational and discriminatory (in terms of articles 8 and 14 of the Human Rights Convention). More generally, Mr Stark submits that the benefits are intended as no more than the officially prescribed subsistence level (see Humphreys v Revenue and Customs Comrs [2012] UKSC 18; [2012] 1 WLR 1545, para 3 per Lady Hale). They are designed to cover necessary living expenses of the family. They cannot properly be treated as notionally available to make up a shortfall between housing benefit and rent. Thus in Mathieson v Secretary of State for Work and Pensions [2015] UKSC 47; [2015] 1 WLR 3250, para 15 (which concerned the cost occasioned by the prolonged stay in hospital of a disabled child, in a case where the family were receiving income support with child benefits and child tax credit), Lord Wilson observed that income support brought the familys economy up to, but not beyond, subsistence level; and that the Secretary of State had conceded that there would have been no surplus available to meet such extra expenditure as the family might incur as a result of [their child being admitted to hospital]. He relies also on what was said by Henderson J in Burnip v Birmingham City Council [2012] EWCA Civ 629; [2013] PTSR 117, para 45: it is necessary to draw a clear distinction between the benefits which Mr Burnip was entitled to claim for his subsistence, and those which he was entitled to claim in respect of his housing needs. It would therefore be wrong in principle, in my judgment, to regard Mr Burnips subsistence benefits as being notionally available to him to go towards meeting the shortfall between his housing related benefits and the rent he had to pay. Although these statements were made specifically with reference to income support, it cannot have been intended that benefits related to children would be treated less favourably. Further, to do so would be inconsistent with the authoritys duty to have regard to the need to safeguard and promote the welfare of children (Children Act 2004 section 11(2); and see Nzolameso v Westminster City Council (Secretary of State for Communities and Local Government intervening) [2015] UKSC 22; [2015] PTSR 549, paras 22 30). In support of these submissions Mr Westgate refers to more recent statements in the government White Paper Universal Credit: welfare that works (DWP, November 2010 CM 7957). He refers to chapter 2 (Universal Credit: a new approach to welfare) which states: The personal amount is the basic building block of Universal Credit as it is in existing benefits. The purpose of the personal amount is to provide for basic living costs. It will broadly reflect the current structure of personal allowances in Income Support, Jobseekers Allowance and the assessment phase of Employment and Support Allowance, with single people and couples getting different rates. (para 19) The Government is committed to providing the financial support less well off families need to cover childrens living costs. We will therefore include fixed amounts within Universal Credit to provide for these costs. The amounts will be based on those currently provided through Child Tax Credit. They will be additional to Child Benefit. (para 38, emphasis added) Thus says Mr Westgate the personal allowance provides for no more than basic living costs while the amounts for children provide the support which the families need to cover (their) living costs. Although those passages are related directly to Universal Credit, the passages make clear that the policy approach as respects the purpose, and the level of, benefits has not changed from the previous system. Finally, Mr Westgate relies on the evidence of Polly Neate, Chief Executive of Shelter, as to the lack of any generally accepted guidance for authorities to assess the reasonableness of living expenses under the Suitability Order. Shelters research shows a wide variety of practice among housing authorities, and the absence of any transparent or evidence based guidance for that purpose. According to her evidence, 60% of authorities told Shelter that they have no internal guidance to assist them; only 17 of the 246 authorities who responded to Shelters Freedom of Information Act requests provided any training to housing decision makers on affordability assessment; and 43 of the 105 authorities who had some form of guidance or policy relied on one of three published guides on expenditure: (i) the Standard Financial Statement (SFS); (ii) the Common Financial Statement (CFS); or (iii) the Association of Housing Advice Services (AHAS) guideline figures. According to Ms Neate, none of these is designed for assessing affordability under the Housing Act, and they are subject to other concerns described in her evidence. In response to the appellants submissions, Mr Manning for the council adopts the reasoning of the Court of Appeal. The review officer correctly applied the approach of the 1996 Order, which required him to consider all sources of income, including social security benefits of all kinds. There was nothing in the Order, or any other policy statement, to support Mr Starks central thesis that non housing welfare benefits cannot be used to meet housing costs, nor taken into account in assessing the affordability of rented accommodation. Had it been intended that any category of non housing benefits should be excluded from consideration, it would have been easy so to provide. In the absence of such provision, it is not for the authority to investigate the policy from time to time behind particular benefits. The arguments based on the history of paragraph 17.40 of the Code, he submits, are not supported by the wording of the paragraph. The specific reference to tax credits in paragraph 17.39 shows that the author had the changes well in mind. The authoritys duty to have regard to the Code does not require, or entitle, it to search for interpretations which are not clear on a natural reading of the wording, nor to assume a meaning of income support based on a previous version of benefits law. Statements in the authorities to the effect that income support was set at subsistence level were made in different statutory contexts. In any event, child tax credit and child benefit are not subsistence benefits in that sense (see Humphreys supra para 22; R (PO) v Newham London Borough Council [2014] EWHC 2561 (Admin), paras 45 46). Discussion It is unfortunate that the submissions for the appellant, and in particular the arguments based on the interpretation of paragraph 17.40, seem to have been fully developed for the first time in this court. We do not therefore have the full benefit of the experience in this field of the Court of Appeal. Although Mr Westgates submissions and the supporting evidence for the interveners have provided some valuable background to the legal issues, we must bear in mind that this is an appeal relating to a particular decision, made more than five years ago, on the information then available to the council, not a general review of the law and policy in this field. There is an attraction in the argument that references to income support in paragraph 17.40 should be understood in the sense in which that expression was apparently used at the time of the earlier versions of the Code. It seems surprising, even nonsensical, that the level of income support should be maintained as a guide to affordability, but without regard to the changes which excluded from income support any allowance for the children of the family. However, those issues are not in my view critical to the resolution of this appeal. I would start from the terms of the 1996 Order itself. On the one side it requires the authority to take into account all sources of income, including all social security benefits. I agree with Mr Manning that there is nothing in the Order which requires or justifies the exclusion of non housing benefits of any kind. On the other side it requires a comparison with the applicants reasonable living expenses. Assessment of what is reasonable requires an objective assessment; it cannot depend simply on the subjective view of the case officer. Furthermore, as Mr Stark submits, affordability has to be judged on the basis that the accommodation is to be available indefinitely (see R (Aweys) v Birmingham City Council [2009] WLR 1506; [2009] UKHL 36). Guidance is provided by paragraph 17.40, where the Secretary of State recommends authorities to regard accommodation as unaffordable if the applicants residual income would be less than the level of income support (para 6 above). Even if that recommendation in respect of income support is not interpreted as extending to benefits for children, the lack of a specific reference does not make the level of those benefits irrelevant. As the authorities referred to by Mr Stark (para 26 above) show, benefit levels are not generally designed to provide a surplus above subsistence needs for the family. If comparison with the relevant benefit levels is material to the assessment of the applicant, it is difficult to see why it should be any less material in assessing what is reasonable by way of living expenses in relation to other members of the household. Relevant also is the duty under the Children Act to promote and safeguard the welfare of children. The guidance makes clear, as one would expect, that amounts will vary according to the circumstances and composition of the applicants household. Further, it is to be noted that, immediately after the reference to the household, there is a reference to a current tariff in respect of such benefits (plural), which suggests that the tariff may be looked at in respect of benefits other than income support, and is at least a good starting point for assessing reasonable living expenses. That was not how the review officer dealt with Ms Samuels case. He asked whether there was sufficient flexibility to enable her to cope with the shortfall of 151.49 between her rent and her housing benefit. However, the question was not whether, faced with that shortfall, she could somehow manage her finances to bridge the gap; but what were her reasonable living expenses (other than rent), that being determined having regard to both her needs and those of the children, including the promotion of their welfare. The amount shown in the schedule provided by her solicitors (1,234.99) was well within the amount regarded as appropriate by way of welfare benefits (1,349.33). In the absence of any other source of objective guidance on this issue, it is difficult to see by what standard that level of expenses could be regarded as other than reasonable. For these reasons in my view the appeal should be allowed and the review decision must be quashed. Mr Stark has not in his submissions invited us to give any further relief at this stage. I would however add that, in the light of the law as I have endeavoured to explain it, and on the information available to us, I find it hard to see on what basis the finding of intentional homelessness could be properly upheld. I therefore express the hope that, five years on, the process can be short circuited, and the council will on reconsideration be able to accept full responsibility under Part VII for Ms Samuels and her family. Postscript more recent developments For completeness, since this judgment may be relevant in future cases, I note that in the time since the councils decision there have been significant changes to the law and policy in this area. The Welfare Reform Act 2012 effected a radical overhaul of the benefits system, with the introduction of Universal Credit. When fully in force it will replace the existing system of means tested benefits and tax credits with a single payment. Awards under the new scheme comprise a standard allowance, with additional amounts for children, housing and other particular needs. Another significant change in 2017 was the Homelessness Reduction Act 2017, which among other things was designed to involve authorities at an earlier stage in preventing homelessness. In connection with the new legislation the government undertook a review of the Homelessness Code of Guidance, for which purpose it consulted on a revised draft published in October 2017. Under affordability, paragraph 17.40 was replaced by the following much shorter version: 17.45 Housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials specific to their circumstances. There was no reference to the use of welfare benefits as a guide. The governments consultation response dated February 2018 recorded a significant number of requests from all stakeholder groups for further guidance on assessing the affordability of accommodation, and that it had been decided to include additional information on assessing affordability for a person based on Universal Credit standard allowances in chapter 17. The revised paragraph of the 2018 Code as issued reads: 17.46 Housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials specific to their circumstances. Housing costs should not be regarded as affordable if the applicant would be left with a residual income that is insufficient to meet these essential needs. Housing authorities may be guided by Universal Credit standard allowances when assessing the income that an applicant will require to meet essential needs aside from housing costs, but should ensure that the wishes, needs and circumstances of the applicant and their household are taken into account. (Emphasis added) It will be noted that this is no longer a recommendation but merely something which may be used as guidance; and that the suggested comparison is with Universal Credit standard allowances. The court did not hear argument on whether this is limited to a standard allowance payable to adults or whether it includes amounts payable in respect of children. It is not clear from the consultation response whether the new form of wording followed any discussion of the issues raised in this appeal or highlighted in the interveners evidence. That evidence shows what appears to be an unfortunate lack of consistency among housing authorities in the treatment of affordability, and a shortage of reliable objective guidance on reasonable levels of living expenditure. It is to be hoped that, in the light of this judgment, the problem will be drawn to the attention of the relevant government department, so that steps can be taken to address it and to give clearer guidance to authorities undertaking this very difficult task. |
This appeal is concerned with the operation of the disciplinary procedures for doctors and dentists in the National Health Service, which the Secretary of State for Health introduced over eight years ago. It raises an important question about the roles of the case investigator and the case manager when handling concerns about a doctors performance. The relevant procedures In December 2003 the Secretary of State for Health exercised his powers under section 17 of the National Health Service Act 1977 to give directions called the Restriction of Practice and Exclusion from Work Directions 2003. These required all NHS bodies to comply with a document which set out new procedures for the initial handling of concerns about doctors and dentists in the NHS (Health Service Circular 2003/12). Those procedures became parts I and II of the framework for disciplinary procedures for doctors and dentists in the NHS which was agreed by the Department of Health, the British Medical Association and the British Dental Association and was issued in February 2005. By the Directions on Disciplinary Procedures 2005 the Secretary of State directed all NHS bodies in England and Wales to implement the full version of the framework contained in a document called Maintaining High Professional Standards in the Modern NHS (MHPS). The principal relevant innovations in MHPS were: (1) An employing trust took on responsibility for disciplining doctors and dentists whom it employed; (2) Doctors and dentists were made subject to the same locally based misconduct procedures as other staff members; (3) The same disciplinary procedures applied to all doctors and dentists employed in the NHS; (4) The new disciplinary procedure replaced the disciplinary procedures contained in circular HC(90)9, which I discuss in paras 16 and 17 below; and (5) There was a single process for dealing with concerns about the professional capability of a doctor or dentist, which tied in with the work of the National Clinical Assessment Authority (NCAA). This involved the preparation of an action plan to address the concerns about capability. But if that plan had no realistic chance of success, there would be a capability hearing before a panel. MHPS recognised the importance of doctors and dentists keeping their skills and knowledge up to date. It expressed a preference for tackling concerns about the performance of a doctor or dentist by training and other remedial action rather than solely through disciplinary action. But it did not seek to weaken accountability or avoid disciplinary action where there was genuinely serious misconduct. It recognised that, where serious concerns were raised, the paramount duty was to protect patients. MHPS provided that where concerns arose about a practitioners performance, the medical director was to liaise with the head of human resources to decide the appropriate course of action. This involved the identification of the nature of the problem or concern and consideration whether it could be resolved without resort to formal disciplinary procedures. Where the concerns related to clinical directors or consultants, the medical director was to be the case manager and was responsible for appointing a case investigator. It was the task of the case investigator to investigate the allegations or concerns and report within four weeks. Paragraph 12 of Part I of MHPS stated: The case investigator is responsible for leading the investigation into any allegations or concerns about a practitioner, establishing the facts and reporting the findings. It was the responsibility of the case investigator to decide what information needed to be gathered and how it should be gathered. It was envisaged that this could involve both written statements and oral evidence. The practitioners who were the subject of investigations were entitled to see a list of the people whom the case investigator would interview. The practitioners were to be given an opportunity to put their view of events to the case investigator and were to have the opportunity to be accompanied when they did so. The case investigators report was to give the case manager sufficient information to enable him or her to decide whether, among other things: (i) there was a case of misconduct which should be considered by a disciplinary panel; (ii) there were concerns about performance that should be explored by the NCAA; (iii) there was a need to consider restrictions on the practice of the practitioner or his or her exclusion from work; and (iv) there were intractable problems about performance which should be put before a capability panel. Part III of MHPS provided guidance on conduct hearings and disciplinary procedures. Every NHS employer was to have a code of conduct or staff rules which set out acceptable standards of behaviour. Breaches of those rules were to be treated as misconduct. Issues of misconduct were to be dealt with by the employing NHS body under its own conduct procedures. Employers were advised to seek the advice of the NCAA particularly in cases of professional misconduct. In 2005 the NCAA changed its name to the National Clinical Assessment Service (NCAS) when it became part of the National Patient Safety Agency. It is now an operating division of the NHS Litigation Authority. The Trusts implementation of MHPS In March 2007 the West London Mental Health NHS Trust (the Trust) implemented the Secretary of States directions by introducing a policy for handling concerns about a doctors performance (policy D4A) and by amending the disciplinary policy (D4) which it introduced in July 2001. The latter policy set out guidance on the conduct of staff in its staff charter (appendix 3 of policy D4). That guidance included as a value Preserve Confidentiality and stated as example behaviour the following: Uphold the Trusts policies on freedom of and disclosure of information. Do not abuse knowledge. Use appropriate private locations for discussions of a personal nature and use e mail correspondence cautiously. The disciplinary policy (D4), as amended, applied to all of the Trusts employees. It stated, at para 3.1: It is a fundamental principle of all disciplinary action that employers and managers must act in a way which an objective observer would consider reasonable It provided that the member of staff had to be told in writing of the complaint in advance of any disciplinary hearing (para 3.6) and stated that no formal hearing should be convened until there was sufficient evidence to suggest that there was potentially a case to answer (para 3.8). In para 13 it identified misconduct which might result in disciplinary action under three categories: minor, serious and gross. Serious misconduct was defined as misconduct which is not so severe as to warrant dismissal but is too serious to be considered as minor. In para 13.4.1 it described gross misconduct in the following terms: Some instances of misconduct/poor performance will be so serious as to potentially make any further relationship and trust between the Trust and the employee impossible. It listed typical examples of such conduct. In January 2011, after the events which gave rise to disciplinary proceedings in this case, the Trust amended that list with effect from 28 March 2011 to include: serious breaches of information governance with regard to data protection, confidentiality and information security. The policy also set out in section 15 and appendix 5 a fair blame procedure which could apply when the potential conduct or performance issues do not constitute serious or gross misconduct. Appendix 6 set out guidance for managers for investigations under the disciplinary policy. In para 1.1 it stated Before disciplinary action is taken, it is essential to establish the facts through an investigation. In para 2, it answered the question Why is the investigation important? thus: 2.1 to establish as far as practicable what has happened and why. 2.2 to ensure future decisions are rational and made on the basis of evidence. 2.3 to meet the requirement to demonstrate that natural justice has been observed. 2.4 to form the basis of any case presented to a Disciplinary Panel. 2.5 to ensure decisions made by the trust are capable of scrutiny either through an internal appeal or by an Employment Tribunal or court of law. The appendix advised the manager carrying out the investigation on how to conduct and record interviews and on the preparation and content of the investigatory report. Para 5 stated that the investigatory officer would be required to present findings to a formal hearing if there is a prima facie case of misconduct and their report would form the basis of their verbal presentation. In para 9 the guidance stated that the report should contain conclusions, including whether there was a disciplinary case to answer at a formal hearing. It stated that the conclusion might suggest whether the misconduct (if proven) could constitute serious or gross misconduct, or whether the Fair Blame procedure should apply. The report was to have appendices including records of witness interviews and statements (para 10). Para 11 instructed the investigatory officer to ensure that key witnesses were available for the hearing before the disciplinary panel to enable their evidence to be scrutinised by the employee and the panel. Policy D4A, which related to doctors and dentists, replaced the disciplinary procedures in circular HC(90)9. It provided in section 1 that where a serious concern arose about the conduct or capability of a doctor or dentist, the chief executive would appoint a case manager, whose first task was to identify the nature of the problem and assess the seriousness of the issue on the information available. In deciding how to proceed, the chief executive was to consult the director of human resources, the medical director and the NCAS (para 1.8). Where it was decided to follow a formal route, the medical director was to appoint an appropriately experienced person as case investigator. Para 1.13 provided that the case investigator was responsible for leading the investigation into any allegations or concerns about a practitioner, establishing the facts and reporting the findings. The case investigator was charged with collecting sufficient written statements and oral evidence to establish a case before it was decided whether to convene a disciplinary panel. He or she had to keep a written record of the investigation, the conclusions reached and the course of action agreed by the director of human resources and the medical director. The case investigator did not decide on what action should be taken and would not be a member of a disciplinary panel in the case (para 1.14). The purpose of the investigation was to ascertain the facts in an unbiased manner (para 1.17). The case investigator was to complete an investigation within four weeks and thereafter to submit a report to the case manager, giving sufficient information to enable the latter to decide, among other things, whether there was a case of misconduct that should be put to a conduct panel (para 1.19). Part 3 of policy D4A provided that Misconduct matters for doctors and dentists, as for all other staff groups, are dealt with under the trusts disciplinary policy and procedure, D4, but that the Trust was to contact the NCAS for advice before proceeding when the concerns related to a medical practitioner. Para 3.2 spoke about alleged misconduct being investigated under the Trusts disciplinary policy. In my view, the succinct provisions in policy D4A relating to the investigation need to be read alongside the provisions relating to investigations in policy D4, and in particular in appendix 6, which I have summarised in para 11 above and which cover the same ground in more detail. If there are any inconsistencies between the two policies, D4A will govern as the policy specific to doctors and dentists. Part 4 of policy D4A set out procedures for dealing with concerns about capability, such as incompetent clinical practice, inability to communicate effectively with colleagues and ineffective clinical team working skills. In short, the policy provided for consultation with the NCAS and, where possible, the remediation of any lack of capability identified in an assessment through an agreed action plan to provide education and support. Where problems of capability were so serious that no such action plan had a realistic prospect of success, the case manager, informed by the investigation report and the advice of the NCAS, would have to decide whether there should be a capability hearing before a panel (para 4.12). Such a hearing could result in the termination of the practitioners employment (para 4.23). Para 4.5 gave guidance on how to proceed where issues of conduct and capability were involved. It provided: It is inevitable that some cases will cover both conduct and capability issues. It is recognised that these cases can be complex and difficult to manage. If a case covers more than one category of problem, they should usually be combined under a capability hearing although there may be occasions where it is necessary to pursue a conduct issue separately. Although it is for the Trust to decide upon the most appropriate way forward having consulted the NCAS[,] [i]n the event of a dispute the practitioner may make representations to the designated board member. The individual is also entitled to use the Trusts grievance procedure if they consider that the case has been incorrectly classified. The new investigative procedures were materially different from those in the previous disciplinary procedure set out in circular HC(90)9. The earlier procedure involved first a decision by the chairman of a public health authority whether there was a prima facie case against the practitioner. If the chairman decided that there was a prima facie case but the facts were disputed, the authority responsible for appointing the practitioner could set up an investigating panel, normally of three persons and with a legally qualified chairman who was not an officer of the Department of Health or the authority. The task of the investigating panel was to establish all the relevant facts of the case (para 11). The practitioner had a right to appear and be legally represented at the hearing. A lawyer would adduce the evidence on behalf of the authority; the practitioners lawyer would cross examine the authoritys witnesses; and the practitioner could call his own witnesses, who would be subjected to cross examination. The investigating panel produced a report, making findings of fact, and determining whether the practitioner was at fault. The panel was entitled to recommend disciplinary action. Although policy D4A used similar language to circular HC(90)9 when it spoke of the case investigator establishing the facts, the case investigators role is more limited than that of the investigating panel under circular HC(90)9, which could be described as quasi judicial in nature. The latter made findings of fact after hearing evidence which would often have been tested by cross examination. The authority then acted on the facts which the investigating panel had determined. By contrast, under policies D4A and D4 the case investigator enquires into the facts by interviewing people, and the practitioner is not able to test their accounts of events during the investigation. The outcome of the investigation is a report on whether there is a prima facie case of misconduct. Thereafter, if the case manager decides that it is appropriate, the facts are determined at a hearing before a conduct panel, where the practitioner may be represented, test the evidence of the management witnesses, and call his or her own witnesses (policy D4 appendix 8). The events in this case Dr Chhabra was first employed by the Trust as a consultant forensic psychiatrist at Broadmoor Hospital, which is a high security unit, on 3 September 2009. There was a written contract of employment dated 26 October 2009. Clause 3 of that written contract provided: Whilst it is necessary to set out formal employment arrangements in this contract, we also recognise that you are a senior and professional employee who will usually work unsupervised and frequently have the responsibility for making important judgements and decisions. It is essential therefore that you and we work in a spirit of mutual trust and confidence. The clause then listed several mutual obligations, including cooperation and maintaining goodwill. It was common ground that policies D4 and D4A were incorporated into the contract of employment so far as they were apt for incorporation. Shortly after her appointment, problems emerged in her relationship with her clinical team. In October 2009, negative feedback from members of her team caused her line manager to have concerns about her clinical team working skills. As a result of the continued expression of concerns it was arranged in October 2010 that Dr Chhabra should undergo a 360 appraisal process. Dr Chhabra contended that her case load had been increased contrary to her agreed job plan and that she had been deprived of the support of a senior house officer and a secretary for a number of months. Her line manager, Dr Bhattacherjee, warned her that there might be a formal process if people continued to express concerns about her. In dealing with those issues her line manager took advice from Mr Alan Wishart, the Trusts associate human resources director. On 1 October 2010 a solicitor of one of Dr Chhabras patients submitted a complaint against her. On 1 December 2010, Ms Jo Leech, who was the Head of Secure Services Policy at the Department of Health and had previously worked at Broadmoor Hospital, complained that Dr Chhabra had breached patient confidentiality when travelling by train in the company of another doctor on 24 November 2010. The allegation was that Dr Chhabra, whilst seated opposite Ms Leech in a busy carriage, discussed an incident involving a patient in the secure unit and was reading a medical report on a patient whose name and personal details could be clearly identified. As a result, the Trust suspended her from work. After Dr Chhabra brought proceedings seeking an injunction against her suspension, the Trust allowed her to resume her work at another location in March 2011. Meanwhile, on 15 December 2010 Dr Nicholas Broughton, the Trusts medical director, who was the case manager in relation to the concerns raised about Dr Chhabra, decided to commission an investigation into those concerns. He appointed Dr Amanda Taylor, a consultant forensic psychiatrist from another trust as case investigator. He instructed Dr Taylor to investigate the following four matters: (1) The allegation of breach of patient confidentiality during the train journey on 24 November 2010; (2) An allegation that Dr Chhabra had dictated patient reports when travelling on a train; (3) The concerns about Dr Chhabras working relationship with her clinical team; and (4) The solicitors complaint dated 1 October 2010. After Dr Chhabra expressed concerns that Mr Wishart should not be involved in the investigation, solicitors acting on behalf of the Trust wrote a letter to her solicitors dated 24 February 2011 in which they undertook that Mr Wishart would take no part in the investigation. Dr Taylor carried out her investigation, which included an interview with Dr Chhabra. Unknown to Dr Chhabra, Dr Taylor communicated with Mr Wishart during the investigation. In an email to him dated 29 March 2011, Dr Taylor recorded that Dr Chhabra had admitted the breach of patient confidentiality on the train journey on 24 November 2010 (allegation (1) in para 21 above) and expressed the view that she was unlikely to make the same mistake again. More significantly, Dr Taylor sent Mr Wishart a draft of her report and Mr Wishart prepared suggested amendments to the draft. The amendments, which were extensive, had the effect of stiffening the criticism of Dr Chhabra. Dr Taylor accepted some of the suggested amendments but not others. Among those she accepted was the characterisation as serious of breaches of confidentiality she had described in her report. In June 2011 Dr Taylor completed and signed her report. She found that Dr Chhabra had breached patient confidentiality by having patient documents clearly visible in a public environment during the train journey on 24 November 2010 and by dictating reports, which included patient sensitive information, on a train on other occasions. She recorded Dr Chhabras admission of those breaches. Her report also recorded Dr Chhabras unchallenged account that she had not appreciated at the time that her practice compromised patient confidentiality and that she believed that she had ensured that no other passengers were close by when she dictated the reports. Dr Taylor also reported on an allegation by Dr Chhabras former secretary, which had not been expressly included in her terms of reference, that she had made telephone calls when travelling by train to work in which she had discussed patient information. Dr Taylor did not make any finding on the accuracy of this allegation but recorded that there was a difference of opinion between Dr Chhabra and her secretary. In relation to the third concern (in para 21 above), Dr Taylor stated that there were difficulties within Dr Chhabras clinical team which were issues of capability that needed to be addressed. She concluded that the fourth issue, the solicitors complaint, did not have merit. On 12 August 2011 Dr Broughton wrote two letters to Dr Chhabras solicitors. In one, he informed her that he regarded the concerns about her team working to be matters of capability. He said that he intended to seek the guidance of the NCAS on whether an assessment was needed or whether the Trust would be justified in proceeding to a capability hearing. In the other letter, Dr Broughton stated that the breaches of confidentiality set out in the investigation report were potentially very serious allegations of misconduct which fell within para 8.4 (sic) of policy D4, and he quoted an extract from para 13.4.1 of the January 2011 revision of policy D4 (para 10 above). The charges which he proposed to put to a disciplinary panel included not only the admitted breaches of confidentiality but also (i) the allegation, on which Dr Taylor had noted there had been a conflict of opinion, that Dr Chhabra, while travelling by train, had telephoned her secretary to discuss patient related information, and (ii) an allegation, which was not within Dr Taylors remit and on which she had not reported, that Dr Chhabra had breached patient confidentiality by disclosing information via email to her medical protection society and legal advisers. Dr Broughton expressed the view that the charges were considered to be potential gross misconduct and that dismissal was a possible outcome of the hearing before the disciplinary panel. He also stated his view that the issues of conduct and capability were unrelated and that the conduct allegations were straightforward and discrete. Dr Chhabras solicitors objected to the charge of breach of patient confidentiality by disclosing information to her protection society and her legal advisers, which had not been the subject of Dr Taylors investigation. At their request, the Trust agreed to instruct Dr Taylor to investigate that allegation. Dr Taylor carried out this further investigation and reported that there was no complaint to answer. As a result, on 17 January 2012 Dr Broughton informed Dr Chhabra by letter that that charge would not be pursued at the disciplinary hearing. On 22 December 2011 the Trust referred the teamwork issues (the third matter in para 21 above) to the NCAS. Dr Chhabra invoked the Trusts grievance procedure to complain about the decision to deal with the breaches of confidentiality in advance of the NCAS assessment. Mr Wishart prepared the management case for the grievance hearing. Dr Chhabras grievance was not upheld on first consideration. The panel accepted that there was a possible relationship between the conduct and capability matters but concluded that issues of capability could be presented in mitigation at a conduct hearing. It concluded that the decision to separate the conduct matters from the capability matters was appropriate and necessary. She appealed that decision but her grievance appeal was rejected by letter dated 29 February 2012. The appeal panel concluded that it was necessary to deal with the conduct matters separately because they were discrete and needed to be determined, whatever was the outcome of the capability process. On 6 February 2012 a case conference was held to consider the Trusts capability concerns. The Trust, Dr Chhabra and the NCAS entered into a tripartite agreement under which the Trust referred its concerns to the NCAS for an assessment. Meanwhile, the disciplinary process continued on a separate track. A conduct hearing was fixed for 9 March 2012, but that hearing was discharged after Dr Chhabra sought declaratory and injunctive relief from the High Court on 2 March 2012. That started the legal process which has led to this appeal. The legal proceedings On 1 June 2012 Judge McMullen QC, sitting as a judge of the High Court, granted Dr Chhabra a declaration and injunctive relief, preventing the disciplinary panel from investigating the confidentiality concerns as matters of gross misconduct under the Trusts disciplinary policy. The judge held that Dr Broughton had failed to re assess the gravity of the charges after he received Dr Taylors second report. The Trust had erred and had breached its contract with Dr Chhabra in treating the matters as gross misconduct for which she could be dismissed. He also held that Dr Broughton had broken the contract by referring to the conduct panel charges which were not grounded in Dr Taylors report. The judge also held that the Trust was bound to deal with the matters through the capability procedures under para 4.5 of policy D4A. He expressed the view that, as Dr Chhabra had admitted her mistakes, the case cried out to be dealt with under the fair blame procedure. On 25 January 2013 the Court of Appeal (Pill, Jackson and Treacy LJJ) upheld the Trusts appeal and set aside the order of the judge at first instance. The court held that policies D4 and D4A should be read together and that the applicable rules and procedures had contractual force. The Trust had a discretion whether to combine capability and conduct issues under para 4.5 of policy D4A. Use of the fair blame procedure was encouraged but the Trust had a power to refer disciplinary matters to a conduct panel. The case investigators role was to establish and report the available evidence. The case manager in deciding what action to take was not confined to the findings of fact of the case investigator but could consider complaints supported by evidence reported by the case investigator, even if denied by the practitioner. The conduct panel would resolve issues of disputed fact. It was the task of the case manager to exercise judgement as to the seriousness of the misconduct, having regard to the evidence reported and findings made by the case investigator. The central question was whether the case manager was justified in the circumstances in convening a disciplinary hearing. The court concluded that Dr Broughton was entitled to regard the breach of confidentiality as a potentially serious offence and as a result was justified in deciding to convene the conduct panel. Dr Chhabra appeals to this court. Discussion of the legal challenges The first and most significant issue is the roles of the case investigator and the case manager. The procedures, which MHPS envisaged and which the Trust has set out in policy D4A and the amended policy D4, do not give the case investigator a power to determine the facts. This is, as I have said (paras 16 and 17 above), radically different from the role of the investigating committee under circular HC(90)9. The aim of the new procedure is to have someone, who can act in an objective and impartial way, investigate the complaints identified by the case manager to discover if there is a prima facie case of a capability issue and/or misconduct. The case investigator gathers relevant information by interviewing people and reading documents. The testimony of the interviewees is not tested by the practitioner or his or her representative. In many cases the case investigator will not be able to resolve disputed issues of fact. He or she can only record the conflicting accounts of the interviewees and, where appropriate, express views on the issue. Where, as here, the practitioner admits that she has behaved in a certain way or where there is otherwise undisputed evidence, the case investigator can more readily make findings of fact. If the case investigator were to conclude that there was no prima facie case of misconduct, there would normally be no basis for the case manager to decide to convene a conduct panel. But if the report recorded evidence which made such a finding by the case investigator perverse, the case manager would not be bound by that conclusion. Where the case investigators report makes findings of fact or records evidence capable of amounting to misconduct, the case manager may decide to convene a conduct panel. The case manager can make his or her own assessment of the evidence which the case investigator records in the report. The procedure before the panel enables the practitioner to test the evidence in support of the complaint and any findings of fact by the case investigator. It would introduce an unhelpful inflexibility into the procedures if (i) the case investigator were not able to report evidence of misconduct which was closely related to but not precisely within the terms of reference (as in the former secretarys allegations) or (ii) the case manager were to be limited to considering only the case investigators findings of fact when deciding on further procedure. Similarly, it would be unduly restrictive to require the case manager to formulate the complaint for consideration by a conduct panel precisely in the terms of the case investigators report. I do not interpret MHPS or the Trusts policies in D4 and D4A as being so inflexible or restrictive. The case manager has discretion in the formulation of the matters which are to go before a conduct panel, provided that they are based on the case investigators report and the accompanying materials in appendices of the report, such as the records of witness interviews and statements. But the procedure does not envisage that the case manager can send to a conduct panel complaints which have not been considered by the case investigator or for which the case investigator has gathered no evidence. Thus I consider that the Trust was correct in acceding to Dr Chhabras request for a second report from Dr Taylor in relation to the new allegation of breach of confidentiality in her communications with the protection society and her solicitors. In reaching this view, I am in general agreement with the judgment of the Court of Appeal. I also agree with the Court of Appeal that Dr Broughton would have been entitled to take the view that there was evidence in Dr Taylors report which could amount to serious misconduct and that he could properly have convened a conduct panel on that basis. There is no doubt that patient confidentiality is an overriding principle and is central to trust between patients and doctors (General Medical Council, Good Medical Practice (2006) page 5 and paras 21 and 37, Guidance on Confidentiality (2009), para 6). In my view the evidence in Dr Taylors report on the matters (1) and (2), which I set out in para 21 above, was capable of supporting a complaint of serious misconduct. Where I respectfully differ from the Court of Appeal is that I consider that there have been a number of irregularities in the proceedings against Dr Chhabra which cumulatively render the convening of the conduct panel unlawful as a material breach of her contract of employment. I have four concerns about the procedure which the Trust followed. First, I do not think that the findings of fact and evidence, which Dr Taylor recorded, were capable when taken at their highest of supporting a charge of gross misconduct. Paragraph 13.4.1 of policy D4 speaks of conduct so serious as to potentially make any further relationship and trust between the Trust and the employee impossible. This language describes conduct which could involve a repudiatory breach of contract: Dunn v AAH Ltd [2010] IRLR 709, para 6; Wilson v Racher [1974] ICR 428. There is no material in Dr Taylors report to support the view that the breaches of confidentiality which she recorded, including the former secretarys allegations, were wilful in the sense that they were deliberate breaches of that duty. In my view they were qualitatively different from a deliberate breach of confidentiality such as speaking to the media about a patient. Secondly, in reaching the view that Dr Chhabras behaviour could amount to gross misconduct, Dr Broughton founded on the words added to para 13.4.1 with effect from 28 March 2011, after the incidents in this case. The list of misconduct in para 13.4.1 comprised only typical examples of what the Trust saw as amounting to gross misconduct and was not a comprehensive statement of the concept. But Dr Broughton relied on the amended provision in support of his view that the complaints might amount to gross misconduct and quoted it in his letter of 12 August 2011 relating to the disciplinary procedure (para 24 above). Thirdly, I consider that the Trust breached its contract with Dr Chhabra when Mr Wishart continued to take part in the investigatory process in breach of the undertaking which the Trusts solicitors gave in their letter of 24 February 2011 (para 21 above). In particular, when Mr Wishart proposed extensive amendments to Dr Taylors draft report and Dr Taylor accepted some of them, which strengthened her criticism of Dr Chhabra, the Trust went outside the agreed procedures which had contractual effect. Policies D4 and D4A established a procedure by which the report was to be the work of the case investigator. There would generally be no impropriety in a case investigator seeking advice from an employers human resources department, for example on questions of procedure. I do not think that it is illegitimate for an employer, through its human resources department or a similar function, to assist a case investigator in the presentation of a report, for example to ensure that all necessary matters have been addressed and achieve clarity. But, in this case, Dr Taylors report was altered in ways which went beyond clarifying its conclusions. The amendment of the draft report by a member of the employers management which occurred in this case is not within the agreed procedure. The report had to be the product of the case investigator. It was not. Further, the disregard for the undertaking amounted to a breach of the obligation of good faith in the contract of employment. It was also contrary to para 3.1 of policy D4 as it was behaviour which the objective observer would not consider reasonable: Dr Chhabra had an implied contractual right to a fair process and Mr Wisharts involvement undermined the fairness of the disciplinary process. Fourthly, Dr Broughton did not re assess the decision in his letter of 12 August 2011 that the matters were considered as potential gross misconduct after he departed from the additional complaint once he had received Dr Taylors second report. In my view he was obliged to do so under para 3.1 of policy D4: an objective observer would not consider it reasonable to fail to do so. I am persuaded that the cumulative effect of those irregularities is that it would be unlawful for the Trust to proceed with the disciplinary procedure and that the court should grant relief. As a general rule it is not appropriate for the courts to intervene to remedy minor irregularities in the course of disciplinary proceedings between employer and employee its role is not the micro management of such proceedings: Kulkarni v Milton Keynes Hospital NHS Foundation Trust [2010] ICR 101, para 22. Such intervention would produce unnecessary delay and expense. But in this case the irregularities, particularly the first and third, are of a more serious nature. I also bear in mind that any common law damages which Dr Chhabra might obtain if she were to succeed in a claim based on those irregularities after her employment were terminated might be very limited: Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22 and Geys v Socit Gnrale [2013] 1 AC 523, para 73, Lord Wilson. I do not think that the second irregularity on its own could have justified this courts intervention. I have some doubt whether the fourth irregularity, if it were the only complaint, would in the circumstances have justified injunctive relief. I acknowledge that Dr Chhabra did not plead Mr Wisharts involvement as a ground of her challenge to the decision either at first instance or in the Court of Appeal. Had this been the only successful ground of challenge, I would have viewed it as coming too late as the Trust might have led different evidence in answer before Judge McMullen. But the categorisation of Dr Chhabras conduct as gross misconduct is itself a sufficient ground for injunction. Further, the facts relating to Mr Wisharts involvement were before Judge McMullen, and in the Court of Appeal Pill LJ discussed them in para 62 of his judgment. Where I differ from the judge at first instance is that, like the Court of Appeal, I do not consider Mr Wisharts involvement to be a minor irregularity. Where I differ from the Court of Appeal, is that I do not think that Dr Taylors acceptance of some of his suggested amendments and her good faith materially reduce the seriousness of the procedural irregularity. I deal briefly with three further submissions which Mr Sutton advanced on behalf of Dr Chhabra. First, I consider that the Trust was not obliged to consider the operation of the fair blame procedure in appendix 5 of policy D4 (para 10 above) because the Trust was entitled to view the allegations against Dr Chhabra, if established, as constituting serious misconduct. Secondly, the Trust had a discretion under para 4.5 of policy D4A (para 15 above) whether to combine issues of capability and conduct in a capability hearing. The Trusts decision that it was appropriate to convene a conduct panel for the discrete complaints about Dr Chhabras conduct was within its discretion. I construe the guidance in that paragraph, when it speaks of there being occasions when it is necessary to pursue a conduct issue separately, as referring to what is appropriate in the circumstances rather than a test of strict necessity. Such a test would not be consistent with the subsequent reference to the Trust deciding upon the most appropriate way forward. It is not necessary for me to decide whether these clauses are apt for incorporation into the contract of employment or are mere guidance. Thirdly, I consider the irregularity of the proposed inclusion of the additional complaint in the reference to the conduct panel (para 24 above) was cured by the Trusts decision on 17 January 2012 not to pursue that complaint. I would allow the appeal and substitute for Judge McMullens orders an order restraining the Trust from (a) pursuing any of the confidentiality concerns contained in the Trusts letter of 12 August 2011 as matters of gross misconduct and (b) pursuing any confidentiality concerns without first re starting and completing an investigation under its policy D4A. |
From time to time cases come before the courts that try the patience of even the most phlegmatic of judges. This, I fear, is one of them. On the one side there is an articulate and determined litigant who suffers from an implacable belief that his case has not been dealt with justly and, because he has run out of money, cannot afford to be represented. On the other is an opposing party for whom these proceedings have been dragging on for far too long and which has little or no prospect of recovering any of its expenses. One may regret the situation in which that party finds itself. But our basic common law rule that a party is entitled to a fair hearing applies not only to those whom the court finds it easy to deal with, but to everyone. That is the standard the judges who have dealt with this case in the Court of Session set for themselves at each stage in the proceedings, as their carefully reasoned opinions amply demonstrate. So, had it not been for an order that they made because they regarded the proceedings as incapable of achieving anything of value, the case would not have been open to consideration by the Supreme Court at all. As it is, the course they took has raised the possibility which this court cannot ignore that the interlocutor which they pronounced may, after all, be appealable. Mr and Mrs Politakis are the directors and the only shareholders of Apollo Engineering Ltd (Apollo). They wish to appeal to this court against two interlocutors that were pronounced in a case that was stated for the opinion of the Court of Session under section 3 of the Administration of Justice (Scotland) Act 1972 (the 1972 Act) on 28 September 2007. The case had been stated on the application of Apollo before section 3 of the 1972 Act was repealed by paragraph 1 of Schedule 2 to the Arbitration (Scotland) Act 2010. The arbitration proceedings to which the stated case related arose out of a contractual dispute between Apollo and James Scott Ltd about pipe construction work which Apollo had been carrying out for James Scott Ltd in 1990 at Coulport. James Scott Ltd are the respondents to these proceedings. On 18 January 2012 an Extra Division of the Inner House (Lady Paton and Lords Reed and Bracadale) refused a motion enrolled by Mr Politakis in his own name, as Apollo had run out of funds and could no longer afford legal representation: [2012] CSIH 4. He had asked the court to make an order under article 6 of the European Convention on Human Rights which would allow him to represent the company. He was invited to make submissions on his own behalf, and he did so both orally and in writing. The court held that it was well established by the authorities that Scots law does not permit a company to be represented by a director or an employee of the company. It can be represented only by an advocate or a solicitor with a right of audience: Equity and Law Life Assurance Society v Tritonia Ltd 1943 SC (HL) 88; Secretary of State for Business, Enterprise and Regulatory Reform v UK Bankruptcy Ltd 2011 SC 115. The Extra Division also held by a majority (Lord Reed and Lord Bracadale differing in this respect from Lady Paton) that, as the issues in the case were complex and it was unlikely that the appeal could be presented effectively by anyone without legal qualifications, article 6 did not require that Mr Politakiss motion should be granted. As he was not suitably qualified, this would not provide the company with an effective right of access to the court: Airey v Ireland (1979) 2 EHRR 305. On 27 November 2012 the Extra Division (Lady Paton and Lords Menzies and Bracadale) pronounced a further interlocutor which dealt, among other things, with an opposed motion which had been enrolled by James Scott Ltd for the stated case to be dismissed: [2012] CSIH 88. It was in these terms: The Lords, having resumed consideration of the cause, refuse Mr Politakis leave to appeal to the Supreme Court; refuse the motion enrolled by Mr Politakis in June 2011 and amended on 18 April 2012 to sist himself in room and place of Apollo Engineering Limited; refuse the alternative motion to sist himself as a party to the court and arbitration proceedings; find Apollo Engineering Limited liable to the respondents James Scott Limited in the expenses of the two day hearing held on 7 and 8 July 2011, said expenses to be paid out of the sum held as caution for Apollo Engineering Limited by the Accountant of Court; remit an account thereof, when lodged, to the Auditor of Court to tax; dismiss the Stated Case and decern; reserve meantime any question of expenses in that process insofar as not already dealt with. That interlocutor, leaving aside the orders about expenses, fell into three parts. First, Mr Politakis was refused leave to appeal to this court against the interlocutor of 18 January 2012 refusing his application to represent his company. Second, his attempts to sist himself as a party to the proceedings were rejected. That would have enabled him to represent himself, as a natural person is entitled to present his own case. But he was not a party to the arbitration or to the contract with James Scott Ltd, so there were no grounds for regarding him as entitled to be sisted in these proceedings in his own name. Mr Politakis has not sought leave from the Inner House to appeal against this part of the interlocutor. Third, the stated case was dismissed, so the proceedings in the stated case were brought to an end. The Extra Division did not give its opinion on the questions in the case, on which it had not heard any argument. It was of the opinion that, since at any future hearing Apollo would be unrepresented, it would be fruitless for it to permit the stated case proceedings to continue: [2012] SCIH 88, para 40. There has been no application for leave to appeal against that part of the interlocutor either. The circumstances in which it is competent to appeal to the Supreme Court against a judgment of the Court of Session are set out in section 40 of the Court of Session Act 1988 (the 1988 Act) which, so far as relevant to this case, provides: (1) Subject to the provisions of any other Act restricting or excluding an appeal to the Supreme Court and of sections 27(5) and 32(5) of this Act, it shall be competent to appeal from the Inner House to the Supreme Court (a) without the leave of the Inner House, against a judgment on the whole merits of the cause, or against an interlocutory judgment where there is a difference of opinion among the judges or where the interlocutory judgment is one sustaining a dilatory defence and dismissing the action; (b) with the leave of the Inner House, against any interlocutory judgment other than one falling within paragraph (a) above. (4) On an appeal under this section all the prior interlocutors in the cause shall be submitted to the review of the Supreme Court. The answer to the question whether it is competent to appeal to this court against the interlocutors of 18 January 2012 and 27 November 2012 is not as straightforward as it might have been if the Court of Session had proceeded to answer the questions in the stated case. In John G McGregor (Contractors) Ltd v Grampian Regional Council 1991 SC (HL) 1 it was held that an opinion of the court upon questions of law given on consideration of a case stated under provisions such as those in section 3 of the 1972 Act did not constitute a judgment within the meaning of section 40(1) of the 1988 Act. The House dismissed Grampian Regional Councils petition of appeal as incompetent. But the facts here are different, as the Extra Division did not give its opinion on the questions of law that were before it in the stated case. In this situation two questions arise. The first is whether, having regard to the terms of section 3 of the 1972 Act, the decision in McGregor applies to this case at all. Apollo is not seeking to appeal against any opinion. Its appeal is directed to the fact that the stated case has been dismissed. The second is whether, if the appeal is not incompetent for the reasons given in McGregor, that part of the interlocutor of 27 November 2012 which dismissed the stated case was a judgment against which an appeal to this court is competent under section 40(1) of the 1988 Act without the leave of the Inner House of the Court of Session. The Supreme Court directed that these two questions should be the subject of an oral hearing as to the competency of an appeal against that interlocutor. Mr Politakis was given permission, in the exceptional circumstances of this case, to represent Apollo at the hearing. The court was also assisted by submissions made by Mr Andrew Young QC, who had been appointed at the courts request as an advocate to the court by the Dean of Faculty. Mr Politakis made it clear that he also wished to appeal against the interlocutor of 18 January 2012. But it is plain that this was an interlocutory judgment within the meaning of section 40(1) of the 1988 Act for which the leave of the Inner House was required to appeal against it, and the Inner House has refused his application for leave to appeal. It could be submitted to the review of this court under section 40(4) as one of the prior interlocutors in the cause. But that can only happen if an appeal is competently before this court under section 40(1) in the first place, and if it is necessary to subject the interlocutor to review as part of that appeal. Leave to appeal having been refused by the Inner House, there is no self standing right of appeal against it. Section 3 of the 1972 Act The report of the Appeal Committee in McGregor was given by Lord Jauncey. He said at p 4 that its decision to find that the petition to appeal in that case was incompetent was based on clear authority for the view that an opinion of the court upon questions of law in a case stated under section 3 of the 1972 Act did not constitute a judgment within the meaning of section 40(1) of the 1988 Act. He added that this view was in any event consonant with the ordinary use of language, and that it was supported by various other statutory provisions such as those now to be found in section 27 of the 1988 Act, which enables a special case to be presented to the court for its opinion by parties who are agreed on the facts and are in dispute on a question of law only, and in section 13(2) of the Tribunals and Inquiries Act 1971 which, by making express provision to the contrary, appears to recognise that in general an opinion of the court on a stated case does not constitute a judgment for the purposes of the jurisdiction of the Court of Appeal to entertain appeals. But none of the decisions in the cases to which he referred were concerned with the situation that has arisen in this case, and it is not so obvious that the decision of the Inner House to dismiss the stated case did not constitute a judgment within the meaning of section 40(1) of the 1988 Act. The leading case on this subject, prior to that of McGregor, was In re Knight and the Tabernacle Permanent Building Society [1892] 2 QB 613. The question in that case was whether there was an appeal to the Court of Appeal from a decision of the High Court upon a special case stated by an arbitrator under section 19 of the Arbitration Act 1889. The ratio of the decision is to be found in the judgment of Lord Esher at p 617, where he said: It appears to me that what the statute in terms provides for is an opinion of the court to be given to the arbitrator or umpire: and there is not to be any determination or decision that amounts to a judgment or order. Under these circumstances I think there is no appeal. I base my decision on the words of the statute: but when I consider the result of holding otherwise, I am fortified in the conclusion at which I have arrived. It seems to me that it would be most inexpedient that, where an opinion is given by the court under this statute in the course of a reference for the guidance of arbitrators, there should be an appeal which might be carried up to the House of Lords. Bowen LJ said at p 619 that it appeared to him that the consultative jurisdiction of the court did not result in a decision which was equivalent to a judgment or order. The proposition that the giving by the court of its opinion to the arbitrator is not a determination or decision that amounts to a judgment is easy to understand, but it does not apply to this case as no such opinion was given. Lord Eshers point on expediency also assumes that the court has given its opinion on the questions of law that were before it. It is less easy to see why, if the court has declined to give its opinion, its reasons for reaching that decision should not be open to review by means of an appeal to a higher court. Lord Jauncey also referred to two cases from Scotland. In Johnstons Trustees v Glasgow Corporation 1912 SC 300 the question was whether the sheriff could be required to state a case under the Housing, Town Planning etc Act 1909 after he had given judgment. It was held that it was incompetent for him to do so after he had disposed of the appeal. The court would not then be giving its opinion for the sheriffs guidance, as the sheriff could not recall his judgment and there was no provision in the statute that would allow it to be recalled by the court. Lord President Dunedin observed at p 303 that the issue was absolutely decided by authority both in Scotland and in England. The Scottish case was Steele v McIntosh Brothers (1879) 7 R 192 in which, after reviewing various examples in the statutes, Lord President Inglis said at p 195 that there were some proceedings, as in that case, where all that those stating the case were empowered to do was to obtain the opinion and guidance of the court in the administration of the jurisdiction conferred on them. The English case was In re Knight and the Tabernacle Permanent Building Society. Lord President Dunedin said that the decision in that case was entirely on the same lines as Steeles case. In Mitchell Gill v Buchan 1921 SC 390 it was held that an arbiter who had stated a case for the opinion of the court would be guilty of misconduct if he disregarded the law as stated in its opinion. Agreeing with the other judges that the arbiter was not entitled to disregard it, Lord Skerrington observed at p 398 that this was so even though the opinion could not be enforced or appealed against in the same way as a judgment or decree. None of these cases touch on the question that has to be resolved in this case. The special nature of the proceedings is recognised, but it is assumed in all of them that the court will do what is provided for by the statute and will give its opinion for the guidance of the tribunal by which the case has been stated. Neither Mr Ellis QC for James Scott Ltd nor Mr Young were able to refer us to any authorities that offered assistance as to the situation which we have here where the court has declined to do what the statute provides for. Mr Ellis submitted that it made no sense for an interlocutory decision to be appealed where there was no appeal against a decision answering the questions of law, and Mr Young said to allow a right of appeal in such a case would run counter to the general thrust of section 40 of the 1988 Act which sought to limit appeals to the Supreme Court on procedural matters. But it seems to me that those submissions beg the question whether the part of the interlocutor of 27 November 2012 by which the stated case was dismissed was truly of a procedural or interlocutory character. Our attention was drawn by Mr Young to Lady Cathcart v The Board of Agriculture for Scotland 1915 SC 166, where a reclaiming motion against an opinion of the Lord Ordinary on a stated case was held to be incompetent as the Lord Ordinarys opinion was final, and to Johnston Ferguson v Board of Agriculture 1921 SC 103, where it was held that it was beyond the intention of the legislature for a procedure to be introduced which would allow the opinion of the sheriff to be a matter of appeal to the court. Neither of these cases offers direct assistance on the point at issue. But Lord Skerringtons observation in Lady Cathcarts case at p 168 that in legal language an opinion is one thing and a judgment is another is of some interest. It suggests that an interlocutor which dismisses a case without giving an opinion could be regarded as a judgment for the purposes of section 40(1) of the 1988 Act simply because, if it is not one thing, it must be the other. Mr Ellis suggested that section 3 of the 1972 Act was a provision of a kind referred to in the preamble to section 40(1) of the 1988 Act because, as properly construed, it excluded an appeal to the Supreme Court. As he put it, nothing done within it will give rise to such an appeal. I do not think, however, that this provides an answer to the problem posed by this case. Section 3(1) provides that the arbiter may, on the application of a party to the arbitration, and shall, if the Court of Session on such an application so directs at any stage in the arbitration state a case for the opinion of that Court on any question of law arising in the arbitration. As Lord Jauncey said in McGregor at p 5, the ordinary use of language indicates that an appeal to this court against an opinion of the Court of Session under that section is excluded by necessary implication because it is for the opinion of that court only that the case has been stated. But there is nothing in the language of section 3(1) which addresses the situation where the Court of Session has dismissed the stated case without giving its opinion on the questions that were before it at all. Its role is, of course, simply to answer the questions. And the parties to the arbitration were entitled to make use of the procedure provided for by the statute and, a case having been competently stated under it, to obtain the courts opinion for the guidance of the arbiter. The statute makes no provision for the course of action that the Extra Division felt obliged to take in this case. It seems to me in these circumstances that the question of competency depends on whether that part of the interlocutor of 27 November 2012 which dismissed the stated case was a judgment within the meaning of section 40(1)(a) of the 1988 Act against which there is a right of appeal to this court without the leave of the Inner House. If it is, there being no provision in any other statute of the kind referred to in the preamble to section 40(1), we must conclude that Apollo has a right of appeal under that subsection to which effect must be given so long, of course, as the appeal raises a question which can responsibly be certified by counsel as reasonable. Section 40 of the 1988 Act Section 40(1)(a) of the 1998 Act provides that an appeal from the Inner House to the Supreme Court is competent without the leave of the Inner House in one or other of three kinds of case: (1) where it is an appeal against a judgment on the whole merits of the cause; (2) where it is an appeal against an interlocutory judgment where there is a difference of opinion among the judges; and (3) where the interlocutory judgment is one sustaining a dilatory defence and dismissing the action. An appeal is also competent, but only with the leave of the Inner House, under section 40(1)(b) where it is an appeal against an interlocutory judgment other than one falling within cases (2) and (3) above. The language that section 40(1) uses is not easy to translate into modern legal terminology. As the Lord Justice Clerk, Lord Carloway, explains in his chapter on Decrees and Interlocutors in Macfadyen, Court of Session Practice, Division K, Chapter 1, para [1], it is best to read the words in the context in which they appear and in their historical context. One can take as the starting point the fact that an appeal lies to the Supreme Court from any order or judgment of the Court of Session if an appeal lay from that court to the House of Lords at or immediately before 1 October 2009: Constitutional Reform Act 2005, section 40(3), read together with the Constitutional Reform Act (Commencement No 11) Order 2009 (SI 2009/1604). Section 3(2) of the Appellate Jurisdiction Act 1876 provided that an appeal lay to the House of Lords from any order or judgment of any court in Scotland from which error or an appeal at or immediately before the commencement of that Act lay to the House of Lords by common law or statute. Lord Keith of Kinkel understood this to mean that, as a general rule, every final judgment of the Inner House was appealable to the House of Lords, but that the right might be restricted or excluded by statute: Stair Memorial Encyclopaedia, vol 6, Courts and Competency, para 829. I would take the right of appeal to the Supreme Court to be subject to the same general rule and to the same qualification. The common law right of appeal which had existed since the Treaty of Union of 1707 was not at first under any restriction, and it was too easily open to abuse: see Lord Brodies chapter in The Judicial House of Lords 1876 2009 (2009), Part D, Regional Perspectives, From Scotland and Ireland, pp 282 283. So it was restated and modified by section 15 of the Court of Session Act 1808, which provided that thereafter no appeal to the House of Lords was to be allowed from interlocutory judgments but that such appeals were to be allowed only from judgments or decrees on the whole merits of the cause, except with the leave of the Division of the Judges pronouncing such interlocutory judgments or except in cases where there was a difference of opinion among the Judges of that Division. In Beattie v Glasgow Corporation 1917 SC (HL) 22 the House of Lords held that an interlocutor allowing an issue so that an action of damages could proceed to trial before a jury was an interlocutory judgment which was not appealable without leave. Lord Loreburn observed at p 24 that interlocutory judgments meant judgments which are in substance interlocutory, not those which although in form interlocutory are final in substance. Then, by section 5 of the Court of Session Act 1825, which dealt with the disposal of dilatory defences by the Court of Session, it was provided that it was not to be competent to appeal to the House of Lords against an interlocutory judgment which sustained a dilatory defence where the action was not dismissed, unless express leave be given by the Court. In Ross v Ross 1927 SC (HL) 4, at p 6, Lord Dunedin said that the disability imposed on the House which forbade the hearing of appeals against interlocutory judgments where there had been no difference of opinion in the court below and no leave to appeal had been granted was statutory and could not be got over. But the generality of the right of appeal in cases where it was not restricted or excluded by statute has never been called in question. Interlocutors which are final in substance are, as a general rule, appealable. The wording of section 40(1) of the 1988 Act must be understood against that background. Mr Ellis submitted that the interlocutor of 27 November 2012 was not a judgment on the whole merits of the cause for three reasons. The first was that it was not proper to regard the stated case as the cause. The cause from which the stated case arose was the arbitration. All the Court of Session was asked to do was to offer advice to the arbiter. The second was that the interlocutor was not a judgment of the Inner House because it was an interlocutory decision in a process from which there was no appeal to the Supreme Court. The third was that it was a procedural decision taken in unusual circumstances of the stated case process which did not address the substance of the questions in the stated case at all. I do not think that there is any substance in the second and third of these propositions. The decision to dismiss the stated case cannot be regarded as an interlocutory judgment of the kind referred to in section 40(1)(b) which is appealable only with leave: see Buchanan v Alba Diagnostics 2004 SC (HL) 9, 17. All the issues that were in controversy before the Court of Session were disposed of when the stated case was dismissed. The interlocutor was in substance a final interlocutor because the proceedings were brought to an end by it. They could not continue and the Court of Session was not in a position to retrieve them. For the same reason the decision which the Extra Division took cannot be treated as a procedural decision only. There were, no doubt, procedural reasons for it, as Mr Politakis had been refused permission to represent Apollo and the company was unable to pay for counsel to represent it. One can understand why, in these circumstances, the Extra Division was of the opinion that it would be fruitless for the proceedings to continue. But the effect of the interlocutor was not merely to resolve that issue of procedure. It was to end the proceedings completely as, having dismissed the stated case, the court had exhausted its functions under the statute, save as to resolving any outstanding issues about expenses. As for the first point, the word cause is a word of wide ambit. It is defined in rule 1(3) of the Rules of the Court of Session 1994 as meaning any proceedings. And it does not make sense of section 40(1) of the 1998 Act to regard the cause in question as the arbitration proceedings out of which the application for the stated case arose. The cause in question must be taken to be the cause or matter that was before the Inner House. Section 40 is concerned only with the proceedings in the Inner House in which the interlocutor was pronounced. There is no indication anywhere in the section that it is concerned in any way with proceedings in any lower court or tribunal. The proceedings in the Inner House must be regarded for this purpose, both in form and in substance, as a separate process from the proceedings before the arbiter. The dismissal of the stated case was final, in just the same way as if the interlocutor had encompassed the courts opinion on the questions that were before it: see Davidson v Scottish Ministers (No 3) 2005 SC (HL) 1, paras 12 14. In either case the court had, or would have had, no further functions to perform under the procedure that brought the matter before it. The question then is, which of the three kinds of interlocutor referred to in section 40(1)(a) are we dealing with in this case? For the reasons already given, the interlocutor of 27 November 2012 was not an interlocutory judgment of the second kind. It did not answer the questions in the stated case. But it was final in substance, in the words of Lord Loreburn in Beattie, as it brought the stated case proceedings to an end. This suggests that it was an interlocutor which did actually dispose of the whole merits of the cause. Mr Young suggested that, if we were to conclude that it was not a judgment of that kind, it could be considered to be an interlocutory judgment of the third kind because it sustained a dilatory defence by dismissing the stated case. Mention of this kind of interlocutor made its first appearance in section 5 of the Court of Session Act 1825. It provided that it was not to be competent to appeal to the House of Lords against such a judgment where the action was not dismissed unless express leave was given by the court. But that qualification did not apply where the action was dismissed. The use of the adjective dilatory appears still to have been in common use in 1893: see Mackays Manual of Practice in the Court of Session (1893), where at p 221 the author said: Defences are dilatory or preliminary, and peremptory or on the merits. A dilatory or preliminary defence is one which, if sustained, puts an end to the particular suit, or at least suspends it till some other action is brought and terminated, or some proceeding taken which is necessary before the suit can proceed. Twenty three years later it seems that the use of the adjective preliminary was beginning to predominate: see Maclaren, Court of Session Practice (1916), p 379 where the following description is given: A preliminary or dilatory defence is a defence which does not touch the merits of the case, but is based upon the failure of the pursuer to observe the rules of practice or procedure of the Court before which the cause is brought. The word dilatory does not appear again in the following discussion, and it is not mentioned in the index. It has long since dropped out of the vocabulary of the Court of Session practitioner. It was preserved in section 40(1) as part of the process of consolidation of the previous Court of Session Acts. But it now looks rather odd, and thought might perhaps be given to rewording this part of the subsection at the next opportunity. It is not easy to fit the interlocutor dismissing the stated case into this description. It did not touch the merits of the issues on which its opinion was being sought. The respondents motion for its dismissal, to which the Extra Division gave effect, was based on Apollos inability to fulfil the courts rules of practice about representation. But it would be stretching the language of the statute to say that this objection was a defence, especially as the procedure under section 3 was not one that could, in the ordinary sense of the word, be defended. It may not matter much whether the interlocutor is to be regarded as a judgment on the whole merits of the cause or as one sustaining a dilatory defence, as both are appealable without the leave of the Inner House. On balance, however, I think that would be more correct to regard it as a judgment on the whole merits of the cause within the meaning of section 40(1)(a) of the 1988 Act, even though the Inner House did not address itself to the issues raised in the stated case. Conclusion For these reasons I would hold that Apollo can competently appeal to this court against that part of the interlocutor of 27 November 2012 which dismissed the stated case without the leave of the Inner House. As is the case with all other interlocutors that are appealable without leave however, its petition of appeal must be certified by two counsel as reasonable the test for which is whether the appeal raises arguable points of law which are of general public importance: Uprichard v Scottish Ministers [2013] UKSC 21, per Lord Reed at paras 58 63. It must be emphasised that the question for counsel is not whether the arguments which Apollo would have wished to advance in the stated case were reasonable. That is not an issue which is open for consideration by this court. It was for the Court of Session to give its opinion on the questions that were before it, not this court. The only question which this court can consider is whether the Extra Divisions decision to dismiss the stated case was one which was open to it to take under the jurisdiction given to it by the statute. Unless something has gone seriously wrong, however, this was an exercise of judgment on a matter of procedure with which this court would not normally wish to interfere: McIntosh v British Railways Board (No 2) 1990 SC 339; Girvan v Inverness Farmers Dairy 1998 SC (HL) 1, at 21C G. have been represented so as to avoid the situation that the Extra Division described as fruitless is not before us. But it is a troublesome aspect of this case, and there may be grounds for thinking that the rule which disables a company from being represented other than by counsel or a solicitor with a right of audience needs to be re examined. The rule about representation does not apply to proceedings before an arbiter, as has now been made clear by rule 33 in Schedule 1 to the Arbitration (Scotland) Act 2010 which provides that a party may be represented by a lawyer or any other person: see also rule 41 which enables a party to apply for issues of Scots law arising in an arbitration to be determined in the Outer House. Rules 33 and 41 are, it must be emphasised, default rules. They apply only in so far as the parties have not agreed to modify or disapply them: see section 9 of the 2010 Act. But the fact that they are there suggests that the rule about representation ought not to be applied in cases where they do apply in a way that disables a company which is unable to pay for a lawyer from obtaining the view of the court on such issues. The question whether there was any way in which Apollos interests could |
In these proceedings the appellant, Ms OConnor, a practising barrister, claims damages under the Human Rights Act 1998 against the respondent, the Bar Standards Board (the BSB), alleging discrimination in her enjoyment of the right to a fair trial, in breach of article 14 of the European Convention on Human Rights (ECHR) considered in conjunction with article 6 ECHR. The appellant, who is black, alleges that the BSB discriminated against her on grounds of her race in bringing disciplinary proceedings which ended in her acquittal on appeal in August 2012. On 9 June 2010 the BSB Complaints Committee brought 6 disciplinary charges against the appellant. Charges 1 3 each alleged professional misconduct in that she had conducted litigation by signing a statement of truth on behalf of a party to litigation. Charge 4 alleged professional misconduct in that, in conducting litigation by signing a statement of truth on behalf of a party to litigation, she failed to have regard to Public Access Work Guidance for Barristers, issued by the General Council of the Bar. Charge 5 alleged professional misconduct in that she engaged in conduct discreditable to a barrister by committing an offence under section 70(8) of the Courts and Legal Services Act 1990 as a member of an unregulated limited liability partnership which filed a defence and counterclaim with the claimants solicitor, thereby unlawfully conducting litigation. Charge 6 alleged professional misconduct in that she engaged in conduct likely to diminish public confidence in the legal profession or the administration of justice or otherwise bring the legal profession into disrepute by committing the offence contrary to section 70(8) of the Courts and Legal Services Act 1990 referred to in Charge 5. On 23 May 2011 a Disciplinary Tribunal found Charges 1 5 proved. Charge 6 was dismissed. The appellant appealed to the Visitors to the Inns of Court (the Visitors). (It should be noted that the procedure for an appeal to the Visitors with which we are concerned in this case is no longer in force, having been replaced by an appeal to the High Court. See section 24(1) of the Crime and Courts Act 2013 which came into force on 7 January 2014; Tariq Rehman v The Bar Standards Board [2016] EWHC 1199 (Admin), at para 22, Hickinbottom J.) On 17 August 2012 her appeal was allowed. The Visitors found that none of the conduct alleged against the appellant involved any breach of the Code of Conduct of the Bar of England and Wales. Sir Andrew Collins, delivering the judgment of the Visitors, observed that they had no doubt that none of these charges should stand. In the light of this conclusion it was not necessary for the Visitors to rule on two further submissions, namely that there had been procedural unfairness in the course of the hearing and that there was a lack of reasons in the decision of the tribunal. The Visitors observed, however, that there was in their view considerable force in those submissions. The appellant issued the present proceedings against the BSB on 21 February 2013. The appellant relied on various causes of action including allegations of violation of articles 6 and 14 ECHR, contrary to section 6 of the Human Rights Act 1998. By its defence the BSB denied the appellants allegations and also maintained that the claims under the 1998 Act were time barred. On 9 October 2013 the appellant issued an application for directions. These included an application for permission to amend her particulars of claim and directions for the service of a reply. The draft amended pleading did not answer the BSBs plea that the claim was time barred. The appellant did not serve a reply. On 3 January 2014 the BSB issued an application seeking an order that the statement of case be struck out pursuant to CPR rule 3.4(2) on the grounds that it disclosed no reasonable grounds for bringing the claim or that summary judgment be given in its favour pursuant to CPR Part 24. On 28 March 2014 Deputy Master Eyre heard the application. The BSB maintained that none of the claims had a real prospect of success and that, in any event, the limitation defence was bound to succeed. Deputy Master Eyre granted the application with costs. He held: (1) The allegation is on its face time barred and there is no application to extend the time limits; and (2) So far as the allegation rests on the allegations supporting misfeasance it must fail. (3) The allegation rests also on a general assertion that the defendant is habitually or systematically unfair to black barristers, an allegation which is demurrable. (4) The evidence is quite to the contrary. The appellants appeal was heard by Warby J [2014] EWHC 4324 (QB) who on 18 December 2014 held that there was sufficiently pleaded a case that the BSB indirectly discriminated against the appellant on racial or ethnic grounds by bringing the disciplinary proceedings against her. He did not consider that it was possible for the court to determine that the appellant had no real prospect of establishing that the statistics on which she relied were significant (at paras 63, 65). However, he held (at para 79) that the claim was time barred by section 7(5) of the 1998 Act. Here, the act complained of in the one human rights claim that I have held to be both adequately pleaded and sustainable for the purposes of a summary judgment application is the BSBs prosecution of the appellant. The decision to bring proceedings was taken on 9 June 2010 or at the latest in late July 2010 when the charges were served on the appellant. If time runs from either of those dates then the one year time limit expired some 17 or 18 months before the issue of these proceedings in February 2013. If the BSBs prosecution of the appellant is considered to be a continuing state of affairs up to the tribunal decision, time under section 7 expired in May 2012. Warby J also rejected (at para 81) the submission on behalf of the appellant that the deputy master had been wrong not to grant her an extension of time under section 7(5)(b) of the 1998 Act. The appellant appealed to the Court of Appeal. In its judgment of 25 July 2016 the Court of Appeal (Lord Dyson MR, Elias and Sharp LJJ) [2016] 1 WLR 4085 held that the one year time limit under section 7(5)(a) of the 1998 Act had started to run when the Disciplinary Tribunal had found the charges against the claimant proved and so had expired before she had issued her claim. The Court of Appeal refused a renewed application for permission to appeal on the ground that the limitation period should have been extended pursuant to section 7(5)(b) of the 1998 Act. On 8 December 2016 the Supreme Court granted permission to appeal only in respect of the issue under section 7(5)(a) of the 1998 Act. The following issues arise on this appeal. (1) Are the disciplinary proceedings brought by the BSB against the appellant to be considered a series of discrete acts or a single continuing act for the purposes of section 6(1)(a) of the 1998 Act? (2) Tribunal or with the verdict of the Visitors? If the latter, does that act end with the verdict of the Disciplinary Furthermore, by a respondents notice, the BSB contends that the decision of the Court of Appeal should be affirmed on grounds other than those relied on by that court, namely that Warby J erred in holding that the article 14 claim had a real prospect of success. In this regard, the BSB also seeks permission to adduce new evidence of fact, thereby replicating a respondents notice and related application to adduce new evidence which were before the Court of Appeal. Relevant Provisions Article 6(1) ECHR provides in relevant part: (1) In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Article 14 ECHR provides: The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. Section 6 of the 1998 Act provides in relevant part: (1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right. (6) An act includes a failure to act Section 7 of the 1998 Act provides in relevant part: (1) A person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1) may (a) bring proceedings against the authority under this Act in the appropriate court or tribunal; or (b) in any legal proceedings, rely on the Convention right or rights concerned but only if he is (or would be) a victim of the unlawful act. (5) Proceedings under subsection (1)(a) must be brought before the end of the period of one year beginning with the date on (a) which the act complained of took place; or (b) considers equitable having regard circumstances, such longer period as the court or tribunal to all the but that is subject to any rule imposing a stricter time limit in relation to the procedure in question. The nature of the discrimination claim Before addressing the application of section 7(5)(a) to the present proceedings, it is necessary to consider the precise nature of the discrimination claim which the appellant wishes to make. In particular it is necessary to establish whether the complaint is directed at the conduct of the BSB in bringing and pursuing the prosecution against this appellant or, more generally, at alleged systemic discrimination against BME barristers. The discrimination claim is pleaded in the Particulars of Claim in very general terms which are vague and unclear. The relevant paragraphs provide: 22. The defendant infringed the claimants right to a fair trial on grounds of her race, in breach of article 14 of the Convention. 23. The refusal to allow sufficient time to prepare is in line with the defendants general complaints process which impacts disproportionately on black and ethnic Barristers. Black and ethnic Barristers are more likely to have a complaint referred for disciplinary action, are more likely to be convicted, and are more likely to have those convictions upheld. The claimant avers that the fact that every element of the defendants disciplinary system impacts on black and ethnic Barristers more adversely indicates that there is a systemic bias against black and ethnic Barristers. 24. There is no objective or reasonable reason why, given that black and ethnic Barrister make up such a small proportion of the Bar, they are more likely to be investigated following a complaint, more likely to have a complaint referred for prosecution, more likely to be prosecuted, more likely to be convicted and more likely to have those convictions upheld. There is no objective reason why the defendant ignored its own rules and prosecuted the claimant. 29. The defendant discriminated against the claimant indirectly in breach of section 53(2), 53(3) of the Equality Act 2010, section 1 of the Race Relations Act 1976 and article 14 of the Convention. The defendants rules are applied in such a way that although the Code of Conduct of the Bar applies to all Barristers in England and Wales it particularly disadvantages ethnic Barristers who make up only a small proportion of the membership of the Bar. The claimant again repeats para 20 of these Particulars. The reference in para 23 to refusal to allow sufficient time to prepare is no longer relevant as that basis of claim did not survive the hearing before Warby J. Para 20 of the pleading had alleged, inter alia, that the BSB had acted knowing that it had no power to act because its actions were in breach of its own rules and knowing that its action would injure the claimant. Warby J had this to say about the pleaded case: 63. The relevant parts of the appellants particulars of claim could be more clearly formulated and do contain some surplus wording. In my judgment however she has, within paras 22 24 and 29, sufficiently pleaded a case that the BSB indirectly discriminated against her on racial or ethnic grounds by bringing the disciplinary prosecution against her. At 23 and 24 she alleges that in practice the complaints process impacts disproportionately on BME barristers in particular ways. These include the allegation that BME barristers are more likely to have a complaint referred for prosecution. She also alleges, though it may not be necessary for her to do so, that there is no objective reason to justify this different treatment. At 29 she expressly alleges indirect discrimination in that the relevant rules are applied in such a way by the BSB that it particularly disadvantages black barristers. At para 79 he concluded that the act complained of in the one human rights claim that he held to be both adequately pleaded and sustainable for the purposes of a summary judgment application was the BSBs prosecution of the appellant. However, he also considered (at para 62) that the decision of the Grand Chamber of the European Court of Human Rights in DH v Czech Republic (2008) 47 EHRR 3 showed that in an appropriate case statistics may be relied on to establish that an applicant is a member of a group which has been treated differently in practice from others in a comparable situation in a way which is disproportionately prejudicial to members of that group, and thereby shift the onus to the public body concerned to provide evidence of an objective and reasonable justification for the difference. In the Court of Appeal Lord Dyson MR (at para 21) approached the issue of limitation on the basis that the complaint was that the proceedings against the appellant were in breach of article 14. Elias LJ (at paras 38 and 39) suggested that some confusion had arisen over the article 14 claim. He distinguished between an allegation of discriminatory treatment of the appellant herself and a distinct, wider allegation that there is systemic discrimination against BME barristers. In the former case the focus had to be on the act or acts directed against the appellant and the limitation period fell to be determined by reference to that act or those acts. In that regard the disproportionate treatment of BME barristers was potentially evidence of discrimination against the appellant herself. In the latter case each BME barrister subjected to the disciplinary process would, on the analysis of DH, be a victim with the right to take action to challenge the wider systemic discrimination. The remedy for such a claim would, however, be different and it was highly arguable that the limitation period would run from a different time. In his view the operation of the limitation period had at all points in the present proceedings been argued on the assumption that it ran by reference to acts directed against the appellant. Accordingly, that gave rise to the question whether the decision to bring disciplinary proceedings against her, as an alleged act of discrimination, was a continuous act or not and if so, whether it ran until the appeal was determined. On this appeal counsel for the appellant, Mr Mark Anderson QC and Mr S Chelvan, neither of whom appeared below, have made clear in their written case and in the oral submissions of Mr Anderson that the appellants complaint is that the disciplinary proceedings were brought against her for reasons which infringe her Convention rights. The BSBs written case states that the only act complained of which survived the hearing before Warby J is the alleged violation of article 14 by indirect discrimination pursuant to the DH v Czech Republic line of Strasbourg case law. However, it later states that the only surviving allegation of discrimination is that by bringing disciplinary proceedings against the appellant, the respondent indirectly discriminated against her contrary to article 14 pursuant to the DH v Czech Republic line of Strasbourg case law. I agree with Elias LJ as to the basis on which the claim has been presented and I gratefully adopt his analysis. The appellants challenge is to the conduct of the BSB in bringing and pursuing disciplinary proceedings against her, not to an alleged state of affairs in which BME lawyers were more likely to be the subject of such proceedings. The appellants reliance on DH is intended to demonstrate that the disciplinary proceedings against her were discriminatory. This has an important impact on the issue of limitation. The bringing and pursuit of disciplinary proceedings must be the focus of the investigation into the date on which the act complained of took place. Section 7(5)(a): A series of acts or a single act? The question which then arises in relation to the application of section 7(5)(a) to the present proceedings is whether the bringing of disciplinary proceedings by the BSB is to be considered a series of discrete acts or a single continuous act. The expression the date on which the act complained of took place is apt to address a single event. However, the provision should not be read narrowly. There will be many situations in which the conduct which gives rise to the infringement of a Convention right will not be an instantaneous act but a course of conduct. The words of section 7(5)(a) should be given a meaning which enables them to apply to a continuing act of alleged incompatibility. While it is correct that section 7(5)(b) may often empower a court to grant an extension of time to bring proceedings in respect of a course of conduct which has extended over a period of longer than a year, leaving a claimant to have recourse to such a discretionary remedy is inappropriate. It cannot justify limiting the scope of section 7(5)(a). The primary provision in 7(5)(a) must be capable of providing an effective and workable rule for situations where the infringement arises from a course of conduct. It is then necessary to consider whether the alleged infringement of Convention rights in the present case arises from a course of conduct as opposed to a single act. On behalf of the appellant, Mr Anderson submits that where a barrister complains that she was prosecuted for reasons which infringe her Convention rights, she is not complaining about each of the individual steps which comprise the prosecution but about the fact that the BSB prosecuted her, a state of affairs which lasted until the prosecution came to an end. He also draws attention to section 6(6) of the 1998 Act which provides that an act includes a failure to act. He submits that the BSB had the power to decide at any moment after preferring the charges and before the verdict of the Visitors that it would offer no evidence and, in certain circumstances, a duty to offer no evidence. However, he accepts that the Court of Appeal was correct to conclude that a failure to act does not arise in this case, provided that it is accepted that the prosecution is a single continuous act. On behalf of the BSB, Ms Padfield submits that the decision to refer the appellant to a disciplinary tribunal, even if indirectly discriminatory, was a one off act with potentially continuing consequences rather than a continuing violation. She submits that this is a case of alleged indirect discrimination and that any unlawfulness does not automatically continue for as long as the prosecution continues. She accepts that there is evidence of disproportionate impact in relation to the decision to refer BME barristers to disciplinary tribunals but submits that there is no evidence of disproportionate impact in relation to the continuation of disciplinary prosecutions or the failure to bring them to an end. The only authority to which we were referred on this issue is Somerville v Scottish Ministers [2007] UKHL 44; [2007] 1 WLR 2734. This decision is, however, not particularly illuminating on this point because of the variety of views expressed. The petitioners were serving sentences of imprisonment and were at various times segregated from other prisoners by monthly orders and authorisations that were made over a period of time. They sought judicial review of the decisions to segregate them on the ground that their Convention rights had been infringed. Several of the periods of segregation had concluded more than one year before the proceedings were brought. The House held that the time limit in section 7(5) did not apply to the proceedings and the observations on its operation were therefore obiter. Lord Hope of Craighead stated (at paras 51 52) that he would hold that the phrase the date on which the act complained of took place in section 7(5)(a) means, in the case of what may properly be regarded as a continuing act of alleged incompatibility, that time runs from the date when the continuing act ceased, not when it began. Otherwise it would not be open to a person who was subjected to a continuing act or failure to act which was made unlawful by section 6(1) to take proceedings to bring it to an end without relying on section 7(5)(b) while it was still continuing after the expiry of one year after its commencement. He also considered that, so long as the proceedings were brought within the time permitted by section 7(5)(a) and any longer period allowed under section 7(5)(b), damages may be awarded as just satisfaction for the whole of the period over which the continuing act extends, including any part of it that commenced before the period of one year prior to the date when the proceedings were brought. The question whether the acts complained of in that case were continuing acts or one off acts with continuing consequences was not easy to determine on the pleadings and he preferred to reserve his opinion on that point. Lord Mance, by contrast, (at para 197), considered that each monthly order and authorisation constituted for the purpose of section 7(5) a separate act in respect of which separate one year limitation periods would run. If a period of segregation has lasted for more than a year the claimant would be left to seek an extension of time under section 7(5)(b). Lord Rodger of Earlsferry (at paras 145 146) preferred to express no view on the point but considered Lord Mances approach at least arguable. Lord Walker of Gestingthorpe (at para 167) did not expressly address the point but said he agreed on all other issues with Lord Hope and Lord Rodger. Lord Scott of Foscote (at para 81) observed that act includes a failure to act. In his view it therefore followed that the one year beginning with the date on which the act complained of took place should simply be calculated back from the date on which the section 7(1)(a) proceedings were commenced. I consider that the alleged infringement of Convention rights in the present case arises from a single continuous course of conduct. Although disciplinary proceedings brought by the BSB necessarily involve a series of steps, the essence of the complaint made here is the initiation and pursuit of the proceedings to their conclusion, ie the entirety of the course of conduct as opposed to any component steps. As Lord Dyson MR observed in the Court of Appeal (at para 21) without expressing a concluded view on this issue, prosecution is a single process in which the prosecutor takes many steps. It cannot have been the intention of Parliament that each step should be an act to which the one year limitation period should apply. I also note in this regard that, were it otherwise, a prosecution which lasted longer than one year could not be relied on in its entirety as a basis of complaint unless proceedings were commenced before the conclusion of the disciplinary proceedings or relief were granted under section 7(5)(b). A claimant would be placed in the difficult position of having to bring a human rights claim within one year of the commencement of what might be lengthy proceedings, without knowing the outcome which might be very material to the claim. On the basis that we are concerned here with a single continuing act of alleged incompatibility, I agree with Lord Hope in Somerville (at para 51) that time runs from the date when the continuing act ceased, not when it began. In view of my conclusion on this issue, it is not necessary to consider the appellants alternative argument based on a failure to act. I would, however, suggest that it may, in certain other circumstances, be necessary to guard against reliance on a failure to reverse an out of time decision which would have the potential to subvert the limitation scheme of the Act. When did the continuing act cease? On the basis that the conduct challenged in these proceedings is the single continuing act of bringing and pursuing disciplinary proceedings against the appellant, it is necessary to consider when that continuing act ceased. In the Court of Appeal Lord Dyson MR, with whom the other members of that court agreed, considered, at para 22, that the question for consideration here was whether opposing an appeal by a convicted defendant should be regarded as a continuation of the prosecution. His view was that it should not be so regarded. He considered that a prosecution comes to an end with the verdict when the prosecution has run its course. In opposing an appeal by a convicted defendant a prosecutor is not continuing the prosecution but is seeking to uphold the decision of the court or tribunal that has convicted the defendant. In his view, seeking to uphold a conviction is a categorically different act from that of prosecuting. It appears that throughout the current proceedings the disciplinary proceedings brought by the BSB against the appellant have been described as a prosecution. This is, perhaps, an understandable analogy but it is imprecise and may tend to obscure the fact that the complaint is of discrimination in bringing disciplinary proceedings not a criminal prosecution. There is a danger that this characterisation may influence the outcome on the current issue. Whatever may be the position in relation to an appeal against a criminal conviction, in considering whether in the present case the BSBs conduct in proceedings before the Visitors should be considered as forming part of the same continuing act as its conduct in proceedings before the Disciplinary Tribunal for the purpose of the rules on limitation, it is necessary to have regard to the nature of the regulatory scheme and the precise features of such conduct. Several features of the regulatory scheme and the Visitors jurisdiction, as applicable to the disciplinary proceedings against this appellant lead me to the conclusion that the BSBs part in proceedings before the Disciplinary Tribunal and those before the Visitors should be regarded for this purpose as part of a single continuing act. (1) In In re S (A Barrister) [1970] 1 QB 160 five judges sitting as Visitors of the Inns of Court stated (at p 166G H), that [t]he judges as visitors have always had supervisory powers and their decision, upon an appeal by a barrister or student to them, has always been the final determination of such matter. The precise origins of the long established visitorial jurisdiction of the judges to hear disciplinary appeals from the Inns of Court are obscure. (See J H Baker, Judicial Review of the judges as Visitors to the Inns of Court, (1992) Public Law 411.) For present purposes it is sufficient to record that in 1886 the Council of Judges resolved that the jurisdiction as to appeals from decisions of the benchers of the several Inns of Court is now vested in the judges of the High Court. (See R v Visitors to the Inns of Court, Ex p Calder [1994] QB 1 per Sir Donald Nicholls V C at pp 35D E). This arrangement continued notwithstanding the transfer by the Inns of Court of their disciplinary function (other than the power to pronounce and carry into effect any sentence) to the Senate of the Inns of Court in 1966 and to the Council of the Inns of Court in 1986. The first Hearings before the Visitors Rules were issued in 1980. (2) One aspect of the continuing supervisory jurisdiction of the Visitors was apparent in their role in hearing applications and giving directions for the conduct of the disciplinary proceedings. Regulation 9(1) of The Disciplinary Tribunals Regulations 2009 (Annexe K to the Code of Conduct of the Bar of England and Wales) required the President of a Disciplinary Tribunal to designate a judge or judges to perform this function. The directions to be given by a designated judge might concern (inter alia) the severance or strike out of charges, the attendance of witnesses, the admission of documents, the admission of facts and such other matters as the judge deemed expedient for the efficient conduct of the hearing. In the proceedings against this appellant Field J heard the appellants application to strike out the proceedings and gave directions for their conduct. (3) The function of the Visitors in hearing appeals from Disciplinary Tribunals was a further aspect of this supervisory jurisdiction. The appeal brought by this appellant was governed by the Hearings before the Visitors Rules 2010 (Annexe M to the Code of Conduct). (4) In cases where one or more charges of professional misconduct had been proved, an appeal against conviction or sentence could be lodged by the barrister as of right (Regulation 25(1) of The Disciplinary Tribunals Regulations 2009). (5) In certain circumstances (which did not arise in this case) the BSB could appeal against the dismissal of a charge of professional misconduct with the consent of the Chairman of the BSB or the Chairman of the Complaints Committee or the permission of the visitors (Regulation 25(1)(c), 25(5) of The Disciplinary Tribunals Regulations 2009). (6) On an appeal the Visitors were required to look afresh at the matters in dispute and to form their own views. They were required to consider whether the charge had been made out to their satisfaction, to the requisite standard of proof. The proper approach was that of an appellate court rehearing the case on its merits. (R v Visitors to the Inns of Court, Ex p Calder [1994] QB 1 per Sir Donald Nicholls V C at pp 42D F, 42H; per Stuart Smith LJ at pp 61H 62D. See also Lincoln v Daniels [1962] 1 QB 237, per Devlin LJ at p 256.) (7) It was open to the Visitors to correct procedural defects and to remedy procedural unfairness before the Disciplinary Tribunal. As Sir Andrew Collins observed in delivering the judgment of the Visitors in the present case, the Visitors were able to hear the matter entirely on its merits. They would give the necessary protection to an appellant and it was not necessary for the matter to be remitted for further consideration by the Tribunal. (8) Following a finding or sentence of the Tribunal on a charge of professional misconduct, the Treasurer of a defendants Inn was required to pronounce and implement the sentence. However, the Treasurer was required first to wait for 21 days to allow a notice of appeal to be lodged. Where a defendant had given notice of appeal to the Visitors against a finding or sentence of the Tribunal on a charge of professional misconduct, the pronouncement and implementation of the sentence by the Treasurer of the defendants Inn were automatically deferred (Regulation 27, The Disciplinary Tribunals Regulations 2009). The verdict of the Tribunal could not be put into effect until after the decision of the Visitors on the appeal. These features, considered cumulatively, persuade me that the role of the BSB in initiating and pursuing these proceedings before the Tribunal and before the Visitors is essentially one continuing act. In these circumstances it is not necessary to express any view as to whether the same conclusion should be drawn in relation to an appeal against a criminal conviction. Before leaving this issue, I should refer to a further submission of Mr Anderson based on Delcourt v Belgium (1970) 1 EHRR 355 where the Strasbourg court, in rejecting a submission that article 6 had no application to the Belgian Court of Cassation because it was concerned not with the merits of the case but with the validity of the judgment, observed: Thus, a criminal charge is not really determined as long as the verdict of acquittal or conviction has not become final. Criminal proceedings form an entity and must, in the ordinary way, terminate in an enforceable decision. Proceedings in cassation are one special stage of the criminal proceedings and their consequences may prove decisive for the accused. It would therefore be hard to imagine that proceedings in cassation fall outside the scope of article 6(1). (at para 25) I do not find this passage of any assistance, even by way of analogy. The Strasbourg court was there concerned with the distinct question as to the scope of application of article 6. As Lord Dyson MR observed in the Court of Appeal (at para 23) in relation to a similar submission based on Eckle v Federal Republic of Germany (1982) 5 EHRR 1, this does not touch on the question whether the role of a prosecutor in appeal proceedings is to be considered as a continuation of the act of prosecuting the defendant in the first place. I would therefore allow the appeal. I consider that the conduct of the BSB in bringing and pursuing the disciplinary proceedings was, for the purposes of section 7(5)(a), a single continuing act which continued until the Visitors to the Inns of Court allowed the appeal on 17 August 2012. The present proceedings against the BSB, which were commenced on 21 February 2013, were therefore commenced within a period of one year beginning with the date on which the act complained of took place. The respondents notice By its Notice of Objection dated 12 January 2017 the BSB asks this court to uphold the Court of Appeals decision on the alternative ground that Warby J was wrong to hold that the article 14 claim had real prospects of success. In addition, it seeks permission to adduce new evidence of fact to counter the conclusion of Warby J on this point. The Notice of Objection and the application to adduce new evidence replicate a respondents notice and related application that were before the Court of Appeal. Warby J had concluded that the particulars of claim both in their unamended and draft amended forms adequately stated a case, which was not fanciful, that by bringing disciplinary proceedings against the appellant, the BSB indirectly discriminated against her contrary to article 14. In the light of its conclusion as to the limitation period under section 7(5)(a) the Court of Appeal did not address these matters in any detail or express any concluded view. However, Lord Dyson did refer to the main submission made by Ms Padfield for the BSB in this regard which, as before us, was, essentially that the discrimination claim founded on Strasbourg decisions such as DH v Czech Republic could have no real prospect of success without statistics sufficient to raise a prima facie case of discrimination, general statements of disproportionate impact being unlikely to be sufficient. In this regard Ms Padfield relied on Oru v Croatia (2011) 52 EHRR 7. Lord Dyson MR observed (at para 35) that, in his view, there was considerable force in these points and that, at best, the appellants case, on the basis of the evidence she had adduced so far, was very thin. Had this point been raised in isolation by BSB on an application for permission to appeal to the Court of Appeal, it seems most unlikely that permission would have been granted. It would have been a second appeal and it would not have satisfied the second appeal criteria in that it does not raise an important point of principle or practice and there is no other compelling reason why an appeal should be heard (CPR 52.7 and 52.13). The point is now before this court only because BSB took a limitation point which in my view should fail. It is adventitious that it is before the court at all. Moreover, it cannot be said that the respondents notice raises a point of law of general public importance. In these circumstances, it would certainly be open to this court to decline to entertain the ground in the respondents notice. Nevertheless, in the light of the history of these proceedings, I consider it appropriate to address the merits of the respondents notice. I can do so briefly. I consider that Warby J was correct to conclude on the basis of the evidence before him that there were reasonable grounds for bringing the claim and that it had a real prospect of success. The appellants case is based, in part, on a 2013 report by Inclusive Employers into the BSBs complaints system. That report analysed data from the period 2007 11 and concluded that (i) BME barristers were disproportionately over represented in the complaints process in relation to the outcomes of external complaints; (ii) BME barristers were more likely to have a complaint referred to disciplinary action; and (iii) BME barristers were more likely to have complaints upheld. The report went on to find that although there were steps the BSB could take to improve the complaints process from an equality and diversity perspective in particular the provision of more prompt training for tribunal members which included training in unconscious bias the procedure itself was not discriminatory and that other factors, as yet unidentified, were causing the disproportions shown in the data. Ms Padfield for the BSB objects that the mere fact of a statistical difference in treatment between two groups is not sufficient to establish that there is prima facie evidence that the effect of a measure or practice is discriminatory. I accept that in DH and in Sampanis v Greece (Application No 32526/05), 5 June 2008, the difference in treatment between different groups was so striking as to amount, of itself, to prima facie evidence that the effect was discriminatory and to require explanation. That may not be the position in the present case. Nevertheless, I consider that the appellant is entitled to rely on this evidence, so far as it goes, in conjunction with the unhappy history of the proceedings against her, as supporting her case that she has been the victim of discrimination. The BSBs submission in the present case rests on the fallacious assumption that an inference from statistical difference in treatment is the only way in which a claimant can establish an infringement of article 14. As the Strasbourg court has made clear, indirect discrimination can be proved without statistical evidence (DH at para 188; Oru at para 153). Finally, Ms Padfield seeks, by her application to adduce new evidence, to produce a further report by the BSBs research department dated January 2016 and entitled Complaints at the Bar: An Analysis of ethnicity and gender 2012 2014, in order to counter the 2013 report. I would refuse the application. It is not appropriate for this court to address, for the first time in the course of these proceedings, competing submissions of fact on a strike out application. |
The issue in this case is whether the court should order the return to France of two little girls who have been living with their mother in Scotland since July 2013. The issue arises under article 3 of the 1980 Hague Convention on the Civil Aspects of International Child Abduction, as incorporated into the law of the United Kingdom by the Child Abduction and Custody Act 1985. The facts The children were born in France in August 2010 and June 2013. Their father is a French citizen who has lived in France all his life. He has a small business in France. Their mother is a British and Canadian citizen, who was born in Canada of a Scottish mother. She works from home for a Canadian employer. She and the father have never been married. Until July 2013 the family lived together in France, visiting the mothers parents in Scotland from time to time. During July 2013 the mother and the two children came to live in Scotland. They did so with the agreement of the childrens father. According to the fathers affidavit, it had been agreed that the mother and the children should live in Scotland during her 12 months maternity leave, returning afterwards to France. According to the mothers affidavit, it had been agreed that the family would move permanently away from France, although not necessarily remaining in Scotland beyond the duration of her maternity leave. The father was to join the rest of the family after the family home in France had been sold, and arrangements had been made in relation to the management of his business, and they would then decide where to settle in the longer term. What is uncontroversial is that the mother and children were to live in Scotland for the period of about a year from July 2013 during which she was on maternity leave. Following their arrival in Scotland, the mother and children lived initially with the maternal grandparents. In August 2013 the family home in France was sold, the sale being completed two months later. The elder child also started to attend the local nursery in Scotland in August 2013, and has continued to do so since then. The father visited the rest of the family in Scotland for several days every month. The mother and children joined the father for a holiday in France in September 2013, and also spent 12 days with him in October 2013 at their former home in France, shortly before it changed hands. On their return to Scotland they moved into a rented house, adjacent to the maternal grandparents, which the mother and father had inspected together. The mother and children have lived there ever since. On 9 November 2013 the mother discovered infidelity on the part of the father and told him that their relationship was over. On 20 November 2013 he was served with notice of proceedings in Scotland in which the mother sought a residence order in respect of the children, and interdict against the father removing them from Scotland. In the present proceedings, brought under the 1985 Act and seeking an order for the return of the children to France, the father maintains that the initiation of the mothers proceedings was a wrongful retention within the meaning of the Hague Convention. That proposition is predicated upon the childrens being habitually resident in France immediately before 20 November 2013. That is the question on which issue was joined in the courts below. The proceedings below In the Outer House of the Court of Session, the Lord Ordinary, Lord Uist, identified the first question which he had to determine as being whether the children were habitually resident in France immediately before 20 November 2013. It was common ground that that question was to be determined in accordance with the guidance given by this court in A v A and another (Children: Habitual Residence) (Reunite International Child Abduction Centre and others intervening) [2013] UKSC 60; [2014] AC 1 and In re L (A Child) (Custody: Habitual Residence) (Reunite International Child Abduction Centre intervening) [2013] UKSC 75; [2014] AC 1017. After summarising the evidence and the parties contentions, the Lord Ordinary stated (para 7): After considering all the relevant evidence I am satisfied that the children had not immediately before 20 November 2013 lost their habitual residence in France. They had both been born there and lived there in family with their parents until 26 July. This was a French family living in France. There is nothing which happened thereafter which persuades me that they had ceased to be habitually resident in France. I conclude from the evidence and productions presented that the stay of the respondent and the two children in Scotland was to be of limited duration, consisting of the period of her maternity leave. I do not regard the sale of the family home in Narbonne as evidencing a joint intention to leave France for good. I am not persuaded that there was a joint decision to uproot themselves from France and relocate permanently to Scotland. The petitioner has his own expanding business in Narbonne, for which he relies on his livelihood (sic) and in order to maintain the respondent and children. He speaks little or no English. I reject as fanciful any suggestion that he intended to set up a business in Scotland. That would have involved abandoning his established business in France and attempting to set up a business in a country where he did not speak the language and had no obvious prospect of succeeding. He continued to live and work in France after the respondent and children came to live in Scotland, although he visited them regularly. The respondent and children returned to France on two occasions after their move to Scotland. Certain of the children's belongings were in storage in France. The lease of the property in which the respondent and children were living in Scotland was in her name alone. Nothing in the communications between the parties indicates a joint intention to uproot themselves from France and relocate permanently to Scotland. The Lord Ordinary therefore granted the fathers application. That decision was reversed by an Extra Division of the Inner House of the Court of Session: [2014] CSIH 95; 2014 SLT 1080; [2014] Fam LR 131. The court considered that the Lord Ordinary had erred in law, in the passage which I have just quoted, in treating a shared parental intention to move permanently to Scotland as an essential element in any alteration of the childrens habitual residence from France to Scotland. This error had deflected him from a proper consideration of the factors relied upon by the mother. Considering the matter afresh, in the light of the guidance provided by this court, the Extra Division concluded that the children were habitually resident in Scotland at the material time: If the salient facts of the present case are approached in accordance with the guidance summarised earlier, the key finding of the Lord Ordinary is that the children came to live in Scotland. The real issue is whether there was a need for a longer period in Scotland before it could be held that there had been a change in their habitual residence. For our part, in the whole circumstances we would view four months as sufficient. (para 14) The law Article 1 of the Hague Convention provides that its objects include to secure the prompt return of children wrongfully removed to or retained in any contracting state. In terms of article 3, the removal or the retention of a child is to be considered wrongful where, in the first place, it is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the state in which the child was habitually resident immediately before the removal or retention. Article 12 provides that, where a child has been wrongfully removed or retained in terms of article 3, and proceedings are commenced within one year before the judicial or administrative authority of the contracting state where the child is, the authority shall order the return of the child forthwith. Under article 13, the return of the child need not be ordered if it is established, inter alia, that the applicant for the order consented to the removal or retention. In relations between the member states of the EU other than Denmark, the Hague Convention is supplemented by the Brussels II Revised Regulation (EC) No 2201/2003 (the Regulation), which is in similar but not identical terms. The Regulation takes precedence over the Convention: see article 60. It is common ground that habitual residence, for the purposes of applying the Hague Convention and the Regulation, is to be determined in accordance with the guidance given by this court in the cases of A v A, In re L and In re LC (Children) (Reunite International Child Abduction Centre intervening) [2014] UKSC 1; [2014] AC 1038. It is also common ground that that guidance is consistent with the guidance given by the Court of Justice of the European Union as to the application of the Regulation in Proceedings brought by A (Case C 523/07) [2010] Fam 42, Mercredi v Chaffe (Case C 497/10PPU) [2012] Fam 22, and C v M (Case C 376/14PPU) [2015] Fam 116. judgment of the Court of Justice in Proceedings brought by A: In A v A, Lady Hale drew attention at para 48 to the operative part of the 2. The concept of 'habitual residence' under article 8(1) of Council Regulation (EC) No 2201/2003 must be interpreted as meaning that it corresponds to the place which reflects some degree of integration by the child in a social and family environment. To that end, in particular the duration, regularity, conditions and reasons for the stay on the territory of a member state and the family's move to that state, the child's nationality, the place and conditions of attendance at school, linguistic knowledge and the family and social relationships of the child in that state must be taken into consideration. It is for the national court to establish the habitual residence of the child, taking account of all the circumstances specific to each individual case. (p 69) Lady Hale also noted at para 50 the need to focus upon the primary carer, rather than the child, in cases where the child is an infant. As the Court of Justice explained in Mercredi v Chaffe: An infant necessarily shares the social and family environment of the circle of people on whom he or she is dependent. Consequently, where . the infant is in fact looked after by her mother, it is necessary to assess the mother's integration in her social and family environment. In that regard, the tests stated in the court's case law, such as the reasons for the move by the child's mother to another member state, the languages known to the mother or again her geographic and family origins may become relevant. (para 55) In the circumstances of the present case, it is also important to note what was said by Lady Hale in relation to passages in Mercredi v Chaffe which appeared to import a requirement of permanence for residence to be habitual. In particular, in para 51 of Mercredi v Chaffe the Court of Justice stated: In that regard, it must be stated that, in order to distinguish habitual residence from mere temporary presence, the former must as a general rule have a certain duration which reflects an adequate degree of permanence. However, the Regulation does not lay down any minimum duration. Before habitual residence can be transferred to the host state, it is of paramount importance that the person concerned has it in mind to establish there the permanent or habitual centre of his interests, with the intention that it should be of a lasting character. Accordingly, the duration of a stay can serve only as an indicator in the assessment of the permanence of the residence, and that assessment must be carried out in the light of all the circumstances of fact specific to the individual case. In A v A, Lady Hale commented at para 51: At first instance in DL v EL [2013] FLR 163, Sir Peter Singer compared the French and English texts of the judgment, which showed that the French text had almost throughout used stabilit rather than permanence and in the one place where it did use permanence it was as an alternative to habituelle: paras 71 et seq. It is therefore the stability of the residence that is important, not whether it is of a permanent character. There is no requirement that the child should have been resident in the country in question for a particular period of time, let alone that there should be an intention on the part of one or both parents to reside there permanently or indefinitely. As Lady Hale observed at para 54 of A v A, habitual residence is therefore a question of fact. It requires an evaluation of all relevant circumstances. It focuses upon the situation of the child, with the purposes and intentions of the parents being merely among the relevant factors. It is necessary to assess the degree of integration of the child into a social and family environment in the country in question. The social and family environment of an infant or young child is shared with those (whether parents or others) on whom she is dependent. Hence it is necessary, in such a case, to assess the integration of that person or persons in the social and family environment of the country concerned. The essentially factual and individual nature of the inquiry should not be glossed with legal concepts which would produce a different result from that which the factual inquiry would produce. In particular, it follows from the principles adopted in A v A and the other cases that the Court of Appeal of England and Wales was right to conclude in In re H (Children) (Reunite International Child Abduction Centre intervening) [2014] EWCA Civ 1101; [2015] 1 WLR 863 that there is no rule that one parent cannot unilaterally change the habitual residence of a child. Finally, it is relevant to note the limited function of an appellate court in relation to a lower courts finding as to habitual residence. Where the lower court has applied the correct legal principles to the relevant facts, its evaluation is not generally open to challenge unless the conclusion which it reached was not one which was reasonably open to it. The present case Counsel for the father sought to persuade this court that there had been no error of approach by the Lord Ordinary, and that the Inner House had therefore not been entitled to interfere with his assessment. I am unable to accept that submission. In the salient passage in his judgment, quoted earlier, the Lord Ordinarys focus was entirely upon whether there had been a joint decision to move permanently to Scotland. He began by expressing his conclusion, at para 7: I conclude from the evidence and productions presented that the stay of the respondent and the two children in Scotland was to be of limited duration, consisting of the period of her maternity leave. He then referred to aspects of the evidence which bore upon that issue, stating that he did not regard the sale of the family home in France as evidencing a joint intention to leave France for good, and that he was not persuaded that there was a joint decision to uproot themselves from France and relocate permanently to Scotland. In that regard, he referred to the fathers business interests in France, his limited command of English, the fact that he continued to live and work in France, the fact that the mother and children had visited him there, the fact that certain of the children's belongings were in storage in France after the [mother] and children came to live in Scotland, and the fact that the lease of the house in Scotland was in the mothers name alone. He then concluded his discussion of the issue of habitual residence: Nothing in the communications between the parties indicates a joint intention to uproot themselves from France and relocate permanently to Scotland. In determining the case on this basis, the Lord Ordinary failed to apply the guidance given in the authorities. As I have explained, parental intentions in relation to residence in the country in question are a relevant factor, but they are not the only relevant factor. The absence of a joint parental intention to live permanently in the country in question is by no means decisive. Nor, contrary to counsels submission, is an intention to live in a country for a limited period inconsistent with becoming habitually resident there. As was explained in A v A, the important question is whether the residence has the necessary quality of stability, not whether it is necessarily intended to be permanent. The Lord Ordinarys exclusive focus on the latter question led to his failing to consider in his judgment the abundant evidence relating to the stability of the mothers and the childrens lives in Scotland, and their integration into their social and family environment there. Counsel for the father further argued that the Extra Division had themselves fallen into error, in treating the critical issue as being whether it was necessary for the mother and children to have spent a longer period in Scotland before the children could be said to have become habitually resident there. The Extra Division had, it was argued, answered that question without themselves addressing the truly critical issue, namely whether the children retained habitual residence in France immediately before 20 November 2013. They had erroneously focused only on the childrens circumstances in Scotland, and had left out of account the agreement between their parents as to the limited duration of the stay in Scotland, and their parents intentions. I do not find that submission persuasive. The Extra Division proceeded on the basis that the stay in Scotland was originally intended to be for the 12 months maternity leave, that much being uncontroversial. They therefore assumed, in the fathers favour, that the stay in Scotland was originally intended to be of limited duration. Their remark that the real issue was whether there was a need for a longer period than four months in Scotland, before it could be held that the childrens habitual residence had changed, followed immediately upon their statement: If the salient facts of the present case are approached in accordance with the guidance summarised earlier, the key finding of the Lord Ordinary is that the children came to live in Scotland. In other words, following the childrens move with their mother to Scotland, that was where they lived, albeit for what was intended to be a period of 12 months. Their life there had the necessary quality of stability. For the time being, their home was in Scotland. Their social life was there. Their family life was predominantly there. The longer time went on, the more deeply integrated they had become into their environment in Scotland. In that context, the question the Extra Division asked themselves did not indicate any error of approach. Nor did their answer: For our part, in the whole circumstances we would view four months as sufficient. The Extra Division therefore considered the evidence on a proper understanding of the nature of habitual residence. In the light of the evidence before them, their conclusion that the children were habitually resident in Scotland at the material time is one which they were entitled to reach. Other issues Counsel for the mother took the opportunity of this appeal to raise the question whether there had been any wrongful retention of the children in Scotland. It was argued that the bringing of the residence proceedings did not amount, implicitly or otherwise, to a wrongful retention within the meaning of the Hague Convention. That issue was not raised in the courts below, and it does not arise for decision by this court: given the conclusion that the children were habitually resident in Scotland at the material time, they cannot have been wrongfully retained there. There was also discussion in the courts below of the question, under article 13 of the Hague Convention, whether the father had consented to the childrens retention in Scotland. Given my conclusion on the issue of habitual residence, that question also does not arise, and need not be considered. Conclusion For these reasons, I would dismiss the appeal. |
The appellant, KM, is a profoundly disabled man aged 26. He lives in Cambridgeshire with his mother, by whom he acts in these proceedings, and with his brother aged 19 and his sister aged 18. In the proceedings, brought by way of judicial review, the appellant challenges a determination made by Cambridgeshire County Council (Cambridgeshire) and communicated, at the latest, by a letter dated 3 June 2010 to pay him (in round numbers and as an annual sum) 85k in discharge of its duties to him under section 2(1) of the Chronically Sick and Disabled Persons Act 1970. He contends that the determination was unlawful either because it was not adequately supported by reasons or because it was irrational. He asks that the determination be quashed and either that Cambridgeshire should conduct a re determination of it or that the court should itself substitute for it a determination that the annual sum payable to him be 120k. On 26 November 2010 His Honour Judge Bidder QC, sitting as a deputy judge of the Queens Bench Division, Administrative Court, refused to grant the appellant permission to make the application for judicial review: [2010] EWHC 3065 (Admin). The Court of Appeal (Sir Anthony May, President of the Queens Bench Division, and Jackson and Tomlinson LJJ) granted the permission which the judge had withheld and ordered pursuant to CPR 52.15(4) that it should itself conduct the hearing of the substantive application for judicial review. On 9 June 2011, however, by a judgment delivered by the President on its behalf, [2011] EWCA Civ.682, (2011) 14 C.C.L.Rep.402, the court dismissed the application. It is against its dismissal of his application that the appellant appeals. first, set out at para 23, was as follows: In its judgment the Court of Appeal gave four reasons for its decision. Its (a) the local authority, whose funds are not limitless, are both entitled and obliged to moderate the assessed needs to take account of the relative severity of all those with community care needs in their area. It is true that constraints upon its resources are a relevant consideration during one of the stages through which a local authority must pass in computing the size of a direct payment owed under section 2 of the 1970 Act. In paras 15 and 23 below I will identify four such stages; and constraints upon an authoritys resources are undoubtedly relevant to the second stage. But the leading exposition of the law in this respect is to be found in the speeches of the majority of the appellate committee of the House of Lords in R v Gloucestershire County Council ex p Barry [1997] AC 584; and, if and insofar as it was there held that constraints upon resources were also relevant to what I will describe as the first stage, there are arguable grounds for fearing that the committee fell into error: see the concerns expressed by Baroness Hale in R (McDonald) v Kensington and Chelsea Royal London Borough Council [2011] UKSC 33, [2011] PTSR 1266, at paras 69 to 73. Mr Ian Wise QC, who represents the appellant in the present proceedings, drafted the grounds of appeal to this court on the very day, namely 6 July 2011, when its judgments in the McDonald case were delivered. Such were the circumstances in which he sought to fortify his challenge to the Court of Appeals reference to the relevance of constraints upon Cambridgeshires resources with a ground of appeal (the third ground) that the decision of the committee in the Barry case had been wrong and that, pursuant to Practice Statement (Judicial Precedent) [1966] 1 WLR 1234, this court should depart from it. Following its grant of permission to appeal, this court granted permission to four charities to intervene in the appeal and thus to make submissions; but the court limited the scope of their intervention to the third ground. The court also granted permission to the Secretary of State for Health to intervene; and, although it did not formally define the scope of his intervention, the primary basis of his application had been a wish to make submissions upon the third ground. When, however, on 7 February 2012, the hearing of the appeal in this court began, it soon became apparent that, in referring to the relevance of constraints upon a local authoritys resources, the Court of Appeal had introduced a point which Cambridgeshire had not itself put forward and which in the context of the particular inquiry for which the proceedings called it felt unable to defend. As I will explain, the inquiry relates to the lawfulness of its determinations at what I will describe as the third and fourth stages of the exercise mandated by section 2 of the 1970 Act; and it is common ground that, subject to one matter, constraints on an authoritys resources are irrelevant to either the third or the fourth stage. The one matter is that it is always open to an authority to decide to meet a particular need by the provision of a cheaper service so long as it duly meets it rather than of a more expensive service; such is an elementary aspect of financial management and is better not even included within the debate about the relevance of constraints upon an authoritys resources to the discharge of its duty under section 2 of the 1970 Act. It thus also quickly became clear at the hearing that the issues about what the Barry case had decided in relation to the first stage of the exercise, and, in the light thereof, about whether this court should depart from the decision, were irrelevant. The court therefore ruled that it would not, after all, hear argument on the third ground; and perhaps apologies are due in that regard, in particular to the charities and those who represent them. In what follows it will therefore be important to say as little as possible and certainly nothing controversial about the decision in the Barry case. B: THE APPELLANTS CIRCUMSTANCES The appellant was born without eyes and suffers septo optic dysplasia, which has manifested itself as a lack of optic nerves and an abnormal development of the part of his brain which should have connected with the optic nerves. He has other medical problems, including a growth hormone deficiency, spinal disease and lung and hearing problems. He has learning difficulties and an autistic spectrum disorder. But he is intelligent and articulate. He can type and use Braille. He has obtained GCSE passes in French and music. He spends substantial periods in his music room, playing the piano, the clarinet and the drums. He is keen on jazz and composes his own rhythm and blues music. When in 2006 a Welsh social worker visited him, he went to the piano, played the Welsh national anthem and sang it correctly in Welsh. That is remarkable. The appellant needs substantial support in feeding and self care and in many other aspects of daily living. He struggles to tell the difference between hot and cold and has a fear of burning himself. He needs assistance in the use of a knife and fork. Outside the home he needs a guide. The burden of caring for him has been a source of acute stress for his mother and, to a lesser extent, for his brother and sister. In 1995 the family moved to Cambridgeshire and there is a long history of conflict between the appellants mother and Cambridgeshire about the scale of support to be provided for him. She accuses Cambridgeshire of being too slow to respond to his needs and it accuses her of being consistently uncooperative and antagonistic towards its officers. But the stress upon her of caring for the appellant provides significant mitigation for any regrettable conduct of that sort. In the years prior to 2008 the appellant was the subject of various residential placements, funded by Cambridgeshire. For different reasons they all broke down. Since May 2008 he has been living back at home. In 2010 he began to attend college for three days a week; but after several months he ceased to do so. Until October 2010 the family lived in council accommodation which was unsuitable for his needs. It also had only three bedrooms so, even at their ages, his brother and sister had to share a bedroom. Now, however, the family occupies more suitable privately rented accommodation, with four bedrooms, in the same village. C: THE DUTY UNDER SECTION 2 OF THE 1970 ACT Section 29 of the National Assistance Act 1948, as amended, assigns specified functions to local authorities in relation to disabled people. Still cast largely in the language of that era, it provides: (1) A local authority may, with the approval of the Secretary of State, and to such extent as he may direct in relation to persons ordinarily resident in the area of the local authority shall, make arrangements for promoting the welfare of persons to whom this section applies, that is to say persons who are blind, deaf or dumb, or who suffer from mental disorder of any description and other persons who are substantially and permanently handicapped by illness, injury, or congenital deformity or such other disabilities as may be prescribed by the Minister. Subsection (4) of the section gives examples of the arrangements which the authority might make under subsection (1). In the event the Secretary of State has given wide ranging approvals, but relatively limited directions, pursuant to subsection (1): see Appendix 2 to the Local Authority Circular issued by the Department of Health numbered LAC (93) 10. The result is that, had it not been for further legislation, the authoritys functions under the section would largely have consisted only of powers rather than of duties. In enacting section 2 of the 1970 Act Parliaments purpose was to elevate the functions of local authorities in relation to disabled people under section 29 of the 1948 Act to duties in specified circumstances. Section 2 provides: (1) Where a local authority having functions under section 29 of the National Assistance Act 1948 are satisfied in the case of any person to whom that section applies who is ordinarily resident in their area that it is necessary in order to meet the needs of that person for that authority to make arrangements for all or any of the following matters, namely (a). (h). then subject to the provisions of section 7(1) of the Local Authority Social Services Act 1970 (which requires local authorities in the exercise of certain functions, including functions under the said section 29 to act under the general guidance of the Secretary of State). it shall be the duty of that authority to make those arrangements in exercise of their functions under the said section 29. The list of matters set out at (a) to (h) of the subsection is often described as the service list. It includes the provision, at (a), of practical assistance in the home; at (b), of radio, television, library and other recreational (presumably now including computer) facilities; at (c), of lectures, games, outings or other recreational facilities outside the home; at (d), of facilities for travel for specified purposes; at (e), of assistance in carrying out works of adaptation in the home; at (f), of facilities enabling holidays to be taken; at (g), of meals; and at (h), of a telephone. Thus the kernel of section 2 of the 1970 Act is that, if it is necessary in order to meet the needs of a person disabled within the meaning of section 29 of the 1948 Act to make arrangements for any of the matters set out in the service list, then, subject to guidance given by the Secretary of State pursuant to statute, the local authority has a duty to make them in exercise of its functions under section 29. Section 4 of the Disabled Persons (Services, Consultation and Representation) Act 1986 provides that, upon request by or on behalf of a disabled person, a local authority shall decide whether the needs of the disabled person call for the provision by the authority of any services in accordance with section 2(1) of the 1970 Act. No one suggests that those words emasculate the extent of the duty under section 2 set by the terms of that section itself. The same should be said of section 47 of the National Health Service and Community Care Act 1990 which, by subsection (1)(a), obliges an authority to conduct an assessment of a persons need for a variety of community care services, including under section 2 of the 1970 Act, if it appears that the person may be in need of them, and which, by subsection (2), obliges it, following any such assessment of a person who appears to be disabled within the meaning of the 1986 Act, to proceed to make the decision required by section 4 thereof. These are important obligations but they are procedural. For the ambit of the substantive obligation, the court should look no further than at the terms of section 2(1) of the 1970 Act itself. When a local authority is required to consider whether it is necessary in order to meet the needs of that person for that authority to make arrangements for the provision of any of the matters on the service list, it is required to ask itself three questions and should do so in three separate stages: (i) What are the needs of the disabled person? (ii) In order to meet the needs identified at (i), is it necessary for the authority to make arrangements for the provision of any of the listed services? If the answer to question (ii) is affirmative, what are the nature and extent of the listed services for the provision of which it is necessary for the authority to make arrangements? (iii) There is a fourth potential stage of the inquiry which I will identify in para 23 below. Section 2 of the 1970 Act provides that the duty imposed by it is subject to the general guidance of the Secretary of State given pursuant to section 7(1) of the Local Authority Social Services Act 1970, being guidance under which, in the words of that subsection, a local authority shall. act. The current guidance is entitled Prioritising need in the context of Putting People First: A whole system approach to eligibility for social care, published in February 2010. The Guidance, as I will call it, extends beyond the discharge of an authoritys duty to a disabled person under section 2 of the 1970 Act to its various other statutory responsibilities for adult social care. But, although the language of the Guidance is not bespoke to section 2, it fits perfectly with the three stages which I have identified. Thus, in para 47 of the Guidance, the Secretary of State says: In this guidance, the issues and support needs that are identified when individuals approach, or are referred to, councils seeking social care support are defined as presenting needs. Those presenting needs for which a council will provide help because they fall within the councils eligibility criteria, are defined as eligible needs. Eligibility criteria therefore describe the full range of eligible needs that will be met by councils, taking their resources into account. Transposed into the context of section 2 of the 1970 Act, the reference in the Guidance to presenting needs is a reference to the needs identified in answering the question at the first stage. Transposed into the same context, the reference to eligible needs is a reference to the needs for the meeting of which there is the necessity identified in answering the question at the second stage, namely the necessity for the local authority to make arrangements for the provision of any of the services listed in section 2. In para 44 of the Guidance the Secretary of State advises local authorities to specify their eligibility criteria in accordance with an eligibility framework which he proceeds to set out in para 54 and he reaffirms that, in setting their eligibility criteria, they should take account of their own resources as well as of local expectations and local costs. His eligibility framework has four categories critical, substantial, moderate and low and he gives examples of the types of presenting needs which should fall into each category. One important aspect of the question raised at the second stage is to ask whether the presenting needs of the disabled person can reasonably be met by family or friends (which I will describe as natural support) or by other organs of the state, such as the NHS, or by charities etc, or indeed out of the persons own resources. But it will by now be clear that the question at the second stage goes far further and, in particular, encompasses consideration of the relationship between the scale of the local authoritys resources and the weight of other demands upon it, in other words the availability of its resources. The interesting debate about whether the notion of a necessity to make arrangements is sufficiently elastic to embrace consideration of the availability of resources has already taken place. It took place in the Barry case [1997] AC 584 and, albeit by the narrowest possible margin, the ayes had it. Whatever else was or was not decided in that case, the decision was that the availability of resources was relevant to the question at the second stage: see Lord Clyde at p610E H, Lord Nicholls at p605E F and p606B and Lord Hoffmann at p606C D, but, to the contrary, Lord Lloyd at p597H 598C and Lord Steyn at p606C. Any statutory guidance given by the Secretary of State which ran counter to the legislative provision in relation to which it was given would be of no effect. But the Guidance, which states that the availability of resources is relevant to the question asked at the second stage of the inquiry, is precisely in accordance with the law. Like other local authorities, Cambridgeshire has decided, presumably only for the time being and subject to review, that, in the light of the other demands on its resources, it is not necessary to make arrangements for the meeting of such needs of a disabled person as are to be categorised as moderate or low. In that, as I will explain, it categorised all the appellants needs as critical, Cambridgeshires decision in relation to moderate and low needs does not fall for review. It is on any view highly regrettable that any needs of a disabled person, whatever their category, should not be met. Nevertheless it may well be that any inquiry, however difficult, into the relationship between the present scale of Cambridgeshires resources and the weight of the other demands upon it would yield a conclusion that its decision in relation to moderate and low needs was rational. At the other end of the spectrum a decision by Birmingham that it could afford to meet only critical needs was recently held unlawful because of deficiencies in the process which had led to it: R(W) v Birmingham City Council [2011] EWHC 1147 (Admin), (2011) 120 BMLR 134. It is common ground that, once the second stage has been passed, as it was in the case of all of the appellants presenting needs, by an identification of the requisite necessity and thus of the eligibility of the needs, the duty of the local authority to make provision for them in accordance with the third and fourth stages of the inquiry becomes absolute. The second reason put forward by the Court of Appeal, at para 23, for the dismissal of the appellants application was that (b) the local authority are not obliged to meet an individuals needs in absolute terms. Had the present inquiry been into Cambridgeshires decision at the second stage, the Court of Appeals observation would have been impeccable. But, in the context of an inquiry into its decision at the third and fourth stages, it was, with respect, erroneous. The Court of Appeal sought to fortify its observation by adding see para 18 of Savva, where the submissions in paras 16 and 17 are rejected. Its reference was to a decision of a different constitution of that court, reached several months earlier, in R (Savva) v Kensington and Chelsea Royal London Borough Council [2010] EWCA Civ 1209, [2011] PTSR 761, which, like the present, required review of an authoritys determinations at the third and fourth stages of its inquiry into its obligations under section 2 of the 1970 Act. Unfortunately even only a cursory reading of paras 16 to 18 of the judgment of Maurice Kay LJ in the Savva case demonstrates that in the present case, no doubt under pressure, the Court of Appeal misunderstood them. Indeed, in para 18, Maurice Kay LJ said: once Mrs Savvas eligible needs had been assessed, it was under an absolute duty to provide her with the services that would meet those needs or a personal budget with which to purchase them. The above reference by Maurice Kay LJ to a personal budget with which to purchase the necessary services leads to a consideration of the fourth stage of the inquiry. Section 1 of the Community Care (Direct Payments) Act 1996 conferred upon a local authority a discretion to make to specified service users in the field of adult social care a payment which they might themselves apply to the purchase of such services as the authority would otherwise have provided in order to meet their eligible needs. In relation to England and Wales the 1996 Act was repealed by the Health and Social Care Act 2001, which provided for the making of regulations which would substantially extend the system whereby an authority made a direct payment to the service user in lieu of its provision to him of the requisite services in kind. The current regulations are the Community Care, Services for Carers and Childrens Services (Direct Payments) (England) Regulations 2009, SI 2009 No.1887. Once it is satisfied that the persons need for the relevant service can be met by securing the provision of it by means of a direct payment, the authority is in many cases under a duty, with that persons consent, to make such a payment, the amount of which must equate to the reasonable cost of securing the provision: see regulations 7(1)(c) and (2) and 9(1), together with section 57(4)(a) of the 2001 Act. The admirable idea is to empower him with control over his own budget. So, in cases like the present in which a disabled person qualifies for a direct payment in lieu of its own provision of services to him, the local authority is required to proceed to the fourth stage as follows: (iv) What is the reasonable cost of securing provision of the services which have been identified at (iii) as being those for the provision of which it is necessary for the authority to make arrangements? How does a local authority approach the exercise of answering the question at the fourth stage? To set about costing each of the services identified in answer to the question at the third stage upon, as it were, a blank sheet of paper would be unacceptably laborious and expensive. So a mechanism has been devised in order to give the exercise a kick start. It is called a Resource Allocation System (a RAS); and many authorities, including Cambridgeshire, have developed one for their own use. Under a RAS the local authority ascribes a number of points, within a prescribed band, to each of the eligible needs in the particular case. It then calculates the total points and consults a table within the RAS which ascribes an annual sum to the total points. For example, under the model adopted by Cambridgeshire, one point equates to 455 and 55 points (being the maximum under its model) equates to 61k. Crucial to a RAS is a realistic nexus both between needs and points and between points and costs. Cambridgeshire developed its nexus by taking a group of 260 of its service users who were in receipt of a direct payment, by analysing each of the eligible needs for which the payment was made and by seeking to make a realistic attribution of part of the payment to each need. It conducted various counter checks in order to test the robustness of its attribution. It follows that the sum identified by application of a RAS is not the product of a direct, individual costing of each of the requisite services in the particular case. For that reason the use of a RAS is only the first step in a local authoritys search for the answer to the question posed at the fourth stage. As an approximate indicator of the appropriate payment, a RAS collects the Secretary of States approval in the Guidance: see para 130. As the generator of a ball park figure, subject to adjustment up or down, it wins the endorsement of the Association of Directors of Adult Social Services in its publication, dated October 2009, entitled Common resource allocation framework: see p 4. A contention that a RAS is an unlawful tool for an authority to deploy even only as a starting point was rejected in the Savva case, cited above, at p 768F; and it is rightly not revived in the present appeal. Some service users have eligible needs which require so high a level of services that under Cambridgeshires RAS they score total points beyond its maximum of 55. The appellant is a case in point: he scored 62. In order to cater for such cases Cambridgeshire has developed a second indicative tool. It is called an Upper Banding Calculator (a UBC). It reflects in effect three factors which, in Cambridgeshires experience, often greatly elevate the requisite level of services, namely a requirement for a carer to remain awake at night, for two carers to operate simultaneously and for a carer to have specialist expertise. In a case in which its RAS has identified a figure above the maximum, Cambridgeshire asks whether any of these three factors is present and, if so, it calculates, by reference to them, an appropriate annual sum for addition to the principal sum of 61k identified by the RAS. Cambridgeshire insists that it regards the additional sum identified by the UBC as only the second part of the starting point. On that basis I will put aside my failure to understand how Cambridgeshire can discern within the total of 61k the sum for which allowance has already been made for such of the three factors as require an addition under the UBC. What is crucial is that, once the starting point (or indicative sum) has finally been identified, the requisite services in the particular case should be costed in a reasonable degree of detail so that a judgement can be made whether the indicative sum is too high, too low or about right. Such is an exercise which, in accordance with the Guidance at para 121, Cambridgeshire carries out, usually and preferably in conjunction with the service user himself, and it is called the making of a support plan. It may therefore be seen that, in effect, Cambridgeshire provides the answers at stages three and four as a result of a composite inquiry. D: CAMBRIDGESHIRES COMPUTATION OF 85k Following his arrival back home in 2008 Cambridgeshire set about answering in relation to the appellant the questions set at the four stages. Back in 2006, in relation to the first and second stages, there had been an assessment of his presenting needs in accordance with section 47 of the 1990 Act and of their eligibility in accordance with section 4 of the 1986 Act. In April 2009, following what it considered to be obstruction on the part of his mother towards any re assessment, Cambridgeshire resolved that the 2006 assessment should be taken as remaining valid. It accepted all of the appellants presenting needs as critical and thus as eligible. So it turned to address the answers at the third and fourth stages. In April 2009, in order to identify the nature and extent of the requisite services, one of its officers completed a support questionnaire. In the completion of the questionnaire the mother did co operate. But her co operation had a negative feature. This related to her own contribution to the appellants care, which she was then providing at a very substantial level and for which she was in receipt of an annual carers allowance of 5k designed to enable her to purchase limited respite from caring for him. No doubt she reasonably considered that the level of her care of the appellant should be reduced: she claimed in answer to the questionnaire that it was having a critical impact on her lifestyle and could not continue. Yet it seems extraordinary that she should have caused the officer to record, in relation to all of the seven areas of need identified in the questionnaire, that the unpaid support. offered by families was none. No other evidence in the proceedings suggests that the mother has refused to continue to play any role in the care of the appellant living, as he does, within her home; on the contrary, see para 32 below. It is hard to avoid concern about the motives of the mother in having made such representations. It is clear that, irrespective of the outcome of the appeal, Cambridgeshire made three significant mistakes in its analysis, and presentation to the appellant, of the extent of its duty to him under section 2 of the 1970 Act. The first was in its treatment of the mothers representations, through the answers to the questionnaire, that in the future he would receive no natural support. Inevitably it did not accept the representations; but it never stated, whether in writing to the mother or orally to the appellant or otherwise, that it did not accept them. It lulled the appellant and the mother into thinking that, for some extraordinary reason, it did accept them. Even if, in the interests of co operation, Cambridgeshire was prepared to proceed on that basis, it should have put down a marker that it did not accept them. When, in May 2009, by reference to the questionnaire, it performed its RAS and UBC calculations, it made no allowance for natural support. The RAS figure was 61k and the UBC addition was 6k: the total was thus 67k. Had allowance been made for a reasonable level of future support by the mother, the RAS figure would have been about 46k and so there would have been no UBC addition at all. There is no need to dwell on Cambridgeshires offer to the appellant of 67k made in May 2009. By his solicitors, the appellant rejected it but, without prejudice, they agreed to accept it on an interim basis; and agreement was reached that Cambridgeshire should fund a re assessment of his needs by an independent, jointly instructed, social worker, later identified as Mr C. I will not refer to him by name since I propose to make a criticism of him to which he has had no opportunity to respond. By report dated 30 September 2009 Mr C made a detailed assessment of the appellants needs and classified them all as critical. Cambridgeshire accepted both his assessment and his classification: so the first and second stages were again passed. Of relevance for present purposes was Mr Cs report that, out of the funds provided to the appellant on the interim basis, outside carers were being paid to look after him for eight hours during weekdays and for five hours at weekends. Mr C added that the family considered that paid care for 14 hours per day would be preferable. He also recorded, however, contrary to the mothers answers to the questionnaire, that both she and indeed the appellants two siblings were, as one would expect, willing to continue to provide a significant, albeit lesser, degree of care for him. Cambridgeshire and the appellant, by his solicitors, then agreed that, by an addendum report, Mr C should address the third and fourth stages, namely the nature and extent, and the cost, of the services requisite for the meeting of his needs. Mr Cs addendum report, dated 10 December 2009, was a most unhelpful document. It was not an experts report: it was a presentation of what the appellant and his mother wanted. Mr Cs costings totalled 157k. Into his figures he brought forward the suggestion that paid care for the appellant was required to be purchased for 14 hours (thus, for example, from 8:00 am to 10:00 pm) on each day of the year, at (so Mr C wrote) 18 per hour, i.e. 92k. Mr C did not suggest that, in his expert view, paid care of that magnitude was necessary, still less did he explain why such should be. He said only that it was reported that it was necessary: the report, of course, had come from the family and no doubt in particular from the mother. Mr C also identified 13 different educational, therapeutic and leisure activities in which the appellant might engage for a total of 32 hours each week (while the paid carer was presumably expected to sit and wait, as also during the substantial periods to be spent by the appellant in his music room) at a cost of 40k; and, among his remaining provisions, Mr C included two two week holidays each year for the appellant, his mother and a paid carer, at a cost of 19k. Unfortunately the uncritical endorsement of the wishes of the appellant and of the mother by Mr C in his addendum report led them to believe that he had become entitled to provision of such magnitude. Even more unfortunately Cambridgeshires response to the report fortified their belief. The authority considered that, in relation in particular to the level of paid care but also to the suggested activities and holidays, Mr Cs presentation of the requisite services and their cost was manifestly excessive. But it did not say so; and such was its second significant mistake. No doubt allowance falls to be made for the need for an authority to try to co operate harmoniously with the service user in the future and thus for it to avoid any unnecessary injection of conflict. But to the appellant Cambridgeshire gave the impression, in particular, that it was putting forward calculations on the basis of a requirement for 14 hours of paid care on each day of the year not just for the sake of argument but because it considered such a requirement to be reasonable. Thus, again on the curious footing that no natural support would be available to the appellant, it re conducted its RAS calculation, which again, of course, produced the maximum of 61k. Then it re conducted its UBC calculation but, on this occasion, it did so on the premise that there should be an uplift referable to the cost of specialist, paid care for the appellant for 14 hours on each day of the year: the calculation produced an extra 24k. Thus it was that, by letter to the appellants solicitors dated 5 January 2010, Cambridgeshire, by then acting through its legal department, made the offer of 85k which became the subject of challenge in the proceedings. It pointed out that specialist paid care for 14 hours on each day of the year, at (so it suggested) just under 15 per hour, would cost 75k and that on that basis 10k would remain for educational, therapeutic and leisure activities. Such may therefore just about be characterised as a support plan, albeit of an extremely general character. By its letter dated 5 January 2010, Cambridgeshire had thus explained how the offered 85k might be deployed; but it had not explained how it had been computed. In a series of good letters sent during the following five months the appellants solicitors pressed Cambridgeshire to provide such an explanation; but, without prejudice, they agreed to accept payments in accordance with the increased offer on an interim basis and such increased payments have been made to the appellant to date. Contrary, no doubt, to appearances, the offered figure, being the product of the RAS and the UBC, was not, of course, the result of any detailed costing of the services which Cambridgeshire regarded as requisite for the meeting of the appellants eligible needs. But, as Cambridgeshire accepts, the different basis of the two elements of the computation should, in broad terms, have been explained; and such was its third significant mistake. Even a session of mediation which took place in May 2010 proved abortive for want of the explanation; but at least the mediator facilitated the extraction from Cambridgeshire of a commitment to provide it within 14 days. In the event Cambridgeshire finally provided a full explanation under cover of a letter dated 3 June 2010; and it described the offer of 85k as an envelope within which any reasonable support plan might be accommodated. But the process of its arrival at an intelligible explanation of the offer had been, as the Court of Appeal observed, tortuous. Meanwhile, in April 2010, it had provided another, rather more detailed, support plan in order to reflect the fact that, by then (albeit, as it was to transpire, not for long), the appellant was attending the college so needed less paid care. On that basis, as the plan indicated, a very substantial sum namely 28k, would remain available to the appellant for application to other outside activities. I return at last to the appellants twin challenges to the lawfulness of Cambridgeshires determination to offer him 85k. I agree with Langstaff J in R(L) v Leeds City Council, [2010] EWHC 3324 (Admin), at para 59, that in community care cases the intensity of review will depend on the profundity of the impact of the determination. By reference to that yardstick, the necessary intensity of review in a case of this sort is high. Mr Wise also validly suggests that a local authoritys failure to meet eligible needs may prove to be far less visible in circumstances in which it has provided the service user with a global sum of money than in those in which it has provided him with services in kind. That point fortifies the need for close scrutiny of the lawfulness of a monetary offer. On the other hand respect must be afforded to the distance between the functions of the decision maker and of the reviewing court; and some regard must be had to the courts ignorance of the effect upon the ability of an authority to perform its other functions of any exacting demands made in relation to the manner of its presentation of its determination in a particular type of case. So the court has to strike a difficult, judicious, balance. In the Savva case, cited above, Maurice Kay LJ gave helpful guidance as to the proper approach to the provision of reasons in this class of case as follows: 21. In many cases, the provision of adequate reasons could be achieved with reasonable brevity. In the present case, I would consider it adequate to list the required services and assumed timings. together with the assumed hourly cost. That would not be unduly onerous. I appreciate that some recipients require more complicated arrangements which would call for more expansive reasoning but if that is what fairness requires, it must be done. The appellant does indeed require more complicated arrangements than did Mrs Savva. Even in a more complicated case, however, it may be enough for the authority, as here, to attribute a compendious cost to a group of requisite services of similar character, particularly if there are reasons for concluding that general assumptions have been made which, if reflective of error, would reflect error in the service users favour. Notwithstanding what, with respect, were the deficits in its own process of reasoning which I have sought to identify, the Court of Appeal was in my view correct to conclude that Cambridgeshires determination to offer 85k to the appellant survives his twin challenges. His challenge to its rationality may quickly be rejected. Mr Wise has failed to make out his case that the offer did not reflect a rational computation of the cost of meeting the appellants eligible needs. It was rational for Cambridgeshire to use the RAS and the UBC provided that the result was cross checked in the manner to which I have referred. Indeed, apart from additional, more minor, features with which I decline to clutter this judgment, the false premise behind the RAS calculation that the appellant would not continue to receive any natural support, taken together with the arresting premise behind the UBC calculation that he required no less than 16 hours of paid care on each day of the year, generates a provisional conclusion, which there is no evidence to dislodge, that any flaw in the computation is likely to have been in his favour. His challenge to the adequacy of the reasons for the offer is more arguable. Notwithstanding that, in the light of the conflict as to the sufficiency of the offer, it could not produce a support plan reflective of it in conjunction with the appellant, Cambridgeshire should have made a more detailed presentation to him of how in its opinion he might reasonably choose to deploy the offered sum than in the plans put forward in January and April 2010. In particular Cambridgeshire should have made a presentation of its own assessment of the reasonable cost of the principal item of the appellants future expenditure, namely the cost of paying for carers for him. Its belated explanation in June 2010 of the different basis of the indicative calculation, though necessary, did not repair that deficit. Nevertheless, in the light of the amplification of Cambridgeshires reasoning in the mass of evidence filed on its behalf in response to the application for judicial review issued in July 2010, which has enabled the appellant, by Mr Wise, to lead a fully informed inquiry into its determination in courts at three different levels, the result of which leaves no real doubt about its lawfulness, it would be a pointless exercise of discretion to order that it should be quashed so that the appellants entitlement might be considered again, perhaps even to his disadvantage. E: CONCLUSION So I would dismiss the appeal. LADY HALE I agree that this appeal must be dismissed for the reasons given by Lord Wilson. The case is, and has always been, a challenge (a) to the rationality, and (b) to the adequacy of the reasons given for the local authoritys decision to pay the appellant an annual sum of (in round figures) 85,000 in discharge of their duty to him under section 2(1) of the Chronically Sick and Disabled Persons Act 1970. But his advisers were no doubt emboldened to add an invitation to this court to reconsider the decision of the House of Lords in R v Gloucestershire County Council, Ex p Barry [1997] AC 584 by some remarks of mine in R (McDonald) v Kensington and Chelsea Royal London Borough Council [2011] UKSC 33, [2011] PTSR 1266. It was for that reason that a court of seven justices was convened and four charities (The Royal National Institute of Blind People, The National Autistic Society, The Guide Dogs for the Blind Association and Sense) and the Secretary of State for Health intervened in the proceedings. If apology is due, it is certainly due from me more than any other member of this court, but after considering what both Lord Wilson and I have to say, they may feel that their journey has not been entirely in vain. At the hearing, it rapidly became apparent that the issue with which Barry was concerned to put it as neutrally as possible, the extent to which the resources of a local authority may be taken into account in making decisions under section 2 simply does not arise in this case. The local authority do not rely at all upon resource constraints to justify or to explain their decision. Rather they rely upon equity between all their disabled clients. The appellant is indeed very severely disabled and all his needs have been assessed as critical within the meaning of Prioritising need in the context of Putting People First: A whole system approach to eligibility for social care, the Department of Healths statutory Guidance on Eligibility Criteria for Adult Social Care (2010). The local authority say that the figure which they have arrived at is more than sufficient to meet the appellants needs. The appellants advisers were understandably baffled by the explanations given by the local authority for how they had arrived at the various figures given in the course of negotiations with the family. The figure generated by the Resource Allocation System (RAS) is not intended to be an item by item calculation of what it will cost to meet each of the applicants enumerated needs. Rather, as the Association of Directors of Adult Social Services (ADASS) explain in their Common resource allocation framework (October 2009, p 4), it is a ballpark figure for the majority of users which can be adjusted up or down, depending upon those individual circumstances. In Cambridgeshire, the framework has been devised by reference to the total costs of the care packages for a number of disabled people. The figure generated by the framework (the maximum) has then been adjusted upwards by reference to the authoritys upper banding calculator. This does give the impression that the whole calculation is based upon an itemised bill of costs. Hence some of the confusion. But the object is rather to produce a total sum which the authority are satisfied can meet the reasonable costs of securing the services he needs. It is then up to the applicant (or in this case his mother) to use that sum as suits him best. Given that the authority have never thought that he needed all the items claimed at the cost claimed for them, it is scarcely surprising that they consider that the total offered is more than sufficient for this purpose. This court cannot conclude that that decision is irrational and however confusing the explanations have been, the family and the court do now have an explanation which makes sense. As resources did not come into the local authoritys decision making at any stage, it was the unanimous decision of this court that we should not undertake a re examination of the Barry decision. Even if a majority had taken the view that it was wrongly decided, this could not be the ratio decidendi of this case. Thus it would not be binding authority in any later case where the issue actually mattered. As Lord Wilson observes, it is important to say as little as possible and certainly nothing controversial about the decision in the Barry case (at para 7 above). I would only add that this wise observation applies as much to any account of what was in fact decided in Barry as it does to any observations about whether that decision was a correct interpretation of section 2(1) of the 1970 Act. We have not heard argument on either point. Mr Richard Gordon QC, appearing on behalf of the four intervening charities, has argued that Barry has been widely misunderstood. He may well be right. As Lord Wilson has offered an analysis, it is worth while digging just a little deeper. It is possible to break down the decision making involved in section 2(1) in a number of different ways. Lord Wilson has broken it down thus (at paras 15 and 23): (i) what are the needs of the disabled person; (ii) is it necessary for the local authority to make arrangements to provide any of the listed services in order to meet those needs; (iii) if so, what are the nature and extent of the services for the provision of which it is necessary for the local authority to make arrangements; and (iv) if the disabled person qualifies for a direct payment, what is the reasonable cost of securing the provision of those services? That division is by no means crystal clear from the speeches in Barry. The clearest analysis is that of Lord Lloyd, in the minority, who stated that section 2 involved three stages: (i) assessing the needs of the disabled person; (ii) deciding whether it is necessary for the authority to make arrangements to meet those needs; and (iii) making the necessary arrangements (direct payments had not then been invented). In his view, there was not much dispute about the second and third stages. It was agreed that once stages (i) and (ii) were passed, (iii) was an absolute duty. It was also agreed that there had to be flexibility over (ii). It was over the first stage that the battle was joined (pp 597H to 598C). In his view, Parliament had not intended that resources be taken into account in assessing need (p 599H). But it is also clear that in his view, the majority favoured taking resources into account at stage (i) as well as at stage (ii). That may be what Lord Nicholls meant when he said that cost is a relevant factor in assessing a persons needs for the services listed (p 605D). But he also said that his reasons were substantially to the same effect as those of Lord Clyde (p 606B). Lord Clyde does not break the decision making down into clear stages; but he does distinguish between the assessment of the severity of the condition or the seriousness of the need and the level at which there is to be satisfaction of the necessity to make arrangements, and then observes that If my resources are limited I have to need the thing very much before I am satisfied that it is necessary to purchase it (pp 610G to 611A). That would be consistent with taking resources into account at Lord Wilsons stage (ii) and balancing them against the severity of the need objectively established at his stage (i). Lord Steyn simply agreed with Lord Lloyd (p 606C) and Lord Hoffmann simply agreed with Lord Nicholls and Lord Clyde (p 606D). Mr Gordon, on behalf of the disabled applicants in Barry, had in fact argued that resources were not to be taken into account in either stage (i) or stage (ii) (p 591G). It is, of course, possible to break the analysis of section 2(1) down in a slightly different way (see McDonald, at [69]): (i) what are the needs of the disabled person, (ii) what arrangements are necessary to meet those needs, and (iii) which of those arrangements is it necessary for the local authority to make? But whichever way it is broken down, the one clear message which emerges from the majority in Barry is that the local authority are entitled to take their resources into account in deciding whether it is necessary for them to make the arrangements to meet the disabled persons needs. This message is then encapsulated in the distinction drawn in the Departmental Guidance, between presenting needs, the needs which the disabled person actually has, and eligible needs, the needs which the local authority consider it necessary for them to meet (at [47]). The Guidance tries to achieve consistency of assessment among local authorities, by setting out objective criteria for distinguishing between critical, substantial, moderate and low levels of need (at [54]). But it is left to each local authority to decide which level of need will be eligible for the services which they provide or arrange. The unpalatable result is that exactly the same level of presenting need will be eligible for services in one authority area but not in another. But that is currently the law. All of this is consistent with the view that resources are not to be taken into account at stage (i). Indeed, as the above analysis reveals, it is doubtful that the majority in Barry thought that they should be. Their speeches and conclusions are just as consistent with resources only being relevant at Lord Wilsons stage (ii). And as he observes (at para 5 above), if they did hold resources relevant at stage (i), there are indeed arguable grounds for fearing that they fell into error. But, having considered the matter with some care, it would appear to me that they did not fall into that error (it is a separate question whether their conclusion at stage (ii) was also in error). These observations, along with those of Lord Wilson on this subject, are strictly by the way, but I am grateful to him for the opportunity he has given us to clarify the debate. |
In 2006 and 2007 a number of London local authorities entered into arrangements for mutual insurance against various classes of risk, including property, liability and terrorism. Mutual insurance occurs where a group of similarly placed persons or organisations agree to insure each other against risks in which they all have an interest. It relieves its members of the profit element which is built into an ordinary commercial premium. The criteria for membership may also reduce the level of risk, and thus the overall cost of cover, in comparison with the level of premium that is needed where risks are accepted from a large number of policy holders, some of whom represent a greater risk than others. The aim of the arrangements that the London local authorities entered into was to reduce the cost of premiums to its members and to raise the standard of risk management. In pursuing these objectives they were acting solely in the public interest. The insurance was to be provided by London Authorities Mutual Ltd (LAML), a company limited by guarantee. One of the local authorities involved in these arrangements was the London Borough of Brent (Brent). On 9 October 2006 Brents Executive gave approval in principle to Brents participation in LAML, subject to a report from officers once they had fully explored the option and taken legal advice. On 13 November 2006 the Executive was told that the cost of the insurance premiums with LAML would be at least 15% less than the premiums Brent was paying an insurance company for its insurance, and that this saving could be used in its budget to fund priority growth or to reduce overall expenditure and hence the level of council tax. Having also been advised that Brent had power to enter into the arrangements, the Executive resolved to give approval to its participation in capitalising LAML. In December 2006 Brent decided to invite tenders for combined and miscellaneous insurance for the period commencing 1 April 2007. The invitation, which was divided into seven lots and was issued in accordance with the Public Contracts Regulations 2006 (2006 SI/5) (the 2006 Regulations), was extended to, among others, Risk Management Partners Ltd (RMP). RMP was informed that the invitation was being issued because it was not clear whether LAML would be a viable option until January 2007, by which date it would be too late to seek tenders. This invitation was abandoned because the brokers had used incorrect documentation. Brent became a member of LAML, as did nine other of the 32 London boroughs including Harrow London Borough Council (Harrow), by subscribing to its Memorandum and Articles of Association on 18 January 2007. In February 2007 Brent again invited tenders in accordance with the 2006 Regulations for the same period, to be submitted by 23 February. RMP submitted a tender. LAML did not do so. It took no part in the public procurement process. On 16 March 2007, after LAML had been authorised to carry out insurance business by the Financial Services Authority, Brent paid to LAML the sum of 160,500 as a capitalisation amount. On 27 March 2007 it entered into a guarantee by which it undertook to pay sums on demand to LAML up to an aggregate amount of 609,500. On the same date Brent informed RMP that it had abandoned the contract award procedure that was being carried out in accordance with the 2006 Regulations for six of the seven lots, as it was proposing to award the contract to LAML. On 30 March 2007 LAML submitted an offer to insure Brent in respect of terrorism, liability, property and contents for 2007 2008. Brent accepted this offer and, on payment of premiums of 520,328.14, it became a participating member of LAML. On 6 April 2007 it issued a press notice announcing that LAML had opened for business. The court was informed that the company is now in provisional liquidation. The business of LAML was restricted to the provision of insurance to participating members or persons or bodies sponsored by them, referred to in the Memorandum of Association as affiliates. It was funded by paid and guaranteed contributions from participating members, by premiums, by supplementary calls on participating members and by reinsurance placed in the open market. The management of its affairs was vested in a Board which comprised a majority of directors appointed by participating members. There had to be at least two independent directors. On 27 March 2007 LAML entered into a management agreement with Charles Taylor & Co Ltd to perform for it the various management services described in the agreement. RMP decided to challenge these arrangements. It claimed that, as a commercial insurer, it might have obtained the insurance business that was placed with LAML had the tender process under the 2006 Regulations not been discontinued. Its challenge took two distinct forms. First, RMP took proceedings in the administrative court seeking judicial review of Brents decision to participate in LAML on the ground that it was beyond its statutory powers. Harrow and LAML participated in those proceedings as interested parties. Secondly, in separate proceedings in the Queens Bench Division, RMP claimed damages against Brent on the basis that by entering into insurance contracts under the mutual insurance scheme it had acted in breach of the 2006 Regulations. By a judgment delivered on 22 April 2008 Stanley Burnton LJ declared that Brent had no power under either section 111 of the Local Government Act 1972 or section 2 of the Local Government Act 2000 to participate in establishing LAML or become a participating member of that company, or to make payment of the capitalisation amount or to grant a guarantee to the company: [2008] EWHC 692 (Admin); [2008] LGR 331. By a further judgment delivered on 16 May 2008 Stanley Burnton LJ held that Brent had acted in breach of the 2006 Regulations when it abandoned the tender process and awarded the insurance contracts to LAML: [2008] EWHC 1094 (Admin); [2008] LGR 429. His judgment in that action was confined to the issue of liability. He reserved issues of causation and quantum of damages. He granted permission to appeal in both cases. By a single judgment the Court of Appeal (Pill, Moore Bick and Hughes LJJ) affirmed both decisions and dismissed the appeals: [2009] EWCA Civ 490; [2010] PTSR 349. The scope of the dispute has narrowed considerably since the decision of the Court of Appeal. There have been two significant developments. First, on 12 November 2009 Royal Assent was given to the Local Democracy, Economic Development and Construction Act 2009 (the 2009 Act). Section 34 of the 2009 Act gives power to local authorities to enter into mutual insurance arrangements of the kind in issue in this case. It also permits the benefit of such arrangements to be extended to other persons to be specified by regulation. That section is not yet in force, but it is expected to be brought into force shortly. This change in the law has largely superseded any question as to the statutory power of local authorities to enter into such arrangements. Secondly, the proceedings between Brent and RMP have been settled. This has resulted in Brent being given leave to withdraw its appeal to this court. In the result the appeal is now confined to the question of principle arising in the damages action only, in which Harrow still has an interest. This is whether, by entering into the mutual insurance arrangements with LAML, Harrow was acting in breach of the 2006 Regulations. In their written case Counsel for Harrow explain why, notwithstanding the enactment of section 34 of the 2009 Act, this question of principle continues to be of considerable importance. Until it ceased trading in 1992, most insurance provided to local authorities in the United Kingdom was provided by Municipal Mutual Insurance Ltd. As its name indicates, that company was a mutual insurer. It was created on the initiative of a number of local authorities and had been in existence since 1903. Mutual insurance is potentially a source of significant financial savings for local authorities, and it provides other advantages which are not readily available in the commercial insurance market. The effect of the decisions of Stanley Burton LJ and the Court of Appeal, if they are allowed to stand, is that local authorities are likely to find it difficult in practice to avail themselves of their expanded powers under section 34 of the Act of 2009 because of the requirement that they must comply with the 2006 Regulations. This is a source of real concern not only to Harrow but also to other local authorities insured by LAML or who are interested in obtaining mutual insurance on a similar basis. There are currently six other actions for damages pending in the High Court against local authorities who contracted with LAML. They have been stayed pending this appeal. The Public Contracts Regulations 2006 The 2006 Regulations were made under section 2(2) of the European Communities Act 1972. They give effect to Council Directive 2004/18/EC of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L134, p 114). The broad object of Directive 2004/18/EC, and of the Regulations that give effect to it, is to ensure that public bodies award certain contracts above a minimum value only after fair competition, and that the award is made to the person offering the lowest price or making the most economically advantageous offer. Directive 2004/18/EC replaced earlier EC legislation to the same effect, including Directives 92/50/EEC and 93/36/EEC with which some of the decisions of the European Court that it will be necessary to refer were concerned. But the differences between them are not relevant to the issue arising in this appeal. So I shall refer to them all, without regard to which of them was in play in each case, as the Directive. Regulation 5 of the 2006 Regulations provides that the Regulations apply whenever a contracting authority seeks offers in relation to the award of a variety of public contracts and other arrangements, including a Part A services contract. It is agreed that insurance contracts of the kind and values awarded by Brent to LAML were contracts under which services specified in Part A of Schedule 3 were to be provided and that the definition of a Part A services contract in regulation 2(2) is satisfied. Regulation 30(1) sets out the basic rule. It provides that a contracting authority shall award a public contract on the basis of the offer which (a) is the most economically advantageous from the point of view of the contracting authority or (b) offers the lowest price. Regulation 3 provides a list of bodies that are to be taken to be a contracting authority for the purposes of the Regulations. Among those listed is a local authority. Harrow is a contracting authority for those purposes, as of course was Brent. Various expressions used in the 2006 Regulations are defined in regulation 2. The expression public contract means a public services contract, a public supply contract or a public works contract. Public services contract means a contract, in writing, for consideration (whatever the nature of the consideration) under which a contracting authority engages a person to provide services but does not include (a) a public works contract; or (b) a public supply contract; but a contract for both goods and services shall be considered to be a public services contract if the value of the consideration attributable to those services exceeds that of the goods covered by the contract and a contract for services which includes activities specified in Schedule 2 that are only incidental to the principal object of the contract shall be considered to be a public services contract. Services provider means a person who offers on the market services and who sought, or would have wished, to be the person to whom a public services contract is awarded or to participate in a design contest and which is a national of and established in a relevant state. RMP, as a commercial insurer, is a person who offers on the market services within the meaning of that definition. The issues Harrow does not claim to have observed the 2006 Regulations when it placed insurance with LAML. As in Brents case, the contract which it entered into with LAML was not put out to tender. The question which Harrow raises in its defence is whether the 2006 Regulations apply to the kind of collective provision of services that its contract with LAML involved. Article 1(2)(a) of the Directive defines public contracts as contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services within the meaning of this Directive. It submits that the question what is a public contract for the purposes of the EU public procurement regime is a question of EU law. Under English law a contract requires agreement between two distinct juridical persons. But EU law has developed its own autonomous concepts for determining whether the parties to an agreement are sufficiently distinct for it to constitute a public contract. It is fundamental to the operation of the regime that it applies only to contracts awarded to external contractors, and is not intended to prevent a public authority from procuring the relevant goods or services from its own resources. This gives rise to no particular difficulty where a public authority seeks to make use of services that it can provide for itself in house. The problem arises where the public authority wishes to procure them from a distinct juridical entity with which the authority is closely associated or from a distinct juridical entity which is closely associated with a consortium of authorities to which it belongs. There is now a substantial body of case law in the Court of Justice of the European Union on this issue. The leading decision is Teckal Srl v Comune di Viano and Azienda Gas Acqua Consorziale (AGAC) di Reggio Emilia (Case C 107/98) [1999] ECR I 8121 (Teckal). AGAC was a corporate entity which had been set up by a consortium of Italian municipalities to provide energy and environmental services to the participating authorities. For some time prior to 1997 Teckal had supplied fuel to Viano and had serviced its heating systems. In May 1997 Viano decided to switch its custom to AGAC. It did so without inviting competing tenders from other interested persons. Teckal challenged this decision on the ground that Viano had failed to comply with Directives 92/50/EEC (as to services) and 93/36/EEC (as to goods). Vianos case was that it had decided to undertake these matters itself through a body which had been set up for the purpose. In para 41 of its judgment the court said: In order to determine whether the fact that a local authority entrusts the supply of products to a consortium in which it has a holding must give rise to a tendering procedure as provided for under Directive 93/36, it is necessary to consider whether the assignment of that task constitutes a public supply contract. In para 49, as to whether there was a contract for this purpose, it said that the national court must determine whether there had been an agreement between two separate persons. In para 50 it then gave guidance as to how the issue as to whether it was a public service contract was to be determined: In that regard, in accordance with article 1(a) of Directive 93/36, it is, in principle, sufficient if the contract was concluded between, on the one hand, a local authority and, on the other, a person legally distinct from that local authority. The position can be otherwise only in the case where the local authority exercises over the person concerned a control which is similar to that which it exercises over its own departments and, at the same time, that person carries out the essential part of its activities with the controlling local authority or authorities. In para 51 it said that the Directive applied only to contracts between a public authority and an entity which was formally distinct from it and independent of it in regard to decision making. Two conditions must therefore be satisfied if a contract between a public authority and a legally distinct entity is to be taken out of the scope of the Directive. First, the public authority must exercise control over the entity with which it contracts. But it may wish to co operate with other public authorities in the procurement of services. As the contractor in Teckal was a consortium company, the decision in that case suggests, without actually saying so, that control can be exercised by a public authority jointly with other public authorities. This condition was referred to in argument as the control test. Secondly, the contractor must carry out the essential part of its activities with the controlling local authority or authorities. This condition was referred to as the function test. The Teckal exemption is not referred to anywhere in the Directive. It is a judicial gloss on its language. Harrow submits that it reflects the courts view of the Directives wider economic purpose and its traditional concern with economic substance as opposed to legal form. Its case is that agreements between a public authority and a controlled entity, although satisfying all the requirements of contractual validity imposed by the national law of contract, are nevertheless not to be treated as public contracts for the purposes of the Directive if the reality is that they are in house arrangements made by the public authority itself or by a group of public authorities acting collectively for their public purposes. RMP has however raised a threshold issue as to whether the Teckal exemption has any application in domestic law to the public procurement regime that the 2006 Regulations set out. This is because the Regulations are drafted in terms of English law and do not refer to or expressly enact the exemption. It was agreed that the following issues arise on this appeal: (1) Does the Teckal exemption apply to the 2006 Regulations? (2) If so, is the exemption applicable where the contract is for insurance? (3) If so, to satisfy the Teckal control test, must the contracting authority exercise a control over the legally distinct entity which is similar to that which it exercises over its own departments, or is it sufficient that control is exercised by the contracting authorities collectively? (4) If it is sufficient that the contracting authorities exercise that control collectively, is that requirement satisfied in this case? (5) Is the Teckal function test also satisfied in this case? (6) Is a reference to the Court of Justice required on issue (2) or the issues about the control test? Stanley Burnton LJ held that the Teckal exemption applied to the 2006 Regulations. He held that the term contract in the Regulations should be construed in the light of the expressed intention to implement the Directive and as requiring two contracting parties that do not satisfy the Teckal conditions: [2008] LGR 429, para 65. He rejected RMPs argument that it would be inconsistent with the Teckal exemption to apply it to insurance: para 67. The real issue, as he saw it, was whether on the facts the requirements of the exemption were satisfied. Having examined the Memorandum and Articles of Association of LAML and the Rules appended to the Articles, he said that the general picture that they gave was of a business the administration of which was relatively independent, and of a relationship between Brent and LAML that was inconsistent with Teckal: para 78. He did not find it necessary to consider whether the function test was satisfied. The Court of Appeal agreed with Stanley Burnton LJ on the question whether the Teckal exemption formed part of the 2006 Regulations: [2010] PTSR 349, paras 133 (Pill LJ), 225 (Moore Bick LJ). It held that the requirements of the Teckal control test were not satisfied. Pill LJ said that the nature of LAMLs business and the possibly differing interests of different authorities and affiliates, were antithetic to the necessary local authority control: para 131. Moore Bick LJ said that the facts showed that the Board of LAML was intended to exercise a substantial amount of discretionary control over the way the company was run, particularly in relation to its dealing with individual members, and that the nature of the relationship between the member as insured and LAML was essentially one between independent third parties: para 236. Pill LJ said that, if he had found that the Teckal control test was satisfied, he would have been prepared to find that the Teckal function test was satisfied also: para 132. Does the Teckal exemption apply to the 2006 Regulations? Mr Howell QC for RMP submitted that the 2006 Regulations should be construed and applied in the same way as any other regulations made under domestic law, unless they were found to be incompatible with EU law. There was no such incompatibility in this case. They were within the powers of section 2(2) of the European Communities Act 1972, as it permits a domestic measure to be wider in its effects than the EU measure to which it gives effect. So it would not have been incompatible for them to have subjected more contracts to the procurement regime than EU law required. They did not contain a Teckal exemption, but the Directive did not in terms do so either. As for their terms, they did not simply reproduce the wording of the Directive. On the contrary, they set out the requirements for procurement in domestic law in terms of domestic legal concepts. Instead of adopting the definition of public contracts in article 1(2)(a) of the Directive, they provided their own definitions of public contract and public services contract. The definitions were all couched in terms of domestic contract law, in the interests of greater certainty. There was no evidence as to whether national contract procurement rules in other member states included a Teckal exemption, but there was nothing odd about having different contract procurement regimes. The Commission could have directed that it was to be applied in all Member states, but it had not done so. I do not find these arguments persuasive. It is a sufficient answer, as Mr Sumption QC for Harrow submitted, to say that the basis for implying the Teckal exemption into the 2006 Regulations is to be found in their underlying purpose, which was to give effect to the Directive. The absence of any reference to the exemption in the Regulations is of no more significance than the absence of any reference to it in the Directive that was being transposed. The exemption in favour of contracts which satisfy its conditions was read into the Directive by the European Court in Teckal because it was thought to be undesirable for contracts of that kind to be opened up for public procurement. This was not just a technicality. It was a considered policy of EU law. It would be odd if a significant and policy based exemption were to apply in some member states and not others, especially as one of the aims of the Directive was to harmonise procedures. This can be seen from recital (2) of the preamble to the Directive, which states in part: for public contracts above a certain value, it is advisable to draw up provisions of Community coordination of national procedures for the award of such contracts which are based on [the principles of non discrimination, mutual recognition, proportionality and transparency] so as to ensure the effects of them and to guarantee the opening up of public procurement to competition. Furthermore, as some of the authorities that I will refer to later show, the Teckal exemption applies equally to cases where, because the relationship does not fall within the scope of the Directive, the issue is one as to its compatibility with articles 12, 43 and 49 of the EC Treaty: Parking Brixen GmbH v Gemeinde Brixen (Case C 458/03) [2005] ECR I 8585; Asociacin Nacional de Empresas Forestales (Asemfo) v Transformacin Agraria SA (Tragsa) (Case C 295/05) [2007] ECR I 2999; Coditel Brabant SA v Commune dUccle (Case C 324/07) [2008] ECR I 8457. So it does not depend on the meaning to be given to particular words or phrases in the Directive, such as those to be found in the definition of public contracts in article 1(2)(a). The basis for it is more fundamental than that. That is why, as Advocate General Geelhoed pointed out in Asemfo [2007] ECR I 2999, paras 58 59, services where no element of a contract for a pecuniary interest is involved (and which, for that reason, lie outside the scope of the Directive but are within the scope of the EC Treaty) but which have the same effect in economic terms as an arrangement in which one authority entrusts services under contracts for pecuniary interest to an entity which is under the control of another authority (which are public contracts within the meaning of the Directive) should be judged as far as possible by the same measure. It is true that section 2(2) of the European Communities Act 1972 is in wide terms. It does not confine any measures made under it to doing the minimum necessary to give effect to a Directive. But, if it is to be within the powers of the subsection, the measure has to arise out of or be related to an EU obligation. As Waller LJ said in Oakley Inc v Animal Ltd (Secretary of State for Trade and Industry intervening) [2006] Ch 337, para 39, the primary objective of any secondary legislation under section 2(2) must be to bring into force laws which, under the Treaties, the United Kingdom has agreed to make part of its laws. There is nothing in the Explanatory Memorandum to the Regulations that was prepared by the Office of Government Commerce and laid before Parliament to indicate that it was intended to depart from the jurisprudence of the court as to the scope of the Directive. In paras 7.2 7.4 of the Memorandum it was stated that the change to the legislation was necessary to implement the new public procurement Directive, that it clarified and modernised the previous texts and that the simpler and more consistent public sector text should reduce the burdens involved under the EU rules. If the Teckal exemption were to be held not to apply to the 2006 Regulations, it could only be because the purpose of the Regulations was to apply the public procurement rules to relationships that fell outside the regime provided for by the Directive. But that would not be consistent with the Memorandum, and it would not be a permitted use of the power. As for the meaning and effect of the 2006 Regulations, I think that it would be wrong to apply a literal approach to the words and phrases used in it, such as in the definitions of public contract and public service contract. A purposive approach should be adopted. As Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 881 indicated, this means that regard must be had to the context in which the Regulations were made, to their subject matter and to their purpose. Would it be inconsistent with the achievement of that purpose if the Teckal exemption were not to be held to apply to them? Was this an exemption to which Parliament must have intended them to be subject? Having regard to the background of EU law against which the Regulations were made, the definitions in the Regulations can be taken to express the same idea as those in the Directive. Thus something which amounts to a contract in domestic law can nevertheless be held, without doing undue violence to the words of the Regulations, not to be a relevant contract for the purpose of the public procurement rules. I would hold accordingly that the Teckal exemption does apply to the 2006 Regulations. By implication, the rules that it lays down do not apply to contracts between a public authority and a person which is legally distinct from it if, but only if, the control and function tests identified in Teckal are both satisfied. Is the exemption applicable where the contract is for insurance? Mr Howells argument on this issue was based in the proposition that the Teckal exemption applies only where there was no contract, by which he meant that there was in substance no agreement between two separate persons. A contract of insurance, which by its very nature transferred the insured risk from one person to another, could not meet that requirement. It was inherently a contract between two different people. Insurance is not something which can be internal to the contracting authority. So the arrangements between Harrow and LAML were not entitled to the benefit of the exemption. Mr Sumptions reply to this submission was equally short. It was obvious that a person could not insure himself. As Moore Bick LJ said in the Court of Appeal, para 236, the nature of the relationship between the participating member and LAML as insurer was essentially one between independent third parties. But it was not a pre condition of the Teckal exemption that the services which were the subject of the contract between the local authority and the other person should be services that were capable of being provided by one of the local authoritys own departments. Stanley Burnton LJ was right to observe that there was no reason why a public authority could not establish a captive insurer with its own resources: [2008] LGR 429, para 67. I would reject Mr Howells proposition that the Teckal exemption applies only where there is no agreement between two separate persons. That is a misreading of paras 50 and 51 of Teckal. It is, of course, necessary that there be a contract for pecuniary interest concluded in writing between one or more economic operators for the Directive to be applicable: see the definition of public contracts in article 1(2)(a). The whole point of the Teckal exemption, however, is to build on that starting point and to define the circumstances in which, as para 50 puts it, the position can be otherwise. It assumes that there is a contract between two separate entities. So the mere fact that the nature of the relationship between an insured and his insurer is essentially one between two independent parties does not, of itself, make the exemption inapplicable. It is a necessary consequence of the nature of that relationship that the transfer of risk from one person to another is not a service that a local authority can provide for itself. But I can detect no indication from what was said in paras 50 51 of Teckal and subsequent authorities that this is a factor of the slightest importance. This point is confirmed by the courts reasoning in Commission of the European Communities v Federal Republic of Germany (Case 480/06) [2009] ECR I 4747, para 47: see para 51, below. What matters is whether the arrangement satisfies the control test. If it does, an insurance contract is as just as eligible for exemption under Teckal as a contract for the collection and disposal of waste. The control test The first issue as to the application of the control test to this case is one of principle. It arises where, as in this case, several local authorities combine together to procure services from an entity which is formally distinct from any of them. For the Teckal exemption to apply must each contracting authority exercise the required control over the formally distinct entity itself in a manner which is similar to that which it exercises over its own departments? Or is it sufficient that the contracting authorities exercise that control over it collectively? In short, is individual control necessary? The answer to this question lies at the heart of this case. This is because of the way the Rules annexed to LAMLs Articles of Association deal with the handling and settlement of claims by LAML. The third paragraph of rule 21 provides that all lawyers and others appointed by LAML for the account of the participating member shall be answerable to LAML without prior reference to the participating member. Rule 22 sets out the powers of the board relating to recoveries from LAML. It provides: The board shall consider claims which may be paid by [LAML] in accordance with these rules, but the board shall have power from time to time to authorise the managers to effect and determine payment of claims without prior reference to the board. Without the prior agreement of the board, no member director of [LAML] shall sit on the board while it is engaged in the consideration or settlement of any claim in which the participating member of that member director is interested. The effect of rule 22, as Stanley Burnton LJ observed [2008] LGR 429, para 78, is that a participating member will normally be excluded from the Boards consideration of its insurance claim. The degree of independence of decision making in the handling and settlement of claims is apparent also from rule 21 and from article 11 of LAMLs Articles of Association which provides that a participating member shall cease to be a participating member if the board in its judgment determines it is undesirable for a participating member to continue to be a participating member. These provisions are both appropriate and desirable given the importance of ensuring that there is fair dealing between all the participating members if one of them seeks an indemnity from LAML. But they are very different from those which an individual local authority would agree to with one of its own departments. It is hard to see how these arrangements could be said to be similar to that which Harrow, in particular, exercises over the departments which it employs to carry out its functions as a local authority. Everything therefore is likely to depend on whether control can be exercised by the local authorities collectively. In Teckal there was collective control. AGAC was a consortium established by 45 Italian municipalities to manage and control energy and environmental services. Viano, which was a member of the consortium, had been supplied with fuel and had its heating services serviced by Teckal, which was a private company. It decided to switch its custom to AGAC without inviting tenders from others. Teckal challenged this decision on the ground that Viano had failed to comply with the then current Directives. It was met with the argument that Viano had merely decided to undertake these things for itself through a body which had been set up for the purpose. The question whether individual control was necessary was not explored by the court. The control test in para 50 is expressed in the singular, not the plural: similar to that which it exercises over its own departments. The ruling is also expressed in the singular. But the function test in para 50 ends with the phrase the controlling authority or authorities. (emphases added) The point of principle was left open. So it is necessary to examine some of the later cases in which the Teckal exemption has been developed and explained to find the answer to it. Mr Sumption selected six cases in support of his argument that it is now plain that it is enough if the control is exercised collectively. He summarised his submission in this way. Where the contractor is controlled by a consortium of public authorities, and is sufficiently identified with their public purposes and functions, the control test will be satisfied. This will be so even though it is in the nature of collective control that no single authority can be said to exercise the kind of control which it would have over one of its own departments. In effect EU law treats the controlling group as if it were a single public authority dealing with a captive contractor that is to say, a contractor which is wholly identified with the controlling group and has no wider commercial objectives. There is no doubt that the case law on the Teckal exemption has become progressively clearer as the European Court has developed its jurisprudence on public procurement and has placed a growing emphasis on the underlying rationale. In Stadt Halle v Arbeitsgemeinschaft Thermische Restabfall und Energieverwertungsanalage TREA Leuna (Case C 26/03) [2005] ECR I 1 (Stadt Halle) the City of Halle decided to award a contract for the handling and disposal of its waste to RPL, a company with limited liability. Just over three quarters of RPLs shares were held by a wholly owned subsidiary of a company wholly owned by Halle. Just under one quarter were held by a private company. Leuna challenged the proposed contract on the ground that Halle had failed to comply with the Directives. The question was whether the existence of a substantial private shareholding in the contractor was inconsistent with the control test. The court observed in para 49 that in Teckal the distinct entity was wholly owned by the public authorities. On the other hand, participation, even as a minority, of a private undertaking excluded the possibility of the contracting authority exercising a control similar to that which it exercises over its own departments. This was incompatible with the Teckal exemption because the element of private capital meant that the control test was not satisfied. That was not a case about collective control as the City of Halle was not a member of a consortium. But the case is of interest nevertheless. In her opinion Advocate General Stix Hackl broke new ground when she addressed the issue of what she called quasi in house procurement. In para 49 she said that this differed from in house supply in that it involved awards to an entity entirely separate from the contracting authority and having legal personality. In her opinion the case turned on the application of the control test and, despite the minority shareholding, this test was satisfied: paras 62, 70. The court disagreed with her only on the question whether the control test was satisfied. Any exception to the application of the obligation to apply the Community rules in the field of public procurement must be interpreted strictly: para 46. In para 48 the court identified the exception on which the City of Halle sought to rely: A public authority which is a contracting authority has the possibility of performing the tasks conferred on it in the public interest by using its own administrative, technical and other resources, without being obliged to call on outside entities not forming part of its own departments. In such a case, there can be no question of a contract for pecuniary interest concluded with an entity legally distinct from the contracting authority. There is therefore no need to apply the Community rules in the field of public procurement. The minority shareholding by the private company in RPL made all the difference, however. The award of a public contract to what the court termed a semi public company without calling for tenders would interfere with the objective of free and undistorted competition and give it an advantage over its competitors: para 51. The control test was not satisfied. In Parking Brixen GmbH v Gemeinde Brixen (Case C 458/03) [2005] ECR I 8585 (Parking Brixen) the municipality of Brixen granted a concession for the management of two car parks to a company which it wholly owned. The court held that this was a public service concession to which the then applicable Directive did not apply: para 43. But it said that public authorities are nevertheless bound to comply with the fundamental rules of the EC Treaty in general and with the principles of non discrimination on grounds of nationality in particular as set out in articles 12EC, 43EC and 49EC: para 49. Their application did not depend on the existence of a contract. The Teckal principles could be transposed to the Treaty provisions, but it was not appropriate to apply the Community rules to public service concessions which were excluded from the scope of the public procurement Directives: para 61. The application of the rules in articles 12EC, 43EC and 49EC was precluded if the control exercised was similar to that which the public authority exercises over its own departments and if the concessionaire carries out the essential part of its activities with the controlling authority: para 62. As already noted, these findings provide authority for Mr Sumptions submission that the application of the Teckal exemption does not depend on the meaning to be given to particular words or phrases in the Directive, such as those to be found in the definition of public contracts in article 1(2)(a): see para 23, above. The court recognised that the basis for the Directive was to be found in the fundamental rules that were to be found in the EC Treaty. The problem for Brixen was that the concessionaire was a company limited by shares resulting from the conversion of a special undertaking of the public authority. Applying the control test as described in Teckal, the court said in para 65 that the assessment must take account of all the legislative provisions and relevant circumstances: It must follow from that examination that the concessionaire in question is subject to a control enabling the concession granting public authority to influence the concessionaires decisions. It must be a case of a power of decisive influence over both strategic objectives and significant decisions. At the time of the award the concessionaire was wholly owned by the municipality, but it had become market oriented. In pursuance of its objects it had begun to perform services on a commercial basis to third parties, its statute provided for the obligatory opening up of the company to private capital, considerable powers of management were conferred on its Board with in practice no control by the municipality and it could effect certain transactions up to a value of 5m Euros without the prior authority of a meeting of the shareholders: paras 67 68. Because of these elements it was not possible for the concession granting public authority to exercise over the concessionaire control similar to that which it exercised over its own departments. So the award of the concession to such a body could not be regarded as a transaction internal to the public authority to which the rules of Community law did not apply: paras 70 71. That case did not involve a consortium. But the court endorsed the point made in Stadt Halle, at para 48, that it was not appropriate to apply the Community rules on public procurement in case where a public authority performs tasks in the public interest for which it is responsible without calling upon external entities. The decisive influence test described in Parking Brixen, at para 65, was applied in Carbotermo SpA v Comune di Busto Arsizio (Case C 340/04) [2006] ECR I 4137 (Carbotermo). This was a consortium case. The municipality of Busto Arsizio had awarded a contract for the supply of fuel and the maintenance and upgrading of its heating equipment to AGESP SpA. Its decision to do so was challenged by Carbotermo because it did not call for tenders before awarding the contract. Busto Arsizio owned 99.98% of the shares in the company of which AGESP was a wholly owned subsidiary. The remaining 0.2% of the shares was held by a number of adjoining municipalities. The key issue was control. Applying the test described in Parking Brixen the court said in para 37: The fact that the contracting authority holds, alone or together with other public authorities, all of the share capital in a successful tenderer tends to indicate, without being decisive, that that contracting authority exercises over that company a control similar to that which it exercises over its own departments, as contemplated in para 50 of Teckal. (emphasis added) Here, for the first time, the court recognised that individual control was not necessary for the Teckal exemption to apply. The contracting public authority could exercise control over the contractor alone or together with other public authorities. The point was made despite the fact that the proportion of shares held by the other public authorities was very small. It was held nevertheless that the control test was not satisfied. The statutes of both AGESP and its parent company conferred the broadest possible discretion on the boards of each of them for their ordinary and extraordinary management. They gave no control or specific voting powers to the commune to enable it to restrict the boards freedom of action. The court said that the control that the commune was given over these two companies could be described as consisting essentially of the latitude conferred by company law of a majority of the shareholders and that this places considerable limits on its power to influence the decisions of the companies: para 38. The fact that any influence that it might have on AGESPs decisions was through a holding company might also weaken any control that might possibly be exercised: para 39. It followed that the contracting authority did not exercise over the successful tenderer a control similar to that which it exercised over its own departments. The court went on to deal with the Teckal function test. It held that the undertaking in question could be viewed as carrying out the essential part of its activities with the controlling authority within the meaning of Teckal only if that undertakings activities were devoted principally to that authority and any other activities were only of marginal significance: para 63. This condition could be met, where the undertaking was controlled by several public authorities, if it carried out the essential part of its activities with all of those authorities together: para 70. Asociacin Nacional de Empresas Forestales (Asemfo) v Transformacin Agraria SA (Tragsa) (Case C 295/05) [2007] ECR I 2999 (Asemfo) was another case about collective control. It was also a Treaty case. Tragsa was a Spanish company which was owned as to 99% by the State and as to the remaining 1% by four autonomous communities. It was established to carry out agricultural, forestry and other rural development activities for those public bodies. Although it was a legally distinct entity, it was obliged to act in accordance with instructions received from them and to carry out work at rates fixed by regulation. It could not negotiate terms. Asemfo complained that the legal regime applicable to Tragsa, which allowed it to execute public works without being subject to the public procurement rules, was not compatible with Community law. Advocate General Geelhoed observed in para 38 of his opinion that the effect of this regime, which created obligations in public law only, was that the contractual element between the contracting authority and the contractor considered in previous cases was entirely absent. But he said, following Parking Brixen, that the issue of compatibility with primary Community law, and in particular with articles 12EC, 43EC and 49EC, had to be assessed: para 52. The court too noted in para 54 of its judgment that the requirement for the application of the Directives relating to the existence of a contract was not met. But it went on to consider whether the Teckal exemption applied. Dealing first with the control test, the court referred to the point made in Carbotermo, at para 37, that the fact that all of the share capital in a successful tenderer is held, alone or with other public authorities, by the contracting authority tends to indicate, generally, that the contracting authority exercises over that company a control similar to that which it exercises over its own departments: para 57. It rejected the argument that the condition could only be met for contracts performed at the demand of the Spanish State, which held a 99% interest in Tragsa, and not those which were the subject of a demand from the autonomous communities. Tragsa could not be regarded as a third party in relation to the communities which held a part of its capital: paras 60 61. As to the function test, it said in para 62 that it followed from the case law that, where several authorities control an undertaking, that condition may be met if that undertaking carries out the essential part of its activities, not necessarily with any one of those authorities but with all of them together: Carbotermo, para 70. The courts finding in paras 60 61 of Asemfo as to the position of the autonomous communities is an important indication of the way the element of collective control operates. All members of the consortium are entitled to take the benefit of it in the application of the Teckal exemption. The decisive influence that a contracting authority must exercise over the contractor may be present even if it is exercisable only in conjunction with the other public authorities. It is also clear, as was pointed out in Asociacin Profesional de Empresas de Reparto y Manipulado de Correspondencia v Adiminstracin General del Estado (Case C 220/06) [2007] ECR I 12175, para 52, that a critical factor in the courts decision in Asemfo was that, as Tragsa was an instrument and technical service of the Spanish Administration, it was required to implement only work entrusted to it by the General Administration of the State, the autonomous communities or the public bodies subject to them. The principles applied in the previous cases were developed and expanded in Coditel Brabant SA v Commune dUccle (Case C 324/07) [2008] ECR I 8457 (Coditel). The Belgian municipality of Uccle awarded a contract for the operation of its cable television network to a co operative called Brutl, which had been set up by a consortium of municipalities with separate legal personality. Uccle had joined the consortium in order to be able to contract with Brutl. Coditel challenged the award of the contract on the ground that Uccle had not followed the public contract procurement process. The court held that the method of remuneration, which came not from the municipality but from payments made by the users of the network, was characteristic of a public service concession: para 24. So, like Parking Brixen, this was a Treaty case to which the rules set out in articles 12EC, 43EC and 49EC applied. Following Carbotermo, para 37 and Asemfo, para 57, the court said that the fact that Uccle, the concession granting public authority, held together with other public authorities all of the share capital in Brutl tended to indicate, but not conclusively, that the control test was satisfied: para 31. It was clear that Brutl was an inter municipal company whose members were all public authorities and that it was not open to private members. The fact that its governing council was composed of representatives of the participating public authorities showed that it was under the control of the public authorities, as they were able to exert decisive influence over both Brutls strategic objectives and significant decisions: paras 32 34. The fact that the governing council enjoyed the widest powers of management was noted in para 35. But this was not fatal because, as the court said in para 36: The question arises as to whether Brutl has thus become market oriented and gained a degree of independence which would render tenuous the control exercised by the public authorities affiliated to it. Having noted that Brutls object under its statutes was the pursuit of the municipal interest that being the raison dtre for its creation and that it did not pursue any interest which was distinct from that of the public authorities affiliated to it, it held that the control that was exercised over it could be regarded as similar to that exercised by the participating public authorities over their own departments: paras 38 41. It was the exclusively public nature of the interest that Brutl was pursuing that was decisive in this assessment. The court then addressed the question whether the control had to be exercised by each of the participating public authorities individually or whether it can be exercised jointly by them, with decisions taken by a majority, as the case may be: para 43. In answer to this question the court said it would be consistent with its reasoning in Carbotermo, paras 70 and 71, and Asemfo, para 62, to consider that the condition as to the control exercised by the public authorities may also be satisfied if account is taken of the control exercised jointly over the concessionaire by the controlling authorities. It then made these important rulings: 46 According to the case law, the control exercised over the concessionaire by a concession granting public authority must be similar to that which the authority exercises over its own departments, but not identical in every respect (see, to that effect, Parking Brixen, para 62). The control exercised over the concessionaire must be effective, but it is not essential that it be exercised individually. 47 Secondly, where a number of public authorities elect to carry out their public service tasks by having recourse to a municipal concessionaire, it is usually not possible for one of those authorities, unless it has a majority interest in that entity, to exercise decisive control over the decisions of the latter. To require the control exercised by a public authority in such a case to be individual would have the effect of requiring a call for competition in the majority of cases where a public authority seeks to join a grouping composed of other public authorities, such as an inter municipal cooperative society. 48 Such a result, however, would not be consistent with Community rules on public procurement and concession contracts. Indeed, a public authority has the possibility of performing the public interest tasks conferred on it by using its own administrative, technical and other resources, without being obliged to call on outside entities not forming part of its own departments (Stadt Halle, para 48). 49 That possibility for public authorities to use their own resources to perform the public interest tasks conferred on them may be exercised in cooperation with other public authorities (see to that effect, Asemfo, para 65. It noted that in Asemfo, paras 56 61 the court recognised that in certain circumstances the condition relating to the control exercised by the public authority could be satisfied where such an authority held only 0.25% of the capital in a public undertaking: para 53. Mr Howell said that the court had lost sight in Coditel of the fact that the purpose of the function test which was what it was discussing in Carbotermo, paras 70 and 71, and Asemfo, para 62 was different from that of the control test. The last sentence of para 46 was a non sequitur. In paras 47 48 the court had conflated two different things, namely becoming a member of an association of contracting authorities and the awarding the association a contract. The Directive did not apply to the first, but it did to the second. And the court did not, when it referred to Asemfo, para 53, ask itself what were the circumstances in which the condition could be satisfied. It had therefore not grappled with the Directive and its scope. I would not, for my part, accept these criticisms. It is plain that the question of collective control arose directly in that case. The courts reasoning shows that it was concerned with substance rather than with form. That was the point that was made in Asemfo. The proposition in the last sentence of para 46 encapsulates a perfectly rational principle. I do not see it as containing a non sequitur. The message which it conveys is very clear. Collective control is enough. Individual control is not necessary. In Commission of the European Communities v Federal Republic of Germany (Case 480/06) [2009] ECR I 4747 (Commission v Germany) four local authorities entered into a contract with the cleansing department of the City of Hamburg to enable it to build a larger waste treatment facility than it required for its own purposes. Capacity was to be reserved for them for a price to be paid to the facilitys operator so that it would serve their purposes also. The contract was not put out for tender. The Commission challenged the arrangement on the ground that there had been a failure to comply with the Directive. The City of Hamburg was not a member of a consortium, and it was admitted that the four local authorities did not exercise any control which could be described as similar to that which they exercised over their own departments. On these facts the local authorities did not satisfy the Teckal control test: para 36. Their contract was nevertheless held to fall outside the Directive, for three main reasons. First, the contract established cooperation between local authorities with the aim of ensuring that a public task they all had to perform was carried out: para 37. It was concluded solely by public authorities without the participation of any private party, and it did not provide for or prejudice the award of any contracts that might be necessary in respect of the construction and operation of the waste treatment facility: para 44. And Coditel, para 48 and 49 had established that a public authority had the possibility of performing the public interest tasks conferred on it by using its own resources without being obliged to call on outside entities not forming part of its own departments, and that it may do so in co operation with other public authorities: para 45. The Commission said that, had there been cooperation by means of the creation of a body governed by public law to which the various local authorities entrusted performance of the task in the public interest of waste disposal, it would have accepted that the use of the facility did not fall under the rules of the Directive: para 46. But it maintained that, as there was no such body, a call for tenders should have been issued. The court summarised its response in para 47: It must be observed, though, first, that Community law does not require public authorities to use any particular legal form in order to carry out jointly their public service tasks. Secondly, such cooperation between public authorities does not undermine the principal objective of the Community rules on public procurement, that is, the free movement of services and the opening up of undistorted competition in all the member states, where implementation of that cooperation is governed solely by considerations and requirements relating to the pursuit of objectives in the public interest and the principle of equal treatment of the persons concerned, referred to in Directive 92/50, is respected, so that no private undertaking is placed in a position of advantage vis vis competitors (see, to that effect, Stadt Halle, paras 50 and 51). The reasoning in that paragraph shows how far we have travelled since the court issued its judgment in Teckal. The same approach is taken whether the case concerns a service concession, to which the provisions of the Treaty apply, or a public service contract which falls within the ambit of the Directive: Sea Srl v Comune di Ponte Nossa (Case C 573/07) [2009] ECR I 8127, para 35. There is now a much clearer focus on the purpose of the Community rules on public procurement so as not to inhibit public authorities from co operating with other public authorities for the purpose of carrying out some of their public service tasks. The exact basis for the decision in Commission v Germany is not easy to detect from a reading of the courts judgment. But it does confirm the conditions that need to be satisfied to fall within the Teckal exemption: para 34. Collective control is enough, and para 47 tells us that public authorities do not require to follow any particular legal form in order to take advantage of it. So long as no private interests are involved, they are acting solely in the public interest in the carrying out of their public service tasks and they are not contriving to circumvent the rules on public procurement (see para 48), the conditions are likely to be satisfied. As to the last point, it should be noted that the management agreement between LAML and Charles Taylor & Co was put out for public tender, as were all LAMLs reinsurance contracts. There is nothing in para 47 of Commission v Germany which cannot equally be said of the arrangements that are under scrutiny in this case. I would sum up my conclusions on the control test, in the light of the guidance offered by these authorities, as follows. Individual control is not necessary. No injury will be caused to the policy objective of the Directive if public authorities are allowed to participate in the collective procurement of goods and services, so long as no private interests are involved and they are acting solely in the public interest in the carrying out of their public service tasks. Asemfo shows that the decisive influence that a contracting public authority must exercise over the contractor may be present even if it is exercisable only in conjunction with the other public authorities. This was confirmed by the last sentence of para 46 of Coditel and re affirmed in Sea Srl v Comune di Ponte Nossa, paras 54 57. Where such a body takes its decisions collectively, the procedure used for the taking of those decisions is immaterial: Sea Srl, para 60. These points illustrate the strength of the presumption referred to in Carbotermo, para 37 and Asemfo, para 57 that applies where the contracting authority holds, alone or together with other public authorities, all of the share capital in a successful tenderer. The fact that two or more public authorities have collaborated to secure a service which is designed exclusively for the performance of their public functions, as in Commission v Germany where they did not hold any share capital in the cleansing department, carries at least as much weight. The argument that the control test was satisfied failed in Carbotermo because the broadest possible discretion was conferred on the boards of the parent company and its subsidiary for their ordinary and extraordinary management. No control was given to the commune to enable it to restrict the boards freedom of action, in the form of specific voting powers or otherwise. It would have been otherwise if the commune had had power to give directions to the boards on strategic matters or important issues of policy. Is the control test satisfied in this case? This is a matter for the domestic court to determine in the light of the jurisprudence of the European Court. Mr Sumption accepted that, if he was wrong on the question whether individual control was necessary, his case must fail. For the reasons I have given in paras 48 and 49 above, I am satisfied that collective control is enough. This means that the test will be satisfied even though it is in the nature of collective control that no single authority can be said to exercise the kind of control which it would have over its own departments. The relevant facts as to the control of LAML are as follows. The Board had the normal powers of management under articles 4 and 36 of its Articles of Association. It consisted of not less than five and no more than 11 directors, of whom at least two had to be independent directors: article 16(a). The Chairman was selected from the directors, but he was not to be an independent director: article 16(c). No meeting of the directors was to be quorate unless the majority of directors present were member directors, that is to say directors representing a participating member: article 39 read with article 33(f) and (g). Membership was personal to the London local authority concerned, and it was not transferable: article 10. The participating members each had one vote at general meetings under article 15(a), and the member directors were elected by them. By article 1 it was provided that regulation 70 of Table A of the Companies (Tables A F) Regulations 1985 (SI 1985/805) was expressly incorporated. So the special resolution procedure, as defined by section 283(1) of the Companies Act 2006, applied. This meant that the Board was subject to direction by the participating members in general meeting, so long as they achieved a 75% majority. 100% of the voting rights at general meetings lay with the participating members. The insurance that might be offered to members was governed by the rules annexed to LAMLs Articles of Association. Under rule 16 LAML could offer only such insurance as the participating members had agreed at general meeting. The effect of rule 22 was that a member director of a participating member would normally be excluded from the boards consideration of its insurance claim. But this is a matter of detail. I cannot agree with Stanley Burnton LJ [2008] LGR 429, para 78 that the general picture that these provisions give is of a business the administration of which was relatively independent, or with the Court of Appeal [2010] PTSR 349, paras 131, 236 that the nature of LAMLs business and the possibly differing interests of different authorities were antithetic to the necessary local authority control. It is true that, when it came to claims, the nature of the relationship between each participating member as insured and LAML was essentially one between independent third parties. But, as I have already said, individual control is not required. Collective control over strategic objectives and significant decisions was with the participating members at all times. They controlled a service which was designed exclusively for the performance of their public functions. No private interests whatever were involved. On these facts I would hold that the Teckal control test is satisfied. The function test This issue can be dealt with quite shortly. The question where several public authorities control an undertaking, as the court made plain in Carbotermo, para 70, and Asemfo, para 62, is whether that undertaking carries out the essential part of its activities with all of the public authorities together in the consortium. As was explained in Asemfo, paras 62 and 65, this does not necessarily have to be with any one of those authorities individually. It is enough that it is with the same authorities collectively as exercise control over it. This is because, if this test is satisfied, it shows that implementation of the cooperation between the public authorities is governed solely by considerations and requirements relating to the pursuit of objectives in the public interest by those authorities. The absence of private capital and private customers is another important indication that the cooperation is for that purpose only, and that there is no risk of putting any private undertaking at a disadvantage vis vis its competitors: Commission v Germany, para 47. In this case the relevant facts are these. There was no private involvement in the affairs of LAML, which had no external or private capital, other than the presence on the Board of a minority of independent directors. This was required by the Financial Services Authority as a condition of its authorisation of LAML as an insurer. The main objects of the company were to provide insurance to participating members and affiliates. All the other objects in its Memorandum were restricted by reference to the main objects of the company. The expression participating member meant any London Borough that subscribed to the Memorandum and Articles of Association and had received an indemnity from LAML. By definition they were all public authorities. For the purposes of the Memorandum affiliates comprised various persons or bodies associated with a participating member in respect of whom that participating member was empowered to arrange an indemnity. They were insured only in their capacity as affiliates. LAML existed only to serve the insurance needs of its members. Rule 16 of its Rules confined the persons to whom LAML might offer indemnity to the London local authorities. It could only be provided to an affiliate if the insurance was arranged by a participating member, who was responsible for payment of the premium. As already noted (see para 52, above), all major contracts for the provision of goods and services to LAML were put out for public tender in accordance with the 2006 Regulations, including in particular its reinsurance contracts. I would hold that, on these facts, it is plain that the Teckal function test also is satisfied. It follows that, as the Teckal exemption applies to the 2006 Regulations and the arrangements between LAML and the London local authorities satisfy both tests, Harrow did not act in breach of the Regulations when it entered into insurance contracts with LAML under the mutual insurance scheme. Is a reference required? I would hold that the answers to be given to issue (2) and the issues about the control test do not give rise to any questions on which further guidance needs to be sought from the Court of Justice of the European Union by means of a preliminary ruling under article 267TFEU (ex article 234EC). Conclusion I would allow the appeal. LORD RODGER The facts and issues in this appeal have been explained by Lord Hope, whose detailed account I gratefully adopt. The ultimate question for this court is whether Brent was entitled to enter into contracts of insurance with LAML without first putting those contracts out to tender in accordance with the Public Contracts Regulations 2006 (the 2006 Regulations). Those Regulations were made in order to implement Directive 2004/18/EC (the Directive) on public procurement of goods, works and services. Even though the proceedings involving Brent have now been settled, the question arising out of those proceedings remains significant because it determines the answer to the further question: would a local authority such as Harrow be entitled, in the future, to enter into contracts of insurance with LAML without having first having complied with the 2006 Regulations? At the hearing before this court the debate concentrated on whether the relationship between Harrow and LAML was such that the so called Teckal exemption would take effect, with the result that the Directive would not apply and, even if that were the position, whether an equivalent exemption applies in the case of the 2006 Regulations. The Teckal exemption derives from what the Court of Justice said in Teckal Srl v Comune di Viano (Case C 107/98) [1999] ECR I 8121, 8154, paras 49 and 50, in relation to Council Directive 93/36/EEC on the co ordination of procedures for the award of public supply contracts: 49. As to whether there is a contract, the national court must determine whether there has been an agreement between two separate persons. 50. In that regard, in accordance with article 1(a) of Directive 93/36, it is, in principle, sufficient if the contract was concluded between, on the one hand, a local authority and, on the other, a person legally distinct from that local authority. The position can be otherwise only in the case where the local authority exercises over the person concerned a control which is similar to that which it exercises over its own departments and, at the same time, that person carries out the essential part of its activities with the controlling local authority or authorities. It is common ground that the Teckal exemption applies to the current Directive. In order to understand why it does so, it is necessary to look at the purpose of the Directive and the wider context in which it operates. The starting point is that the principal objective of the Community rules in the field of public procurement [is] the free movement of services and the opening up to undistorted competition in all the member states. That involves an obligation on all contracting authorities to apply the relevant Community rules where the conditions for such application are satisfied: Stadt Halle v Arbeitsgemeinschaft Thermische Restabfall und Energieverwertungsanlage TREA Leuna (Case C 23/03) [2005] ECR I 1, 46, para 44. So the requirements of the Directive apply where a contracting authority sets out to purchase from an outside supplier, say, a product or services which it requires. In that event the Directive ensures that potential suppliers have a proper opportunity to compete for the contract. It follows, of course, that the Directive has no application in a situation where a public authority obtains the product or services which it requires from its own resources as it is perfectly free to do. The Court of Justice pointed this out in para 48 of its judgment in Stadt Halle [2005] ECR I 1, 47 48: A public authority which is a contracting authority has the possibility of performing the tasks conferred on it in the public interest by using its own administrative, technical and other resources, without being obliged to call on outside entities not forming part of its own departments. In such a case, there can be no question of a contract for pecuniary interest concluded with an entity legally distinct from the contracting authority. There is therefore no need to apply the Community rules in the field of public procurement. In short, the Directive is not intended to protect the commercial sector by forcing public authorities to obtain the services which they need on the commercial market. For instance, a local authority can have its own architects department and does not need to look outside to obtain the services of an architect or architects to design municipal buildings or housing. It is free to obtain these services in house. The purpose of the Directive is simply to ensure that, if public authorities do decide to obtain the services which they need from outside bodies, proper procedures are followed to ensure that potential providers of the services have an opportunity to compete for the work. While the general approach is clear, its application can give rise to problems where an authority obtains the services or products which it requires not from one of its own departments, but from a separate body which, it claims, is so closely connected with it that the authority should still be regarded as, in substance, obtaining the services or products in house rather than from an outside body. Obviously, if interpreted over generously, that broadening of the circumstances in which the Directive does not apply might tend to undermine its effective operation. The two criteria laid down in Teckal are designed to guard against that risk. If, but only if, they are satisfied, the Directive does not apply because, even though the public authority is intending to contract with another body for the supply of the products or services, the authority can still be regarded as fulfilling its requirements in house, rather than looking to an outside body to fulfil them. Again, since they are preconditions for an exception to the application of the obligations in the Directive, the criteria must be interpreted strictly: Stadt Halle [2005] ECR I 1, 47, para 46. In practice, a local authority which can afford, say, to run its own architects department is unlikely to see any real advantage in simply establishing that department as a separate legal entity with which it can then enter into contracts to meet its requirement for architectural services. Such an arrangement would probably not, for example, save costs. But local authorities and other public bodies may well be able to make considerable savings by co operating to obtain the services and products which they require. For instance, a single local authority might not have enough work to make it economically worthwhile to have its own architects department; but, between them, two authorities might well have enough work to make such a department viable. The possibility of local authorities co operating in the provision of services has long been recognised: section 101(5) of the Local Government Act 1972 makes provision for two or more local authorities to discharge any of their functions jointly. So, for example, two or more local authorities may arrange for trading standards services to be provided jointly. Equally, two or more authorities may co operate to obtain the architectural services which they require. One possible way of doing this would be for the authorities to co operate to establish and finance a body which was separate from them but whose employees could design buildings for them. Each of the authorities would then contract with the body for the design services that it required. Does the Directive apply if a local authority intends to contract with such a body to provide the products or services which it requires? The Court of Justice has seen no reason to distinguish in principle between a situation where the body in question exists to serve the interests of a single local authority and a situation where it exists to serve the interests of several authorities. In both situations the Teckal criteria apply. Indeed, the cases which have come before the Court of Justice have tended to concern situations where several local authorities were co operating to obtain products and services. That was the position in Teckal itself and, for example, in Stadt Halle [2005] ECR I 1 and Asociacin Nacional de Empresas Forestales (Asemfo) v Transformacin Agraria SA (Tragsa) (Case C 295/05) [2007] ECR I 2999. In short, not only are local authorities free to use their own resources to perform the services which they exist to provide, but they may also co operate with other local authorities to ensure that, collectively, they have the necessary resources to do so. See, for example, Coditel Brabant SA v Commune dUccle (Case C 324/07) [2008] ECR I 8457, 8504, paras 48 49: Indeed, a public authority has the possibility of performing the public interest tasks conferred on it by using its own administrative, technical and other resources, without being obliged to call on outside entities not forming part of its own departments (Stadt Halle, para 48). 49. That possibility for public authorities to use their own resources to perform the public interest tasks conferred on them may be exercised in cooperation with other public authorities. The Court of Justice reaffirmed this, in the context of a different kind of arrangement between a number of local authorities, in Commission of the European Communities v Federal Republic of Germany (Case C 480/06) [2009] ECR I 04747, 04777, para 45. Where the co operation among the local authorities takes the form of establishing a body which then provides them with the necessary products or services, the Directive will not apply if, in substance, each of the co operating authorities is intending to obtain the products or services from the resources contributed by the co operating authorities for the use of the body. In such a case, in substance, the authority is intending to obtain the products or services in house, in co operation with other public authorities. Since the whole point is that the Directive does not apply in the case of such an arrangement because the public authorities are intending to obtain the products or services from their own resources which are to be administered in the public interest, it is essential that any body which the authorities establish does not involve any private investment. As the Court of Justice observed in Stadt Halle [2005] ECR I 1, 48, para 51: the award of a public contract to a semi public company without calling for tenders would interfere with the objective of free and undistorted competition and the principle of equal treatment of the persons concerned, referred to in Directive 92/50, in particular in that such a procedure would offer a private undertaking with a capital presence in that undertaking an advantage over its competitors. Under reference to this passage, the Court of Justice returned to the point in Commission v Germany [2009] ECR I 04747, 04777, para 47, where it said that the co operation among the public authorities in that case: does not undermine the principal objective of the Community rules on public procurement, that is, the free movement of services and the opening up of undistorted competition in all the member states, where implementation of that cooperation is governed solely by considerations and requirements relating to the pursuit of objectives in the public interest and the principle of equal treatment of the persons concerned, referred to in Directive 92/50, is respected, so that no private undertaking is placed in a position of advantage vis vis competitors. A couple of months later the Court of Justice summarised its approach in Sea Srl v Comune di Ponte Nossa (Case C 573/07) [2009] ECR I 8127, 8151, paras 45 46: the fact of the contracting authoritys holding, together with other public authorities, all the share capital in a contractor company, tends to indicate, but not conclusively, that that contracting authority exercises over that company control similar to that which it exercises over its own departments. 46. In contrast, the holding, even a minority holding, of a private undertaking in the capital of a company in which the contracting authority in question also has a holding too means that, on any view, it is impossible for that contracting authority to exercise over that company control similar to that which it exercises over its own departments (internal citations omitted). So, if a body becomes market oriented, the award of a contract to it by a public authority cannot be regarded as a transaction internal to that authority to which the rules of Community law do not apply. Cf Parking Brixen GmbH v Gemeinde Brixen C 458/03 [2005] ECR I 8585, 8637, para 71. Assuming, however, that there is no private investment, how are the Teckal criteria to be applied to a body, such as LAML, which provides services to more than one contracting authority? The first of the two cumulative criteria for holding that the Directive does not apply is that the local authority exercises over the person concerned a control which is similar to that which it exercises over its own departments:Teckal [1999] ECR I 8121, 8154, para 50. The Court of Justice has gone on to explain that this means that the authority should have a power of decisive influence over both the strategic objectives and significant decisions of the body with which it intends to contract: Parking Brixen GmbH v Gemeinde Brixen [2005] ECR I 8585, 8635, para 65. Is it enough, however, if this decisive influence is exercised by all the authorities combined, or must it be exercised by the individual authority which intends to contract with the body concerned? There is an obvious contrast in para 50 of Teckal (set out at para 65 above) between the reference to the control which the local authority (singular) exercises over its own departments in the first criterion and the reference to the activities which the person concerned carries out with the controlling local authority or authorities (singular or plural). On that basis Mr Howell QC submitted on behalf of RMP that the Directive always applies unless the authority which is intending to contract has, itself, the necessary degree of control over the other prospective party to the contract. But, as a matter of substance, that argument is really inconsistent with the European Courts thinking on the right of local authorities to co operate in such matters. As already explained, the court recognises that a local authority can perform its services for the public either entirely out of its own resources or by co operating with other local authorities to perform them out of their pooled resources. That co operation may take the form of the authorities establishing and financing a body to provide what they require. If, taken overall, the control of the body by the authorities is great enough to satisfy the first Teckal criterion, this will be an indication that the body is there to carry out the purposes of the local authorities which control it and, hence, that it is not to be regarded as an outside body vis vis any of them. For this reason, the mere fact that any single authority does not exert the necessary degree of control by itself is irrelevant. If there were ever any doubts on this matter, they were settled decisively by the decision of the Court of Justice in Coditel Brabant [2008] ECR I 8457, 8503 8504, paras 46 51: 46. According to the case law, the control exercised over the concessionaire by a concession granting public authority must be similar to that which the authority exercises over its own departments, but not identical in every respect (see, to that effect, Parking Brixen, para 62). The control exercised over the concessionaire must be effective, but it is not essential that it be exercised individually. 47. Secondly, where a number of public authorities elect to carry out their public service tasks by having recourse to a municipal concessionaire, it is usually not possible for one of those authorities, unless it has a majority interest in that entity, to exercise decisive control over the decisions of the latter. To require the control exercised by a public authority in such a case to be individual would have the effect of requiring a call for competition in the majority of cases where a public authority seeks to join a grouping composed of other public authorities, such as an inter municipal cooperative society. 48. Such a result, however, would not be consistent with Community rules on public procurement and concession contracts. Indeed, a public authority has the possibility of performing the public interest tasks conferred on it by using its own administrative, technical and other resources, without being obliged to call on outside entities not forming part of its own departments (Stadt Halle, para 48). 49. That possibility for public authorities to use their own resources to perform the public interest tasks conferred on them may be exercised in cooperation with other public authorities (see, to that effect, Asemfo, para 65). 50. It must therefore be recognised that, where a number of public authorities own a concessionaire to which they entrust the performance of one of their public service tasks, the control which those public authorities exercise over that entity may be exercised jointly. Although Coditel Brabant was a public concession case, the reasoning of the court is general and is equally applicable to a case like the present. Moreover, I see no force in Mr Howells suggestion that the last sentence of para 46 involves a non sequitur. Rather, the court is making the cogent point that, in a situation where a number of public authorities have combined to exert effective control over the body and any one of them intends to contract with it, the fact that this authority exercises control along with the others indicates, though not conclusively, that the body is not to be regarded as an external entity and that the Directive should therefore not apply. The position which the Court of Justice has adopted on this matter is not only unmistakable but is consistent with its overall thinking as to why the Directive does not apply in such cases. Not surprisingly, the court reaffirmed its view in Sea Srl v Comune di Ponte Nossa (Case C 573/07) [2009] ECR I 8127, 8153 8155, paras 54 63. Moreover, as Advocate General Trstenjak pointed out in Coditel Brabant [2008] ECR I 8457, 8482, para 82, if the individual local authority had to exercise the necessary control, then inter municipal cooperation would in future be rendered virtually impossible. For it is an important feature of genuine cooperation that decisions are made as equals and that one of the partners in the cooperative does not dominate. So the approach advocated by Mr Howell would, in effect, rule out genuine co operation or collaboration among authorities. The Advocate General continued: 83. As stated, that would render virtual impossible even pure inter municipal cooperation. Inter municipal cooperating regional authorities would then always have to reckon with the likelihood of having to award their tasks to private third parties making more favourable bids; that would be tantamount to the compulsory privatisation by means of procurement law of public interest tasks. To construe the first Teckal criterion so narrowly would be to attach disproportionate weight to competition law objectives at the same time as interfering too much with the municipalities right to self government and with it in the competences of the member states (citations omitted). See also Sea Srl v Comune di Ponte Nossa (Case C 573/07) [2009] ECR I 8127, 8154, paras 56 and 57. 84. In the light of these considerations I am satisfied that the first Teckal criterion is to be applied by reference to the control exercised by all the authorities which have co operated to establish and finance the body with which the individual authority intends to contract. I have already noted that the Directive will apply if there is private investment in the body with which the local authority intends to contract or if the body is market oriented. The Directive has to apply in such circumstances in order to prevent the body concerned enjoying an unfair competitive advantage. The second Teckal criterion is therefore designed to ensure that the Directive always applies unless, in substance, the body concerned only trades with the local authority or authorities unless, in short, it is not market oriented. In other words, the body must remain within the public authority sphere and cannot go out and compete with other suppliers for other primary insurance business on the open market. It would obviously be unfair if the body could compete in this way, but, when one of the local authorities was contemplating contracting with it, other suppliers were prevented from competing for the business. The second criterion prevents this. The second Teckal criterion is not difficult to apply to the facts which give rise to this appeal. In terms of clause 3(1) of the Memorandum, the object of LAML is to receive premiums from participating members or affiliates and to indemnify through a mutual fund the liabilities, losses or expenses incurred by participating members or affiliates in accordance with the rules. In other words, there is no question of LAML insuring anyone other than participating members and affiliates. Affiliates are public bodies sponsored by participating members. In that situation the essential part of LAMLs activities is, unquestionably, with the boroughs which are participating members. The evidence in the case shows that at the beginning of the 20th century many United Kingdom public authorities co operated to establish a mutual insurance company, Municipal Mutual Insurance Ltd (MMI), which would provide insurance cover to the authorities which were members of the company. MMI flourished and, over the years, established itself as the leading provider of insurance to public bodies. But, for various reasons, including the increase in claims against authorities in the 1980s, by 1992 MMI was no longer in a position to write new business or to renew existing business and it eventually ceased trading. The idea that local authorities and other public authorities should work together to arrange the efficient and economical provision of insurance cover is therefore by no means new. Although the detailed arrangements differ, the idea behind LAML is essentially the same as with MMI. The relevant London boroughs set up a company limited by guarantee, for which they provided the necessary resources by means of paid capital contributions and guaranteed capital contributions. In the case of a shortfall in the capital requirement of LAML, participating members (those who receive an indemnity from this company) can be called on to make an additional paid or guaranteed contribution. Participating members are entitled to vote at a general meeting of the company. In particular, it should be noted that a 75% majority of participating members present and voting at the meeting may issue any direction to the board by special resolution. In my view, for this reason, the authorities who contract with LAML have a power of decisive influence over both the strategic objectives and significant decisions of LAML. In respectful disagreement with the Court of Appeal, I would hold that this is sufficient to satisfy the first Teckal criterion. In summary, LAML is a vehicle which the participating London boroughs control and through which they can arrange for the provision of insurance to each other and to their affiliates out of resources which they provide in the form of capital contributions and premiums. No capital is contributed by any private body nor is any such contribution envisaged in the future. Of course, like any other insurance company, LAML reinsures some of its risks on the secondary reinsurance market and, in doing so, it follows the public procurement procedure set out in the 2006 Regulations. But the overall purpose and effect of the arrangement is that primary insurance should be provided to public authorities out of the resources which they and the other public authorities provide for the purpose. Therefore to adapt the formulation of Advocate General La Pergola in Arnhem v BFI Holding BV (Case C 360/96) [1998] ECR I 6821, 6839, para 35 so far from removing primary insurance from the ambit of the responsibilities of the local authorities, the whole purpose of the scheme is to keep it within that ambit and not to transfer it to an outside body. I am accordingly satisfied that in the circumstances of this case both of the Teckal criteria are satisfied and that, since the local authorities are not to be regarded as contracting with an outside body, Community legislation which is designed to secure the free movement of services and the opening up to undistorted competition has no application. So the Directive is not intended to apply where a borough such as Harrow intends to contract with LAML. The 2006 Regulations give effect to the Directive in English law. In other words, they are the way in which English law secures the free movement of services and the opening up to undistorted competition in relation to contracts which are to be placed by English local authorities. That being the purpose of the Regulations, they, too, cannot be meant to apply in circumstances where that purpose is not relevant because a contracting authority intends to contract with a body which is not properly to be regarded as an outside body. Although the Teckal criteria were formulated with particular reference to the predecessors of the Directive, they are simply a way of identifying situations where the authority can be regarded as obtaining the products or services which it requires in house and, so, where there is no need to secure the free movement of services and the opening up to undistorted competition. In my view, the criteria are an equally good indication of situations where, for that reason, the 2006 Regulations have no application. The insight of Advocate General Trstenjak in para 83 of her opinion in Coditel Brabant [2008] ECR I 8457, 8482, is instructive. To hold that the Regulations did apply in these circumstances would involve saying that the legislature intended to attach weight to competition law objectives in an area where they have no legitimate application. This would, in turn, involve inappropriate interference with local authorities right to co operate in discharging their public functions. For all these reasons, which are essentially the same as Lord Hopes, I would hold that the 2006 Regulations do not apply where a local authority, like Harrow, intends to enter into a contract of insurance with LAML. The appeal should accordingly be allowed. LORD WALKER, LORD BROWN AND LORD DYSON For the reasons given by Lord Hope and Lord Rodger, with which we entirely agree, we too would allow this appeal. |
When a person is facing insolvency, a possible alternative to sequestration is a voluntary arrangement with his creditors. Under Scots law, this usually takes the form of a deed granted by the debtor, conveying his property to a trustee for the benefit of his creditors. The trustee is given powers to collect and realise assets, to rank claims, and to distribute the estate among the creditors according to their respective rights and preferences. The trust deed will usually contain provisions relating to the discharge of the debtor from his debts, the restoration to him of any surplus, and the discharge of the trustee. At common law, the trust deed is binding on creditors who accede to it. As will be explained, it may also, under statute, affect the rights of non acceding creditors. This appeal concerns a situation in which, after the debtors estate so far as known had been distributed in partial payment of his debts, and he and his trustee had received their discharges, additional property was discovered, of which his trustee had not previously been aware. There is no suggestion that it had been concealed, or that the debtor was even aware of its existence. The question raised in the appeal is whether the trustee (or former trustee, depending on the view one takes) is entitled to the property, and can distribute it among the creditors (or former creditors) in further payment of the debts (or former debts). As will appear, the form in which the case has been brought presents the court with a narrow issue, and it has been unable to consider wider aspects of the question which it might otherwise have addressed. The facts On 29 September 2006 Mr Davidson, the second respondent, granted a trust deed for his creditors. It was in a standard form, and was a protected trust deed to which the provisions of the Bankruptcy (Scotland) Act 1985 (the 1985 Act), Schedule 5, paragraphs 5 10, as amended by section 11(3) of, and paragraph 32 of Schedule 1 to, the Bankruptcy (Scotland) Act 1993, applied. Put briefly, those provisions have the effect of restricting the rights of non acceding creditors and conferring on the trust deed some protection against being superseded by the sequestration of the debtors estate. In accordance with paragraph 5(1) of Schedule 5 to the 1985 Act, the trust deed was sent to all known creditors, notice of it was published in the Edinburgh Gazette, and it was registered in the Register of Insolvencies. The material provisions of the trust deed can be summarised as follows. Clause 1 provided that Mr Davidson transferred to a named insolvency practitioner, as trustee for his creditors, the rights and assets which would vest in a permanent trustee in terms of sections 31, 32 and 33 of [the 1985 Act]. Those rights and assets were described as Mr Davidsons estate. They included any right of action and any estate acquired by the debtor during the currency of the trust, in accordance with section 32(6) and (10) of the 1985 Act. Under Clauses 2 and 3, the trustee was entitled to receive, during the period of the trust, the amount of Mr Davidsons income which exceeded a suitable amount to allow for his aliment and relevant obligations as defined in section 32(3) of the 1985 Act. Under Clause 7, headed Distribution of my Estate, the estate was to be distributed first in payment of the expenses of the trust deed and the trustees remuneration, secondly in payment of creditors, and thirdly so as to re convey any remaining surplus to Mr Davidson. In relation to the payment of creditors, Clause 7 (Second) provided, so far as material: My Trustee shall determine as he thinks fit the time(s) when payment should be made, what notice of payment should be given and whether payment should be made by way of interim or final dividend(s). Clause 10 provided: This Trust Deed is granted by me on condition that the creditors acceding to the Trust Deed shall discharge me of all my debts due to them on the termination of this Trust Deed unless: (i) My Trustee reports that in his opinion I have not made fair and full surrender of my Estate or; (ii) The Trust Deed terminates on an award of sequestration of my Estate being made. Clause 11 provided that the trust deed would terminate on the earliest of the following events: (i) An award of sequestration of my Estate . (ii) The final distribution of my Estate (which shall for the avoidance of doubt include a nil distribution) by my Trustee in accordance with this Trust Deed. (iii) The acceptance by my creditors of any composition offered by me. Clause 12 provided for the discharge of the trustee: When my Trustee considers it appropriate to wind up this trust created by the Trust Deed, he shall summon a final meeting of my creditors by issuing a notice sent by first class post and confirmed by a certificate of posting and shall include with such notice a copy of the accounts of his transactions and intromissions with my Estate. At the meeting of my creditors he can seek his discharge from my creditors. Mr Mond, the appellant, was assumed as the trustee in July 2010. On 16 September 2010 he wrote to the creditors, stating: I am now in a position to complete the administration of the case and make payment of the first and final dividend. All the assets in the Trust Deed have been realised . Creditors had been invited to submit their claims. They exceeded the known estate. On 5 November 2010 Mr Mond paid the creditors a dividend of 22.41 pence in the pound. On 19 November 2010 he received his discharge. On 5 April 2011 he sent the Accountant in Bankruptcy, for registration in the Register of Insolvencies, a statement indicating how the estate was realised and distributed, and a certificate to the effect that the distribution was in accordance with the trust deed, as required by paragraph 9 of Schedule 5 to the 1985 Act. That provision applies where the trustee under a protected trust deed has made the final distribution of the estate among the creditors, and requires the trustee to submit the statement and certificate not more than 28 days after the final distribution. The certificate was made expressly in terms of paragraph 9, and stated that a full distribution of the debtors estate has now been made in accordance with the terms of the Trust Deed. At the same time, Mr Mond also requested the Accountant in Bankruptcy to register his discharge in the Register of Insolvencies in accordance with paragraph 10 of Schedule 5. Unbeknown to Mr Mond, before Mr Davidson entered into the trust deed he had been mis sold payment protection insurance (PPI) which he had taken out in respect of various loans from the Bank of Scotland (the Bank). In January 2015 he appointed Dooneen Ltd, the first respondent, as his agent for the purpose of making a claim against the Bank for the mis selling of the PPI, and assigned to Dooneen 30% of the value of any compensation received. Dooneen made a claim, and in April 2015 the Bank agreed to pay compensation of around 56,000. Mr Mond claimed that he was entitled to payment of that sum, on the basis that the right to compensation had vested in him as part of the estate subject to the trust deed and remained vested in him as trustee. The Bank paid the compensation to Mr Mond. The present proceedings In the present action, Dooneen and Mr Davidson seek declarator that the compensation had not vested in Mr Mond together with payment of the compensation from Mr Mond. They accept that Mr Davidsons right to compensation formed part of the estate transferred to his trustee for the benefit of his creditors, but argue that his radical right to it became disburdened of the trust when the avowedly final distribution was made, since the trust then came to an end in accordance with Clause 11(ii). Mr Mond, on the other hand, argues that there was no final distribution within the meaning of the trust deed, since a distribution cannot be final if, as a result of ignorance, it leaves part of the trust estate out of account. That, he argues, is clearly the position in a statutory sequestration: Whyte v Northern Heritable Securities Investment Co Ltd (1891) 18 R (HL) 37; [1891] AC 608. The same, he argues, should follow under a voluntary trust deed, which should be construed so as to prevent the debtor from receiving a windfall at the expense of his creditors. The Lord Ordinary, Lord Jones, found in favour of Dooneen and Mr Davidson: [2016] CSOH 23. That decision was upheld by the Second Division of the Inner House (Lady Dorrian, the Lord Justice Clerk, Lord Malcolm and Lord McGhie): [2016] CSIH 59; [2017] SCLR 199; [2017] BPIR 380. The Inner House considered that, on a proper construction of the trust deed, a final dividend within the meaning of Clause 7 (Second), and the equivalent expression final distribution in Clause 11(ii), meant a dividend or distribution declared to be such by the trustee. The distribution on 5 November 2010 was made on the basis that the trustee had determined that a final dividend should be paid. It was therefore a final distribution within the meaning of the trust deed, notwithstanding the existence of an asset which was unknown to the trustee. The trust therefore came to an end on that date, in accordance with Clause 11(ii), and the debtor was discharged of his debts, in accordance with Clause 10. The essence of the Second Divisions reasoning was set out in para 18 of its Opinion, delivered by the Lord Justice Clerk: This interpretation is necessary because the termination of the trust deed, as we have noted, is tied to, amongst other things, final distribution. The final distribution acts not only as the trigger for a discharge of the debtor by creditors, but, in effect, a composition, whereby the trust deed (the voluntary equivalent of a sequestration) is ended and the debtor is entitled to be re invested in any remaining trust estate. As was explained in Flett v Mustard [1936 SC 269] (Lord President Normand, p 275): If abandonment is out of the way, the only other mode by which retrocession can be established, short of full payment of the creditors, is by showing that there was a discharge on composition Northern Heritable Securities Investment Co, Lord Watson at p 39. There may be a discharge of a debtor under a trust deed for creditors which does not expressly bear to be a discharge on composition but which is intended to have that effect, and that intention may be found in the terms of the trust deed and of the discharge. That was the view taken by Lord Trayner (at p 570) in Kinmond, Luke & Co v James Finlay & Co [(1904) 6 F 564]. In Kinmond, where there was a provision in similar terms to clause 11(ii), Lord Trayner had said (p 570): Under the trust deed, to which the pursuers creditors acceded, it was made matter of contract that on receiving a final dividend (as declared by the trustee) the pursuers should, ipso facto, stand discharged of all claims ranked on their estate. Such a dividend has been paid and the discharge given. In my opinion, that operated practically as a discharge on a composition would have done, and had the effect of reinvesting the pursuers. The discharge in the present case has the same effect, terminating the trust and reinvesting the truster in any unrealised estate, which includes the PPI payment. Discussion In my respectful opinion, the Inner House reached the correct conclusion as to the construction of the trust deed. It provides in effect for a composition between the debtor and the acceding creditors, as the Lord Justice Clerk explained under reference to the dicta in Kinmond, Luke & Co v James Finlay & Co and Flett v Mustard. The composition is conditional on the final distribution of the estate by the trustee (subject to the contingencies mentioned in Clause 10(i) and (ii)). It is for the trustee, acting in accordance with his fiduciary duty towards the creditors, to determine when a final distribution should take place. Those considerations do not in themselves entail that a final distribution, within the meaning of the trust deed, can take place even though a part of the estate of which the trustee was unaware has not been distributed in payment of the debts. But the contrary argument that a final distribution only occurs, in the absence of full payment of the debts, when all the assets transferred to the trustee under the trust deed have in fact been distributed, whether or not the trustee is aware of their existence would have consequences which the debtor cannot reasonably be taken to have intended when granting the deed. First, since one could never be certain that any distribution was a final distribution in that sense, one could never be certain that the trust had terminated. It would potentially be of indeterminate duration. The consequent uncertainty as to whether the trust had terminated or not is particularly difficult to reconcile with the provisions of Clause 1, vesting acquirenda in the trustee, and Clause 2, requiring the debtor to pay part of his income to the trustee, so long as the trust subsists. Secondly, if one cannot be certain whether the trust has terminated, it follows that the debtor cannot be certain that he has been discharged of his debts under Clause 10. This could have serious practical consequences not only for the debtor but also for anyone else doing business with him after his apparent discharge and the apparent termination of the trust, since he might nevertheless prove to be an undischarged bankrupt. Thirdly, if the discovery of previously unknown assets signifies that there has not been a final distribution, even though the certificate required by paragraph 9 of Schedule 5 to the 1985 Act has already been registered, then it follows that reliance cannot be placed on the accuracy of the public Register of Insolvencies. It is inherently unlikely that the trust deed was intended to have that result. Counsels response was that Clause 1 defines the trust estate by reference inter alia to section 32 of the 1985 Act, which refers to estate acquired by the debtor on a relevant date, defined by section 32(10) as meaning a date after the sequestration and before the date on which the debtors discharge becomes effective. Under section 54 of the 1985 Act, a debtor automatically obtains his discharge three years after the date of sequestration. On that basis, it was argued that the definition of the trust estate in Clause 1 does not include acquirenda acquired more than three years after the commencement of the trust. This argument cannot be accepted. The incorporation into Clause 1 of section 32 of the 1985 Act, for the purpose of defining the trust estate, does not entail the incorporation of section 54 for the purpose of determining whether property was acquired before the date of the debtors discharge. On the contrary, the trust deed itself makes provision for the date of the debtors discharge in Clause 10, so giving content to section 32(10) as applied to the trust. Furthermore, the terms of Clause 10, read together with Clause 11, are inconsistent with section 54: discharge does not occur automatically after three years, but on the termination of the trust, which takes place on the earliest of the three events listed in Clause 11(i) to (iii), all of which can occur more than three years after the commencement of the trust. Counsel also relied on the case of Whyte v Northern Heritable Securities. That case was concerned with a similar factual situation to that in the present case, but it arose in a materially different legal context. The debtor had been sequestrated under the Bankruptcy (Scotland) Act 1856 (19 & 20 Vict, c 79). Section 102 vested his property in the trustee for behoof of the creditors, absolutely and irredeemably. Section 132 required the payment of dividends from time to time until the whole funds of the bankrupt shall be divided. Section 152 provided a procedure for the trustee to obtain his discharge after a final division of the funds. Section 155 provided for any surplus of the bankrupts estate remaining after payment of his debts to be paid to him. The case arose because the creditors discovered, after both the debtor and the trustee had been discharged, that part of the estate had not been distributed. The House of Lords concluded that, under the legislation, the remaining estate could only vest in the debtor upon a composition or other transaction with his creditors, or upon payment in full of his debts. Since none of these events had occurred, it followed that the process of sequestration under the Act had not been completed, and that a new trustee should be appointed for the purpose of distributing the remaining estate. Lord Watson explained at pp 39 and 614 615: According to my view of the statute, he [the debtor] can only get back the property which has been taken from him absolutely and irredeemably by the force of the statute in one of three ways; either, first, by his discharge upon payment of a composition to his creditors; secondly, by receiving a part of it as surplus after satisfying their claims to the extent of 20 shillings in the pound; or, in the third place, by a transaction with the trustee and creditors of the bankrupts estate I think the final close of the sequestration contemplated by the statute was the discharge of the trustee after the final distribution after the whole of the funds vested in him by force of the statute had been applied to their proper purpose, namely, payment of the debts ranked in the sequestration. When I speak of final distribution, I mean distribution of what were in fact the last funds available for the purpose. Now in this case there was no doubt a discharge of the trustee upon the footing that the available funds had been distributed. That was the footing upon which the discharge of the trustee proceeded, so far as I can see. But it proves to have been in face of the fact that there were funds extant at that date which were available, and might have been made available by the trustee for division among the creditors. Now it appears to me that the discharge of a trustee upon that footing before final distribution, either in ignorance or by inadvertence, cannot possibly alter the provisions of the Act, and that by force of the Act the sequestration notwithstanding subsists for behoof of the creditors. Counsel relied on the second paragraph of that passage as defining the meaning of the words final distribution. But Lord Watson was merely explaining the sense in which he was using those words in his speech, rather than defining a term of article The decision in the case turned on the relevant statutory provisions, in particular sections 132 and 155 of the 1856 Act. In the present case, by contrast, the trust deed contains no comparable provisions. Furthermore, in the present case the debtor has been discharged on the basis of what is in effect a composition with his creditors: a situation in which Lord Watson accepted that the position would have been different. It might also be observed that the proceedings in that case were brought by the creditors, in order to have a new trustee appointed to the undistributed estate. Although the point was not raised in the courts below, and it is unnecessary to decide it, one might question on what basis the present action, even if well founded in law, could be brought by a former trustee who had received his discharge. Conclusion For the foregoing reasons, a decision that a distribution is final, taken by the trustee under the present trust deed in accordance with his fiduciary duty, must be regarded as definitive, subject to the possibility, discussed below, of its being reduced (ie set aside). It follows, in the present case, that the trust came to an end on 5 November 2010, that the debtor was then discharged of his debts, and that the former trustee, discharged later the same month, has no entitlement to the asset discovered in 2015. The appeal should therefore be dismissed. Postscript This is scarcely a satisfactory outcome. An asset which vested in the trustee for the benefit of the creditors and ought to have been applied to payment of the debts due to them, will instead be paid to the debtor, merely because the trust was administered in ignorance of its existence. One might question whether the law is powerless to provide a remedy in this situation. Prior to the hearing of the appeal, the court informed the parties that it would be assisted by discussion of the legal consequences of a mistake in this context: in particular, whether the relevant acts of the trustee might be reduced if they were the result of an error as to the extent of the trust estate. In posing that question, the court had it in mind that on the construction of the trust deed which it has now upheld, the acceding creditors effectively conferred on the trustee a power to extinguish their rights as against the debtor by determining that a dividend should be a final distribution; and that the determination in the present case had been made in ignorance of a relevant indeed, critical consideration. It also had it in mind that reduction is a discretionary remedy, which may be granted on terms, or withheld, where that is appropriate to protect the rights of third parties. The court drew the attention of the parties to the Scottish Law Commission Discussion Paper on Supplementary and Miscellaneous Issues relating to Trust Law (2011) (No 148), Chapter 14, Error and other defects in trustees exercise of discretionary powers, and the Scottish Law Commission Report on Trust Law (2014) (Scot Law Com No 239), Chapter 19, Defects in the exercise of trustees powers, where relevant authorities are discussed. Those authorities include the decisions of the House of Lords in Dundee General Hospitals Board of Management v Bells Trustees 1952 SC (HL) 78; [1952] 1 All ER 896 and Hunter v Bradford Property Trust Ltd 1970 SLT 173, to which one might add the case of Whyte v Knox (1858) 20 D 970. In the event, the parties declined to make submissions on these matters. In those circumstances, it would be inappropriate for the court to consider them further on this occasion. |
This appeal raises a short point in relation to the Proceeds of Crime Act 2002 (POCA), namely whether, in assessing the amount of the benefit obtained by a company for the purpose of a confiscation order, any Value Added Tax accounted for and/or paid for to Her Majestys Revenue and Customs should be subtracted from the turnover figure prior to any final calculation of the benefit. The appellants arguments involve consideration of the VAT collection system, the interpretation of POCA, and the effect of article 1 of the First Protocol to the European Convention on Human Rights (A1P1). The factual and procedural background In 1972, the appellant, Jack Harvey, established a company, JFL Harvey Ltd (the Company), whose business was the hiring out of items of machinery. The Company traded from premises in Cornwall, and at all times the appellant owned 98.9% of the shares, the balance being owned by his wife. The Company was registered for VAT, and its accountants ensured that the requirements of the VAT legislation were duly complied with by the Company. Following an arson attack orchestrated by the appellant on premises owned by a competitor of the Company, the police raided the Companys premises in May 2009, and discovered that a significant proportion of the items of machinery present had been stolen. The appellant was in due course convicted at the Truro Crown Court of nine counts of handling stolen goods and sentenced to 15 months imprisonment. (He was also convicted on a separate indictment of five counts of arson, for which he was sentenced to a consecutive terms of 12 years imprisonment. On appeal, the total sentence was reduced to nine years and six months.) Following his conviction for handling stolen goods, there was a five day hearing before His Honour Judge Elwen, starting on 19 March 2012, pursuant to section 6 of POCA. It was conceded on his behalf that the appellant had a criminal lifestyle as defined by section 75(3)(a) of POCA. Accordingly, the judge had to decide to what extent, if any, he had benefited over the relevant period from his general criminal conduct, as defined by subsections (1) and (2) of section 76 of POCA. As the appellant had been charged on 11 November 2009, the relevant period for the purpose of assessing the extent of his benefit began on 11 November 2003. It was common ground that by no means all the items of machinery hired out by the Company were stolen, and the Crown accepted that the Company would have been viable if it had limited itself to legitimate activities. In a judgment given on 16 April 2012, the judge assessed the benefit obtained by the appellant at 2,275,454.40, comprising 1,960,754.40 from general criminal conduct and a further 314,700 from particular criminal conduct. In very summary terms, the sum of 1,960,754.40 was assessed by means of the following three steps: (i) the Companys aggregate turnover for the relevant period was 5,159,880 (inclusive of VAT); (ii) the proportion of stolen items to the total stock over that period was 38%; (iii) the benefit from general criminal conduct was therefore 38% of 5,159,880, namely 1,960,754.40. The appellants available assets were agreed at 3,000,000; accordingly, a confiscation order was made in the sum of 2,275,454.40. The appellant was given six months (later extended to 12 months) to pay, and was ordered to serve ten years (reduced to eight years by the Court of Appeal) in default of payment. The appellant appealed to the Court of Appeal on a number of points. In a judgment given on 3 July 2013 (Jackson LJ, Wyn Williams J and HH Judge Russell QC) his appeal was dismissed (save in relation to the default sentence) [2013] EWCA Crim 1104; [2014] 1 WLR 124. The issue on this appeal The appellants appeal to this court concerns only one of the issues determined by the courts below, namely whether the judge was right to include the VAT in the figure of 5,159,880 in step (i) of his assessment as set out in para 5 above. The Crowns case, which was accepted by the judge and the Court of Appeal, was that it has been authoritatively established that a benefit is obtained for the purpose of POCA if it has been received by a defendant, even if he has subsequently had to account to a third party for some, or even all, of it. The appellants case is that, given that the Company accounted for the VAT to HMRC, it would involve an unacceptable degree of double counting if the VAT is included in the sum which is the subject of the confiscation order. The Proceeds of Crime Act 2002 The provisions of POCA which are relevant for present purposes are sections 6, 76, 79, 80 and 84. The effect of those sections has been considered in a number of cases in the House of Lords and this court, as well as in a large number of cases in the Court of Appeal. The sections are pretty fully set out in the judgment of Lord Walker of Gestingthorpe and Hughes LJ in R v Waya [2012] UKSC 51; [2013] 1 AC 294, paras 9 and 15, and they are also described in R v Ahmad [2014] UKSC 36; [2015] 1 AC 299, paras 28 33. Accordingly, it is unnecessary to set them out or to describe them in this judgment. As Lord Bingham of Cornhill pointed out in R v May [2008] UKHL 28; [2008] AC 1028, para 8, a court considering an application for a confiscation order must address and answer three questions. The first question is whether a defendant has benefited from the relevant criminal conduct; the second question concerns the value, or quantification, of that benefit; and the third question is what sum is recoverable from the defendant (and see Waya, para 7, which has a slightly fuller exegesis). When considering the first question, section 76(4) of POCA provides that [a] person benefits from conduct if he obtains property as a result of or in connection with the conduct, and property is defined as including money by section 84(1). Section 84(2) contains some rules, which include in para (b) that property is obtained by a person if he obtains an interest in it. The proper application of these provisions requires, however, a more purposive approach than the mechanical application of the law of property. In Ahmad, paras 35 36, it was acknowledged that POCA was poorly drafted, but the court went on to say that this was explicable in part by the fact that there will be obvious difficulties in applying established legal principles to the allocation of liability under [POCA], as the rules relating to matters such as acquisition, joint and several ownership, and valuation of property and interests in property, and the rights and liabilities of owners, both as against the world and inter se, have been developed by the courts over centuries by reference to assets which were lawfully acquired and owned. In para 8 of Waya, POCA was described as framed in broad terms with a certain amount of overkill. Lord Walker and Lord Hughes went on to say that [a]lthough the statute has often been described as draconian that cannot be a warrant for abandoning the traditional rule that a penal statute should be construed with some strictness, adding that, subject to this and to [the Human Rights Act 1998], the task of the Crown Court judge is to give effect to Parliaments intention as expressed in the language of the statute. The statutory language must be given a fair and purposive construction in order to give effect to its legislative policy. Later in their judgment at para 55(a), Lord Walker and Hughes LJ said that [o]nce property has been obtained as a result of or in connection with crime, it remains the defendants benefit whether or not he retains it. The overall aim of POCA has been described as being to recover assets acquired through criminal activity, both because it is wrong for criminals to retain the proceeds of crime and in order to show that crime does not pay Ahmad, para 38. To similar effect, in May, para 48(1), Lord Bingham said that the legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means. Construing the legislation on that basis, in May at para 48(6), Lord Bingham explained that a defendant ordinarily obtains property if in law he owns it, whether alone or jointly, which will ordinarily connote a power of disposition or control, as where a person directs a payment to someone else. In Ahmad, para 49, this court observed that [i]t is clear that the amount of the benefit which a defendant obtains is not affected by the amount which might be obtained by others to whom he transfers any part of it. However, the court immediately went on to accept that there could be other cases where the court may be satisfied on the evidence that individual defendants obtained (ie assumed the rights of an owner over) only a specific part or share of the property which had been acquired as a result of the criminal activity. Article 1 of the First Protocol A1P1 was brought into United Kingdom law by the Human Rights Act 1998. The first paragraph of A1P1 provides that each person should be entitled to the peaceful enjoyment of his possessions, and that nobody should be deprived of his possessions except in the public interest and subject to the conditions provided for by law . The second paragraph derogates from the first paragraph to the extent that it states that it should not in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property for two identified purposes, namely in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. The jurisprudence both domestically and in Strasbourg on A1P1 is now clear. As Lord Hope of Craighead explained in Salvesen v The Lord Advocate [2013] UKSC 22, para 34 (omitting the citations): The tests to be applied are now firmly established. The second paragraph of A1P1 must be construed in the light of the principle laid down in the first sentence of the article. An interference must achieve a fair balance between the demands of the general interest of the community and the requirements of the protection of the individuals fundamental rights. The search for this balance is reflected in the structure of the article as a whole and therefore also in the second paragraph. There must be a reasonable relationship of proportionality between the means employed and the aim pursued. Value Added Tax VAT is payable on the supply of goods or services (save in relation to exempt and zero rated supplies) normally at a single specified rate, currently 20%. It is an EU tax, whose terms are governed by the VAT Directive, 2006/112/EC, which is implemented in UK law by the Value Added Tax Act 1994 (VATA) and the Value Added Tax Regulations 1995 (SI 1995/2518). Section 25(1) of VATA provides that a taxable person, such as the Company, must account for and pay VAT by reference to such periods at such time as may be determined by or under regulations . The VAT payable thereunder is based on the persons output tax, that is the tax he has charged, or is treated as having charged, in his invoices for the goods and services which he has sold. Section 25(2) explains that such a person is entitled at the end of each prescribed accounting period to credit for so much of his input tax as is allowable under section 26, and then to deduct that amount from any output tax that is due from him. In other words, to relate the position to the present case in a very summary way, where the Company purchased an item, it would pay input tax on the price to the supplier, and when it hired out an item, it would receive output tax from the hirer; and accordingly, the VAT it would pay in respect of any prescribed period would be the difference between (i) the aggregate output tax for which it had invoiced its hirers in that period and (ii) the aggregate input tax it had paid its suppliers in that period. In terms of section 1(2) of VATA, VAT on any supply of goods or services is a liability of the person making the supply, and becomes due at the time of the supply. There was therefore no scintilla temporis during which the Company possessed output tax without being liable to account for it to HMRC. The European Court of Justice explained how the VAT system should be regarded as working in this way in Elida Gibbs Ltd v Customs and Excise Comrs (Case C 317/94) [1996] ECR I 5339: 19. The basic principle of the VAT system is that it is intended to tax only the final consumer. Consequently, the taxable amount serving as a basis for the VAT to be collected by the tax authorities cannot exceed the consideration actually paid by the final consumer which is the basis for calculating the VAT ultimately borne by him. 22. It is not, in fact, the taxable persons who themselves bear the burden of VAT. The sole requirement imposed on them, when they take part in the production and distribution process prior to the stage of final taxation, regardless of the number of transactions involved, is that, at each stage of the process, they collect the tax on behalf of the tax authorities and account for it to them. 23. [A] basic feature of the VAT system is that VAT is chargeable on each transaction only after deduction of the amount of VAT borne directly by the cost of the various price components of the goods and services. The procedure for deduction is so arranged that only taxable persons are authorised to deduct from the VAT for which they are liable the VAT which the goods and services have already borne. A taxable person, such as the Company, is not therefore intended to bear the burden of VAT: the tax is intended to be neutral in its impact on taxable persons. The taxable person merely collects VAT on behalf of HMRC and accounts to it for the balance due. The taxable person does not however hold any sum on trust for HMRC. Thus, when the Company became insolvent, any unpaid VAT was a debt for which HMRC would have had to prove as an unsecured creditor. The contentions of the parties The Crowns case is simply this: according to the judges now unchallenged finding, the Company (and therefore, for present purposes, the appellant) obtained a total of 5,159,880 over the relevant period, and the fact that it had to account, and did in fact account, to HMRC for VAT out of that sum pursuant to its obligations under section 25 of VATA is irrelevant for the purposes of assessing what money was obtained for the purposes of POCA in the light of the dicta from May para 48(1) and Ahmad para 49, quoted in para 13 above. Mr Mitchell QC also made the valid point on behalf of the Crown that, when assessing the value of what has been obtained for the purposes of POCA, a defendant cannot argue that a sum of money, or the value of an asset, acquired as a result of criminal activity should be reduced by other liabilities. For instance, no deduction can be made to take into account the amount of income tax or corporation tax which is paid in respect of the activity; nor can other expenditure necessarily incurred in connection with, or as a result of, the acquisition of an asset through criminal activity be deducted from the value of what has been acquired in order to assess the value of what has been obtained for the purposes of POCA. The appellants case is that the figure of 5,159,880, in step (i) of the judges assessment as set out in para 5 above, should have been reduced to take into account any VAT which had been paid, or accounted for in a VAT return, to HMRC. This is said by Mr Boyce QC on behalf of the appellant, (a) to follow from the wording of POCA, interpreted according to normal domestic principles, or alternatively (b) to result from the incidence of A1P1. No argument has been advanced as to the compatibility of the judges approach with EU law relating to VAT or the confiscation of the proceeds of crime. Discussion The principle stated in the passages cited in para 13 above is generally applicable. As Jackson LJ put it in this case at [2014] 1 WLR 124, para 52, relying on what Leveson LJ said in R v Del Basso [2010] EWCA Crim 1119; [2011] 1 Cr App R (S) 268, [t]he court ha[s] to focus on the property coming to the offenders, not what happened to it subsequently, a conclusion subsequently approved in Ahmad at para 49, cited in para 14 above. Hence the factual basis for Mr Mitchells argument as summarised in para 22 above is correct: the fact that income tax or corporation tax has been paid in respect of a sum of money or an asset which has been acquired as a result of criminal activity, cannot be invoked to reduce the value of the property or the sum of money when assessing what has been obtained for the purposes of POCA. However, it can fairly be said that, in a number of respects VAT for which a defendant had to account, and has accounted, to HMRC is in a different category from either income or corporation tax, and, a fortiori, from expenses incurred in connection with acquiring money or an asset. First, income tax and corporation tax are computed on a taxpayers overall, or aggregate, net income, and therefore cannot be allocated to a particular transaction or the obtaining of particular property. By contrast, a VAT liability arises on each taxable supply, and therefore can be directly and precisely related to the obtaining of the property in question under POCA. This makes it clear, at least in a case where the VAT on a particular transaction has been paid, or even accounted for, to HMRC, that, if the courts below are correct, the United Kingdom government will, albeit through different arms, enjoy double recovery of the VAT: once under VATA and again through POCA. Secondly, although no question of a trust arises, the fact remains that, where money is paid to a defendant as a result of a transaction which is liable to VAT, the defendant is regarded under EU law as collecting the VAT element on behalf of HMRC see Elida Gibbs cited in para 19 above. As discussed in para 20 above, the tax is intended to be neutral in its impact on taxable persons. We note that the ECJ in Commission of the European Communities v Kingdom of the Netherlands (Case C 338/98) [2004] 1 WLR 35, para 55, referred to the objectives of the predecessor to the present VAT Directive as including fiscal neutrality and the avoidance of double taxation. Consistently with that approach, and indeed with the reality of the situation, it is difficult to regard output tax which has been collected and accounted for as forming part of the economic advantage derived from criminal offences. These considerations suggest that, where a taxable person has accounted to HMRC for the tax which he collected on their behalf, there may be a degree of artificiality involved in treating him as having obtained the VAT in question for the purposes of POCA. Again, no such considerations apply to income tax or corporation tax. Thirdly, at least in some cases, the defendant will have paid VAT in the form of input tax to its suppliers. It would seem particularly harsh, even penal, in a case where a defendant has accounted for all the VAT for which he is liable, not to allow him credit for that sum, but that would be the effect of his being rendered liable to a confiscation order in respect of the output tax on his transactions. We accept that it may well be that the Company in this appeal paid no input tax in respect of such of the items used in its hire business as were stolen. However, even if that is the case, this point has force, as it would be hard to justify treating the Company in the same way regardless of whether it had paid the input tax or not. Fourthly, HMRC does not as a matter of practice seek double recovery both of the excise duty due in respect of smuggled goods and a confiscation order in the same sum. Instead, they seek a confiscation order only, and do not seek to recover the duty: see R v Edwards [2004] EWCA Crim 2923; [2005] 2 Cr App R (S) 160, paras 24 25, where it is explained that the existence of this practice was the reason why no breach of A1P1 to the ECHR was argued. In Waya, it was observed at para 33 that it might need to be argued in the future whether a proportionate result should not be left to be achieved by way of Executive concession but rather should be the responsibility of the court to which an application for a confiscation order was made. Whatever the basis may be for bringing confiscation proceedings in such cases as to which, we note the observations of Lord Phillips of Worth Maltravers and Lord Mance in R v Varma [2012] UKSC 42; [2013] 1 AC 463, paras 60 65 it is questionable whether the same approach can be adopted in relation to VAT. Since VAT is a tax imposed under EU law, the scope for its non collection as a matter of concession may be less than under domestic law. It is unnecessary to decide that question in the present proceedings, but it raises the possibility of double recovery which HMRC have recognised, and sought to avoid by extra statutory means, in the context of excise duty. The factors discussed in paras 25 29 above give rise to a powerful argument that, at least when the VAT has been accounted for to HMRC, it, or a sum equivalent to it, has not been obtained by the defendant as a matter of ordinary domestic statutory construction. There are judicial observations as to how POCA is to be construed, and in particular what was said in Waya para 8 could be cited to support that view. However, we see the force of the argument that POCA is a statute which is complex and difficult to interpret in any event, and that it is important to hold fast to the principle enunciated in Waya, para 55(a) and the other judicial observations discussed in para 13 above and by Lord Toulson in paras 94 101 below. In the light of these observations, and in the interests of minimising the risk of uncertainty as to the meaning of POCA, we reject the first way in which the appellant puts his case. However, the same reasoning does not, in our view, justify rejecting the alternative way in which he puts his case, based on A1P1. Although application of the 1998 Act can be said to involve interpretation of POCA, the issue raised by the appellants alternative case involves accepting that POCA, normally construed, has the effect argued for by the Crown, but then going on to consider whether that interpretation infringes A1P1, and, to the extent that it does, modifying the effect of that construction so that it no longer has that infringing effect. Any provision which entitles the Executive to effect double recovery from an individual, although not absolutely forbidden by A1P1, is clearly at risk of being found to be disproportionate. That proposition would seem to apply in relation to any sum payable pursuant to POCA, which, while intended to be deterrent, is not intended to be punitive. This court considered A1P1 in Waya at paras 28 33, where it was made clear that, where the proceeds of crime are returned to the loser, it would be disproportionate to treat such proceeds as part of the benefit obtained by a defendant as it would amount to a financial penalty or an additional punitive sanction, which should not be imposed through the medium of POCA. Lord Hughes is right in para 71 to say that recognition of the disproportionality of treating property restored to the victim as property obtained for the purpose of POCA is not directly in point as it does not concern double recovery. However, given that VAT is effectively collected by a taxpayer as explained above, the two situations are quite similar; furthermore, as Lord Mance points out, the policy behind the principle discussed in Waya, paras 28 34 is in part that a defendant who makes good a liability to pay or restore should not be worse off than one who does not. As Lord Walker and Hughes LJ recognised in para 34 of Waya, [t]here may be other cases of disproportion analogous to that of goods or money entirely restored to the loser, which would have to be resolved case by case, That came to pass in Ahmad, where this court held that it would be disproportionate for the same sum to be recovered from two co conspirators in respect of the same property which they had obtained jointly. At para 71, the court said that it would not serve the legitimate aim of the legislation and would be disproportionate for the state to take the same proceeds twice over. The point was repeated in the following paragraph, where it is said that: [t]o take the same proceeds twice over would not serve the legitimate aim of the legislation and, even if that were not so, it would be disproportionate. We consider those observations are applicable in this case in relation to the VAT which has been accounted for to HMRC. It remains to address the point made by Lord Toulson in paras 123 124, namely the difficult full accountancy process which the appellants case is said to require at least in some cases. It should be said at the outset that the potential inconvenience involved in applying POCA in a manner which is consistent with A1P1 is not a good reason for failing to do so. There are also likely to be many cases where there will be no good reason to doubt that VAT has been properly accounted for to HMRC. Nevertheless, particularly given that POCA claims almost always involve dishonest defendants, we would accept that there may often be difficulties in assessing the amount of VAT to be treated as accounted for to HMRC. However, in some cases, it will be clear, and, where it is not, the judge trying the issue should be guided by two important factors. First, although the burden may be on the Crown to establish the gross value of the benefit obtained by the defendant (ie in this case 2,275,454.40), the burden of establishing that a sum, and if so what sum, should be deducted from that value to reflect VAT accounted for to HMRC lies on the defendant. Secondly, as in many exercises involved in assessments under POCA, a judge should be robust in making such a determination. There is nothing disproportionate about taking a broad brush approach to questions of what sums were received or paid in the context of criminal activity, where the evidence is confusing, unreliable and/or incomplete. On the contrary: the risk of disproportionality may lie more in spending much time and money pursuing a precise answer which is at best elusive and more frequently unattainable. For these reasons, we are of the view that, although it would be appropriate under the terms of POCA as traditionally interpreted, it would be disproportionate, at least when VAT output tax has been accounted for to HMRC (either by remittance or by its being set off against input tax), to make a confiscation order calculated on the basis that that tax, or a sum equivalent to it, has been obtained by the defendant for the purposes of POCA. We would leave open the position in relation to VAT for which the defendant is liable, but in respect of which he has not accounted, to HMRC, essentially for the reasons given in paras 27 28 above. We are conscious that we are leaving undecided a question which will in practice confront Crown Court judges, but it is one which raises difficult issues extending beyond VAT (as Lord Mance explains in para 47), on which the court has not been addressed in the present appeal. Conclusion Accordingly, we would allow this appeal. LORD MANCE: I agree with the reasoning and conclusions of Lord Neuberger and Lord Reed both on the issue whether VAT accounted for has been obtained and on the issue regarding the application of A1P1. As to A1P1, Lord Hughes relies (paras 71 to 72 and 76) on R v Waya [2012] UKSC 51; [2013] 1 AC 294, as supporting his conclusion that it is not disproportionate to ignore output VAT for which the defendant has accounted. In my view that decision both opens the issue under A1P1 and leaves its resolution open. Likewise, although there is a distinction between evasion cases (where payment may be said to redress the offence) and the present case (where the dishonest transaction under which the VAT was obtained remains unredressed), that does not answer the question whether VAT accounted for should be given special treatment under A1P1. Lord Hughes is correct that cases of restoration of misappropriated property to its loser differ in some respects from the present. But they have this in common, that one reason why restoration is taken into account is that a defendant who has made good his liability to restore should not be in a worse position when it comes to the making of a confiscation order than a defendant who has not done so. That also applies to a defendant who has actually accounted for VAT to HMRC. I consider that the issues before the Supreme Court require, and certainly make it highly desirable for future guidance, that we also address the position if output VAT is offset against input VAT. The actual question certified by the Court of Appeal was whether any VAT accounted for and/or paid to HMRC should be subtracted from the turnover figure (emphasis added). Consistently with this, the agreed statement of facts and issues (para 31) identifies as the question for our determination whether any deduction should be (i) the total amount of VAT received from customers; (ii) the net amount paid to HMRC (after deduction of input tax); or (iii) some other figure. It is true that output VAT may be offset against input VAT that is unconnected with the transaction giving rise to the output VAT. As indicated in paras 16 and 17 of Lord Neubergers and Lord Reeds judgment, output VAT is due when charged to the recipient of the goods or services. The entitlement to set it off against input VAT is merely a facility that is permitted at the end of a relevant accounting period in which there happens to be such input VAT: Value Added Tax Act 1994 (VATA), section 25(2). Lord Hughes (para 77) points out that, particularly with dishonest defendants, questions may arise whether the input VAT claimed was genuinely due. That is also true. But equally there will be cases where it is crystal clear that the input tax was due. Could the happenstance that the defendant has offset output VAT against input VAT clearly payable to him by HMRC, rather than actually disbursed the output VAT to HMRC, make all the difference? In my opinion, not. Either way the defendant has in reality and law satisfied his obligation to HMRC to account for or pay the full output VAT he has received. Lord Hughes and Lord Toulson observe that the process of making a confiscation order is already complex, and argue that it would not be proportionate (Lord Hughes, para 77) to make it more so, and could give rise to accounting problems (Lord Toulson, paras 115 to 123). As regards the difficulties involved, that is a generalisation, which, as noted in the previous paragraph, will by no means necessarily be true. But, even when and where it is true, the process of making a confiscation order is, as Lord Hughes and Lord Toulson themselves recognised, inherently complex. Criminal courts have under the Proceeds of Crime Act 2002 to make a whole series of often very difficult assessments, eg as to the nature and scale of offending, as to benefits received and as to means. The question whether it would be disproportionate to include in a confiscation order output VAT for which the defendant has accounted is, under A1P1, a question of substantive justice, which courts cannot and should not avoid addressing for reasons of convenience. The onus will also be on the defendant to show that he has accounted for and met his obligations in respect of output VAT whether by remittance or set off against input VAT due from HMRC. Judges can and should also be robust in their assessments and determinations under POCA, as Lord Neuberger and Lord Reed indicate in para 35 of their judgment. For these reasons, I consider that the answer to the question contained in the agreed statement of facts and issues is that, in a case such as the present, the court when making a confiscation order should ignore the total amount of VAT received from customers for which the defendant shows that he has accounted to HMRC either by actual remittance or by set off against input tax due. The question in the agreed statement does not address the case of a defendant who has received, or is to be taken as having received, output VAT for which he has not accounted to HMRC either by remittance or by offset against input VAT. In such a case, the question may arise whether a confiscation order may be made by reference to the VAT received or taken as received, even though such VAT remains due to HMRC who may require it to be paid or accounted for. That has a parallel in the question arising from cases such as R v Smith (David) [2001] UKHL 68, [2002] 1 WLR 54 and R v Edwards [2004] EWCA Crim 2923, [2005] 2 Cr App R (S) 160 and considered in passing in R v Varma [2012] UKSC 42, [2013] 1 AC 463 whether it is legitimate in evasion cases for the Crown to seek and obtain a confiscation order based on the VAT due but evaded, on the basis that HMRC will not in practice (provided at least the confiscation order specifically identifies the VAT based element of the confiscation order and the period or transaction to which it relates) thereafter seek to recover such VAT as such. As in R v Varma, so too in this case, the question identified in the preceding paragraph must remain open. What can be said about HMRCs expressed policy and practice is that it gives some comfort to the conclusion that it would be disproportionate to contemplate a scenario in which the Crown could, after output VAT had been accounted for to HMRC by payment or offset, seek the equivalent amount by way of a confiscation order. LORD HUGHES: (dissenting) The defendant was convicted of nine offences of handling stolen plant and machinery, which he had used in the course of his plant hire business. He was also convicted of arson of a competitors machinery. After reduction on appeal, he is serving a total sentence of nine years and six months. He had carried on his business through a limited company which was properly treated as his alter ego, so that its receipts were his. On the findings of the judge, he had effectively run his business to a considerable extent on stolen machinery. Some 38 different stolen machines, plus a quantity of accessories, were identified and traced following the intervention of the police; the earliest thefts were some nine years beforehand. The judge assessed the proportion of stolen machinery in his total stock at 38%. The defendant was found to be in possession of blank invoices in varying names, such as strongly suggested a practice of forgery to disguise the origins of stolen property. The handling offences gave rise to confiscation proceedings pursuant to Part 2 of the Proceeds of Crime Act 2002 (POCA). Because of the number of offences the lifestyle provisions of that Act applied to the assessment of the defendants benefit. Accordingly, all property passing through his hands in the relevant six year period was to be assumed to be the proceeds of crime except to the extent that the defendant could prove on the balance of probabilities that any item was not, and unless the making of such an assumption would give rise to a serious risk of injustice: see section 10. The judge heard the evidence of the defendant himself and several witnesses called on his behalf. Except for the accountant who prepared the company accounts, the judge found the evidence untruthful; the accountant was truthful but much of his source material provided by the defendant was not. The judge accordingly found that the principal component of the benefit obtained by the defendant as a result of or in connection with his criminal conduct was 38% of the total business receipts of the company from the hiring out of plant. There is no complaint about this method of calculation. Other benefit brought the total to 2,275,454.40. The appeal is grounded on the single issue of the treatment of the Value Added Tax (VAT) element of the business receipts. Both the judge and the Court of Appeal held that there was no basis for deducting that element from the gross receipts (or, rather, from 38% of them) in arriving at the benefit obtained and thus, in due course, at the amount of the confiscation order. The defendant challenges those decisions. He does so on three alternative bases: if that is wrong and he did obtain the VAT element, he contends that i) he contends that the VAT element in his receipts was never obtained by him, alternatively was not obtained to the extent that he accounted for it to HMRC by declaring it on his VAT returns; or ii) his interest in that element was nil; or iii) if both are wrong, he contends that it is nevertheless disproportionate to make a confiscation order which is not reduced by the amount of VAT received by him from his customers, alternatively received by him and accounted for to the Revenue. The figures given to the judge were these: Gross receipts in the six year period (including an estimated figure of 94,400 for unrecorded or off book trading in cash) 5,159,880.00 38% thereof 1,960,754.40 Output VAT declared) 843,827.00 Input VAT reclaimed) all total figures 643,081.97 VAT paid) 200,745.03 It should be noted that there has been no assessment of the accuracy of the VAT declarations. Since the judge declined to deduct any VAT element, it was not necessary to embark on such an investigation. The defendants use of forged invoices, never mind the clear findings of unrecorded trading, would at the least raise real queries as to the figures. Moreover, the declared output tax would seem to have been upon the on book transactions of which the accountant had knowledge, but presumably not on the off book ones. So it would appear distinctly likely that the defendant under declared output VAT, at least to the tune of 20% of 94,400, which is a little under 12,900. Benefit under POCA Post conviction confiscation orders under POCA are dependent first upon ascertainment of the benefit. This is defined by section 76. Under section 76(4): A person benefits from conduct if he obtains property as a result of or in connection with the conduct. By section 76(7): If a person benefits from conduct his benefit is the value of the property obtained. Subsection 76(5) is not directly applicable to the present case but should be noted. It provides: If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage. Two things are fundamental to the scheme of POCA: (a) The measure of benefit is what is obtained, not what is retained. (b) The measure of benefit is not reduced by the costs or outgoings associated with obtaining it. There has been no dispute about either of these propositions and it is not necessary to rehearse in detail the long line of authorities by which they are established. Both have been established law under successive confiscation statutes for many years. They are, inter alia, integral to the reasoning of the House of Lords in R v May [2008] UKHL 28; [2002] AC 1028 and to that of the Supreme Court in R v Waya [2012] UKSC 51; [2013] 1 AC 294. Proposition (1) follows from the terms of the statute. It was also specifically decided by the House of Lords in R v Smith (David) [2001] UKHL 68; [2002] 1 WLR 54. There, the benefit obtained was (as was agreed) the pecuniary advantage of evading payment of (not liability for) excise duty on smuggled cigarettes. That pecuniary advantage was indisputably obtained. As Laws LJ had put it in a case of tax evasion by fraud, if the crime had not been detected, the defendant would have been better off to the tune of 4m (R v Dimsey [1999] EWCA Crim 2261). The decision of the House of Lords in Smith was that the fact that that benefit was subsequently lost by detection and, in the case of the smuggler in Smith, additionally negated by seizure of the cigarettes under the excise legislation, could not alter the fact that the benefit had been obtained. For the same reason, the burglar remains liable to confiscation in the value of the jewelry and laptops stolen notwithstanding that he lodged the jewels with a dishonest associate who made off with them and that the laptops were ruined by a thunderstorm after he had hidden them in a hedge to make good his escape. The same principle is also inherent in Lord Binghams seminal judgment in May, for it was there decided that the fact that the benefit had been jointly obtained with, and shared with, an accomplice did not mean that the defendant had not obtained the whole of it (recently re affirmed in R v Ahmad [2014] UKSC 36; [2015] AC 299). This principle famously led Lord Bingham to make clear, in the same judgment at para 9, that proceeds of crime legislation is not confiscation as the schoolboy would understand it: Although confiscation is the name ordinarily given to this process, it is not confiscation in the sense in which schoolchildren and others understand it. A criminal caught in possession of criminally acquired assets will, it is true, suffer their seizure by the state. Where, however, a criminal has benefited financially from crime but no longer possesses the specific fruits of his crime, he will be deprived of assets of equivalent value, if he has them. The object is to deprive him, directly or indirectly, of what he has gained. Confiscation is, as Lord Hobhouse of Woodborough observed in In re Norris [2001] 1 WLR 1388, para 12, a misnomer. The post conviction provisions of POCA (Parts 2, 3 and 4 for England and Wales, Scotland and Northern Ireland respectively), and their statutory predecessors, constitute a scheme for penalising criminals by imposing not a fine but a financial order geared to what they obtained by their crime. A fine would be unrelated to what was obtained and would be measured, rather, by the culpability and harm involved in the underlying offence. It would take account of the obligations as well as the assets of the defendant. A post conviction confiscation order is different, and may often be swingeing. It was described in Waya at para 12 as deprivation of property as a form of penalty. It should be emphasised that such confiscation is not designed to restore money to the state, since the state is, in most cases, not the loser by the crime. It is designed to deprive the offender. No doubt a different scheme could have been prescribed, and one such might have involved calculation of retained benefit. In some countries schemes for the confiscation of criminal proceeds do follow this approach, notably those which rely upon tracing and recovering specific property. The UK system does not. It depends upon ascertaining the value of what was obtained, and then recovering not specific property but, rather, that sum. Having obtained such a sum through crime, the defendant is expected to surrender it from any assets which he holds, whether they were legitimately or criminally acquired. That, as Lord Bingham observed in May at para 46, involves no injustice or lack of proportionality. It might be added that two considerable disadvantages of a system which depends on retained benefit are the ease with which confiscation can be avoided by complicated concealment of what has happened to the initial proceeds and the complexity of the investigation and calculations which fall to be made by the court into transactions which a criminal is unlikely to record. UK confiscation under POCA does not, it might be thought, at present want for sufficient complexity. Proposition (2) is of almost equal length of standing. It was decided specifically by the Court of Appeal in R v Smith (Ian) [1989] 1 WLR 765,769, R v Simons (1993) 98 Cr App R 100 and R v Banks [1997] 2 Cr App R (S) 110, which decisions were expressly approved by the House of Lords in May (see para 15). In Banks Lord Bingham CJ said that there were four insuperable objections to the argument that the defendants payment or reward (which expression was then the relevant one under section 4(1) of the Drug Trafficking Act 1994) was limited to his net, rather than his gross, proceeds. They are set out in detail in the judgment of Lord Toulson at paras 98 100; I respectfully agree with what he says and there is no occasion to repeat it here. Are taxes different? Are taxes different from other expenses or incidental outgoings because they are money paid to the State, which is also the recipient of confiscation orders? No doubt in the case of the simple paradigm criminal, the question is unlikely to arise. The burglar or thief will rarely pay income tax or fall liable to other taxes in connection with his crime. But many of the most serious acquisitive criminals will. Those who make a business out of their crime may well do so, and especially if they adopt the cover of legitimate trade under which to pursue offences such as drug trafficking, fraud or smuggling. The bigger the criminal operation, the more likely it is that the outgoings incidental to the crime will include one or more forms of tax payable to the state. The smuggler running a fleet of lorries will need operators licences, will pay probably heavy liabilities in fuel duty, will pay business rates on his depot(s) and employers national insurance contributions for those who work for him, as well as falling liable to corporation tax on his business profits. If what he is smuggling is drugs, they will probably be sold clandestinely and there will be no question of corporation tax being paid on the profits. But if the contraband is container loads of cigarettes or wine and spirits, it may well be sold as if legitimate through the front of an apparently honest trade outlet, and corporation tax accordingly may be paid. These outgoings are no different from the other expenses of criminal offending, some of which may themselves be overtly criminal, such as payments to subordinates or the purchase price of drugs or contraband, and some of which may be neutral, such as the cost of fuel or accommodation or the stamp duty paid on the laundering of the proceeds through the purchase of real property. There is no relevant difference, for example, between the prime cost of fuel used to transport contraband and the fuel tax element of the pump price. It is simply impossible to distinguish between these different types of outgoing on the basis that some are payments made to the state and others are not. None of these outgoings affects the question of what is obtained. Nor, when it comes to proportionality of the confiscation order, does any of them give rise to any disproportion if the order is based on the gross receipts. Nor has the contrary been suggested in any of the arguments before this court. Is VAT different? If taxes generally cannot fall for deduction from benefit, is VAT different? It is certainly true that distinctions can be identified between the mechanics of VAT and those of other taxes, for example corporation tax. i) Corporation tax is assessed on the profits of the business, as is income tax for a non corporate trader. VAT is levied upon each supply made by the trader. It is thus transaction specific, and the VAT component in each invoice can be identified. ii) The overall scheme of VAT is intended to be that the ultimate burden falls on the last purchaser in the chain who cannot reclaim input tax, usually the non trading consumer. This is sometimes described as the principle of fiscal neutrality. In Revenue and Customs Comrs v Aimia Coalition Loyalty UK Ltd [2013] UKSC 15; [2013] 2 All ER 719, both Lord Reed and Lord Walker emphasised this characteristic of VAT: see paras 72 75 and 113. At para 113, Lord Walker quoted Advocate General Lenz in BLP Group plc v Customs and Excise Comrs (Case C 4/94), [1996] 1 WLR 174 (para 30) as envisaging: an ideal image of chains of transactions intended to attach to each transaction only so much VAT liability as corresponds to the added value accruing in that transaction, so that there is to be deducted from the total amount the tax which has been occasioned by the preceding link in the chain. iii) This same characteristic of fiscal neutrality has led the European Court of Justice to refer to the taxable traders position under the VAT system as one of collecting the tax on behalf of the tax authorities. In Elida Gibbs Ltd v Customs and Excise Comrs (Case C 317/94) [1996] ECR I 5399 the court described the overall effect of VAT in this way: 22. It is not, in fact, the taxable persons who themselves bear the burden of VAT. The sole requirement imposed on them, when they take part in the production and distribution process prior to the stage of final taxation, regardless of the number of transactions involved, is that, at each stage of the process, they collect the tax on behalf of the tax authorities and account for it to them. iv) For the purposes of the Companies Act 2006, it is provided by section 474 that turnover is defined to exclude the VAT element in receipts. The questions which matter are therefore whether these differences in the mechanics of VAT are significant for the issues in this and similar cases. In particular, do they mean (1) that the trader does not obtain the VAT element of his receipts for the purpose of POCA, or (2) that even if he does, he has no interest in that part of what he obtains, so that its value is nil, or (3) that despite the VAT element being obtained, it would be a disproportionate infringement of the defendants rights under A1P1 to recover its value as part of a confiscation order? All taxes have specific mechanics, and few are the same as others. It is certainly true that corporation tax and income tax are essentially taxes on profits, and that they are not taxes on individual transactions. But this is not a material distinction. Other taxes, such as fuel tax and excise duty on alcohol, are essentially levied on individual transactions, and moreover the tax paid by the trader is passed on to consumers in the price of each later transaction. Business rates are levied neither on profits nor individual transactions, but on the occupation of premises. National insurance is levied on the engagement of employees. There is nothing distinctive in the mechanics of VAT which differentiates it relevantly from other taxes when it comes to asking the questions posed at para 60. Fiscal neutrality means that, for the trader, the (output) tax which he pays to the Revenue is identical to the charge which he makes (either explicitly or by statutory implication) in his invoice to his customers. Likewise the (input) tax which he is entitled to reclaim is identical to the total VAT which he has been charged by those from whom he has bought goods or services. This is indeed an important characteristic of VAT. But it does not follow from this that he has not obtained the (output) VAT which is included in his charges to his customers. On the contrary, fiscal neutrality is equally achieved if he does obtain the VAT element, but is then required to pay an identical sum to the Revenue. Nor does it follow that his interest in the VAT element obtained is nil; there will still be fiscal neutrality if his interest is substantial but he comes under a corresponding obligation to pay the same sum to the Revenue. Nor, lastly, does fiscal neutrality answer the question whether there is anything disproportionate in declining to net off the VAT element when calculating the amount of a confiscation order under POCA, in the same way as it is agreed that the system declines to set off other outgoings, including other taxes payable to the state. The proposition that the taxable trader collects the VAT on behalf of the state is a no doubt convenient shorthand way of expressing the concept of VAT accumulating in successive transactions, with traders reclaiming inputs and setting them off against outputs, so that the ultimate burden falls on the consumer who pays it but cannot reclaim it. But the mechanics of VAT simply do not work by making the taxable trader the agent of the state in collecting VAT. He is obliged by the Value Added Tax Act 1994 to charge VAT on his supply of goods or services, and he is treated as having done so by the statutory rule that his price for such supply is deemed to be VAT inclusive. But if his customer pays his price, the VAT element in no sense belongs to the Revenue, but to the recipient trader. It is not held on any kind of trust for the Revenue. The trader is free to do with the money whatever he wants. His obligation to the Revenue is not to deliver up something which he has collected for it, but the different one of accounting for tax according to what he has charged and what he has paid out. When he renders the invoice he comes under the obligation to account to the Revenue for the VAT element, that is to say to declare it. In due course at the end of the accounting period he is obliged to pay the Revenue not the amount of VAT charged to his customers, but the difference between the total output VAT charged and the total input VAT paid. The input tax which he can reclaim is not transaction specific. He can reclaim any input tax which he has paid in any part of his business, and even if he has paid nothing at all in relation to the subject matter of the supply(ies) on which he has charged output tax. If his input tax exceeds his output tax, as it may well if he is trading predominately in exempt or zero rated supplies, he has to pay nothing to the Revenue even though he has charged and received output tax on some of his trading. Otherwise his obligation is only to pay the difference between the sums charged by way of output tax and the sums paid out by way of input tax. He is under that obligation whether or not his customer has paid him. There is provision in the Act (section 36) for subsequent adjustments as between the trader and the Revenue by way of bad debt relief if the customer fails altogether to pay, but in the meantime the traders liability to pay the Revenue the difference between output receipts and input payments is unaffected by any such failure, whilst if the customer simply delays, the trader must nevertheless pay up promptly. None of these rules can possibly co exist with a legal framework in which the trader is collecting the output tax on behalf of the Revenue. For the same reasons, Advocate General Lenzs ideal image (see para 59(ii) above) is a helpful illustration of the philosophy behind VAT rather than a legal analysis of the actual mechanics of the tax. Input tax need not relate to the transaction on which output tax has been charged. Moreover, whilst it is undoubtedly true that the philosophy underlying the tax is that the effective burden of it will fall on the ultimate consumer, this is by no means only true of VAT. In the UK, the predecessor of VAT was purchase tax, which was levied on wholesalers only. But in effect that tax was passed down the line of supplies and similarly ended up being felt in the price paid by the consumer: see the analysis of Mance LJ (as he then was) in Debenhams Retail plc v Sun Alliance and London Assurance Co Ltd [2005] EWCA Civ 868; [2005] STC 1443, para 28, where the economic reality of VAT was held to be in this respect very similar to that of purchase tax. That case also demonstrates that the expression turnover, like almost any legal expression, takes its meaning from its context. It was there held that for the purpose of a rent clause which made the rent variable with the tenants turnover, that expression included the VAT element in receipts. The provision in the Companies Act 2006 on which the appellant in the present case relies is similarly contextual. It is applied by section 474 for the purposes of Part 15 of that Act only. Part 15 is concerned with rules for companies to render accounts and reports. The references to turnover in that part of the Act are to the means of classification of companies as small, or as medium sized, for the purposes of differing regimes for accounts and reports: see sections 381 383, 441 444 and 465 466. Turnover does not refer to anything stated in accounts. There is no comparability between this categorisation rule and the entirely different context and purposes of POCA, and it is not possible to read across from the one to the other. Was the VAT element obtained? The mechanics of VAT, as described above, make it clear that when the defendant was paid by his customers a price which was VAT inclusive, he obtained the VAT element as well as the rest of the price paid. It became his to do with as he wished. That he came under an obligation to declare it cannot mean that he did not obtain it. Nor can his subsequent declaration of it (or accounting for it) un obtain it. The features of VAT which are relied upon do not alter these legal facts. Was the defendants interest in the VAT element nil? For the same reasons, when the defendant obtained the VAT element, it became his own. His interest in it was not qualified or limited by any other proprietary interest held by anyone else. The Revenue had no interest in it but only an expectation that it would be paid the difference between output and input tax. There can be no question of the defendant having a nil interest in the VAT element of his receipts. Proportionality and double recovery The remaining question is whether it is a disproportionate interference with the defendants A1P1 rights to make a confiscation order in the sum of the benefit which he obtained, and in particular whether an order is disproportionate unless the VAT element in what he obtained is deducted. It is important to understand that the overriding principle, derived from A1P1, that a confiscation order must be proportionate, does not affect the question of what is obtained. The test of proportionality comes to be applied at the next stage, when one asks what confiscation order is to be made. This was explained in Waya at paras 15 and 16. The A1P1 requirement of proportionality is given effect by reading down section 6(5)(b) of POCA. There is no question of reading down section 76(4) or (7), which is where it is provided that a defendant benefits when he obtains property as a result of or in connection with his (criminal) conduct, and to the extent of the value of what he obtains. Nor is there any question of reading down section 80, which is where the rules for valuation of benefit are set out. The section which is read down is section 6(5)(b) which requires the making of an order in the sum of the recoverable amount (defined in section 7(1) as the value of the benefit obtained). Section 6(5)(b) is read down by adding the qualification except insofar as such an order would be disproportionate and thus a breach of article 1, Protocol No 1 and the section has now been amended to this effect. This difference is not simply technical. It may matter. Because the focus is on the fairness (proportionality) of the amount of the ultimate order, then if the VAT element is to be deducted there might be a difference between a defendant who has paid the VAT element over to the Revenue, and a defendant who, even if he has declared it, has not paid it. The argument of the appellant runs as follows: (a) The VAT element (or a sum equal to it) was a mandatory inclusion in the defendants price, imposed on him by the state. (b) In reality all he did was to collect the tax for the state. (c) The state is the recipient of anything paid under a confiscation order. (d) Therefore if the confiscation order includes the VAT element, the state will recover the same money twice, and this is disproportionate. It seems sometimes to be asserted in argument that the decision of this court in Waya established a general principle that disproportionality of a confiscation order is demonstrated if it entails something described as double recovery. That is not what Waya says and there is no such general principle. Waya did not purport to lay down any general test for disproportionality. It was a case of mortgage fraud in which the deception did not impact in any way on the deceived lenders full security, and indeed he had been repaid some time before the offence was discovered, with the addition of 58,000 for early redemption. In the end, the amount of the confiscation order depended on the correct analysis of what benefit had been obtained rather than on departure from the amount of such benefit on grounds of disproportion: see para 78. Given the kind of case it was, the court unsurprisingly concentrated its more general observations on the possible disproportionality of cases in which the benefit gained has been wholly restored intact to the loser: see the treatment at para 28 of R v Morgan [2008] EWCA Crim 1323; [2008] 4 All ER 890 and at para 31 of R v Wilkes [2003] EWCA Crim 848; [2003] 2 Cr App R (S) 625. It raised at para 34 the possibility that there might be other scenarios analogous to total restoration. It also adverted in passing at para 17 to R v Shabir [2008] EWCA Crim 1809; [2009] 1 Cr App R (S) 497, which was a very exceptional case of a different kind of disproportion; it involved an absurdly excessive disparity between the amount gained (464) and a benefit figure more than four hundred times greater, which derived from a technical application of POCA and the manner in which the offences had been charged. None of the foregoing had anything to do with double recovery. The only mention in Waya of the expression double recovery is to be found in para 33 in the context of rejecting any suggestion that R v Smith (David) [2002] 1 WLR 54 contained anything inconsistent with what had been said about total restoration cases. As has already been explained at para 55 above, that decision of the House of Lords proceeded upon two clearly correct propositions: first that the defendant had obtained the pecuniary advantage of evading payment of excise duty (not the liability to pay it), and second that the subsequent forfeiture of the contraband did not un obtain that pecuniary advantage. The court in Waya went on to disclaim any analysis of excise duty cases, but it recorded that the practice of the Revenue is not, in cases of evasion of payment, to claim both confiscation in the amount of the excise duty and civil recovery of the same excise duty. That practice, the court noted, appeared to have been adopted in order to avoid disproportionate double recovery. That Revenue practice, described also in the judgment of the Court of Appeal in R v Edwards [2004] EWCA Crim 2923; [2005] 2 Cr App R (S) 160, paras 24 to 25, has been confirmed to this court in the course of argument, albeit it is recorded only in various letters written in individual cases. It appears to be adopted at least in those cases where the offence charged is of tax evasion and the confiscation order is for (or includes) the same specified sum of tax evaded. It is not difficult to see that offences of evasion of payment of taxes are in a category of their own. There, the benefit consists of the pecuniary advantage of evasion of payment, not of liability. Payment, once made, satisfies the obligations of the defendant. So if payment is then made in full, whether voluntarily, or by way of civil recovery by the Revenue, or under a confiscation order made for the sum evaded, the liability has been met. In that sense, the position is analogous to total restoration cases. But the excise duty cases, such as R v Smith (David), also demonstrate the absence of any wider or more general rule against double recovery, for it is the state which forfeits contraband which is discovered, but that does not in any sense invalidate the proportionality of imposing on the smuggler a confiscation order based upon his evasion of payment of duty. In Ahmad this court confronted a different kind of double recovery. The two defendants had jointly obtained some millions of pounds through their crime. This court held that although confiscation orders against each of them were properly made for the full amount obtained, it would be disproportionate for the orders both to be enforced in full, thus yielding twice the proceeds of crime to the state. That sheds no light on the present question. Each case will depend on its own facts. But the case of a trader defendant who did not declare any output VAT need not affect the answer to the question posed. He might be prosecuted also for evasion of that liability. Assuming, however, that the VAT element of gross receipts does not fall to be deducted, the benefit of the VAT offence would overlap with the benefit of the dishonest handling and would not increase it. There is of course some initial attraction in a general proposition that it is unjustified and disproportionate for a confiscation order to include a sum already paid to the state. But it is clear both in principle and from the judgment in Waya that there is no room for any general rule that double recovery is either (a) a necessary or (b) a sufficient determinant of when a confiscation order will be disproportionate. As to (a), cases of total restoration to the loser cannot be described as involving double recovery for the loser is in most such cases not the state. As to (b), it is clear from Waya, as from the argument in the present case, that there is nothing disproportionate about a proceeds of crime regime which confiscates the gross proceeds of offending without giving credit for taxes, direct or indirect, paid to the state. That is so, even though this plainly involves the state both receiving the taxes earlier paid and recovering by way of the confiscation order. This follows from the general rule that confiscation is entitled to fasten on gross receipts rather than on profits. There is nothing disproportionate in the mere fact that the consequences of detection and confiscation may leave the criminal worse off than if he had not committed the crime. Once the position as to taxes generally is accepted, there is no sufficient basis for singling out VAT as requiring different treatment; indeed it would be inconsistent to do so. For the reasons set out in paras 59 65 above, the characteristics of VAT, to the extent that they can be distinguished from those of other taxes, are distinctions without a relevant difference. The contention on behalf of the present appellant was that the confiscation order was unlawfully disproportionate to the extent that it did not give credit for 38% of the total output VAT declared (ie 38% x 843,827 = 320,654; see para 52 above), because that was said to be the sum which would be wrongly doubly recovered. If that were to be the necessary consequence of giving credit for the VAT element in gross receipts, it would follow that the Crown Court would have to determine whether there had been a full declaration of output tax and, in order to discover the extent of double recovery, it would have also to determine whether the input tax claimed was all properly offsettable. That would add inordinately, and inappropriately, to the already complex task of the Crown Court when considering a confiscation application, and would in practice mean that the Revenue had to be a participant in every case. That would not be proportionate. It would also mean, as Jackson LJ pointed out in the Court of Appeal, that the order is reduced even though the defendant has used the criminally obtained output VAT element of his receipts from customers to buy goods and services, which is itself an offence: see the passage quoted by Lord Toulson at para 117. But an alternative way of giving credit for VAT might, if the principle were a sound one, be to deduct from the gross receipts the net VAT actually paid (here 200,745.03) or, more accurately I think, 38% of that sum (76,283.11). However, for the reasons given, the suggested principle is unsound. Contrary to this view, the judgments of Lord Neuberger, Lord Reed and Lord Mance hold that in order to meet the requirement of proportionality the output VAT element in relevant receipts must (unlike other taxes payable) be deducted from the confiscation order in some circumstances. It is to be deducted, they all agree, when it has been accounted for to HMRC (either by remittance or by its being set off against input tax): see Lord Neuberger and Lord Reed at para 36 and Lord Mance at para 46. That would appear to mean that the output tax is to be subtracted from the confiscation order if the trader has declared it and paid either it, or the difference between it and input tax he claims to set off. That, as I understand it, will leave it to the Crown Court to determine in each case whether to investigate the propriety of the input set off or not. For the reasons set out above and those additionally explained by Lord Toulson, I myself do not regard this as satisfactory, as a means of determining when an order will be disproportionate, but the working out of this principle must be for Crown Courts and the Court of Appeal; it may be that in practice Crown Courts will be entitled to take the view that the input tax can be taken as correct unless good reason is shown by the Crown (or by the Revenue) to query it, but since most defendants will by definition be unreliable or dishonest, such good reason is very likely to exist in most cases. In that event the kind of case management envisaged by Lord Toulson (para 125) seems likely to be necessary. The question of what to do if the output tax has not been paid (with or without set off for input tax) is left open (see Lord Neuberger and Lord Reed at para 36). The intention would seem to be to avoid requiring the defendant to pay the VAT output element twice, once by way of inclusion in a confiscation order and once by way of orthodox recovery of VAT by the Revenue. If that is the intention, Crown Court judges need to know how to proceed when confronted by a confiscation application. They are obliged to make an order and have no discretion not to do so. There is no mechanism by which they can put the Revenue, which is not a party to the proceedings, on terms that the VAT is not to be recovered by orthodox enforcement. If they simply deduct the output VAT element whether it has been paid or not, and whether or not there is any reasonable prospect of it being paid, they risk making an order which is unduly favourable to the defendant and in no sense required by proportionality, even on the majority view. However that may be, for the reasons given my own clear conclusion is, like that of Lord Toulson, that it was not disproportionate for the confiscation order in the present case to be made on the basis of the defendants benefit, ie gross receipts from dishonest trading, without first deducting the VAT element in those receipts. The practical difficulties set out in para 35 which surround giving effect to the decision of the majority in this case seem to me to provide additional reasons why this is so. For these reasons I would have dismissed this appeal. LORD TOULSON: (dissenting) The question certified by the Court of Appeal is whether, in assessing the amount of benefit obtained by a company for the purpose of confiscation, any VAT accounted for and/or paid to HMRC should be subtracted from the turnover figure prior to any final calculation of the benefit figure. The appellants primary argument is that the question should be answered in the affirmative because on the proper construction of the Proceeds of Crime Act 2002 he did not obtain the VAT element of income received as a result of or in connection with his criminal conduct. He has an alternative argument based on article 1 to the first protocol to the European Convention on Human Rights and Fundamental Freedoms (A1P1). The appellant pleaded guilty to nine counts of handling stolen goods. The stolen goods were items of plant used by a plant hire company, referred to as JHL, which was under his ownership and control. On the prosecutions application for a confiscation order against the appellant under the 2002 Act, it was conceded that the court was entitled to treat deposits into the companys bank account as property obtained by the appellant himself. It was undisputed that the appellant had a criminal lifestyle within the definition of the Act. In those circumstances, section 6 required the court to decide whether he had benefited from his criminal conduct over the period beginning six years prior to the commencement of proceedings against him; and, if so, it required the court to make a confiscation order against him for the recoverable amount. Section 7 provides that the recoverable amount is an amount equal to the defendants benefit from the conduct concerned, unless that amount exceeds the amount available to the defendant, in which case the recoverable amount will be the available amount or, if that is nil, a nominal amount. Section 76(4) is critical. It provides that: A person benefits from [criminal] conduct if he obtains property as a result of or in connection with the conduct. This subsection reproduces verbatim the language of section 71(4) of the Criminal Justice Act 1988 (CJA 1988) and is central to the statutory confiscation scheme. Section 76(7) provides that: If a person benefits from conduct his benefit is the value of the property obtained. Property is defined in section 84(1)(a) in wide terms and includes money. Section 80 deals with the valuation of property obtained from conduct. Section 80(2) provides that the value is the greater of (a) the value of the property (at the time the person obtained it) adjusted to take account of later changes in the value of money or (b) the value of any substitute property. This subsection substantially reproduces section 74(5) of the CJA 1988. The present Act is the latest in a series of statutes providing for the confiscation of assets after conviction. The prototype was the Drug Trafficking Offences Act 1986. It was followed by the CJA 1988, which dealt with offences other than drug trafficking. Between 1988 and 2002 other Acts made refinements. The 2002 Act brought together the provisions for confiscation orders in drugs cases and other cases into a single piece of legislation. Whilst the various Acts made changes in matters of detail, the essential structure of the original regime has been retained, as Lord Bingham observed in R v May [2008] UKHL 28; [2008] 1 AC 1028, para 8. The court has to address three central questions: whether the defendant benefited from the relevant conduct, what is the value of any benefit and what is the recoverable amount. relevant period came from the hiring out of stolen plant. As I see it, that part of the companys income falls squarely within section 76(4) of the present Act. It was money paid into the companys account as a result of, or in connection with, the use of stolen property. A person obtains property within the meaning of section 76(4) if in law he owns it or he assumes the rights of an owner over it: R v May para 48(6), R v Allpress [2009] EWCA Crim 8; [2009] 2 Cr App R (S) 399, para 63 and R v Ahmad [2014] UKSC 36; [2015] AC 299, para 42. On the agreed basis that for the purposes of the confiscation proceedings in this case no distinction is to be drawn between the assets of the company and the appellant, there is no doubt that the appellant owned the money paid into the companys bank account. Strictly speaking, what we talk of colloquially as money in a bank account is a thing in action between the account holder and the bank, which in law belongs to the account holder (save in exceptional circumstances where the account holder is a bare nominee): see R v Sharma [2006] EWCA Crim 16; [2006] 2 Cr App R (S) 416, para 19, R v May, para 34 and R v In this case the judge found that 38% of the companys income over the Allpress, paras 85 86. Referring to the decision in R v Sharma, Lord Bingham said in R v May, para 34: It was rightly held (para 19), applying general principles of law, that a person who receives money into his bank account obtains it from the source from which it is derived and, where he is the sole signatory on the account, he obtains the money and has possession of it for his own benefit. In this case the relevant income paid into the companys account was derived from invoices sent to customers for the hire of stolen goods. It was payment both as a result of and in connection with the appellants criminal conduct. HMRC had no proprietary interest in the money in the companys account. The appellant (or more strictly the company) was under a liability to pay such amount, if any, in respect of VAT as was due after setting off any input tax, but it was a matter for the company what resources it used to pay any balance due. The appellant argues that to the extent that the company paid or accounted for its VAT liability to HMRC in respect of transactions for which it had invoiced its customers, it should thereupon be deducted from the sums received from the customers in calculating what he had obtained and/or its value. But the legislation requires the court to calculate what the defendant has obtained, and not what he has retained. In R v Smith (David) [2001] UKHL 68; [2002] 1 WLR 54, a case about the pecuniary advantage obtained by the smuggling of cigarettes which were soon seized by customs officers, Lord Rodger said at para 26: Under section 74(5) for the purposes of making a confiscation order the value of the property is its value to the offender when he obtained it. In this case the respondent derived a pecuniary advantage by evading the duty at the moment when he imported the cigarettes. The sum equalling that pecuniary advantage is treated as property obtained by the respondent at that moment. (Lord Rodger was referring to section 74(5) of the CJA 1988. As mentioned at para 88 above, that subsection was the predecessor of section 80(2) of the present Act.) Similarly in R v Waya [2012] UKSC 51; [2013] 1 AC 294, at para 55(a), Lord Walker and Hughes LJ said: Once property has been obtained as a result of or in connection with crime, it remains the defendants benefit whether or not he retains it. This is inherent in the value based scheme for post conviction confiscation. The appellant accepts that if the company had never paid the VAT due to HMRC, the property obtained by him would have been the income paid into the companys account. When was that property obtained? The answer can only be when the income was received. If it was property obtained at that moment, as a result of or in connection with the hiring out of stolen goods (as it plainly was), that fact cannot be retrospectively altered by subsequent payment of the companys VAT liability. (The payment of VAT may have an impact under A1P1, but that is a matter for separate consideration.) Early in the history of the legislation the question arose whether in calculating the defendants benefit the relevant figure is his gross receipts or his net receipts. There is a long and unbroken line of authority that it is the former. In R v Banks [1997] 2 Cr App R (S) 110 the Court of Appeal was concerned with section 4(1) of the Drug Trafficking Act 1994. This provided that any payments or other rewards received by a person in connection with drug trafficking carried on by him or another person are his proceeds of drug trafficking and the value of his proceeds of drug trafficking is the aggregate of the values of the payments or other rewards. It was argued that the value of such payments should be taken to be the net value. Lord Bingham CJ said that there were four insuperable objections to this argument. The first derived from the statutory language, which he read as directing the courts attention to gross payments. The second objection was to be found in a series of decisions under the Drug Trafficking Offences Act 1986 (the predecessor of the 1994 Act). Among other authorities he cited the judgment of Lord Lane CJ in R v Smith (Ian) [1989] 1 WLR 765, 769: The words any payments are on the face of them clear. They must mean, indeed it is clear from the wording, any payment in money or in kind It seems to us that the section is deliberately worded so as to avoid the necessity, which the appellants construction of the section would involve, of having to carry out an accountancy exercise, which would be quite impossible in the circumstances of this case. It may be that the wording is draconian, and that it produces a draconian result. But it seems to us that if that is the case, it was a result intended by those who framed the Act. Lord Binghams third insuperable objection was that the relevant provisions of the 1986 Act had been re enacted in almost precisely the same terms in the 1994 Act. It could not be said that the statute had simply been reproduced without attention being paid to the intervening case law, because other amendments had been made which showed that attention had been paid to intervening case law. The court was therefore bound to proceed on the assumption that Parliament re enacted the provision, knowing of the decisions which had been made on them and intending that they should have that effect. Lord Binghams fourth objection was that the 1994 Act also contained provisions which made it an offence to conceal or disguise property which directly or indirectly represented the proceeds of drug trafficking. Lord Bingham considered that it would reduce those provisions to absurdity if they did not refer to the aggregate of the payments received, and that the same term must bear the same meaning in the earlier and later sections of the Act. The same four points apply to section 76(4) of the 2002 Act. It is true that its language is slightly different from the language used in the earlier drug trafficking legislation (although not the language of the CJA 1988), but Lord Bingham said in Jennings v Crown Prosecution Service [2008] UKHL 29; [2008] AC 1046, para 13 that the appellate committee regarded the meaning of section 71(4) as in substance the same as the equivalent provisions of the drug trafficking legislation. Lord Binghams fourth point in R v Banks can be made by reference to the money laundering offences in sections 327 to 329 of the 2002 Act. These penalise various forms of dealing with criminal property, which is defined in section 340(3) as property which constitutes or represents a persons benefit from criminal conduct. More broadly, for nearly 30 years it has been a central feature of the statutory confiscation schemes that in identifying and assessing the defendants benefit from criminal conduct, the court is concerned with the gross value of what he has obtained in cash or in kind. As Lord Walker and Hughes LJ observed in R v Waya at para 26, to embark on an accounting exercise in which the defendant is entitled to set off the cost of committing his crime would be to treat his criminal enterprise as if it were a legitimate business and confiscation as a form of business taxation. The cost to the appellant of his form of criminal conduct included his liability to HMRC for VAT on the service provided by him to customers; the gross value of what he obtained was the gross income from hiring out stolen goods. In summary, I reject the argument that in deciding what benefit the appellant obtained, within the meaning of section 76(4) of the 2002 Act, by way of payments into the companys accounts of invoices for the hire of stolen goods, the amount of moneys subsequently paid (or accounted for) by the company to HMRC, in respect of its VAT liabilities on the supply of the goods, is to be deducted, for the following reasons: i) The argument is incompatible with the plain language of the sub section, which is a re enactment of earlier legislation going back to section 71(4) of the CJA 1988. ii) It is a core feature of the scheme of post conviction confiscation of the legislation from the Drug Trafficking Offences Act 1986 onwards, as interpreted in a line of authorities including at the highest level, that the scheme strikes at the gross value of money or other property obtained as a result of or in connection with the relevant criminal conduct. iii) The relevant provisions have been re enacted by Parliament with knowledge of their judicial interpretation. iv) A person obtains money or other property within the meaning of section 76(4) if he becomes the owner or assumes the ownership of it. The company was unquestionably the legal owner of the money in its bank account (and it was conceded that the court was entitled to treat it as obtained by the appellant himself). v) The appellants argument fails to focus on the moment when the moneys were paid into the companys account, but depends on later payments out of the account. This approach is contrary to the proper approach as stated in R v Smith (David) and R v Waya. Departure from that approach in this case is not only contrary to the language of the statute and to authority, but it would lead inevitably to future arguments and uncertainty about whether the courts should make similar exceptions in other cases of perceived hardship. It then becomes necessary to consider the effect of A1P1. This raises separate issues. The courts obligation under section 6(5)(b) of the 2002 Act to make a confiscation order requiring a defendant who has benefited from criminal conduct in the available amount has to be read with the qualifying words except in so far as such an order would be disproportionate and thus a breach of [A1P1], as the court held in R v Waya. (Since 1 June 2015 the section has been amended so as to make the qualification express: see the Serious Crime Act 2015, section 85 and Schedule 4, paragraph 19.) A1P1 provides as follows: Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. A measure which deprives a person of his property must not only serve a legitimate aim, but there must be a reasonable relationship of proportionality between that aim and the measure adopted to achieve it. In deciding whether that requirement is satisfied, the Strasbourg court has recognised that the state enjoys a wide margin of appreciation as to the choice of means of enforcement and its assessment of whether consequences are justified in the general interest for the purpose of achieving its legitimate aim: see, for example, Jahn v Germany (2005) 42 EHRR 1084, para 93. The primary aim of the present legislation is to provide a practicable means of taking away from criminals their proceeds of crime. A secondary aim is to deter others. These are legitimate aims. The mere fact that enforcement of the order will in many cases leave the criminal worse off than if he had never committed an offence does not of itself mean that the measure is disproportionate. Double recovery of the same benefit is another matter and is liable to be disproportionate as going against the grain of the legislation: see R v Waya, paras 20 and 30 to 34. But it is important to be careful in the use of the expression double recovery. Lord Walker and Hughes LJ instanced a case of a confiscation order being sought solely on the basis of the momentary benefit of a thief (or handler of stolen goods) obtaining property which had been restored intact to the true owner before the making of a confiscation order. In such a case the benefit obtained and the benefit restored are identical. To make a confiscation order in respect of that benefit in those circumstances would be disproportionate. It would not serve the aim of the legislation. (It might, on the contrary, act as a disincentive to a thief making reparation before the imposition of a confiscation order; if he had stolen money, he might be better off to keep it and use it to pay the confiscation order.) The court recognised that there might be other cases of disproportion analogous to that of goods or money entirely restored to the owner. These would have to be resolved case by case. In R v Ahmad the question of double recovery arose in another way. Co defendants were found to have benefited jointly from their offending. This court held that it was proper in principle to make confiscation orders against each of them for the full amount of the benefit jointly obtained, but that the orders should contain a provision preventing their enforcement in such a way that the state recovered the same benefit twice over. The court said that it would not serve the legitimate aim of the legislation and would be disproportionate for the state to take the same proceeds twice over and that a violation of A1P1 would occur at the time when the state sought to enforce an order for the confiscation of proceeds of crime which have already been paid to the state (paras 71 72). In this case the appellant argues that where the benefit consists of income derived from payments by customers of invoices for the hire of stolen plant which included (or are to be taken as including) the VAT for which the supplier was liable on the supply, and where the supplier has either paid that amount to HMRC or offset it against input tax paid on purchases of goods or services by the supplier, the amount so paid or offset should be deducted in arriving at the final amount of the confiscation order so as to avoid double recovery, which would be disproportionate and contrary to A1P1. The prosecution argue that liability for VAT is part of the expense of carrying on a business. Under section 1 of the Value Added Tax Act 1994, VAT on any supply of goods and services is a liability of the person making the supply. It is not disproportionate to the object of the legislation that in making a confiscation order the court should ignore expenses incurred by defendant, whether of a fiscal nature or otherwise. The appellant counters that argument by saying that VAT is unlike other forms of taxation. It is regulated by a series of European Directives. Its purpose and nature are that the trader in gathering and paying VAT is acting as a tax collector for the state: Elida Gibbs Ltd v Customs and Excise Comrs (Case C 317/94) [1996] ECR 1 5339, para 22. (The trader who is VAT registered is required by regulations to provide a VAT invoice to the customer, and even if VAT is not shown as a discrete charge in a traders invoice, it is treated as such for revenue purposes: paragraph 5 of Schedule 11 of the VAT Act.) By paying or accounting for that element of the benefit received by way of customers payments, the trader makes restitution to the state, and for that amount to be included in the confiscation would amount to the state taking the same thing twice. For my part, as a matter of general principle I do not consider it disproportionate to the legitimate aim of the legislation for the court, when making a confiscation order, to disregard outgoings associated with property obtained by a defendant as a result of or in connection with his criminal conduct; and I cannot see a satisfactory reason in general for distinguishing fiscal from other outgoings. Examples would include a person who pays income tax on criminal earnings, a company which pays corporation tax on the profits from criminal business or a person who pays stamp duty or capital gains tax in connection with the laundering of criminal property. In such cases the liability to tax arises because the defendants overall profit after setting off allowable losses or expenses during the relevant tax period exceeds the relevant tax threshold. They are not cases of the state taking the same proceeds twice over, in the sense that the court was speaking of in R v Ahmad. They are readily distinguishable from cases in which a thief or handler restores stolen property to its owner or where the amount of confiscation orders made against two or more defendants in respect of their joint benefit is paid off by one or some of them. There is not the same degree of identity between the benefit obtained and the benefit restored or surrendered. Does A1P1 require a different approach to be taken in the present case? The arguments were presented at a rather abstract level, but the factual setting is relevant to a full understanding of the issues and their ramifications. The known receipts of the company during the relevant period were 5,159,880. There was also significant off the book trading. Because of the statutory assumptions applicable to a defendant with a criminal lifestyle, the burden was on the appellant to show what part, if any, of the sums received by the company was not the benefit of his criminal conduct. It has been held that rebuttal of the assumption requires clear and cogent evidence. For this purpose at the confiscation proceedings the appellant gave evidence and called evidence from his two daughters and a friend. The judge found that none of them was worthy of belief. In an attempt to show that nearly all the companys income was from the use of plant lawfully obtained the appellant produced invoices and receipts, but he was unable to show which invoices fitted which pieces of plant. Further there was evidence of forgery of invoices. At his daughters home the police discovered draft invoices in the names of other plant and machinery traders, and the judge disbelieved the defence evidence about how they came to be there. The only point which told in the appellants favour was that of 91 pieces of plant found by the police at the companys premises only 39 were identified as having been stolen. Adopting a broad approach, the judge found that not less than 38% of the companys turnover came from the use of stolen plant. The evidence of the companys accountants about VAT was that during the relevant period the company received 843,827 VAT in respect of sales and services provided, according to its VAT returns; it paid 200,745 VAT to HMRC; and it offset the balance against VAT input tax which it claimed to have paid on purchases. The appellants primary argument is that 38% of the entire sum of 843,827 should be deducted from the amount of the confiscation order. Rejecting this argument in the Court of Appeal, Jackson LJ said at [2013] EWCA Crim 1104; [2014] 1 WLR 124, para 79: In relation to VAT, the way in which JHL dealt with these moneys is significant. JHL expended three quarters of the VAT which it collected upon the purchase of goods and services. In doing so, JHL was using the proceeds of criminal conduct to purchase those goods and services. It would be wrong in principle for the defendant to be given credit in respect of the VAT element of these purchases. I agree. The use of criminal proceeds to purchase goods and services would in fact be itself an offence under section 329 of the 2002 Act. I do not see the courts refusal to reduce the amount of the confiscation order by the amount spent by the company from its criminal receipts on other trading (including the VAT element of such expenditure) as disproportionate to the proper objectives of the legislation. The appellants alternative argument is that there should be a deduction of 38% of the lesser sum of 200,745 said to have been paid to HMRC. Rejecting that argument in the Court of Appeal, Jackson LJ said, at para 80, that it would be wrong for the court to carry out an accounting exercise in respect of VAT collected through the use of stolen property. He had earlier, at para 76, made the general point that in confiscation proceedings the focus is on what money was received and not how it was spent: Waya, para 26. The question whether there would be dual recovery of the same benefit, such as to offend against A1P1, if the confiscation order were to include the VAT element of his criminal benefit which the appellant has already paid to the state is at first sight more difficult than the appellants primary argument. In R v Waya, para 34, the court spoke of taking a case by case approach to the application of A1P1 to the post conviction confiscation legislation. Inevitably there will be cases in which it will be possible to point to apparent anomalies on whichever side of the line the question is resolved. On first impression the appellants alternative argument has a beguiling simplicity and attraction: that in charging VAT to customers the trader acts as a tax gatherer for the state, and, if he pays it to HMRC, he should not be made subject to a confiscation order which includes that amount. But on fuller consideration I am not persuaded that the court should make a distinction between the 843,827 and 200,745. It is argued that the company was a mere temporary custodian of the 200,745 for the state, but that argument (which goes really to the question whether it was a benefit obtained by the appellant) is unsound. The company was not a custodian of the 843,827 or the 200,745. The entire money received by the company was its money. The description of the company as a tax gatherer for the state is misleading if it is intended to suggest that the company was an agent or trustee of HMRC. The effect of taxing the company on the amount charged by it for the supply of goods and services was to reduce its net profit after tax (unless it increased its charges accordingly) but the same would be true of other forms of taxation, such as corporation tax or capital gains tax or stamp duty on the purchase of a property as part of a crime or as a form of laundering of criminal property. Other examples could be given. Jackson LJ referred in the passage cited to JHL having expended three quarters of VAT which it collected on the purchase of goods and services, but, for all that is presently known, it may have used the entirety of the initial proceeds of its criminal transactions in other transactions funded by money criminally obtained; the use of the criminal funds may or may not have been off the books; and the amount paid by the company to settle its VAT liabilities may or may not have been exceeded by other benefits, which may or may not have been reflected in the companys records. The answers would depend on a full accountancy process, if that were possible. I do not see that it is possible, in principle or in practice, to draw a satisfactory distinction between VAT accounted for and VAT paid. The judge in the Crown Court will face these questions when this case goes back to him to assess the amount of the confiscation order. The majority recognise that there may be difficulties in assessing the amount of VAT to be treated as accounted for to HMRC in the case of a dishonest defendant; that the burden of proof lies on the defendant; and that the court may take a robust and broad brush approach (para 35). I take it from these observations that the judge will not be obliged to accept that the defendant has accounted to HMRC for VAT merely by producing VAT returns purporting to show that he has offset VAT due against input tax paid on purchases of goods or services. Especially in view of the evidence of forgery of invoices, together with the appellants possession of draft invoices in the names of other plant and machinery suppliers, the court would be entitled to require evidence from a credible source that the purported transactions, generating the supposed input tax against which the appellant claimed to have offset output tax, were genuine. One test of their genuineness would be whether the supposed supplier had accounted for the input tax claimed to have been paid to the supplier by the appellants company. This is just the sort of accountancy exercise against which the courts have taken a firm stand from the outset (see, for example, Lord Lane CJs judgment in R v Smith (Ian) referred to at para 98). Moreover, supposing that there were purchases by the company of goods and services in respect of which it paid input tax to the supplier, if those purchases were part of the companys criminal trading it is hard to see why the company should be able effectively to recoup that part of its criminal expenditure by offsetting it against the output tax due from the company to HMRC. For my part, I do not consider it to be disproportionate to the proper object of the confiscation scheme to treat the entirety of the companys receipts from its criminal conduct as having been obtained by the appellant, but the majority consider otherwise. As a matter of practicality, I would expect the next step to be for the judge of the Crown Court to arrange a hearing for directions about evidence. The court should be encouraged to use its case management powers to ensure that the appellant produces all evidence, whether by way of witness statements, documents or expert evidence, in support of his claim to deduct VAT from the amount of the confiscation in a clear and timely fashion. I conclude that the question certified by the Court of Appeal should be answered either in the affirmative or in the negative, but not half and half; and that, although the results in an individual case may seem harsh, A1P1 is not violated by the court adhering to the general principle that in determining the amount of a confiscation order the focus is on the benefits received, ignoring associated outgoings, including tax liabilities. I do not see the application of that principle as going against the grain of the legislation. I would therefore answer the certified question in the negative and dismiss the appeal. |
This judgment is given in unusual circumstances. The Secretary of State, as respondent to these appeals, has applied pursuant to rule 34(2) of the Supreme Court Rules 2009 for these appeals to be allowed by consent. The appellants of course agree. However, this court took the view that we could not make an order allowing the appeals and setting aside the orders in the courts below without understanding the reasons for doing so and their impact upon the point of law of general public importance raised by the appeals. The Secretary of State has supplied those reasons, with which this court agrees. This judgment is accordingly based upon them. Although there are only two appeals before this court, these cases were heard in the Court of Appeal along with a third case, that of Mr Kaziu, which was decided on the same basis: R (Kaziu) v Secretary of State for the Home Department [2015] EWCA Civ 1195, [2016] 1 WLR 673. The Secretary of State therefore accepts that the principles adopted in this judgment should also apply to him. The issue is whether the misrepresentations made by the appellants in their applications for United Kingdom citizenship made the grant of that citizenship a nullity, rather than rendering them liable to be deprived of that citizenship under sections 40 and 40A of the British Nationality Act 1981. The facts Mr Hysaj was born Dinjan Hysaj in Albania in 1977. He came to this country and claimed asylum in July 1998. He gave his true name, but claimed to have been born in 1981 and thus to be a child at the time of his asylum claim. He also falsely claimed that he was a citizen of the Federal Republic of Yugoslavia from Kosovo, and that he had been persecuted there. He was accepted as a refugee and given indefinite leave to remain (ILR) here in 1999. In 2004 he applied for and was granted naturalisation as a British citizen, using the same false details as he had used in his asylum claim. Thus he obtained British citizenship in his own name but using a false date of birth, a false nationality and a false place of birth. Mr Bakijasi was born Agron Bakijasi in Albania on 22 October 1972. He came to this country and claimed asylum in 1999. He gave a false name, Agron Adjini, a false date of birth, and falsely claimed to be a citizen of the Federal Republic of Yugoslavia from Kosovo, and that he had been persecuted there. His asylum claim was refused on the basis that it was safe for him to return to Kosovo. But his later application for ILR, using the same false details, was granted under the Family ILR exercise in September 2005. Using the same false details, he applied for and was granted naturalisation as a British citizen in November 2006. Thus he obtained British citizenship using a false name, a false date of birth, a false nationality and a false place of birth. When these frauds came to light, the Secretary of State decided that, in each case, the grant of citizenship was a nullity, so that the appellants were not, and never had been, British citizens. They had therefore remained at all times on ILR, which had been validly granted to them. She did so on the basis of binding Court of Appeal authority. In these judicial review proceedings, that decision was upheld, albeit with some reluctance, by Ouseley J in the High Court ([2014] EWHC 832 (Admin), [2015] 1 WLR 945) and by the Court of Appeal ([2015] EWCA Civ 1195, [2016] 1 WLR 673). Sales LJ described the interpretation given by the binding Court of Appeal authorities as problematic in various respects (para 64). The legislation Section 6(1) of the British Nationality Act 1981 provides that: If, on an application for naturalisation as a British citizen made by a person of full age and capacity, the Secretary of State is satisfied that the applicant fulfils the requirements of Schedule 1 for naturalisation as such a citizen under this subsection, he may, if he thinks fit, grant to him a certificate of naturalisation as such a citizen. Section 40 of the 1981 Act makes provision for the Secretary of State to deprive a person of citizenship obtained by registration or naturalisation if satisfied that the registration or naturalisation was obtained by means of fraud, false representation or concealment of a material fact. On the face of it, fraud or false representation would include the sort of misrepresentations as to identity made by the appellants, so that, if the Secretary of State sees fit, they could be deprived of their citizenship under that provision. Section 40A makes provision for a right of appeal against most such deprivations to the First tier Tribunal. The previous case law There are four relevant decisions in the Court of Appeal before this one but none in the House of Lords or Supreme Court. For convenience, the applicant for citizenship is referred to as X and the identity in which he applied for citizenship is referred to as Y. In R v Secretary of State for the Home Department, Ex p Sultan Mahmood [1981] QB 58, decided in 1978, X impersonated Y, a real person, who was his dead brother in law and cousin, to obtain registration as a British citizen under section 5A of the British Nationality Act 1948. Roskill LJ held that there were three possible effects of the purported grant. First, it might have been a grant to Y; but it could not have been, because Y was dead. Second, it might have been a grant to X; but it could not have been, because the Secretary of State had no knowledge of X, believing him to be Y. Third, it might have been of no effect at all; as it could not be the first or the second, it could only be a nullity. Accordingly, X had never become a citizen of the United Kingdom. The next case, decided in 1980, was R v Secretary of State for the Hone Department, Ex p Parvaz Akhtar [1981] QB 46. X was registered as a citizen by his purported father, Z, in the name of Y, under section 7(1) of the 1948 Act, which allows for the registration of a minor child of a British citizen. X was not the son of Z. Applying Mahmood, the Court of Appeal held that the Secretary of State had no power or intention to register X or any Y other than an actual son of Z. Accordingly, X never became a citizen of the United Kingdom. Next came R v Secretary of State for the Home Department, Ex p Ejaz [1994] QB 496. X applied for citizenship in her real name under section 6(2) of the 1981 Act, which provides for the naturalisation of a person who is married to a British citizen. Later, it turned out that Xs husband was not, and never had been, a British citizen, having been granted a British passport in a false identity. The Court of Appeal declined to hold that the grant of citizenship was a nullity, pointing to the uncertainty and injustice which could be caused by holding that a person had never been a citizen, which could have effects upon third parties such as children, and was highly undesirable in matters of status. Deprivation of citizenship, on the other hand, did not have such retrospective effect. Then came Bibi v Entry Clearance Officer, Dhaka [2007] EWCA Civ 740, [2008] INLR 683. X had obtained entry to the United Kingdom by assuming the identity of Y, another real person who had been granted an employment voucher to enable him to enter. After living here for five years, X was registered as a British citizen in the name of Y. The appellants were the wife and four children of X and claimed a right of abode in the United Kingdom based on the purported citizenship of X. The Court of Appeal held that, because X had applied for citizenship in a false identity, Mahmood and Akhtar applied and there never was a grant of citizenship to him. As the Secretary of State points out, these cases demonstrate a gradual expansion of the nullity approach since Mahmood. Thus, Mahmood established that if X adopts the identity of Y, another real person, and Y has the characteristics required to obtain citizenship, the purported grant of citizenship to X in the identity of Y is a nullity. Akhtar decided that if X adopts the identity of Y, where Y is not a real person but a false identity created by X (or someone else for him) having the characteristics required to obtain citizenship, the purported grant of citizenship to X as Y is a nullity. Bibi decided that, if X adopts the identity of Y, another real person, and X acquires the characteristics needed to obtain citizenship by using the identity of Y, the purported grant of citizenship to X as Y is a nullity. The present case went a stage further than Bibi and decided that if X adopts the identity of Y, where Y is a false identity created by X and X acquires the characteristics needed to obtain citizenship by using the identity Y, the purported grant of citizenship to X as Y is a nullity. The Secretary of States position Having reviewed the matter after permission to appeal was granted in this case on 27 February 2017, the Secretary of State has come to the conclusion that the law took a wrong turning after Mahmood. The Mahmood type of case involves two real people, X and Y. X impersonates Y for the purpose of applying for citizenship. Y has the characteristics required for citizenship. Y is considered by the Secretary of State and is granted citizenship. But Y has never applied for it, may not want it, or may even be dead. Thus it cannot be said that citizenship has been granted either to Y or to X. Accordingly there was no grant of citizenship. Mahmood, in the Secretary of States view, remains good law. By contrast, in the later cases, X uses a false identity created by him (or someone on his behalf) and in that identity he acquires the characteristics needed to obtain citizenship. X applies for citizenship using the false identity Y. But X meets the requirements for citizenship albeit having acquired them by using the false identity Y. X is considered for citizenship by the Secretary of State in identity Y and is granted citizenship in that identity. In such a case, in the Secretary of States view, the grant of citizenship is valid, albeit that the person may later be deprived of it under section 40. Ejaz was rightly decided but Akhtar and Bibi were wrongly decided. Those cases, and the Court of Appeals decision in this case, were based on the principle that there is a category of fraud as to identity which is so serious that a purported grant of citizenship is of no effect. But, argues the Secretary of State, the courts have not articulated any clear or principled definition of the types of fraud which will be so serious as to have this consequence. In the current cases, for example, neither appellant pretended to be someone he was not. Mr Hysaj used his real name but put forward a false date of birth, nationality and place of birth in gaining his ILR and gained citizenship on the basis of the ILR that he himself had obtained. Mr Bakijasi used a false name in gaining his ILR but otherwise gained citizenship in the same way. Ouseley J held that the key characteristics of identity for this purpose were the name, date of birth, and nationality or the country and place of birth, because this was the information on the certificate. But he also held that there had to be fraud innocent mistakes or misunderstandings were not enough (paras 46, 47). Such uncertainty means that the law is difficult to apply in practice. It also has a number of illogical and unsatisfactory consequences. Thus it is not clear when the use of a false identity to obtain citizenship by one person will lead to the nullification of the grant of citizenship to those making a derivative claim, whether as a spouse or child. It is not easy to reconcile Akhtar, Ejaz and Bibi. Logically, as Ouseley J pointed out in this case (para 55) either all derivative citizenship should be of no effect if the citizenship from which it is derived is of no effect, or the nullity should be confined to the person who obtained citizenship using the false identity. As Ouseley J also pointed out (para 69) the logic of the position then adopted by the Secretary of State would also nullify the grant of ILR, but the Secretary of State has never contended for this. IN THE SUPREME COURT ON APPEAL FROM THE COURT OF APPEAL (CIVIL DIVISION) BETWEEN: SC/2016/0209 SC/2016/0211 THE QUEEN on the application of DINJAN HYSAJ AGRON BAKIJASI and DRAFT ORDER SECRETARY OF STATE FOR THE HOME DEPARTMENT Appellants Respondent UPON the Respondent accepting that the Appellants are British citizens by naturalisation under section 6(1) of the British Nationality Act 1981 (the 1981 Act), and that that citizenship remains valid unless and until a formal deprivation order is made pursuant to section 40(3) of the 1981 Act AND UPON the Respondent accepting that her decisions, dated 13 February 2013 and 27 June 2013, that the Appellants British citizenships were nullities (i.e. that the Appellants were not, and had never been, British citizens) were wrong in law AND UPON the Respondent agreeing to withdraw the said decisions dated 13 February 2013 and 27 June 2013 AND UPON the Respondent accepting that the elder child of Mr Dinjan Hysaj, born in Albania on 23 November 2010, is a British citizen by virtue of section 2(1) of the 1981 Act AND UPON the Respondent accepting that the younger child of Mr Hysaj, born in the United Kingdom on 19 September 2015, is a British citizen by virtue of section 1(1) of the 1981 Act AND UPON the Respondent accepting that the elder child of Mr Bakijasi, born in the United Kingdom on 23 August 2003, and registered as a British citizen on 11 October 2006, is a British citizen by virtue of section 1(3) of the 1981 Act AND UPON the Respondent accepting that the younger child of Mr Bakijasi, born in the United Kingdom on 14 June 2007, is a British citizen by virtue of section 1(1) of the 1981 Act IT IS ORDERED BY CONSENT THAT: 1. The appeals be allowed. 2. The Order of the Court of Appeal dated 26 November 2015 be set aside. 3. The Respondent do pay the Appellants reasonable costs of the claim, the appeal to the Court of Appeal and the appeal to the Supreme Court on standard basis, to be assessed, if not agreed. 4. The Appellants publicly funded costs be subject to a detailed assessment. 5. The Respondent make a payment to each Appellant on account of that Appellants costs, equivalent to 25% of the relevant Appellants total bill of costs, such payment to be made within 28 days of the relevant bill of costs being served on the Respondent. This court agrees with the reasoning now put forward by the Secretary of State. It follows that the decisions of the Court of Appeal in Akhtar and Bibi must be overruled and that this appeal must be allowed by consent in terms of the detailed order proposed. |
Until relatively recent times, English judges were obliged to impose sentences of imprisonment for life only in cases of murder. A judge might also impose a discretionary life sentence in other cases where a determinate sentence would not provide adequate protection to the public against the risk of serious harm presented by the particular individual. In practice, such sentences were highly unusual. Following a series of judgments in which the European Court of Human Rights considered the compatibility of life sentences with the European Convention on Human Rights and Fundamental Freedoms (the Convention), statutory reforms were introduced so that, where a life sentence was imposed, the judge determined a minimum period or tariff to be served for the purposes of retribution and deterrence, following which the continued detention of the prisoner depended upon an assessment of the level of risk which he continued to present, carried out by the Parole Board (the Board). I shall return to the statutory functions of the Board. In more recent times, sentencing legislation required judges to impose automatic life sentences upon a much wider range of offenders. In particular, section 2 of the Crime (Sentences) Act 1997 (the 1997 Act) required the courts to impose a life sentence upon anyone convicted of a second serious offence, unless there were exceptional circumstances permitting the court not to take that course. A similar duty was imposed by section 109 of the Powers of Criminal Courts (Sentencing) Act 2000 (the 2000 Act). Section 225 of the Criminal Justice Act 2003 (the 2003 Act) introduced, with effect from 4 April 2005, indeterminate sentences of imprisonment for public protection (IPP), which were to be automatically imposed whenever a person was convicted of any one of a large number of offences designated as serious offences and the court thought there to be a significant risk of serious harm to members of the public by the commission of a further specified offence. Risk was to be assumed in cases where the person had previously been convicted of a relevant offence. The Board is responsible for the release of prisoners sentenced to life imprisonment and those serving IPP sentences. Under section 28(5) of the 1997 Act as amended, the Secretary of State is required to release a life or IPP prisoner who has served his tariff period if the Board has directed his release. Section 28(6) provides that the Board shall not give such a direction unless the Secretary of State has referred the prisoners case to it, and the Board is satisfied that it is no longer necessary for the protection of the public that the prisoner should be confined. Section 28(7) provides that a life prisoner may require the Secretary of State to refer his case to the Board at any time after the expiry of his minimum term. In practice, cases are normally referred to the Board by the Secretary of State some months before the expiry of the tariff period. The Board also receives from the Secretary of State the reports which it requires on the prisoners progress, and then fixes an oral hearing prior to reaching its decision. One consequence of the changes introduced by the legislation described in paragraph 2, and in particular the introduction of IPP sentences, was greatly to increase the number of prisoners whose cases required to be considered by the Board. Another consequence was that a much higher proportion of prisoners subject to indeterminate sentences, particularly in IPP cases, had short tariff periods. The cumulative effect of these developments was greatly to increase the workload of the Board. Although these consequences of the introduction of IPP sentences were entirely predictable, they had not been anticipated by the Secretary of State, and the Board was not provided with a commensurate increase in its resources. It soon became clear that the existing resources were insufficient. The result was delay in the consideration of the cases of prisoners who had served their tariff period, and whose further detention could only be justified on the basis of an assessment of the risk which they continued to present. Steps have been taken to address the problem. The 2003 Act was amended by the Criminal Justice and Immigration Act 2008, with effect from 14 July 2008, so that IPP sentences are no longer mandatory. In addition, the Board has been provided with additional resources, and administrative changes have been introduced in order to increase the efficiency of the system. The courts however have to deal with the legal consequences of the problems which I have described. Convention rights In that regard, important issues arise under the Human Rights Act 1998 (the 1998 Act). In that Act, Parliament required the courts to give effect to Convention rights corresponding to those guaranteed by the Convention. Those rights include the rights conferred by article 5(1) and (4) of the Convention. Article 5(1) provides: (1) Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: Article 5(4) provides: (a) the lawful detention of a person after conviction by a competent court Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. Compliance with article 5(1)(a) requires more than that the detention is in compliance with domestic law. As the European court stated in Weeks v United Kingdom (1987) 10 EHRR 293, para 42: The 'lawfulness' required by the Convention presupposes not only conformity with domestic law but also conformity with the purposes of the deprivation of liberty permitted by sub paragraph (a) of article 5(1). Furthermore, the word 'after' in sub paragraph (a) does not simply mean that the detention must follow the 'conviction' in point of time: in addition, the 'detention' must result from, 'follow and depend upon' or occur 'by virtue of' the 'conviction'. In short, there must be a sufficient causal connection between the conviction and the deprivation of liberty at issue. In relation to a discretionary life sentence imposed for the purpose of public protection, the court added (para 49): The causal link required by sub paragraph (a) might eventually be broken if a position were reached in which a decision not to release or to re detain was based on grounds that were inconsistent with the objectives of the sentencing court. In those circumstances, a detention that was lawful at the outset would be transformed into a deprivation of liberty that was arbitrary and, hence, incompatible with article 5. The court further held in that case that, where a defendant was recalled to prison following release on licence, it followed that it was necessary for him to be able to bring proceedings, as soon as he was recalled to prison and at reasonable intervals thereafter (since the need for continued public protection was liable to change over time), in order to determine whether his continued detention had become unlawful for the purposes of article 5(1)(a), on the basis that it was no longer consistent with the objectives of the sentencing court. The obligation to provide an opportunity for such a determination arose under article 5(4). In Thynne, Wilson and Gunnell v United Kingdom (1990) 13 EHRR 666 this reasoning was applied in relation to discretionary life prisoners whose tariff periods had expired. Since there was a question whether their continued detention was consistent with the objectives of the sentencing court, it followed that they too were entitled under article 5(4) to have the question determined. The subsequent judgment in Stafford v United Kingdom (2002) 35 EHRR 1121 confirmed that a mandatory life prisoner was also entitled to the protection of article 5(4), by means of regular reviews of the risk which he presented, once the punitive period of his sentence had expired. The implications of these judgments were then reflected in domestic case law. In relation to automatic life prisoners, in particular, it was held in R (Noorkoiv) v Secretary of State for the Home Department [2002] 1 WLR 3284 that article 5(4) requires a review by the Board of whether the prisoner should continue to be detained once the tariff period has expired, and therefore requires a hearing at such a time that, whenever possible, those no longer considered dangerous can be released on or very shortly after the expiry date. In practice, that meant that the Board should hold hearings prior to the expiry of the tariff period. Since Noorkoivs case had not been heard until two months after the expiry of his tariff period, he was therefore the victim of a violation of article 5(4). That approach has been followed in the subsequent case law. Another important aspect of the 1998 Act is that the remedies which Parliament has provided for a violation of Convention rights, by section 8 of the Act, include damages. Accordingly, it was accepted in the case of R (James) v Secretary of State for Justice [2010] 1 AC 553 that a violation of a prisoners rights under article 5(4) could result in an award of damages. The present appeals are concerned primarily with the circumstances in which a life or IPP prisoner who has served his tariff period, and whose case has not been considered by the Board within a reasonable period thereafter, should be awarded damages under the 1998 Act, and with the quantum of such awards. They raise a number of questions: in particular, (1) whether an award should be made only in a case where the prisoner would have been released earlier if his case had been considered by the Board without undue delay, or whether an award may also be appropriate even if the prisoner would not have been released earlier; (2) if the latter view is accepted, whether an award should be made whenever undue delay has occurred, or whether delay has to have been of a certain duration before an award is appropriate; and (3) how, on either view, damages should be assessed. A question is also raised as to whether the detention of a prisoner, during a period when he would have been at liberty if his case had been considered by the Board in accordance with article 5(4), constitutes false imprisonment under the common law, or a violation of article 5(1) of the Convention. Summary of conclusions reached. It may be helpful at this point to summarise the conclusions which I have 1. A prisoner whose detention is prolonged as the result of a delay in the consideration of his case by the Board, in violation of article 5(4) of the Convention, is not the victim of false imprisonment. 2. Nor is he ordinarily the victim of a violation of article 5(1) of the Convention: such a violation would require exceptional circumstances warranting the conclusion that the prisoners continued detention had become arbitrary. 3. At the present stage of the development of the remedy of damages under section 8 of the 1998 Act, courts should be guided, following R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673, primarily by any clear and consistent practice of the European court. 4. In particular, the quantum of awards under section 8 should broadly reflect the level of awards made by the European court in comparable cases brought by applicants from the UK or other countries with a similar cost of living. 5. Courts should resolve disputed issues of fact in the usual way even if the European court, in similar circumstances, would not do so. 6. Where it is established on a balance of probabilities that a violation of article 5(4) has resulted in the detention of a prisoner beyond the date when he would otherwise have been released, damages should ordinarily be awarded as compensation for the resultant detention. 7. The appropriate amount to be awarded in such circumstances will be a matter of judgment, reflecting the facts of the individual case and taking into account such guidance as is available from awards made by the European court, or by domestic courts under section 8 of the 1998 Act, in comparable cases. 8. Pecuniary losses proved to have been caused by the prolongation of detention should be compensated in full. 9. It will not be appropriate as a matter of course to take into account, as a factor mitigating the harm suffered, that the claimant was recalled to prison following his eventual release. There may however be circumstances in which the claimants recall to prison is relevant to the assessment of damages. 10. Damages should not be awarded merely for the loss of a chance of earlier release. 11. Nor should damages be adjusted according to the degree of probability of release if the violation of article 5(4) had not occurred. 12. Where it is not established that an earlier hearing would have resulted in earlier release, there is nevertheless a strong, but not irrebuttable, presumption that delay in violation of article 5(4) has caused the prisoner to suffer feelings of frustration and anxiety. 13. Where such feelings can be presumed or are shown to have been suffered, the finding of a violation will not ordinarily constitute sufficient just satisfaction. An award of damages should also be made. Such damages should be on a modest scale. No award should however be made where the delay was such that any resultant frustration and anxiety were insufficiently severe to warrant such an award. That is unlikely to be the position where the delay was of the order of three months or more. In the remainder of this judgment I shall explain the grounds upon which I 14. have reached those conclusions. The lawfulness of detention when there is a violation of article 5(4) 15. Before considering the issue of just satisfaction, it is necessary to consider first whether, as was argued, the detention of a prisoner, during a period when he would have been at liberty if his case had been considered by the Board speedily as required by article 5(4), constitutes false imprisonment at common law, entitling the prisoner to an award of damages in tort. Alternatively, it was argued that the detention of the prisoner in such circumstances constitutes a violation of article 5(1), entitling the prisoner to an award of just satisfaction for unlawful detention. The argument that the detention of a life prisoner constitutes false imprisonment, if it continues beyond the point in time when article 5(4) required a hearing to be held, must be rejected. As was explained in R (James) v Secretary of State for Justice [2010] 1 AC 553, the continued detention is authorised by statute. Under the relevant statutory provisions, which I have summarised at paragraph 3, there is no entitlement to release by the Secretary of State until release has been directed by the Board, and a direction to that effect cannot be given until the Board is satisfied that detention is no longer necessary for the protection of the public. By virtue of the relevant legislation, the prisoners detention is therefore lawful until the Board gives a direction for his release. That conclusion is not affected by section 6(1) of the 1998 Act, which makes an act of a public authority unlawful if it is incompatible with Convention rights. That provision does not apply to an act if, as a result of one or more provisions of primary legislation, the public authority could not have acted differently: see section 6(2)(a). In a case where there has been a failure to review the lawfulness of detention speedily, as required by article 5(4), there may well be some respects in which a public authority could have acted differently; but, as I have explained, the absence of a speedy decision does not affect the question whether the prisoner can be released under the relevant provisions. It has not been suggested that section 3 of the 1998 Act requires those provisions to be read or given effect in a way that differs from their ordinary meaning. The question whether detention may constitute a violation of article 5(1), if it continues beyond the point in time when release would have been ordered if article 5(4) had been complied with, is in my view more difficult. As I have explained, article 5(4) provides a procedural entitlement designed to ensure that persons are not detained in violation of their rights under article 5(1): the notion of lawfulness has the same meaning in both guarantees. A violation of article 5(4) does not however entail eo ipso a violation of article 5(1). In Rutten v Netherlands (Application No 32605/96) (unreported) 24 July 2001, for example, the European court found that there had been a violation of article 5(4) as a result of delay in the holding of a hearing to determine whether the prolongation of detention was necessary, following the expiry of the period initially authorised. The court also held that there had been no violation of article 5(1). That conclusion was reached on the basis that the purpose of article 5(1) was to prevent persons from being deprived of their liberty in an arbitrary fashion, and, on the facts, the detention during the period of the delay could not be regarded as involving an arbitrary deprivation of liberty. The application of article 5(1) was considered by the House of Lords in R (James) v Secretary of State for Justice [2010] 1 AC 553. It is necessary to consider this case in some detail. The principal issue in the case arose from the failure of the Secretary of State to provide courses or treatment which would assist IPP prisoners to address their offending behaviour and enable them to undergo assessments which could demonstrate to the Board their safety for release. The appellant Jamess case was first considered by the Board three months after his tariff had expired, at which point a hearing was deferred, as he had been unable to participate in any relevant courses. A hearing subsequently took place, eight months after his tariff had expired, at which point the Board exceptionally directed his release notwithstanding his failure to undertake the courses. The appellant Wellss case was first considered by the Board nine months after his tariff had expired. The Board declined to direct his release, explaining that since he had been unable to take part in the relevant courses he could not demonstrate that he presented an acceptable level of risk. Wells had to wait until about two years after his tariff had expired before he was able to participate in the courses. A further hearing was held more than three years after the tariff had expired, at which point the Board directed his release. The appellant Lees case was considered by the Board four months after his tariff had expired. No direction was made for his release, since he had been unable to take part in the relevant courses. He had to wait almost three years after his tariff had expired before he could take part in the courses. The Board finally considered his case four years after the tariff had expired, and declined to order his release. The House of Lords held that there had been no violation of article 5(1) in any of the three cases. It was accepted that the causal connection between a prisoners conviction and the deprivation of his liberty, required by article 5(1)(a), might be broken by a prolonged failure to enable the prisoner to demonstrate that he was safe for release. The facts of the cases did not however demonstrate, in the view of the House, a breakdown of the system of such an extreme character as to warrant the conclusion that the prisoners detention following the expiry of their tariffs had been arbitrary. In a passage subsequently cited by the European court, Lord Hope of Craighead observed at para 15: The claimants' cases were referred by [the Secretary of State] to the Parole Board as the statute required. A favourable consideration of them may have been delayed, but performance of its task of monitoring their continued detention was not rendered impossible. Mr Lee and Mr Wells remain in custody because the Board was not yet satisfied that they are no longer a risk to the public. The causal link with the objectives of the sentencing court has not been broken. When the cases proceeded to Strasbourg (James, Wells and Lee v United Kingdom (2012) 56 EHRR 399, the European court agreed with the House of Lords that there was a sufficient causal connection between the applicants convictions and their deprivation of liberty following the expiry of their tariffs. Indeterminate sentences had been imposed on the applicants because they were considered to pose a risk to the public. Their release was contingent on their demonstrating to the Board's satisfaction that they no longer posed such a risk. As Lord Hope had pointed out, this was not a case where the Board was unable to carry out its function: its role was to determine whether the applicants were safe to be released and it had before it a number of documents to allow it to make that assessment. That conclusion was not affected by the fact that, without evidence that the applicants had undertaken treatment to reduce the risks they posed, the Board was unlikely to give an affirmative answer to that question. The European court nevertheless considered that the applicants post tariff detention had been arbitrary, and therefore in violation of article 5(1)(a), during the periods when they had no access to relevant courses to help them address the risks they posed to the public. That conclusion reflected the courts view, influenced by international law in respect of prison regimes, that a real opportunity for rehabilitation was a necessary element of any detention which was to be justified solely by reference to public protection. In other words, since the justification for detention after the expiry of the tariff was the protection of the public, it followed that the conditions of such detention must allow a real opportunity for rehabilitation. In the absence of such an opportunity, the detention must be considered to be arbitrary. The judgment of the European court in that case does not appear to me to be directly relevant to the present appeals. That is, in the first place, because these appeals are not concerned with the lack of access to rehabilitation courses which was in issue in James, Wells and Lee. Secondly, the awards made in James, Wells and Lee were not for loss of liberty but for the feelings of distress and frustration resulting from continued detention without access to the relevant courses: see para 244 of the judgment. That, as I have explained, is not an issue that arises in the present appeals. Just satisfaction and damages Article 41 of the Convention provides: If the court finds that there has been a violation of the Convention or the protocols thereto, and if the internal law of the high contracting party concerned allows only partial reparation to be made, the court shall, if necessary, afford just satisfaction to the injured party. Article 41 is not one of the articles scheduled to the 1998 Act, but it is reflected in section 8 of the Act, which so far as material is to this effect: (1) In relation to any act (or proposed act) of a public authority which the court finds is (or would be) unlawful, it may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate. (2) But damages may be awarded only by a court which has power to award damages, or to order the payment of compensation, in civil proceedings. (3) No award of damages is to be made unless, taking account of all the circumstances of the case, including (a) any other relief or remedy granted, or order made, in relation to the act in question (by that or any other court), and (b) the consequences of any decision (of that or any other court) in respect of that act, the court is satisfied that the award is necessary to afford just satisfaction to the person in whose favour it is made. (4) In determining (a) whether to award damages, or (b) the amount of an award, the court must take into account the principles applied by the European Court of Human Rights in relation to the award of compensation under article 41 of the Convention. (6) In this section court includes a tribunal; damages means damages for an unlawful act of a public authority; and unlawful means unlawful under section 6(1). These provisions were considered by the House of Lords in R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673. In a speech with which the other members of the House agreed, Lord Bingham of Cornhill noted at para 6 that there are four preconditions to an award of damages under section 8: (1) that a finding of unlawfulness or prospective unlawfulness should be made based on breach or prospective breach by a public authority of a Convention right; (2) that the court should have power to award damages, or order the payment of compensation, in civil proceedings; (3) that the court should be satisfied, taking account of all the circumstances of the particular case, that an award of damages is necessary to afford just satisfaction to the person in whose favour it is made; and (4) that the court should consider an award of damages to be just and appropriate. In relation to the third and fourth of these requirements, Lord Bingham observed that it would seem to be clear that a domestic court could not award damages unless satisfied that it was necessary to do so; but, if satisfied that it was necessary to do so, it was hard to see how the court could consider it other than just and appropriate to do so. Lord Bingham also stated (ibid) that in deciding whether to award damages, and if so how much, the court was not strictly bound by the principles applied by the European court in awarding compensation under article 41 of the Convention, but it must take those principles into account. It was therefore to Strasbourg that British courts must look for guidance on the award of damages. A submission that courts in England and Wales should apply domestic scales of damages when exercising their power to award damages under section 8 was rejected. Dicta in earlier cases, suggesting that awards under section 8 should not be on the low side as compared with tortious awards and that English awards should provide the appropriate comparator, were implicitly disapproved (para 19). Lord Bingham gave a number of reasons why the approach adopted in the earlier cases should not be followed. First, the 1998 Act is not a tort statute. Even in a case where a finding of violation is not judged to afford the applicant just satisfaction, such a finding will be an important part of his remedy and an important vindication of the right he has asserted. Secondly, the purpose of incorporating the Convention in domestic law through the 1998 Act was not to give victims better remedies at home than they could recover in Strasbourg but to give them the same remedies without the delay and expense of resort to Strasbourg. Thirdly, section 8(4) requires a domestic court to take into account the principles applied by the European court under article 41 not only in determining whether to award damages but also in determining the amount of an award. Lord Bingham commented that there could be no clearer indication that courts in this country should look to Strasbourg and not to domestic precedents. This approach was not challenged in the present appeals. It differs from the ordinary approach to the relationship between domestic law and the Convention, according to which the courts endeavour to apply (and, if need be, develop) the common law, and interpret and apply statutory provisions, so as to arrive at a result which is in compliance with the UKs international obligations; the starting point being our own legal principles rather than the judgments of an international court. In contrast to that approach, section 8(3) and (4) of the Act have been construed as introducing into our domestic law an entirely novel remedy, the grant of which is discretionary, and which is described as damages but is not tortious in nature, inspired by article 41 of the Convention. Reflecting the international origins of the remedy and its lack of any native roots, the primary source of the principles which are to guide the courts in its application is said to be the practice of the international court that is its native habitat. I would however observe that over time, and as the practice of the European court comes increasingly to be absorbed into our own case law through judgments such as this, the remedy should become naturalised. While it will remain necessary to ensure that our law does not fall short of Convention standards, we should have confidence in our own case law under section 8 once it has developed sufficiently, and not be perpetually looking to the case law of an international court as our primary source. In Greenfield the House of Lords rejected a submission, repeated in the present appeals, that the levels of Strasbourg awards were not principles within the meaning of section 8(4). Lord Bingham stated at para 19: this is a legalistic distinction which is contradicted by the White Paper [Rights Brought Home: The Human Rights Bill (1997) (Cm 3782)] and the language of section 8 and has no place in a decision on the quantum of an award, to which principle has little application. The court routinely describes its awards as equitable, which I take to mean that they are not precisely calculated but are judged by the court to be fair in the individual case. Judges in England and Wales must also make a similar judgment in the case before them. They are not inflexibly bound by Strasbourg awards in what may be different cases. But they should not aim to be significantly more or less generous than the court might be expected to be, in a case where it was willing to make an award at all. The term principles is therefore to be understood in a broad sense. It is not confined to articulated statements of principle: such statements by the European court in relation to just satisfaction are uncommon, and, as will appear, it may be unsafe to take them at face value, without regard to what the court actually does in practice. The focus is rather upon how the court applies article 41: the factors which lead it to make an award of damages or to withhold such an award, and its practice in relation to the level of awards in different circumstances. As Lord Dyson observed in Rabone v Pennine Care NHS Foundation Trust [2012] UKSC 2; [2012] 2 AC 72, para 84, in the absence of a guideline case in which the range of compensation is specified and the relevant considerations are articulated, it is necessary for our courts to do their best in the light of such guidance as can be gleaned from the Strasbourg decisions on the facts of individual cases. The search for principles in this broad sense is by no means alien to British practitioners, at least to those who had experience of practice in the field of personal injury law before the Judicial Studies Board published its guidelines. The conventions underlying the amounts awarded as general damages (or, in Scotland, solatium) for particular forms of harm could only be inferred from an analysis of the awards in different cases and a comparison of their facts. It is an exercise of a similar kind which may be called for when applying section 8 of the 1998 Act in connection with the quantification of awards for non pecuniary damage (or moral damage, as the court sometimes describes it, employing a literal translation of the French expression). As Lord Bingham acknowledged, although the court must take into account the principles applied by the European court, it is not bound by them: the words must take into account are not the same as must follow. In particular, important though the guidance provided by the European court may be, there are differences between an international court and a domestic court which require to be borne in mind. One difference, of degree at least, which I have already mentioned is that the European court does not often articulate clear principles explaining when damages should be awarded or how they should be measured. That reflects a number of factors. One is that the court cannot replicate at an international level any one of the widely divergent approaches to damages adopted in the domestic legal systems from which its judges are drawn: the systems of 47 countries, stretching from the Atlantic to the Caspian, with diverse legal traditions. Nor is there a relevant body of principles of international law which it can apply. The court has therefore had to develop its own practice through its case law. Given the differing traditions from which its judges are drawn, and bearing in mind that the court has not regarded the award of just satisfaction as its principal concern, it is not altogether surprising that it has generally dealt with the subject relatively briefly, and has offered little explanation of its reasons for awarding particular amounts or for declining to make an award. Furthermore, as I shall shortly explain, the court has a more limited role in relation to fact finding than national courts, as is reflected in its procedure and in its treatment of evidence. For all these reasons, the court has treated questions of just satisfaction as requiring what it describes as an equitable approach, as the Grand Chamber explained in Al Jedda v United Kingdom (2011) 53 EHRR 789, para 114: The court recalls that it is not its role under article 41 to function akin to a domestic tort mechanism court in apportioning fault and compensatory damages between civil parties. Its guiding principle is equity, which above all involves flexibility and an objective consideration of what is just, fair and reasonable in all the circumstances of the case, including not only the position of the applicant but the overall context in which the breach occurred. Its non pecuniary awards serve to give recognition to the fact that moral damage occurred as a result of a breach of a fundamental human right and reflect in the broadest of terms the severity of the damage. In consequence of the European courts treatment of the award of damages as a broader and more discretionary exercise than under our domestic law, some commentators have expressed scepticism as to the existence of principles and as to the value of any attempt to identify them. Similar scepticism was expressed at the hearing of these appeals by counsel for the Secretary of State, who submitted that there was an air of unreality about the attempt by counsel for the appellants and the Board to analyse an accumulation of ad hoc decisions by a court which did not have the same regard for precedent as our courts. That view reflects factors which are undeniable. Nevertheless, such scepticism appears to me to be over stated. As Lord Bingham indicated in Greenfield in the passage which I have cited in paragraph 30, and as I have sought to explain in paragraph 31, the statutory expression principles has to be understood in a broad sense. In relation to the quantum of awards in particular, section 8(4) of the 1998 Act merely means that courts should aim to pitch their awards at the general level indicated by Strasbourg awards in comparable cases, so far as that can be estimated. In relation at least to some aspects of the application of article 41, a body of identifiable practices has developed through the case law of the European court. In Greenfield itself, for example, the House of Lords succeeded in identifying through an analysis of numerous judgments of the court, few of which contained any articulated statement of principle, the ordinary practice of the court when applying article 41 in relation to violations of the rights under article 6 to an independent tribunal, and to legal representation, in the determination of a criminal charge. In so far as there are principles in that sense, domestic courts are required by section 8(4) of the 1998 Act to take them into account. That is consistent with the wider approach to the Strasbourg case law described by Lord Slynn of Hadley in R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295, para 26: that, in the absence of some special circumstances, the court should follow any clear and constant jurisprudence of the European court. The over arching duty of the court under section 8(1) is however to grant such relief or remedy as it considers just and appropriate; and that duty exists even where no clear or consistent European practice can be discerned. A second difference between the European court and a national court is that the European court does not normally undertake detailed fact finding in relation to damages in the way which a national court of first instance would do, at least in jurisdictions such as those of the UK. As it observed in Denizci v Cyprus 23 May 2001, Reports of Judgments and Decisions, 2001 V, para 315, the court is acutely aware of its own shortcomings as a first instance tribunal of fact. The court referred in that connection to problems of language, to an inevitable lack of detailed and direct familiarity with the local conditions, and to its inability to compel the attendance of witnesses (or, it might have added, to secure the production of evidence). In consequence, it is often dependent upon the information and arguments put before it by the parties. If they conflict, rather than resolving the conflict it may say that it declines to speculate, or it may award damages for a loss of opportunity rather than undertaking a more definite assessment of the harm suffered. If, on the other hand, the material placed before it by the parties enables it to proceed upon a more detailed basis, it will do so. That will be the case, in particular, where the relevant facts have been found by the national court. To the extent that domestic courts, applying their ordinary rules of evidence and procedure, are able to resolve disputed issues of fact in circumstances in which the European court would not, and are therefore able to proceed upon the basis of proven facts in situations in which the European court could not, their decisions in relation to the award of damages under section 8 of the 1998 Act may consequently have a different factual basis from that which the European court would have adopted. A third difference between the European court and a national court reflects a further practical aspect of awards of damages at an international level: namely, that the awards made by the European court, including those in respect of non pecuniary loss, reflect the relative value of money in the contracting states. If applicants from different contracting states who had suffered identical violations of the Convention and had suffered identical non pecuniary losses were to receive identical awards, those awards would in reality be of much greater value to some applicants than to others. The point can be illustrated by the case of Cesk v Czech Republic (2000) 33 EHRR 181, where the applicant claimed the equivalent of 5660 for four years lost earnings, on the basis of average earnings in the Czech Republic between 1993 and 1997. Awards made by the European court to applicants from countries where the cost of living is relatively low tend to be low by comparison with awards to applicants from countries where the cost of living is much higher. In order to obtain guidance as to the appropriate level of awards under section 8 of the 1998 Act, it is therefore necessary to focus upon awards made to applicants from the UK or from other countries with a comparable cost of living. Three conclusions can be drawn from this discussion. First, at the present stage of the development of the remedy of damages under section 8 of the 1998 Act, courts should be guided, following Greenfield, primarily by any clear and consistent practice of the European court. Secondly, it should be borne in mind that awards by the European court reflect the real value of money in the country in question. The most reliable guidance as to the quantum of awards under section 8 will therefore be awards made by the European court in comparable cases brought by applicants from the UK or other countries with a similar cost of living. Thirdly, courts should resolve disputed issues of fact in the usual way even if the European court, in similar circumstances, would not do so. It is necessary next to turn to some of the authorities which were cited from the case law of the European court. Reflecting the foregoing conclusions, my focus will be primarily upon cases concerned with violations of article 5(4) arising from delay in the holding of a hearing, and in particular upon such of those cases as have concerned delay in the holding of a hearing to determine whether a convicted prisoner should be released. In relation to the quantum of damages, my focus will be upon such of those cases as concerned the UK or other countries in Western Europe. Damages for violations of the requirement that the lawfulness of detention be reviewed speedily In the great majority of cases since the inception of the modern court in November 1998, in which the European court has found a violation of article 5(4) by reason of a failure to decide the lawfulness of detention speedily, it has made an award of compensation in respect of non pecuniary damage. That has been the case, in particular, in every case of this kind concerned with the Board. In all of these cases the award was made to compensate for feelings of frustration, anxiety and the like caused by the violation. In most of the cases the court made no finding that there had been a loss of liberty, or the loss of an opportunity of liberty, as a consequence of the violation. Indeed, in several of the cases it expressly stated that it could not make any such finding. In the small number of cases where the court found that there had been a loss of an opportunity of liberty, this was not critical to the decision to make an award of damages. It appears therefore that in these cases, even in the absence of a real loss of opportunity of earlier release, the court would have regarded an award of damages as appropriate. The loss of opportunity was one aspect of the harm suffered; the feelings of frustration and anxiety were another. Very many examples could be cited, but it is enough to refer to the following cases, which I shall discuss in chronological order. Oldham v United Kingdom (2000) 31 EHRR 813 was a case where, as in the present appeal by Mr Faulkner, the violation of article 5(4) resulted from a delay between reviews by the Board. There had been a period of two years between successive reviews, in circumstances where the applicant had completed all the work required with a view to rehabilitation within the first eight months of that period. The court did not suggest that there had been any loss of liberty, but stated that the applicant must have suffered feelings of frustration, uncertainty and anxiety flowing from the delay in review which cannot be compensated solely by the finding of a violation (para 42). In Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001, a violation was found in similar circumstances, where there had been periods of 21 months and two years between successive reviews. The court repeated the statement it had made in Oldham, and also stated in terms that The court does not find that any loss of liberty may be regarded as flowing from the finding of a breach of article 5(4), which in this case is limited to the delay in between reviews (para 48). In Reid v United Kingdom (2003) 37 EHRR 211 there had been a delay in court proceedings in which the applicant challenged the lawfulness of his detention in a psychiatric hospital. The court stated that it could not speculate as to whether the applicant would have been released if the procedures adopted by the courts had been different (para 85). The court however noted a procedural breach concerning the burden of proof (which had been reversed) and the long period of delay in the proceedings brought by the applicant for his release, and considered that some feelings of frustration and anxiety must have arisen which justify an award of non pecuniary damage (para 86). In Blackstock v United Kingdom (2005) 42 EHRR 55 the circumstances were similar to those in Oldham and Hirst. The period between successive reviews was 22 months. The court again stated that it does not find that any loss of liberty may be regarded as flowing from the finding of a breach of article 5(4), which in this case is limited to the delay in between reviews, but that the applicant must have suffered feelings of frustration, uncertainty and anxiety flowing from the delays in review which cannot be compensated solely by the finding of violation (para 56). In Kolanis v United Kingdom (2005) 42 EHRR 206 there had been a delay of about 12 months in the reconsideration by a mental health tribunal of the case of a patient detained in a psychiatric hospital, following the discovery that practical difficulties prevented the implementation of an earlier decision that she should be conditionally discharged. The re consideration of the case resulted in the applicants discharge. The court stated that It cannot be excluded on the facts of this case that the applicant would have been released earlier if the procedures had conformed with article 5(4) and therefore she may claim to have suffered in that respect a real loss of opportunity (para 92). The court added that Furthermore the applicant must have suffered feelings of frustration, uncertainty and anxiety from the situation which cannot be compensated solely by the finding of violation (ibid). In Mooren v Germany (2009) 50 EHRR 554, a Grand Chamber decision, there had been a delay in the determination of proceedings for judicial review of an order for the applicants detention pending trial. There had also been procedural unfairness. The court found that both the violations of the fairness and of the speed requirements under article 5(4) caused the applicant non pecuniary damage, such as stress and frustration, which cannot be compensated solely by the findings of violations (para 130). In STS v Netherlands (2011) 54 EHRR 1229 there was a delay in determining an appeal by a juvenile offender against a decision to extend a period of custodial treatment previously imposed. Referring to para 76 of its judgment in the case of Nikolova v Bulgaria (1999) 31 EHRR 64, and to its judgments in the cases of HL v United Kingdom (2004) 40 EHRR 761 and Fodale v Italy (2006) 47 EHRR 965, to all of which it will be necessary to return, the court stated expressly that it cannot find it established that the Supreme Court would have ordered the applicant released had its decision been given any more speedily (para 69). Nevertheless, the court stated, under reference to its judgments in the cases of Reid, Kolanis and Mooren, the court considers that the applicant has suffered non pecuniary damage that cannot be made good merely by the finding of a violation of the Convention (para 70). Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013, in which judgment was given subsequent to the hearing of the present appeals, was a case where, as in the present appeal by Mr Sturnham, the violation of article 5(4) resulted from a delay in the holding of a review by the Board following the expiry of an IPP prisoners tariff. The court proceeded on the basis that the Board would not have ordered the applicants release had the review taken place speedily. It nevertheless made an award on the basis that the delay gave rise to feelings of frustration which were not sufficiently compensated by the findings of violations of the Convention (para 69). A number of examples can be found in the case law of the old court of cases in which the European court found a violation of article 5(4) by reason of a failure to decide the lawfulness of detention speedily, but made no award of compensation in respect of non pecuniary damage. They include Bezicheri v Italy (1989) 12 EHRR 210, where the court did not state the extent to which it considered that the proceedings had been unduly prolonged, but focused on the final two months; Koendjbiharie v Netherlands (1990) 13 EHRR 820, where unsuccessful proceedings brought by the applicant to challenge his detention in a state psychiatric clinic had taken four months to be completed, the period allowed under domestic law being three months; and E v Norway (1990) 17 EHRR 30, where the unacceptable delay would appear to have been about three or four weeks, and where the European court observed that, if the applicant had suffered any non pecuniary injury as a result of the undue length of the proceedings, the judgment provided him with sufficient just satisfaction. In the modern case law of the court, cases where no award has been made are unusual. One example is Rutten v Netherlands (Application No 32605/96) (unreported) 24 July 2001, where domestic court proceedings had lasted two and a half months at first instance and a further three months on appeal. The proceedings had been brought by the public prosecutor to obtain an extension of the period during which the applicant, who had been convicted of attempted murder, was confined in a secure institution where he was being treated. The proceedings were based on the institutions assessment that the applicant remained dangerous. The applicant unsuccessfully opposed the proceedings on a technical ground relating to jurisdiction. This was not, therefore, a case of delay affecting proceedings in which a person sought to establish that his continued detention was unjustified. The delayed hearing resulted in a decision that continued detention was justified. The European court found that the length of the proceedings may have engendered in the applicant a certain feeling of frustration, but not to the extent of justifying the award of compensation (para 59). Another example is Pavleti v Slovakia (Application No 39359/98) (unreported) 22 June 2004, where the European court found a violation of article 5(3) in that the applicants detention prior to trial, for a period of two years, had lasted an unreasonably long time. There was also a breach of article 5(4) relating to an application which the applicant had made to the public prosecutor to be released on bail. The prosecutor had transmitted the request to the domestic court, which had failed to deal with it. The European court found however that the applicants detention on remand had been justified. In dealing with the claim under article 41, it noted that the period spent on remand had been deducted from the prison sentence which the applicant was ordered to serve following his conviction; and the court has long accepted that the deduction of a period of detention from the ultimate sentence may remove the need for any further award in respect of non pecuniary loss arising from a violation of article 5(3) (see, for example, Neumeister v Austria (No 2) (1974) 1 EHRR 136, para 40). It decided that In view of the circumstances of the case the finding of a violation was sufficient to afford just satisfaction (para 110). The circumstances of the case included (i) that the detention on remand was justified, and (ii) that the period on remand had been deducted in full from the sentence. Although the court cited its Nikolova judgment, to which I shall return, in connection with an unrelated aspect of the case, it made no reference to it in its discussion of article 41. It is apparent therefore that the general practice of the European court is to apply article 41 on the basis that the failure to decide the lawfulness of detention speedily, as required by article 5(4), causes harm in the form of feelings of frustration and anxiety, for which damages should be awarded. It also appears that the court is prepared to presume such harm without direct proof, consistently with its approach to non pecuniary loss in other contexts. In Scordino v Italy (No 1) (2006) 45 EHRR 207, for example, the Grand Chamber said at para 204, in the context of unreasonable delay in violation of article 6(1), that there was a strong but rebuttable presumption that excessively long proceedings would occasion non pecuniary damage. It is clear from the cases which I have discussed that the court will make an award on that basis even where there has been no deprivation of liberty or loss of an opportunity of earlier release. Where such additional harm is established, however, the court can normally be expected to make an award of damages on that basis, which may be for both pecuniary and non pecuniary losses. The case law of the European court in relation to violations of the requirement to review the lawfulness of detention speedily is, therefore, unequivocally inconsistent with the submission, made on behalf of the Board, that there is a general rule that an award can only be made in respect of a violation of article 5(4) if the violation has resulted in a deprivation of liberty. That submission was based on judgments of the court which concerned violations of the requirement to have such reviews decided in accordance with a fair procedure. As these judgments appear to have been misinterpreted, it is necessary to turn to them next. Violations of the requirement that reviews of the lawfulness of detention follow a fair procedure The case in this category upon which the greatest weight was placed by the Board was Nikolova v Bulgaria (1999) 31 EHRR 64, a decision of the Grand Chamber concerned with the applicants detention in custody prior to trial. Her detention had initially been ordered by prosecutors. Her initial appeals against her detention were also decided by prosecutors. After three weeks she appealed to a court, which refused her appeal about four weeks later. It confined its consideration to the question whether she had been charged with a serious crime and whether her medical condition required that she be released. It did not consider the applicants arguments that she was unlikely to abscond or to interfere with the investigation. The case was examined in camera and without the participation of the parties, and the court considered written comments from the prosecutor to which the applicant had no opportunity to respond. The European court found that there had been a breach of article 5(3), which provides (so far as material): Everyone arrested or detained in accordance with the provisions of paragraph 1(c) of this article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release pending trial. There had also been a breach of article 5(4): the proceedings before the domestic court were not truly adversarial and did not ensure equality of arms, and the court had failed to consider the applicants contentions. The European court decided by a majority to make no award under article 41 in respect of non pecuniary damage, stating (para 76): The court recalls that in certain cases which concerned violations of article 5(3) and (4) it has granted claims for relatively small amounts in respect of non pecuniary damage (see Van Droogenbroeck v Belgium (1983) 13 EHRR 546, para 13, and De Jong, Baljet and Van den Brink v Netherlands (1984) 8 EHRR 20, para 65). However, in more recent cases concerning violations of either or both paragraphs 3 and 4 of article 5, the court has declined to accept such claims (see Pauwels v Belgium (1988) 11 EHRR 238, para 46, Brogan v United Kingdom (1989) 11 EHRR 117, para 9, Huber v Switzerland 23 October 1990, Publications of the European Court of Human Rights, Series A no 188, p 19, para 46, Toth v Austria (1991) 14 EHRR 551, para 91, Kampanis v Greece (1995) 21 EHRR 43, para 66, and Hood v United Kingdom (1999) EHRR 365, paras 84 87). In some of these judgments the court noted that just satisfaction can be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not have suffered if he or she had had the benefit of the guarantees of article 5(3) and concluded, according to the circumstances, that the finding of a violation constituted sufficient just satisfaction in respect of any non pecuniary damage suffered. In the present case the court sees no reason to depart from the above case law. The court cannot speculate as to whether or not the applicant would have been detained if there had been no violation of the Convention. As to the alleged frustration suffered by her on account of the absence of adequate procedural guarantees during her detention, the court finds that in the particular circumstances of the case the finding of a violation is sufficient. Counsel for the Board also referred to a number of other judgments of the European court concerned with violations of article 5(4) in which the same approach was followed as in Nikolova, on broadly similar facts. They include Niedbala v Poland (2000) 33 EHRR 1137, Migo v Poland (Application No 24244/94) (unreported) 25 June 2002, HL v United Kingdom (2004) 40 EHRR 761, Fodale v Italy (2006) 47 EHRR 965, Galliani v Romania (Application No 69273/01) (unreported) 10 June 2008 and Mitreski v Former Yugoslav Republic of Macedonia (Application No 11621/09) (unreported) 25 March 2010. A number of judgments concerned with violations of article 5(3), in which the same approach was followed, were also referred to. They included SBC v United Kingdom (2001) 34 EHRR 619. Paragraph 76 of the Nikolova judgment is relied on by the Board as an important statement of a general principle: as counsel put it, just satisfaction can be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not have suffered if he or she had had the benefit of article 5(3) and (4) protection. It is however apparent from the subsequent cases which I have discussed in paragraphs 40 to 48 that there is no such general principle: the European court has repeatedly made awards in respect of non pecuniary damage resulting from a violation of article 5(4) consequent upon delay, in the absence of any finding that the applicant had suffered a deprivation of liberty as a result of the violation. Furthermore, in several of those cases the court referred to Nikolova, without any indication that there was perceived to be an inconsistency between the courts award of just satisfaction in the case at hand and the Nikolova judgment. Those cases include Reid, STS v Netherlands and Betteridge, and also the judgment of the Grand Chamber in Mooren. The true scope of the judgment in Nikolova appears to be narrower. It is important to appreciate that the violation of article 5(4) with which the Nikolova judgment was concerned related solely to the procedural fairness of the domestic proceedings: in the courts words, the absence of adequate procedural guarantees. The same is true of the later judgments in which it was followed. Similarly, none of the earlier cases cited in Nikolova, in which the court had declined to make an award, concerned a violation of article 5(4) arising from delay. When the court spoke in Nikolova of procedural guarantees it appears to have had in mind the procedure followed when the lawfulness of the applicants detention was considered, rather than to the time that it took for that exercise to take place. That would be consistent with the courts approach under article 6(1), where awards are regularly made for breaches of the reasonable time guarantee, but where compensation may be denied in cases which have involved only procedural breaches of fair hearing guarantees. The distinction between the European courts approach to just satisfaction in cases where the violation of article 5(4) results from delay, and in cases where it results from some other procedural failure, was explained by the court in HL v United Kingdom (2004) 40 EHRR 761. The court described Nikolova as having endorsed the principle that, where the violation of article 5(3) or (4) was of a procedural nature, just satisfaction could be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not otherwise have suffered (para 148). The court then distinguished cases concerned with violations of article 5(4) arising from delay, stating (para 149): The awards of non pecuniary damages in Reid v United Kingdom (2003) 37 EHRR 211 and in the series of French cases to which the applicant referred [Delbec v France (Application No 43125/98) (unreported) 18 June 2002 and Laidin v France (Application No 43191/98) (unreported) 5 November 2002, both concerned with failures to deal speedily with applications to be discharged from psychiatric hospitals] followed findings of, inter alia, unreasonable delay in the domestic proceedings determining applications for release from detention. This is consistent with the award of non pecuniary damages following a finding of unreasonable delay under article 6(1) of the Convention: despite the procedural nature of such a violation, it is accepted that there can be a causal link between the violation (delay) and the non pecuniary damage claimed (see, more recently, Mitchell and Holloway v United Kingdom (2002) 36 EHRR 951, para 69). Although it is unnecessary to consider Nikolova further for the purpose of the present appeals, it should also be borne in mind that in para 76 of the judgment the court stated that it reached its conclusion in the particular circumstances of the case. Consistently with the courts general approach to article 41, that is not the language of a strict rule. There are numerous cases subsequent to Nikolova, not concerned with delay, in which awards have been made to applicants who had suffered feelings of frustration and anxiety caused by a violation of article 5(4). Examples include Curley v United Kingdom (2000) 31 EHRR 401, Stafford v United Kingdom (2002) 35 EHRR 1121, Waite v United Kingdom (2002) 36 EHRR 1001, Von Bulow v United Kingdom (2003) 39 EHRR 366 and Allen v United Kingdom (Application No 18837/06) (unreported) 30 March 2010 (in which Nikolova was cited, but not in connection with article 41). In its recent judgment in Abdi v United Kingdom (Application No 27770/08) (unreported) 9 April 2013 at para 91 the court cited para 76 of Nikolova and para 149 of HL in support of the proposition that in cases concerning article 5(3) of the Convention it has not made an award of damages unless it could be shown that the applicant would not have suffered if he or she had had the benefit of the guarantees of that article. Is there a de minimis principle? If, then, the failure to decide the lawfulness of detention speedily will normally result in an award of damages as compensation for mental suffering, does the delay have to be of a minimum duration in order to warrant such an award, as counsel for the Board contended? Is it enough that the delay is sufficiently long to constitute a violation of article 5(4), or may a delay which results in a violation of article 5(4) nevertheless not be sufficiently long to warrant an award of damages? The court did not specify in terms of time, in the cases discussed in paragraphs 41 to 49, the extent to which there had been a failure to decide the matter speedily. In the group of UK cases concerned with delays between successive reviews by the Board, the court observed that the question whether the periods between reviews complied with article 5(4) must be determined in the light of the circumstances of each case: it was not for the court to attempt to rule as to the maximum period of time between reviews which should automatically apply to an entire category of prisoners, since there were significant differences between their personal circumstances. The court also observed that in previous cases the Convention organs had accepted periods of less than a year between reviews and had rejected periods of more than a year. It was therefore not the entirety of the period between reviews in these cases which was unacceptable, but the excess beyond what would have been reasonable. The court did not specify what that period was. The cases are therefore of limited assistance in relation to the point now under consideration. Most of them would appear however to have involved an unacceptable delay of nine months or more. In the case of Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013, the hearing before the Board took place 13 months after the expiry of the tariff. In Kolanis v United Kingdom (2005) 42 EHRR 206, the delay was of the order of a year. The cases of Reid v United Kingdom (2003) 37 EHRR 211 and STS v Netherlands (2011) 54 EHRR 1229 appear to have involved delays of several months. There are other cases in which awards were made which involved shorter periods. In Mooren v Germany (2009) 50 EHRR 554, the proceedings for review of the order for the applicants detention on remand took two months and 22 days, which was considered excessive. The Grand Chamber emphasised the right of persons who have instituted proceedings challenging the lawfulness of their deprivation of liberty to a speedy judicial decision, and the strict standards laid down by the court in that respect (paras 106 107). In that regard, the court cited earlier decisions concerned with detention on remand. These included the case of GB v Switzerland (2000) 34 EHRR 265, where the court found that proceedings which had lasted 32 days had violated article 5(4) by reason of the time taken, and awarded compensation. It is however necessary to bear in mind, in considering these decisions, that persons detained on remand are in a particularly sensitive position, and are in consequence particularly liable to experience stress and anxiety if their application for bail is not determined speedily. Such proceedings cannot therefore be assumed to be equivalent, in relation to the award of damages for delay, to applications for release from imprisonment following conviction. Those cases might be contrasted with others in which no award was made. In Rutten v Netherlands (Application No 32605/96) (unreported) 24 July 2001, the unacceptable delay appears to have been of a few months at most, and the applicant sought compensation on the basis that his rights had been violated for a period of at least 17 days. As I have explained in paragraph 50, no compensation was awarded in that case. A similar conclusion was reached in the judgments, now somewhat dated, in Koendjbiharie v Netherlands (1990) 13 EHRR 820 and E v Norway (1990) 17 EHRR 30, which I have discussed in paragraph 49. In the former case, the unacceptable delay would appear to have been of about one month; in the latter, about three or four weeks. The question whether feelings of frustration and anxiety are sufficiently serious to warrant an award of compensation will evidently depend to some extent upon the circumstances of the individual case. Where for example there is a particular reason for anxiety, or where there is mental illness, even a relatively short delay may occasion acute mental suffering. It is impossible therefore to lay down absolute rules. It is on the other hand reasonable to suppose that the presumption that the lack of a speedy decision has occasioned sufficiently serious mental suffering to justify an award of compensation should only apply if the delay has been of a significant duration. In the circumstances of a convicted prisoner awaiting review of his case by the Board, the cases which I have discussed suggest that a delay of three months or more is likely to merit an award, whereas the stress and anxiety which can be inferred from a delay of shorter duration are ordinarily unlikely to be of sufficient severity. The quantum of awards for feelings of frustration and anxiety Awards for frustration and anxiety caused by violations of the article 5(4) guarantee of a speedy decision have invariably been modest. In Oldham v United Kingdom (2000) 31 EHRR 813 the court awarded 1000. In Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001 the award was again 1000. In Reid, where the delay was more substantial and there was also procedural unfairness, the award was 2000. In Blackstock v United Kingdom (2005) 42 EHRR 55 the award was 1460, the equivalent at that time of 1000. In Mooren the Chamber had awarded 1500 for distress resulting from delay alone. The Grand Chamber increased the award to 3000, but that award was for stress and frustration caused by the unfairness of the procedure as well as by delay. In STS the court awarded 2000, but in that case there was a breach of the requirement of effectiveness as well as of the requirement as to speed. In Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013 the court awarded 750, equivalent to 645. It would be a mistake to attempt to analyse these awards too closely: they were considered equitable in their particular circumstances. The cases involving delay in reviews by the Board nevertheless indicate the modest level of awards in the absence of special circumstances. The quantum of awards for loss of liberty No case was cited to this court in which the European court had made an award for a loss of liberty resulting from a violation of the speedy decision guarantee in article 5(4). There are however a number of cases in which awards were made for the loss of an opportunity of earlier release. Reference was also made to a number of cases in which awards were made for a loss of liberty resulting from violations of article 5(1), article 5(3) and article 6. Considering first the loss of opportunity awards under article 5(4), in the case of Kolanis v United Kingdom (2005) 42 EHRR 206, discussed in paragraph 46, the court considered that it could not be excluded that the applicant would have been released earlier from detention in a psychiatric hospital if the procedures had been in conformity with article 5(4). The delay had been of about 12 months. The award was 6000. The earlier case of Weeks v United Kingdom (1987) 10 EHRR 293 (judgment on the merits), (1988) 13 EHRR 435 (article 50 judgment) concerned the recall to prison of a prisoner who had been released on licence. His recall and subsequent detention were considered by the Board, but under the system then in place it could only make a non binding recommendation. Recommendations for release had not been acted upon. When the applicant was subsequently released, some years after his release had first been recommended, he repeatedly reoffended, and his licence was again revoked. The Grand Chamber made an award of 8000, equivalent to about 17600 if adjusted for inflation, for both pecuniary and non pecuniary losses. In relation to the former, the applicant had made a substantial claim which the court considered could not be completely discounted. In relation to non pecuniary loss, the court said that the applicant must have been caused feelings of frustration and helplessness. The court did not explain how it arrived at the global sum which it awarded. The parties also cited a number of cases concerned with violations of article 5(1) which had resulted in a deprivation of liberty. In some of the cases relied upon, awards were made which were either unusually low or unusually high, for particular reasons explained by the European court. In other cases, the low awards reflected the value of money in the countries in question. Awards made in more typical cases involving the UK, or other countries with a comparable cost of living, are potentially of greater assistance. In Johnson v United Kingdom (1997) 27 EHRR 296 the applicant had been detained in a psychiatric hospital in breach of article 5(1) for a period of three and a half years. The court observed that the delay in his release could not be attributed entirely to the authorities: some delay was inevitable, as a suitable hostel placement had to be found, and in addition the applicant had contributed to the delay by his refusal to co operate. Having regard to those factors, the court awarded 10,000. In Beet v United Kingdom (2005) 41 EHRR 441 the court made an award of 5000 as compensation for unlawful detention in prison for a period of two days. In Medvedyev v France (2010) 51 EHRR 899 an award of 5000 was made by the Grand Chamber to applicants who had been unlawfully detained on board a ship for 13 days. The relatively low awards made in such cases as Jecius v Lithuania (2000) 35 EHRR 400, Kucheruk v Ukraine (2007) 52 EHRR 878 and Veniosov v Ukraine (Application No 30634/05) (unreported) 15 December 2011, to which the Board referred, are less relevant for the reasons I have explained in paragraph 38. Reference was also made to a number of cases in which awards were made for violations of article 5(3). These cases do not appear to me to be of assistance. The case of Caballero v United Kingdom (2000) 30 EHRR 643 concerned an applicant who had been detained in custody prior to trial as he fell within a category of accused persons to whom bail could not be granted. The period spent on remand had been deducted from the sentence, so that ordinarily no award would have been made. The court however noted that the applicants state of health was such that any release on bail prior to his trial could have been his last days of liberty. There was also undisputed evidence that the applicant would have had a good chance of being released on bail but for the breach of article 5(3). In these exceptional circumstances, an award of 1000 was made on an equitable basis. The other cases cited concerned countries where the value of money is much lower than in the United Kingdom. Reference was also made to two UK cases where there had been a loss of liberty, or of the opportunity of liberty, as a result of violations of article 6. First, in Perks v United Kingdom (1999) 30 EHRR 33 there had been a finding by the domestic courts that the applicant was unlikely to have been committed to prison, where he spent six days, if he had received competent legal assistance. Proceeding on that basis, the European court awarded 5500. Secondly, in Hooper v United Kingdom (2004) 41 EHRR 1 the applicant had been imprisoned for two weeks in default of finding surety for a binding over order. It had been found by the High Court that, if a fair procedure had been followed, the magistrate might well have been persuaded to a different result. The European court observed that this conclusion was not expressed in such strong terms as in Perks, and awarded 8000. In considering these awards, it is necessary to bear in mind that unlawful detention in violation of article 5(1) is often a particularly serious violation of the Convention, and is of a different nature from a violation of article 5(4). It is also necessary to take into account that the freedom enjoyed by a life prisoner released on licence is more circumscribed in law and more precarious than the freedom enjoyed by the ordinary citizen, as the European court has recognised (Weeks v United Kingdom (1987) 10 EHRR 293, para 40). The risk that a prisoner may be recalled to custody, even where no further offence has been committed, is real, as the facts of Weeks and of Mr Faulkners case, to which I shall return, amply demonstrate. Although the European court does not make precise adjustments to reflect inflation, it is also necessary to bear in mind that some of these awards were made many years ago. For these reasons, none of the awards which I have mentioned offers any clear guidance. That said, the most helpful is perhaps the award in the Kolanis case, since it related to a breach of article 5(4). As I have explained, in that case 6000 was awarded in 2005 as compensation for the loss of a real opportunity of release 12 months earlier from a psychiatric hospital. A higher award would no doubt have been appropriate if there had been a definite loss of liberty for 12 months; but a lower award would have been appropriate if, instead of a patient losing her liberty, the case had concerned a convicted prisoner who had lost an opportunity of earlier release on licence. The award in Weeks, considered in the context of the facts of that case, similarly suggests a level of awards for breaches of article 5(4) in respect of convicted prisoners which is much lower than the level in such cases as Beet or Perks. Allowing for the various factors which I have mentioned, and in particular for the important differences between conditional release and complete freedom, the cases which I have discussed suggest that awards where detention has been prolonged for several months, as the result of a violation of article 5(4), could reasonably be expected to be significantly above awards for frustration and anxiety alone, but well below the level of awards for a loss of unrestricted liberty. It is however impossible to derive any precise guidance from these awards. In accordance with section 8(1) and (4), a judgment has to be made by domestic courts as to what is just and appropriate in the individual case, taking into account such guidance as is available from awards made by the European court, or by domestic courts under section 8 of the 1998 Act, in comparable cases. It remains to apply the general principles which I have explained to the particular cases which are before the court. The case of Daniel Faulkner In 1999 Daniel Faulkner, then aged 16, was sentenced to two years detention for an offence involving grievous bodily harm. In 2001, at the age of 18, he was convicted of a second such offence. He was sentenced to custody for life, in accordance with section 109 of the 2000 Act. The tariff period was set at two years and eight and a half months. That period expired in April 2004. In May 2005 the Board recommended that Mr Faulkner should be transferred to open conditions, but that recommendation was rejected by the Secretary of State. In January 2007 the Board made a similar recommendation, which was again rejected. Mr Faulkners case was next due to be heard by the Parole Board in January 2008. The Secretary of State was informed of that date, but the case was not referred to the Board by a case worker in the Ministry of Justice until 21 December 2007, making it impossible to fix a hearing for January 2008 as intended. The case was however provisionally listed for a hearing in May 2008, pending the receipt of the necessary dossier of reports, known as the rule 6 dossier, from the prison where Mr Faulkner was detained. That dossier should have been provided to the Board in about September 2007. In the event, the dossier was not provided until 6 May 2008. The reasons for that delay are not apparent. Having received the dossier, the Board conducted a case management review on 16 May 2008, at which it decided that the hearing could not now proceed during that month. It also directed the prison to provide further reports which it required and which were missing from the dossier. Those reports were not received until 8 October 2008. The reasons for the time taken to provide those reports are not apparent. The Board then fixed a hearing to be held on 8 January 2009. On 23 January 2009 the Board directed Mr Faulkners release, and he was released four days later. On 22 May 2009 Mr Faulkners licence was revoked. He had been arrested on suspicion of wounding, and had failed to attend a meeting with his offender manager. He remained in hiding until 17 October 2009, when he was returned to prison. He was subsequently acquitted of the charge of wounding. The Board directed his release on 22 April 2010, and he was then released. On 13 June 2011 Mr Faulkners licence was again revoked, following his arrest on suspicion of having committed an offence of grievous bodily harm. He was subsequently acquitted of that charge. He remains in custody. In October 2008 Mr Faulkner was granted permission to apply for judicial review of the failure of the Board and the Secretary of State to conduct a review of his detention, in breach of article 5(4) of the Convention as given effect by the 1998 Act. The application was heard in June 2009, while Mr Faulkner was unlawfully at large, and was dismissed ([2009] EWHC 1507 (Admin)). The judge considered that, even if Mr Faulkner had succeeded on the merits of his application, no award of damages would have been appropriate. An appeal against that decision was allowed by the Court of Appeal ([2010] EWCA Civ 1434; [2011] HRLR 165). In a judgment delivered by Hooper LJ, with whom Sedley and Wilson LJJ agreed, the court held that: (1) Mr Faulkner had suffered a breach of article 5(4) lasting for a period of 10 months, between March 2008 and January 2009, due to unjustified delays on the part of the Ministry of Justice. There had not been any unjustified delay by the Board in setting the hearing date, once all the reports were available. (2) There was no reason in this case to award damages for a breach of article 5(4) on the basis of a loss of a real chance of earlier release. Rather, it was necessary for Mr Faulkner to show that he would have been released earlier if the breach had not occurred. (3) Mr Faulkner had shown on the balance of probabilities that he would have been released if the review had taken place in about March 2008. (4) As a result of the breach of article 5(4), Mr Faulkner had spent some 10 months in prison when he ought not to have done. The court then invited parties to make written submissions on the quantum of damages. Hooper LJs conclusion that Mr Faulkner could only recover for a loss of liberty if he established on a balance of probabilities that he would have been released earlier, and that it was not enough to show that there was a loss of a chance, was in my view correct. As I have explained at paragraph 37, the Strasbourg courts approach to this issue reflects its limited fact finding role: it will make an award for a loss of liberty if that is uncontested, but otherwise it is likely either to decline to speculate, or to make an award for a loss of opportunity. A domestic court is not however restricted in its fact finding capabilities. In those circumstances, it is not in my view required by section 8 of the 1998 Act to apply a self denying ordinance, but should establish the facts of the case in the usual way, and apply the normal domestic principle that the claimant has to establish on a balance of probabilities that he has suffered loss. Hooper LJ also rejected a submission that events following Mr Faulkners release were relevant to the issue of quantum. He observed that it would be speculation to say that, if Mr Faulkner had been released earlier, he might have been back in prison a few months later for breach of his licence; and, furthermore, that taking into account that Mr Faulkner spent a further six months in prison following his recall, for conduct of which he was ultimately acquitted, there was no reason why his damages award should be reduced. I agree. The court cannot reduce the damages it would otherwise have awarded on the basis of speculation. It is possible to conceive of circumstances in which a different conclusion might be appropriate: for example, where the claimant was recalled after committing an offence which he had been planning prior to his release and which would probably have been committed earlier if he had been released earlier. This is not however a case of that kind. On the facts of Mr Faulkners case, including his acquittal of any criminal responsibility in respect of the circumstances leading to his recall, the court is not in a position to say that, if he had been released earlier, he would simply have behaved that much sooner in the manner which led to the revocation of his licence. In its decision on quantum ([2011] EWCA Civ 349; [2011] HRLR 489), the Court of Appeal ordered the Secretary of State to pay Mr Faulkner 10000. The judgment of the court was delivered by Sedley LJ. He correctly proceeded on the basis that the court should not adjust its award according to the degree of probability of release had the violation not occurred. That follows from the general approach which I have discussed in paragraph 37. Once the court has found on a balance of probabilities that the claimant would have been released earlier if there had been no violation, he should ordinarily be fully compensated for the harm which he has suffered. In relation to quantum, the court arrived at the figure of 10000 by making a broad assessment of the award which appeared to it to be appropriate. The Board appealed to this court against that award on the ground that it was excessive. The fact that the appeal was taken by the Board, rather than by the Secretary of State, reflects the fact that the judgment is regarded as having significant consequences for the Board in relation to other cases, although the Secretary of State has agreed to be responsible for the discharge of any award made in the present case. No point was taken on behalf of Mr Faulkner in respect of the identity of the appellant. Mr Faulkner also appealed against the award on the ground that it was inadequate. He was in addition granted permission to argue that his detention, after the date when his case ought to have been heard by the Board, constituted false imprisonment at common law, or a violation of article 5(1) of the Convention. These contentions had not been advanced in the courts below, but no objection was taken on behalf of the Board or the Secretary of State. For the reasons which I have explained at paragraph 16, the submission that Mr Faulkner was the victim of false imprisonment under English law must be rejected. So too, for the reasons explained at paragraph 23, must the submission that he was detained in violation of article 5(1). The problems which resulted in delay in Mr Faulkners case, according to the findings of the Court of Appeal, appear to have been the result of errors by administrative staff, of a kind which occur from time to time in any system which is vulnerable to human error. It was extremely unfortunate that the errors occurred and resulted in the prolongation of Mr Faulkners detention, but they were not of such a character, and the delay was not of such a degree, as in my view to warrant the conclusion that there was a violation of article 5(1). An appellate court will not interfere with an award of damages simply because it would have awarded a different figure if it had tried the case at first instance. In these appeals however this court is being invited to give guidance as to the appropriate level of awards in cases of this character. For that purpose, the court has undertaken a fuller analysis of the Strasbourg authorities than the Court of Appeal, in the course of which it has considered authorities to which that court was not referred. In the light of that analysis, and applying the general approach which I have described in paragraph 75, it appears to me that an award in the region of 6500 would adequately compensate Mr Faulkner for his delayed release, bearing in mind the conditional and precarious nature of the liberty foregone. That amount falls well short of the award of 10,000 made by the Court of Appeal. In the circumstances, it is in my view appropriate for this court to allow the Boards appeal and to reduce the award accordingly. The case of Samuel Sturnham In May 2006 Samuel Sturnham was involved in an altercation outside a public house in the course of which he punched a man, who fell backwards and struck his head on the ground. He died the next day. In January 2007 Mr Sturnham was convicted of manslaughter. He had no previous convictions for offences of violence. An IPP sentence was imposed under section 225 of the 2003 Act, with a tariff period of two years and 108 days. That period expired on 19 May 2009. Mr Sturnhams case was referred to the Board by the Secretary of State on 10 July 2008, in good time for a review to take place around the time when his tariff expired. The Secretary of State however misinformed the prison where Mr Sturnham was detained as to the date when the rule 6 dossier was required, with the result that it was not prepared in time. The prison appears to have disregarded correspondence from the Board informing it of the date when the dossier was required, and subsequent correspondence informing it that the dossier was overdue. The prison then failed to prepare the dossier in accordance with the Secretary of States instructions. The Secretary of State had not followed the normal practice of setting up a mechanism for a reminder to be sent if the dossier was not provided in time. As a result of these various administrative failures, the dossier was not provided to the Board until 30 July 2009. A hearing was not convened until April 2010. The delay in listing the case for hearing was due in part to a request by Mr Sturnham for an extension of time to make representations. That hearing had to be adjourned, as Mr Sturnham was unwell. A review finally took place on 10 May 2010. The Board declined to order Mr Sturnhams release, but recommended his transfer to open conditions. He was transferred to such conditions in August 2010. His case was again reviewed in July and August 2011, when the Board directed that he should be released on licence. He was released in September 2011. Mr Sturnham brought proceedings for judicial review in which he challenged the lawfulness of the decision taken by the Board following the hearing in May 2010, and also the delay in holding that hearing. The application was heard in March 2011 by Mitting J, who rejected the challenge in respect of the lawfulness of the decision. In relation to the issue of delay, he held ([2011] EWHC 938 (Admin)) that: (1) Mr Sturnhams rights under article 5(4) were breached in that the hearing before the Board did not take place until approximately six months had elapsed from the date on which it should have taken place. That delay resulted from the delay in the delivery of the dossier to the Board. (2) There was no prospect that Mr Sturnhams release would have been ordered if the hearing had taken place six months earlier. (3) It was more likely than not that the Board would have directed Mr Sturnhams transfer to open conditions six months earlier than occurred. (4) Such a transfer would not necessarily have resulted in his earlier release. Nor would it have done so to a lower standard of probability. (5) Mr Sturnham had been caused anxiety and distress by the delay. In view of the six month delay, the judge ordered the Secretary of State to pay Mr Sturnham 300 as compensation for the consequent anxiety and distress. He arrived at that figure by taking as a guide the award of 1200 made in R (Guntrip) v Secretary of State for Justice [2010] EWHC 3188 (Admin), where the first hearing before the Board, following the expiry of the tariff, had not taken place until about two years after the latest date by which it ought to have been held. The judge treated the award in Guntrip as amounting to 50 per month, and accordingly awarded 300 for a delay of six months. The Secretary of State appealed against that award on the ground that no award should have been made. Mr Sturnham appealed against the High Courts rejection of his challenge to the lawfulness of the Boards decision. He also sought permission to cross appeal on the ground that the award should have been higher. The Court of Appeal allowed the Secretary of States appeal, dismissed Mr Sturnhams appeal and quashed the award ([2012] EWCA Civ 452; [2012] 3 WLR 476). It refused Mr Sturnham permission to cross appeal on quantum. The judgment of the Court of Appeal was given by Laws LJ, with whom the other members of the court agreed. Laws LJ took as his starting point the different treatment under the common law of wrongs in private law and in public law, and considered that an analogous distinction was reflected in some of the Strasbourg case law: in particular, in the cases of Nikolova v Bulgaria (1999) 31 EHRR 64, Niedbala v Poland (2000) 33 EHRR 1137 and Migo v Poland (Application No 24244/94) (unreported) 25 June 2002, which I have discussed at paragraphs 55 to 61. In the light of those cases, Laws LJ found it difficult to see how cases in which awards had been made for frustration and anxiety, such as Oldham v United Kingdom (2000) 31 EHRR 813, Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001 and Blackstock v United Kingdom (2005) 42 EHRR 55, could be treated as constituting an authoritative body of principle. He concluded that, in an article 5(4) case concerned with delay, just satisfaction would ordinarily be achieved by a declaration of the violation. If however the violation involved an outcome for the claimant in the nature of a trespass to the person, just satisfaction was likely to require an award of damages. The paradigm of such a case arose where the claimant's detention was extended by reason of the delay. Cases where the consequence of the delay was merely stress and anxiety would not generally attract compensation in the absence of some special feature by which the claimant's suffering was materially aggravated. Following that approach, no award was appropriate in Mr Sturnhams case. Mr Sturnham applied to this court for permission to appeal against the Court of Appeals decision to dismiss his appeal and to allow the Secretary of States appeal. The Board and the Secretary of State objected to the grant of permission. The court directed that Mr Sturnhams application for permission should be heard with the appeal in Mr Faulkners case, with the appeal to follow if permission were granted. In the event, the court granted Mr Sturnhams application in relation to the Court of Appeals decision to allow the Secretary of States appeal and quash the award, and heard the appeal on that point together with the appeal and cross appeal in Mr Faulkners case. The court deferred consideration of Mr Sturnhams application in respect of the Court of Appeals decision to dismiss his appeal, since it raised a different issue. At the hearing of the appeal, Mr Sturnham also sought permission to argue for a higher award. He relied upon section 40(5) of the Constitutional Reform Act 2005 (the 2005 Act), which provides: The court has power to determine any question necessary to be determined for the purposes of doing justice in an appeal to it under any enactment. That provision is concerned with questions which it is necessary to determine in order to do justice in an appeal. It does not provide a means of circumventing the need to obtain permission to appeal, where such permission is necessary in order to raise the question in issue. As I have explained, Mr Sturnham was refused permission to appeal in respect of the quantum of the award. It is unnecessary to determine whether the award was too low in order to do justice in his appeal against the quashing of the award. Mr Sturnhams application should therefore be refused. Turning then to Mr Sturnhams appeal against the quashing of his award of damages, his appeal should in my view be allowed. The Court of Appeal was wrong to take as its starting point the treatment of wrongs under the common law. Following R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673, the starting point, at this stage in the development of the remedy of damages under section 8 of the 1998 Act, should be the practice of the European court. The Court of Appeal also erred in its interpretation of the Strasbourg case law. As I have explained at paragraphs 58 to 60, the Nikolova line of authority is not concerned with violations resulting from delay. The Oldham line of authority illustrates how cases of the latter kind are dealt with. It is unfortunate that the case of HL v United Kingdom (2004) 40 EHRR 761, which contains the clearest explanation of the distinction between the two lines of authority, does not appear to have been cited to the Court of Appeal. Approaching Mr Sturnhams case in the light of the authorities from Oldham to Betteridge, it is apparent that an award of damages was appropriate as compensation for the frustration and anxiety which he suffered. The frustration and anxiety occasioned by a delay of six months cannot in my view be regarded as insufficiently severe to warrant such an award. In the light of the awards made in the Strasbourg cases, of which Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013 is the most nearly in point, the award of 300 which was made by the judge was reasonable in the circumstances of this case. Conclusion For the reasons I have explained, I consider that the appeal in the case of Mr Faulkner should be allowed, and that the sum of 10000 awarded as damages by the Court of Appeal should be reduced to 6500. The cross appeal should be dismissed. Mr Sturnhams appeal against the quashing of his award of damages should be allowed. Postscript: submissions on the case law of the European Court of Human Rights In the present appeals, the Strasbourg case law was presented to the court in the usual way. The court was provided with bound volumes of authorities in which the cases appeared in alphabetical order, and counsel referred the court to the authorities in the order in which they featured in their submissions. Around 75 Strasbourg authorities were cited to the court. It was a time consuming process to be taken through each of the cases at least twice, as each counsel in turn presented their analysis of it. Eventually the court requested to be provided with a schedule of the kind I shall shortly explain. The manner in which the authorities were presented also made it difficult for the court to discern how the case law had developed over time, as it was difficult to keep track of how the cases related to one another chronologically. Counsel are not to be criticised for having proceeded in this way, but with the benefit of hindsight it is apparent that it would be possible to present the authorities to the court in a more helpful way. With that aim in mind, the following guidance should be followed in any future cases where it is necessary to cite substantial numbers of Strasbourg decisions on the application of article 41 with a view to identifying the underlying principles. That exercise will not of course be necessary in relation to any future case on article 5(4), which should take the present judgment as its starting point. First, the court should be provided with an agreed Scott schedule, that is to say a table setting out the relevant information about each of the authorities under a series of columns. The information required is as follows: 1. The name and citation of the case, and its location in the bound volumes of authorities. 2. The violations of the Convention which were established, with references to the paragraphs in the judgment where the findings were made. 3. The damages awarded, if any. It is helpful if their sterling equivalent at present values can be agreed. 4. A brief summary of the appellants contentions in relation to the case, with references to the key paragraphs in the judgment. 5. A brief summary of the respondents contentions in relation to the case, again with references to the key paragraphs. Secondly, the court should be provided with a table listing the authorities in chronological order. Thirdly, it has to be borne in mind that extracting principles from a blizzard of authorities requires painstaking effort. The submissions should explain the principles which counsel maintain can be derived from the authorities, and how the authorities support those principles. Otherwise, to adapt Mark Twains remark about life, the citation of authorities is liable to amount to little more than one damn thing after another; or even, to borrow a well known riposte, the same damn thing over and over again. LORD CARNWATH I agree with the disposal of the appeals proposed by Lord Reed, and am content to adopt his reasons. I add a concurring judgment of my own, not by way of disagreement, but merely to suggest an alternative, and perhaps less laborious, route to the same end. It is based on a more selective approach to the Strasbourg jurisprudence, which also accords more closely to that of the Court of Appeal in this case. Given the enormous workload of the Strasbourg court, and the varied composition of the chambers to which cases are allocated, it is unrealistic to treat all decisions as of equal weight, particularly on the issue of damages. The great majority of such awards are made on an equitable basis reflecting particular facts. No doubt the judges attempt to achieve a degree of internal consistency. But most of the decisions are not intended to have any precedential effect, and it is a mistake in my view to treat them as if they were. Principles under the Human Rights Act 1998 The starting point must be section 8 of the Human Rights Act 1998, the relevant parts of which have been set out by Lord Reed. Of particular significance is section 8(4) which requires the court to take into account the principles applied by the European Court of Human Rights in relation to the award of compensation under article 41 of the Convention. The emphasis on principles applied by the Strasbourg court has been seen as problematic. In their review in 2000 (Damages under the Human Rights Act 1998, Law Com No 266; Scot Law Com No 180), the Law Commissioners drew attention to the striking lack of clear principles relating to the award of damages in the Strasbourg case law (para 3.4). They attributed this to a number of factors, including the diverse traditions in the countries within the jurisdiction of that court: On the one hand, the German and Dutch systems have rules as detailed as the English. Their theories of causation are highly developed, and pecuniary and non pecuniary loss are dealt with under clearly separated headings. In contrast, French and Belgian courts proceed empirically in matters of causation, with a minimum of theorising and swayed by considerations of fairness as much as causal potency. Thus, in French private law, for example, the measure of damages is regarded as a matter for the sovereign power of assessment of the judge of first instance. The comparative lack of structure is most evident in relation to the assessment of the relevant damage. This is always treated as a question of fact, thus leaving the judge in the lower court with a degree of unstructured discretion to adjust the award as he or she sees fit. As long as the award is framed properly in law, the appeal courts will not interfere with it. Conventional scales are sometimes used, but must not be treated as rules of law. In particular, French judges do not draw clear distinctions between different heads of loss. The Strasbourg practice appears to be close to the French tradition. (para 3.7 8). They also cited practical factors: At a more practical level, the character and size of the court inevitably affects its ability to deal with detailed issues of damages in a consistent way. It is a large body, sitting in a number of different constitutions. The judges are drawn from different backgrounds and diverse jurisdictions, and will have varied experiences of awarding damages. It is inevitable that their views as to the proper level of compensation, and the basis on which it should be assessed, will differ. (para 3.10) Against that background, there was force in the comments of the academic commentators cited by the Commissions (paras 3.12). Thus Dinah Shelton commented: It is rare to find a reasoned decision articulating principles on which a remedy is afforded. One former judge of the European Court of Human Rights privately states: We have no principles. Another judge responds, We have principles, we just do not apply them. (D Shelton, Remedies in International Human Rights Law (1999) p 1) Similarly, Lester and Pannick saw the courts decisions on just satisfaction as little more than equitable assessments of the facts of the individual case, and urged that there is a danger of spending time attempting to identify principles that do not exist. (Lord Lester of Herne Hill and D Pannick (eds), Human Rights Law and Practice (1999) para 2.8.4, note 3). As will be seen, the court has taken some steps to address these criticisms by choosing particular cases in which to offer more reasoned justifications. Domestic case law Since the Law Commissions report a significant body of domestic case law has developed, the most important authorities being Anufrijeva v Southwark London Borough Council [2004] QB 1124 (article 8), in the Court of Appeal, and R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673 (article 6) in the House of Lords. Neither was directly concerned with a violation of article 5(4), as in this case. In the latter Lord Bingham referred to the risk of error if Strasbourg decisions given in relation to one article of the Convention are read across as applicable to another (para 7). Those words seem to me of general application, even though he was drawing a specific contrast with article 5(5), which (uniquely in the Convention) confirms a specific right to compensation for arrest or detention in breach of that article. It appears from other Strasbourg authority that article 5(5) has limited effect in relation to the procedural rights conferred by articles 5(3) and (4), under which entitlement to compensation depends on the circumstances of each case (Pavletic v Slovakia (Application No 39359/98 (unreported) 22 June 2004, para 95). Lord Binghams speech in Greenfield provides the most recent, authoritative guidance on the correct approach of the domestic courts to the issue of compensation for breaches of the Convention rights. As a general comment on the Strasbourg cases on this issue, Lord Bingham adopted the words of the Court of Appeal in Anufrijeva, paras 52 53: The remedy of damages generally plays a less prominent role in actions based on breaches of the articles of the Convention, than in actions based on breaches of private law obligations where, more often than not, the only remedy claimed is damages. Where an infringement of an individual's human rights has occurred, the concern will usually be to bring the infringement to an end and any question of compensation will be of secondary, if any, importance. As Lord Reed has explained, an important point in the speech is the confirmation that, in accordance with section 8(4) of the 1998 Act, domestic British courts should look to Strasbourg, rather than to common law precedents, for guidance on the award and assessment of damages (paras 6, 19). Lord Bingham rejected as unduly legalistic an argument that the levels of Strasbourg awards were not principles within the meaning of section 8. Greenfield itself related to a disciplinary decision in a prison resulting in additional days of imprisonment. By the time the case reached the House of Lords it had been conceded that there was a violation of article 6, in that the decision had not been made by an independent tribunal, and there had been no right to legal representation; the only issue therefore was damages. It is true, as Lord Reed notes (para 36), that Lord Binghams speech contained analysis of numerous decisions of the European court, few of which contained any articulated statement of principle. However, that exercise does not appear to have been critical to the ultimate decision. He was able to identify a clear and relevant statement of practice in a decision of the Grand Chamber, Kingsley v United Kingdom (2002) 35 EHRR 177, para 43: In all the circumstances, and in accordance with its normal practice, in civil and criminal cases, as regards violations of article 6(1) caused by failures of objective or structural independence and impartiality, the court does not consider it appropriate to award monetary compensation to the applicant in respect of loss of procedural opportunity or any distress, loss or damage allegedly flowing from the outcome of the domestic proceedings. (emphasis added) Lord Bingham commented: Thus, whatever the practice in other classes of case, the ordinary practice is not to make an award in cases of structural bias. (para 16) On the facts of the case before him, he found no special feature which warrants an award of damages (para 29). I agree, respectfully, with Lord Bingham that the extreme view that there are no principles at all is inconsistent with the underlying assumption of section 8(4). However, the specific reference to principles in section 8(4) must be given some effect. Those words may be contrasted with the more general duty imposed on the domestic courts by section 2(1). The duty, when determining any question in connection with a Convention right is to take into account any judgment of the Strasbourg court, so far as considered relevant to the proceedings in which the question arises (section 2(1)). The more specific wording of section 8(4) in my view reflects the reality that not all decisions of the Strasbourg court in relation to damages will be determinative, or even illustrative, of any principle of general application. Accordingly, while Strasbourg case law must be the starting point, the primary search in my view should be for cases, which are not only referable to the particular article and type of case under consideration, but are also identifiable as more than simple, one off decisions on their own facts. This may be, for example, because they are expressed in terms of principle or practice (as in Kingsley), or contain substantive discussion of principle, or can be shown to be part of a recognisable trend applied in a series of cases on the same subject matter. The court should not be subjected to a blizzard of authorities (as Lord Reed describes it). It is incumbent on those arguing for a principle to show why the cases on which they rely meet those requirements. Where the court is faced with an apparent conflict between two different lines of approach, the court may have to choose between them in as principled a way as the context makes possible. Principles under article 5(4) That approach can be illustrated by reference to the cases reviewed by Lord Reed in the present case. In Sturnham in the Court of Appeal, Laws LJ rightly paid tribute to the helpful discussion of the cases under article 5(4) by Stanley Burnton J in R (KB) v South London and South and West Region Mental Health Review Tribunal [2004] QB 936, para 32ff, which had also been cited with approval by Lord Woolf CJ, in Anufrijeva v Southwark London Borough Council [2004] QB 1124, para 63. The principal foundation of the reasoning of both Stanley Burnton J and Laws LJ lay in the judgment in Nikolova v Bulgaria (1999) 31 EHRR 64. The facts and the reasoning of the court are set out by Lord Reed (paras 56 57). It is noteworthy that an award was refused, even though the issue between the parties seems to have been one of quantum only. The claim was for US$15,000, which the respondent government described as excessive, relying on an award of US$3,500. The Commissions Delegate invited the court to award an equitable amount (para 75). However, the court refused to make any award, for the reasons given in the passage quoted by Lord Reed. In my view, the courts below were correct to treat this decision of the Grand Chamber (presided over by the President, Judge Wildhaber) as intended to establish an approach of general application in relation to violations of article 5(3) and (4). It is true, as Lord Reed observes (para 62), that the second paragraph of that passage refers to the particular circumstances of the case. However, it is clear from the terms of the judgment as a whole, and from its treatment in later cases, that it was intended to draw a line under discrepancies in the previous jurisprudence, and to provide more consistent guidance for the future. That it followed a full debate within the court, and was regarded at the time as dealing with a controversial issue of principle, is apparent also from the strength of the dissents, notably that of Judge Bonello (joined by Judge Maruste). Of interest also is the partly dissenting opinion of Judge Fischbach (joined by Judges Kuris and Casadevall), which complained that the principle adopted by the majority was such as to restrict in advance the scope for awarding compensation for non pecuniary damage; whereas in their view that issue was one to be determined in the light of the particular facts of each case (para O II5). Judge Greve, also partly dissenting, thought it would be preferable for the court normally to use its discretion to award some equitable satisfaction, the issue then being in each case to settle the amount (para O III6). It is clear that she understood the majority judgment to reject that approach. That understanding of Nikolova was reinforced by my own experience as a participant shortly afterwards in another Grand Chamber decision on the same issue, Caballero v United Kingdom (2000) 30 EHRR 643, in which many of the same judges took part (see my article, cited before us without objection, ECHR Remedies from a Common Law Perspective [2000] ICLQ 517, in which I related that case to the Law Commissions then current review, in which I was directly involved as Chairman of one of the commissions). The judgment in Caballero repeated (in para 30) the substance of the relevant paragraph in Nikolova, but indicated that because of factors special to the instant case (described in para 31) it felt it right in the particular circumstances to make an equitable award of 1,000. That case was in turn distinguished in SBC v United Kingdom (2001) 34 EHRR 619, para 30, where no award was made, on the grounds that, in Caballero, unlike the instant case, the government had in effect accepted that apart from the breach the claimant would have had a good chance of being released on bail prior to his trial (para 31). Another important decision from that period, also highlighted by Stanley Burnton J, is Migon v Poland (Application No 24244/94) (unreported) 25 June 2002. A breach of article 5(4) had been found, arising from the failure to provide the applicant with the documents necessary to give him an adequate basis on which to address the arguments relied on in support of the decisions to prolong his detention (para 86). The Chamber chaired by Sir Nicholas Bratza rejected the claim for damages, following Nikolova, in which it was said: the court stated that just satisfaction can be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not have suffered if he or she had had the benefit of the procedural guarantees of article 5 of the Convention and concluded, according to the circumstances, that the finding of a violation constituted sufficient just satisfaction in respect of any non pecuniary damage suffered. (para 91) 92. In the present case, the court cannot speculate as to whether the applicant would have been detained if the procedural guarantees of article 5(4) of the Convention had been respected in his case. Consequently, the court considers that the non pecuniary damage claimed is adequately compensated by the finding of a violation of this provision. Faced with a claim of US$300,000 for pecuniary and non pecuniary loss, alleged to arise from loss of family life, destruction of a business, and pain and distress (para 89), the court made no award, since it was not possible to speculate whether the violation of article 5(4) made any difference to the detention. The continuing relevance of the principle or practice established in Nikolova is apparent from the subsequent cases in which it has been cited (one of the more recent being Mitreski v Former Yugoslav Republic of Macedonia (Application No 11621/09) (unreported) 25 March 2010) and the absence of any case in which it has been directly questioned. Mr Southey has sought to rely on some cases where awards have been made in apparent departure from the Nikolova approach. Some are referred to by Lord Reed (para 61). I find these of no real assistance. As I read them, they were decisions on their own facts, and did not purport to reformulate principle. Mr Southey is, however, on stronger ground, when he argues for an exception to the Nikolova principle, applicable to breaches involving delay in proceedings governing release from detention. In support of that distinction he relies on the decision in HL v United Kingdom (2004) 40 EHRR 761, which again is significant because it contains a reasoned discussion of principle. The case has been referred to by Lord Reed (para 60). The court found breaches of both article 5(1) and (4), arising out of the lack of fixed procedural rules governing the detention of a mental patient. The court declined to make an award for non pecuniary loss. The judgment (by a chamber, which included Judge Bratza and other judges who had been parties to Nikolova) dealt at some length with the issue of non pecuniary loss. The court noted that in Nikolova the court had endorsed the principle that just satisfaction under articles 5(3) and (4) could only be awarded in respect of damage from a deprivation of liberty that the applicant would not have suffered apart from the violation. It saw no reason to depart from the position outlined in the Nikolova judgment concerning just satisfaction as regards distress or frustration suffered on account of the absence of adequate procedural guarantees (paras 148 149). However (in the passage quoted by Lord Reed para 60), it distinguished cases in which awards had been made following findings of unreasonable delay in the domestic proceedings determining applications for release from detention. These were seen as consistent with the award of non pecuniary damages following a finding of unreasonable delay under article 6(1). Despite the procedural nature of such a violation, it was accepted that in such cases there could be a causal link between the violation (delay) and the non pecuniary damage claimed. This is another example of the court specifically addressing the principles to be applied to the award of damages under article 5. It is of importance in considering the three cases on which Mr Southey principally relies, which were all cases relating specifically to delay before the Parole Board: Oldham v United Kingdom (2000) 31 EHRR 813; Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001; Blackstock v United Kingdom (2005) 42 EHRR 55. They have all been described by Lord Reed (paras 42, 43, 45), along with a series of other cases less close on their facts to the present. It is right now to add to them another very similar case: Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013. Laws LJ commented that, against the background of the cases analysed by Stanley Burnton J in KB, these cases could not be treated as constituting any authoritative body of principle (para 20). Taken on their own, I might have been inclined to agree. However HL, which was not referred to by the Court of Appeal, puts a different perspective on the earlier cases. There are other factors which in my view give support to Mr Southeys submission that these cases do exemplify a principle directly relevant to cases of the kind before us: i) The issue of damages for non pecuniary loss under article 5(3) and (4) seems to have been subject to vigorous debate within the court between 2001 and 2002. ii) The three Parole Board cases demonstrated a consistency of approach, expressed in consistent language, over a period of five years to cases of significant delay before the Parole Board. The court was willing to make an award of 1,000 as equitable compensation for non pecuniary loss, regardless of the prospects of earlier release. iii) That approach was maintained both before and after the Migon decision. Judge Bratza, who led the chamber in Migon and was party to the judgment in HL, was also involved in all three decisions. There is no indication that he or the chamber as a whole saw any conflict between them. The natural explanation is that drawn by the court itself in HL. It is also apparent that not every case of delay attracts an award. In Rutten v The Netherlands (Application No 32605/96) (unreported) 24 July 2001), where the court found a breach of article 5(4) because of delays in access to a court for a detained person, the court found that any feeling of frustration engendered by the length of the proceedings was not to the extent of justifying the award of compensation (para 59). As Mr Grodzinski says, it is not easy to work out how long the breach lasted. The claim was for actual loss of liberty for 17 days (para 57), but it appears that the length of proceedings to which the court was referring was several months. Similarly, in Pavletic v Slovakia (Application No 39359/98) (unreported) 22 June 2004, no award was made in respect of a failure to rule on a petition for release from detention for a period of almost a year, that is, from the date of the petition made on 10 January 1996 (para 89) until the applicants release on 26 January 1997 (para 17). The court noted that the period of detention had been deducted from his subsequent sentence and made no separate award for any prejudice which the applicant may have suffered (para 110). It seems therefore that, where there is no finding of actual or possible loss of liberty, questions of degree are relevant, and that there is a threshold of distress below which no award need be made. For these purposes I would concentrate on the cases which are directly related to the present facts, involving failures in the review of detention following conviction. Although the Strasbourg court has declined to lay down a precise measure of acceptable delay, the three cases relied on by Mr Southey seem, as far as one can judge, to have involved unacceptable delays of around a year or more, justifying awards of 1,000. A national court, paying due regard to Strasbourg principles, but also in the interests of certainty and proportionality, may properly take the view that there should be a threshold, defined by a period of excessive delay, in relation to which a breach of article 5(4) may be established, but no monetary award is necessary. Although I would have regarded a threshold of six months as consistent with the Strasbourg jurisprudence, I do not dissent from the guidance proposed by Lord Reed or from his approval of the award in Mr Sturnhams case. |
The appellants are former employees of the London Borough of Lewisham (the council). They worked in the councils leisure department until 2002. Their part of the councils undertaking was then contracted out to a private sector employer named CCL Ltd and they were transferred into its employment. In May 2004 CCLs undertaking was taken over by another private sector employer named Parkwood Leisure Ltd (Parkwood), which is the respondent to this appeal. As a result of that transfer the appellants became employees of Parkwood. The Transfer of Undertakings (Protection of Employment) Regulations 1981 (SI 1981/1794) (TUPE) applied to each of these transfers. TUPE safeguards the rights of employees when the business in which they worked changes hands between employers. It preserves their contractual rights so that they are enforceable against the transferee after the transfer. Regulations 5(1) and 5(2) of TUPE provided that their contracts of employment were to have effect after the transfer as if originally made between the persons so employed and the transferee. TUPE was replaced by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) which came into force on 5 April 2006. But the transfers with which this case is concerned took place before that date. So the position that applies to them is governed by the 1981 Regulations, which I shall continue to refer to as TUPE. The council subscribed to the National Joint Council for Local Government Services (the NJC). The NJC comprises within its membership representatives of local authority employers and trades unions. As the appellants were employees of a local authority, their contracts of employment with the council included a term which entitled them to the benefit of the terms and conditions set by the NJC. They were in a standard form which, under the heading Terms and Conditions of Employment, contained the following express term: During your employment with the council your terms and conditions of employment will be in accordance with collective agreements negotiated from time to time by the National Joint Council for Local Government Services, set out in the scheme of conditions of service (commonly known as the Green Book) supplemented by agreements reached locally through the councils negotiating committees. Among the terms and conditions collectively agreed by the NJC were rates of pay for employees of local authorities. At the date of the appellants transfer to CCL there were in place collectively agreed terms setting out the pay rates for the period from 1 April 2002 to 31 March 2004. Those terms were honoured by CCL throughout the period of the appellants employment with that company. In March 2004 NJC negotiations began for the period from 1 April 2004 to 31 March 2007. There were twelve representations of the local government associations on the NJC and various unions, including UNISON of which the appellants were members. But Parkwood does not recognise UNISON and, as it is a private sector employer, it cannot belong to the NJC or be represented on it. So it was not a party to these negotiations. The negotiations concluded on 4 June 2004, after the date of Parkwoods takeover of CCL. On 14 July 2004 the NJC issued a circular summarising the three year settlement. It included pay increases for the periods from 1 April 2004 and 1 April 2005. Parkwood initially refused to award the appellants pay increases in accordance with the collective agreement for the periods from 1 April 2004 and 1 April 2005. The appellants brought claims against it for unauthorised deductions from their wages contrary to section 13 of the Employment Rights Act 1996. These claims were settled without admission of liability and the increases for these years were paid. But Parkwood declined to award the appellants increased rates of pay in accordance with the collective agreements with effect from 1 April 2006 and 1 April 2007. So the appellants brought further claims against Parkwood for unauthorised deductions in the London (South) Employment Tribunal (the ET). The ET dismissed their claims, for reasons that were given in a judgment sent to the parties on 16 July 2008. On 12 January 2009 the Employment Appeal Tribunal (the EAT), allowed the appellants appeal against that decision and remitted the claims to the ET for a hearing as to remedy: [2009] ICR 703. Parkwood was given permission to appeal. On 29 January 2010 the Court of Appeal (Ward, Smith and Rimer LJJ) allowed the appeal, set aside the order of the EAT and restored the decision of the ET to dismiss the appellants claims: [2010] EWCA Civ 24, [2010] ICR 793. The issues The issue which lies at the heart of this appeal is whether the effect of regulations 5(1) and 5(2) of TUPE is that the appellants are entitled to the benefit of increases in pay negotiated by the NJC after they were transferred into the employment of Parkwood. It is common ground that, had this issue been solely one of domestic law, the question would have been open only to one answer. In BET Catering Services Ltd v Ball (unreported) 28 November 1996, Lindsay J, delivering the judgment of the appeal tribunal in Mrs Balls favour, said that he could see no conceptual difficulty in a private sector employer binding itself to public sector pay rates. In Whent v T Cartledge Ltd [1997] IRLR 153, in a judgment delivered by Judge Hicks QC, the appeal tribunal said that, once it was accepted that regulation 5 of TUPE applied and that there had been no relevant subsequent variation in the contract of employment, the issue became simply one of the true meaning of the clause that provided that the employees pay would be in accordance with the agreement made by the NJC as amended from time to time, and that there was no apparent reason why the transfer should cause any change in the meaning of these words: para 9. The employment tribunals view that it could not be right that an employer is bound ad infinitum by the terms of a succession of collective agreements negotiated by bodies other than themselves was rejected. In para 16 Judge Hicks said: there is simply no reason why parties should not, if they choose, agree that matters such as remuneration be fixed by processes in which they do not themselves participate. In Glendale Grounds Management v Bradley, (unreported) 19 February 1998, and Glendale Managed Services v Graham [2003] EWCA Civ 773, [2003] IRLR 465 issues were raised as to whether a different result followed because of particular words used in the employees contract. In Bradley it was held that the particular terms of the contract required the approval of the employer for the time being to any new negotiated terms, whereas Glendale had given none. In Graham the clause provided that the rate of remuneration would normally be in accordance with the NJC. The Court of Appeal held that it was an implied term of that contract that the employer must inform the employee if and when there was to be a departure from the normal situation. BET Catering Services Ltd v Ball and Whent v T Cartledge Ltd were not referred to. But I agree with Rimer LJs observation in the Court of Appeal in this case that the decision in Graham was impliedly consistent with the approach that was reflected in those cases: [2010] ICR 793, para 21. The view that was taken in those decisions about the effect of conditions of the kind that the appellants rely on in this case was, in my opinion, entirely consistent with the common law principle of freedom of contract. There can be no objection in principle to parties including a term in their contract that the employees pay is to be determined from time to time by a third party such as the NJC of which the employer is not a member or on which it is not represented. It all depends on what the parties have agreed to, as revealed by the words they have used in their contract. The fact that the employer has no part to play in the negotiations by which the rates of pay are determined makes no difference. Unless the contract itself provides otherwise, the employee is entitled to be paid according to the rates of pay as determined by the third party. This is simply what the parties have agreed to in their contract. The same is true of the transferee in the event of the transfer of an undertaking regulated by TUPE. Domestic law tells us that the term in the contract is enforceable against the transferee in just the same way as it was against the original employer. As Rimer LJ said in the Court of Appeal, decisions such as Whent amount to no more than a conventional application of ordinary principles of contract law to the statutory consequences apparently created by regulation 5 of TUPE: [2010] ICR 793, para 46. But the issue is not solely one of domestic law. Regulation 5 of TUPE must be read together with article 3(1) of Council Directive 77/187/EEC of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees rights in the event of transfers of undertakings, businesses or parts of businesses (OJ 1977 L61, p 26) (the Directive), to which it gave effect. The question that has brought the appeal before this court is whether the approach that has hitherto been taken as to the effect of TUPE can still stand, in the light of the decision of the European Court of Justice in Werhof v Freeway Traffic Systems GmbH & Co KG (Case C 499/04) [2006] ECR I 2397 (Werhof). The ECJ was concerned in that case with the meaning and effect of article 3(1) of the Directive. The Court of Appeal held that the decision of the ECJ in Werhof was to be understood as meaning that the transferee was not committed by article 3(1) to any collective agreement made after the expiry of an agreement that was in force at the date of the transfer, and that there was nothing in the language of regulation 5 of TUPE to indicate that it was intended to enlarge employees rights beyond those provided for by article 3(1). Its conclusion was that, in the light of Werhof, the domestic decisions in cases such as Whent were wrong and should not be followed. The appellants contend for what has been described as a dynamic interpretation of the effect of their contract on transferees. That is to say, that their contracts should be given effect according to their terms, binding the transferee to give effect to collective agreements negotiated by the NJC from time to time in the same way as if they had still been employed by the council. The respondents submit that the effect of Werhof is that static rights only are protected, with the result that the transferee is not bound by any collective agreements that were not already binding on the original employer on the date of the transfer. The questions that must be examined, therefore, are these: (i) what is the effect of the judgment of the Court of Justice in Werhof as to the interpretation of article 3(1) of the Directive? (ii) to what extent, if at all, is there room for giving a different meaning to regulation 5 of TUPE in domestic law from that indicated by Werhof as to the meaning of article 3(1)? The legislation As Rimer LJ observed in para 9 of his judgment, the law in the United Kingdom prior to the bringing into force of legislation to comply with the Directive was that, if an employer transferred his business to another, the employees contracts of employment were terminated. It was a matter entirely for the transferee to decide whether it should continue to employ the employees of the transferor in the business which it had acquired and, if so, on what terms. That position was reversed by the implementation of the Directive in 1981 by TUPE. The position now is that the rights of employees when the business in which they worked changes hands between employers are safeguarded. The extent to which their contractual rights are protected so that they are enforceable against the transferee after the transfer has not hitherto been in question. The 1977 Directive was amended by Council Directive 98/50/EC (OJ 1998 L201, p 88). Article 3 of the amended version reproduced in substance the provisions of article 3 of the 1977 Directive, as the ECJ noted in Werhof, para 4. Council Directive 2001/23/EC of 12 March 2001 (OJ 2001 L82, p 16) has replaced the 1977 Directive, but the tenor of the wording used in the article 3 of the 1998 Directive has been retained: Werhof, in the opinion of Advocate General Ruiz Jarabo Colomer, para 9. As both the Advocate General and the Court of Justice directed their attention to the wording of the 1977 Directive in Werhof, and as that was the Directive that TUPE was intended to implement, I shall do the same for the purposes of this judgment. The preamble to the Directive included the following recitals : Whereas it is necessary to provide for the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded; Whereas differences still remain in the Member States as regards the extent of the protection of employees in this respect and these difference should be reduced; Whereas these differences can have a direct effect on the functioning of the common market; Whereas it is therefore necessary to promote the approximation of laws in this field . No mention was made in the recitals of any need to protect employers in the event of a change in employer as against the rights that were to be safeguarded for the protection of the employees. In article 1(1) of the Directive it was declared that the Directive was to apply to the transfer of an undertaking, business or part of a business to another employer as a result of a legal transfer or merger. Article 3 of the Directive included these provisions: 1.The transferors rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer within the meaning of article 1(1) shall, by reason of such transfer, be transferred to the transferee. Member States may provide that, after the date of the transfer within the meaning of article 1(1) and in addition to the transferee, the transferor shall continue to be liable in respect of obligations which arose from a contract of employment or an employment relationship. 2. Following the transfer within the meaning of article 1(1), the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement, until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement. Member States may limit the period for observing such terms and conditions, with the proviso that it shall not be less than one year. As the aim of the Directive was the approximation of the laws of the Member States, not their harmonisation, article 7 of the Directive provided: This Directive shall not affect the right of member states to apply or introduce laws, regulations or administrative provisions which are more favourable to employees. In that connection it should be noted that the Directive did not apply to sea going vessels: article 1(3). Nor, according to consistent decisions of the Court of Justice, did it apply to transfers of undertakings in the context of insolvency proceedings unless the undertaking had continued to trade or was expected to continue to trade: see Transport and General Workers Union v Swissport (UK) Ltd (in administration) and another [2007] ICR 1593, paras 56 58. TUPE was made under the authority of section 2 of the European Communities Act 1972, subsection (2) of which, as amended by section 27(1) of the Legislative and Regulatory Reform Act 2006, provides inter alia that at any time after the passing of that Act any designated Minister or department may by order, rules, regulations or scheme make provision for the purpose of implementing any EU obligation of the United Kingdom or enabling any such obligation to be implemented. Paragraphs (1) and (2) of Regulation 5 of TUPE, as amended by section 33(4)(a) and (b) of the Trade Union Reform and Employment Rights Act 1993, provided: (1) Except where objection is made under paragraph (4A) below, a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee. (2) Without prejudice to paragraph (1) above, but subject to paragraph (4A) below, on the completion of a relevant transfer (a) all the transferors rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and (b) anything done before the transfer is completed by or in relation to the transferor in respect of that contract or a person employed in that undertaking or part shall be deemed to have been done by or in relation to the transferee. A relevant transfer is a transfer to which TUPE applies, that is to say a transfer from one person to another of an undertaking situated immediately before the transfer in the United Kingdom: regulation 3, read with regulation 2(1). Regulation 5(4A), which was inserted by section 33(4)(c) of the 1993 Act, provided that paragraphs (1) and (2) were not to operate to transfer the employees contract of employment and the rights, powers, duties and liabilities under or in connection with it if he informs the transferor or the transferee that he objects to becoming employed by the transferee. Regulation 6 of TUPE was in these terms: Where at the time of a relevant transfer there exists a collective agreement made by or on behalf of the transferor with a trade union recognised by the transferor in respect of any employee whose contract of employment is preserved by regulation 5(1) above, then (a) without prejudice to section 18 of the 1974 Act or article 63 of the 1976 Order (collective agreements presumed to be unenforceable in specified circumstances) that agreement, in its application in relation to the employee, shall, after the transfer, have effect as if made by or on behalf of the transferee with that trade union, and accordingly anything done under or in connection with it, in its application as aforesaid, by or in relation to the transferor before the transfer, shall, after the transfer, be deemed to have been done by or in relation to the transferee; and (b) any order made in respect of that agreement, in its application in relation to the employee, shall, after the transfer, have effect as if the transferee were a party to the agreement. Section 18 of the 1974 Act is now to be found in section 179 of the Trade Union and Labour Relations (Consolidation) Act 1992. The interpretative obligation in domestic law I shall deal with this question first so that the decision of the Court of Justice in Werhof [2006] ECR I 2397, which is the most troublesome aspect of this case, can be examined in the right context. The appellants submit that, even if the ruling in Werhof is inconsistent with the interpretation of regulation 5 of TUPE for which they contend, it does not warrant any reading down of regulation 5 given that article 7 of the Directive expressly authorises more generous protection for employees. The respondents, on the other hand, say that regulation 5 of TUPE was introduced to implement, and to do no more than implement, article 3 of the Directive and that, in that situation, the courts of the United Kingdom are obliged to construe the domestic legislation consistently with the Directive and rulings of the Court of Justice as to the meaning and scope of the Directive. As to the latter point, it is well established that it is the duty of the court to construe domestic legislation which has been enacted to give effect to the United Kingdoms obligations under the EU Treaty so as to conform to those obligations, so far as it is possible to do so. In Pickstone v Freemans plc [1989] AC 66 it was held that words were to be implied into a regulation which was designed to give effect to Council Directive 75/117/EEC dealing with equal pay for women doing work of equal value. This was because, if the House had not been able to make that implication, the United Kingdom would have been in breach of its treaty obligations to give effect to Directives. In Litster v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546, where the employees had been dismissed a short time before the transfer became operative, the issue was as to the meaning of the words immediately before the transfer in regulation 5(3) of TUPE. Lord Keith of Kinkel said at p 554: it is the duty of the court to give to regulation 5 a construction which accords with the decisions of the European Court upon the corresponding provisions of the Directive to which the regulation was intended by Parliament to give effect. The precedent established by Pickstone v Freemans plc indicates that this is to be done by implying the words necessary to achieve that result. Lord Oliver of Aylmerton said at p 559: If the legislation can reasonably be construed so as to conform with those obligations obligations which are to be ascertained not only from the wording of the relevant Directive but from the interpretation placed upon it by the European Court of Justice at Luxembourg such a purposive construction will be applied even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use. This approach is consistent with what the Court of Justice itself said in von Colson and Kamann v Land Nordrhein Westfalen (Case 14/83) [1984] ECR 1891 with regard to Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment (OJ 1976 L39, p 40). In para 26 the court said that: the member states obligation arising from a Directive to achieve the result envisaged by the Directive and their duty under article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of member states including, for matters within their jurisdiction, the courts. It follows that, in applying the national law and in particular the provisions of a national law specifically introduced in order to implement Directive 76/207, national courts are required to interpret their national law in the light of the wording and the purpose of the Directive in order to achieve the result referred to in the third paragraph of article 189. All of this is, of course, now very well known and it is common ground between the parties. Mr Linden QC for the appellants submitted, however, that there was no decision of the Court of Justice which prohibits the domestic court from doing other than applying its domestic law approach to interpretation in a case where there was no reason to be concerned that the domestic provisions fell short of what Community law requires. In R (Hurst) v London Northern District Coroner [2007] UKHL 13, [2007] 2 AC 189, para 52 Lord Brown of Eaton under Heywood said that the interpretative effect that Community law required was strictly confined to those case where, on their particular facts, the application of the domestic legislation in its ordinary meaning would produce a result incompatible with the relevant European Community legislation. In cases where no European Community rights would be infringed, the domestic legislation is to be construed and applied in the ordinary way. Mr Linden referred to two decisions of the Court of Justice that he said supported this approach to the construction of domestic legislation by national courts. They showed, he said, that it was open to national courts to adopt an interpretation of domestic legislation that had been designed to give effect to the result sought to be achieved by a Directive that was more favourable than that indicated by the Directive itself. In Katsikas v Konstantinidis (Joined Cases C 132/91, C 138/91 and C 139/91) [1992] ECR I 6577 the court was asked to consider a provision in article 613a(1) of the German Domestic Code which had been held by the German Labour Court to have the effect of preventing a transfer of the employment relationship where one of the employees had objected to the transfer of his employment by the business in which he was employed. Provisions to the same effect are now to be found in regulations 5(4A) and 5(4B) of TUPE. The question was whether the words laws, regulations or administrative provisions in article 7 of the Directive, which enable Member States to introduce laws which were more favourable to employees than the Directive, covered more favourable interpretations of measures of that kind given by national courts. The court said in paras 39 and 40 that it had been consistently held that the scope of national laws, regulations and administrative provisions had to be assessed having regard to the interpretation given to them by the national courts and that the expression used in article 7 must be understood as referring to those measures as they are interpreted by the courts of that state. In Criminal Proceedings against Lindqvist (Case C 101/01) [2004] QB 1014 questions had been referred to the Court of Justice as to whether Council Directive 95/46/EC on the protection of individuals with regard to the processing of personal data was compatible with the general principles of freedom of expression and whether national rules might be introduced that were more restrictive than the Community provisions. As to the first point, the court said in para 85 that it was at the stage of the application at national level of the legislation implementing the Directive in individual cases that a balance must be found between the rights and interests involved. The courts of the member states had to make sure, however, that they did not rely on an interpretation which would be in conflict with the fundamental principles protected by the Community legal order: para 87. In paras 97 98 it said: 97 It is true that Directive 95/46 allows the member states a margin for manoeuvre in certain areas and authorises them to maintain or introduce particular rules for specific situations, as a large number of its provisions demonstrate. However, such possibilities must be made use of in the manner provided for by Directive 95/46 and in accordance with its objective of maintaining a balance between the free movement of personal data and the protection of private life. 98 On the other hand, nothing prevents a member state from extending the scope of the national legislation implementing the provisions of Directive 95/46 to areas not included within the scope thereof, provided that no other provision of Community law precludes it. The question that these decisions give rise to are (1) whether regulations 5(1) and 5(2) of TUPE were designed to be more generous than article 3(1) of the Directive as interpreted by the Court of Justice in Werhof [2006] ECR I 2397, according to the respondents reading of that decision; and (2) if not, whether it is open to the national court to construe regulation 5 of TUPE more generously because to do so is not precluded by article 3(1). Was regulation 5 of TUPE designed to be more generous? There is no doubt that in some respects TUPE was more generous to employees than the Directive. As already noted (see para 16, above), the Directive did not apply to sea going vessels. In Castle View Services Ltd v Howes 2000 SLT 696, however, the First Division of the Court of Session held that the crews of such vessels were not excluded from the benefit of the regulations: see also NUMAST v P&O Scottish Ferries Ltd [2005] ICR 1270. In Transport and General Workers Union v Swissport (UK) Ltd (in administration) [2007] 1CR 1593 it was held that TUPE applied to transfers of undertakings in insolvency cases, whereas the Directive did not. TUPE did not adopt the one year maximum on the period for observing collective agreements after a transfer in regulation 6, as member states were authorised to do by the second paragraph of article 3(2). And regulations 5(4A) and 5(4B) introduced by section 33 of the Trade Union Reform and Employment Rights Act 1993, which enable employees to object to being transferred, are also more generous: Katsikas v Konstantinidis v Stauereibetreib Paetz [1992] ECR I 6577. It is not possible, however, to detect anything in regulations 5(1) and 5(2) of TUPE that is so obviously more generous than what is to be found in article 3(1) of the Directive. Regulation 5(1) does say something that article 3(1) does not say in so many words. This is that a relevant transfer shall not operate so as to terminate the contract of employment, which shall have effect after the transfer as if originally made between the employee and the transferee. Article 3(1) leaves this to implication, concentrating as it does on the fundamental point that the transferors rights and obligations arising from the contract shall, by reason of the transfer, be transferred to the transferee. This is the point that is picked up, admittedly in more elaborate language, in regulation 5(2)(a) and (b). The words rights and obligations are expanded to rights, powers, duties and liabilities. But the expanded phrase does not encompass anything more than was caught by the words used in article 3(1). So there is in substance no difference. Regulation 5(2)(b) goes on to refer to things done in relation to the transferor before the transfer, which are deemed to have been done by or in relation to the transferee. But here too we find an expanded description of what is already captured by the words rights and obligations in article 3(1). Mr Linden sought to find support for his argument as to the intention of Parliament from the fact that regulations 4(1) and (2) of the 2006 Regulations which came into force on 6 April 2006 were in almost the same terms as regulations 5(1) and (2) of TUPE. He submitted that, by re enacting the equivalent provisions of TUPE, Parliament must be taken to have endorsed the interpretation that had been given to those provisions in BET Catering Services Ltd v Ball and Whent v T Cartledge Ltd (see para 7, above). I do not think that it is open to us to make that assumption. No reference to these authorities was made in the Public Consultation Document issued by the Employment Relations Directorate of the Department of Trade and Industry in March 2005 and none of the questions that were asked were addressed to this point. Furthermore, by the time the 2006 Regulations were laid before Parliament on 7 February 2006 the Advocate Generals opinion in Werhof [2006] ECR I 2397 was in the public domain. It was delivered on 15 November 2005, so anyone who was keeping an eye on what was being said about the effect of article 3(1) of the Directive would have been aware of the raising of the issue as to its limits by that time. The judgment in Werhof was promulgated on 9 March 2006, and the 2006 Regulations came into force on 6 April 2006. This timetable indicates that it would not be safe to infer that Parliaments intention was to do anything more than simply to give continuing effect to the Directive. I think therefore that Rimer LJ summarised the situation correctly when he said that it seemed to him that the language of regulations 5(1) and (2) of TUPE sat harmoniously with that of article 3(1) and gave effect to it: [2010] ICR 793, para 56. In my opinion Parliament must be taken to have intended to do no more, when it was enacting regulations 5(1) and (2), than implement article 3(1) of the Directive. The same must be said of its intention when it was enacting the 2006 Regulations. Is it open to the national court to interpret regulation 5 more generously? I address this question on the assumption, whose soundness I will examine later, that the effect of the decision of the Court of Justice in Werhof [2006] ECR I 2397 is that the transfer of dynamic contractual rights was inconsistent with article 3(1) of the Directive. It seems to me that Mr Lindens argument that it is open to the domestic courts to give regulations 5(1) and 5(2) of TUPE their ordinary meaning derives some support from what the Court of Justice said in the cases of Katsikas v Konstantinidis [1992] ECR I 6577 and Criminal Proceedings against Lindqvist [2004] QB 1014: see paras 24 and 25, above. Lord Keiths statement in Litster v Forth Dry Dock & Engineering Co Ltd (In Receivership) [1990] 1 AC 546, 554 that it is the duty of the court to give to regulation 5 a construction which accords with the decisions of the European Court upon the corresponding provisions of the Directive to which the regulation was intended by Parliament to give effect must be read subject to this qualification. It is open to the national court, as the Court of Justice said in para 98 of Lindqvist, to extend the scope of the national legislation implementing the provisions of the Directive to areas not included within its scope, provided that no other provisions of Community law preclude it. In the present context this means that it would be open to the national court to give regulations 5(1) and 5(2) their ordinary and natural meaning so long as there was nothing in Werhof that indicates that it is not open to it to do so. Mr Lynch QC for Parkwood submits however that this is exactly what, in the light of the ruling in Werhof, the national court cannot do. Werhof Mr Linden submits that there are two main reasons why Werhof v Freeway Traffic Systems GmbH & Co KG [2006] ECR I 2397 is not to be read as having the effect of overruling the case law of the EAT as indicated by Whent [1997] IRLR 153. The first depends on the facts in Werhof. He submits that it was concerned with a different question from that which arises in this case, as it did not concern a term in the employment contract which incorporated terms and conditions as agreed from time to time by a collective bargaining body such as the NJC. The second is that in any event Werhof merely decided that the Directive did not require the transferred employees to be entitled to the benefit of subsequent collective agreements. It did not prohibit national law from being more generous to the employees, in accordance with our own domestic case law as to the effect of regulation 5 of TUPE. Mr Werhofs terms of employment with his original employer were governed by a framework collective agreement and wages agreement in force at the material time for workers in the North Rhine Westphalia metal and electrical industry negotiated between the trade union for the metal industry, of which he was not a member, and the metal and electrical Industry for North Rhine Westphalia, of which the undertaking was a member: Advocate General, para 17; ECJ, paras 7 and 8. The Advocate General acknowledged that, under German employment law, a contract of employment may refer to other instruments such as collective agreements which have not necessarily been concluded by the contracting parties: para 30. These clauses act statically or dynamically, depending on whether they refer to a specific agreement which is in force or to the agreement applicable at any time to the undertaking or economic sector in which the business is conducted: para 32. Mr Werhofs agreement was of the dynamic kind. This was what gave rise to the problem with which his case was concerned. As the Advocate General explained in para 33, the problem arose as to the legal effects of an agreement of that kind when the undertaking has been transferred, where the transferor was a member of the employers federation with whom the union negotiated but the transferee was not and the collective agreement was replaced by another one after the transfer. The referring court, the Landesarbeitsgericht at Dsseldorf, was in doubt as to whether the right to participate in amendments made to agreements following the transfer was one of the rights that passed to the transferee under article 3(1) of the Directive. This was because, as the Advocate General explained in para 35, in Germany, the Bundesarbeitsgericht (Federal Labour Court) has interpreted paragraph 613a of the BGB stating that, under the second sentence, the collectively agreed rules become a constituent part of the contract of employment with the content that they possess at the time when the business is transferred and subsequent amendments are not relevant, because a right to benefit from the advantages of further dynamic development in negotiation cannot be inferred, since the protection granted to the rights of workers is static; the Bundesarbeitsgericht, combining the first sentence of the provision with paragraphs 3 and 4 of the TVG [Law on Collective Agreements: Advocate General, para 10], also considers that subjection of workers to subsequent collective agreements cannot do without the subjection of the employer; otherwise, if the company were transferred, the position of the employees would depend on the concluding of an arrangement for parity of treatment. The point that the Advocate General was making in the concluding part of this paragraph was that the system of collective bargaining that was in issue in that case was enforceable by statute, which required the employer to be a member of the employers federation that was a party to the collective agreement. The only way the collective agreement could be rendered enforceable, if the statute did not apply to it, would be by entering into a contract which gave parity of treatment to the employee. Mr Werhofs contract of employment was not of that kind. The first sentence of paragraph 613a(1) of the BGB provides that, where a business is transferred to another owner, the rights and obligations arising from the employment relationship existing on the date of the transfer shall pass to the owner. The second sentence provides that, where the rights and obligations are governed by the provisions of a collective or works agreement, they shall be incorporated into the employment relationship with the new owner and the employee. This was the provision that the Federal Labour Court had interpreted as having the effect that such agreements had the content that they possessed at the time when the business was transferred and that subsequent amendments were not relevant. The question that the case raised was whether this interpretation was precluded by article 3(1) of the Directive. The Advocate General drew attention to the distinction between articles 3(1) and 3(2) of the Directive in paras 38 43. Article 3(1) refers to clauses applying to individuals and article 3(2) to those stipulated in a collective agreement. Where the document concluded by the worker and the employer refers to a collective agreement on a matter such as wages it is governed by article 3(1) because it is included in an individual contract. But the collective provision to which the parties refer is governed by article 3(2). He drew attention too to the fact that the right to freedom of association under article 11 of the European Convention on Human Rights includes the right not to join or to withdraw from an association: Young, James and Webster v United Kingdom (1981) 4 EHRR 38; Gustafsson v Sweden (1996) 22 EHRR 409, para 45. In para 49 he observed that if the new owner wished to participate in agreements with the unions he would have to join the negotiating employers federation which would curtail his freedom of association. In paras 51 52 the Advocate General said that the right of a person acquiring an undertaking must prevail over any other of lesser importance, such as the right of the employee to the financial advantages arising from the development of the collective agreements signed by the transferor, otherwise the consequences would be similar to contracts imposing obligations on third parties in breach of the general principle pacta tertiis nec nocent. In para 53 he concluded that a dynamic interpretation of the clause in Mr Werhofs contract was inappropriate. He suggested that the Court of Justice should rule that it was not contrary to article 3(1) of the Directive if a transferee, who was not a member of an employers federation which negotiates such agreements, did not apply collective agreements which had replaced the one which was in force at the time of change of ownership. The Court of Justice was more guarded in its approach to the question whether the principle that contracts cannot impose obligations on third parties would be infringed. In paras 24 and 25 it noted that the Community legislature has sought to ensure that, on the transfer of an undertaking, employees enjoyed special protection designed to prevent the erosion which could result from the application of that principle. According to the case law of the court, the Directive was intended to safeguard the rights of employees by allowing them to continue to work for the new employer on the same conditions as those agreed with the transferor. The rights and obligations arising from a collective agreement to which the contract of employment refers were automatically transferred to the new owner even if the new owner was not a party to any collective agreement. That having been said, however, the court found two reasons for holding that Mr Werhof could not maintain that his clause referring to collective agreements must necessarily be dynamic, so that by the application of article 3(1) of the Directive it referred to collective agreements concluded after the date of the transfer. The first was that account had to be taken of article 3(2), which contained limitations to the principle that the collective agreement to which the contract of employment referred was applicable. It showed that the object of the Directive was merely to safeguard the rights and obligations of employees in force on the date of the transfer, and was not intended to protect hypothetical advantages flowing from future changes to collective agreements: paras 28 29. The second was that, although the interests of the employees must be protected, those of the transferee could not be disregarded. If the dynamic interpretation were to be applied it would mean that the transferees fundamental right not to join an association could be affected, whereas that right would be fully safeguarded if the static interpretation were to be adopted: paras 31 35. The Court concluded its judgment with a ruling in these terms, at para 37: . Article 3(1) of the Directive must be interpreted as not precluding, in a situation where the contract of employment refers to a collective agreement binding the transferor, that the transferee, who is not a party to such an agreement, is not bound by collective agreements subsequent to the one which was in force at the time of the transfer of the business. [emphasis added] Is a dynamic interpretation precluded by article 3(1)? The Advocate Generals summary of the facts indicates that the system under national law which applied in Werhof was different from that which formed the context for the appellants contracts of employment with the council. Among other things, the German employment law with reference to which Mr Werhofs employment contract was framed assumes that the employer is a member of the employers federation which is a party to the collective agreement and, in consequence, is bound by statute to comply with it: Advocate General, para 12; see also Employment Law In Europe 2nd ed (2009), paras 11.197 11.200. There is no such statutory obligation in our domestic law, nor is membership of the negotiating body a prerequisite for the enforceability of any agreement that has been reached collectively. It all depends upon what the parties have provided for in their individual contracts. There is therefore something to be said for Mr Lindens submission that the decision in Werhof is distinguishable on its facts, especially as to the point that the Court of Justice made in paras 31 35 of its judgment about the transferees fundamental right not to be required to join an employers federation. The more important point of distinction for present purposes, however, is the second point on which Mr Linden relies: see para 34, above. The question which the Court of Justice addressed by its ruling in Werhof is not the same as that which requires to be answered in this case. It was sufficient to resolve the issue that had been raised by the referring court for it to say that the ruling of the Federal Labour Court summarised by the Advocate General in para 35 of his opinion was not precluded by article 3(1) of the Directive. In our case the question has to be looked at the other way round. This is because, as the Court of Justice recognised in Criminal Proceedings against Lindqvist [2004] QB 1014, para 98, there is nothing to prevent a member state from extending the scope of the national legislation implementing the provisions of the Directive to areas not included within it, so long as no other provisions of Community law preclude this. It would, of course, not be open to the national court to adopt that approach if the effect of the Directive was that it was precluded by it. That is why the way in which the Court of Justice framed its ruling in Werhof does not answer directly the question that needs to be resolved in this case. The absence of a direct answer to it would not have given rise to difficulty if it had been possible to infer from the judgment how the question would have been answered. Mr Lynch invited us to draw that inference, as his case is that the principle enunciated in the judgment is that the transfer of dynamic contractual rights is inconsistent with the Directive so regulation 5 of TUPE must be confined to static contractual rights. But it is not obvious, if it is open to the national courts to interpret legislation that was intended to give effect to the Directive more generously in favour of employees than the Directive itself envisaged, why this should be so. The first of the two reasons for the courts decision, that the object of the Directive was merely to safeguard the rights and obligations of employees in force on the date of the transfer, would not seem to preclude a more generous interpretation if the national court thought that this was appropriate to give effect to the ordinary meaning of TUPE. There are various reasons for thinking that, when TUPE was originally being framed, it was thought that employment contracts such as those which the appellants entered into which provided for a dynamic approach to be taken to collective agreements were permitted by the Directive. The aim of the Directive was to promote approximation of laws among the member states, not their harmonisation. None of the recitals in the preamble refer to a need to balance protection for employers against the protection given to employees in the event of a change of employer. And it was stated in article 7 of the Directive that it was not to affect the right of member states to introduce laws which are more favourable to employees. It hardly needs to be said that the question whether Werhof precludes the dynamic approach, if this is indeed what the employment contract interpreted according to the principles of domestic law provides for, is of fundamental importance to the many employees who work in sectors where their terms and conditions of employment are commonly determined through collective bargaining. The second reason for the courts decision was its finding that, when interpreting the Directive, account had to be taken of the principle of the coherence of the Community legal order which required secondary Community legislation to be interpreted in accordance with the general principles of Community law among which was that the right not to join an association or a union was protected in the Community legal order: paras 32 33. As I have already mentioned, this point was directly relevant in Mr Werhofs case because of the way German employment law deals with collective agreements. Our domestic law is entirely different. There is no equivalent statutory framework. The matter depends entirely on the domestic law of contract, under which parties are at liberty to agree to abide by agreements arrived at by a process in which they do not, and are not required to, participate. Parkwood has not sought to argue that regulation 5 of TUPE is objectionable because it breached its article 11 Convention right of freedom not to join an association. There is no question of its being forced to become a member of one of the participants in the NJC. The appellants contracts do not require this, and in any event it would not be eligible to do so. In these circumstances, as I consider the answer to the question not to be acte clair, I would refer the issue as to whether article 3(1) of the Directive precludes national courts from giving a dynamic interpretation to regulation 5 of TUPE in the circumstances of this case to the Court of Justice of the European Union for a preliminary ruling under article 267 TFEU (ex article 234 EC). I would invite the parties to make submissions in writing within 28 days on the questions to be referred to the Court of Justice. |
The United Kingdom was an occupying power in Iraq from May 2003, and a mandatory power acting in support of the Iraqi government from June 2004 until her withdrawal in 2011. She was a mandatory power in Afghanistan between December 2001 and her withdrawal early in 2015. In both countries, the United Kingdoms international status depended throughout on successive resolutions of the United Nations Security Council. Substantial numbers of British troops were engaged in both theatres as part of separate multi national forces, primarily in southern Iraq and in the Afghan province of Helmand. They were required to deal with exceptional levels of violence by organised armed groups. In the course of their operations, prisoners were taken and detained in British military facilities for varying periods of time. These two appeals arise out of actions for damages brought against the United Kingdom government by detainees, alleging unlawful detention and maltreatment by British forces. They are two of several hundred actions in which similar claims are made. In both cases, the claim is based in part on article 5(1) of the European Convention on Human Rights, which provides that no one shall be deprived of his liberty except in six specified cases and in accordance with a procedure prescribed by law. They also rely on article 5(4), which requires that the detainee should be entitled to take proceedings by which the lawfulness of his detention may be tested. The appeals have been heard together with a view to resolving one of the more controversial questions raised by such actions, namely the extent to which article 5 applies to military detention in the territory of a non Convention state in the course of operations in support of its government pursuant to mandates of the United Nations Security Council. Abd Ali Hameed Ali Al Waheed was captured by HM forces at his wifes home in Basrah on 11 February 2007 during a search. The Secretary of State contends that components for improvised explosive devices (IEDs) and explosive charges and various other weaponry were found on the premises. He was held at a British army detention centre for six and a half weeks. He was then released after an internal review had concluded that a successful prosecution was unlikely, as there was no evidence that he had personally handled the explosives. At a pre trial review before Leggatt J, it was common ground that so far as Mr Al Waheeds claim was based on detention in breach of article 5(1) of the Convention, the judge and the Court of Appeal would be bound to dismiss it by the decision of the House of Lords in R (Al Jedda) v Secretary of State for Defence [2008] AC 332. The Appellate Committee had held in that case that article 5(1) was displaced by the United Nations Security Council Resolutions authorising military operations in Iraq. The judge was therefore invited to dismiss the claim under article 5(1) by consent and grant a certificate for a leap frog appeal directly to the Supreme Court. A limited number of facts have been agreed, but there are no findings. Serdar Mohammed, whom I shall refer to as SM, was captured by HM forces in Afghanistan on 7 April 2010. The Secretary of State contends that he was captured in the course of a planned operation involving a firefight lasting ten hours in which a number of men were killed or wounded, and that he was seen to flee from the site, discarding a rocket propelled grenade launcher and ammunition as he went. He was brought into Camp Bastion at Lashkar Gah, which was the joint operating base of the British army in Helmand. Intelligence is said to have identified him shortly afterwards as a senior Taliban commander who had been involved in the large scale production of IEDs and was believed to have commanded a Taliban training camp in 2009. SM was detained for a period of three and a half months in British military holding facilities until 25 July 2010, when he was transferred to the Afghan authorities. He was subsequently convicted by the Afghan courts for offences relating to the insurgency and sentenced to ten years imprisonment. In his case, the procedural history is more complicated. Leggatt J directed three preliminary issues to be determined on the assumption that the circumstances of SMs capture and detention, as pleaded in the Secretary of States defence, were true. One of the preliminary issues concerned the relationship between article 5 of the Convention and the international law governing detention in the course of armed conflict. In the result, the judge held that in Afghanistan HM forces had no power, either under the relevant Security Council Resolutions or under customary international law, to detain prisoners for any longer than was required to hand them over to the Afghan authorities, and then for no more than 96 hours. He also found that they had no greater power under the domestic law of Afghanistan. On that footing, he considered that in detaining SM the United Kingdom was in breach of article 5(1) and (4) of the Convention: see [2014] EWHC 1369 (QB). The Court of Appeal, although differing from some aspects of the judges reasoning, reached the same conclusion: see [2016] 2 WLR 247. These decisions, and the reasoning behind them, have significant implications for the Ministry of Defence and for British troops deployed to Iraq or Afghanistan and indeed other theatres to which they may be deployed under UN mandates. The Secretary of State formulated eight grounds on which he sought leave to appeal to the Supreme Court in Serdar Mohammed. He received permission to appeal, either from the Court of Appeal or from the Supreme Court on six of them, the question of permission for the other two being deferred until the hearing. As a result of directions given in the course of the appeals, the sole ground of appeal before us at the opening of the hearing was the Secretary of States ground 4. In the statement of facts and issues in Serdar Mohammed, the parties agreed that ground 4 raised the following issues: (1) Whether HM armed forces had legal power to detain SM in excess of 96 hours pursuant to: the relevant resolutions of the United Nations International Humanitarian Law applicable in a (a) Security Council; and/or (b) non international armed conflict. If so, whether article 5(1) of the ECHR should be read (2) so as to accommodate, as permissible grounds, detention pursuant to such a power to detain under a UN Security Council Resolution and/or International Humanitarian Law. In Al Waheed, the parties are agreed that the same issues arise, except that the question is whether HM armed forces had power to detain Mr Al Waheed at all, there being no separate issue relating to the first 96 hours. In the course of the hearing the parties were invited to make written submissions on two further questions arising in SMs appeal about the scope of article 5, which had been argued before Leggatt J and the Court of Appeal. This was because it was considered to be unsatisfactory to examine the Secretary of States ground 4 without regard to them. The additional questions substantially corresponded to the Secretary of States grounds 5 and 6. They were: (3) Whether SMs detention was compatible with article 5(1) on the basis that it fell within paragraph (c) of article 5(1) of the Human Rights Convention (detention for the purpose of bringing a suspect before a competent judicial authority) or article 5(1)(f) (detention pending extradition); and (4) Whether the circumstances of his detention were compatible with article 5(4) of the Human Rights Convention (if necessary, as modified). These are complex appeals raising distinct issues, which were argued in stages. They are also related to other appeals arising out of military operations in Iraq and Afghanistan which were before the court at the same time. For these reasons the argument has extended over an unusually long period, rather more than a year. The retirement of Lord Toulson in July 2016 meant that he did not sit on the oral argument on the procedural requirements of articles 5(1) and 5(4) of the Convention, and has been concerned only with the other issues. Lord Hodge, who sat for the first time on these appeals in October 2016 has been concerned only with those procedural issues. International and Non International Armed Conflict International humanitarian law is the modern name for what used to be called the law of war and is still commonly called the law of armed conflict. It is a body of international law based on treaty and custom, which seeks to limit for humanitarian reasons the effects of armed conflict. International humanitarian law distinguishes between international and non international armed conflict. An international armed conflict is an armed conflict between states. A non international armed conflict is an armed conflict between one or more states on the one hand and non state actors on the other. In theory, it is the difference between an armed conflict of juridical equals and an armed conflict conducted by a lawfully constituted authority against organised rebels or criminals. The distinction is an ancient one. It dates back at least as far as Grotius (De Jure Belli ac Pacis I.4, III.6.27), who limited certain belligerent rights to public wars, on the ground that the rights of participants in civil wars were governed by municipal law administered by the municipal judge. But the crude distinction proposed by Grotius was never an adequate tool for dealing with the complex position of non state actors. As Vattel pointed out a century later (Droit des Gens, III.18.293), civil wars break the bonds of society, leaving the parties without a common judge and in the same practical position as two nations. Vattel made this point in support of his argument that once a civil war achieved a level of intensity on a par with an interstate war, the humanitarian customs of war should be observed by both sides. But ever since his day, there has been a tension between the desire of states to civilise the conduct of war by extending humanitarian rules to all armed conflicts, and their desire to treat their internal enemies as rebels and criminals rather than belligerents. International humanitarian law treats the parties to international armed conflicts as juridically equal and their rights and obligations as reciprocal. It proceeds on the basis that in such a conflict members of the armed forces of a state are reciprocally entitled to combatant immunity. They commit no offence by merely participating in the armed conflict, but only by committing war crimes proscribed by international law. Their detention is authorised on the footing that it is a purely administrative measure with no penal purpose, and must terminate when the armed conflict ends. However, notwithstanding the persistent advocacy of the International Committee of the Red Cross in favour of applying the same rules under both regimes, states have generally been reluctant to accept that a non international armed conflict can be reciprocal in the same way as international armed conflicts. Their concern is that unless a special regime is devised for such conflicts, the corollary would be a recognition of the juridical equality of the participants and the immunity of non state actors. None the less, it is now accepted that the law of armed conflict cannot be confined to wars waged between states. A non international armed conflict is an armed conflict for the purposes of international humanitarian law, albeit that it raises more difficult problems of definition and classification than an international armed conflict. The leading modern authorities are the decisions of the International Criminal Tribunal for Yugoslavia, whose jurisdiction depends on the existence of an armed conflict. They identify non international armed conflicts by reference to their duration, their intensity and the degree of organisation of the non state actors engaged. In its widely cited decision in Prosecutor v Duko Tadi (Jurisdiction of the Tribunal) ICTY Case No IT 94 1 AR72 (2 October 1995), the Tribunal held (para 70) that an armed conflict existed whenever there is a resort to armed force between states or protracted armed violence between governmental authorities and organised armed groups or between such groups within a state, provided that it exceeds the intensity requirements applicable to both international and internal armed conflicts. The intensity requirements were considered in greater detail in Prosecutor v Ramush Haradinaj ICTY Case No IT 04 84 T (3 April 2008). Indicative factors included (para 49): intensity of the number, duration and individual confrontations; the type of weapons and other military equipment used; the number and calibre of munitions fired; the number of persons and type of forces partaking in the fighting; the number of casualties; the extent of material destruction; and the number of civilians fleeing combat zones. The involvement of the UN Security Council may also be a reflection of the intensity of a conflict. In short, the test is whether the operations conducted by non state actors are characteristic of those conducted by the armed forces of the state, as opposed to its police force. It is common ground that British troops in Afghanistan were engaged in an armed conflict. The main distinction between international and non international armed conflict lies in the more limited provision made for the latter in the main relevant treaties. Although the earliest Geneva Convention was adopted in 1864, no attempt was made to provide by treaty for non international armed conflicts until the Geneva Conventions of 1949. Article 21 of the Third Geneva Convention of 1949 in terms confers on states a right to detain prisoners of war which they had long enjoyed as a matter of customary international law, and comprehensively regulates the conditions of their detention. Article 78 of the Fourth Geneva Convention confers on an occupying power a right to detain civilians in cases where this is considered necessary for imperative reasons of security. But these provisions apply only in international armed conflicts: see common article 2. The International Committee of the Red Cross had proposed that the Conventions of 1949 should apply in their entirety in international and non international armed conflicts alike. But this proposal was rejected by most states. Instead, it was agreed to confer a more limited measure of protection by common article 3, which unlike the rest of the Conventions applied in the case of armed conflict not of an international character occurring in the territory of one of the High Contracting Parties. Common article 3 does not in terms confer a right of detention. But it provides for the humane and non discriminatory treatment of persons taking no active part in the hostilities, including members of armed forces who have laid down their arms and those placed hors de combat by sickness, wounds, detention or any other cause. It specifically prohibits the practice against such persons of violence, killing, mutilation, cruelty, torture, hostage taking and outrages against their personal dignity, as well as the infliction of penal sentences upon them otherwise than by the judgment of a regularly constituted court affording all the judicial guarantees which are recognised as indispensable by civilised peoples. Further provision for the treatment of prisoners in non international armed conflicts is made by Protocol II, adopted in 1977 in cases where dissident armed forces or other armed groups control part of the territory of a state so as to enable them to carry out sustained and concerted military operations and to implement this Protocol: article 1. In those circumstances, the existence of a legal right in international law to detain members of opposing armed forces in a non international armed conflict must depend on (i) customary international law, and/or (ii) the authority of the Security Council of United Nations. To establish the existence of a rule of customary law, two things are required. First, there must be a uniform, or virtually uniform practice of states conforming to the proposed rule, reflected in their acts and/or their public statements; and, secondly, the practice must be followed on the footing that it is required as a matter of law (opinio juris). It follows that although the decisions of domestic courts may be evidence of state practice or of a developing legal consensus, they cannot themselves establish or develop a rule of customary international law: see Jones v Ministry of the Interior of the Kingdom of Saudi Arabia [2007] 1 AC 270 at para 63 (Lord Hoffmann). Lord Reed has dealt fully in his judgment with the question whether the detention of members of the opposing armed forces is sanctioned by customary international law in a non international armed conflict. He concludes that as matters stand it is not, and I am inclined to agree with him about that. But for reasons which will become clear, I regard it as unnecessary to express a concluded view on the point. It is, however, right to make certain observations about it which bear on the construction of the relevant Security Council Resolutions. The first is that, whether or not it represents a legal right, detention is inherent in virtually all military operations of a sufficient duration and intensity to qualify as armed conflicts, whether or not they are international. As the International Committee of the Red Cross has recently observed (Statement, 27 April 2015), deprivation of liberty is a reality of war. Whether detention is carried out by states or by non state armed groups, whether it is imposed on military personnel or on civilians, it is certain to occur in the vast majority of armed conflicts. The same view was expressed by the Supreme Court of the United States in holding, in Hamdi v Rumsfeld 542 US 507 (2004), at p 10, that a power of detention was implicitly conferred by a statute authorising the use of all necessary and appropriate force: Detention of individuals falling into the limited category we are considering [the Taliban and Al Qaeda], for the duration of the particular conflict in which they were captured, is so fundamental and accepted an incident to war as to be an exercise of the necessary and appropriate force Congress has authorized the President to use. It has been the practice of states to capture and detain members of the opposing armed forces throughout the recorded history of war. That includes its recent history, which has for the most part been a history of non international armed conflicts. The purpose of any state participating in an armed conflict is to overcome the armed forces of the other side. At any time when the opposing forces are in the field, this necessarily involves disabling them from fighting by killing them or putting them hors de combat. The availability of detention as an option mitigates the lethal character of armed conflict and is fundamental to any attempt to introduce humanitarian principles into the conduct of war. In many cases, the detention of an enemy fighter is a direct alternative to killing him, and may be an obligation, for example where he surrenders or can be physically overpowered. As the majority of the US Supreme Court observed in Hamdi, at p 11, citing the earlier decision in In re Territo 156 F 2d 142, 145, (1946) The object of capture is to prevent the captured individual from serving the enemy. He is disarmed and from then on must be removed as completely as practicable from the front, treated humanely, and in time exchanged, repatriated, or otherwise released. Second, if there is nevertheless an insufficient consensus among states upon the legal right of participants in armed conflicts to detain under customary international law, it is not because of differences about the existence of a right of detention in principle. At their most recent international conference (Geneva, 8 10 December 2015), the constituent associations of the Red Cross and Red Crescent approved a resolution by consensus which recited that states had the power to detain in all forms of armed conflict and proposing measures to strengthen the humanitarian protection available to detainees. The lack of international consensus really reflects differences among states about the appropriate limits of the right of detention, the conditions of its exercise and the extent to which special provision should be made for non state actors. There is no doubt that practice in international and non international armed conflicts is converging, and it is likely that this will eventually be reflected in opinio juris. It is, however, clear from the materials before us that a significant number of states participating in non international armed conflicts, including the United Kingdom, do not yet regard detention as being authorised in such conflicts by customary international law. Third, if there were a right of detention on whatever legal basis, there are various conditions which might be imposed for its exercise. But if the right were to have any reality, it would at least have to apply in a case where detention was necessary for imperative reasons of security, the test which article 78 of the Fourth Geneva Convention (1949) applies to the right of an Occupying Power to detain civilians. This is the narrowest available test, and the one which has been proposed by the International Committee of the Red Cross. On these appeals, the Secretary of State does not contend for anything less. The Security Council Resolutions At the time of Mr Al Waheeds detention, the relevant Security Council Resolution was 1723 (2006). This extended the authority conferred by Resolution 1546 (2004), which had marked the point at which Britain ceased to be an occupying power in Iraq and became a mandatory power acting in support of the newly formed indigenous government of Iraq. Articles 9 and 10 of Resolution 1546 (2004) It is convenient to start with the position in Iraq. reaffirmed the authorisation conferred by earlier resolutions for the multinational force to operate in Iraq, and conferred on it the authority to take all necessary measures to contribute to the maintenance of security and stability in Iraq in accordance with the letters annexed to this resolution expressing, inter alia, the Iraqi request for the continued presence of the multinational force and setting out its tasks, including by preventing and deterring terrorism, so that, inter alia, the United Nations can fulfil its role in assisting the Iraqi people as outlined in para 7 above and the Iraqi people can implement freely and without intimidation the timetable and programme for the political process and benefit from reconstruction and rehabilitation activities. The attached letters included a letter of 5 June 2004 from the US Secretary of State, which expressed the willingness of the United States to deploy forces to maintain internal security in Iraq. Their activities, he said include activities necessary to counter ongoing security threats posed by forces seeking to influence Iraqs political future through violence. This will include combat operations against members of these groups, internment where this is necessary for imperative reasons of security R (Al Jedda) v Secretary of State for Defence [2008] AC 332 arose out of the detention of the applicant by HM forces in Iraq in October 2004. Article 103 of the UN Charter provides that the obligations of members under the Charter should prevail over their obligations under any other international agreement. The main issue on the appeal was whether that meant that the Security Council Resolutions authorising military operations in Iraq displaced article 5 of the European Convention on Human Rights. This depended on whether detention in the course of those operations was an obligation, or merely a power. The House of Lords held that Resolution 1546 both authorised and required the exercise of a power of detention where this was necessary for imperative reasons of security. Lord Bingham, with whom the rest of the House agreed, gave three reasons for this. The first was that British forces occupying Iraq before Resolution 1546 came into effect had been authorised to intern persons for imperative reasons of security. This was because detention in those circumstances was authorised by the Hague Regulations (1907), and if the occupying power considers it necessary to detain a person who is judged to be a serious threat to the safety of the public or the occupying power there must be an obligation to detain such person. (para 32) Resolution 1546 was intended to continue the pre existing security regime, not to change it. Lord Binghams second reason was that although the resolution was couched in permissive terms, this merely reflected the fact that the United Nations can invite but not require states to contribute forces for purposes such as the security of Iraq. Applying a purposive approach, and adopting the view of a substantial body of academic writing, he considered the exercise of that authority to be an obligation for those who accede to that invitation. The third reason was that those states which contributed forces became bound by articles 2 and 25 of the UN Charter to carry out the decisions of the Security Council so as to achieve its objectives. They were therefore bound to exercise the power of detention where this was necessary for imperative reasons of security. The decision of the Appellate Committee in Al Jedda was rejected by the European Court of Human Rights when the matter came before them: Al Jedda v United Kingdom (2011) 53 EHRR 23. I shall return to the implications of this decision below. But it was rejected only insofar as it treated the exercise of the power of detention as an obligation. It was not suggested that the exercise of the power of detention was not even authorised by the Security Council Resolution. Turning to the position in Afghanistan, Security Council Resolution 1386 (2001) authorised the establishment of an International Security Assistance Force to assist the Afghan Interim Authority in the maintenance of security in Kabul and its surrounding areas so that the Afghan Interim Authority can operate in a secure environment. It called on the International Security Assistance Force (ISAF) to work in close consultation with the Afghan Interim Authority in the implementation of the force mandate, and on member states to contribute personnel and resources to ISAF. Article 3 authorised member states participating in the International Security Assistance Force to take all necessary measures to fulfil its mandate. The mandate was subsequently extended by Resolution 1510 (2003) to the provision of security assistance for reconstruction and humanitarian efforts throughout Afghanistan. At the time of SMs detention, the most recent Security Council Resolution was 1890 (2009), which extended the mandate by twelve months and reaffirmed its earlier resolutions. Resolution 1890 contained a number of recitals which throw light on the nature of ISAFs role as it was then perceived to be and on the dangerous character of its mission. The recitals recognised that the responsibility for providing security and law and order resided with the government of Afghanistan, and that the mandate of ISAF was to assist the Afghan government to improve the security situation. What was meant by the security situation appears from a subsequent recital expressing the Security Councils strong concern about the security situation in Afghanistan, in particular the increased violent and terrorist activities by the Taliban, Al Qaida, illegally armed groups, criminals and those involved in the narcotics trade, and the increasingly strong links between terrorism activities and illicit drugs, resulting in threats to the local population, including children, national security forces and international military and civilian personnel. The recitals go on to express concern about the high level of civilian casualties, and the harmful consequences of violent and terrorist activities by the Taliban, Al Qaida and other extremist groups on the capacity of the Afghan Government to guarantee the rule of law, to provide security and basic services to the Afghan people, and to ensure the full enjoyment of their human rights and fundamental freedoms. They condemned in the strongest terms all attacks, including Improvised Explosive Device (IED) attacks, suicide attacks and abductions, targeting civilians and Afghan and international forces and their deleterious effect on the stabilization, reconstruction and development efforts in Afghanistan, and condemning further the use by the Taliban, Al Qaida and other extremist groups of civilians as human shields. They recorded the Security Councils support for ISAFs work in improving the security situation in Afghanistan in the face of these threats, and welcomed ISAFs intention to undertake continued enhanced efforts in this regard including the increased focus on protecting the Afghan population as a central element of the mission, and noting the importance of conducting continuous reviews of tactics and procedures and after action reviews and investigations in cooperation with the Afghan Government in cases where civilian casualties have occurred and when the Afghan Government finds these joint investigations appropriate. Under article 24 of the United Nations Charter, the Security Council has primary responsibility for the maintenance of international peace and security, and under article 25 the member states of the UN have a duty to carry out its decisions in accordance with the Charter. The basis of the Security Council Resolutions in Iraq and Afghanistan was Chapter VII (Action with respect to Threats to the Peace, Breaches of the Peace and Acts of Aggression). This confers extensive powers on the Security Council to deploy force on its own account or call on its members to do so, and imposes on members corresponding duties to support these operations. Measures taken under Chapter VII of the United Nations Charter are a cornerstone of the international legal order. They are taken under a unique scheme of international law whose binding force is now well established. In Legal Consequences for States of the Continued Presence of South Africa in Namibia, Advisory Opinion [1971] ICJ Rep 16, paras 115 116, the International Court of Justice confirmed that these provisions are binding not only by treaty on members of the United Nations but as a matter of customary international law on the small number of states which are not members. In Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883, at para 115, Lord Steyn described them as embodying a principle of international public policy. At para 114 he summarised their status in the following terms: Not only has the Charter of the United Nations been adhered to by virtually all states, that is 189 states, but even the few remaining non members, have acquiesced in the principles of the Charter: American Law Institute, Restatement of the Law, The Foreign Relations of Law of the United States, 3d (1987), Section 102, comment (h). It is generally accepted that the principles of the United Nations Charter prohibiting the use of force have the character of jus cogens, ie is part of peremptory public international law, permitting no derogation: see Restatement, p 28, para 102, comment (k). Security Council Resolutions under Chapter VII of the Charter, and therefore the resolutions in question here, were binding in law on all members including the United Kingdom and Iraq It would have been contrary to the international obligations of the United Kingdom were its courts to adopt an approach contrary to its obligations under the United Nations Charter and under the relevant Security Council Resolutions. These considerations are recognised in the jurisprudence of the European Court of Human Rights in the same way as they are by other international courts and by the domestic courts of England. In Behrami v France; Saramati v France, Germany and Norway (2007) 45 EHRR SE10 at paras 148 149, the Strasbourg Court declined to review the compatibility of the acts of French, German and Norwegian troops operating under direct United Nations command. In doing so it drew attention to the significance of the UNs functions in conducting peacekeeping operations or authorising member states to conduct such operations, and to the special legal framework within which these functions were performed. 148. the primary objective of the UN is the maintenance of international peace and security. While it is equally clear that ensuring respect for human rights represents an important contribution to achieving international peace (see the Preamble to the Convention), the fact remains that the UNSC has primary responsibility, as well as extensive means under Chapter VII, to fulfil this objective, notably through the use of coercive measures. The responsibility of the UNSC in this respect is unique and has evolved as a counterpart to the prohibition, now customary international law, on the unilateral use of force. 149. Since operations established by UNSC Resolutions under Chapter VII of the UN Charter are fundamental to the mission of the UN to secure international peace and security and since they rely for their effectiveness on support from member states, the Convention cannot be interpreted in a manner which would subject the acts and omissions of contracting parties which are covered by UNSC Resolutions and occur prior to or in the course of such missions, to the scrutiny of the Court. To do so would be to interfere with the fulfilment of the UNs key mission in this field including, as argued by certain parties, with the effective conduct of its operations. It would also be tantamount to imposing conditions on the implementation of a UNSC Resolution which were not provided for in the text of the Resolution itself. This reasoning equally applies to voluntary acts of the respondent States such as the vote of a permanent member of the UNSC in favour of the relevant Chapter VII Resolution and the contribution of troops to the security mission: such acts may not have amounted to obligations flowing from membership of the UN but they remained crucial to the effective fulfilment by the UNSC of its Chapter VII mandate and, consequently, by the UN of its imperative peace and security aim. A Security Council Resolution adopted in the exercise of these responsibilities is not itself a treaty, nor is it legislation. But it may constitute an authority binding in international law to do that which would otherwise be illegal in international law. Sir Michael Wood, a former Principal Legal Adviser to the Foreign and Commonwealth Office, has made the point that Security Council Resolutions are not usually drafted by the Secretariat, but within the various national missions. For this reason they are not always clear or consistent either in themselves or between one resolution and another: The Interpretation of Security Council Resolutions, Max Planck Yearbook of United Nations Law [1998] 73. The meaning of a Security Council Resolution is generally sensitive to the context in which it is made. In its advisory opinion of June 1971 on the Legal consequences for states of the continued presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276 (1970) [1971] ICJ Rep 16, 53, para 114, the International Court of Justice observed: The language of a resolution of the Security Council should be carefully analysed before a conclusion can be made as to its binding effect. In view of the nature of the powers under article 25 [which requires member states to carry out decisions of the Security Council], the question whether they have been in fact exercised is to be determined in each case, having regard to the terms of the resolution to be interpreted, the discussions leading to it, the Charter provisions invoked and, in general, all circumstances that might assist in determining the legal consequences of the resolution of the Security Council. The expression all necessary measures, as used in a Security Council Resolution has, however, acquired a meaning sanctioned by established practice. It authorises the use of the full range of measures open to the United Nations itself for the purpose of maintaining or restoring international peace and security under Chapter VII of the Charter. This will normally involve the use of force under article 42, but subject to the requirement that the measures should be necessary. What is necessary depends primarily on the specific mandate, on the general context and on any conditions or limitations laid down in the resolution. In Gill & Flecks valuable Handbook of the International Law of Military Operations (2010), at para 25.03, the opinion is expressed that although Security Council Resolutions do not as a rule authorise operational detention in so many words, a mandate to use all necessary means to achieve the assigned tasks logically encompasses operational detention as one such means, if indeed necessary. A similar approach was adopted by the European Court of Human Rights in Behrami v France; Saramati v France, Germany and Norway, supra. In that case, the analysis of the legal responsibility of UN forces proceeded on the basis, accepted by the Court, that Security Council Resolution 1244 (1999), authorising military operations in Kosovo, implicitly authorised detention: see paras 124, 127. There was no express authority to detain. But it was deduced from the authority conferred on troop contributing nations by article 7 to take all necessary means to fulfil certain responsibilities specified in article 9, including supporting the work of the international civil presence. In my opinion, that inference was inevitable, just as it is in relation to the corresponding operations in Iraq and Afghanistan. This point is not dependent on the categorisation of the relevant armed conflict as international or non international. In my opinion, it is clear that the authorisation given to troop contributing states in Afghanistan by Resolution 1386 (2001) to use all necessary measures included the detention of members of the opposing armed forces when this was required for imperative reasons of security. The nature of the mission, apparent from the context recited in Resolution 1890 (2009), involved operations of two kinds. The first entailed operations ancillary to the ordinary law enforcement processes of the Afghan government, essentially heavy police work. The second entailed armed combat with the forces of an organised insurrection, with a view to defending ISAF and its contingent forces, protecting the civilian population against the continual threat of violence, and creating a secure environment for the reconstruction of the Afghan state and the country generally. The distinction between these two functions broadly corresponds to the distinction made by UK military doctrine between (i) military internment authorised either by the host states municipal law or by United Nations Security Council Resolutions, and (ii) criminal detention in support of the national police force: see Joint Doctrine Publication 1 10 (Prisoners of War, Internees, Detainees, April 2006), at para 113. In performing functions in the former category they must be authorised to employ methods appropriate to military operations. In short, if detention is imperative for reasons of security, it is must be necessary for the performance of the mission. Leggatt J accepted this up to a point, but considered that it could authorise detention only for a very short period. His reason was that once a prisoner had been captured and disarmed, he no longer represented an imminent threat to the security of HM forces or the civilian population. His continued detention thereafter could not therefore be justified under the Security Council Resolutions. This seems a surprising conclusion and it was rejected, rightly to my mind, by the Court of Appeal. If a person is a sufficient threat to HM forces or the civilian population to warrant his detention in the first place, he is likely to present a sufficient threat to warrant his continued detention after he has been disarmed. Unless UK forces are in a position to transfer him for detention to the civil authorities for possible prosecution, the only alternative is to release him and allow him to present the same threat to HM forces or the civilian population. This necessarily undermines the mission which constitutes the whole purpose of the armys operations. I conclude that in both Iraq and Afghanistan, the relevant Security Council Resolutions in principle constituted authority in international law for the detention of members of the opposing armed forces whenever it was required for imperative reasons of security. It was not limited to detention pending the delivery of the detainee to the Afghan authorities. I say that this was the position in principle, because that conclusion is subject to (i) in the case of SM the question whether that authority was limited to 96 hours by virtue of the detention policy of ISAF, and (ii) in the case of both SM and Mr Al Waheed, the question whether the authority conferred by the relevant Security Council Resolutions was limited by article 5 of the European Convention on Human Rights. The alleged limitation of detention to 96 hours in Afghanistan This issue arises from differences between the detention policy applied generally by ISAF and that operated by United Kingdom forces and the forces of certain other troop contributing nations in their own areas of operation. Both Leggatt J and the Court of Appeal concluded that although detention was in principle authorised by the Security Council Resolutions for imperative reasons of security, in Afghanistan the duration of that detention was limited to 96 hours by ISAFs detention policy. In order to address this question, it is necessary to say something about the relationship between ISAF and the command structure of British forces in Afghanistan. Overall command of ISAF was exercised by its commander in Afghanistan who was himself under the command of NATO at the relevant time. ISAFs detention policy was contained in its Standard Operating Procedures for detention (SOP 362). Paras 4 8 of SOP 362 provided that the only grounds on which a person might be detained were that detention was necessary for ISAF force protection, self defence of ISAF or its personnel or the accomplishment of the ISAF mission. Detention was limited to 96 hours, after which the person must either be released or transferred to the Afghan authorities. That period could be extended on the specific authority of the ISAF commander or his delegate, or in a case where there were logistical difficulties about effecting his release or transfer within the 96 hour period. Across Afghanistan there was a regional command structure with distinct task forces. Most British troops, including those who detained SM, were deployed in Helmand as part of Task Force Helmand. They operated there under their own national chain of command. British commanders in the field reported up their chain of command to UK Permanent Joint Headquarters, which in turn reported to the Ministry of Defence. The judge found that the conduct of operations in Afghanistan, including detention policy, was regarded as United Kingdom sovereign business. He described the relationship between the UK Detention Authority and the ISAF chain of command as one of liaison and coordination only. The British position, summarised in a military assessment report of September 2006, was that the United Kingdom was responsible for complying with its domestic and international legal obligations and that this required that responsibility for detention should rest with British officials. The judge found (para 181) that ISAF headquarters tacitly accepted this, and that thereafter detention decisions continued to be taken by British officials without involving ISAF. It was essentially for this reason that the judge and the Court of Appeal found that the United Kingdom and not the United Nations was responsible for SMs detention, a conclusion which is no longer challenged. It is clear from the recitals in the successive Resolutions of the Security Council, culminating in Resolution 1890 (2009), that the level of violence increased over time and that the threat to the force and the civilian population from suicide attacks, improvised explosive devices and other extreme methods had become very serious by 2009. The evidence is that Helmand was one of the most difficult provinces. In these circumstances, the United Kingdom government became concerned that the 96 hour limit was unsatisfactory, primarily because in some cases it did not allow long enough for the prisoner to be interrogated with a view to acquiring valuable intelligence which was judged essential for mission accomplishment. This was unsatisfactory to the main detaining nations (identified as the United States, the United Kingdom, Canada and the Netherlands), but it was considered that agreement to a change would not be obtained from other detaining nations or from non detaining nations. For these reasons, the United Kingdom decided in November 2009 to adopt its own detention policy. The UK policy was announced in Parliament on 9 November 2009: see Hansard (HL (Written Statements)), 9 November 2009, cols WS 31 32). The minister recorded that under ISAF guidelines, detainees were either transferred to the Afghan authorities within 96 hours for potential prosecution, or released. He said that in the majority of cases, UK forces will operate in this manner. However, in the light of the evolving threat to our forces, they would detain for longer periods those prisoners who can yield vital intelligence that would help protect our forces and the local population potentially saving lives, particularly when detainees are suspected of holding information on the placement of improvised explosive devices. Given the ongoing threat faced by our forces and the local Afghan population, this information is critical, and in some cases 96 hours will not be long enough to gain that information from the detainees. Indeed, many insurgents are aware of the 96 hours policy and simply say nothing for that entire period. In these circumstances the Government have concluded that Ministers should be able to authorise detention beyond 96 hours, in British detention facilities to which the ICRC has access. Each case will be thoroughly scrutinised against the relevant legal and policy considerations; we will do this only where it is legal to do so and when it is necessary to support the operation and protect our troops. The new policy was notified to NATO, which made no objection. The judge found that it was also accepted by ISAF headquarters. The detention policy applied by HM forces in Afghanistan was contained in UK Standard Operating Instructions (SOI) J3 9 (Stop, Search and Detention Operations in the Herrick JOA), issued on the authority of UK Permanent Joint Headquarters. It was originally issued in 2006. At the time of SMs capture, the version in force was Amendment 1, issued on 6 November 2009. This was replaced on 10 April 2010, three days after SMs capture, by Amendment 2, which was issued to forces in the field two days later on 12 April. Since Amendment 2 was in force for substantially the whole of the period when the judge found SMs detention to have been unlawful, I shall refer throughout to this version. SOI J3 9 authorised British troops to conduct stops, search, detention and questioning procedures in accordance with [Security Council Resolutions] for reasons of force protection, mission accomplishment and self defence. The introduction sets out in general terms the principles governing detention policy. It provided: 6. Detention Criteria. UK Forces are authorised to conduct stop, search, detention and question procedures in accordance with Reference A for reasons of Force Protection, Mission Accomplishment and Self Defence. ISAF authorises detention for up to a maximum of 96 hours following the point of detention 7. Post detention requirements. Within 96 hours detainees will in most cases be either handed over to the Afghan Authorities in accordance with [the UK/Afghan Memorandum of Understanding] or released. Detention and evidence gathering processes must be managed as a capability to ensure that they support the collection of tactical intelligence and assist the Afghan criminal justice system in achieving lawful convictions. In almost all cases, Afghan Authorities in this context refers to the National Directorate of Security (NDS) and it is to the NDS that transfers will normally be made Detainees should only ever be detained beyond 96 hours in exceptional circumstances as follows: a. On medical or logistic grounds, with HQ ISAF authorisation (and ministerial authority where appropriate) b. With PJHQ and ministerial authority Part I of SOI J3 9 dealt with the initial capture of a detainee. It provided: 8. As in the case of stop and search, a person must only be detained if it is deemed necessary to do so. If items found during the search of the individual or any other factors indicate that he may be a threat to mission accomplishment, the call sign or wider force protection, he should be detained. If items found relate purely to criminal conduct and do not threaten the accomplishment of the mission, there are no grounds for UK FE to detain. In such circumstances the individual should be released and his details passed to the ANP Force protection must always be the primary concern in such situations. 9. Decision to Detain. UK FE can detain persons only if: The person is a threat to force protection; and/or to mission threat a. b. The person is a accomplishment; and/or c. It is necessary for reasons of self defence. The view of the courts below was, in effect, that the United Kingdom had no power under the Security Council resolutions to adopt its own detention policy so far as that policy purported to authorise detention for longer than was permitted by ISAFs practice, even in the exceptional circumstances envisaged in SOI J3 9. This was because they considered that the Security Council Resolutions conferred the authority to take all necessary measures on ISAF and not on troop contributing nations. It followed that although British forces had their own chain of command leading ultimately to ministers in London, compliance with ISAFs detention policy was a condition of any authority to detain conferred by the Security Council Resolutions. In my opinion they were mistaken about this. The Security Council Resolution has to be interpreted in the light of the realities of forming a multinational force and deploying it in a situation of armed conflict. ISAF is simply the expression used in the Resolutions to describe the multinational force and the central organisation charged with co ordinating the operations of its national components (liaison and co ordination, to use the judges phrase). Resolution 1386 (2001) provides for the creation of that force, but article 3 (quoted above) expressly confers authority to take all necessary measures on the member states participating in it. Both practically and legally, the British government remained responsible for the safety of its forces in Afghanistan and the proper performance of their functions, as the United States Supreme Court has recognised in the case of American forces participating in multinational forces under United Nations auspices: Munaf v Geren (2008) 533 US 674. ISAF was not authorised, nor did it purport to serve as the delegate of the Security Council for the purpose of determining what measures should prove necessary. It follows that the United Kingdom was entitled to adopt its own detention policy, provided that that policy was consistent with the authority conferred by the relevant Security Council Resolutions, ie provided that it did not purport to authorise detention in circumstances where it was not necessary for imperative reasons of security. For these reasons, I conclude that the authority conferred by the Security Council Resolutions on Afghanistan to detain for imperative reasons of security, was not limited to 96 hours. I would have reached the same conclusion even if I had thought that the power to detain was conferred by the Security Council Resolutions on ISAF, as opposed to the troop contributing nations. This is because, in agreement with Lord Mance and for the same reasons, I consider that the unchallenged evidence, accepted by the judge, shows that ISAF tacitly accepted the United Kingdoms right to adopt its own detention policy within the limits allowed by the Resolutions. Impact of the European Convention on Human Rights All international human rights instruments include provisions which potentially affect the conduct of military operations in an armed conflict. Those which protect the rights to life and liberty are the most likely to be relevant. In the European Convention on Human Rights, these rights are protected by articles 2 and 5. Article 5 provides, so far as relevant: (1) Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: (c) the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so. (f) the lawful arrest or detention of a person to prevent his effecting an unauthorised entry into the country or of a person against whom action is being taken with a view to deportation or extradition. (3) Everyone arrested or detained in accordance with the provisions of paragraph 1(c) of this article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release pending trial. Release may be conditioned by guarantees to appear for trial. (4) Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. The enforcement of human rights has from its inception been a significant part of the United Nations mission under its Charter. It is therefore appropriate to construe Security Council Resolutions on the footing that those acting under their authority will respect the human rights of those with whom they deal, so far as that is consistent with the proper performance of the functions entrusted to them. But that qualification is important. In the first place, although it is axiomatic that under a resolution authorising all necessary measures, the measures must be necessary, ie required for imperative reasons of security, military operations will in the nature of things interfere with rights such as the right to life, liberty and property. Secondly, most if not all schemes of human rights protection assume a state of peace and basic standards of public order. This is particularly true of provisions protecting liberty, which are generally directed to penal and police procedures. They assume not just minimum levels of public order, but a judiciary with effective criminal jurisdiction and a hierarchy of state officials with a chain of responsibility. The rights which they protect cannot be as absolute in a war zone in the midst of a civil war, where none of these conditions necessarily obtains. Thirdly, Security Council Resolutions such as those authorising peacekeeping operations in Iraq and Afghanistan are addressed to every country in the world. They must be taken to mean the same thing everywhere. This means that they cannot be construed by reference to any particular national or regional code of human rights protection, such as the European Convention on Human Rights. The United Kingdom is a member of the Council of Europe and a party to the European Convention, but about 50 countries participated in ISAF many of which were not. These considerations are particularly important when it comes to article 5 of the European Convention, which is unique among international codes of human rights protection in containing an exhaustive list of six grounds on which the law may authorise a deprivation of liberty. No other major international human rights instrument has this feature. In particular it is not a feature of the corresponding provision, article 9, of the International Covenant on Civil and Political Rights. The Covenant, which is an expansion in treaty form of the Universal Declaration of 1948, has been ratified by 167 states to date and may be regarded as the paradigm statement of internationally recognised human rights. Article 9.1 provides: Everyone has the right to liberty and security of person. No one shall be subjected to arbitrary arrest or detention. No one shall be deprived of his liberty except on such grounds and in accordance with such procedure as are established by law. The rest of article 9 is concerned with procedural safeguards. These include provisions for judicial supervision and a right of resort to a court to challenge the detention. No attempt is made to prescribe exhaustively the grounds on which the law may authorise detention, provided that those grounds do not amount to a licence for arbitrary detention. The attempt by the draftsmen of article 5 of the European Convention to codify the exceptions more precisely makes it unusually inflexible if applied according to its literal meaning in a situation of armed conflict. In some circumstances, some of the six grounds may adventitiously accommodate military detention. But as the Strasbourg court recognised in Hassan v United Kingdom (2014) 38 BHRC 358, para 97, they are not designed for such a situation and are not well adapted to it. When the Security Council calls upon member states of the United Nations to participate in an armed conflict, the relevant source of human rights protection as far as the Security Council is concerned is not some particular code of human rights, let alone a national or regional one. It is the body of principle which applies as a matter of international law in armed conflicts. The laws of armed conflict are lex specialis in relation to rules laying down peace time norms upon the same subjects. In the case of a non international armed conflict, this includes Common Article 3 of the Geneva Conventions and, where it applies, Additional Protocol II. In Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion [1996] ICJ Rep 226, the International Court of Justice considered the interrelation between international humanitarian law and international human rights law, taking the International Covenant on Civil and Political Rights as the measure of the latter. Article 6 of the International Covenant on Civil and Political Rights provides that no one may be arbitrarily deprived of his life. At para 25 of its advisory opinion, the Court observed that the protection of the International Covenant of Civil and Political Rights does not cease in times of war, except by operation of article 4 of the Covenant whereby certain provisions may be derogated from in a time of national emergency. Respect for the right to life is not, however, such a provision. In principle, the right not arbitrarily to be deprived of ones life applies also in hostilities. The test of what is an arbitrary deprivation of life, however, then falls to be determined by the applicable lex specialis, namely, the law applicable in armed conflict which is designed to regulate the conduct of hostilities. Thus whether a particular loss of life, through the use of a certain weapon in warfare, is to be considered an arbitrary deprivation of life contrary to article 6 of the Covenant, can only be decided by reference to the law applicable in armed conflict and not deduced from the terms of the Covenant itself. Referring to these observations in Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion, [2004] ICJ Rep 136, the International Court of Justice said, at para 106: the relationship between As regards international humanitarian law and human rights law, there are thus three possible situations: some rights may be exclusively matters of international humanitarian law; others may be exclusively matters of human rights law; yet others may be matters of both these branches of international law. In order to answer the question put to it, the Court will have to take into consideration both these branches of international law, namely human rights law and, as lex specialis, international humanitarian law. Cf Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v Uganda) Judgment, [2005] ICJ Rep, 168, para 216. As a study group of the United Nations International Law Commission has observed, when lex specialis is being invoked as an exception to the general law, then what is being suggested is that the special nature of the facts justifies a deviation from what otherwise would be the normal course of action: Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law (2006) A/CN.4/L.682. These observations, which were made in the context of article 6 of the International Covenant on Civil and Political Rights, are equally true of the prohibition in article 9 of the Covenant of arbitrary detention or detention otherwise than in accordance with law. Article 9, like article 6, applies in hostilities. But the question what is arbitrary or in accordance with law in an armed conflict cannot be answered in the same way as it would be in peacetime. International humanitarian law does not specifically authorise detention in a non international armed conflict. But, as I have explained, the relevant Security Council Resolutions did authorise detention, and international humanitarian law regulates its consequences on the assumption that it is an inevitable feature of state practice. In that respect, the Resolutions served the same function in a non international armed conflict as the authority to detain under article 21 of the Third Geneva Convention does in an international armed conflict. It conferred an authority in international law to detain in circumstances where this was necessary for imperative reasons of security. The next question is how these considerations can live with the European Convention when troops are contributed to a United Nations multinational force by a member state of the Council of Europe. The European Convention is not easy to apply to military operations outside the national territory of a contracting state. Article 2(2)(c) provides that the right to life is not infringed when it results from necessary action taken to quell an insurrection, but there is no corresponding provision for killing in the course of an international armed conflict. Article 5 of the European Convention, as I have observed, lists the permissible occasions for a deprivation of liberty in terms which take no account of military detention in the course of an armed conflict, whether international or non international. In the case of an armed conflict on the national territory of the member state concerned, these problems may be resolved by resort to article 15, which permits derogation from (among others) article 2 in respect of deaths resulting from lawful acts of war and from article 5 generally. But derogation under article 15 is permitted only in time of war or other public emergency threatening the life of the nation. Like Lord Bingham of Cornhill in R (Al Jedda) v Secretary of State for Defence [2008] AC 332, para 38, I am inclined to think that the nation in article 15 means the nation seeking to derogate. It cannot, as Leggatt J suggested, mean Iraq or Afghanistan. It is of course theoretically possible that an armed conflict outside the United Kingdom might threaten the life of the British nation. The fighting in France in 1939 40 could no doubt have been so described. But it is difficult to imagine any circumstances in which this would be true of an armed conflict abroad in which UK armed forces were engaged as part of a peacekeeping force under the auspices of the United Nations. In Bankovic v Belgium (2001) 44 EHRR SE5, the European Court of Human Rights rejected an argument that a Convention states obligation under article 1 to secure to everyone within their jurisdiction the rights and freedoms secured by Section I, could apply to those affected by military operations conducted abroad, unless they occurred in the territory of another Convention state or in a non Convention territory where a Convention state exercised effective governmental control. Two features of the reasoning are particularly significant for present purposes. The first was the Courts view that the rights protected by Section I of the Convention were a total package. It could not be divided and tailored in accordance with the particular circumstances of the extra territorial act in question (para 73). The Convention could not therefore be applied in a non Convention territory where the Convention state in question was not in a position to apply it as a whole. The second significant feature of the reasoning concerned the relationship between the Convention and international law generally. In Behrami v France; Saramati v France, Germany and Norway (2007) 45 EHRR SE10 at para 122, the Court cited the decision in Bankovic in support of the broader proposition that the principles underlying the Convention must take into account relevant rules of international law when examining questions concerning its jurisdiction and, consequently, determine state responsibility in conformity and harmony with the governing principles of international law of which it forms part, although it must remain mindful of the Conventions special character as a human rights treaty. The principle thus stated corresponds to the ordinary principle on which treaties are interpreted, taking into account any relevant rules of international law: see Vienna Convention on the Law of Treaties, article 31(3)(c). In Al Skeini v United Kingdom (2011) 53 EHRR 18, the Grand Chamber adopted what was widely regarded as a radically different approach. The Convention was held to apply, so far as relevant, to extra territorial military operations in any case where the agents of a Convention state exercised control and authority over an individual, even if they did not exercise governmental powers in the place where the relevant operations occurred. The procedural requirements of article 2 were accordingly applied to the deaths of Iraqi citizens in the course of firefights with British troops. The implications of this for the conduct of military operations were apparent from the Grand Chambers judgment in Al Jedda v United Kingdom (2011) 53 EHRR 23, which was delivered on the same day as Al Skeini. The Strasbourg court, rejecting the prior decision of the House of Lords, held that in the absence of a derogation under article 15 military detention in the course of an armed conflict outside the national territory of a Convention state contravened article 5, because it could not be brought within any of the six permitted occasions for detention in article 5(1). It rejected the submission that under article 103 of the UN Charter, UN member states had an obligation to give effect to resolutions of the Security Council which prevailed over obligations under the European Convention. This was because the relevant Security Council Resolution left the choice of methods to the multinational force in Iraq. In the absence of sufficiently specific language the Security Councils authorisation to use all necessary measures did not therefore create an obligation to detain even if it created a power to do so. The Strasbourg court reached a similar conclusion in two cases arising out of Security Council Resolutions imposing sanctions on specified individuals: Nada v Switzerland (2012) 56 EHRR 18, and Al Dulimi and Montana Management Inc v Switzerland (Application No 5809/08) (judgment delivered 21 June 2016). In both cases article 103 of the United Nations Charter was held to be inapplicable because the sanctions resolutions left enough discretion to member states to fall short of an obligation. In equating the application of physical force with the exercise of jurisdiction, the decision of the Strasbourg court in Al Skeini was consistent with the opinion of the United Nations Human Rights Committee, which has treated extraterritorial kidnappings as exercises of state jurisdiction: see Lopez Burgos v Uruguay (Case No C 52/79) (1981) 68 ILR 41 and Lilian Celiberti de Casariego v Uruguay (Case No C 56/79) (1981) 68 ILR 29. The principle in Al Skeini was also adopted by this court in Smith v Ministry of Defence [2014] AC 52, in the admittedly rather different context of the states duties to its own soldiers. But it goes substantially further than the jurisprudence of the International Court of Justice, which has thus far recognised the extraterritorial application of human rights treaties only in cases where governmental powers are exercised by a state in the course of a military occupation of foreign territory: see Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion, [2004] ICJ Rep 136, para 109; Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v Uganda) Judgment, [2005] ICJ Rep 168, para 216. It also gives rise to serious analytical and practical difficulties, when applied to a states treatment of enemy combatants outside its own territory, because the practical effect is to apply the Convention to any extra territorial exercise of force. This is not consistent with the essentially regional character of the Convention. It goes well beyond the ordinary concept of extra territorial jurisdiction in international law, which is generally confined to territory where the state is the governmental authority or occupying power and to enclaves of national jurisdiction such as ships, aircraft, military establishments or diplomatic premises. It thereby requires a Convention state to apply its terms in places where it has no effective administrative control and no legal right to effective administrative control. It brings the Convention into potential conflict with other sources of international law such as the Charter and acts of the United Nations, as well as with the municipal law of the territory in question. It requires the application of the Convention to the conduct of military operations for which it was not designed and is ill adapted, and in the process cuts across immunities under national law which may be fundamental to the constitutional division of powers, as they arguably are in the United Kingdom. The ambit of article 1 of the Convention is a matter of particular sensitivity to any Convention state. At the level of international law, by defining the extent of the Contracting Parties obligation to give effect to its provisions, it identifies the limits of what they have agreed in an altogether more fundamental sense than the following articles which set out the rights protected. At the level of municipal law, the authority of the courts to apply the Convention is a creature of the Human Rights Act 1998. It is ultimately a matter for the courts of the United Kingdom to decide the territorial ambit of the obligation of public authorities under section 6 to act compatibly with the Convention. In doing so it will in accordance with established principle assume that the legislature intended to act consistently with the United Kingdoms treaty obligations. It will not depart from the interpretation of those obligations by the European Court of Human Rights without very good reason. But it cannot in the last resort be bound by the view of the Strasbourg court on that question if it is satisfied that that view goes beyond what Parliament has enacted. As Lord Neuberger and Lord Mance observed of the European Communities Act 1972 in R (Buckinghamshire County Council) v Secretary of State for Transport [2014] 1 WLR 324, para 207, there may be fundamental principles, whether contained in other constitutional instruments or recognised at common law, whose abrogation Parliament neither contemplated nor authorised. The particular application of the principle in Al Skeini by the Strasbourg court in Al Jedda gives rise to further difficulties of its own. It caused consternation among those concerned with the enforcement of international humanitarian law, because it appeared to undermine its role in armed conflicts as well as the efficacy of international peacekeeping operations. In an influential article in the International Review of the Red Cross (The European Court of Human Rights Al Jedda judgment: the oversight of international humanitarian law, (2011) 93 IRRC 837), Jelena Pejic, the Legal Adviser in the Legal Department of the International Committee of the Red Cross and a distinguished authority in this field, criticised the decision on the grounds (i) that it required authority to detain in armed conflicts to be specifically conferred by the language of a Security Council Resolution, when the relevant lex specialis in international law was the Geneva Conventions; and (ii) that to make detention an obligation of powers participating in an armed conflict would restrict their discretion in a way which would be operationally counter productive and hardly a human rights friendly outcome (pp 847 848). For the moment, she concluded (p 851), Al Jedda casts a chilling shadow on the current and future lawfulness of detention operations carried out by ECHR states abroad. In addition, their ability to engage with other, non ECHR, countries in multinational military forces with a detention mandate currently remains, at best, uncertain. It is, however, unnecessary to explore these problems any further in the present case, because of the relatively narrow basis on which Al Jedda was argued and decided and because of the development of the jurisprudence of the Strasbourg court since it was decided. Al Jedda was presented as a case of conflicting obligations. The argument in the Strasbourg court proceeded, as it had done in the House of Lords, on the footing that there was an irreconcilable conflict between the Security Council Resolutions and article 5 of the European Convention, one of which must be displaced by the other: see para 105. By declining to treat military detention as an obligation, as opposed to a discretionary power, the court was able to treat article 5 as consistent with the United Kingdoms obligations under the UN Charter. But, in the light of later developments, perhaps the most significant feature of the decision in Al Jedda was that it marked a clear (though unacknowledged) departure from the principle stated in Bankovic that the Convention could not be divided and tailored for particular situations and had to be applied on an all or nothing basis. It thereby opened the possibility of a partial or modified application of the Convention to the extra territorial acts of Convention states. In particular, some adaptation of the Convention might be required by the international law context in which those acts occurred: see paras 76, 102. This suggests that a more fruitful approach in Al Jedda would have been to reconcile the terms of the Convention with those of the Security Council Resolutions by adapting the former to the situation created by the latter. This was the step which the Grand Chamber ultimately took in Hassan v United Kingdom (2014) 38 BHRC 358, a decision which was considered by the Court of Appeal but unfortunately appeared too late to be taken into account by Leggatt J. The facts were that the applicants brother had been detained by British forces in Iraq for a period of nine days. When it was ascertained that he was a civilian who posed no threat to security, he was released. This happened in 2003, immediately after the invasion of Iraq by coalition forces, at a stage when the armed conflict was international in character. Hassans detention did not fall within any of the six cases specified in article 5(1) where detention might be permitted, and he had no effective access to a court for the purposes of article 5(4). The Grand Chamber none the less held that there was no violation of article 5. It rejected the argument that article 5 was displaced, as it had in Al Jedda, but held that it fell to be adapted to a context in which international humanitarian law provided the relevant safeguards against abuse. The judgment calls for careful study. The starting point is that on the Courts analysis no question arose of conflicting international obligations or of a Security Council Resolution displacing or overriding article 5 of the European Convention. Cases of conflicting obligations may have to be resolved by deciding which of them is to override the other. But where an obligation is inconsistent with a mere power, there is normally no conflict. The power does not have to be exercised. The United Kingdom relied in Hassan on article 21 of the Third Geneva Convention and article 78 of the Fourth Geneva Convention. These provisions did no more than confer a power to detain. No one suggested that they gave rise to an obligation to detain or that they overrode article 5 of the Convention. The question was a different one, namely what did article 5 mean in the context of an armed conflict. Or, as the Grand Chamber put it (para 99), whether the Court should interpret [the obligations of the United Kingdom under article 5] in the light of powers of detention available to it under international humanitarian law. In particular, the question was whether the six cases of permissible detention listed in article 5(1) were to be interpreted as exhaustive in that context. This involved interpreting it according to the ordinary principles of international law, taking account of state practice in its application and of any relevant rules of international law: see article 31(3)(b) and (c) of the Vienna Convention. In the result, the Grand Chamber held that article 5(1) fell to be modified by treating the six cases as non exhaustive so as to accommodate the existence of a power of detention in international law. This was a very different issue from the one which had arisen in Al Jedda, as the court pointed out at para 99. The court began (para 97) by drawing attention to the incongruity of the six permitted grounds of detention in article 5(1) of the Convention in a situation of armed conflict: It has long been established that the list of grounds of permissible detention in article 5(1) does not include internment or preventive detention where there is no intention to bring criminal charges within a reasonable time (see Lawless v Ireland [1961] ECHR 332/57 at paras 13 and 14; Ireland v UK [1978] ECHR 5310/71 at para 196; Guzzardi v Italy [1980] ECHR 7367/76 at para 102; Jecius v Lithuania [2000] ECHR 34578/97 at paras 47 52; and Al Jedda v UK (2011) 30 BHRC 637 at para 100). Moreover, the court considers that there are important differences of context and purpose between arrests carried out during peacetime and the arrest of a combatant in the course of an armed conflict. It does not take the view that detention under the powers provided for in the Third and Fourth Geneva Conventions is congruent with any of the categories set out in sub paras (a) to (f). Although article 5(1)(c) might at first glance seem the most relevant provision, there does not need to be any correlation between security internment and suspicion of having committed an offence or risk of the commission of a criminal offence. As regards combatants detained as prisoners of war, since this category of person enjoys combatant privilege, allowing them to participate in hostilities without incurring criminal sanctions, it would not be appropriate for the court to hold that this form of detention falls within the scope of article 5(1)(c). The court went on to consider whether these inconsistencies could be resolved by resort to the right of derogation under article 15. It did not decide whether derogation was available in respect of armed conflict in Iraq, but concluded that it was unnecessary to do so, because the consistent practice of states was not to derogate from article 5 of the European Convention or article 9 of the International Covenant on Civil and Political Rights in order to detain persons on the basis of the Third and Fourth Geneva Conventions during international armed conflict: However, in respect of the criterion set out in article 31(3)(b) of the Vienna Convention , the court has previously stated that a consistent practice on the part of the high contracting parties, subsequent to their ratification of the convention, could be taken as establishing their agreement not only as regards interpretation but even to modify the text of the convention (see, mutatis mutandis, Soering v United Kingdom [1989] ECHR 14038/88 at paras 102 103 and Al Saadoon v United Kingdom [2010] ECHR 61498/08 at para 120). (para 101) In those circumstances, the solution was to adapt the states obligations under the European Convention so as to accommodate the lex specialis applicable to armed conflict: The court has made it clear on many occasions that the Convention must be interpreted in harmony with other rules of international law of which it forms part This applies no less to international humanitarian law. The four Geneva Conventions of 1949, intended to mitigate the horrors of war, were drafted in parallel to the European Convention on Human Rights and enjoy universal ratification. The provisions in the Third and Fourth Geneva Conventions relating to internment, at issue in the present application, were designed to protect captured combatants and civilians who pose a security threat. The court has already held that article 2 of the Convention should be interpreted in so far as possible in light of the general principles of international law, including the rules of international humanitarian law which play an indispensable and universally accepted role in mitigating the savagery and inhumanity of armed conflict (see Varnava v Turkey [GC] para 185, ECHR 2009), and it considers that these observations apply equally in relation to article 5. Moreover, the International Court of Justice has held that the protection offered by human rights conventions and that offered by international humanitarian law co exist in situations of armed conflict In its judgment Armed Activities on the Territory of the Congo, the International Court of Justice observed, with reference to its advisory opinion concerning Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, that [a]s regards the relationship between international humanitarian law and human rights law, there are thus three possible situations: some rights may be exclusively matters of international humanitarian law; others may be exclusively matters of human rights law; yet others may be matters of both these branches of international law The court must endeavour to interpret and apply the Convention in a manner which is consistent with the framework under international law delineated by the International Court of Justice. (para 102) The Courts conclusion is set out at paras 104 106. Dealing first with the lawfulness of detention, it observed: 104. None the less, and consistently with the case law of the International Court of Justice, the Court considers that, even in situations of international armed conflict, the safeguards under the Convention continue to apply, albeit interpreted against the background of the provisions of international humanitarian law. By reason of the co existence of the safeguards provided by international humanitarian law and by the Convention in time of armed conflict, the grounds of permitted deprivation of liberty set out in subparagraphs (a) to (f) of that provision should be accommodated, as far as possible, with the taking of prisoners of war and the detention of civilians who pose a risk to security under the Third and Fourth Geneva Conventions. The court is mindful of the fact that internment in peacetime does not fall within the scheme of deprivation of liberty governed by article 5 of the Convention without the exercise of the power of derogation under article 15 (see para 97 above). It can only be in cases of international armed conflict, where the taking of prisoners of war and the detention of civilians who pose a threat to security are accepted features of international humanitarian law, that article 5 could be interpreted as permitting the exercise of such broad powers. 105. As with the grounds of permitted detention already set out in those subparagraphs, deprivation of liberty pursuant to powers under international humanitarian law must be lawful to preclude a violation of article 5 para 1. This means that the detention must comply with the rules of international humanitarian law and, most importantly, that it should be in keeping with the fundamental purpose of article 5 para 1, which is to protect the individual from arbitrariness (see, for example, Kurt v Turkey (1998) 5 BHRC 1, para 122; El Masri v former Yugoslav Republic of Macedonia (2012) 34 BHRC 313, para 230; see also Saadi v Italy (2008) 24 BHRC 123, paras 67 74, and the cases cited therein). In para 104 of the judgment the Grand Chamber referred to the co existence of the safeguards provided by international humanitarian law and by the Convention in time of armed conflict. It is clear that the fact that the relevant lex specialis applicable to armed conflict contained its own safeguards against abuse, albeit less extensive than those of article 5 of the Convention, was at least part of the reason why it was legitimate to accommodate the six permitted grounds of detention to cater for detention in the course of armed conflict. The rules of international humanitarian law which the court had in mind are identified in para 106 of the judgment: 106. As regards procedural safeguards, the Court considers that, in relation to detention taking place during an international armed conflict, article 5 paras 2 and 4 must also be interpreted in a manner which takes into account the context and the applicable rules of international humanitarian law. Articles 43 and 78 of the Fourth Geneva Convention provide that internment shall be subject to periodical review, if possible every six months, by a competent body. Whilst it might not be practicable in the course of an international armed conflict for the legality of detention to be determined by an independent court in the sense generally required by article 5 para 4 (see, in the latter context, Reinprecht v Austria, para 31, ECHR 2005 no 67175/01), none the less, if the contracting state is to comply with its obligations under article 5 para 4 in this context, the competent body should provide sufficient guarantees of impartiality and fair procedure to protect against arbitrariness. Moreover, the first review should take place shortly after the person is taken into detention, with subsequent reviews at frequent intervals, to ensure that any person who does not fall into one of the categories subject to internment under international humanitarian law is released without undue delay. The reference to articles 43 and 78 of the Fourth Geneva Convention is of some importance. Leaving aside common article 3, the Fourth Geneva Convention is concerned with the treatment of protected persons (essentially civilian non combatants) who in the course of an international armed conflict find themselves in the hands of a belligerent or occupying power of which they are not nationals. The Convention authorises the internment of aliens found in the territory of a party to the conflict (article 42) and of protected persons generally in an occupied territory (article 78). The analogy between those situations and the present one is that internment is authorised under article 42 only if the security of the Detaining Power makes it absolutely necessary and under article 78 only for imperative reasons of security. The difference of phraseology reflects the fact that internment in an occupied territory may be necessary for the security of those interned. There is no substantial difference in the test of necessity as between the two situations. This contrasts with the position relating to prisoners of war under the Third Geneva Convention, where it is enough to justify their detention that they belong to a hostile organised armed force or a civilian service ancillary to such a force. Since the factual basis of internment is more readily disputable under Fourth Convention, article 43 confers on those interned under article 42 a right to have their internment reconsidered as soon as possible by an appropriate court or administrative board designated by the Detaining Power for that purpose. If continued detention is authorised, the court or administrative board must review the case at least twice a year to determine whether detention is still justified. Article 78 confers similar rights on persons interned under that article. In either case, article 132 provides that an internee shall be released as soon as the reasons which necessitated his internment no longer exist. With the possible exception of article 5 of the Third Geneva Convention (which provides for a competent tribunal to determine disputed claims to prisoner of war status), articles 43 and 78 of the Fourth Geneva Conventions are the only provisions of the Geneva Conventions which confer rights on detainees that can in any sense be said to correspond to those conferred by article 5 of the European Convention on Human Rights. It was argued before us that these observations had no bearing on a non international armed conflict such as we are concerned with on these appeals, and no bearing on detentions under the authority of a Security Council Resolution as opposed to international humanitarian law. There are occasional passages in the judgment which can be cited in support of these arguments. But I would not accept them, for two main reasons. In the first place, the Grand Chamber in Hassan dealt with the point before them by reference to international armed conflicts because that was the character of the Iraqi conflict at the time of the events in question. It followed that the relevant source of the international law power to detain was the Third and Fourth Geneva Conventions. But the essential question was whether article 5 of the European Convention on Human Rights should be interpreted so as to accommodate an international law power of detention which was not among the permissible occasions for detention listed at article 5(1). The question is the same in the present cases, although the source of the international law power to detain is a resolution of the Security Council under Chapter VII of the Charter instead of the Geneva Conventions. I have already pointed out that resolutions under Chapter VII are a cornerstone of the international legal order. Their status as a source of international law powers of coercion is as significant as the Geneva Conventions, and is just as relevant where the Convention falls to be interpreted in the light of the rules of international law. Secondly, I reject the argument that the decision has no application to non international armed conflicts because, while there are differences between the two classes of armed conflict, those differences do not, as it seems to me, affect the particular features of the reasoning in Hassan which are critical to the resolution of these appeals. The fundamental question in Hassan was whether the six permitted grounds listed in article 5(1) of the Convention were to be treated as exhaustive in the context of armed conflict. The Court decided that they were not. This was because the exhaustive list of permitted grounds was designed for peacetime and could not accommodate military detention in the very different circumstances of an armed conflict: para 97. The Grand Chamber referred at para 102 to the decision of the International Court of Justice in Armed Activities on the Territory of the Congo, and its advisory opinion concerning The Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory. At para 104, it drew the same distinction as the International Court of Justice had made between peacetime norms, such as the prohibition of internment by international human rights instruments, and detention in the course of an armed conflict. These points do not depend on the international character of the armed conflict in question. The taking of prisoners of war and the detention of civilians posing a threat to security are inherent in international and non international armed conflicts alike. The practice of states to detain is common to both and is universal in both contexts. It is right to add that the state practice as regards derogations, to which the Grand Chamber attached some importance, is the same in both international and non international armed conflicts. No member of the Council of Europe has ever derogated from the European Convention with respect to military action of whatever kind taken abroad: see Pejic, art cit, at p 850. It is fair to point out that some aspects of the functions of the peacekeeping forces deployed in Iraq and Afghanistan can more readily be accommodated within the six specified grounds in article 5(1) than the internment of prisoners of war in an international armed conflict. In particular, where armed forces are operating in support of the government of the territory, article 5(1)(c) may apply (detention for the purpose of bringing a person before a competent legal authority on suspicion of having committed an offence or to prevent him from committing one). But the enforcement of the criminal law against individual suspects is far from exhausting the functions of the forces deployed in either theatre. As I have pointed out (paras 21 22, 28 above), their mandate under the relevant Security Council Resolutions extended well beyond operating as an auxiliary police force. It required them to engage as combatants in an armed conflict with the forces of a violent, organised insurrection, with a view to defending itself, protecting the civilian population, and creating a secure environment for the reconstruction of the country. Once one concludes that the six grounds are not necessarily exhaustive in a situation of armed conflict, the next question is whether there is some alternative legal standard to determine what circumstances justify detention and subject to what procedural safeguards. The court in Hassan answered this question by seeking to identify the fundamental purpose of ECHR article 5(1) and to consider whether that purpose would be sufficiently served by the rules applicable in armed conflict even if the case did not come within the six permitted grounds. They considered that, as with other international human rights instruments, the fundamental purpose of article 5 was to protect the individual from arbitrariness (para 105). The essence of arbitrariness is discretion uncontrolled by law. There were two essential conditions for ensuring that detention was not uncontrolled by law. The first was that there should be a legal basis for it. In other words, there must be a legal power to detain and it must not be exercisable on discretionary principles so broad, flexible or obscure as to be beyond legal control. The second was that there must be some sufficient means available to the detainee to challenge the lawfulness of his detention. In these respects article 5 of the European Convention, although a great deal more prescriptive in detail, shares the objective of article 9 of the Universal Declaration of Human Rights and article 9 of the International Covenant on Civil and Political Rights. The relevance of the Geneva Conventions in Hassan was that in the context of an international armed conflict, they provided an appropriate alternative legal standard to the literal application of article 5. But it does not follow that in a conflict to which the relevant provisions of the Geneva Conventions do not directly apply, anyone detained by the peacekeeping forces must necessarily be treated as being detained arbitrarily. The present question is whether there is an appropriate legal standard in a non international armed conflict, notwithstanding that the relevant provisions of the Geneva Conventions do not directly apply. As far as the right of detention itself is concerned, the answer is reasonably straightforward. There is, for the reasons which I have explained, a sufficient legal basis for detention in the Security Council Resolutions. The implicit limitation to occasions where detention is necessary for imperative reasons of security, provides a clear legal standard which is no wider than the purpose of the UN mandate requires. Indeed, it is the same standard as that which applies under articles 42 and 78 of the Fourth Geneva Convention, which the Grand Chamber endorsed in the context of an international armed conflict. The claimants argue that the Grand Chamber could not have envisaged that its reasoning would be applied to non international armed conflicts because the procedural safeguards derived from international humanitarian law, which they regarded as an acceptable substitute for the protection of article 5, were available only to those detained in the course of an international armed conflict. I recognise the force of this argument, but I think that it is mistaken. It is true that with the exception of common article 3, the Third and Fourth Geneva Conventions apply only in international armed conflicts. The duty of review in articles 43 and 78 of the Fourth Convention, to which the Grand Chamber attached importance, does not apply to those detained in the course of a non international armed conflict. But it should be noted that it does not apply to most of those detained in an international armed conflict either. It applies only to those detainees who are protected persons within the meaning of article 4 of the Fourth Convention. They are, as I have observed, mainly civilian non combatants. The definition of protected persons expressly excludes those who are protected by the Third Geneva Convention. The persons thus excluded from the ambit of articles 43 and 78 of the Fourth Convention include not only the armed forces and civilian ancillary services of a belligerent state, but also other persons participating in an international armed conflict as members of organised and identifiable resistance movements or militias, or as persons who on the approach of the enemy take up arms spontaneously: see article 4 of the Third Geneva Convention. The Third Convention has no equivalent provision for review of the detention of persons in these categories. It is of course possible that the Grand Chamber intended to confine the accommodation between international humanitarian law and article 5 of the European Convention on Human Rights strictly to the limited category of detainees entitled to the benefit of articles 43 and 78 of the Fourth Geneva Convention. This would, however, have been a rather arbitrary choice. The Grand Chamber was not concerned to define the ambit of international humanitarian law but to adapt article 5 of the Convention to conditions of armed conflict for which it was not primarily designed. I think it unlikely that they intended that article 5 should apply without modification to prisoners of war taken in an international armed conflict, simply because no review procedure was available to them under the Geneva Conventions. It is in my opinion clear that they regarded the duty of review imposed by articles 43 and 78 of the Fourth Convention as representing a model minimum standard of review required to prevent the detention from being treated as arbitrary. They were adopting that standard not just for cases to which those articles directly applied, but generally. Given that the Security Council Resolutions themselves contain no procedural safeguards, it is incumbent on Convention states, if they are to comply with article 5, to specify the conditions on which their armed forces may detain people in the course of an armed conflict and to make adequate means available to detainees to challenge the lawfulness of their detention under their own law. There is no reason why a Convention state should not comply with its Convention obligations by adopting a standard at least equivalent to articles 43 and 78 of the Fourth Geneva Convention, as those participating in armed conflicts under the auspices of the United Nations commonly do. Provided that the standard thus adopted is prescribed by law and not simply a matter of discretion, I cannot think that it matters to which category the armed conflict in question belongs as a matter of international humanitarian law. The essential purpose of article 5, as the court observed at para 105 of Hassan, is to protect the individual from arbitrariness. This may be achieved even in a state of armed conflict if there are regular reviews providing sufficient guarantees of impartiality and fair procedure to protect against arbitrariness (para 106). which are central to the resolution of these appeals: I conclude that Hassan v United Kingdom is authority for three propositions (1) The Strasbourg court was concerned in Hassan with the interface between two international legal instruments in the domain of armed conflict outside the territory of a Convention state. This is pre eminently a domain governed by international legal norms. In that context, the Grand Chamber recognised that international law may provide a sufficient legal basis for military detention for the purposes of article 5, which requires that any detention should be lawful. This is consistent with the courts approach in Medvedyev v France (2010) 51 EHRR 39, in which the adequacy of the legal basis for the detention of the applicant on a Cambodian merchant ship on the high seas by French armed forces was analysed wholly in terms of international law. The particular source of the international law right to detain which was relevant in Hassan was international humanitarian law, specifically the Geneva Conventions. But I see no reason to regard the position as any different in a case where the source of the international law right to detain is a resolution of the UN Security Council under powers conferred by the UN Charter. It does not of course follow from the fact that international law authorises military detention for the purposes of article 5 of the Convention, that it also constitutes a defence to a claim in tort. That depends on other considerations lying wholly in the realm of municipal law, notably the concept of Crown act of state, which are addressed in the Serdar Mohammed case in a separate judgment. (2) Hassan does not add a notional seventh ground of permitted detention to those listed at (a) to (f) of article 5(1), namely military detention in the course of armed conflict. Its effect is rather to recognise that sub paragraphs (a) to (f) cannot necessarily be regarded as exhaustive when the Convention is being applied to such a conflict, because their exhaustive character reflects peacetime conditions. This means that where the armed forces of a Convention state are acting under a mandate from the Security Council to use all necessary measures, article 5(1) cannot be taken to prevent them from detaining persons for imperative reasons of security. (3) The procedural provisions of article 5, in particular article 5(4), may fall to be adapted where this is necessary in the special circumstances of armed conflict, provided that minimum standards of protection exist to ensure that detention is not imposed arbitrarily. The minimum standard of protection is a standard equivalent to that imposed by articles 43 and 78 of the Fourth Geneva Convention. This involves an initial review of the appropriateness of detention, followed by regular reviews thereafter, by an impartial body in accordance with a fair procedure. These are the minimum requirements for protection against arbitrary detention, and nothing in the Grand Chambers decision in Hassan justifies any departure from them. Indeed, it is clear that in the Courts view, the continuing existence of these procedural obligations in large measure justified reading the six permitted occasions for detention as non exhaustive in conditions of armed conflict. In the following sections of this judgment, I shall deal with the safeguards which were available to those in SMs position. The circumstances of SMs detention after his capture Part II of SOI J3 9 dealt with the processing of detainees through temporary holding facilities after capture, and their ultimate release or transfer to the Afghan authorities. The Detention Authority was required to decide within 48 hours whether the prisoner should be released, further detained or transferred to the Afghan authorities. The relevant paragraphs of Part II provided: 19. The Detention Authority must decide whether to release, transfer or further detain the detainee. This decision must be made within 48hours of the time of detention of the detainee. To authorise continued detention, the Detention Authority will need to be satisfied, on the balance of probabilities, that it is necessary for self defence or that the detainee has done something that makes him a threat to Force Protection or Mission Accomplishment. 24. Logistical Extensions. On some occasions, practical, logistic reasons will entail a requirement to retain a UK detainee for longer than the 96 hours. Such occasions would normally involve the short notice non availability of pre planned transport assets or NDS facilities toreceive transferred detainees reaching full capacity. These occasions may lead to a temporary delay until the physical means to transfer or release correctly can be reinstated. Where this is the case, authority to extend the detention for logistic reasons is to be sought from both HQ ISAF and from Ministers in the UK through the Detention Authority. 25. Initial Detention Review. The Initial Detention Review must take place within 48 hours of the point of detention The Detention Authority does not have the authority to hold a detainee for longer than 96 hours from the point of detention (this authority must be sought from Ministers through the Detention Review Committee (DRC) see paras 26 29 below. Routinely, therefore, within the 96 hour point the detainee must be either released or transferred to the Afghan authorities. Detention beyond 96 hours is only permitted in exceptional circumstances. 26. Detention Review Committee (DRC). The DRC is the mechanism which supports the Detention Authority in managing detention cases in the Op HERRICK theatre. The key role of the DRC is in assessing applications for exceptional extension to detention before they are submitted through PJHQ and from there on to the MoD for Ministerial approval as necessary. The committee should be convened by the Detention Authority as and when required and may take the form of a standing committee. The committees membership is flexible (and should be reviewed regularly by the Detention Authority), but should include the following as a minimum: Detention Authority (chair), [Chief of Staff Joint Force Support Afghanistan, Joint Force Support Afghanistan Legal Adviser, Commanding Officer Intelligence Exploitation Force, Force Provost Marshall, Staff Officer Grade 2, J3 Branch (current operations), Joint Force Support Afghanistan Policy Adviser, Task Force Helmand Liaison Officer Joint Force Support Afghanistan] The chair may call on SME advice from Comd Med, S02 J2X and the [redacted] as necessary, but the core membership must remain outside the chain of command for targeting and tactical legal issues, with the aim of being able to present cases to the Detention Authority cold. Members do not hold a vote as such, but attend in order to provide expert advice to the Detention Authority to assist in his decision making Detention beyond the 96 hour limit applied by ISAF was permitted only in exceptional circumstances on medical or logistic grounds or with the authority of both the UK Permanent Joint Headquarters and ministers in London. The criteria used to assist ministers in deciding whether to approve continued detention were set out in paragraph 27 of Part II and the procedure was described in para 29. They provided, so far as relevant, as follows: 27. Extension of Detention. Where it is believed that there are exceptional circumstances which justify an extension to the 96 hour limit, the Detention Authority should make an application for an extension through the DRC to PJHQ, using the form at Annex G. This application should describe the background to the application, the operational imperative for the extension, any anticipated impacts of the decision and any other pertinent factors to assist in the consideration of the application. The following criteria are used to assist Ministers in deciding whether or not to approve applications for extension of detention: a. Will the extension of this individual provide significant new intelligence vital for force protection? b. Will the extension of this individual provide significant new information on the nature of the insurgency? c. How long a period of extension has been requested [redacted] 29. Extended Detention Review Process. In exceptional cases, where extended detention is authorised beyond 96 hours, the detention is to be the subject of review as follows: a. Detention Authority. The Detention Authority is to conduct an internal review of the detention through the DRC every 72 hours after extended detention starts. The Detention Authority is similarly to submit a review to PJHQ at the 14 day period to seek authorisation for continued extended detention, using Annex H. b. PJHQ. PJHQ J3 will review all periods of extended detention every 14 days, informed by a submission from Theatre c. Ministerial Level. The Minister authorising the extension is to review the decision every 14 days The maximum detention permissible (inclusive of the initial ISAF permissible 96 hours), as endorsed by UK Ministers and the Attorney General, is [redacted] The judge found that until some point shortly before 12 April 2010 (five days after SMs capture) the Detention Authority for British forces in Helmand was the commander of Task Force Helmand. He delegated his authority to handle routine authorisations and reviews to the commander of the Camp Bastion Joint Operating Base. At some point on or shortly before that date the commander of Joint Force Support (Afghanistan) became the Detention Authority. The evidence about which officer was the Detention Authority at the time when the first application was made to extend SMs detention beyond 96 hours was unclear, but the Secretary of States case proceeded on the basis that it was the later arrangements which applied, and the judge proceeded on the same basis. As Part II, paragraph 27 records, the Detention Authority chaired the Detention Review Committee, whose function was to support him in managing detention cases and to provide him with expert advice. The Committee had an important role in preparing the reports on which any decision would be based and in advising the Detention Authority. But the decision rested with the Detention Authority alone. SM was captured in the early hours of 7 April 2010. Upon his arrival at Camp Bastion, he was informed that he had been detained because he was considered to pose a threat to the accomplishment of the ISAF mission, and that he would either be released or transferred to the Afghan authorities as soon as possible. He was told that he was entitled to make a statement about his detention if he wished, to which he replied through the interpreter that he was working in his field when a helicopter arrived, and so he lay down in the field until he was attacked by a military dog and then arrested. He was told that he was entitled to contact the International Committee of the Red Cross, and on being asked whether there was any one whom he wished to be informed of his capture he gave the name of his father. Thereafter, he was detained in British military detention facilities, at Camp Bastion and at Kandahar airport. On 9 April 2010, two days after SMs capture, a request was made to the Ministry of Defence in London to exceptionally extend the 96 hour detention limitation in order to gain intelligence from [SM], on the basis that in theatre reviews of the continuing utility of his detention would be conducted every 72 hours. The official submission to the minister was consistent with the criteria set out in Part II, paragraph 27 of SOI J3 9. It recommended that SM should be further detained to gain valuable intelligence, and advised that this was necessary in the particular case for intelligence exploitation. It described the circumstances of his capture, summarised what was known or believed about him, and set out the information relevant to each of the three criteria listed in paragraph 27. On 12 April, a minister authorised his continued detention to gain valuable intelligence. Writing to the Foreign Secretary to report his decision, the minister recorded his view that questioning SM would provide significant intelligence which was vital for force protection purposes and would provide valuable information about the nature of the Taliban insurgency. Thereafter, in theatre reviews were conducted every 72 hours until 4 May, and after that roughly every 14 days. Responsibility for making decisions about the prosecution of detainees rested with the Afghan authorities, principally the National Directorate of Security (NDS). The review documentation suggests that after an initial assessment of SM, the Detention Review Committee took the view that the prospect of a successful prosecution was weak unless a confession was obtained. This was because the rocket propelled grenade launcher had not been recovered and the biometric evidence linking him with other weaponry was judged to be of poor quality. On 19 April it is recorded that the NDS will be consulted further, and on 22nd it is recommended that he be held until the [redacted] point and then transferred to the NDS for investigation by the Afghan authorities. Although there are references to discussions on the point with the NDS from 24 April 2010, the Secretary of States pleading and evidence is that the NDS was not asked until 4 May, when the British authorities had concluded that there was no more intelligence to be obtained from him. On that date it was decided that SM should remain in UK custody for interrogation until 6 May. Contact was then made with the NDS to find out whether they wished to take him into their custody for investigation and possible prosecution. They replied that they did, but had insufficient capacity to do so at the prison to which he was to be transferred. At the time, there was a serious capacity problem, partly because of an increase in the number of detentions following the surge of the previous year; and partly because the British authorities had a policy of refusing to transfer detainees to a number of NDS prisons at which they had reason to believe that detainees were liable to be maltreated. The result was that from 6 May 2010 the British authorities regarded themselves as holding SM on behalf of the Afghan authorities until capacity became available at an acceptable prison. He was finally transferred on 25 July. The judge distinguished between three periods of detention. He found that for the first 96 hours after his capture (the first period), SM was detained for the purpose of bringing him before an Afghan prosecutor or judge in circumstances where he was believed to be a senior Taliban commander involved in the production of improvised explosive devices. He found that his detention beyond 96 hours had been authorised by Ministers for the sole purpose of interrogating him with a view to obtaining intelligence, and that that remained the sole purpose of his detention for the next 25 days until 4 May, when the NDS formally expressed their intention of taking him into their custody as soon as they could (the second period). From 4 May to 25 July 2010, (the third period), the judge considered that SM was once again being held for the purpose of bringing him before the competent legal authorities on reasonable suspicion of having committed an offence. Application of ECHR: article 5(1) Of the six permissible grounds of detentions listed in article 5(1), only two were relied upon by the Secretary of State before us. They were ground (c), which deals with lawful detention for the purpose of bringing a suspect before a competent legal authority, and ground (f), which deals with detention pending extradition. Ground (f): detention pending extradition I can deal shortly with this ground. The judge accepted that the transfer of a detainee to the Afghan authorities was capable of being an extradition, but held that it did not apply on the facts. For my part, I would not even accept that it was capable of being an extradition. The judges reasoning on this point was that the Convention was only engaged because SM was regarded as being within the jurisdiction of the United Kingdom for the purposes of article 1. It followed that the transfer constituted a removal of the detainee from the jurisdiction of the United Kingdom to that of Afghanistan, notwithstanding that it occurred within the national territory of Afghanistan. In my opinion, this analysis stretches the meaning of sub paragraph (f) further than it will go, and is not consistent with what actually happens when a detainee is transferred from British to Afghan custody. Sub paragraph (f) is concerned with movements between the territorial jurisdiction of one state and that of another. Thus it deals with detention in the course of enforcing immigration control and with deportation on the same footing as extradition. SM was not within the territorial jurisdiction of the United Kingdom at any time. He was not even in a place where the United Kingdom exercised effective governmental control. He was within its jurisdiction for the purpose of article 1 of the Convention in a different sense, namely that he was under the physical power and control of the United Kingdoms agents: see Al Skeini v United Kingdom (2011) 53 EHRR 18, para 136. That physical power and control was exercised, like other functions of HM forces, in support of the government of Afghanistan. It is not therefore correct to speak of a transfer from the jurisdiction of the United Kingdom to that of Afghanistan. Afghanistan always had criminal jurisdiction in Helmand Province and in other places where British forces operated. In transferring a detainee to the Afghan criminal justice system British forces were simply enabling the criminal jurisdiction which Afghanistan already possessed over SM to be more effectually exercised. Ground (c): detention for the purpose of bringing SM before a competent legal authority The judge concluded that SMs detention was justified on ground (c) during the first 96 hours. He held that ground (c) did not apply during the second period, because in that period he was being held solely for intelligence exploitation and not for ultimate transfer to the Afghan authorities. The Strasbourg court has consistently ruled that detention for the sole purpose of intelligence exploitation is incompatible with article 5(1) of the Convention in a domestic context, even in the face of a significant terrorist threat: Sakik v Turkey (1998) 26 EHRR 662, para 44, calan v Turkey (2005) 41 EHRR 45, para 104, Medvedyev v France (2010) EHRR 39, para 126. The Grand Chambers decision in Hassan does not in my opinion justify a departure from that principle in an armed conflict. Nor does the Secretary of State suggest otherwise. However valuable the intelligence is expected to be, its exploitation lacks the immediate connection with the neutralisation of the threat which justifies detention for imperative reasons of security. As Justice OConnor pointed out in the Supreme Court of the United States in Hamdi v Rumsfeld 542 US 507 (2004), the considerations of military security which justify the detention of combatants do so only for the purpose of preventing them from returning to the battlefield. Since imperative reasons of security were the only ground on which detention was authorised by the relevant Security Council Resolutions, it follows that the new policy announced to Parliament in November 2009, which permitted extended detention solely for the purpose of intelligence exploitation, had no basis in international law. In other circumstances, it might have been argued that the intention to transfer SM to the Afghan authorities persisted during the second period notwithstanding that advantage was being taken of his detention to question him. But that would not be consistent with the facts. The evidence shows that after an initial assessment following his capture, there was thought to be little prospect that the evidence would support a prosecution. The NDS was not asked at this stage whether they wanted him for further investigation and possible prosecution. If SM had been detained in the second period in order to obtain better evidence against him, the case might have fallen within sub paragraph (c), even if that evidence was not forthcoming: see Brogan v United Kingdom (1988) 11 EHRR 117 at para 53. But in fact the intelligence that the British authorities hoped to obtain by detaining him related not to his own criminality but to the nature of the Taliban insurgency and the requirements of force protection generally. It follows that SMs detention in the second period cannot be justified by reference to article 5(1)(c). It does not follow from this that SM would or should have been released on 11 April if ministers had not authorised his further detention for intelligence exploitation. While this must be a matter for trial, it is on the face of it more likely that if SM had not been detained for intelligence exploitation during the second period, the British authorities would have asked the NDS earlier whether they wanted to take custody of him, and would have received the same answer. He would then have been further detained until he could be transferred to them, although not necessarily until 25 July. To the extent that his detention was prolonged by the interlude of intelligence exploitation, and that this was not taken into account in determining the duration of his imprisonment pursuant to the sentence of the Afghan court, he may have suffered a recoverable loss. Turning to the third period, the judge held that article 5(1)(c) applied in principle because from 4 May 2010 SM was once again being detained for the purpose of being transferred to the Afghan authorities. But he held that his detention in the third period could not be justified on that ground because he was not brought promptly or at all before a judicial officer as required in such cases by article 5(3). I shall return to article 5(3) when I come to deal with the procedural requirements of article 5. Detention for imperative reasons of security I have explained earlier in this judgment why, even on the footing that none of the of the six grounds of detention specified in article 5(1) of the Convention applies, military detention may be justified. Notwithstanding the ostensibly exhaustive character of the six grounds, that article cannot be taken to prevent HM forces from detaining persons in the course of an armed conflict for imperative reasons of security. The real question in those circumstances is whether this was in fact why SM was detained in the second and third periods. The judge made findings about the reasons for SMs detention on which the claimants naturally rely. But the problem about these findings is that they were made for the purpose of determining whether SMs detention was justified on any of the six grounds specified in article 5(1). It is not easy to redeploy them for the rather different purpose of determining whether detention was justified by imperative reasons of security. This is not only because, coming to the matter as he did before the judgment of the Strasbourg court in Hassan, the judge regarded the six grounds as exhaustive, and imperative reasons of security as irrelevant. The judge also believed that there could be no imperative reasons of security for detaining someone once he had been captured and disarmed. He did not therefore consider the possibility that imperative reasons of security might have been a concurrent reason for SMs detention during the second and third periods. I have already said, in agreement with the Court of Appeal, that in my opinion he was wrong about this. For that reason, I do not think it possible to attach any weight to his finding that interrogation was the sole purpose of SMs detention in the second period, nor to his implicit view that detention pending the availability of prison capacity to the NDS was the sole reason for his detention in the third period. So far as the judge rejected the possibility that SM was also being detained for imperative reasons of security, he did so on a false legal premise. There is, as it seems to me, a real issue about whether imperative reasons of security continued to operate after the first 96 hours concurrently with other factors. It is clear from SOI J3 9, the relevant part of which I have quoted, that the British authorities in Afghanistan did not regard themselves as entitled to detain any person unless his detention was and remained necessary for self defence, force protection, or wider mission accomplishment. Persons arrested on these grounds might, consistently with the Security Council Resolutions, have been detained for as long as they continued to represent a threat. In fact, however, as the minister explained to Parliament when announcing the new detention policy in November 2009, the policy was to hold them only pending transfer to the Afghan authorities or (subject to ministerial authorisation) for intelligence exploitation. In the absence of one or other of these grounds, the detainee would be released, as SM would have been if the NDS had shown no interest in him on 4 May 2010. For that reason, the only question with which a minister was concerned when considering whether to authorise extended detention for intelligence exploitation was whether it was justified for that purpose. There is nothing in SOI J3 9 or in the ample documentation concerning SMs detention to suggest that the minister was concerned with any other grounds for his detention. It seems probable that even after ministers had authorised continued detention for intelligence exploitation purposes, it was a precondition for the actual exercise of that authority in the field that detention should be assessed as necessary for imperative reasons of security. The detention documentation relating to SM appears to suggest that this test was applied at each review after the ministerial authorisation had been received. On each occasion, the Detention Review Committees assessment for the authorising officers included an account of the circumstances of his capture, followed by the following statement: Legal issues. The test to be applied is whether, on the balance of probabilities, [SM] has done something which makes him a threat to self defence, force protection, or wider mission accomplishment. Having considered that [SM] was seen running from a Col known to have links with Obj WHITE, in an attempt to evade [redacted] after they had been engaged from nearby compounds, the route along which he was running was found to contain a hidden RPG launcher and two rounds and the assessment that he may be Obj WHITEs deputy, I advise that the policy test is satisfied. The judgment of those involved was presumably that this test was satisfied in SMs case. On that basis, there may have been concurrent reasons for holding any detainee, because imperative reasons of security were a necessary condition for detention, even if not the only one. Unlike the judge, the Court of Appeal did consider the possibility that imperative reasons of security constituted a concurrent reason for his detention after the expiry of the initial period of 96 hours. But they did so only by reference to the grounds on which further detention was authorised by ministers in London. It is correct that the sole criterion for ministerial authorisation for continued detention beyond 96 hours was the value of the intelligence that the detainee might be in a position to provide. Indeed, that was the reason for the change of policy which led to the adoption of the procedure for ministerial authorisation. It is also correct that British troops had no right, either under SOI J3 9 or under the Security Council Resolutions, to arrest someone solely in order to interrogate them. But it does not follow that they could not interrogate a detainee who was being held for imperative reasons of security. Nor does it follow that continued detention after 96 hours for intelligence exploitation was not also justified by imperative reasons of security. It is not necessary for this court to express a concluded view on these points, and not appropriate to do so on the inevitably incomplete information before us. They will be open to the parties at the full trial of the action. At that trial, my discussion of the facts at paras 86 88 may turn out to be very wide of the mark. For present purposes, it is enough to say that imperative reasons of security are capable of justifying SMs detention in all three periods. Application of article 5: Procedural safeguards Article 5 imposes procedural requirements on any deprivation of liberty at four points. Under article 5(1), the detention must be in accordance with a procedure prescribed by law. Under article 5(2), the detainee must be informed promptly, in a language that he understands, of the reason for his detention. Under article 5(3), where a person is detained in accordance with article 5(1)(c) (detention of suspects for the purpose of bringing them before the competent legal authorities), he must be brought promptly before such an authority. And under article 5(4) the detainee must be entitled to take proceedings by which his detention shall be decided speedily by a court, and his release ordered if the detention is not lawful. The claimants allege breach of all of these requirements except for the one imposed under article 5(2). ECHR article 5(1): in accordance with a procedure prescribed by law There is a substantial overlap between the requirement of article 5(1) that any detention should be in accordance with a procedure prescribed by law and the requirements of the other sub articles, in particular article 5(4). In substance, the difference is that this part of article 5(1) requires that the detention should be authorised by law. Moreover, as explained over the years in the jurisprudence of the Strasbourg court, it also implicitly defines what kind of rules may properly be regarded as law for this purpose. By comparison, article 5(4) prescribes the minimum content of that law in one critical area, namely the availability of an effective right to challenge the lawfulness of the detention. Both sub articles are concerned with the protection of persons against arbitrariness, which the Grand Chamber in Hassan identified as the core function of article 5. I have dealt with the Grand Chambers analysis of this point at paras 63 and 68(3) above. The requirement that the procedure should be prescribed by law, is intended to satisfy the test of legal certainty which is inherent in any prohibition of arbitrary detention. Law for this purpose has the enlarged meaning which it normally bears in the Convention. It is not limited to statute, but extends to any body of rules which is enforceable, sufficiently specific, and operates within a framework of law, including public law: Nadarajah v Secretary of State for the Home Department [2004] INLR 139, at para 54; R (Gillan) v Comr of Police of the Metropolis [2006] 2 AC 307, paras 32 34. In Medvedyev v France, (supra,) another case of extraterritorial military detention, the Strasbourg court observed at para 80 that it was essential that the conditions for deprivation of liberty under domestic and/or international law be clearly defined and that the law itself be foreseeable in its application, so that it meets the standard of lawfulness set by the Convention, a standard which requires that all law be sufficiently precise to avoid all risk of arbitrariness and to allow the citizens if need be, with appropriate advice to foresee, to a degree that is reasonable in the circumstances of the case, the consequences which a given action may entail. As I have pointed out (para 63), this means in a case like the present one, that a power of detention must not only be governed by rules but those rules must not be exercisable on discretionary principles so broad, flexible or obscure as to be beyond effective legal control. The procedure governing military arrest and detention by HM forces in Afghanistan was laid down by SOI J3 9. I have summarised this document above, and quoted the essential parts of it. Its requirements were precise, comprehensive and mandatory. The principles on which discretionary judgments were to be made, whether by the Detention Authority in the theatre or by ministers in London, were exactly specified. The judge considered that it defined the conditions for deprivation of liberty with sufficient clarity and precision to meet the requirement of legal certainty. The Court of Appeal agreed, and so do I. ECHR article 5(3): brought promptly before a judge or other officer authorised by law Article 5(3) qualifies the ground of detention specified in article 5(1)(c). It requires that a person suspected of having committed an offence, who is detained for the purpose of bringing him before the competent legal authority, must be brought promptly before a judge or other officer authorised by law. It is relevant to this appeal only so far as it is sought to justify his detention under article 5(1)(c) during the third period. It is plain that SM was not brought before a judge or other officer promptly or at all in that period. The question is therefore how far the requirements of article 5(3) can properly be adapted to conditions of armed conflict in a non Convention state. Without the benefit of the decision in Hassan, the judge understandably did not appreciate the significance of this question and did not deal with it. The Court of Appeal recorded the judges conclusion, but did not address article 5(1)(c) at all, presumably because it was irrelevant in the light of their conclusion that any authority to detain conferred by the Security Council Resolutions was limited to the 96 hours prescribed by the ISAF policy. This is, I think, a more difficult question than the judge appreciated. Articles 5(3) and 5(4) are both directed to the requirement for independent judicial oversight of any detention. Article 5(3) must be read with article 5(1)(c), to which it is ancillary. Unlike article 5(4), which applies generally, article 5(3) is concerned only with prospective criminal proceedings. What is envisaged is that the suspect will be brought promptly before a judge or other officer with jurisdiction either to try him summarily or to release him summarily or to make arrangements for his continued detention or release on bail or otherwise pending a later trial. In the present case, that posits a judge or other officer with criminal jurisdiction under Afghan law. It is far from clear what if any procedures of this kind existed in Afghanistan. The judges findings about Afghan criminal procedure do not identify any. The judge adopted the statement of principle by the Strasbourg court in Demir v Turkey (1998) 33 EHRR 43, para 41, that where necessary, it is for the authorities to develop forms of judicial control which are adapted to the circumstances but compatible with the Convention. This gives rise to no particular difficulty in a purely domestic case such as Demir, where the state is responsible both for the arrest and detention of the suspect and for the process of prosecution and trial. But in citing Demir the judge appears to have thought that the British government assumed the same responsibility in Afghanistan. This cannot in my view be correct. The United Kingdom was not a governmental authority or an occupying power. It was responsible for SMs arrest and detention, but it did not have and could not have assumed responsibility for the organisation or procedures of the system of criminal justice in Afghanistan, which was a matter for the Afghan state, nor for the conduct of prosecutions, which was a matter for the NDS. The operations of the British army in Afghanistan did not displace the role of the NDS, which had jurisdiction throughout the country, including those areas in which British troops were operating. It was seized of SMs case at the latest by 4 May 2010, when the third period began. The British authorities regarded themselves as holding SM on their behalf. If there was such a procedure as article 5(3) envisages, it was on the face of it the responsibility of the NDS and not of the British army to operate it. For the same reason, I do not think that the judge can have been right to say that, quite apart from any limit on detention arising from ISAF policy, any period of detention in excess of four days without bringing the person before a judge is prima facie too long. I doubt whether there can be even a prima facie rule about the appropriate period of detention which applies as a matter of principle in all circumstances for the purpose of article 5(3) of the Convention, although four days is probably a reasonable maximum in the great majority of cases. A prima facie limit of four days takes no account of the truly extraordinary position in which British troops found themselves in having to contain a violent insurgency while dealing with the prosecuting authorities of a country whose legal system had recently been rebuilt and over which they had no control or constitutional responsibility. The judge recorded that the Secretary of State adduced no evidence that it was impractical to bring SM before an Afghan judicial officer and that accordingly the Secretary of State had failed to justify the detention under articles 5(1)(c) and 5(3). I confess to finding this an unsatisfactory basis on which to resolve this question. The judge cannot be criticised for adopting it, because he understandably assumed in the light of the then state of Strasbourg jurisprudence that article 5 of the Convention fell to be applied without modification to military detention in Afghanistan. There are difficulties about determining preliminary issues of law in a complex case, in conjunction with limited questions of fact, the answers to which are not only inter related but dependent on the answers to the issues of law. The difficulties are increased when the issues of fact fall to be determined partly on assumptions derived from the pleadings and partly on evidence. They are further increased when the basis on which article 5 of the Convention falls to be applied is changed by developments in the jurisprudence of the Strasbourg court after the judge has given judgment, with the result that findings made in one legal context have to be applied in another. On any view there will have to be a trial before SMs claims can be finally determined. I would therefore decline to determine at this stage whether the procedure adopted in SMs case was compatible with article 5(3) of the Convention, and would leave that question to a trial at which the relevant facts can be found and assessed in the light of the judgments on this appeal. ECHR article 5(4): right to take proceedings to decide the lawfulness of the detention If the essence of arbitrariness is discretion uncontrolled by law, article 5(4), although procedural in nature, is fundamental to the values protected by article 5. The gravamen of the procedural objection to SMs detention was that he had no practical possibility of testing its lawfulness while he remained in British custody. There are three avenues by which in theory a detainee might have challenged his detention. The first was an application to the High Court in England for a writ of habeas corpus. The second was an internal challenge under the system of review provided for by SOI J3 9. The third was an application for equivalent relief to the courts of Afghanistan. No one appears to have suggested that the third possibility was available even in theory, and we have no information about it. We are therefore perforce concerned with the first two. The Secretary of State submits that there would be no jurisdiction to grant a writ of habeas corpus in these cases. This appears always to have been the British governments position in relation to military detention in Iraq and Afghanistan. There is aged but respectable authority that habeas corpus will not be granted to prisoners of war: see R v Schiever (1759) 2 Keny 473, Furly v Newnham (1780) 2 Dougl 419, The Case of Three Spanish Sailors (1779) 2 W Bl 1324. Nor will it be granted to those interned as enemy aliens in the United Kingdom in time of war: Ex p Weber [1916] 1 KB 280; [1916] 1 AC 421, R v Superintendant of Vine Street Police Station, Ex p Liebmann [1916] 1 KB 268. None of these cases, however, decided that there is no jurisdiction to grant habeas corpus. They decided only that it would not be granted on the merits because the detention of prisoners of war and enemy aliens was a lawful exercise of the prerogative of the Crown. These classes of persons were regarded as liable to internment merely on account of their status. Thus in Ex p Weber, and in the later case of R v Home Secretary, Ex p L [1945] KB 7, where there was an issue about whether the applicant was in fact an enemy alien, the court resolved it. It must have had jurisdiction to do that. The only case in which the courts have declined to entertain the issue was R v Bottrill, Ex p Kuechenmeister [1947] KB 1, a questionable decision in a case where the Crown had continued to detain a civilian internee after the war had ended. The application for habeas corpus was met with the answer that the courts would not review the Crowns prerogative to determine whether or not the United Kingdom was still at war. If this decision was ever good law, it has certainly not been since the decision of the House of Lords in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 that the exercise of prerogative powers is in principle reviewable. Once that is accepted, the rest is legally straightforward. A writ of habeas corpus is a personal remedy directed against the person alleged to have possession or control of the applicant. Jurisdiction to issue it depends on the respondent being within the jurisdiction of the court, and not on the location of the applicant. There is no principle to the effect that the writ is not available where the applicant has been captured in the course of armed conflict, if he disputes the status which is said to make his detention lawful or otherwise challenges its lawfulness. Thus the US Supreme Court has recognised that habeas corpus is available to persons captured in non international armed conflicts seeking to challenge their designation as enemy combatants: Hamdi v Rumsfeld 542 US 507 (2004). The same court has held that habeas corpus may issue to a public official whose agents have effective control over the applicants detention outside the United States: Boumedienne v Bush 553 US 73 (2008). In the United Kingdom, this court has gone further and approved the issue of the writ in a case where the applicant had been lawfully delivered in Iraq by British forces to the United States, and the only element of control over his subsequent detention was an undertaking by the United States to return him on demand: Rahmatullah v Secretary of State for Defence (JUSTICE intervening) [2013] 1 AC 614. There was no reason in principle why SM should not have been entitled to apply for habeas corpus while he was detained by British forces in Afghanistan. I have concluded that British forces in Afghanistan were entitled to detain him if detention was and remained necessary for imperative reasons of security. On that footing, the only issue on the review would have been whether the Detention Authority had reasonable grounds for concluding that imperative reasons of security required the detention to continue. The problem about treating the right to apply for habeas corpus as a sufficient compliance with article 5(4) lies not in any legal difficulty, but in the absence of any practical possibility of exercising it. SM was an illiterate man with, by his own account, limited formal education, detained by troops who did not speak his language and who worked within a system of military law which he had no reason to understand. In these respects, his position must have been similar to that of many other detainees. Without sponsors in the United Kingdom, a detainee in Afghanistan would face formidable practical difficulties in applying for habeas corpus in an unfamiliar court in a distant foreign country, even if the circumstances of his detention allowed it. In fact, however, they did not allow it. The British authorities did not recognise the existence of a right to challenge military detention. Like other persons detained by British forces under SOI J3 9, SM had no access to legal advice or assistance and no facilities for communicating with his family or making contact with the outside world (except with the Red Cross). It follows that although SM was entitled in point of law to apply for a writ of habeas corpus, the procedures operated by the British authorities prevented that right from being effective. Wisely, Mr Eadie QC, who appeared for the Secretary of State, did not press this aspect of his case. This would not necessarily matter if there was a satisfactory alternative. I turn therefore to the system of internal review, which is the real area of dispute. The procedure put in place by SOI J3 9 operated wholly internally. In itself this was not necessarily objectionable. The Grand Chamber in Hassan (para 106) envisaged that it might not be practical in a war zone to bring the detainee before a court. Articles 43 and 78 of the Fourth Geneva Convention, which they regarded as providing an alternative standard in that event, provide for a review by an appropriate court or administrative board designated by the Detaining Power for that purpose (article 43), or in the case of an occupying power a competent body set up by the said Power (article 78). The essential requirements emphasised by the Grand Chamber were (i) that the detention should be reviewed shortly after it began and at frequent intervals thereafter, and (ii) that it should provide sufficient guarantees of impartiality and fairness to protect against arbitrariness. In my opinion, the British procedures satisfied the first criterion but not the second. Even on the footing that a review by a court was impractical, the procedure which existed had two critical failings, both of which were pointed out by the courts below. The first was that it lacked independence. It is true, as counsel for the Secretary of State pointed out, that in addition to fairness the fundamental requirement in the eyes of the Grand Chamber was impartiality, and that independence is not necessarily the same thing. This is, however, an unsatisfactory distinction in practice. We are concerned with the framework of rules governing military detention, and not with the circumstances of any individual case. What is required is not just impartiality in fact, but the appearance of impartiality and the existence of sufficient institutional guarantees of impartiality. I would accept that it may be unrealistic to require military detention in a war zone to be reviewed by a body independent of the army or, more generally, of the executive, especially if reviews are to be conducted with the promptness and frequency required. But it is difficult to conceive that there can be sufficient institutional guarantees of impartiality if the reviewing authority is not independent of those responsible for authorising the detention under review, as it commonly is in the practice of other countries including the United States. The Court of Appeal doubted whether the procedure for review under SOI J3 9 was sufficiently independent but considered that it was impossible to reach a concluded view on that point without further information about the procedure and the chain of command. I am bound to say that I do not see how the process described in SOI J3 9 (Amendment 2) can possibly be regarded as independent. The UK Detention Authority was responsible both for authorising detention and then for reviewing his own decision. The role of the Detention Review Committee was purely advisory and it consisted, with the possible exception of the Legal Adviser and the Political Adviser (a civilian), of his military subordinates. There was no procedure for the case to be reviewed at any higher level than the Detention Authority, except where it was referred to a minister in London for authority to detain beyond 96 hours. But the written procedures envisaged that in those cases the minister would focus on the intelligence value of extended detention, and the documentation in SMs own case does not suggest that any wider considerations were before him. I do not doubt that those who operated this system in the field brought an objective eye to the matter. On the facts to be assumed for the purpose of this appeal, SMs detention was certainly not arbitrary. The problem is that there were no sufficient institutional guarantees that this would necessarily be so. The assumptions in SMs case have not been fully tested, as they might have been under a procedure which was fairer to the detainee. The second failing of the system was that it made no provision for the participation of the detainee. SM did not in fact participate. Indeed, there is no reason to believe that he was even aware that the reviews were occurring. The right conferred on a detainee by article 5(4) of the Convention is to take proceedings by which the lawfulness of his detention shall be decided. This is not simply a requirement that the authorities should review their own act. It is a right of challenge which must necessarily involve the detainee. Specifically, he must be entitled to challenge the existence of any imperative reasons of security justifying his detention, which was the essential condition for it to be lawful. This is, as I have observed in another context, an inherently disputable question. At each review of his detention, the Detention Authority had before him a brief written summary of what SM had said when he was first brought into Camp Bastion and asked whether he had anything to say about his detention. This recorded that he was briefly questioned and denied he was running away or that he had been in command [redacted] stating he is simply a farmer and had no knowledge of the RPG launcher or rounds. Otherwise, the only version of the facts which was before the Detention Authority was that of the soldiers who captured him. It may well be that SM would have had little to add. But the vice of the procedure adopted is that we cannot know that, because he was never given an opportunity to do so. There is no treaty and no consensus specifying what fairness involves as a matter of international humanitarian law. But some basic principles must be regarded as essential to any fair process of adjudication. In the present context, the minimum conditions for fairness were (i) that the internee should be told, so far as possible without compromising secret material, the gist of the facts which are said to make his detention necessary for imperative reasons of security; (ii) that the review procedure should be explained to him; (iii) that he should be allowed sufficient contact with the outside world to be able to obtain evidence of his own; and (iv) that he should be entitled to make representations, preferably in person but if that is impractical then in some other effective manner. It is a more debatable question whether he should be allowed access to legal advice and assistance. In a situation of armed conflict this may not always be possible, at any rate within the required time scale. But there is no evidence before us to suggest that the restrictions on access to such assistance imposed by the British authorities in Afghanistan were necessary. They do not, for example, appear to have been imposed by ISAF, whose procedures permitted both communication with the outside world and contact with lawyers: see SOP 362 (Detention Procedure), para 7. In these respects, British practice also conflicted with the UN Body of Principles for the Protection of All Persons under Any Form of Detention or Imprisonment, adopted by the General Assembly in 1988: see Principles 17 19; and with the position taken by the International Committee of the Red Cross: see Pejic, Procedural Principles and Safeguards for Internment/ Administrative Detention in Armed Conflict and Other Situations of Violence, International Review of the Red Cross, 87 (2005), 375 at 388. The absence of minimal procedural safeguards was unwise as well as legally indefensible, for it rendered the decisions of the Detention Authority more vulnerable than they need have been. Even without a judicial element, a proper procedure for the fair and independent review of detention in the theatre may be faster, more efficient, better informed, and more satisfactory for both detainer and detainee than a procedure by way of application for habeas corpus or judicial review in the courts of a country on the other side of the world. I conclude that the United Kingdom was in breach of its obligations under article 5(4) of the Convention. How far this conclusion will help SM remains to be seen. Article 5(4) imposes an ancillary duty on the state, breach of which does not necessarily make the detention unlawful under article 5(1): R (Kaiyam) v Secretary of State for Justice [2015] AC 1344, para 37. It does not therefore follow from a finding of breach of article 5(4) that SM ought to have been released any earlier than he in fact was. The facts which are being assumed for the purpose of the preliminary issues may or may not be proved at trial. If they are proved, it is difficult to envisage that a fair and independent review process would have resulted in his release, and an application for habeas corpus would probably have failed. In those circumstances, it is far from clear that SM would be able to show that he had suffered any recoverable loss. Conclusion In the result, in Serdar Mohammed I would set aside paragraph 1(3)(ii) and paragraph 1(5) of the judges order dated 20 May 2014. Subject to the parties submissions on the form of order, I would make the following declarations: (1) For the purposes of article 5(1) of the European Convention on Human Rights HM armed forces had legal power to detain SM in excess of 96 hours pursuant to UN Security Council Resolutions 1386 (2001), 1510 (2003) and 1890 (2009) in cases where this was necessary for imperative reasons of security. (2) ECHR article 5(1) should be read so as to accommodate, as permissible grounds, detention pursuant to that power. (3) SMs detention in excess of 96 hours was compatible with ECHR article 5(1) to the extent that he was being detained for imperative reasons of security. (4) SMs detention after 11 April 2010 did not fall within ECHR article 5(1)(f), and his detention between 11 April and 4 May 2010 did not fall within ECHR article 5(1)(c). (5) The arrangements for SMs detention were not compatible with ECHR article 5(4) in that he did not have any effective means of challenging the lawfulness of his detention. (6) Without prejudice to any other grounds on which it may be found that SMs detention was unlawful, the defendant is liable under ECHR article 5(5) and section 8 of the Human Rights Act 1998 to pay compensation to the claimant so far as the duration of his detention (including any detention pursuant to his conviction by the court in Afghanistan) was prolonged by his detention by HM forces between 11 April and 4 May 2010 for intelligence exploitation purposes. All other questions raised in Serdar Mohammed by the issues identified in paras 5 and 6 of this judgment, should be open to the parties at any further trial. In Al Waheed I would make the following declarations: (1) For the purposes of article 5(1) of the European Convention on Human Rights HM armed forces had legal power to detain Mr Al Waheed pursuant to UN Security Council Resolutions 1546 (2004) in cases where this was necessary for imperative reasons of security. (2) ECHR article 5(1) should be read so as to accommodate, as permissible grounds, detention pursuant to that power. LORD WILSON: I agree with the judgment of Lord Sumption. In the light, however, of the disagreement within the court, I propose in my own words to address the main issues before it. A: RESOLUTION 1546 (2004) REFERABLE TO IRAQ The authority given by the UN Security Council in Resolution 1546 was to take all necessary measures to contribute to the maintenance of security and stability in Iraq in accordance with Mr Powells letter dated 5 June 2004; and it is worth noticing that the authority was expressed to be given to the multinational force. Mr Powells letter included, as an example of such a measure, internment where this is necessary for imperative reasons of security. In the Al Jedda case both in the House of Lords and in the Grand Chamber of the Strasbourg court, Mr Al Jedda therefore conceded that the resolution conferred on the UK, as one member of the multinational force, an authorisation, valid under international law, to detain Iraqi nationals where necessary for imperative reasons of security. Mr Al Waheed makes the same concession. But an issue remains, albeit in the end not at the centre of either of these appeals, whether in context the authorisation should, as in the Al Jedda case the House of Lords accepted but the Grand Chamber rejected, be regarded as an obligation. In the House Lord Bingham accepted at para 31 that the language of the resolution was one of authorisation rather than of obligation. He proceeded, however, with the agreement of the other members of the House (apart from Lady Hale, who had doubts about it), to identify in paras 32 to 34 three reasons which, so he considered, justified a conclusion that, for the purposes of article 103 of the UN Charter, the resolution imposed an obligation to intern in the specified circumstances. So Lord Bingham concluded in para 39 that the conflict between the UKs obligation to detain an Iraqi national under the resolution and its obligation to uphold his right not to be deprived of his liberty under article 5 of the European Convention (the Convention) should be the subject of what one might now conveniently describe as an accommodation: namely that the United Kingdom might detain him if necessary for the imperative reasons but must ensure that the detainees rights under article 5 are not infringed to any greater extent than is inherent in such detention. When the Al Jedda case reached the Strasbourg court, the Grand Chamber carefully considered the reasons which Lord Bingham and the other members of the House had articulated. In para 102 of its judgment, however, it noted that, of the four declared purposes of the UN, one was to achieve international co operation in promoting respect for human rights. In that light it approached the task of interpreting Resolution 1546 with a presumption that the Security Council does not intend to impose any obligation on member states to breach fundamental principles of human rights. It followed, so the Grand Chamber considered, that, in the event of any ambiguity in the terms of a resolution of the Security Council, the interpretation more in harmony with the requirements of the Convention should be preferred. In some of its language, for example in para 101 of the judgment, the court seemed to accept that Resolution 1546 did contain obligations; but the decision was that, insofar as it did so, the obligations did not extend to internment on the part of such states as were members of the Council of Europe because article 5(1) cast a contrary obligation upon them. It was accepted without argument by the Grand Chamber in the Al Jedda case that the effect of article 5(1), even when construed in the context of Resolution 1546 and its successors, was such as to impose an obligation on member states not to effect internment otherwise than with a view to criminal proceedings pursuant to subpara (c). At the outset of its assessment, namely in paras 99 and 100, the court emphasised that since, as was accepted, none of the six exceptions prescribed in article 5(1) applied, the United Kingdom did indeed have an obligation thereunder not to intern Mr Al Jedda. So the only question was whether its obligation under article 5(1) had altogether been displaced by the resolutions in the light of article 103 of the UN Charter. The assumption of the Grand Chamber was therefore that, subject only to the possibility of its displacement altogether, the extent of the United Kingdoms obligation under article 5(1) was immutable even in the context of the resolutions; and, having made that assumption, the Grand Chamber turned to construe the resolutions in order to determine the applicability of article 103. In Mr Al Waheeds appeal the central task of this court today is to decide whether, particularly in the light of the later reasoning of the Grand Chamber in the Hassan case, it is necessary to regard the extent of the United Kingdoms obligation to him under article 5(1) as having been immutable. Unless it was immutable, we have no need to wrestle with the difference of opinion as to whether Resolution 1546 cast an obligation to detain where necessary for imperative reasons of security. B: RESOLUTION 1386 (2001) REFERABLE TO AFGHANISTAN The authority given by the UN Security Council in Resolution 1386 was to take all necessary measures to fulfil the mandate given to ISAF; and its mandate was, by para 1, to assist the Afghan Interim Authority in the maintenance of security in Kabul and its surrounding areas, so that the Afghan Interim Authority as well as the personnel of the United Nations can operate in a secure environment. Later resolutions expanded the geographical reach of the mandate beyond Kabul and surrounding areas and they progressively extended the period for which the authority was to remain operative; but the terms of the authority itself remained untouched. There can be no doubt that all necessary measures included a power to intern. All measures were included so long as they were necessary. If, as the Security Council was later to recognise expressly when passing Resolution 1546 in relation to Iraq and when annexing Mr Powells letter to it, all necessary measures to contribute to the maintenance of security in Iraq included a power of internment, how could the Council not have regarded it as likewise included in relation to the maintenance of security in Afghanistan? An authority to assist in the maintenance of security which did not include a power to intern would not have been a worthwhile authority at all. In Mr Mohammeds case the Court of Appeal agreed that the authority included a power to intern but held that the authority had been given to ISAF and so was subject to their policy. There, in my respectful opinion, the Court of Appeal misread the resolution. The authority to take all necessary measures was given to the member states participating in the [ISAF]. In this regard the later Resolution 1546 referable to Iraq, which, in conferring authority on the multinational force, is accepted to have conferred authority on the United Kingdom, ran closely parallel to it. ISAF was no more than an umbrella body, which had no independent personality in law, international or otherwise. Indeed the authority to take all necessary measures was unqualified: it was not to take all such necessary measures as ISAF might identify. Were the continued internment of an insurgent after 96 hours to be objectively necessary and yet to conflict with ISAFs policy, the authority to intern under the resolution would be unaffected. How could necessity, of all things, be subordinated to policy? C: THE AL SKEINI CASE In a second controversial decision handed down on the same day as its decision in the Al Jedda case, namely Al Skeini v United Kingdom (2011) 53 EHRR 18, the Grand Chamber held that non detained Iraqi civilians, shot by United Kingdom forces in the course of military operations during the second of the three periods in which United Kingdom forces operated in Iraq, namely the period of occupation from 1 May 2003 to 28 June 2004, had also had rights under the Convention which the United Kingdom had been bound to respect, including a right under article 2 of the Convention to an investigation into their deaths, and that the United Kingdom had breached it. The declared basis of this seemingly novel extension of the Convention was that during this period the United Kingdom had assumed authority for the maintenance of security in South East Iraq and had thus assumed authority over the individual civilians whom they had shot, even if it had not had effective control over the area in which the shootings had occurred (para 149). The Grand Chamber added, however, that, when jurisdiction under article 1 of the Convention depended upon authority over an individual, including when a Convention state took a person into custody abroad, rather than upon effective control over an area, Convention rights could be divided and tailored (paras 136 137). This was an important recognition that the courts substantial extra territorial enlargement of the concept of jurisdiction under article 1 of the Convention required re examination of the breadth of certain of the articles in section 1 of it. It seems obvious that in particular attention would need to be given to the tailoring of article 5(1) which, on the face of it, permitted no detention in the course of military operations; and the first step towards doing so was soon taken by the Grand Chamber in its decision in the Hassan case. D: THE HASSAN CASE The facts in the Hassan case were that on 23 April 2003 British forces, searching for the applicant who was a general in the army of the Baath party, raided his home in Basra and found not him but his brother, T, who might well have been armed with an AK 47 machine gun. They arrested T either as a suspected combatant or as a civilian suspected to pose a threat to security. They detained him for eight days. At about midnight on 1/2 May 2003, having established that he was a civilian rather than a combatant and that he did not pose a threat to security, they released him. Following his subsequent death, the applicant brought a claim on Ts behalf in the High Court against the Secretary of State in which he alleged a breach of Ts rights under the Convention, including under article 5. The judge dismissed the claim on the ground that Ts detention, albeit managed by British forces, had been in a camp officially designated as a US facility and under overall US control, with the result (so the judge held) that he had not been within the jurisdiction of the United Kingdom within the meaning of article 1 of the Convention. The applicant then made an analogous application against the United Kingdom in the Strasbourg court. Disagreeing with the High Court judge, the Grand Chamber held that, while in detention, T had been in the physical control of United Kingdom forces and that the substantive provisions of the Convention were therefore engaged. It therefore proceeded to consider the nature of its obligations to him, in particular under article 5. At this stage it is important to note the context of Ts detention. It occurred in the first of the three periods in which United Kingdom forces operated in Iraq, namely between 20 March 2003 and 1 May 2003, during which there was an international armed conflict (an IAC). Geneva Convention III, relating to the treatment of prisoners of war, and Geneva Convention IV, relating to the protection of civilians in time of war, have a common article 2, which provides that they apply to all cases of declared war or any other armed conflict which may arise between two or more of the High Contracting Parties, in other words that they apply to an IAC. Article 21 of Convention III provides that the Detaining Power may subject prisoners of war to internment. Article 78 of Convention IV provides that the Occupying Power may intern protected persons if it considers it necessary, for imperative reasons of security. Insofar as British forces suspected that T was a combatant, the United Kingdom had power to detain him under article 21 of Convention III. Insofar, alternatively, as they suspected that he was a civilian who posed a threat to security, it had power to detain him under article 78 of Convention IV. The source of the power to detain him was therefore in those two conventions rather than, for example, in any resolution of the Security Council. Section II of Part III of Convention III and Section IV of Part III of Convention IV contain elaborate provisions for the proper treatment of prisoners of war and civilian internees respectively. By 13 votes to four, the Grand Chamber held that, in detaining T, the United Kingdom had not violated article 5(1) of the Convention. Its central reasoning was as follows: (a) There were important differences of context and purpose between arrests carried out during peacetime and the arrest of a combatant in the course of an armed conflict (para 97). (b) None of the six exceptions to the right to liberty, prescribed in article 5(1), applied (para 97). (c) But in Cyprus v Turkey (1976) 4 EHRR 482 the European Commission of Human Rights had refused to examine the lawfulness of the detentions of Greek Cypriot forces by Turkey in the area of Cyprus under Turkish control because the detentions had been effected under Geneva Convention III, which accorded to the detainees the status of prisoners of war thereunder (para 99). (d) The court should interpret article 5(1) of the Convention in the light of article 31(3) of the Vienna Convention on the law of treaties 1969 (the Vienna Convention), which required it to take into account, at (b), any subsequent practice in the application of the (European) Convention which established the agreement of the parties regarding its interpretation and, at (c), any applicable rules of international law (para 100). (e) The case of Al Saadoon v United Kingdom (2010) 51 EHRR 9 demonstrated that, in accordance with article 31(3)(b) of the Vienna Convention, consistent practice of the parties to the (European) Convention could even establish an agreement to modify its text (para 101). I interpolate that the central fact there had been that all but five of the member states had agreed in a protocol that the death penalty shall be abolished. Taking it together with consistent state practice not to impose the death penalty, the Strasbourg court in the Al Saadoon case had held, at para 120, that the protocol indicated that article 2 of the Convention, which had allowed for the imposition of the death penalty in specified circumstances, had been amended so as to delete that part of it. (f) The practice of member states, when engaged extra territorially in IACs in which they effected detentions under Geneva Conventions III and IV, had not been to exercise their power of derogation from article 5 under article 15 of the Convention (para 101). (g) In accordance with article 31(3)(c) of the Vienna Convention, the court should interpret article 5 of the Convention in harmony with international humanitarian law, in particular Geneva Conventions III and IV, which had been designed to protect both prisoners of war and captured civilians who posed a threat to security (para 102). (h) The United Kingdom (which had argued see para 90 that it was more in the interests of a detainee that the detaining power should not derogate altogether from article 5 but should instead remain subject to a suitably accommodated interpretation of it) had been correct in saying that the lack of derogation did not disable the court from interpreting article 5 in the light of Geneva Conventions III and IV (para 103). (i) The safeguards in article 5(2) to (4) of the Convention, albeit also to be interpreted in the light of Geneva Conventions III and IV, should continue to apply to detentions during an IAC but, in the light of those safeguards and of those in the Geneva Conventions themselves, the six exceptions to the right to liberty prescribed in article 5(1) should be accommodated, as far as possible with the taking of prisoners of war and the detention of civilians under the Geneva Conventions (para 104). (j) The court is mindful of the fact that internment in peacetime does not fall within the scheme of deprivation of liberty governed by article 5 of the Convention without the exercise of the power of derogation under article 15 It can only be in cases of international armed conflict, where the taking of prisoners of war and the detention of civilians who pose a threat to security are accepted features of international humanitarian law, that article 5 could be interpreted as permitting the exercise of such broad powers. (para 104). (k) But the requirement in article 5(1) that every deprivation of liberty should be lawful continued to apply to these cases, with the result that detentions had to comply with the provisions of the two Geneva Conventions (para 105). (l) Interpretation in the light of the Geneva Conventions of the safeguard in article 5(4), when applied to detentions during an IAC, required limited, but only limited, departure from its usual interpretation (para 106). The central issue in these appeals is whether the reasoning of the Grand Chamber in the Hassan case should be applied so as to justify a conclusion that, when detaining the two claimants, the United Kingdom did not violate article 5(1) any more than when it had detained T. The obvious difference is that the detention of T took place in the course of an IAC whereas the detention of the claimants took place in the course of a non international armed conflict (a NIAC). In the Hassan case the Grand Chamber laid great stress on Geneva Conventions III and IV, which, as I have explained, provided both the source of the power to detain T and the safeguards which were to surround his detention. But these two Geneva Conventions scarcely relate to a NIAC. They include just one provision relating to a NIAC, namely article 3, which is common to both of them and which requires humane treatment of all those taking no active part in the conflict, whether by reason of detention or otherwise. Additional Protocol II to the Geneva Conventions, dated 8 June 1977 and expressed to relate to the protection of victims of NIACs, develops and supplements article 3 (Part I, article 1), in particular by elaborating upon the requirement that they be treated humanely (Part II). But the legal regulation exerted by the Geneva Conventions, together with Additional Protocol II, of states participating in a NIAC is negligible in comparison with their regulation of states participating in an IAC. This is no accident. In his article entitled Is There a Way Out of the Non International Armed Conflict Detention Dilemma?, 91 Intl L Stud 32 (2015), Professor Rona identifies at pp 37 38 three reasons why states have traditionally had no desire to accept international regulation of the grounds of their detentions, or of the procedures relating to them, during a NIAC. They have insisted that: international regulation would be an intrusion into their sovereign (a) right to address conflict confined to their own territory; (b) an entirely adequate, means of addressing it; and their domestic law, in particular their criminal law, was the proper, and (c) the prospect that international regulation would afford reciprocity of rights to the other party to the conflict, ie to the insurgents, was unacceptable. On any view the claimants are entitled to place reliance on the references of the Grand Chamber in the Hassan case to the application in that case of the two Geneva Conventions and, of course, on the sentence in para 104 of its judgment, quoted in para 124(j) above, which begins [i]t can only be in cases of international armed conflict . But one does not have to delve far below the surface of the Grand Chambers judgment in the Hassan case in order to perceive the problems which confront the claimants in seeking to distinguish it. It was inevitable that in its judgment the Grand Chamber should speak in terms of an IAC: for T had been detained in the first period of the conflict in Iraq. The court had no reason to consider detention in the course of a NIAC. Significantly the essential distinction which it drew, both in para 97 and in para 104, was between detention during an IAC, on the one hand, and detention during peacetime (as opposed to during a NIAC), on the other. The Grand Chamber relied heavily on the requirement under article 31(3)(c) of the Vienna Convention that, in interpreting the (European) Convention, it should take account of any relevant rules of international law. It had not considered this important principle in the Al Jedda case when making the assumption which I have identified in para 117 above. In the Hassan case the relevant authority under international law for the purposes of article 31(3)(c) was derived from the two Geneva Conventions. In the present cases, by contrast, it was derived from the resolutions of the Security Council. There is no reason to afford any less interpretative significance to the resolutions of the Security Council than to the Geneva Conventions. On the contrary the resolutions may be said to have carried greater significance. The purposes of the United Nations, invested with greater world wide authority than any other body in seeking to achieve them, are to maintain international peace and security, and to that end to take effective collective measures for the prevention and removal of threats to the peace and to achieve international co operation in promoting and encouraging respect for human rights: paras 1 and 3 of article 1 of the UN Charter. Primary responsibility for the maintenance of international peace and security is conferred by the UN on the Security Council which, in discharging it, must act in accordance with those purposes: article 24. Unlike the generalised authorities to detain during every IAC which are to be found in the two Geneva Conventions, the authority to detain in the resolutions was specifically devised by the Security Council to address what it had concluded to be the threat to international peace and security which were constituted by the situations in Iraq and Afghanistan. But the authority conferred by the Security Council was appropriately narrow: internment would be lawful not because it was expedient nor even because it was reasonably deemed to be necessary but only when it was actually necessary for the maintenance of security. Since about the end of the Second World War an apparently rigid distinction has emerged between an IAC and a NIAC. But, particularly where there is foreign intervention in an armed conflict within a state, the distinction is often difficult to apply in practice: International Law and the Classification of Conflicts ed Wilmshurst (2012), Chapter III by Professor Akande, p 56. Before concluding that article 5(1) of the Convention falls to be accommodated to an IAC but not to a NIAC, we should ask: why not? There is in principle no lesser need for detention in a NIAC than in an IAC. I can see no reason why, if an authorisation for detention during a NIAC is valid under international law in that it emanates from the Security Council, article 5(1) should hobble the authorisation so long, of course, that safeguards against arbitrary or unchallengeable detention remain in place. So I agree with the conclusion of the Court of Appeal in Mr Mohammeds case, at para 163, that, in the light of the Hassan case, a resolution of the Security Council which (contrary to that courts construction of Resolution 1386) did confer direct authority on a troop contributing state to effect a detention during a NIAC would be compatible with article 5 of the Convention, provided that procedural safeguards in relation to detention and to its review were also compatible with it. Interpretation of the procedural safeguards provided in paras (2) to (4) of article 5 may also be sufficiently flexible to take account of the context of the detentions, namely that they took place in the course of armed conflict and pursuant to the resolutions (see the Hassan case at para 106). But any dilution of those safeguards should be to the minimum extent necessary to accommodate the demands of that context; and (if I may gratefully adopt the reasoning in para 146 of the decision in a different context of the Grand Chamber in Al Dulimi v Switzerland, Application No 5809/08, 21 June 2016) these resolutions, which contained no explicit wording to the contrary, cannot justify any interpretation of the safeguards which undermines their objective that detentions should not be arbitrary. But it is insufficient to consider only the safeguards, diluted to the minimum extent necessary, in paras (2) to (4) of article 5. In the context of detention safeguards are so important that they are subject to a double lock. The extra lock is provided by the requirement in para 1 that no one shall be deprived of his liberty save in accordance with a procedure prescribed by law. No one suggests that this particular IN ACCORDANCE WITH LAW phrase requires to be accommodated with the circumstances surrounding the detentions in Iraq and Afghanistan. An interesting question, left open in the courts below but pressed on this court by Ms Fatima QC on behalf of the first interveners in the appeal relating to Mr Mohammed, is whether, even if the detentions were to accord with international law, the phrase would nevertheless also require their accordance with national law. Even after having studied paras 79 and 80 of its judgment in the Medvedyev case, cited by Lord Sumption at para 80 above, I regard the Strasbourg court as not yet having provided clear authority on this question for us to consider. On any view, however, there is much to be said in favour of Ms Fatimas submission that accordance with national law remains necessary. At the centre of the requirement is the need for the detaining state to be answerable for the detention; and that need is most obviously met in the domestic law by which the state is bound. The detention is required to accord with a procedure prescribed by law; within the resolutions which in these appeals represent the relevant international law there is no prescription of procedure. In its report to the UN Human Rights Council dated 4 May 2015, the Working Group on Arbitrary Detention suggested, in Guideline 17 at para 115(ii), that a detention in the course of a NIAC had to be shown to be on the basis of grounds and procedures prescribed by law of the State in which the detention occurs and consistent with international law. Although the prescription can no doubt be by any law by which the detaining State is bound, thus including, if it is operating abroad, its own domestic law, the guideline in my view helps to identify the source of the law with which article 5 requires accordance. So the next question is: what does this phrase in the opening words of article 5(1) require of domestic law? The answer is complicated first by the use in the Convention of the word lawful in the description of each of the six exceptions to the right to liberty in (a) to (f) of para 1; and also by the three specific safeguards, each clearly procedural, which are importantly provided by paras 2, 3 and 4 of the article. So there is overlap between the various requirements of the article in this respect. All of them are generally designed to prevent a detention from being arbitrary: A v United Kingdom (2009) 49 EHRR 29, para 164. Clearly, however, the precise territory of the phrase in the opening words of para 1 is procedure. In Winterwerp v The Netherlands (1979) 2 EHRR 387, the Strasbourg court stated at para 45: The notion underlying the term in question is one of fair and proper procedure, namely that any measure depriving a person of his liberty should issue from and be executed by an appropriate authority and should not be arbitrary. This statement has stood the test of time; and in my view the only helpful elaboration of it has been the suggestion that the phrase relates to the quality of the law rather than the content of it. As the Grand Chamber observed in Mooren v Germany (2009) 50 EHRR 23, para 76, it requires the relevant domestic law to be compatible with the rule of law. The court added: Quality of the law in this sense implies that where a national law authorises deprivation of liberty it must be sufficiently accessible, precise and foreseeable in its application, in order to avoid all risk of arbitrariness. In para 80 of the Medvedyev case, cited above, these requirements were described as falling within the general principle of legal certainty. In the case of Iraq Mr Powell referred in his letter annexed to Resolution 1546 to the obligations of the multinational force under the Geneva Conventions. Why did he do so in circumstances in which, apart from those in common article 3, the obligations would not in terms relate to the NIAC which was shortly to begin? The answer is to be found in sections 1 and 6 of the revised Memorandum No 3, which was promulgated lawfully, so I will assume on 27 June 2004 by the administrator of the Coalition Provisional Authority. The memorandum was given continuing effect under Iraqi law after 28 June 2004, when the conflict became a NIAC, by article 26(C) of the Transitional Administrative Law which had been promulgated in March 2004 by the Iraqi Governing Council: see the Al Saadoon case at para 22, cited at para 124(e) above. Under those sections the multinational force was to apply the relevant standards of Geneva Convention IV as a matter of policy during the forthcoming NIAC and specific provisions were made for regular reviews of internment. Procedural safeguards under Iraqi law, binding on the United Kingdom when operating there, were thereby put in place; and in my view it follows that Mr Al Waheeds detention was in accordance with a procedure prescribed by law. In para 38 of its judgment in the Al Jedda case the Grand Chamber, which had set out the memorandum in para 36, referred to the Iraqi Constitution adopted in 2006; and it seemed to suggest that (or at least to question whether) articles 15 and 37 of the constitution thereafter rendered Mr Al Jeddas detention unlawful even under Iraqi law. Unfortunately, however, the Grand Chambers attention was not drawn to article 46 of the constitution, which allows other Iraqi laws, such as the memorandum, to limit constitutional rights in certain circumstances. In its consideration of a second claim made by Mr Al Jedda, namely Al Jedda v Secretary of State for Defence [2010] EWCA Civ 758, [2011] QB 773, the Court of Appeal concluded that article 46 did indeed limit Mr Al Jeddas constitutional rights, with the result that his detention remained lawful under Iraqi law even after 2006. It would be extraordinary that, by a side wind generated by a conventional constitutional provision intended to protect civilians against arbitrary detention during peacetime, detentions in Iraq effected by the multinational force during the final years of the armed conflict suddenly became unlawful under Iraqi law. In the case of Afghanistan, the requisite obligation upon the United Kingdom under article 5(1) to effect internment there only if in conformity with the rules of national law as well as to keep within the boundaries of its authorisation under international law arose even more directly. For the Ministrys policy in that respect was set out in instruction SOI J3 9; and United Kingdom law will in principle require it to have implemented its policy. The conclusion of Leggatt J that the terms of the instruction satisfied the requirement of legal certainty in the opening words of article 5(1) does not appear to have been challenged in the Court of Appeal and is not in issue before this court. F: CONCLUSION I conclude that the effect of the resolutions of the Security Council was to modify the United Kingdoms obligations to the claimants under para 1 of article 5 of the Convention with the result (a) that its detention of Mr Al Waheed was not in breach of it and (b) that, to the extent that Mr Mohammed was detained for imperative reasons of security, its detention of him was not in breach of it. The invitation of the claimants to this court has been that it should depart from the decision of the House of Lords in the Al Jedda case pursuant to Practice Statement (Judicial Precedent) [1966] 1 WLR 1234. Any departure pursuant to the statement must be from the previous decision itself rather than from any of the reasoning which led to it. Like that of Mr Al Waheed, the detention of Mr Al Jedda by United Kingdom forces took place during the third and final period in which they operated in Iraq; and Resolution 1546 and its successors applied to it. It can now be seen that the effect of the resolutions was to modify Mr Al Jeddas right under article 5(1) of the Convention, with the result that, by detaining him, the United Kingdom did not violate it. So, by a jurisprudential route different from that which it took, the decision of the House to that effect can now be seen to have been correct. Far more debateable is whether, in light of the points later to be made by the Grand Chamber, the reasoning of the House was correct. For reasons which one can well understand but which in retrospect have proved unfortunate, the drafters of the Convention chose to identify six cases as being the only cases in which it would be lawful for a member state to deprive a person of liberty. Compare the exhaustive precision of article 5(1) with, for example, article 9(1) of the UNs International Covenant on Civil and Political Rights 1966, which, although otherwise closely modelled on article 5, provides that [n]o one shall be deprived of his liberty except on such grounds as are established by law. There is nothing to indicate that the drafters of the Convention contemplated that its jurisdiction under article 1 would extend to the operations of member states in the course of armed conflict beyond their territories. Once, however, the Strasbourg court had construed the jurisdiction of the Convention as extending that far, it became essential, as indeed was swiftly recognised in the Al Skeini case, that Convention rights should be so divided and tailored as to make the extension workable. Otherwise member states would be driven, insofar as they were able to do so, to derogate under article 15 from their obligations under the Convention which would leave the human rights of those caught up in the conflict far less protected. The exercise of tailoring article 5 was duly conducted by the Grand Chamber in the Hassan case; and today, by a majority, the court takes forward the exercise which it charted. In my view it is no part of the function of this court to speculate upon the approach of another court, not even of the Grand Chamber of the Strasbourg court, to the issue presently raised before it. We cannot foretell the determination in the Grand Chamber of any claim which might now be brought by the claimants, and by the hundreds of other claimants in our courts in a position analogous to them, of a violation by the United Kingdom of article 5(1) of the Convention. No doubt there would again be dissentient voices, concerned, in a way understandably, about a perceived dilution of Convention rights. But a vastly more important factor would be in play. For all of us judges, both in Strasbourg and in the United Kingdom, who believe many of us, passionately in the value of the Convention in having raised the standards of a states treatment of its people across the Council of Europe, its very credibility is at stake in determination of the present issues. Could it be that, by reason of article 5(1), such state contributors to the multinational forces in Iraq and Afghanistan as happened also to be members of the Council of Europe would be legally disabled from effecting internments in Iraq after 28 June 2004, and from effecting internments in Afghanistan beyond 96 hours, even where necessary for the maintenance of security and even pursuant to UN resolutions which, having surveyed the nature of the conflict there, expressly sanctioned internment in such circumstances? Could it be that those contributors to the multinational force would be disabled from acting pursuant to the UN resolutions although fellow contributors which happened not to be members of the Council of Europe would not be so disabled? Such conclusions would bring the Convention into widespread international disrepute and it is, frankly, a relief for me to have found myself persuaded that they can properly be avoided. By contrast there was a clear breach of Mr Mohammeds rights under para 4 of article 5 of the Convention, irrespective of the extent to which the paragraph falls to be accommodated with the exigencies of an armed conflict; and in that regard the only remaining question for the trial judge should, in my view, be whether the breach caused Mr Mohammed to suffer loss. For the reasons given by Lord Sumption at paras 105 and 106 above, the violation of the paragraph was in each of two respects: first, the structural system for the reviews of Mr Mohammeds detention meant that they were not sufficiently independent of those within the United Kingdom force who sought its continuation; and second, he was afforded no opportunity to contribute to them. Lord Mance argues strongly, at para 216 below, that the evidence so far filed by the Ministry about the structural system for the reviews might, if supplemented, displace a positive finding against it in the first respect; but in my view the opportunity already given to the Ministry to file the relevant evidence has been fair and there is no justification for granting to it any extra indulgence. LORD MANCE: Introduction The present appeals concern claims for damages by two individuals in respect of their allegedly wrongful detention by British forces in respectively Iraq and Afghanistan. I have had the benefit of reading in draft three of the other judgments which have been prepared, by respectively Lord Sumption, Lord Wilson and Lord Reed. A central issue of principle on these appeals is whether the United Kingdom, in the course of assisting the recognised governments of Iraq and Afghanistan to combat non international armed insurgencies, had under international law power to detain suspected terrorists or insurgents when necessary for imperative reasons of security, or whether any power to detain must be found within the express terms of article 5 of the European Convention on Human Rights. The United Kingdom advances two bases on which it submits that it possessed such power; one is customary international law applicable to a non international armed conflict (a NIAC) read with the Geneva Conventions and their additional Protocols; the other is the relevant Security Council Resolutions (SCRs) endorsing the authority of the United Kingdom to act as part of the multinational force in Iraq and as part, or indeed leader, of the International Security Assistance Force (ISAF), in Afghanistan at the relevant times. Customary international law Lord Reed concludes positively that customary international law and the Geneva Conventions and their Protocols do not confer any such authority to detain on states (para 263). Lord Sumption is inclined to agree with Lord Reed on this, but regards it as unnecessary to decide (para 14). His more nuanced thinking is that, while there is in principle consensus about a right to detain, there is a lack of consensus about its limits and conditions and the extent to which special provision should be made for non state actors, but that practice is converging and it is likely that this will ultimately be reflected in opinio juris (para 16). My position is closer on this issue to Lord Sumptions than to Lord Reeds. Like Lord Sumption I also regard it as one which is in the event unnecessary to decide. But I add one observation. The role of domestic courts in developing (or in Lord Sumptions case even establishing) a rule of customary international law should not be undervalued. This subject was not the object of detailed examination before us, and would merit this in any future case where the point was significant. But the intermeshing of domestic and international law issues and law has been increasingly evident in recent years. Just as States answer for domestic courts in international law, so it is possible to regard at least some domestic court decisions as elements of the practice of States, or as ways through which States may express their opinio juris regarding the rules of international law. The underlying thinking is that domestic courts have a certain competence and role in identifying, developing and expressing principles of customary international law. The potential relevance of domestic court decisions as a source of international law was recognised and discussed as long ago as 1929 by H Lauterpacht, then an assistant lecturer at the London School of Economics, in his article Decisions of Municipal Courts as a Source of International Law 10 British Yearbook on International Law (1929) 65 95. This drew on insights derived from Lauterpachts joint editorship with his former LSE doctorate supervisor, the then Arnold McNair, of the Annual Digest and Reports of Public International Law Cases (now the International Law Reports) series also launched in 1929: see The Judiciary, National and International, and the Development of International Law by Sir Robert Jennings QC in vol 102 of the series (1996). There is a further extensive bibliography on the subject annexed at pp 18 19 of the Fourth report on identification of customary international law dated 25 May 2016 submitted by Sir Michael Wood QC as rapporteur to the International Law Commission (ILC). Most recently, in the chapter The Interfaces between the National and International Rule of Law: a Framework Paper in The Rule of Law at the National and International Levels (Hart Publishing, 2016) the classic answer given by Machiko Kanetake (at p 27) is that under international law, national rule of law practices are, after all, part of state practices, which contribute to the creation of new customary international law, that they may also form part of the general principles of international law, and may also qualify as opinio juris. Sir Michael Wood, as rapporteur to the ILC, recognised in his Second Report dated 22 May 2014 para 58 the potential significance in international law of domestic jurisprudence not only as state practice, but also, with caution, as a means for the determination of rules of customary international law: see also his Third Report dated 27 March 2015 paras 41(e) and 76(b). Yet more significantly, the current draft Annual Report of the International Law Commission to the UN General Assembly for 2015, following upon Sir Michael Woods Reports, contains the following draft Conclusion 13 (subject to finalisation in 2018): Decisions of courts and tribunals 1. Decisions of international courts and tribunals, in particular of the International Court of Justice, concerning the existence and content of rules of customary international law are a subsidiary means for the determination of such rules. 2. Regard may be had, as appropriate, to decisions of national courts concerning the existence and content of rules of customary international law, as a subsidiary means for the determination of such rules. Security Council Resolutions (SCRs) (a) The relevant SCR for Iraq was 1723 (2006), whereby the Security Council, recognizing the tasks and arrangements set out in letters annexed to resolution 1546 (2004) and the cooperative implementation by the Government of Iraq and the multinational force of those arrangements, reaffirmed the authorisation for the multinational force as set forth in resolution 1546 (2004) and decided to extend the mandate of the multinational force as set forth in that resolution until 31 December 2007, taking into consideration the Iraqi Prime Ministers letter dated 11 November 2006, which had in turn requested such extension in accordance with the Security Council Resolutions 1546 (2004) and 1637 (2005) and the letters attached thereto until 31 December 2007. SCR 1546 (2004) itself reaffirming the authorisation conferred by earlier resolutions, conferred the authority to take all necessary measures to contribute to the maintenance of security and stability in Iraq in accordance with the letters annexed to this resolution . The resolution went on to state that the letters set out the tasks of the multinational force, including preventing and deterring terrorism. The letters included a letter of 5 June 2004 from the US Secretary of State, expressing the United States willingness to deploy forces to maintain internal security in Iraq and to undertake activities which would, the letter said: include activities necessary to counter ongoing security threats posed by forces seeking to influence Iraqs political future through violence. This will include combat operations against members of these groups, internment where this is necessary for imperative reasons of security SCR 1546 (2004) is thus on its face clear. It gave authority to take all necessary measures, which, it was expressly stated, would include internment where this is necessary for imperative reasons of security. In Al Jedda v United Kingdom (2011) 53 EHRR 23, the European Court of Human Rights addressed the relevant letter (which it had earlier summarised in para 34), by concluding that it did not impose an obligation or requirement to detain (para 108). On that basis, it further concluded that the letter could not override the United Kingdoms duties under article 5 of the Convention. But it did not suggest that the SCR, read with the letter, did not contain power to detain. The European Court of Human Rights in Al Jedda was only concerned with arguments based under article 103 on competing obligations: see paras 101 110. Once it had concluded that there were no competing obligations, that was the end of those arguments. The relationship between a power to detain conferred by international law in circumstances of armed conflict and article 5 of the European Convention on Human Rights was not squarely addressed until Hassan v United Kingdom (2014) 38 BHRC 358. There it was addressed in the context of an international armed conflict (IAC). The Third and Fourth Geneva Conventions expressly recognise certain powers (though not obligations) to detain prisoners of war and civilians who pose a risk to security. The European Court of Human Rights held that the scheme provided by article 5 had to be read in the light of, and modified to reflect, the power to detain on security grounds, subject to the condition that such detention was not arbitrary, but was accompanied by a review process which was independent, even if it was not by a court. The European Court of Human Rights acknowledged at the outset that the arguments raised in Hassan were novel. As it said (para 99): 99. This is the first case in which a respondent state has requested the court to disapply its obligations under article 5 or in some other way to interpret them in the light of powers of detention available to it under international humanitarian law. In particular, in Al Jedda v United Kingdom (2011) 30 BHRC 637, the United Kingdom government did not contend that article 5 was modified or displaced by the powers of detention provided for by the Third and Fourth Geneva Conventions. Instead they argued that the United Kingdom was under an obligation to the United Nations Security Council to place the applicant in internment and that, because of article 103 of the United Nations Charter, this obligation had to take primacy over the United Kingdoms obligations under the convention. It was the governments case that an obligation to intern the applicant arose from the text of United Nations Security Council Resolution 1546 and annexed letters and also because the resolution had the effect of maintaining the obligations placed on occupying powers under international humanitarian law, in particular article 43 of the Hague Regulations (see Al Jedda v United Kingdom (2011) 30 BHRC 637 at para 107). The court found that no such obligation arose. In this passage, the European Court of Human Rights was recognising, realistically, that it had before it arguments that had not been, though they might have been, raised for its consideration in Al Jedda. (This is so, even though its reference to powers of detention provided for by the Third and Fourth Geneva Conventions may quite possibly be open to question, in the light of paras 115 116 of this judgment.) To treat the fact that the United Kingdom did not in Al Jedda present any argument about the relationship between a power to detain conferred by international law and the provisions of article 5 of the Convention as fatal to any such argument now appears to me unreal. The United Kingdom has now changed its stance, and the previous stance of one individual state cannot in context anyway be significant. As to the European Court of Human Rights, in a case law system, like that which the European Court of Human Rights operates under the Convention, courts proceed from case to case, sometimes having to reconsider or modify past jurisprudence (moreover, in Strasbourg without applying any strict doctrine of precedent). Above all, it is necessary to bear in mind the very considerable difficulty of the issues which arise, since the European Court of Human Rights judgment in Al Skeini v United Kingdom (2011) 53 EHRR 18, in applying the Convention to circumstances and territories outside any which are likely to have been in Contracting States mind when they agreed to secure the Convention rights and freedoms to everyone within their jurisdiction (Convention, article 1). Finally, if Hassan had been decided before Al Jedda, it is quite obvious that the submissions and the reasoning in the judgment in Al Jedda would have been very different. Hassan itself concerned a situation of IAC, where the Geneva Conventions confer express powers to detain. This was, not surprisingly, underlined by the European Court of Human Rights as a reason for concluding that the terms of article 5 could not be applied, and that they should be modified so as to recognise a further and different power to detain, based on the Conventions concurrently. Thus, the court said in para 104: 104. None the less, and consistently with the case law of the International Court of Justice, the Court considers that, even in situations of international armed conflict, the safeguards under the Convention continue to apply, albeit interpreted against the background of the provisions of international humanitarian law. By reason of the co existence of the safeguards provided by international humanitarian law and by the Convention in time of armed conflict, the grounds of permitted deprivation of liberty set out in subparagraphs (a) to (f) of that provision should be accommodated, as far as possible, with the taking of prisoners of war and the detention of civilians who pose a risk to security under the Third and Fourth Geneva Conventions. The court is mindful of the fact that internment in peacetime does not fall within the scheme of deprivation of liberty governed by article 5 of the Convention without the exercise of the power of derogation under article 15 (see para 97 above). It can only be in cases of international armed conflict, where the taking of prisoners of war and the detention of civilians who pose a threat to security are accepted features of international humanitarian law, that article 5 could be interpreted as permitting the exercise of such broad powers. Again, it would be unrealistic to treat this (and in particular the word only in the last sentence) as either addressing or as decisive of the issue now before the courts, where there is on the face of SCR 1546 an unqualified power to detain where necessary for imperative reasons of security. There is no logical and substantial reason why article 5 should not adapt to a power to detain contained in a SCR directed to a NIAC, just as it does to a power to detain conferred by customary international law and/or the Geneva Conventions in the context of an IAC. The reasons why there may as yet be no recognised customary international law power to detain in a NIAC are closely associated with member states wish to avoid recognising or giving reciprocal rights to insurgent groups. These are precisely the reasons why a host state may request, and the Security Council may under Chapter VII of the UN Charter confer, a unilateral power to detain to a friendly third state helping the host state to resist the insurgency. The principal basis on which Lord Reed would refuse to recognise the existence of any such power consists in the reasoning in Al Jedda, as followed in Nada v Switzerland (2012) 56 EHRR 18 and Al Dulimi and Montana Management Inc v Switzerland (Application No 5809/08) (unreported) (judgment given 21 June 2016). In the latter two cases, the European Court of Human Rights identified the need for clear and specific language if SCRs were to be read as intending states to take measures that would conflict with their obligations under international human rights law: see in particular Al Dulimi, para 140. That was said in the context of the fundamental right of a person made the subject of a sanctions order to know and have the right to address the case against him or her. In the present case, not only is SCR 1546 clear on its face in authorising detention, but there is nothing in general international human rights law precluding such a measure. Article 5 of the European Convention on Human Rights is alone in seeking to define and limit grounds of permissible detention. International human rights law generally is reflected by the International Covenant on Civil and Political Rights (ICCPR). Article 9 of the ICCPR provides a general limitation, by reference to a test of arbitrariness, no more. It reads, so far as relevant: 1. Everyone has the right to liberty and security of person. No one shall be subjected to arbitrary arrest or detention. No one shall be deprived of his liberty except on such grounds and in accordance with such procedure as are established by law. 2. Anyone who is arrested shall be informed, at the time of arrest, of the reasons for his arrest and shall be promptly informed of any charges against him. The argument that one must start with the express terms of article 5 of the Convention, and read SCR 1546 consistently therewith is not in my opinion sustainable. SCR 1546 was not directed to states party to the Convention, but to all member states of the United Nations and to the multinational force established to operate in Iraq. It is perfectly tenable to treat a SCR as intended impliedly (in the absence of clear and specific language to the contrary) to comply with general principles of international law, as the European Court of Human Rights indicated in Nada and Al Dulimi. But article 5 of the European Convention does not reflect general international law, and it is circular to construe SCR 1546 in the light of an assumption that it cannot have been intended to detract or differ from article 5. The starting point is not what article 5 says. The starting point is to identify what SCR 1546 says about the power to detain in a NIAC, just as the starting point in Hassan was to see what customary international law and the Geneva Conventions say about the power to detain in an IAC. As the European Court of Human Rights said in Hassan (paras 77 and 102) that it had observed on many occasions, the Convention cannot be interpreted in a vacuum and should so far as possible be interpreted in harmony with other rules of international law of which it forms part. The fundamental significance in international law of SCRs under Chapter VII of the United Nations Charter needs little underlining. It has been recorded by Lord Sumption in his judgment (para 23), and was clearly expressed by the European Court of Human Rights in Behrami v France; Saramati v France, Germany and Norway [2007] 45 EHRR SE10, para 149, when the Court said that the contribution by NATO states of troops to the KFOR security mission in Kosovo may not have amounted to obligations flowing from membership of the UN but they remained crucial to the effective fulfilment by the UNSC of its Chapter VII mandate and, consequently, by the UN of its imperative peace and security aim. To treat SCR 1546 as contemplating that member states, participating in the peace keeping operations in Iraq and exercising the power to detain afforded by its terms, would satisfy their European Convention obligations by derogating from the Convention appears to me unreal. Putting the same point the other way round, I see no basis for treating member states party to the Convention when exercising such power to detain as being in breach of article 5 unless they derogated from the Convention. First, it seems clear that article 15 of the Convention, which authorises derogation in time of war or other public emergency threatening the life of the nation was itself not conceived with this this type of situation expressly in mind. Second, if it be said that the expanded concept of jurisdiction now recognised in European Court of Human Rights jurisprudence under article 1 should lead to some implied modified understanding of the scope of potential derogation under article 15, that is both highly speculative, and a possibility which any contracting state can well be forgiven for missing. Third, not surprisingly, there is just as little indication that any state has ever purported to derogate under article 15 in respect of involvement in a NIAC as there is in respect of involvement in an IAC (see Hassan). Fourth, it would be splitting hairs to treat the reasoning and decision in Hassan as turning essentially on state practice not to derogate under article 15 in the course of an IAC. In the light of the above, I conclude that SCR 1546, properly construed in the light of its terms and the circumstances to which it was directed, provided for a power to detain in a NIAC for imperative reasons of security. On the assumption (which the government does not now challenge on this appeal) that the matters in question fell within the United Kingdoms jurisdiction under article 1 of the Convention, and provided that sufficient procedural safeguards exist (see the next two paragraphs), I also conclude that article 5 of the Convention should be interpreted in a way which gives effect to and enables the exercise of this power. This can be done, as it was in Hassan, by recognising that the fundamental purpose of article 5(1) is to protect the individual from arbitrariness in accordance with the basic international law principle stated in ICCPR, article 9 (para 160 above). On that basis, the more detailed express terms of article 5(1) may be seen as illustrations of, rather than limitations on, the exercise of the power to detain. This in turn allows scope for or accommodates the operation of wider powers to detain in situations of armed conflict, where provided by general international law or by a specific SCR under Chapter VII. It follows that I concur in principle with all that is said by Lord Sumption in para 18 to 30 and 40 to 68 and by Lord Wilson in paras 114 to 117 and 121 to 134 of their respective judgments. On that basis, the only point requiring further attention is whether a power to detain where this is necessary for imperative reasons of security, as provided in Iraq by SCR 1546, is too unspecific, or too lacking in procedural safeguards, to be recognised either generally or in conjunction with and in addition to the express terms of article 5. As already stated (para 160), the general principle of international law is that No one shall be subjected to arbitrary arrest or detention. The relevant ICCPR article 9(1) goes on to provide that: No one shall be deprived of his liberty except on such grounds and in accordance with such procedure as are established by law. The requirement for grounds to be established is met by a power to detain where necessary for imperative reasons of security. The requirement for a procedure established by law was met in Hassan by the terms of the Third and Fourth Geneva Conventions. The Third Convention provides for the internment of prisoners of war (articles 4(A) and 21), for any doubt about their status to be determined by a competent tribunal (article 5) and for their release and repatriation without delay after the cessation of active hostilities (article 118). The Fourth Convention provides for the detention of individuals definitely suspected of or engaged in activities hostile to the security of the state (Fourth Convention, article 5), for any such action to be reconsidered as soon as possible by an appropriate court or administrative board, and, if maintained, to be reviewed periodically and at least twice yearly (article 43). The United Kingdom had reason to believe that Mr Hassan fell within these categories, and released him as soon as screening showed that he was a civilian who did not pose a threat to security: Hassan, para 109. In agreement with Lord Sumption (paras 67 68), I would not read Hassan as requiring the procedure needed to avoid arbitrariness to be specified in the convention or other treaty or the relevant SCR authorising detention. The procedure falls to be established by or on behalf of the detaining state, and it must at least comply in a NIAC both with the minimum standard of review required in an IAC under article 43 of the Fourth Geneva Convention and accepted as appropriate in that context in Hassan and, subject to such alterations as are necessary to meet the exigencies of armed conflict, with the procedural requirements of article 5: see per Lord Sumption, paras 91 et seq. (b) Afghanistan The relevant SCR in respect of Afghanistan at the time of the detention of Mr Serdar Mohammed (SM) was 1386 (2001), the operation of which was subsequently extended, lastly by SCR 1890 (2009). Lord Sumption has stated the terms of these SCRs in his paras 21 22. SCR 1386 authorised the establishment of an International Security Assistance Force (ISAF) to assist in the maintenance of security in Kabul and surrounding areas, working in close cooperation with the Afghan Interim Authority, and it authorised member states participating in [ISAF] to take all necessary measures to fulfil its mandate. This last critical phrase of article 3 of SCR 1386 falls to be read in the context of the extreme circumstances of violence (including improvised explosive device, IED, and suicide attacks targeting civilians as well as Afghan and international forces and use of civilians as human shields), terrorism, illegally armed groups, increasingly strong links between terrorism activities and illegal drugs, recounted in recitals to resolution 1890. For the reasons coinciding with those given by Lord Sumption in paras 28 and 30 and by Lord Wilson in paras 118 and 119, I consider that the critical phrase in article 3 of SCR 1386 in principle contemplated and authorised detention where necessary to fulfil the mandate, in short detention for imperative reasons of security. Again, appropriate procedural safeguards must be established, meeting the standards identified in para 160 and 165 to 167 above. Afghanistan do the SCRs give powers to ISAF alone or to both ISAF and its member states? This further question arises because of SMs case that any permissible detention was governed by the detention policy guidelines adopted by ISAF, which basically restricted detention (before transfer to the custody of Afghan authorities) to 96 hours with only limited exceptions. I understand Lord Reed to conclude that it was, for reasons set out in his paras 322 334 and 343 346. The context in which this question arises can be summarised as follows. Leggatt J considered that the position of ISAF in Afghanistan broadly mirrored that of KFOR in Kosovo, as examined by the European Court of Human Rights in Behrami. But he went on to reject the United Kingdoms submission that the detention of SM was in reality undertaken by or on behalf of ISAF and so the United Nations, to which SM must in consequence address any claim. He rejected it, because the United Kingdom had at least in November 2009, pursuant to responsibilities which it saw as resting on itself under national and international law, established its own extended detention policy, claiming to enable it to detain for periods longer than 96 hours. It had not, in this respect, acted on behalf of or under any authority conferred, at least originally, on ISAF. ISAF originally complained about this, but Leggatt J inferred that ISAF headquarters did subsequently accept the UK position as detention decisions continued to be taken by United Kingdom officials without involving ISAF and there is no evidence of any further complaints. But that did not mean that the United Kingdom was acting as part of or on behalf of ISAF. See generally per Leggatt J, paras 180 184, and see further paras 181 190 below. On that basis Leggatt J held the United Kingdom responsible for the detention of SM. The United Kingdom thus failed below on the basis that the relevant SCRs gave power only to ISAF to detain, and not to individual member states participating in security operations in Afghanistan: see the Court of Appeals judgment, paras 155 156. Lord Sumption (para 38) and Lord Wilson (para 120) consider that the correct analysis is that the relevant SCRs conferred power to act on the individual participating member states, and that there is no basis for limiting this power (as between the United Kingdom and SM) by reference either to ISAFs detention policy or to any agreement between the United Kingdom and the Afghan authorities, such as that dated 23 April 2006, by clause 3.1 whereof it was agreed that the The United Kingdom AF will only arrest and detain personnel where permitted under ISAF Rules of Engagement. In these circumstances, Lord Sumption concludes that the United Kingdom was entitled to operate its own detention policy vis vis SM, provided of course that this complied as a minimum with the procedural standards required under international law to avoid arbitrariness. The difference on this point between Lord Reed on the one hand and Lord Sumption and Lord Wilson on the other turns on the construction of the relevant SCRs. It is correct that article 3 of SCR 1386 authorised the member states participating in the International Security Assistance Force to take all necessary measures to fulfil its mandate. This followed recitals which inter alia recorded a request in the Bonn Agreement to the Security Council to consider authorising the early deployment to Afghanistan of an international security force and welcomed a letter from the United Kingdom government and took note of the United Kingdoms offer contained therein to take the lead in organising and commanding an International Security Assistance Force. In the light of these recitals, articles 1 and 2 of SCR 1386 went on to authorise as envisaged in Annex 1 to the Bonn Agreement, the establishment for six months of an International Security Assistance Force to assist the Afghan Interim Authority in the maintenance of security in Kabul and its surrounding areas, so that the Afghan Interim Authority as well as the personnel of the United Nations can operate in a secure environment and, second, to call upon member states to contribute personnel, equipment and other resources to the International Security Assistance Force. Article 3 was, further, followed by articles 4 and 5, respectively calling upon the International Security Assistance Force to work in close consultation with the Afghan Interim Authority in the implementation of the force mandate, as well as with the Special Representative of the Secretary General and calling upon all Afghans to cooperate with the International Security Assistance Force and relevant international governmental and non governmental organizations, and welcom[ing] the commitment of the parties to the Bonn Agreement to do all within their means and influence to ensure security . The Bonn Agreement itself contained recitals reaffirming the independence, national sovereignty and territorial integrity of Afghanistan, recognizing that some time may be required for a new Afghan security force to be fully constituted and functional and that therefore other security provisions detailed in Annex I to this agreement must meanwhile be put in place and considering that the United Nations, as the internationally recognized impartial institution, has a particularly important role to play, detailed in Annex II to this agreement, in the period prior to the establishment of permanent institutions in Afghanistan. Consistently with the references contained in SCR 1386, Annex I to the Bonn Agreement provided: 3. Conscious that some time may be required for the new Afghan security and armed forces to be fully constituted and functioning, the participants in the UN Talks on Afghanistan request the United Nations Security Council to consider authorizing the early deployment to Afghanistan of a United Nations mandated force. This force will assist in the maintenance of security for Kabul and its surrounding areas. Such a force could, as appropriate, be progressively expanded to other urban centres and other areas. 4. The participants in the UN Talks on Afghanistan pledge to withdraw all military units from Kabul and other urban centres or other areas in which the UN mandated force is deployed. It would also be desirable if such a force were to assist in the rehabilitation of Afghanistans infrastructure. Annex II to the Bonn Agreement included the provision that: 1. The Special Representative of the Secretary General will be responsible for all aspects of the United Nations work in Afghanistan. The Bonn Agreement therefore envisaged a UN mandated force (ISAF) under UN control to assist the Afghan Interim Authority. It does not support the idea of individual contributing nations operating on their own authority or terms to support the UNs role or give effect to its aims. SCR 1510 (2003) authorised expansion of the mandate of [ISAF] to allow it, as resources permit, to support the Afghan Transitional Authority and its successors in the maintenance of security in areas of Afghanistan outside of Kabul and its environs (article 1). It called upon ISAF to continue to work in close consultation with the Afghan Transitional Authority and its successors and the Special Representative of the Secretary General as well as with the Operation Enduring Freedom Coalition in the implementation of the force mandate, and to report to the Security Council on the implementation of the measures set out in article 1 (article 2). It decided also to extend the authorization of ISAF, as defined in resolution 1386 (2001) and this resolution, for a period of 12 months (article 3), and it authorised the member states participating in [ISAF] to take all necessary measures to fulfil its mandate (article 4) and requested the leadership of [ISAF] to provide quarterly reports on the implementation of its mandate to the Security Council through the Secretary General. SCR 1890 (2009) decided to extend the authorization of [ISAF], as defined in resolution 1386 (2001) and 1510 (2003), for a period of 12 months beyond 13 October 2009 (article 1). It authorised the member states participating in ISAF to take all necessary measures to fulfil its mandate (article 2). It recognised the need to further strengthen ISAF to meet all its operational requirements, and in this regard calls upon member states to contribute personnel, equipment and other resources to ISAF (article 3), and stressed the importance of increasing, in a comprehensive framework, the functionality, professionalism and accountability of the Afghan security sector, encourage[ing] ISAF and other partners to sustain their efforts, as resources permit, to train, mentor and empower the Afghan national security forces (article 4). It further called upon ISAF to continue to work in close consultation with the Afghan Government and the Special Representative of the Secretary General as well as with the OEF coalition in the implementation of the force mandate (article 5), and requested the leadership of ISAF to keep the Security Council regularly informed, through the Secretary General, on the implementation of its mandate, including through the provision of quarterly reports (article 6). Under these SCRs, member states were, necessarily, to provide the personnel and resources which ISAF needed, and were thus authorised to participate in ISAF and take all necessary measures to fulfil its mandate. But the SCRs are replete with references to ISAF acting and being authorised to act, to ISAF having or being given resources and to ISAF reporting to the Secretary General. SCRs also need to be read in light of the principle of proportionality: see Simma et al, The Charter of the United Nations: A Commentary (2012), who continue: This will typically lead to a restrictive reading: resolutions should be understood to embody less restrictive measures generally favoured on proportionality grounds unless the SC has clearly used its discretion to decide otherwise. Thus, in cases of deliberate ambiguity, especially as regards delegations of powers and authorizations to use force, a narrow interpretation is appropriate. Against a narrow view, Lord Sumption notes the exceptional and escalating levels and threats of violence faced by UK forces. That these were particularly serious in Helmand Province where UK troops were located is a fact. On the other hand, the wording of the mandate conferred by the SCRs goes back to the outset of UN involvement, when these levels and threats were not necessarily apparent. Viewing the SCRs overall, I am unable to read them as authorising member states to act otherwise than as participants in or in collaboration with ISAF. The alternative construction, which Lord Sumption and Lord Wilson adopt, amounts to saying that member states received their own authorisation entitling them each to act quite independently of ISAF and each other. This appears to me ultimately a recipe for confusion and unlikely to have been intended by the Security Council. That is not however the end of the matter as regards the United Kingdoms authority to operate its own detention policy. ISAFs and the United Kingdoms policies regarding detention The position is summarised in Lord Sumptions judgment in paras 31 to 37. ISAF policy under its Standard Operating Procedures SOP 362 allowed up to 96 hours for release or handing over into the custody of Afghan authorities, subject in para 8 to authority, vested in the ISAF commander in the following terms: The authority to continue to detain an individual beyond the 96 hour point is vested in COMISAF (or his delegated subordinate). A detainee may be held for more than 96 hours where it is deemed necessary in order to effect his release or transfer in safe circumstances. This exception is not authority for longer term detentions but is intended to meet exigenciessuch as that caused by local logistical conditions eg difficulties involving poor communications, transport or weather conditions or where the detainee is held in ISAF medical facilities and it would be medically imprudent to move him. Where this exigency applies, COMISAF must be notified. Where, in the opinion of COMISAF (or his delegated subordinate), continuation of detention is warranted, COMISAF (or his delegated subordinate) may authorize continued detention. Although no change was made in ISAFs guidelines, the United Kingdom did over the years develop and operate its own policy relating to detention. In the years prior to November 2009, this involved decisions regarding detention being taken by United Kingdom officials, rather than ISAF. On the evidence of Mr Devine, called by the Ministry and unchallenged on this point, ISAF was kept informed both of the United Kingdoms policy in this respect and of individual detentions made under it. Leggatt J made significant findings in this connection. In para 181, he referred to a United Kingdom report of an initial objection by the Chief of Staff of ISAF in this connection in 2006, to the effect that ISAF, rather than United Kingdom officials should be taking detention decisions. The United Kingdom rejected this objection, explaining that it considered that the United Kingdom had to take such decisions in order to ensure that its legal obligations were properly discharged. The report concluded by saying that, now United Kingdom officials had made this point to NATO HQ, it is hoped that HQ ISAF will soon be directed to accept the UK position. Importantly, Leggatt J went on to say, in the passage already quoted in para 25 above: I infer that ISAF headquarters did subsequently accept the UK position as detention decisions continued to be taken by UK officials without involving ISAF and there is no evidence of any further complaints. Until November 2009, United Kingdom policy matched ISAF policy with regard to the length of detention. But, with effect from November 2009, the United Kingdoms detention policy changed to allow detention beyond 96 hours not only in accordance with ISAF policy, on the grounds set out in para 8 of SOP 362 and with ISAF HQ authorisation, but also in exceptional circumstances with the authority of United Kingdom HQ and United Kingdom ministerial authorisation. The revised policy was set out in BRITFOR Standard Operating Instruction J3 9 dated 6 November 2009. Annex G required detailed justification to be submitted with any application for extension of detention beyond 96 hours. The notes to assist its compilation identified as relevant factors the intelligence gained to date and likely to be obtained by further detention and its relevance for any prosecution, together with (and emphasised) the likely impact of detention for United Kingdom/Coalition forces, and in particular whether detention would save life and limb and what the detained was likely to do if released, as well as any legal issues relevant to continued detention. Mr Devine also gave evidence that ISAF was made aware at the highest level of the change introduced in November 2009 and of its application thereafter in individual cases and never objected. He said in one passage: No, my point under this policy is when we introduced the policy in November 2009 we informed ISAF both through its senior body, the North Atlantic Council, and I assume, I dont recall, ISAF through its chain of command. The chain of command, and indeed the NATO political authority, the North Atlantic Council, were fully aware of the policy we were undertaking. I think we can take that understanding how NATO works, I think we can take that consent as NATO authority for our actions. Mr Devines evidence on this point was again not challenged by cross examination. In this connection, Leggatt J said this in para 184: The MOD has argued that the UK did not operate a detention policy which was separate from ISAF policy because ISAF policy envisaged and accommodated some variations in national practice and, in particular, ISAF accepted the need for the UK to depart from the ISAF 96 hour detention limit in exceptional circumstances in light of the fact that UK armed forces were operating in an area of Afghanistan where there is a particularly high level of insurgent activity. I have accepted the evidence of Mr Devine that NATO was informed of the UKs decision to apply a national policy caveat to the ISAF 96 hour limit and did not object to this. But that is a very long way from showing that either UK detention operations generally or individual detentions by UK armed forces were under the command and control of ISAF. It is clear that they were not. The documentation shows that NATO was indeed informed in the most formal way and at the highest level, by letter dated 5 November 2009 to its Secretary General, Mr Anders Rasmussen, giving full details and the explanation for the change in policy. The terms would clearly have been expected to elicit an objection, if objection there had been. In fact there was none. In the light of Mr Devines evidence, I read Leggatt Js findings in paras 181 and 184 as accepting as an inference that ISAF acquiesced in the UK position that it was open to the UK to take its own detention decisions within the 96 hour period, and, in and after November 2009, to apply its own policy regarding detention in excess of 96 hours in exceptional circumstances. In international law terms, the position is in my opinion covered by the judgment in Case Concerning the Temple of Preah Vihear (Cambodia v Thailand) Merits, [1962] ICJ Rep (judgment of 15 June 1962), where the ICJ said this at p 23: It has been contended on behalf of Thailand that this communication of the maps by the French authorities was, so to speak ex parte, and that no formal acknowledgment of it was either requested of, or given by, Thailand. In fact, as will be seen presently, an acknowledgment by their conduct was undoubtedly made in a very definite way; but even if it were otherwise it is clear that the circumstances were such as called for some reaction, within a reasonable period, on the part of the Siamese authorities, if they wished to disagree with the map or had any serious question to raise in regard to it. They did not do so, either then or for many years, and thereby must be held to have acquiesced. Qui tacet consentire videtur si loqui debuisset ac potuisset. The Court of Appeal did not consider that ISAFs failure to protest in these circumstances could be considered to amount to tacit consent (para 71). I do not agree with the Court of Appeals analysis. The Court of Appeal did not refer to Leggatt Js clear conclusion in para 181 that ISAF did subsequently accept the UKs position regarding detention, and para 184, which the Court of Appeal did cite, is directed not to the contrary, but to the question of command and control. Leggatt J expressly accepted the evidence of Mr Devine, which also establishes that ISAF was kept fully and regularly informed of the UK detention policy and its application to particular detainees. The natural inference from this and from the absence of any further complaints by ISAF at any time is, in my opinion, that ISAF did accept the UKs right to apply its policies and procedures both before and after November 2009, even though they differed from ISAFs. I add that it seems that two other members of ISAF also adopted different policies regarding the 96 hour limit, the USA by enacting domestic legislation and Canada by reaching specific agreement with the Afghan authorities to treat detainees as prisoners of war. Domestic legislation would protect US forces in at any rate the United States. It may be that an agreement with the Afghan authorities could be presented as an independent source of authority to detain under local law. The UK did not pursue either of these protective routes. But in no case is there an indication that ISAF raised any objection to this conduct by members of ISAF. I add that, had I not concluded that ISAF tacitly accepted (and indeed that the judges findings amount to acceptance that ISAF tacitly accepted) the UKs position regarding its policies both before and after November 2009, I would not have determined this largely factual point against the Ministry of Defence. I would have remitted it to the judge for further examination, on the basis that Mr Devines evidence on the point was effectively unchallenged, such potential significance as the point may have does not appear to have emerged very clearly at the hearing before him, and the point should now be clearly addressed and determined. The consequences of the above analysis The above analysis means that the UK was, when implementing its detention policies before and after November 2009, acting in a way which was accepted as permissible by ISAF. ISAF could not however authorise any detention policy by a state whose forces were participating in ISAF outside the scope of the authority which ISAF had under the relevant SCRs. The SCRs did not authorise detention save where necessary for imperative reasons of security. Any policy involving detention purely for intelligence gathering reasons, without the co existence of some other ground such as danger to UK forces or the ISAF mission generally, could not properly have been authorised by ISAF, or applied by the UK. But, subject to that caveat, I see no reason why ISAF should not accept the operation by a particular state participating in ISAF of its own detention policy, separate from ISAFs own guidelines. A number of possibilities arise from these conclusions. One is that, as a result of ISAFs tacit assent to the United Kingdoms operation of its own policies, responsibility for any detention by United Kingdom forces should be borne by ISAF, not the United Kingdom. The Ministry of Defence argued as much before the courts below, relying on the decision of the Grand Chamber of the European Court in Behrami v France, Saramati v France, Germany and Norway (2007) 45 EHRR SE10. Leggatt J rejected the argument for the reasons given in his para 184 (quoted in para 185 above). The essential reason was that the UK forces were not in this respect under the command and control of ISAF. The Ministry of Defence originally sought permission to appeal against this conclusion (by a proposed Ground 3 in its notice of appeal to this court). The Ministry has not however pursued that application, so that Leggatt Js conclusion in para 184 stands. That is again not the end of the matter. The issue to which Leggatt J was referring in his para 184 whether UK armed forces were under the command and control of ISAF in relation to detention is one thing. Whether the UK was authorised by ISAF to pursue its own detention policy in the context of its activities as a participating member of ISAF is another. Accordingly, subject to the caveat that detention purely for intelligence gathering reasons could not be justified, the primary question in relation to each period of detention in respect of which SM complains is whether there was a good reason for his detention for imperative reasons of security, and if so whether exceptional circumstances existed justifying United Kingdom forces in continuing to act as the detaining authority, rather than handing SM over to the Afghan authorities, after the first 96 hours. If such circumstances operated as a concurrent reason for continued detention, they could justify the detention, even if another illegitimate reason, such as a desire to interrogate, was also in operation. Even if the only motive for continued detention present in the United Kingdom authorities mind was to continue interrogation, that does not exclude the possibility that another basis in fact existed, which would have justified and led to continued detention, had the United Kingdom authorities directed themselves correctly. SM is claiming damages for wrongful detention. It is highly material to consider whether, but for any failures which he may establish in United Kingdom authorities reasoning or procedures, he would have been any better off in other words, anywhere other than in custody. Further, if the answer is that he would not have been in the custody of United Kingdom forces, but would have been in the custody of Afghan forces, it would be material to consider whether this would have involved him in any form of detriment, justifying an award to damages. Exceptional circumstances could well exist if extended detention was or would have been necessary because SM represented a real danger to United Kingdom forces or ISAFs mission generally, but could not in the meanwhile be transferred to Afghan custody because the Afghan facilities were for the time being either unsatisfactory or full. As to this, para 44 of the Ministrys amended defence, which is for the purposes of the issues now before the Court to be taken as correct, indicates that overcrowding and lack of capacity in Afghan facilities was a reason for non transfer during the third period from 6 May to 25 July 2010 in respect of which SM complains. It seems unlikely that this situation did not also exist during the second period starting on 10 April 2010. Another factor of potential relevance is that throughout that period a legal challenge was on foot as to the appropriateness of any transfers of detainees to any of the three detention facilities operated by the National Directorate of Security (NDS) of Afghanistan in Kabul, Kandahar and Lashkar Gah. The relevant proceedings were heard in the Divisional Court on 19 to 23 and 26 to 29 April 2010. They led to a judgment given 25 June 2010, which concluded that it would be unlawful for United Kingdom transfers to be made to NDSs Kabul facility. It could hardly lie in the mouths of the present respondents to assert that they could have been transferred to a facility to which it would have been unlawful for such a transfer to be made. As to the danger or risks for United Kingdom forces or the ISAF mission, the assumed facts set out in paras 26 to 65 of the amended defence speak for themselves. I set out the most material: 26. The claimant was detained at around 3.20 am (Afghan time) on 7 April 2010 as part of a planned ISAF operation. The team which undertook this operation included UK military personnel, members of the Afghan Partnering Unit and ISAF military working dogs. The operation targeted a senior Taliban commander and the vehicle in which it was believed he was travelling. When the operation was launched, approximately four people were seen leaving the vehicle and entering two compounds. 27. From the outset of the operation, as their helicopter touched down near the two compounds, the capturing team came under heavy fire. 28. The claimant ran from one of the two compounds, along with another insurgent. The other insurgent fired upon UK military personnel and was killed. The claimant fled from the compound into a field about 450 metres from the compound. He was asked a number of times via an interpreter to identify his location and to come out with his hands up. He did not do so. He was considered to present a significant and imminent threat. Accordingly, a military working dog was released into the field by its handler and the dog apprehended the claimant, in the process causing him to suffer a bite to his right arm. 29. Halfway along the route along which the claimant was observed to have fled, between the compound and the place of his arrest, UK Armed Forces found a rocket propelled grenade (RPG) launcher and two RPG rounds. 30. During the course of the operation, another two insurgents were found in one of the two compounds. One of them engaged UK armed forces and was killed. The other insurgent was captured. 31. UK Armed Forces safely extracted the claimant and the other captured insurgent. They did so whilst under heavy and sustained small arms and RPG fire. The extraction took about ten hours. Three members of UK Armed Forces were wounded in action. 32. The claimant was lawfully captured and detained in accordance with ISAFs standard operating procedures, pursuant to authorisation contained in UN Security Council Resolution 1890 (2009) and in compliance with IHL. 33. the claimants asserted ignorance of the RPGs and launcher is denied. The Detainee Transfer Paperwork records that explosive traces were found on the claimants clothes. 36. In response to questioning the claimant stated he was a farmer. The defendant subsequently received information that the claimant was a senior Taliban commander, also known as Mullah Gulmad. Mullah Gulmad was, and is, believed to have been involved with the large scale production of IEDs and to have commanded a local Taliban training camp in mid 2009. 38. On 7 April 2010, at Camp Bastion, the claimant was informed, with the aid of an interpreter, that he had been detained because he was considered to pose a threat to the accomplishment of the ISAF mission and that he would either be released by ISAF or transferred to the Afghan authorities as soon as possible. He was informed that he had the right to contact the International Committee of the Red Cross (ICRC) at any time and when asked if he wished to have someone informed of his detention, gave the name of his father. Taking this account as correct, as we are required for present purposes to do, it is unsurprising that, in an initial application by BRITFOR for continued detention dated 8 April 2010 the Detention Authority said this in respect of SM in the section of the relevant form (Annex G) headed Legal Issues: The test to be applied is whether, on the balance of probabilities, Detainee 995 has done something that makes him a threat to force protection, self defence or wider mission accomplishment. Having considered all the evidence and intelligence relating to this operation, in particular Detainee 995s actions immediately prior to capture and the assessment that he attempted to hide two RPGs, I advise that the policy test is satisfied. The Legal Issues sections in the eight subsequent Annex G applications which were completed to obtain a series of 72 hour extensions of detention included similar information, but were from time to time also expanded and updated. Thus on 13 April 2010 specific mention was added of the fact that the compound from which SM had fled had been known to have links with Obj White (code for the local Taliban commander) and the assessment was added that SM may be that commanders deputy. By 16 April 2010, the assessment was expanded to say that SM is the commanders deputy. On 25 April 2010, there was reference to the positive identification that he is a TB Comd and Obj WHITEs deputy. On 28 April 2010, the addition was made that the recent CHEMEX results have revealed a high confidence return for RDX, PETN and TNT. It is also assessed that he may be Obj WHITES deputy. On 1 May 2010, the further addition appeared that he has been positively identified by HUMINT as call sign . (The dots represent redactions in the versions before the Supreme Court.) The picture which on its face emerges is that the completion of the Annex G applications was not a mere formality or box ticking exercise. Rather, it appears as a conscientious exercise on each occasion in reconsidering and restating the facts and in re applying the test whether SM had done something which makes him a threat to self defence, force protection or wider mission accomplishment. The initial application was also completed with No to Release and Yes to Transfer, Extension to 96 hours and Extension beyond 96 hours. The eight subsequent applications were all completed with No to Release and Yes to Transfer and to Extension beyond 96 hours. In these circumstances, despite the further entries to the effect that the evidence to hand made this a weak case to hand to the NDS, the natural (and unsurprising) inference is that SM was seen throughout not only as a threat to self defence, force protection and/or wider mission accomplishment, but also as a suspect who, once United Kingdom forces ceased to hold him and a suitable NDS facility was available, was to be handed over to the NDS rather than released. Whether exceptional circumstances for extended detention in this or any other sense existed which justified or could have justified detention by United Kingdom forces for longer than 96 hours is therefore an issue which should, in my view, be left open for further consideration at trial. The judges findings in relation to the second and third periods of SMs detention were made on the false premises that, firstly, once someone has been captured and disarmed, there can be no imperative reasons of security for detaining him further, and, secondly, that article 5 of the ECHR applied without qualification or addition. The judge also appears to have thought that a short term absence of capacity in the NDS Lashkar Gar detention facility would preclude a conclusion that SM was being held with a view to transfer there (see eg his para 348). That was wrong in my view, if there was a fair prospect of transfer there within a not unreasonable longer term period. I add that the Court of Appeal was incorrect, in para 250 of its judgment, to say that Mr Devine had stated about SM that his continued detention was not assessed to be necessary for force protection purposes. Likewise, if, contrary to my above conclusions, ISAF cannot be treated as having tacitly accepted the UKs changed policy in and after November 2009, it should still remain open to the UK to submit that SMs detention beyond 96 hours could and would have been authorised under ISAFs guidelines, had they been applied. That too will require factual inquiry and findings about the reasons for which SM was in fact held, as well as potentially about any other basis or bases on which he could and would have been held in any event, and in each case whether they would have constituted grounds for extended detention within the terms of the ISAF guidelines. Para 8 of the ISAF guidelines gives some limited, but not exclusive, examples of the exigencies which may justify extended detention. It also contemplates extended detention where it is deemed necessary in order to effect his release or transfer in safe circumstances. Whether the situation falls within these words or not, there must be a strong argument that the relevant exigencies could include, for example, extended detention when necessary because the person in question represented a real danger to UK forces or ISAFs mission generally, but could not for the meanwhile be transferred to Afghan custody because the Afghan facilities were for the time being either unsatisfactory or full. In these circumstances, and in common with Lord Sumption, (paras 86 and 87), I am not satisfied that Leggatt Js findings can be transposed to the present context, when the issue is now whether there were exceptional reasons which under UK policy, or alternatively, exigencies which under ISAF rules, justified SMs continuing detention during either or both of those periods. I would remit that issue for determination at the trial accordingly. Application of ECHR This brings me to consider whether and how far detention for exceptional reasons under UK policy or by reasons of exigencies under ISAF rules can be regarded as consistent or can be accommodated with article 5 of the ECHR. The Ministry of Defence relies upon article 5(1)(c) and (f) as heads expressly covering the present circumstances, alternatively upon the accommodation between the power to detain conferred by SCR 1546 and article 5 which I have already concluded (para 164 above) should be made in the context of non international armed conflicts such as those in Iraq and Afghanistan in which United Kingdom forces were engaged at the times relevant to these appeals. To the extent that SM was held with a view to handing him over to the NDS on reasonable suspicion of having committed an offence or offences, article 5(1)(c) would constitute a basis for his detention. It would, however, be necessary to go on to consider whether the United Kingdom had complied with article 5(3). Article 5(3) is (as Lord Sumption also notes in his para 96) not easy to fit into a context where the United Kingdom was not in a position to exercise judicial authority or power, or ever going to put SM on trial itself. Applying an approach similar to that taken in Hassan, it may be that it can be modified in the present context to accommodate administrative procedures undertaken by United Kingdom authorities. Alternatively, if articles 5(1)(c) and 5(3) do not, even with modification, fit the present circumstances, then, to the extent that SM was held with a view to his handing over to the NDS, there is to my mind attraction in Leggatt Js view that article 5(1)(f) can be regarded as applicable to a de facto transfer of jurisdiction between armed forces of different States in Afghanistan. It would then be necessary to consider whether the United Kingdom complied with article 5(4). However, even if neither article 5(1)(c) nor article 5(1)(f) directly applies, each offers an analogy which points towards and assists in identifying a more general accommodation between the international law power to detain and article 5. Under both article 5(1)(c) and (f), the Ministry of Defence faces a difficulty if its only actual motivation in continuing to detain during the second period was to interrogate. That, as I have stated, was not a legitimate basis under the SCR, any more than it is under the European Convention on Human Rights (see authorities cited by Lord Sumption in para 80). If there was in fact some other legitimate basis on which SM could and would still have been detained, then the question would arise whether, on showing this, the Ministry of Defence could bring itself directly within article 5(1)(c) or (f), or whether its relevance would simply be to the question whether SM should receive any (or what) damages. This would then merit further argument in due course before the judge. If neither article 5(1)(c) nor article 5(1)(f) applies directly, the question arises whether and how far the power conferred by SCR 1546 to detain for imperative reasons of security can and should be accommodated with article 5. For reasons indicated in paras 152 to 168 above, I consider that the two can and should be read together. But this is subject always to compliance with core procedural requirements modelled on the provisions of article 5(1), (3) and (4). With regard to article 5(1) (in accordance with a procedure prescribed by law), I am content to adopt what Lord Sumption says in his paras 91 to 93. With regard to article 5(3), which will arise for consideration if the circumstances prove on further consideration to make article 5(1)(c) relevant, I agree with Lord Sumption that the critical question is how far the requirements of article 5(3) can properly be adapted to the conditions of armed conflict in Afghanistan, and that this question should be left to be determined at the trial (see his paras 95 and 98 in particular). For completeness, I must address the argument raised by the First Interveners and considered by Lord Wilson in paras 136 140 that, whatever the international or Convention law position, compliance with domestic law (whether English law or the law of the place of detention or one or other is not entirely clear) is also required for any detention to be in accordance with law. This argument cannot, in my view, arise in Al Waheed in the light of the limited leap frog issue before the Supreme Court. In SM the argument was suggested below by Ms Fatima QC for the Interveners, but neither court found it necessary to deal with. However, the Ministry of Defence argued unsuccessfully for a reverse position, namely that it was authorised to detain SM by Afghan law, and this alone sufficed to justify SMs detention under article 5, whatever the international legal position. The Supreme Court has now decided to defer decision whether to grant permission to appeal on this issue. My own view is that Ms Fatimas argument fails for the reasons given by Lord Reed in his paras 343 345, which I understand to fit with those given by Lord Wilson in his para 139. But, if the view were to be taken that the argument does not fail for these reasons, this adds potentially to the significance of the issue on which the Court has now deferred any decision whether to grant permission to appeal (viz, whether Afghan law authorised detention in accordance with international law, and in particular in accordance with any Security Council Resolution authorising such detention). ECHR article 5(4): right to review of the lawfulness of detention Article 5(4) provides in terms that: Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. In Hassan, para 106, the European Court of Human Rights explained how this might be understood and adapted to cater for the exigencies of an international armed conflict: 106. As regards procedural safeguards, the Court considers that, in relation to detention taking place during an international armed conflict, article 5 paras 2 and 4 must also be interpreted in a manner which takes into account the context and the applicable rules of international humanitarian law. Articles 43 and 78 of the Fourth Geneva Convention provide that internment shall be subject to periodical review, if possible every six months, by a competent body. Whilst it might not be practicable, in the course of an international armed conflict, for the legality of detention to be determined by an independent court in the sense generally required by article 5 para 4 (see, in the latter context, Reinprecht v Austria, (2005) no 67175/01, para 31, ECHR 2005XII), none the less, if the Contracting State is to comply with its obligations under article 5 para 4 in this context, the competent body should provide sufficient guarantees of impartiality and fair procedure to protect against arbitrariness. Moreover, the first review should take place shortly after the person is taken into detention, with subsequent reviews at frequent intervals, to ensure that any person who does not fall into one of the categories subject to internment under international humanitarian law is released without undue delay. For reasons already given, I consider that this guidance is equally relevant in relation to the NIAC in which United Kingdom forces were engaged and in the context of which SM was captured and detained. In October 2012, a wide range of 24 states together with international organisations including the UN, NATO, the African Union, the European Union and the ICRC agreed on The Copenhagen Process: Principles and Guidelines. These were specifically intended to reflect generally accepted standards (Commentary, para 16.2) applicable to international military operations in the context of non international armed conflicts and peace operations (Introductory para IX). Principle and Guideline 12 reads: A detainee whose liberty has been deprived for security reasons is to, in addition to a prompt initial review, have the decision to detain reconsidered periodically by an impartial and objective authority that is authorised to determine the lawfulness and appropriateness of continued detention. This is both consistent with and supports the application to detention in the course of a NIAC of principles similar to those recognised in Hassan as appropriate in relation to an IAC. The possibility that SM could have sought habeas corpus while in United Kingdom forces custody was not pressed by Mr Eadie QC. Even assuming that a writ of habeas corpus could (contrary to the Ministry of Defences primary case) have lain, Mr Eadie was, as I understood him, prepared to accept that the possibility of seeking and obtaining such a writ would not, at least in the Afghan context, satisfy the modified requirements of article 5(4). On the other hand, it is not, I understand, suggested, and in any event could not, I think, realistically be suggested, that SM should have been afforded access to any local court prior to being handed over to an NDS detention facility. The question is therefore whether the legality of SMs detention was subject to periodic review by a competent body in the sense of a body providing sufficient guarantees of impartiality and fair procedure to protect against arbitrariness, the first such review taking place shortly after he was taken into detention, with subsequent reviews at frequent intervals thereafter. What is frequent must depend on the context in and basis on which a detainee is being held. But the European Court of Human Rights was, on the face of it, envisaging periodic reviews of greater regularity than if possible every six months, the phrase it quoted earlier in para 106 from the Fourth Geneva Convention. The scheme established by SOI J3 9 is detailed and clear. The reviews undertaken under it in respect of SM were very frequent, and the documentation relating to them can be seen (despite redactions for security reasons) to be impressive in its thoroughness. Criticisms are however directed in two main areas: (a) sufficiency of the guarantees of impartiality and (b) fairness of the procedure so far as concerns SMs involvement. Before considering these criticisms, it is appropriate to consider the purpose, in the context of the present case, of reviews such as those contemplated by Hassan, para 106, and by Copenhagen principle 12. The purpose is to ensure that detention only occurs and continues when there is good cause for it. For that reason, the detainee should be told why he is being detained, and given the opportunity to give his account of events as well as to pass information to the outside world which will reach his family. But, if this has occurred and a detainee is held as an active member of the Taliban and a continuing threat, with a view to his eventual transfer to NDS custody, the frequency of review which is required may well diminish. In the present case, the actual frequency of reviews was closely linked with the process of obtaining authorisation for further interrogation, but interrogation was not itself a basis for detention. What was a potential basis for detention was the risk that SM posed to United Kingdom forces and the ISAF mission and the intention to transfer him into NDS custody with a view to further investigation and/or criminal prosecution. In the present case, SM was arrested during armed operations and extracted under heavy and sustained small arms and RPG fire in a process which took ten hours. He must have known that he was being arrested as an insurgent, and he responded to questioning by saying that he was a farmer: see para 195 above. He was then taken to Camp Bastion where he was interviewed through an interpreter, told that he had been detained as a threat to the ISAF mission and further told that he would be either released or transferred to the Afghan authorities as soon as possible. He was then given the opportunity of making a statement about his detention. Form Annex A Rights of a detainee, which was (on the currently assumed facts) accurately translated to him and signed by SM by thumbprint, records SMs response and information which he was given, in the following terms: I was working in the field 9 12. Helicopter came so I layed down in my Field, they let the dog attack me and then arrested me. Likewise, he was informed of his right to contact the ICRC by letter at any time during your detention here. No subsequent information came to light to change the United Kingdom forces assessment of SMs role and involvement with the Taliban in any way which could have militated in favour of his release, rather than his detention and transfer in due course into NDS hands. On the contrary, such further information as came to light merely strengthened the grounds for considering that he was an insurgent: see para 196 above. In fact, SM was also interrogated over a period during which he maintained an obstructive approach to questioning and persisted in his denial of involvement in the insurgency and specifically Obj WHITE, as recorded in Annex G relating to the eighth successive 72 hour review. So it is clear that he did have further opportunities to give his account and to provide any information which might put a different complexion on his involvement. Against this background, I turn more specifically to the two areas of criticism. As to (a), sufficiency of the guarantees of impartiality, the Court of Appeal dealt with this at some length, on the assumption that (although it took place on 9 10 April 2010) the initial review as well as all the subsequent reviews were all conducted in accordance with the revised Detention Authority regime set out in Amendment 2 of SOI J3 9 dated 12 April 2010. The Court of Appeal noted that under Amendment 2 the Detention Authority was the Commander of Joint Force Support (Afghanistan), and went on (para 288): Amendment 2, para 12 states that his continuing duty as the Detention Authority to ensure that each detention is justified provided an independent level of review for all detention operations, and that the Legal Advisor is a member of the Detention Review Committee. We note that it is also stated that the core members of the Detention Review Committee must remain outside the chain of command for targeting and tactical legal issues, although they are not wholly outside the chain of command in the Theatre. The Court of Appeal went on to point out (para 289) that the judge had made no detailed findings about the nature of this relationship (because he did not need to in the light of his view that strict compliance with article 5 was necessary and because he was only dealing with preliminary issues), and continued: This, together with the fact that this issue was only explored in the Secretary of States post hearing note on outstanding issues, means that we have limited information as to the precise relationship of the chain of command which has the Commander of Joint Force Support (Afghanistan) at its pinnacle and those responsible for detaining a person. The court lacks the factual context required to reach a decision about the independence of the reviewing body. That would include details of the precise chain of command in Afghanistan, and the meaning of the statement that the core membership must remain outside the chain of command for targeting and tactical reasons. However, the Court of Appeal went on to give some guidance, stating: 291. We doubt whether a Detention Authority squarely within the chain of command in the relevant theatre, advised by a committee consisting of members who are either the subordinates of the Detention Authority or otherwise within the chain of command under him meets the requirement of independence and impartiality. and 292. As to whether that regime satisfied the requirements of independence and impartiality, we know that the core membership included the Commanding Officer of the Intelligence Exploitation Force and the Force Provost Marshal. The relationship of the legal adviser who was also a core member of the Detention Review Committee and those responsible for tactical legal issues, who it was stated should not be core members, was not explained. We, however, note that the legal and political Advisers and the Force Provost Marshal provided advice to the Detention Authority as to whether to release, transfer or detain in the first 48 hours. The Force Provost Marshal was stated to be the subject matter specialist for detention issues. This does not sit easily with, and might even be thought to be contrary to the requirement that all members of the Committee should be able to present cases cold to the Detention Authority. Moreover, the Detention Authority reported to military superiors, and MoD civil servants advised a government minister who made the decision about whether to authorise further detention. For these reasons, we also doubt that the new regime was sufficiently independent, although our doubts are of a lesser order than those concerning the former Detention Authority regime. During the hearing before the Supreme Court, Mr Eadie produced a list giving the full composition of the Detention Review Committee as well as explaining some of the acronyms used in Amendment 2. But for my part I do not think that the picture is materially clearer than it was before the Court of Appeal. Both the Court of Appeal and Lord Sumption in para 105 of his judgment also adopt the concept of independence as an element of the appropriate test. To my mind, that risks introducing too formal an aspect into an essentially military review. It is notable that the European Court of Human Rights in Hassan, para 106, used only the word impartial, while Copenhagen principle 12 spoke only of review by an impartial and objective authority. I am not confident that the Supreme Court knows enough about the relationships between the various ranks and posts identified in the list that the Court has been given or the way in which the military operates to be able to condemn the review system introduced by Amendment 2 as inadequate. Appellate judges with no military experience sitting thousands of miles from the theatre of armed conflict should, I think, be very cautious to assess the impartiality of a group of officers from or about whom, or of a process about which, they have heard no oral evidence. This should be left to the judge who will at trial have had the opportunity of hearing evidence and making findings about these matters. On this, I see no reason for us, sitting in the Supreme Court, to disagree with the Court of Appeal. Up to this point, I have focused on the process before the Detention Authority and Detention Review Committee. I have done so, because the material available suggests to me that it was only at this level that the existence and level of any threat presented by SM were assessed. So far as appears, and subject to anything that may emerge at trial, it appears that the matter only went to a higher level (that is to Permanent Joint Headquarters (PJHQ) and ultimately to ministerial level) in the context of the 14 day reviews which were undertaken under Amendment 2 Part II paragraph 29 using Annex H, to gain permission for further detention for further interrogation. Annex H does not appear to have included information directed at enabling either PJHQ or ministers themselves to form any view on whether SM presented a threat which itself justified further detention pending transfer into NDS hands. Both paragraph 27 of Part II of Amendment 2 to SOI J3 9 and the way in which Annex H was itself completed focus on the value of the intelligence which any extension of detention might provide for force protection and/or (more generally) for a better understanding of the nature of the insurgency. I would add that in the light of what I have said in paras 209 211 above, I find it difficult to see that the circumstances of SMs detention called for reviews every 72 hours or even every 14 days directed to the question whether he was a threat to United Kingdom forces or the ISAF mission. If he was a threat on capture, as he clearly was on the assumed facts, there was nothing to make that threat go away. Rather, as I have said, the only information becoming available simply strengthened the case for regarding him as a threat. There was no change in the general situation in Afghanistan to affect this. The reason for the regular reviews which actually occurred was the repeated need to authorise further interrogation. But that was not by itself a justified reason for detention (and one might add that, if it had been, it could hardly be expected that SM would be offered the opportunity to make observations on the course of interrogation so far or the merits or otherwise of further interrogation). I turn to (b), the fairness of the procedure as regards SM. For the reasons I have already given, he was in my view given and in possession of sufficient information about the case against him at the outset, and had an appropriate opportunity of responding to it. He must have known that this was part of a process of considering the appropriateness of his continuing detention. Likewise, to the extent that he was held thereafter because he would if released have been a threat and was being held pending transfer to the NDS, I cannot see what any further opportunity or opportunities to comment could have offered him in practical terms. However, I accept that in order to avoid leaving a suspect in SMs position in silent limbo, and in some contexts perhaps also to minimise the risks of ill treatment there is an intrinsic value in having a suspects case reviewed at regular intervals and informing him of the opportunity to make representations. This is so, even if such reviews appear unlikely to lead to any change in his treatment or detention. Here, SM was not, so far as appears, informed about any review process or offered any opportunity of making representations in that connection (although he was offered the opportunity at any time of contacting the ICRC). On the face of it, the United Kingdom fell short in this respect of providing him with the appropriate procedural guarantees. However, the claimant is seeking damages, expressly including just satisfaction. In this context, it seems highly unlikely indeed contrary to all the evidence presently available to suggest that there would have been any prospect that informing SM about any review process, or offering him any opportunity of making representations in respect of it, would have made any difference to actual events. There is of course a question whether SMs handing over to the NDS was delayed, or (putting the point the other way around) whether his detention in United Kingdom hands was extended, by the fact that the United Kingdom regarded him as a potential source of information material to the success of the ISAF mission, and repeated extensions of his detention were sought and obtained on that ground. He was not notified of the reviews which led to such extensions. Had he been notified, he might, at least in theory, have objected to any extensions with that purpose in mind. Had that objection (however implausible it may seem) been given weight, the question would at once have arisen whether there was any other basis for United Kingdom forces continuing to detain him. The United Kingdom authorities would then have had to consider, earlier than it appears they did, the question whether there was any NDS detention facility with spare capacity to which they could properly transfer SM. Again, however, so far as one can presently see, such a process may well have led to no more than SM remaining in United Kingdom custody pending transfer to NDS or his slightly earlier transfer from United Kingdom to NDS custody. Either way, a claim for substantial damages might be optimistic. In the light of the above, I, for my part, would limit myself to the views expressed, and remit the whole case to the judge for trial on that basis. Conclusions The appeal in Al Waheed is not concerned with the question whether minimum procedural standards were established and applied in relation to the relevant detention. I agree with its disposition as Lord Sumption proposes. As to SM, whether the United Kingdom was or would have been entitled to detain him after the expiry of a 96 hour period, that is after 11 April 2010, depends upon whether it can show, firstly, that detention was required for imperative reasons of security, and, secondly, that exceptional circumstances under the UK policy (or alternatively exigencies under ISAF guidelines) existed justifying United Kingdom forces in continuing to act as the detaining authority, rather than handing the detainee over to Afghan authorities. This and the further issue whether failure to provide SM with an appropriate review process in any respect led to any extended detention or other loss should be remitted for determination at the trial. LORD HUGHES: (with whom Lord Neuberger agrees) The ground in this case has been comprehensively covered by the judgments above. It would not help to repeat the valuable analysis offered. Subject to what follows, I agree with the judgments of Lord Mance, Lord Wilson and Lord Sumption. It is necessary to address three points on which these judgments do not agree, and one further point which is considered by Lord Wilson at paras 136 140. The first difference is whether the UN Security Council resolutions concerning Afghanistan conferred authority to detain (and to lay down rules about detention) upon ISAF as an entity (as Lord Mance says) or upon the troop contributing member nations through the medium of ISAF (as Lord Sumption and Lord Wilson say). This difference has no impact on the outcome of the appeal in the case of Serdar Mohammed because, as Lord Mance concludes, ISAF in any event endorsed the decision of the United Kingdom to adopt its own detention policy, as was also the position in relation to the USA and Canada. I therefore doubt if it is necessary to express a concluded view on this topic, but, subject only to observing that the authority to troop contributing member nations is clearly premised on mutual co operation although not on precise identity of polices, I presently prefer the analysis of Lords Sumption and Wilson. The second difference relates to whether there has been established an infringement of article 5(4) ECHR on the grounds that the United Kingdom system of internal review in Afghanistan failed to achieve sufficient impartiality. On this topic I agree with Lord Mance, for the reasons he gives, that that suggested shortcoming has not been established, and accordingly do not agree with the contrary conclusion of Lords Sumption and Wilson. I particularly support Lord Mances observations in the last four sentences of para 215. I also agree with both Lord Mance and Lord Sumption that it is very questionable that any further opportunity to state his case could have made any difference to Serdar Mohammed. The third difference concerns the possible application of article 5(1)(f). On this topic I agree with Lord Mance at paras 202 203. My primary conclusion is, like Lords Mance, Sumption and Wilson, that the very terms of article 5(1)(f), as well as those of other subparagraphs, demonstrate that in the context of armed conflict the article must be interpreted on the principle explained in Hassan. If, however, that were to be wrong, then it seems to me that subparagraph (f) is capable of including situations in armed conflict when one State detains for the purpose of handing over the detainee to another. I should add that I doubt if there is a difference between Lord Mance and Lord Sumption as to the possible application of article 5(1)(c). On the findings of fact made by the judge at para 333 it cannot apply to the second period of Serdar Mohammeds detention but if he could have been detained in that period for the purpose of producing him to the Afghan authorities, this goes to the question whether he is entitled to any, or if so what, award of damages. The additional point considered by Lord Wilson at paras 136 140 concerns the relevance of the domestic law of the country concerned. As to that, I agree with the conclusions of Lord Mance at para 204, for the reasons which he gives and in the light of the observations of the ECtHR in calan v Turkey (2005) 41 EHRR 45, cited by Lord Reed at para 345. LORD TOULSON: My involvement in this appeal has been in relation to all issues except the procedural requirements of articles 5(1), 5(3) and 5(4) of the Convention in relation to the detention of Serdar Mohammed. On all those issues I agree, subject to one point, with the judgments of Lord Mance, Lord Wilson and Lord Sumption. The one point is that discussed in para 226 of Lord Hughes judgment with which I agree. LORD HODGE: My only involvement in this appeal has been the hearing on 26 October 2016, following the retirement of Lord Toulson, at which the court considered the procedural requirements of articles 5(1), 5(3) and 5(4) of the Convention in relation to the detention of Serdar Mohammed. On those matters I agree with the judgment of Lord Sumption at paras 68 and 90 110 and with the declarations which he proposes at para 111(4), (5) and (6). LORD REED: (dissenting) (with whom Lord Kerr agrees) I agree in part with the conclusions reached by Lord Sumption, in which the majority of the court concur. In particular, I agree that Mr Mohammeds detention by HM Forces after 11 April 2010 did not fall within article 5(1)(f) of the European Convention on Human Rights, and that his detention between 11 April and 4 May 2010 did not fall within article 5(1)(c). I also agree that the arrangements for his detention did not fall within article 5(4), and that the question whether they complied with article 5(3) should be considered after trial. I also agree that the Ministry of Defence is in principle liable to pay compensation to Mr Mohammed if and in so far as his detention was prolonged by his detention by HM Forces between 11 April and 4 May 2010 for intelligence exploitation purposes. There are also some matters on which I have reached a different conclusion, in agreement with the courts below: in particular, whether UN Security Council Resolutions (SCRs) 1546 (2004) and 1890 (2009) should be interpreted as authorising detention in circumstances other than those specified in article 5(1)(a) to (f) of the Convention, and in consequence whether HM Forces were entitled to detain Mr Al Waheed and Mr Mohammed in such circumstances, pursuant to those SCRs. Having reached that conclusion, I also require to consider whether a right to detain was conferred by international humanitarian law, an issue on which Lord Sumption does not (and does not require to) reach a concluded view. In relation to that issue, I conclude that no right of detention arose under international humanitarian law. I therefore reach the conclusion that Mr Mohammeds detention between 11 April and 4 May 2010, being authorised neither by an SCR nor by international humanitarian law, was in violation of article 5(1). Given the importance of the issues, and the potential influence of this courts decision, I have thought it right to prepare a reasoned judgment. As it is a long judgment which discusses many issues and arguments, I shall summarise my main conclusions at the outset, with references to the sections of the judgment containing the relevant discussion: (i) Conventional (ie treaty based) international humanitarian law provides no authority for detention in a non international armed conflict (paras 243 270 and 274). (ii) Customary international humanitarian law, in its present state of development, provides no authority for detention in a non international armed conflict (paras 256 257, 271 273 and 275 276). (iii) For the purpose of applying the European Convention on Human Rights, UN Security Council Resolutions should be interpreted on the basis that there is a presumption that the Security Council does not intend to impose any obligation on member states to breach fundamental principles of human rights; that, in the event of ambiguity, the court must choose the interpretation which is most in harmony with the requirements of the Convention; and that it is to be expected that clear and explicit language will be used if the Security Council intends states to take measures which would conflict with their obligations under international human rights law (paras 277 289). (iv) The judgment of the Grand Chamber of the European Court of Human Rights in the case of Hassan v United Kingdom [2014] BHRC 358 should not be interpreted as entailing a departure from that approach (paras 290 300). (v) The court should depart from the decision of the House of Lords in Al Jedda v Secretary of State for Defence (JUSTICE intervening) [2007] UKHL 58; [2008] 1 AC 332, that SCR 1546 imposed an obligation to detain in circumstances other than those listed in sub paras (a) to (f) of article 5(1) of the Convention, which prevailed over the obligation to comply with the Convention by virtue of article 103 of the Charter of the United Nations (paras 304 305). (vi) Hassan should not be interpreted as warranting the modification of article 5(1) so as to permit detention in circumstances not falling within sub paras (a) to (f), in relation to the detention authorised in Iraq by SCR 1546 (2004), as extended by SCRs 1637 (2005) and 1723 (2006) (paras 292 297 and 307 315). (vii) Interpreting SCR 1546 consistently with the Convention, Mr Al Waheeds detention by HM Forces was compatible with article 5(1) of the Convention only if he was detained in circumstances falling within sub paras (a) to (f) (para 316). (viii) Hassan should not be interpreted as warranting the modification of article 5(1) so as to permit detention in circumstances not falling within sub paras (a) to (f), in relation to the detention authorised in Afghanistan by SCR 1386 (2001), as extended by SCR 1890 (2009) (para 324). (ix) Interpreting SCRs 1386 and 1890 consistently with article 5(1), HM Forces had authority to detain Mr Mohammed under the SCRs for more than 96 hours only in circumstances falling within sub paras (a) to (f) of article 5(1) (paras 322 334). (x) Mr Mohammeds detention by HM Forces between 11 April 2010 (ie the end of the initial period of 96 hours) and 4 May 2010 was for the purpose of obtaining intelligence. It did not fall within sub paras (a) to (f) of article 5(1) (paras 335 346 and 351). (xi) Mr Mohammeds detention during that period was in any event for a purpose falling outside the scope of the authority granted by SCR 1890, and was therefore for that reason also incompatible with article 5(1) (paras 343 and 352 353). (xii) Mr Mohammeds detention by HM Forces after 4 May 2010 fell within the scope of article 5(1)(c) of the Convention, and was not incompatible with article 5(1) (paras 347 350 and 354 357). (xiii) The arrangements for Mr Mohammeds detention were not compatible with article 5(4), since he did not have any effective means of challenging the lawfulness of his detention (para 359). (xiv) Whether there was a violation of article 5(3) of the Convention should be considered after trial (para 359). Article 5 of the European Convention on Human Rights Article 5(1) of the Convention defines the circumstances in which persons may be detained. It begins: Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law. In relation to the question whether a procedure prescribed by law has been followed, the Convention refers essentially to national law but also, where appropriate, to other applicable legal standards, including those which have their source in international law: Medvedyev v France (2010) 51 EHRR 39, para 79. Medvedyev itself provides an example of a situation where the legal basis of detention was assessed by reference to international law, since the detention took place on the high seas. There follows in sub paragraphs (a) to (f) a list of circumstances in which detention is permissible. They do not include detention for reasons of security, or for the gathering of intelligence. The only ones which are relevant to these appeals are those set out in sub paragraphs (c) and (f): (c) the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so; . (f) the lawful arrest or detention of a person to prevent his effecting an unauthorised entry into the country or of a person against whom action is being taken with a view to deportation or extradition. The remaining paragraphs of article 5 are concerned with procedural protections against arbitrary detention: 2. Everyone who is arrested shall be informed promptly, in a language which he understands, of the reasons for his arrest and of any charge against him. 3. Everyone arrested or detained in accordance with the provisions of paragraph 1(c) of this article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release pending trial. Release may be conditioned by guarantees to appear for trial. 4. Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. 5. Everyone who has been the victim of arrest or detention in contravention of the provisions of this article shall have an enforceable right to compensation. Although the conflicts in Iraq and Afghanistan with which these appeals are concerned took place outside Europe, the European Court of Human Rights has held that a contracting state which detains persons in a situation of armed conflict, outside its own territory, has those persons within its jurisdiction for the purposes of article 1 of the Convention, so that the Convention is applicable. That approach has been applied in particular to the detention of persons by HM Forces operating in Iraq during both the international and the non international phases of the armed conflict there (the distinction between the international and non international phases will be explained shortly): see Al Skeini v United Kingdom (2011) 53 EHRR 18, Al Jedda v United Kingdom (2011) 53 EHRR 23 and Hassan v United Kingdom (2014) 38 BHRC 358. The substantive guarantees set out in the Convention have been given effect in the domestic law of the United Kingdom by the Human Rights Act 1998. In so far as HM Forces operating in conflicts overseas may have been acting in circumstances which engaged the United Kingdoms responsibilities under the Convention, and in so far as the Human Rights Act is applicable to those overseas operations, any breach of the Convention rights by those forces falls within the jurisdiction of British courts. The central question which has to be determined at this stage of these appeals is how article 5 applied in the context of the phases of the armed conflicts in Iraq and Afghanistan during which Mr Al Waheed and Mr Mohammed were respectively interned by HM Forces. It is contended on behalf of the Secretary of State that detention in these non international armed conflicts was authorised under international law by one or more of (1) treaty based international humanitarian law, (2) customary non international law, or (3) the relevant SCRs. It is further contended that article 5(1) is modified in its application to these conflicts so as to accommodate the authorisation of detention under international humanitarian law or the relevant SCRs, with the consequence that the list of permissible grounds of detention set out in sub paras (a) to (f) is not to be regarded as exhaustive. It is also contended that detention in these conflicts satisfied the requirement in article 5(1) that any deprivation of liberty must be in accordance with a procedure prescribed by law. In considering these contentions, it is necessary to consider the relationship between the Convention, international humanitarian law, and SCRs. It is also necessary to consider the extent to which the application of international humanitarian law and international human rights law depends on the nature of the armed conflict in question: whether, in particular, it is classified under international humanitarian law as an international or a non international armed conflict. It may be helpful at the outset to consider the meaning of these terms. International and non international armed conflict Non international armed conflict is an expression which has no universally agreed definition, but can be understood for present purposes as referring, in the language of article 3 of all four of the Geneva Conventions of 1949 (common article 3), to armed conflict not of an international character, as opposed to international armed conflict, which can be understood as referring, in the language of common article 2, to cases of declared war or of any other armed conflict which may arise between two or more of the high contracting parties. So understood, non international armed conflict includes conflict in which organised armed groups engage in hostilities against a state. Such conflict may be purely internal to the state concerned, or it may not. It may include situations where a foreign state intervenes in an internal armed conflict in support of the government of the state concerned, at its invitation or with its consent. Such conflict is to be distinguished from conflict in which one state engages in hostilities against another, which falls into the category of international armed conflict. Examples of non international armed conflict involving the intervention of foreign armed forces include certain phases of the recent conflicts in Iraq and Afghanistan. Although the conflict in Iraq began as an international armed conflict conducted by coalition forces against the Iraqi armed forces, a multi national force, to which about 40 states contributed, remained there after that war had concluded and a new Iraqi Government had been established, so as to assist the Iraqi Government in combating insurgents. That phase of the conflict was a non international armed conflict. Similarly, when an international security assistance force, to which about 50 states contributed, assisted the Government of Afghanistan in its struggle against the Taliban, that also was a non international armed conflict. Detention and the Geneva Conventions It is necessary next to consider the significance of the distinction between international and non international armed conflicts in relation to the authorisation of detention under international humanitarian law. In that regard, it is helpful to begin by considering the relevant provisions of the Geneva Conventions. Traditionally, international humanitarian law, like other international law, was concerned almost entirely with the reciprocal relationships between states, and therefore with conflicts between states rather than internal conflicts between a state and its subjects (subject to exceptions under customary law where internal conflicts affected relationships with other states). It was therefore concerned only with international armed conflict (subject, as I have explained, to limited exceptions). Atrocities committed in civil wars led however to the adoption, as part of the Geneva Conventions, of a limited measure of treaty based regulation of non international armed conflict under common article 3. That article provides for the humane treatment of those who may have been involved in armed conflict not of an international character occurring in the territory of one of the high contracting parties. It states in para 1: Persons taking no active part in the hostilities, including members of armed forces who have laid down their arms and those placed hors de combat by sickness, wounds, detention, or any other cause, shall in all circumstances be treated humanely . It goes on to prohibit specific acts, such as torture and rape. Common article 3 was later supplemented by Additional Protocol II to the Geneva Conventions (1977). This is narrower in scope than common article 3 in two important respects. First, it is only applicable in armed conflicts taking place on the territory of a state that has ratified it. Those states do not include several states in which non international armed conflicts have recently taken place, including Iraq and, until November 2009, Afghanistan. It also applies to a more limited category of armed conflicts than common article 3: namely, those that take place in the territory of a contracting party between its armed forces and dissident armed forces which, under responsible command, exercise such control over a part of its territory as to be enable them to carry out sustained and concerted military operations and to implement [the obligations imposed by the Protocol]. Certain categories of armed conflict are excluded: first, armed conflicts in which peoples are fighting against colonial domination and alien occupation and against racist regimes in the exercise of their right of self determination, and secondly situations of internal disturbances and tensions, such as riots, isolated and sporadic acts of violence and other acts of a similar nature. The Protocol spells out rules of humane treatment in greater detail than common article 3, and lays down minimum standards in relation to the prosecution and punishment, under domestic law, of criminal offences related to the armed conflict. By comparison, the Geneva Conventions deal much more fully with the treatment of those involved in international armed conflict. In relation to the present appeals, it is relevant to note in particular the provisions concerned with the detention of prisoners of war and civilians. In relation to the first of these categories, article 21 of the Third Geneva Convention authorises the detention of prisoners of war: The Detaining Power may subject prisoners of war to internment. The persons who may be detained under this power are defined in detail by article 4(A). They include members of armed forces of a party to the international armed conflict (article 4(A)(1)), members of other armed forces who profess allegiance to a party to the conflict (article 4(A)(3)), members of militias fulfilling certain conditions (article 4(A)(2)), and persons who accompany the armed forces, such as civilian contractors and war correspondents (article 4(A)(4)). The treatment of prisoners of war during their internment is also the subject of detailed regulation. Under article 118 of the Third Geneva Convention, they must be released and repatriated without delay after the cessation of active hostilities in the international armed conflict. So far as civilians are concerned, the Fourth Geneva Convention is concerned with protected persons, defined by article 4 as those who at a given moment and in any manner whatsoever, find themselves, in case of a conflict or occupation, in the hands of a Party to the conflict or Occupying Power of which they are not nationals. That general definition is then subject to a number of exclusions, such as nationals of a neutral state who find themselves in the territory of a belligerent State . while the State of which they are nationals has normal diplomatic representation in the State in whose hands they are. In the section of the Convention dealing with aliens in the territory of a party to the conflict, article 41 prohibits measures of control of protected persons more severe than assigned residence or internment. Article 42 sets out the permitted grounds of internment, and provides that the internment . of protected persons may be ordered only if the security of the detaining power makes it absolutely necessary. The International Criminal Tribunal for the former Yugoslavia has interpreted article 42 as permitting internment only if there are serious and legitimate reasons to think that the interned persons may seriously prejudice the security of the detaining power by means such as sabotage or espionage: Prosecutor v Zejnil Delali, Case No: IT 96 21 T, Trial Chamber, 16 November 1998, para 1132. Article 43 lays down procedures governing internment: Any protected person who has been interned . shall be entitled to have such action reconsidered as soon as possible by an appropriate court or administrative board designated by the detaining power for that purpose. If the internment . is maintained, the court or administrative board shall periodically, and at least twice yearly, give consideration to his or her case, with a view to the favourable amendment of the initial decision, if circumstances permit. Article 46 requires that restrictive measures taken regarding protected persons, in so far as they have not previously been withdrawn, must be cancelled as soon as possible after the close of hostilities in the international armed conflict. Further provision for the detention of civilians is made in the section of the Fourth Geneva Convention dealing with occupied territories. Article 68 is concerned with protected persons who commit an offence which is solely intended to harm the occupying power. In the case of certain specified types of offence, such persons are liable to internment, provided its duration is proportionate to the offence committed. A further power of internment is provided by article 78: If the occupying power considers it necessary, for imperative reasons of security, to take safety measures concerning protected persons, it may, at the most, subject them to assigned residence or to internment. Decisions regarding such assigned residence or internment shall be made according to a regular procedure to be prescribed by the occupying power in accordance with the provisions of the present Convention. This procedure shall include the right of appeal for the parties concerned. Appeals shall be decided with the least possible delay. In the event of the decision being upheld, it shall be subject to periodical review, if possible every six months, by a competent body set up by the said power. Article 79 of the Fourth Geneva Convention prohibits the internment of protected persons other than in accordance with articles 41, 42, 43, 68 and 78. Detailed provision is made elsewhere in the Fourth Geneva Convention in relation to the treatment of internees. Article 132 requires that each interned person shall be released as soon as the reasons which necessitated his internment no longer exist, and article 133 provides that internment shall cease as soon as possible after the close of hostilities, subject to specified exceptions. Whereas articles 4 and 21 of the Third Geneva Convention, and articles 4, 42, 43, 68 and 78 of the Fourth Geneva Convention, confer explicit authority to detain in an international armed conflict, and contain detailed provisions concerning the grounds and procedures governing detention in those circumstances, no comparable treaty provisions of international humanitarian law apply in relation to non international armed conflicts. Instead, legal authority for the detention of participants in a civil conflict, and the grounds and procedures governing detention in those circumstances, are normally regulated by the domestic law of the state where the conflict occurs. They may also be regulated for some purposes by the domestic law of the detaining state, if different from the state where the conflict occurs; or by SCRs. It will be necessary to return to the latter possibility. This distinction reflects the fact that prisoners of war have committed no offence by their participation in an international armed conflict. They are detained purely as an administrative measure, for the duration of the hostilities. Non state actors who participate in a non international armed conflict, on the other hand, commit offences against the law of the country in question when fighting to overthrow its government (as in most, but not all, non international armed conflicts), and killing or injuring individuals in the course of doing so. They are therefore subject to penal proceedings, including detention pending trial or following conviction. The distinction has long been understood and accepted by the British Government. For example, during the Troubles in Northern Ireland, participants in the violence, other than the forces of the Crown, were treated as criminals under domestic law rather than as prisoners of war. When the Government wished to impose administrative internment on suspected members of the IRA, instead of dealing with them through the criminal justice system, Parliament enacted legislation in order to enable it to do so. The Ministry of Defence summarised the general position in The Joint Service Manual of Armed Conflict (2004 ed), paras 15.6.2 15.6.3: Unlike combatants in an international armed conflict, members of dissident armed forces remain liable to prosecution for offences under domestic law. These can include normal acts of combat for example, a dissident combatant who kills or injures a member of the government forces may be prosecuted for murder or other offences against the person and even membership of the dissident group. A member of the security forces who kills a dissident or a civilian will also have to justify his actions under domestic law and may be tried before the courts for any offence he may have committed. A captured member of dissident fighting forces is not legally entitled to prisoner of war status. He may be dealt with according to the law of the state for any offences he may have committed. A member of the security forces who is captured by the dissidents is not entitled to prisoner of war status but any mistreatment of him is likely to amount to an offence against the law of the state. Prisoner of war status does not arise in internal armed conflicts unless the parties to the conflict agree, or decide unilaterally, as a matter of policy, to accord this status to detainees. Otherwise, the treatment of detainees is governed by the domestic law of the country concerned, and human rights treaties binding on that state in time of armed conflict and the basic humanitarian principles mentioned in [common article 3 and Additional Protocol II]. It added at para 15.30.3: Arguments in favour of the view that detention in non international conflicts is authorised by international humanitarian law Some commentators have argued that international humanitarian law impliedly authorises the detention of persons in a non international armed conflict: see, for example, Gill and Fleck, The Handbook of the International Law of Military Operations (2010), p 471, and Pejic, Procedural principles and safeguards for internment/administrative detention in armed conflict and other situations of violence (2005) 87 International Review of the Red Cross 375, 377. In summary, such arguments place reliance on the reference to detention in common article 3, and the reference to persons interned or detained in Additional Protocol II. They argue that common article 3 and Additional Protocol II, in requiring detention in non international armed conflicts to comply with certain humanitarian standards, impliedly recognise that detention is authorised by international humanitarian law in such circumstances. They also argue that, since states are undeniably entitled to use lethal force in combating insurgents in non international armed conflicts, they must also be authorised to use the lesser alternative of detention. It is inherent in the nature of any armed conflict that parties to such a conflict may capture persons who, if at liberty, would pose a threat to their security. There must, it is contended, be an implied authority under international humanitarian law to intern such persons, since otherwise the alternatives would be either to release them or to kill them. A related approach has been adopted by the International Committee of the Red Cross (ICRC) in its Opinion Paper, Internment in Armed Conflict: Basic Rules and Challenges (2014), where it distinguishes between traditional non international armed conflict, occurring between government armed forces and non state armed groups, and non international armed conflict with an extraterritorial element, in which the armed forces of one or more state, or of an international or regional organisation, fight alongside the armed forces of a host state, in its territory, against one or more organised non state armed groups (p 7). In a situation of traditional non international armed conflict, the ICRC Opinion Paper acknowledges that domestic law constitutes the legal framework for possible internment whereas, in a situation of non international armed conflict with an extraterritorial element, the Opinion Paper contends that common article 3 and Additional Protocol II, and also customary international humanitarian law, reflected in those instruments, contain an inherent legal basis to intern (pp 7 8). Arguments against that view As a matter of policy, there is much to be said for the view that international humanitarian law should recognise a right to intern in non international armed conflicts with an extra territorial element. As statements of the current state of the law, however, these contentions are controversial. Many scholars take a different view: to give only a few recent examples, see Conte, The legality of detention in armed conflict, in The War Report 2014 (2015), ed Casey Maslen; Dinstein, Non International Armed Conflicts in International Law (2014), para 274; Debuf, Captured in War: Lawful Internment in Armed Conflict (2013), p 465; Goldman, Extraterritorial Application of the Human Rights to Life and Personal Liberty, Including Habeas Corpus, During Situations of Armed Conflict, in Research Handbook on Human Rights and Humanitarian Law (2013), eds Kolb and Gaggioli, p 121; Hill Cawthorne, Detention in Non International Armed Conflict (2016), Chapter 3; Milanovic, The Applicability of the Conventions to Transnational and Mixed Conflicts, in The 1949 Geneva Conventions: A Commentary (2015), Clapham, Gaeta and Sassli (eds), pp 46 47; Rona, Is there a Way Out of the Non International Armed Conflict Dilemma? (2015) 91 International Law Studies 32; Rowe, Is there a right to detain civilians by foreign armed forces during a non international armed conflict? (2012) 61 ICLQ 697, 702; and Sivakumaran, The Law of International Armed Conflict (2012), p 71. The contentions set out in paras 256 and 257 above have also been rejected by the International Commission of Jurists in its Legal Commentary on the Right to Challenge the Lawfulness of Detention in Armed Conflict (2015), pp 16 23. Considering first the contention that the Geneva Conventions and their Protocols impliedly authorise detention in non international armed conflicts, the arguments against that view can be summarised as follows. Textual arguments First, whereas articles 4 and 21 of the Third Geneva Convention (concerning prisoners of war), and articles 4, 42, 68 and 78 of the Fourth Geneva Convention (concerning civilians) confer express authority to detain specified categories of person on specified grounds in situations of international armed conflict, the Conventions and their Additional Protocols contain no provisions expressly conferring such authority in situations of non international armed conflict. Applying ordinary principles of interpretation (expressio unius, exclusio alterius), it is unlikely in those circumstances that the contracting parties intended to confer such authority by implication. Secondly, the Geneva Conventions and Additional Protocol II are silent as to the grounds of detention and the applicable procedural safeguards in a non international armed conflict, in contrast to the detailed provision made for international armed conflict. It is argued that it is difficult to suppose that these instruments were intended to confer an authority to detain, or to interpret them as doing so, when they contain no indication of the scope of the power supposedly conferred. The ICRC Opinion Paper suggests that these matters can be addressed, in the context of an extraterritorial non international armed conflict, by an ad hoc international agreement between the international forces and the host state, or by the domestic law of the host state (p 8). In that event, however, the legal basis for detention would be the international agreement or domestic law. Contextual arguments It is also argued that there are cogent reasons why the states negotiating the Conventions and their Additional Protocols are unlikely to have intended to confer any such authorisation. It is apparent from the travaux prparatoires that states regarded it as important to maintain their sovereignty over internal matters. Common article 3 was a controversial measure, the British delegate, for example, objecting that it would strike at the root of national sovereignty (Final Record of the Diplomatic Conference of Geneva of 1949: Vol II, Section B (1963), p 10). It has to be remembered that it was only in the aftermath of the Second World War that the scope of international law was widely extended to matters internal to sovereign states. In that regard, common article 3 was connected to other developments, including the emergence of international human rights law, with the Universal Declaration of Human Rights (1948) and the International Covenant on Civil and Political Rights (ICCPR) (1966), together with regional instruments such as the European Convention on Human Rights (1950). Similar concerns about sovereignty were also expressed by numerous states during the diplomatic conference which led to Additional Protocol II (see Hill Cawthorne, op cit, pp 23 24). A further concern was to avoid giving the appearance of a legitimate status to those who rebel against their government (ibid, pp 25 26). The British delegate in 1949 commented, for example, that the application of the Conventions [to internal conflicts] would appear to give the status of belligerents to insurgents, whose right to wage war could not be recognised (Final Record, Vol II, Section B, p 10). In so far as common article 3 raised that concern, it was addressed by common article 3(4), which makes clear that the legal status of the parties to the conflict is not altered. It is argued that it is unlikely, given those concerns, that the parties intended to depart from the position that the detention of captured insurgents was governed by domestic law, subject to guarantees of humane treatment. Furthermore, since international humanitarian law is generally understood as being reciprocal in its operation (unlike international human rights law, which is directly binding only on states), the authorisation of detention in non international armed conflicts would have entailed that states recognised the legitimacy of detention by dissident armed groups (for example, the legitimacy of the detention of British and American troops in Afghanistan by the Taliban): something which would be anathema to most states. Arguments against inferential reasoning Fourthly, in so far as the contentions are based on an inference, from the fact that common article 3 and Additional Protocol II require a minimum level of humanitarian treatment for people who are detained during non international armed conflict, that detention is therefore authorised by those instruments, it is argued that the reasoning rests on a non sequitur: that the regulation of conduct by international humanitarian law entails that the conduct in question is authorised by international humanitarian law. Provisions requiring that persons interned in a non international armed conflict should be treated humanely implicitly recognise that detention occurs in fact, but, it is argued, do not imply that it is authorised by law, let alone that it is authorised by international law rather than by the domestic law of the place where the conflict takes place or some other applicable law, still less that it is authorised by those very provisions. Common article 3 and Additional Protocol II, it is argued, are not concerned with the grant of powers to detain: they are simply intended to ensure the humane treatment of all persons who are detained, including those detained by non state groups, and apply whether their detention is legally justified or not. As the International Committee of the Red Cross Commentary on the Geneva Conventions (1952), ed Pictet, states in relation to common article 3, it merely ensures respect for the few essential rules of humanity which all civilised nations consider as valid everywhere and in all circumstances (p 60). Fifthly, it is argued that a similar fallacy that the absence of a prohibition is equivalent to the presence of an authorisation vitiates the contention that, since international humanitarian law does not prohibit the use of lethal force in non international armed conflict, therefore it must impliedly provide lawful authority for the use of the lesser alternative of detention. In the first place, it is argued, the contention is based on a false dichotomy: that either international humanitarian law confers lawful authority for the detention of prisoners, or they must be killed or released. As explained above, however, lawful authority for detention (and, indeed, for killing) in a non international armed conflict is normally conferred not by international humanitarian law but by the domestic law of the state in which the conflict occurs. It may also be conferred by other sources of law, such as the domestic law of the detaining state, or SCRs. Detention may be authorised by any of these sources of law only for defined purposes, such as criminal investigation and prosecution, and it may be rendered subject to judicial control (just as domestic or international law may authorise killing only in specified circumstances, and render soldiers who kill in other circumstances liable to prosecution and punishment). The idea that, in the absence of authority under international humanitarian law, soldiers have no lawful option in a non international armed conflict but to release captured prisoners is therefore mistaken. Furthermore, it is argued, the contention that authority to kill impliedly carries with it authority to detain, even if well founded, would only result in authority to detain those who might otherwise be lawfully killed: a limited category of persons which would not, for example, include Mr Al Waheed, who on the assumed facts was an unarmed man who offered no violence towards the members of HM Forces who detained him. The argument would not, therefore, support the existence of a power of detention of the width for which the Secretary of State argues in the present proceedings. In short, it is argued that it is not germane to the question here in issue to demonstrate that the killing of insurgents in non international armed conflict is not prohibited by international humanitarian law. It does not follow from the absence of such a prohibition that international humanitarian law therefore confers lawful authority for detention. In international armed conflict, such authority can be found in article 21 of the Third Geneva Convention and articles 42, 68 and 78 of the Fourth Geneva Convention, but those provisions do not apply to non international armed conflict. In a situation of the latter kind, lawful authority must be sought elsewhere. Normally, it will arise under domestic law, but it may also arise out of other branches of international law, as for example where it is conferred by an SCR. Arguments based on the absence of protection against arbitrary detention Sixthly, it is argued that the contention that common article 3 and Additional Protocol II authorise detention in non international armed conflict is difficult to reconcile with the requirement under international law that the deprivation of liberty must be non arbitrary. That is a requirement which the ICRC maintains is implicit in the obligation, imposed by common article 3 and Additional Protocol II, that detainees should be treated humanely, and it is in any event imposed by article 9(1) of the ICCPR, which provides that no one shall be subjected to arbitrary arrest or detention and that no one shall be deprived of his liberty except on such grounds and in accordance with such procedure as are established by law. Similar provisions exist in the regional human rights treaties: article 6 of the African Charter on Human and Peoples Rights, article 7 of the American Convention on Human Rights, article 14 of the Arab Charter on Human Rights, and article 5 of the European Convention on Human Rights. Any law authorising detention must therefore define the circumstances in which it applies with sufficient precision to avoid overly broad or arbitrary interpretation or application (see the Human Rights Committees General Comment No 35, Article 9 (Liberty and security of the person), UN Doc CCPR/C/GC/35 (2014), para 22: the Human Rights Committee is the UN body established to monitor the implementation of the ICCPR, and has included among its members present and former judges of the European Court of Human Rights). This requirement is illustrated by several reports in which the Human Rights Committee has considered grounds for detention to be insufficiently precise (eg Concluding Observations: Initial Report of Honduras, UN Doc CCPR/C/HND/CO/1 (2006), para 13). The concept of arbitrariness is, however, of broader scope: it is not to be equated with against the law but must be interpreted more broadly to include elements of inappropriateness, injustice, lack of predictability and due process of law: Mukong v Cameroon, UN Doc CCPR/C/51/D/458/1991 (1994). International humanitarian law, however, contains no definition of the permitted grounds of detention in non international armed conflict, nor any mention of procedural protections. Specifically in relation to security detention in situations of armed conflict, the Human Rights Committee has stated that security detention authorised and regulated by and complying with international humanitarian law in principle is not arbitrary (General Comment No 35, para 64; emphasis added). In other words, in order for detention for reasons of security not to be arbitrary, on the hypothesis that it is (1) authorised by international humanitarian law, it must also be (2) regulated by international humanitarian law, so that (3) it is possible to determine whether the detention is in compliance with international humanitarian law. These requirements are satisfied in situations of international armed conflict by the provisions of the Third and Fourth Geneva Conventions which were discussed earlier. In non international armed conflict, on the other hand, it is argued that neither common article 3 nor Additional Protocol II defines who may be detained, on what grounds, in accordance with what procedures, or for how long. In consequence, it is argued, there is no possibility of determining whether detention in non international armed conflict complies with any such requirements. Arguments relating to customary international humanitarian law Considering next the contention that detention in a non international armed conflict is authorised by customary international humanitarian law, the arguments against that view can be summarised as follows. It is argued that the contention lacks sufficient support in either opinio juris or state practice. So far as the former is concerned, the contention is disputed by many experts in this area of the law, as explained in para 258 above. It is argued that it is also unsupported by the ICRCs major international study into state practice, Henckaerts and Doswald Beck, Customary International Humanitarian Law (2005). That study concludes that the arbitrary deprivation of liberty is prohibited (pp 347 349), but not that there are grounds on which the deprivation of liberty is authorised under customary international humanitarian law. The ICRCs catalogue of the rules of customary international humanitarian law is also said to give no support to the idea that they include an authority to detain: ICRC, Customary IHL, www.icrc.org/customary ihl/eng/docs/v1. So far as state practice is concerned, it is of course true that states involved in non international armed conflicts have detained persons, but, it is argued, it does not follow that they have done so in reliance on a right to do so under international humanitarian law (rather than the absence of a prohibition of such detention under international humanitarian law, and a right under domestic law, or under an SCR). Reference was made by counsel for the Secretary of State to a recital forming part of the preamble to Resolution 1 of the 32nd International Conference of the ICRC and Red Crescent in December 2015, which refers to states having in all forms of armed conflict, the power to detain, but commentators have argued that those words are not conclusive evidence of state practice, and that the resolution was not in any event concerned with the authorisation of detention. Reference was also made to The Copenhagen Process: Principles and Guidelines, but commentators have pointed out that the official commentary to principle 16 states that the mere inclusion of a practice in The Copenhagen Process Principles and Guidelines should not be taken as evidence that states regard the practice as required out of a sense of legal obligation. As the Court of Appeal noted at para 231 of its judgment in the case of Mr Mohammed, the only example of a state which has placed reliance on international humanitarian law as a basis for detention in a non international armed conflict, other than the Ministry of Defence in the present proceedings, appears to be the Netherlands, in a letter dated 21 July 2006, headed Combating international terrorism, sent by the Foreign Minister, the Minister of Defence and the Minister for Development Cooperation to the President of the House of Representatives (KST 99753, 27 225 Nr 221). That approach can be contrasted with the practice of the UK and other states in Iraq and Afghanistan (see paras 311 312, 336 337 and 341 below). In addition, it has been pointed out that the ICRC itself accepts that customary international humanitarian law prohibits the arbitrary deprivation of liberty: see ICRC, Customary IHL, rules 87 and 99. That prohibition is said to be a rule applicable in both international and non international armed conflict, established by state practice in the form of military manuals, national legislation and official statements, and also international human rights law. The arguments discussed in paras 268 270 above are therefore also relevant in this context. Conclusions As the foregoing discussion makes clear, there are substantial arguments both for and against the contention that the Geneva Conventions or their Protocols implicitly confer authority under international law for detention in non international armed conflicts. My current view, based on the submissions in the present case, is that the arguments against that contention the textual arguments discussed in paras 260 261 above, the contextual arguments discussed in paras 262 263, the arguments against inferential reasoning discussed in paras 264 267, and the arguments based on the absence of adequate protection against arbitrary detention discussed in paras 268 270 are cumulatively the more persuasive. Customary international humanitarian law is a developing body of law, and it may reach the stage where it confers a right to detain in a non international armed conflict. The submissions made on behalf of the Ministry of Defence have not, however, persuaded me that it has yet reached that stage. The contention that authority for detention in non international armed conflicts is conferred by customary international humanitarian law is controversial as a matter of expert opinion. There appears to be a paucity of state practice which is supportive of the contention, as explained at para 272. In those circumstances, I have not been persuaded that there exists at present either sufficient opinio juris or a sufficiently extensive and uniform practice to establish the suggested rule of customary international law. In short, it appears to me that international humanitarian law sets out a detailed regime for detention in international armed conflict, conferring authority for such detention, specifying the grounds on which detention is authorised, laying down the procedures by which it is regulated, and limiting its duration, in accordance with the requirements of article 9 of the ICCPR and analogous regional provisions. In contrast, subject to compliance with minimum standards of humane treatment, international humanitarian law leaves it to states to determine, usually under domestic law, in what circumstances, and subject to what procedural requirements, persons may be detained in situations of non international armed conflict. It follows that the Ministry of Defences argument in the present case that the detention of Mr Al Waheed and Mr Mohammed was authorised by conventional or customary international humanitarian law should be rejected. Detention in the non international conflicts in Iraq and Afghanistan under the It is necessary next to consider the Ministry of Defences contention that authority for detention, in circumstances falling outside article 5(1)(a) to (f) of the Convention, was conferred on HM Forces, in the non international conflicts in Iraq and Afghanistan, by the relevant SCRs. For the purpose of considering that contention, the SCRs have to be interpreted in accordance with principles laid down by the European Court of Human Rights in a number of its judgments. It is therefore necessary to begin by considering the most significant of these judgments. (1) Al Jedda v United Kingdom In the case of Al Jedda v United Kingdom the Grand Chamber concluded that there had been a violation of article 5(1) in respect of the detention by HM Forces of a suspected insurgent during the non international armed conflict in Iraq. Mr Al Jeddas detention occurred between October 2004 and December 2007, after an Iraqi Government had been established with sovereign authority. It overlapped with that of Mr Al Waheed, which occurred during February and March 2007. The Multi National Force was at that time fighting against insurgents with the consent of the Iraqi Government, under a mandate established by SCR 1546 (2004), as extended by SCRs 1637 (2005) and 1723 (2006). SCR 1546 had been preceded by letters to the President of the Security Council from the Prime Minister of Iraq and the US Secretary of State. In his letter, the Prime Minister requested the Security Council to make a new resolution authorising the Multi National Force, which had previously been in occupation of Iraq following the defeat of Iraqi forces, to remain on Iraqi territory and to contribute to maintaining security there, including through the tasks and arrangements set out in the accompanying letter from the US Secretary of State. In his letter, the Secretary of State confirmed that the Multi National Force was prepared to continue to contribute to the maintenance of security in Iraq, including by preventing and deterring terrorism. He added that, under the agreed arrangement, the Multi National Force stood ready to continue to undertake a broad range of tasks to contribute to the maintenance of security and to ensure force protection. These include activities necessary to counter ongoing security threats posed by forces seeking to influence Iraqs political future through violence. This will include combat operations against members of these groups, internment where this is necessary for imperative reasons of security, and the continued search for and securing of weapons that threaten Iraqs security. The words internment when this is necessary for imperative reasons of security reflected the terms of article 78 of the Fourth Geneva Convention, which had applied prior to the establishment of the Iraqi Government, when Iraq had been an occupied territory. These letters were annexed to SCR 1546. The preamble to the resolution recognised the request of the Iraqi Prime Minister in the annexed letter to retain the presence of the Multi National Force, welcomed the willingness of the Multi National Force to continue efforts to contribute to the maintenance of security and stability in Iraq, and noted the commitment of all forces . to act in accordance with international law. In para 9 of the resolution the Security Council noted that the Multi National Force remained in Iraq at the request of the incoming government, and reaffirmed the authorisation for the Multi National Force first established under SCR 1511, having regard to letters annexed to this resolution. In para 10 it stated that the Multi National Force: shall have the authority to take all necessary measures to contribute to the maintenance of security and stability in Iraq in accordance with the letters annexed to this resolution expressing, inter alia, the Iraqi request for the continued presence of the Multi National Force and setting out its tasks, including by preventing and deterring terrorism. Procedures were laid down for the review of detention, under the domestic law of Iraq, by Coalition Provisional Authority (CPA) Memorandum No 3 (Revised), which provided: (1) Any person who is detained by a national contingent of the MNF [Multi National Force] for imperative reasons of security in accordance with the mandate set out in UNSCR 1546 (hereinafter security internee) shall, if he is held for a period longer than 72 hours, be entitled to have a review of the decision to intern him. (2) The review must take place with the least possible delay and in any case must be held no later than seven days after the date of induction into an internment facility. (3) Further reviews of the continued detention of any security internee shall be conducted on a regular basis but in any case no/later than six months from the date of induction into an internment facility. (4) The operation, condition and standards of any internment facility established by the MNF shall be in accordance with Section IV of the Fourth Geneva Convention . It has been held by a majority of the Court of Appeal that detention in accordance with these procedures was lawful under the law of Iraq: Al Jedda v Secretary of State for Defence [2010] EWCA Civ 758; [2011] QB 773. Mr Al Jedda was detained in a British military facility for over three years. His continuing internment was authorised and reviewed in accordance with the CPA Memorandum, initially by British military personnel and subsequently also by representatives of the Iraqi and British Governments and by non British military personnel, on the basis of intelligence material which was never disclosed to him. He was able to make written submissions to the reviewing authorities but there was no provision for an oral hearing. His internment was authorised for imperative reasons of security. There was no intention at any point to bring criminal charges against him. In these circumstances, his detention did not fall within any of sub paragraphs (a) to (f) of article 5(1) of the Convention. In domestic proceedings, the majority of the House of Lords considered that it could be inferred from the text of SCR 1546, and from the context in which it was adopted, that states contributing to the Multi National Force were authorised to intern individuals where necessary for imperative reasons of security; that the authorisation should be regarded as an obligation for the purposes of article 103 of the UN Charter (In the event of a conflict between the obligations of the members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail); and that, to the extent that such internment was unavoidably incompatible with article 5(1) of the European Convention, the UKs obligations under article 5(1) were therefore qualified: R (Al Jedda) v Secretary of State for Defence (JUSTICE intervening) [2007] UKHL 58; [2008] 1 AC 332. In a speech which anticipated some of the points later to be made by the European court, Baroness Hale of Richmond agreed only to the extent that competing commitments under the UN Charter and the Convention could be reconciled by adopting a qualification of the Convention rights. The European court rejected the idea that the SCR should be interpreted as impliedly imposing an obligation which would contravene obligations under international human rights law: [T]he court must have regard to the purposes for which the United Nations was created. As well as the purpose of maintaining international peace and security, set out in the first sub paragraph of article 1 of the UN Charter, the third sub paragraph provides that the United Nations was established to achieve international cooperation in . promoting and encouraging respect for human rights and fundamental freedoms. Article 24(2) of the Charter requires the Security Council, in discharging its duties with respect to its primary responsibility for the maintenance of international peace and security, to act in accordance with the Purposes and Principles of the United Nations. Against this background, the court considers that, in interpreting its resolutions, there must be a presumption that the Security Council does not intend to impose any obligation on member states to breach fundamental principles of human rights. In the event of any ambiguity in the terms of a Security Council resolution, the court must therefore choose the interpretation which is most in harmony with the requirements of the Convention and which avoids any conflict of obligations . [I]t is to be expected that clear and explicit language would be used were the Security Council to intend states to take particular measures which would conflict with their obligations under international human rights law. (para 102) The principles of interpretation of SCRs which can be taken from that passage are the following: (1) there is a presumption that the Security Council does not intend to impose any obligation on member states to breach fundamental principles of human rights; (2) in the event of ambiguity, the court must choose the interpretation which is most in harmony with the requirements of the European Convention; and (3) it is to be expected that clear and explicit language will be used if the Security Council intends states to take measures which would conflict with their obligations under international human rights law. On that basis, the European court interpreted SCR 1546 as leaving unaffected the obligation of the member states within the Multi National Force to comply with their obligations under international human rights law: Internment is not explicitly referred to in the resolution. In para 10 the Security Council decides that the Multi National Force shall have authority to take all necessary measures to contribute to the maintenance of security and stability in Iraq in accordance with the letters annexed, which inter alia set out the Multi National Forces tasks. Internment is listed in Secretary of State Powells letter, as an example of the broad range of tasks which the Multi National Force stood ready to undertake. In the court's view, the terminology of the resolution appears to leave the choice of the means to achieve this end to the member states within the Multi National Force. Moreover, in the preamble, the commitment of all forces to act in accordance with international law is noted. It is clear that the Convention forms part of international law . In the absence of clear provision to the contrary, the presumption must be that the Security Council intended states within the Multi National Force to contribute towards the maintenance of security in Iraq while complying with their obligations under international human rights law. (para 105) The court rejected the Governments alternative contention that a legal basis for the applicants detention could be found in international humanitarian law. The argument was that SCR 1546 had maintained in place the position under international humanitarian law which had existed during the occupation of Iraq, when the Fourth Geneva Convention applied. The court noted that para 2 of SCR 1546 recorded the end of the occupation, and that the Fourth Geneva Convention did not in any event authorise indefinite internment (para 107). The court also considered whether a basis for detention which could operate to disapply the requirements of article 5(1) was provided by the agreement between the Iraqi Government and the US Government, set out in the letters annexed to SCR 1546, but concluded that such an agreement could not override the obligations under the Convention (para 108). The court therefore concluded that there was no conflict between the United Kingdoms obligations under the UN Charter and its obligations under article 5(1) of the Convention (para 109). It followed that the applicants detention constituted a violation of article 5(1) (para 110). (2) Nada v Switzerland Shortly after Al Jedda, the Grand Chamber decided the case of Nada v Switzerland (2012) 56 EHRR 18, which concerned a Swiss law implementing an SCR requiring sanctions to be imposed on individuals listed as being associated with Al Qaeda. The sanctions imposed were incompatible with the applicants rights under article 8 of the Convention. The court confirmed the principles laid down in para 102 of Al Jedda, set out in para 284 above, but distinguished that case on the basis that the SCR in issue in Nada clearly and explicitly imposed an obligation to take measures capable of breaching human rights, whereas in Al Jedda the wording of the resolution at issue did not specifically mention internment without trial (para 172). However, the court also found that Switzerland enjoyed some latitude, which was admittedly limited but nevertheless real, in implementing the SCR (para 180). On the basis of that finding, it took the view that Switzerland could not confine itself to relying on the binding nature of SCRs, but should have persuaded the court that it had taken or at least had attempted to take all possible measures to safeguard the applicants rights under the Convention within the constraints set by the SCR. On that basis, the court found it unnecessary to determine the relative priority of the two instruments (paras 196 197). (3) Al Dulimi v Switzerland The case of Al Dulimi and Montana Management Inc v Switzerland (Application No 5809/08) (unreported) given 21 June 2016 also concerned the implementation of sanctions required by an SCR. The Grand Chamber repeated what it had said in para 102 of Al Jedda (para 140). It gave effect to that approach by holding that, since the SCR in question did not contain any clear or explicit wording excluding the possibility of judicial supervision of the listing of persons on whom sanctions were to be imposed, it must be understood as authorising national courts to exercise sufficient scrutiny so that any arbitrariness could be avoided (para 146). (4) Hassan v United Kingdom Between Nada and Al Dulimi, the Grand Chamber decided the case of Hassan v United Kingdom, which concerned an earlier phase of the Iraq conflict than Al Jedda or the present appeal of Mr Al Waheed. Mr Hassan was captured by HM Forces in Iraq during 2003, at a time when the situation there constituted either international armed conflict or occupation, and the Third and Fourth Geneva Conventions applied. He was detained for about nine days. He complained of a violation of his rights under article 5 of the Convention. In response, the British Government submitted that his detention had been authorised under article 21 of the Third Geneva Convention, as a prisoner of war, or by articles 42 and 78 of the Fourth Geneva Convention, as a civilian whose internment was necessary for imperative reasons of security. In those circumstances, it argued, article 5 of the Convention was displaced, or had to be modified so as to be compatible with the applicable lex specialis, namely international humanitarian law. In deciding how article 5 was to be interpreted in the light of the provisions of the Third and Fourth Geneva Conventions, the court applied article 31 of the Vienna Convention on the Law of Treaties (para 100). Under article 31(3)(b), account was to be taken of any subsequent practice in the application of the treaty in question which established the agreement of the parties regarding its interpretation. The practice of the contracting parties to the European Convention was not to derogate from their obligations under article 5 in order to detain persons on the basis of the Third and Fourth Geneva Conventions during international armed conflict. That practice was contrasted with the practice of the contracting states in relation to non international armed conflict, such as the Troubles in Northern Ireland and the Kurdish conflict in Turkey, and their practice in relation to terrorist threats (para 101). Under article 31(3)(c) of the Vienna Convention, account was to be taken of any relevant rules of international law applicable in the relations between the parties. The provisions in the Third and Fourth Geneva Conventions relating to internment were designed to protect captured combatants and civilians who posed a security threat. The International Court of Justice had held that the protection offered by human rights conventions and that offered by international humanitarian law co existed in situations of armed conflict. The court must therefore endeavour to interpret and apply the European Convention in a manner which was consistent with the framework under international law delineated by the International Court of Justice (para 102). Accordingly: By reason of the co existence of the safeguards provided by international humanitarian law and by the Convention in time of armed conflict, the grounds of permitted deprivation of liberty set out in sub paras (a) to (f) of [article 5(1)] should be accommodated as far as possible, with the taking of prisoners of war and the detention of civilians who pose a risk to security under the Third and Fourth Geneva Conventions. The court is mindful of the fact that internment in peacetime does not fall within the scheme of deprivation of liberty governed by article 5 of the Convention without the exercise of the power of derogation under article 15. It can only be in cases of international armed conflict, where the taking of prisoners of war and the detention of civilians who pose a threat to security are accepted features of international humanitarian law, that article 5 could be interpreted as permitting the exercise of such broad powers. (para 104) The court added that deprivation of liberty pursuant to powers under international humanitarian law must be lawful to preclude a violation of article 5(1). This meant that the detention must comply with the rules of international humanitarian law and, most importantly, that it should be in keeping with the fundamental purpose of article 5(1), which was to protect the individual from arbitrariness (para 105). In that regard, the court cited its case law concerning the necessary safeguards against arbitrary detention. Applying this approach to the facts, the court found that the applicant was captured in circumstances giving reason to believe that he might be either a person who could be detained as a prisoner of war or someone whose internment was necessary for imperative reasons of security, both of which provided a legitimate basis for detention under international humanitarian law (under article 21 of the Third Geneva Convention and articles 42 and 78 of the Fourth Geneva Convention). He was subject almost immediately to a screening process which led to his being cleared for release. He was released shortly afterwards (para 109). In these circumstances, his detention was consistent with the powers available to the UK under the Third and Fourth Geneva Conventions, and was not arbitrary. In these circumstances, the court held that there had been no breach of article 5(1) of the European Convention. The relevance of Hassan to the present appeals In the present appeals, the majority of the court accept the Ministry of Defences argument that the reasoning in Hassan leads to the conclusion that, where an SCR authorises detention in a non international armed conflict in circumstances other than those contemplated by sub paragraphs (a) to (f) of article 5(1), the latter provision must be modified so as to be consistent with the SCR. On that basis, the majority accept that article 5(1) is modified so as to permit the detention which is said to have been authorised by the SCRs in question in these appeals. The argument takes as its starting point an interpretation of the SCRs as authorising detention in circumstances falling outside the terms of article 5(1)(a) to (f). It is because of that interpretation that it can be argued that article 5(1) then requires to be modified so as to accommodate the detention authorised by the SCRs. The terms of SCR 1546, which applied in the case of Mr Al Waheed, have already been considered. They did not clearly or explicitly authorise detention in circumstances falling outside article 5(1)(a) to (f), as the court held in Al Jedda. Nor did SCR 1890, which applied in the case of Mr Mohammed, and will be considered later. Applying the approach to the interpretation of SCRs established by the court in its case law both prior and subsequent to Hassan, and summarised in para 285 above, it follows that the SCRs cannot be interpreted as authorising detention falling outside article 5(1)(a) to (f). The premise on which the Ministry of Defences argument is based is therefore inconsistent with the clear and constant jurisprudence of the Grand Chamber concerning the interpretation of SCRs. The answer put forward by the majority of the court is that, following Hassan, article 5(1) must be interpreted as permitting detention during armed conflicts which falls outside the categories listed in sub paragraphs (a) to (f) but is authorised by an SCR. On that basis, the interpretation of the SCRs as authorising detention which falls outside article 5(1)(a) to (f) is not incompatible with the Convention. There are a number of reasons why the judgment in Hassan does not appear to me to be applicable to detention in the non international conflicts with which these appeals are concerned, which are explained below at paras 307 315 and 324. But a point which should be made at the outset is that the reasoning of the majority appears to me to be circular. The proposition which the majority seek to establish that article 5(1) is modified so as to permit detention falling outside sub paragraphs (a) to (f), where such detention is authorised by an SCR is actually assumed for the purposes of its premise, that the SCRs should be interpreted as authorising such detention. The case of Hassan was not concerned with the interpretation of an SCR. The court did not, therefore, cite or consider, let alone depart from, the approach to the interpretation of SCRs which it had set out in Al Jedda and repeated in later cases. On the contrary, at para 99 it pointed out that its judgment in Al Jedda had concerned the SCR there in question, and that no issue had been raised in relation to the powers of detention provided for in the Third and Fourth Geneva Conventions. The only issue in the case of Hassan was the interpretation of article 5 of the Convention in a context where detention was authorised by international humanitarian law in particular, by the provisions of the Geneva Conventions authorising the detention of prisoners of war and civilians during international armed conflicts. Those provisions did not apply in the situations with which the present appeals are concerned. Nor was the detention of Mr Al Waheed or Mr Mohammed authorised by any other rules of international humanitarian law, for the reasons summarised in paras 274 276 above. The case of Hassan does not therefore appear to me to be in point when deciding whether the detention of Mr Al Waheed or Mr Mohammed was authorised by the relevant SCRs. The answer to that question depends on the interpretation of the SCRs; and the principles governing their interpretation, for the purpose of establishing whether there has been a breach of the Convention, are those laid down in Al Jedda, Nada and Al Dulimi, and summarised in para 285 above. Put shortly, in Al Jedda the court required greater precision of international law, when it comes to authorising military detention in situations of armed conflict, than was afforded by SCR 1546. Nothing in Hassan appears to me to cast any doubt on that decision. Hassan was concerned with powers of detention under the Geneva Conventions which are explicit and detailed, as explained at paras 249 252 above. A different argument is put forward by Lord Mance at para 163: that to start from the premise that SCR 1546 should be interpreted consistently with article 5(1) is unsustainable, since article 5(1) does not reflect general international law, but is unique in stating an ostensibly exhaustive list of circumstances in which detention is permissible (unlike article 9 of the ICCPR), whereas SCR 1546 was not directed only to states party to the Convention but to all member states of the United Nations. I recognise the force of that argument, but it appears to me to be inconsistent with the approach to the interpretation of SCRs which the European court has adopted in a clear and constant line of decisions at Grand Chamber level. Having considered the Strasbourg authorities, I can next consider the appeals. The case of Mr Al Waheed Mr Al Waheed is an Iraqi citizen. He was detained by HM Forces in Iraq for about six weeks during February and March 2007, when the relevant legal regime was identical to that considered in Al Jedda and explained at paras 278 281 above. The relevant facts in relation to his detention have not yet been established, but it is assumed for the purposes of this appeal that he was detained on 11 February 2007 at a house where arms, ammunition, components for improvised explosive devices (IEDs), and explosive charges, were found. Two days later an ad hoc British Divisional Internment Review Committee decided that he should be interned for imperative reasons of security. On 22 February the committee decided that, if it were confirmed that he could not be proved to have handled any of the recovered material, it was unlikely that he could be successfully prosecuted, and he should be released. His case was reviewed again on 12 or 13 March, and again on 21 March, when a decision on his release was deferred while forensic evidence was obtained. On 28 March he was released. Mr Al Waheed accepts that SCR 1546, as extended by SCR 1723, authorised detention. He complains, however, that his detention violated article 5(1) of the Convention. It is conceded on behalf of the Secretary of State that his detention was attributable to the UK, and that he fell within the jurisdiction of the UK during his internment for the purposes of article 1 of the Convention (which governs its applicability). It is maintained on behalf of the Secretary of State that his detention was justified under article 5(1)(c), but that issue is not before the court in this appeal. The only issue raised in the appeal, as a preliminary point, is whether it was legally necessary for his detention to fall within any of sub paragraphs (a) to (f) of article 5(1). In relation to that issue, the judge, Leggatt J, was bound by the decision of the House of Lords in Al Jedda that article 5(1) did not apply to detention under SCR 1546 for imperative reasons of security, since SCR 1546 should be construed as imposing an obligation to detain, and such an obligation prevailed over the inconsistent obligation imposed by article 5(1) of the Convention, by reason of article 103 of the UN Charter. Since the Court of Appeal would have been equally bound by that decision, the appeal has come directly to this court. Discussion In my opinion this court should depart from the reasoning of the House of Lords in relation to this point, summarised in para 283 above. It did not approach the interpretation of SCR 1546 on the basis subsequently laid down by the Grand Chamber and summarised in para 285 above. That approach, subsequently applied in relation to other SCRs in the cases of Nada and Al Dulimi, represented a development in the courts case law, based on a fuller consideration of international law than appears in the speeches in the House of Lords. Its interpretation of SCR 1546 was also based on a fuller consideration of the scope of the authority conferred than appears to have been canvassed in argument before the House of Lords. Although it is of course open to this court to adopt a different approach to the relationship between the Convention and other international instruments from that adopted by the Grand Chamber, such a course would run contrary to the general intention that the Human Rights Act 1998 should bring rights home, and would require some compelling justification. It does not seem to me that such a justification has been made out. In particular, the Ministry of Defences argument that the issue is a question of interpretation of the UN Charter and the SCR, on which the European court has no particular authority, seems to me to be an over simplification. The interpretation and application of the Convention depend on its interaction with other international instruments, and a uniform approach to these issues is desirable if the Convention system of guaranteeing a minimum level of human rights protection by all the contracting parties is to be preserved. In my view, this court should therefore proceed on the basis that article 103 of the UN Charter is not applicable. Consistently with that conclusion, the Grand Chamber held in Al Jedda that there was a presumption that the Security Council intended states within the Multi National Force to contribute towards the maintenance of security in Iraq while complying with their obligations under international human rights law. In its view, nothing in SCR 1546 displaced that presumption. Article 5(1) of the Convention therefore continued to apply. Since Mr Al Jeddas detention did not fall within any of sub paragraphs (a) to (f), it followed that there was a violation of article 5(1). As I have explained, it is now argued that the reasoning in Hassan supersedes that in Al Jedda. I reject that argument, firstly for the reasons explained in paras 295 300 above, and also for the following additional reasons. In addressing the problem which arose in Hassan, the courts starting point was article 31(3)(b) of the Vienna Convention, and the need to take account of subsequent practice in the application of the treaty in question. In that regard, the court noted the absence of any practice of derogating from article 5 of the Convention in relation to detention during international armed conflicts, notwithstanding the practice of exercising powers of detention under the Third and Fourth Geneva Conventions in circumstances not falling within any of sub paragraphs (a) to (f) of article 5(1). The court expressly contrasted that position with the practice of derogating from article 5 in relation to non international armed conflicts, citing cases concerned with internal conflicts in Northern Ireland and Turkey as examples. In order to answer that point, counsel for the Secretary of State argue that a distinction should be drawn between purely internal conflicts, and those which are extraterritorial, in the sense that they involve armed forces from outside the host state. They point out that, although there have been a number of military missions involving contracting states participating in non international armed conflicts outside their own territory since their ratification of the Convention, no state has ever made a derogation in respect of these. But that is not in itself enough to meet the requirements of article 31(3)(b) of the Vienna Convention (assuming, for the sake of the argument, the validity of the distinction drawn between extraterritorial and other non international armed conflicts: a distinction which is controversial and has not as yet been drawn by the European court in its case law). In the first place, it has to be borne in mind that until the case of Al Skeini it might not have occurred to contracting states participating in military operations overseas that they remained bound by their obligations under the Convention. More importantly, however, a practice of non derogation is significant only if (1) it has been the practice of contracting states to detain persons during non international armed conflicts in circumstances not falling within sub paragraphs (a) to (f) of article 5(1) of the Convention, and (2) if so, that practice has been sufficiently accepted by other contracting states to justify imputing to all of them an intention to modify the obligations undertaken under article 5. It appears to me that neither of these conditions is met. The practice of other contracting states in relation to non international armed conflicts does not establish a common intention to modify the obligations arising under article 5 in the context of extraterritorial non international armed conflicts. On the contrary, statements by a number of contracting states confirm, without qualification, the continuing relevance of international human rights law and, in particular, of the Convention. The German government, for example, made explicit in 2007, in a statement to the Bundestag, its view that its obligations under the Convention continued to apply in relation to persons detained by its forces operating in Afghanistan as part of the International Security Assistance Force (ISAF) (ICRC, Customary IHL Database: Practice Relating to Rule 99 Deprivation of Liberty (www.icrc.org/customary ihl/eng/docs/v2_rul_rule99)). Switzerland has questioned the United Kingdoms claim that the provisions of the Convention need to be qualified, in the context of military operations overseas, in order to take SCRs into account, and recommended that the United Kingdom should consider that any person detained by armed forces is under the jurisdiction of that state, which should respect its obligations concerning the human rights of such individuals (UN Human Rights Council, Report of the Working Group on UPR: United Kingdom, UN Doc A/HRC/8/25 (2008), para 33). The Netherlands has expressed the view that international human rights law, in the absence of derogation, continues to apply without restriction during armed conflicts, and that detainees therefore cannot be held indefinitely or without due process (Hill Cawthorne, op cit, p 178). The argument now put forward by the Ministry of Defence is also a recent departure from the previous practice of the United Kingdom. In Al Jedda, for example, the government did not suggest that the nature of the situation in Iraq at the material time, as an extraterritorial non international armed conflict, affected the application of article 5. Its view of the law at the time of its operations during the non international armed conflict in Afghanistan is discussed below (see paras 336 337). In addressing the problem which arose in Hassan, the court also based its reasoning on the requirement under article 31(3)(c) of the Vienna Convention to take account of other relevant rules of international law applicable in the relations between the parties when interpreting the European Convention. The relevant rules in Hassan were the provisions in the Third and Fourth Geneva Conventions conferring powers of internment on specified grounds during an international armed conflict, subject to specified procedural safeguards. In Mr Al Waheeds case the Secretary of State argues, by analogy, that the European Convention must also be interpreted compatibly with the exercise of the powers of internment conferred by SCR 1546. As explained in para 285 above, the European court construed SCR 1546 in Al Jedda on the basis that there is a presumption that the Security Council does not intend to impose any obligation on member states to breach fundamental principles of human rights; that, in the event of ambiguity, the court must choose the interpretation which is most in harmony with the requirements of the European Convention; and that it is to be expected that clear and explicit language will be used if the Security Council intends states to take measures which would conflict with their obligations under international human rights law. On that basis, the court interpreted the SCR as meaning that the Security Council intended states within the Multi National Force to contribute towards the maintenance of security in Iraq while complying fully with their obligations under the Convention. Article 5(1)(a) to (f) therefore applied, so as to limit the circumstances in which SCR 1546 was to be understood as authorising detention. As explained in paras 288 289 above, the court has followed the same approach to the interpretation of SCRs in more recent cases. On that basis, there is no need to modify article 5 in order for it to be interpreted harmoniously with SCR 1546. Accordingly, whereas in Hassan the court identified an inconsistency between the terms of article 5 of the Convention and the provisions of international humanitarian law regulating detention in an international armed conflict, and resolved that inconsistency by concluding that a substantial body of state practice, together with the need to reconcile the Third and Fourth Geneva Conventions with the European Convention, justified reading article 5 so as to accommodate the relevant provisions of those Conventions, there is no such inconsistency between article 5 and SCR 1546; and there exists, in any event, no comparable body of state practice. It follows that it was necessary for Mr Al Waheeds detention to fall within one or more of the categories listed in sub paragraphs (a) to (f) of article 5(1), in order for it to be compatible with article 5 of the Convention. The case of Mr Mohammed Mr Mohammed is an Afghan national who was detained by HM Forces in Afghanistan for about 15 weeks during 2010. It is assumed, for the purposes of this appeal, that he was captured by HM Forces on 7 April 2010 during a military operation which targeted a senior Taliban commander and the vehicle in which he was travelling. After an exchange of fire, during which two insurgents were killed, Mr Mohammed and another insurgent were captured. They were extracted after an operation lasting ten hours, during which British troops were under heavy and sustained fire. Three British soldiers were wounded. Following his capture, Mr Mohammed was taken to Camp Bastion in Helmand Province. HM Forces received information that he was a senior Taliban commander involved in the large scale production of IEDs. He was said to have commanded a Taliban training camp. On 8 April, an application for the extension of his detention beyond 96 hours for intelligence purposes was submitted to UK Permanent Joint Headquarters (PJHQ), in accordance with BRITFOR Standard Operating Instructions J3 9 (J3 9), discussed at paras 339 340 below. It stated that there was no information to confirm Mr Mohammeds identity, and that information suggested that he might be a senior Taliban commander with an extensive knowledge of the structure of the Taliban and of IED networks. On 9 April, an application was submitted to the Ministry of Defence to extend the 96 hour limit in order to gain intelligence from Mr Mohammed. On 12 April, a minister authorised Mr Mohammeds continued detention to gain further valuable intelligence. The Afghan authorities were not asked whether they wanted Mr Mohammed transferred to them for investigation and possible prosecution. The view had been formed by this time that it would be a weak case to pass to the Afghan authorities for prosecution, given the available evidence. On 4 May it was decided that there was no more intelligence to be obtained from Mr Mohammed. The Afghan authorities were then asked whether they wished to have Mr Mohammed transferred into their custody for criminal investigation and possible prosecution. They responded that they did, as soon as space became available. As they had insufficient capacity at the Lashkar Gah detention facility to which he was to be transferred, he continued to be held by UK armed forces until capacity became available. He was transferred to the Afghan authorities on 25 July 2010. He was subsequently prosecuted and convicted by the Afghan courts of offences relating to the insurgency. He was sentenced to ten years imprisonment. Mr Mohammed complains that his detention, beyond the initial period of 96 hours, violated his rights under articles 3, 5, 6 and 8 of the Convention, as given effect by the Human Rights Act 1998. A number of preliminary issues were identified and decided by Leggatt J. In particular, he found that for the first 96 hours after his capture, Mr Mohammed was detained for the purpose of bringing him before the competent legal authorities on reasonable suspicion of having committed an offence. His detention during that period was authorised, in the judges view, by SCR 1890 and the Memorandum of Understanding concluded between the British and Afghan Governments, as explained at paras 322 326 and 329 334 below. During the period of 24 days between 11 April and 4 May 2010, on the other hand, Mr Mohammed was detained by HM Forces for the sole purpose of obtaining intelligence. During the 82 days between 5 May and 25 July 2010, he was detained for logistical reasons, as they were described, because of the shortage of space in Afghan detention facilities. The judge concluded that Mr Mohammeds detention after the initial period of 96 hours was contrary to article 5 of the Convention, the effect of which was not, in his view, displaced or qualified by SCRs or international humanitarian law. He also held that Mr Mohammeds detention after an initial period of a few days (as explained at para 329 below) was unlawful under Afghan law. On appeal, those conclusions were upheld by the Court of Appeal. The Secretary of State has appealed to this court on a number of grounds. Those which are being considered at this stage of the proceedings are: if so, whether article 5(1) of the Convention should be read so as to (1) whether HM armed forces had the legal power to detain Mr Mohammed in excess of 96 hours pursuant to the relevant SCRs or international humanitarian law; (2) accommodate detention pursuant to such a power; (3) whether Mr Mohammeds detention was in any event compatible with article 5(1) on the basis that it fell within para (c) (detention for the purpose of bringing a suspect before a competent judicial authority) or (f) (detention pending extradition); and (4) whether the circumstances of his detention were compatible with article 5(4) (if necessary, as modified). So far as (1) is concerned, the contention based on international humanitarian law has already been rejected at paras 274 277 above. It is also unnecessary to consider ground (4), as to which I agree with Lord Sumption. That leaves the contention under ground (1) based on the SCRs, any issue then arising under ground (2), and the issues arising under ground (3). The interpretation of SCR 1890 It is common ground that, at the time when Mr Mohammed was detained, HM Forces were engaged in a non international armed conflict. They were operating as part of ISAF, whose establishment had initially been authorised by SCR 1386 (2001), following the establishment of the Afghan Interim Authority by the Bonn Agreement of 5 December 2001 and its agreement to the deployment of such a force. SCR 1386 authorised the establishment of ISAF to assist the Afghan Interim Authority in the maintenance of security in Kabul and its surrounding areas, and authorised the member states participating in ISAF to take all necessary measures to fulfil its mandate. The mandate was subsequently extended to the whole of Afghanistan. At the time of Mr Mohammeds capture, the SCR in force was SCR 1890 (2009). In its preamble, it reaffirmed the Security Councils strong commitment to the sovereignty . of Afghanistan, recognised that the responsibility for providing security and law and order throughout the country resides with the Afghan authorities, and stressed the role of [ISAF] in assisting the Afghan Government to improve the security situation. It also called for compliance with international humanitarian and human rights law. It again authorised the member states participating in ISAF to take all necessary measures to fulfil its mandate. Whereas the letters annexed to SCR 1546 referred explicitly to internment for imperative reasons of security, SCR 1890 said nothing about internment or detention. It was, however, apparent at the time when SCR 1890 was adopted that the accomplishment of ISAFs mission would involve engaging in combat operations against armed and organised insurgents, in the course of which it was inevitable that insurgents and suspected insurgents would be taken prisoner. In that context, construing the SCR in accordance with the principle of interpretation in good faith, ut res magis valeat quam pereat, the words all necessary measures should be understood as encompassing the detention of insurgents. At the same time, since SCR 1890 said nothing about the procedures to be followed, but conferred a mandate on a basis which recognised the sovereignty of Afghanistan and envisaged ISAFs role as being to assist the Afghan authorities in the maintenance of security, it must have been intended that detention would be in accordance with procedures agreed with the Afghan Government. As explained at paras 329 334 below, a Memorandum of Understanding covering these matters was indeed agreed with the Afghan Government. It is argued on behalf of the Ministry of Defence, as in the case of Mr Al Waheed, that in the light of the Hassan judgment, article 5(1) of the Convention is modified by SCR 1890, or in any event by customary international humanitarian law, so as to permit detention falling outside the scope of sub paras (a) to (f). I reject that argument, in agreement with the judge and the Court of Appeal, for the reasons explained at paras 276 277 above in relation to customary international law, and at paras 296 300 and 307 315 in relation to Hassan. Construed on that basis, SCR 1890 can be understood as having conferred on the states participating in ISAF authority under international law to take prisoner persons who posed an imminent threat to ISAF forces or the civilian population, and to detain them for the purpose of transferring them to the Afghan authorities, so that those authorities could then undertake criminal investigations and proceedings. It is accepted, for reasons explained below at para 331, that a period of 96 hours could reasonably be required for that purpose, and it is apparent that there could be circumstances where a longer period was necessary (eg where a detainee was medically unfit to be transferred, or where the Afghan authorities did not have accommodation immediately available). So construed, SCR 1890 is consistent with the principles established by the case law of the European court and summarised in para 285 above. As explained there, the European court considers there to be a presumption that, unless it uses clear and unambiguous language to the contrary, the Security Council does not intend states to take measures which would conflict with their obligations under international human rights law. Interpreting SCR 1890 on that basis, there is nothing which demonstrates, in clear and unambiguous terms, an intention to require or authorise detention contrary to international human rights law. That construction of SCR 1890 is also consistent with the traditional approach to non international armed conflicts, including the approach of the Ministry of Defence, under which the treatment of insurgents is regulated primarily by the law, including the criminal law, of the state where the conflict occurs: see paras 253 255 above. Behrami v France; Saramati v France, Germany and Norway I am not persuaded that the admissibility decision in Behrami v France; Saramati v France, Germany and Norway (2007) 45 EHRR SE10 supports a different conclusion. The relevant part of that decision concerned the criminal justice system operating in Kosovo at the time when the territory was governed by the United Nations Interim Administration in Kosovo (UNMIK), established by SCR 1244. UNMIK was assisted by the UN security presence in Kosovo, Kosovo Force (KFOR), also established by SCR 1244. Para 7 of the SCR authorised member states to establish KFOR with all necessary means to fulfil its responsibilities under para 9. Its responsibilities under para 9 included supporting, as appropriate . the work of [UNMIK]. UNMIKs responsibilities, as set out in para 11, included maintaining civil law and order, including . through the deployment of international police personnel. The UNMIK police force was commanded by the commander of KFOR (COMKFOR). Mr Saramati was arrested by UNMIK police officers on suspicion of attempted murder, by order of COMKFOR, and detained on the orders of COMKFOR until his trial. The admissibility decision concerned the question whether Mr Saramatis detention was the responsibility of the contracting states which had contributed the individuals holding the position of COMKFOR during the relevant period, or was attributable to the UN. In the course of considering that question, the European court stated that KFORs security mandate included issuing detention orders. It stated (para 124) that it based that finding on two considerations. The first was the terms of the agreement under which the government of the Federal Republic of Yugoslavia (FRY) withdrew its own forces from Kosovo in favour of UNMIK and KFOR, which provided that KFOR would operate with the authority to take all necessary action to establish and maintain a secure environment for all citizens of Kosovo. As the court stated, UNMIK and KFOR exercised the public powers normally exercised by the government of the FRY (para 70). The second consideration was para 9 of SCR 1244, as well as para 4 of Annex 2, which repeated the relevant wording of the agreement with FRY, as confirmed by later documents describing the procedures governing detention authorised by COMKFOR. This was a very different context from that of SCR 1890: as has been explained, that SCR was premised on a recognition of the sovereignty of Afghanistan, and of the Afghan authorities responsibility for security. The Memorandum of Understanding SCR 1890 did not itself specify the procedures required to comply with the requirement in article 5(1) of the Convention that detention should be in accordance with a procedure prescribed by law. It was however supplemented by agreements between the Afghan Government and the states participating in ISAF. The relevant agreement between the UK and Afghanistan at the time of Mr Mohammeds detention was a Memorandum of Understanding dated 23 April 2006. Para 3 provided: 3.1 The UK AF will only arrest and detain personnel where permitted under ISAF Rules of Engagement. All detainees will be treated by UK AF in accordance with applicable provisions of international human rights law. Detainees will be transferred to the authorities of Afghanistan at the earliest opportunity where suitable facilities exist. Where such facilities are not in existence, the detainee will either be released or transferred to an ISAF approved holding facility. 3.2 The Afghan authorities will accept the transfer of persons arrested and detained by the UK AF for investigation and possible criminal proceedings . In relation to para 3.1, applicable provisions of international human rights law were recognised at the time to include the European Convention on Human Rights: see para 332 below. The Memorandum of Understanding made no provision for HM Forces to detain persons for intelligence purposes rather than transferring them to Afghan custody, but it provided for British personnel to have full access to question persons who had been transferred to Afghan custody. In relation to para 3.1 of the Memorandum of Understanding, detention was permitted under ISAF rules of engagement, at the relevant time, in the circumstances set out in ISAFs Standard Operating Procedures 362 (the SOP). Para 1 of that document stated that commanders at all levels are to ensure that detention operations are conducted in accordance with applicable international law and human rights standards. Para 4 stated that the only grounds upon which a person could be detained under current ISAF Rules of Engagement were if the detention was necessary for ISAF force protection, for the self defence of ISAF or its personnel, or for accomplishment of the ISAF mission. Para 5 stated that the current policy for ISAF was that detention was permitted for a maximum of 96 hours, after which time an individual was either to be released or handed into the custody of the Afghan National Security Forces or the Government of Afghanistan. According to internal United Kingdom correspondence, 96 hours reflected the time it might take to transport someone from a battlefield to an Afghan detention facility. Para 6 of the SOP stated that, as soon as practicable after a detention had taken place, the decision to continue to detain must be considered by an appropriate authority. Certain senior ranks were specified as being permitted to act as an ISAF Detention Authority. That authority must be able to support the grounds of detention by a reasonable belief in facts. Para 7 permitted a Detention Authority to authorise detention for up to 96 hours. Authority for detention beyond that period could only be granted by the commanding officer of ISAF (COMISAF) or his delegated subordinate. In that regard, para 8 stated: A detainee may be held for more than 96 hours where it is deemed necessary in order to effect his release or transfer in safe circumstances. This exception is not authority for longer term detentions but is intended to meet exigencies such as that caused by local logistical conditions eg difficulties involving poor communications, transport or weather conditions or where the detainee is held in ISAF medical facilities and it would be medically imprudent to move him. Where this exigency applies, COMISAF must be notified. Where, in the opinion of COMISAF (or his delegated subordinate), continuation of detention is warranted, COMISAF (or his delegated subordinate) may authorize continued detention. (Emphasis supplied) A footnote stated that the standards outlined within this SOP are to be considered the minimum necessary to meet international norms and are to be applied. In relation to international norms, the document identified two sources of international human rights law: the ICCPR and the European Convention on Human Rights. It was therefore envisaged under the Memorandum of Understanding, read with the SOP, that persons would only be detained by HM Forces on specified grounds, would be screened as soon as practicable, and would be transferred to the Afghan authorities at the earliest opportunity, for investigation and possible criminal proceedings. Detention by HM Forces would normally be for a maximum of 96 hours, although that period could be extended by a decision taken at a senior level where necessary in order to effect the detainees release or transfer in safety. The detention which this agreement permitted fell within the authorisation conferred by SCR 1890. It reflected the traditional treatment of insurgents in a non international armed conflict as having committed offences under domestic criminal law, and ISAFs mandate to assist the sovereign Afghan authorities. It was compatible with article 5(1)(c) of the Convention: that is to say, the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so. A procedure was prescribed which protected detainees against arbitrary detention. The new United Kingdom policy: detention beyond 96 hours in order to obtain intelligence In the event, powers of detention which were limited to holding persons for up to 96 hours, before transferring them to the Afghan criminal system if they might have committed a criminal act, were found by the states principally involved in detaining insurgents, including the United Kingdom, to be unsatisfactory from a military perspective. Particularly after they undertook operations in Helmand Province, HM Forces wished to be able to hold detainees for longer periods for the purpose of questioning them in order to obtain intelligence, for example about the whereabouts of IEDs. Ministers were advised that legal advice has confirmed that there is currently no basis upon which we can legitimately intern such individuals (briefing paper for the Armed Forces Minister on Detention Policy in Afghanistan, dated 1 March 2006). They were told that the considered advice was that the European Convention would apply unless those detained were immediately handed over to the Afghan authorities, and that the possibility of amending the 96 hour policy to permit longer periods of detention . would not be lawful because the UNSCR does not authorise extended detention (ibid). The advice concluded that The reality of the legal basis for our presence in Afghanistan is such that available powers may fall short of that which military commanders on the ground might wish (ibid). It was felt that the UK was unlikely to succeed in having the SCR revised to provide some kind of specific authorisation to detain, and that, so far as ISAF was concerned, even with the added authority of a UNSCR, the reservations of some of our allies in becoming involved or associated with detention or internment are likely to remain (internal correspondence concerning UNSCR renewal in Afghanistan, dated 25 June 2007). A further memorandum stated: There is no power for any ISAF forces to intern individuals in Afghanistan. This would require an express UNSCR authorisation and preferably a power in Afghan law as well, neither of which currently exist. Therefore, if UK forces were to intern people, we would probably be acting unlawfully. (Ministry of Defence briefing note, Detention by UK Forces on Overseas Operations Iraq and Afghanistan, sent on 12 September 2007) A later briefing for the Secretary of State explained that, although in Iraq a significant proportion of operations had been triggered by intelligence from detainees: In Afghanistan, however, we cannot replicate Iraq arrangements because UK forces have no power to intern under the extant UNSCR (only a power to temporarily detain is inferred). (Ministerial Brief on Afghanistan: Intelligence Exploitation Capability, dated June 2008: NATO was in effective command of ISAF) Later correspondence dated 10, 21 and 24 August 2010 considered the possibility that the ISAF rules of detention might be altered, but concluded that any approach to NATO would be unsuccessful, and that the United Kingdom would have to adopt its own policy if it wished to detain individuals for more than 96 hours. The policy then adopted, as announced to Parliament on 9 November 2009, was that while HM Forces would adhere to NATO guidelines (ie, the SOP) in the majority of cases, Ministers in the United Kingdom would in some cases authorise detention for more than 96 hours in order to obtain intelligence: [I]n exceptional circumstances, detaining individuals beyond 96 hours can yield vital intelligence that would help protect our forces and the local population potentially saving lives, particularly when detainees are suspected of holding information on the placement of improvised explosive devices. Given the ongoing threat faced by our forces and the local Afghan population, this information is critical, and in some cases 96 hours will not be long enough to gain that information from the detainee. Indeed, many insurgents are aware of the 96 hours policy and simply say nothing for that entire period. In these circumstances, the Government have concluded that Ministers should be able to authorise detention beyond 96 hours, in British detention facilities to which the ICRC has access. Each case will be thoroughly scrutinised against the relevant legal and policy considerations; we will do this only where it is legal to do so and when it is necessary to support the operation and protect our troops. Following a Ministerial decision to authorise extended detention, each case will be thoroughly and regularly monitored by in theatre military commanders and civilian advisers. Individuals will not remain in UK detention if there is no further intelligence to be gained. We will then either release the detainee or transfer the detainee to the Afghan authorities. (Hansard (HL (Written Statements), 9 November 2009, cols WS 31 32) The policy announced to Parliament was reflected in J3 9. The version of J3 9 which was in force during most of Mr Mohammeds detention was Amendment 2. Part 1 dealt with the initial stages of detention. It stated in para 9 that a person could be detained by British forces only if he was a threat to force protection or mission accomplishment, or if it was necessary for reasons of self defence. Part II dealt with the processing of detainees, and required the detaining authority to decide within 48 hours whether to release, transfer or further detain the detainee. To authorise continued detention, the Detention Authority had to be satisfied that it was necessary for self defence or that the detainee had done something that made him a threat to force protection or mission accomplishment (para 19). Para 25 stated that the Detention Authority did not have the authority to hold a detainee for longer than 96 hours from the point of detention, and that authority for any further detention must be sought from Ministers through the Detention Review Committee (DRC). Para 27 stated that the criteria used to assist Ministers in deciding whether or not to approve applications for extension of detention were a. Will the extension of this individual provide significant new intelligence vital for force protection? b. Will the extension of this individual provide significant new information on the nature of the insurgency? c. How long a period of extension has been requested [redacted] Para 29 set out the procedure to be followed following an extension. This involved fortnightly reviews, internally and at Ministerial level. The only other nations whose forces were detaining significant numbers of insurgents by that stage of ISAF operations were the USA and Canada (the Netherlands having been the fourth nation in that category at an earlier stage). They also departed from the ISAF policy limiting detention to a maximum of 96 hours, but on a different basis from the United Kingdom. The USA authorised its conduct by domestic legislation. Canada entered into an agreement with the Afghan Government providing for it to treat detainees as if they were prisoners of war, and thus to apply the Third Geneva Convention. An internal assessment dated 18 September 2011 described the United Kingdoms current detention regime in Afghanistan as being based upon United Kingdom national sovereignty. Afghanistan was however a sovereign state at the relevant time; and it was inconsistent with Afghan sovereignty for the United Kingdom to carry out detention in Afghanistan without the permission of the government of that country. The judge found that the United Kingdom policy was not agreed with the Afghan Government, and that there was no evidence that any attempt was made to amend the Memorandum of Understanding between the British and Afghan Governments to reflect the new policy. The legal basis of detention for intelligence purposes The judge concluded that the United Kingdom policy announced in November 2009 had no legal basis under Afghan, international or English law. In relation to Afghan law, he considered that, since the United Kingdom Government was operating on the territory of an independent sovereign state at the invitation of, or at least with the consent of, that state, it was arguable that it was necessary under article 5(1) for the detention to comply with the law of that state. On the basis that there had been no argument on the point, however, he proceeded on the assumption that it was sufficient that there was a basis for the detention under the SCR (para 301). The Court of Appeal considered it unnecessary to decide the point (para 126). The point has however been pursued before this court on behalf of the first interveners, who had also raised it in their skeleton argument before the judge. As they point out, the European court has said many times that, where the lawfulness of detention is in issue, including the question whether a procedure prescribed by law has been followed, the Convention refers essentially to national law and lays down an obligation to conform to the substantive and procedural rules of national law. The same approach has been followed by the UN Human Rights Committee in relation to article 9 of the ICCPR. They also point out that that approach has been adopted, specifically in relation to detention in a non international armed conflict, in the Report of the UN Working Group on Arbitrary Detention, Basic Principles and Guidelines on remedies and procedures on the right of anyone deprived of their liberty to bring proceedings before a court, UN Doc WGAD/CRP.1/2015 (2015), Guideline 17, para 115(a)(ii) (With regard to detention in relation to a non international armed conflict: (a) . the detaining State must show that: . (ii) administrative detention is on the basis of grounds and procedures prescribed by law of the State in which the detention occurs and consistent with international law). I am not persuaded that that is the correct approach to adopt to the application of the Convention in the present context. Guidance is provided by the judgment in Ocalan v Turkey (2005) 41 EHRR 45, which concerned the arrest of a Turkish citizen in Kenya by Turkish officials who then transferred him to Turkey. The court considered it irrelevant to examine whether the conduct of the officials had been unlawful under Kenyan law: what mattered was whether their conduct had been authorised by the Kenyan Government, so as to provide a basis in international law for an extra territorial arrest, and had a legal basis under Turkish law. The court stated: Irrespective of whether the arrest amounts to a violation of the law of the state in which the fugitive has taken refuge a question which only falls to be examined by the court if the host state is a party to the Convention the court requires proof in the form of concordant inferences that the authorities of the state to which the applicant has been transferred have acted extra territorially in a manner that is inconsistent with the sovereignty of the host state and therefore contrary to international law. Only then will the burden of proving that the sovereignty of the host state and international law have been complied with shift to the respondent Government. (para 60; emphasis supplied) So far as international law and English law are concerned, I agree with the judges conclusion, which is consistent with the legal advice given to the British Government at the time. The practice of detaining persons for more than 96 hours for intelligence purposes, rather than transferring them to the Afghan authorities for the purpose of criminal investigations and proceedings, was not authorised by SCR 1890, interpreted as explained in para 325 above. The grounds for the persons being detained by HM Forces, rather than being transferred to the Afghan authorities for criminal investigation and prosecution, did not fall within any of those listed in sub paras (a) to (f) of article 5(1) of the Convention. Indeed, even leaving article 5(1) out of account, the phrase necessary for imperative reasons of security in the SCR did not authorise detention for the purpose of obtaining intelligence from the detainee. In addition, the policy did not respect Afghan sovereignty, having been introduced without the agreement of the Afghan Government, and without any amendment of the Memorandum of Understanding. Since the detention during that period was not authorised by SCR 1890, it was, on that basis also, not lawful for the purposes of article 5(1). Detention pending the availability of space in Afghan facilities As explained at para 332 above, the Memorandum of Understanding, read with the SOP, permitted detention to be extended beyond 96 hours where necessary to enable the detainee to be transferred in safe circumstances. Provision for logistical extensions was also made by para 24 of J3 9: On some occasions, practical, logistic reasons will entail a requirement to retain a UK detainee for longer than the 96 hours. Such occasions would normally involve the short notice non availability of pre planned transport assets or NDS [Afghan National Security Directorate] facilities to receive transferred detainees reaching full capacity. These occasions may lead to a temporary delay until the physical means to transfer or release correctly can be reinstated. Where this is the case, authority to extend the detention for logistic reasons is to be sought from both HQ ISAF and from Ministers in the UK through the Detention Authority. In the event, HM Forces held people for substantial periods when the Afghan authorities wished to accept their transfer but the detention facilities were full, or when the only accommodation available was in facilities which were considered unsuitable. This situation arose as a result of three factors. One was the fact that Afghanistan remained a state under reconstruction, with limited detention facilities. The second was the large number of insurgents captured by HM Forces, particularly during operations in Helmand. The third was the fact that the treatment of detainees in some Afghan detention facilities did not meet Convention standards. It was indeed held by the Divisional Court, during the period when Mr Mohammed was detained pending the availability of space in the Afghan detention facility at Lashkar Gah, that it would be unlawful for HM Forces to transfer detainees to the Afghan detention facility in Kabul: R (Evans) v Secretary of State for Defence [2010] EWHC 1445 (Admin). The judge accepted, in relation to Mr Mohammed, that his detention in these circumstances was for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence. The implication is that such detention fell in principle within the scope of article 5(1)(c) of the Convention. That conclusion has not been challenged: as the Court of Appeal noted, the question has not been explored at any stage of the proceedings. I am inclined to agree with the judge, and to regard such detention as in principle authorised by SCR 1890, but in the absence of any argument on the point it would be inappropriate to consider the issue in detail. There are, however, other aspects of article 5 which are also relevant to detention in these circumstances: notably, the requirement in article 5(1) that detention be in accordance with a procedure prescribed by law, and the procedural requirements of article 5(3) and (4). It will be necessary to return to these. Application to the facts of Mr Mohammeds case On the facts of the case, Mr Mohammeds detention by HM Forces between 11 April 2010 (ie after 96 hours) and 4 May 2010 (when he ceased to be held for intelligence purposes) was not in my view compatible with article 5(1), since it was not for any of the purposes listed in sub paras (a) to (f). In particular, the reason for his detention at that time was not to bring him as a suspect before a competent judicial authority, within the meaning of article 5(1)(c). Nor was he, either then or later, detained pending extradition within the meaning of article 5(1)(f), for the reasons explained by Lord Sumption at para 79. Even if SCR 1890 were to be construed as going beyond article 5(1)(a) to (f), and as authorising detention when necessary for imperative reasons of security, I would not regard it as authorising Mr Mohammeds detention during this period. Although I accept that detention for imperative reasons for security would not become unauthorised by reason of a concurrent purpose of obtaining intelligence, it appears to me to be clear from the facts found by the judge that the obtaining of intelligence was the only reason why HM Forces detained Mr Mohammed during the period in question, rather than enquiring of the Afghan authorities whether they wished to have him transferred to their custody. That was not a reason for detention falling within SCR 1890. Nor was Mr Mohammeds detention during this period in accordance with the commitment in SCR 1890 to respect Afghan sovereignty, since it was based on a policy to which the Afghan Government had not agreed. I respectfully disagree with Lord Sumptions conclusion that there remains a question whether Mr Mohammeds detention between 11 April and 4 May 2010 was for imperative reasons of security, which should be determined after trial. The grounds for his initial detention clearly fell within the scope of that phrase, but it seems to me to be clear that this was not the reason why he continued to be detained by HM Forces after 11 April. As the judge observed at para 333 of his judgment, not only was the obtaining of intelligence the sole purpose alleged in the Secretary of States defence, but there was no other criterion set out in the UK policy which could have been used to approve an extension of Mr Mohammeds detention at that time (the availability of space in Afghan detention facilities not having been investigated). Furthermore, as the Court of Appeal noted at para 250 of its judgment, according to the evidence given on behalf of the Ministry of Defence, Mr Mohammeds continued detention beyond 96 hours was for the purposes of intelligence exploitation and was not assessed to be necessary for force protection purposes. In relation to the period of detention between 5 May and 25 July 2010, the judge found that, although the circumstances of the detention fell within the scope of article 5(1)(c) of the Convention, there was a violation of the requirement in article 5(1) that the detention should be in accordance with a procedure prescribed by law. In that regard, he held (para 309) that detention for lengthy periods (82 days in the case of Mr Mohammed, and between 231 and 290 days in the cases of the interveners) was not authorised by para 24 of J3 9. Alternatively, he held that if that para 24 did authorise detention for such protracted periods, then it failed to meet the test of legal certainty implicit in the requirement that detention be in accordance with a procedure prescribed by law, since it failed to provide standards which were clearly defined and whose application was reasonably foreseeable. I recognise the force of that reasoning. I also recognise the importance of legal certainty, especially in this context. The European court referred in Hassan to the fundamental purpose of article 5(1), which is to protect the individual from arbitrariness (para 105). In Medvedyev v France, the court stated: . where deprivation of liberty is concerned, it is particularly important that the general principle of legal certainty be satisfied. It is therefore essential that the conditions for deprivation of liberty under domestic and/or international law be clearly defined and that the law itself be foreseeable in its application, so that it meets the standard of lawfulness set by the Convention, a standard which requires that all law be sufficiently precise to avoid all risk of arbitrariness . (para 80) Nevertheless, it is also necessary to recognise the practical exigencies of the situation which confronted HM Forces at the time, and to endeavour to apply the Convention in a manner which is feasible in the real world. The terms of para 24 of J3 9 suggest that it was originally envisaged as a basis for accommodating occasional logistical problems, normally arising at short notice and leading to a temporary delay. It did however provide a procedure for extending detention which could be used when more serious and long term problems emerged in relation to the capacity of the Afghan authorities to deal satisfactorily with large numbers of insurgents and suspected insurgents, in the context of a state undergoing reconstruction. In principle, the provision by a member of ISAF of detention facilities on behalf of the Afghan authorities, when they were unable to cope, was within its mandate under SCR 1890. In the nature of things, the duration of such detention in individual cases could not be predicted, particularly when it depended on contingencies, such as the willingness of the Afghan authorities to treat detainees humanely, and the outcome of legal proceedings in the English courts, which lay wholly outside the control of HM Forces and the Ministry of Defence. It is also relevant to note that para 24 of J3 9 required the detention to be authorised by HQ ISAF as well as by UK Ministers. It was therefore consistent with para 8 of the SOP, and hence with the Memorandum of Understanding. In these circumstances, it appears to me that the basic requirement that there should be a procedure prescribed by law was satisfied by J3 9. I agree with Lord Mance that, in considering Mr Mohammeds claim for damages for wrongful detention, it is highly material to consider whether, but for any failures on the part of the United Kingdom authorities, he would have been any better off in other words, would have spent less time in custody. That is an important question both in relation to the period during which Mr Mohammed was held by HM Forces for the purpose of obtaining intelligence, and in relation to the period during which he was held because of the unavailability of suitable accommodation in an Afghan detention facility. Further, as Lord Mance observes, if the answer is that he would have been in the custody of the Afghan authorities, it will be material to consider whether this would have involved him in any form of detriment. Finally, in relation to article 5(3) and (4) of the Convention, I agree with Lord Sumptions conclusions, and with the core of his reasoning at paras 94 109. Whether there was a breach of article 5(3) should be considered after trial. It is however apparent from the material already before the court that the arrangements for Mr Mohammeds detention were not compatible with article 5(4), since he did not have any effective means of challenging the lawfulness of his detention. Conclusions For these reasons, I would have allowed Mr Al Waheeds appeal and declared that it was legally necessary for his detention to fall within one or more of sub paragraphs (a) to (f) of article 5(1). In agreement with the judge and the Court of Appeal, I would have dismissed the Secretary of States appeal in the case of Mr Mohammed, so far as based on the grounds considered at this stage. |
In R v Soneji [2005] UKHL 49; [2006] AC 340, para 3 Lord Steyn feared that it might be innocent to predict that the then new Proceeds of Crime Act 2002 (POCA) had solved the problems involved in the criminal process of confiscation. He was considering in particular the question whether and when a breach of statutory procedural terms for the process of post conviction confiscation deprives the Court of jurisdiction to make such an order. The present appeal raises the same question again. More particularly, the present question is whether a procedural breach deprives the court of jurisdiction if it is combined with a breach of the rules contained in section 15(2) for the order in which sentence and confiscation order are to be approached. The principal statutory provisions in question are sections 15(2), and 14(8), (11) and (12) of POCA. The respondent, Lodvik Guraj, pleaded guilty on 11 June 2012 to offences involving the supply of heroin and money laundering. He had been caught in possession at his home of about 1.5Kg of heroin, some amphetamine and some cocaine. Hidden in the house and garage was equipment for processing the drugs, such as an hydraulic press and cutting agents, and also various substantial quantities of cash. He appeared to have been supplying drugs for some time. The offences were lifestyle offences for the purposes of POCA. On 16 July 2012 the respondent was sentenced to terms of imprisonment totalling five years and four months. At the same time, the judge made, apparently without any question arising as to the propriety of doing so, orders (a) forfeiting the drugs under section 27 of the Misuse of Drugs Act 1971, and (b) depriving the respondent of a car, a laptop, five mobile telephones, some scales, the press and a money counting machine, pursuant to section 143 of the Powers of Criminal Courts (Sentencing) Act 2000, on the basis that they had been used for the purposes of crime. Also at the same time, the judge gave directions for the progression of the confiscation aspect of the case. She set three dates in August, October and November 2012 for the respondent to provide some information he was required to give, and then for the service by first the Crown and then the respondent of the statements of case required by sections 16 and 17 of POCA. The last of the dates thus fixed was 9 November 2012. The judges order then directed that a half day hearing should follow, two weeks thereafter, with a date to be fixed. Thereafter, the timetable set by the judge for confiscation slipped badly. The respondent did give the information required, albeit in September rather than in August as directed. The CPS then lost sight of the case for a whole year and did not serve its section 16 statement. In October 2013, it woke up to what had happened, and contacted the respondent to admit the fact, and to invite agreement to a new timetable. The case was listed for 7 January 2014, but although a Crown statement was prepared in advance of this, it was not served until 15 January, and the CPS failed to get the officer in the case to court so that the hearing was abortive, save that a direction for a further Crown statement was given. The case was next listed on 31 March 2014, but this hearing was also abortive owing to the failure of the CPS to register the date and get the advocate instructed to be there to conduct it. Wasted costs orders were made against the Crown in relation to both these abortive hearings. In due course there was a properly attended hearing on 2 May 2014, but by now the respondents counsel had formulated the submission that the events which had occurred had the consequence that there was no longer any jurisdiction to proceed. The judge directed a special hearing to deal with that contention and in due course, on 7 May 2014, that took place. Whilst lamenting the repeated errors of the prosecution, the judge rejected the defence argument and on 9 June 2014 made a confiscation order in a sum which had been by then agreed, subject to the jurisdiction point, at 57,458. The Court of Appeal took the opposite view to the judge on the jurisdiction point and quashed the confiscation order. orders made at the time of sentencing, and to the matter of timetabling. Forfeiture etc POCA contains provisions which relate both to the forfeiture and deprivation Section 13 POCA provides (as amended), so far as material, as follows: 13. Effect of order on courts other powers If the court makes a confiscation order it must proceed (1) as mentioned in subsections (2) and (4) in respect of the offence or offences concerned. (2) The court must take account of the confiscation order before (a) (b) it imposes a fine on the defendant, or it makes an order falling within subsection (3). (3) These orders fall within this subsection an order involving payment by the defendant, an order under section 27 of the Misuse of Drugs an order under section 143 of the Sentencing Act (a) other than [defined exceptions] (b) Act 1971 (c 38) (forfeiture orders); (c) (deprivation orders); (d) Act 2000 (c 11) (forfeiture orders) an order under section 23 or 23A of the Terrorism (3A) (4) Subject to subsection (2), the court must leave the confiscation order out of account in deciding the appropriate sentence for the defendant. These provisions are directed at the inter relation between confiscation and sentence. They say, in effect, that confiscation has no effect on sentence except for some (but not all) aspects of the latter which are either financial or property depriving. By exceptions defined in section 13(3)(a) and 13(3A), various orders in the nature of compensation or restitution are excluded, as are mandatory orders for the payment of the surcharge; these are plainly given priority. Those apart, the reasoning plainly is that financial/property orders might be affected by removal under a confiscation order of some of the defendants assets, and so the confiscation order is to be taken into account before making them. There is obvious potential for a confiscation order to affect the ability of a defendant to meet a fine, and there might be some scope for it to affect the question whether it is right to make a deprivation order, since the financial impact of such an order on the defendant is, by section 143(5)(b) of the Powers of Criminal Courts (Sentencing) Act 2000, a consideration to which a court is required to have regard when deciding whether to make it. The same might sometimes be true of a forfeiture order under section 27 of the Misuse of Drugs Act 1971, at least when it relates to money, or to property used in the offending, rather than to any drugs recovered. These provisions have existed, essentially in similar form, ever since confiscation was introduced to English criminal law by the Drug Trafficking Offences Act 1986 and, for non drugs crime, by the Criminal Justice Act 1988. In order to understand them it is necessary to remember that, as initially conceived, the scheme was for confiscation to be dealt with before sentence. That is why the provisions are couched in terms of taking account of the confiscation order when determining the sentence. However, it was rapidly discovered that it was wholly unrealistic to expect the complex questions which frequently arise in relation to confiscation, not infrequently involving third party interests, to be ready to be determined immediately on conviction, especially after a contested trial. The result was that the sentencing of offenders was held up, often for a substantial time, when it is a cardinal principle of the criminal law that sentence ought to follow conviction either immediately or very shortly after, not least in the interests of defendants. So, with effect from the Criminal Justice Act 1993, courts were given express power to adopt what is much the more natural sequence, and to sentence first. That was done, however, by creating a power in the court to postpone the confiscation hearing until after sentence, initially as an exception to a general practice of dealing with confiscation first. Although the general practice has rapidly, and inevitably, become to sentence promptly and to deal with confiscation subsequently, the terms of some of the statutory provisions have not, in this respect, altered. The power to postpone has been continued into POCA, and indeed extended. It is no longer predicated, as initially it was, on a decision that the court needs additional information before confiscation can be dealt with, and the initial provision that confiscation must ordinarily be completed within six months has been replaced by a period of two years. But section 13, because it has substantially been modelled on the previous statutes, is still couched in terms which assume that confiscation will ordinarily come first. Timetabling: Postponement The power to postpone confiscation until after sentence is now in section 14 (as amended) which provides (omitting immaterial parts): 14. Postponement (1) The court may (a) proceed under section 6 before it sentences the defendant for the offence (or any of the offences) concerned, or (b) postpone proceedings under section 6 for a specified period. [extension of permitted period if defendant appeals his (2) A period of postponement may be extended. (3) A period of postponement (including one as extended) must not end after the permitted period ends. (4) But subsection (3) does not apply if there are exceptional circumstances. (5) The permitted period is the period of two years starting with the date of conviction. (6) conviction] (7) A postponement or extension may be made (a) on application by the defendant; (b) on application by the prosecutor; (c) by the court of its own motion. If (a) proceedings are postponed for a period, and (b) an application to extend the period is made before it ends, the application may be granted even after the period ends. (9) [definition of date of conviction] (10) [extended definition of appeals] (11) A confiscation order must not be quashed only on the ground that there was a defect or omission in the procedure (8) connected with the application for or the granting of a postponement. (12) But subsection (11) does not apply if before it made the confiscation order the court imposed a fine on the defendant; (a) (b) made an order falling within section 13(3); (c) made an order under section 130 of the Sentencing Act (compensation orders) (ca) made an order under section 161A of the Criminal Justice Act 2003 (orders requiring payment of surcharge); (d) made an order under section 4 of the Prevention of Social Housing Fraud Act 2013 (unlawful profit orders). 15. Effect of postponement (1) If the court postpones proceedings under section 6 it may proceed to sentence the defendant for the offence (or any of the offences) concerned. (2) In sentencing the defendant for the offence (or any of the offences) concerned in the postponement period the court must not (a) impose a fine on him, Section 15 (as also amended) then contains what are, in effect, consequential provisions which combine section 13 with the power to postpone in section 14. So far as material, it provides: (b) make an order falling within section 13(3), (c) make an order for the payment of compensation under section 130 of the Sentencing Act (ca) make an order for the payment of a surcharge under section 161A of the Criminal Justice Act 2003, or (d) make an unlawful profit order under section 4 of the Prevention of Social Housing Fraud Act 2013. (3) If the court sentences the defendant for the offence (or any of the offences) concerned in the postponement period, after that period ends it may vary the sentence by imposing a fine on him, (a) (b) making an order falling within section13(3), (c) making an order for the payment of compensation under section 130 of the Sentencing Act; (ca) making an order for the payment of a surcharge under section 161A of the Criminal Justice Act 2003, or (d) making an unlawful profit order under section 4 of the Prevention of Social Housing Fraud Act 2013. (4) But the court may proceed under subsection (3) only within the period of 28 days which starts with the last day of the postponement period. It will be seen that section 15(2) feeds on the underlying thinking of section 13(2) and (3), but extends it. Sections 13(2) and (3) direct the court to take account of any confiscation order before making the various financial or property orders there specified. But section 15(2) goes on to prohibit the court from dealing with these financial/property aspects of sentence until after the confiscation proceedings have been concluded, and by subparagraphs (b) to (d) it includes a prohibition also on making various financial orders (such as compensation) which are exempted from section 13(3). Curiously, a restitution order under section 148 of the Powers of Criminal Courts (Sentencing) Act 2000, although it may involve payment of money, is not included in the prohibition. As recorded above, section 13 derives from the days before there could be any question of sentence before confiscation. Section 15(2) derives from the creation of what was in 1993 a new power to deal with sentence first, and from a time when it may well have been anticipated, however unrealistically, that postponement would be relatively unusual. Section 15(2) is, however, in many cases counter intuitive, and creates a trap into which even the most experienced and skilled trial judges may fall. That is because many forfeiture orders will not be in the least controversial and are inevitable whatever the outcome of confiscation proceedings may be. A good example is the order in the present case forfeiting the fairly substantial quantity of drugs found on Guraj. But for section 15(2), it would make sense to make inevitable forfeiture orders immediately after conviction in order to avoid the risk of their being overlooked, and, equally importantly, to allow the drugs to be destroyed without delay. It is not obviously sensible to insist on sometimes industrial quantities of volatile substances being kept by the police for months. There may easily be similar practical difficulties in preserving other property which is inevitably going to be forfeited. Section 14(12) essentially follows section 15(2). Its effect is that section 14(11) does not apply if orders have been made prior to the confiscation process of the kind which section 15(2) says should not precede it. Because, when the natural order of process (sentence first) was restored from 1993, it was accomplished hedged about by detailed procedural provisions for postponement of confiscation, there ensued many instances of technical failures to observe the procedures being relied upon for the contention that the ensuing confiscation proceedings were invalid and no order could be made. Similar complaints of procedural errors unconnected with postponement were likewise frequently relied upon as invalidating confiscation orders. On a number of occasions the courts felt obliged to accept these arguments and several confiscation orders were quashed as a result, although it could not be suggested that the defendant had suffered any unfairness or that the confiscation order was other than correct if there was power to make it. Examples included R v Ross [2001] 2 Cr App R (S) 109 and the striking case of R v Palmer [2002] EWCA Crim 2202; [2003] 1 Cr App R (S) 112 at 572, where the order quashed exceeded 32m. Other courts took a different view of the legal consequences of failure to get the procedure right. In due course the resulting uncertainty was addressed both by Parliament in renewing the confiscation legislation in POCA and by the House of Lords in R v Soneji [2005] UKHL 49; [2006] 1 AC 340 and R v Knights [2005] UKHL 50; [2006] 1 AC 368. It is relevant to note that the first preceded the second in time. The legislative response was the insertion into POCA of subsections 14(11) and (12). The manifest purpose of section 14(11) is to remove any supposed rule that a procedural failure connected with postponement invalidates the confiscation procedure and prevents an order being made. Such a failure cannot thereafter be the sole ground for quashing a confiscation order. The subsection is addressed to the Court of Appeal, rather than to the court of trial and sentence, but it is a plain consequence of its provisions that a Crown Court is not disabled from making a confiscation order only on the ground that there was a defect or omission in the procedure connected with the application for or the granting of a postponement. Subsection (11) comes, however, with the qualification of subsection (12). The present case is agreed to be one to which subsection (12) applies, because the judge had inadvertently infringed section 15(2) by making the forfeiture and deprivation orders before confiscation had been considered. The issue in the present case is therefore this: what is the legal position when subsection (12) takes subsection (11) out of the picture? In Soneji and Knights the House of Lords considered the legal consequences of procedural error in the absence of both subsections 14(11) and (12) because neither was present in the (amended) Criminal Justice Act 1988 which governed the cases then before the House. In Soneji confiscation orders had been made more than 18 months after the defendants had been sentenced to imprisonment for money laundering. The statute then in force provided that postponement could not be for more than six months in total unless there were exceptional circumstances; although the postponement had been made in good faith, the question whether there were exceptional circumstances had not been addressed. In Knights, the confiscation hearing had been postponed initially without setting a precise date and in terms which would place it more than six months after the conviction of one of the defendants. The House held that statutory provisions ought no longer to be classified as either mandatory or directory, but rather that attention should focus on what Parliament intended to be the consequences of failure to comply with them. It drew attention to the fact that the court comes under a duty under the confiscation legislation to make the order if the Crown seeks it, and indeed even if it does not, if the court determines that there should be such an order. It followed that the question was whether that duty was removed by the failure to observe the procedural requirements. The House held that the plain purpose of the postponement provisions was to ensure the overall effectiveness of the sentencing process, and to enable sentence to take place promptly, at least where no financial sentence was in prospect. Accordingly it held that it was not the consequence of failure to comply with the statutory procedural provisions that a confiscation order could not be made, at least where there was no injustice to the defendant in making it. Thus both Parliament and the House of Lords as a court recognised that it would defeat the purpose of the confiscation legislation if orders were treated as bad simply because there had been a failure to comply with the procedural provisions laid down for postponement. Parliament accordingly altered the law, prospectively, by inserting section 14(11) into POCA. For its part, the House of Lords construed the existing earlier statute which had no such provision, and which provided stricter procedural requirements than POCA now does, and held that it cannot have been intended that invalidity should be the consequence of procedural breach. It follows from the decisions in Soneji and Knights that irrespective of section 14(11) the correct approach to the legal consequences of failure to observe procedural provisions is to ask whether Parliament must have intended invalidity of any confiscation order to follow, bearing in mind the underlying duty on the court to make such an order. There can be no question of sections 14(11) and (12) being designed to be a Parliamentary response to Soneji and Knights and to curtail the breadth of those decisions; these sections had been enacted before the House came to consider those two cases. Whether those sections do nevertheless curtail the breadth of the decisions in Soneji and Knights is central to the question in the present case. The two responses, by Parliament and the court, both address the problem of procedural error and its effect on the validity of a post conviction confiscation order. But it should be noted that the two responses are not identical. Sections 14(11) and (12) are confined to the case of procedural error connected with the application for or the granting of a postponement. They have no application to any other kind of procedural error. Thus confined, section 14(11), where it applies, is peremptory: an order must not be quashed only on grounds of such error. The decisions in Soneji and Knights are, first of all, not peremptory. They leave to the court the determination of when a procedural defect must have been intended to affect validity. But the decisions are also of broader ambit than sections 14(11) and (12). Although the facts of both cases did concern postponements, the reasoning is not confined to that kind of procedural defect. It proceeds on analysis of the effect of statutory conditions for the exercise of a power generally. The procedural provisions of POCA are legion and certainly not confined to postponements of the hearing. Others which might be invoked in aid of an argument that a post conviction confiscation order was invalid might, for example, include the detailed rules for affording time for payment (section 11 passim), the rules for making compliance orders (section 13A as inserted by section 7 of the Serious Crime Act 2015), a failure to make a section 13(6) order for payment out of the confiscation order of a priority order (which includes the mandatory surcharge order) or the provisions of sections 16 for the furnishing of statements of information by the Crown; those are by no means exhaustive instances. Sections 14(11) and (12) would have no application to this sort of argument, but there is no reason to suppose that the reasoning of Soneji and Knights would not apply. This case The contention of the respondent is that there have been in this case two respects in which the statutory provisions have not been complied with. The first was the making of the forfeiture and deprivation orders, in contravention of section 15(2). The second was the failure on the part of the Crown to make an application for an extension of the postponement before it expired, as is required by section 14(8); the original postponement ordered by the judge in July 2012 had expired by the end of November 2012, and nothing then happened for a year. Says the respondent, the effect of the first error is that section 14(12) takes section 14(11) out of the picture, and the result is that the second error is fatal to the courts jurisdiction. It is expressly accepted that the respondent can point to no injury, unfairness or injustice to which he has been exposed by the making of the order after the timetable recorded above. If, however, the jurisdiction to make the order has gone, that does not matter. The judge applied the Soneji approach. He directed himself that the failure of the Crown to apply before December 2012 for a further postponement was a procedural error, and a serious one, but one which was capable of remedy within the two year period, and had indeed been remedied. He approached the respondents submission as in effect an application to stay the confiscation proceedings and thus asked himself whether any injustice had been sustained by the defendant. He held that Parliament could not have intended that any failure to apply for an extension of postponement, even by, for example, making the application two days late, would lead inevitably to the confiscation proceedings becoming invalid. Delay and incompetence could, he held, be met fairly by a stay if the consequence of them was unfairness. There being no suggested prejudice or unfairness, he proceeded to make the order. The Court of Appeal reached the opposite conclusion. It accepted that there was a clear Parliamentary intention that confiscation proceedings should not be invalidated by technical errors, but held that there was also a clear intention that those proceedings should move on expeditiously, hence the timetabling provisions of section 14. It held that section 14(8) was infringed by the failure to apply for an extension before the initial period of postponement expired. At that point, at para 54, it held, the prosecution needs the balm of section 14(11) in order to retrieve its position. But that balm was unavailable, because of section 14(12). It expressed the result of the interlocking statutory provisions, and particularly of sections 15(2) and 14(12) as follows: 55. It is of course right that we must strive to give effect to the objects of POCA and the intention of Parliament, as the House of Lords stated in both Knights [2006] 1 AC 368 and R v Soneji [2006] 1 AC 340. The difficulty for the prosecution, however, is that part of Parliaments intention is now expressed in section 14(12) of POCA. That is a mandatory prohibition which, as the Lord Judge CJ stated in R v Neish [2010] 1 WLR 2395, cannot be ignored. Forfeiture orders should not be made when confiscation proceedings are under way. If forfeiture orders are made in such circumstances, then the prosecution will be held more strictly to the time limits contained in section 14. The outcome of the appeal was stated thus: we conclude that the combination of delays and breaches by the prosecution was such as to deprive the court of the power to make a confiscation order. (para 57) This approach, centred on a crucial role for section 14(12) as disapplying section 14(11), must be seen against the background that section 14(12) is triggered by any forfeiture or other order specified in section 15(2), whether or not such order could conceivably be affected by a confiscation order. So, for example, section 14(12) is triggered by an order for the forfeiture of drugs recovered, as in the present case, and would also be triggered by a deprivation order relating to a trivial item of property in the hands of a defendant who had ample assets with which to meet a confiscation order. Is this approach compelled by the statute? The Court of Appeals reasoning involves reading section 14(12) as not simply disapplying section 14(11), which plainly it does, but also as restoring those of the pre Soneji cases which regarded procedural errors as going to jurisdiction to make a confiscation order. It involves understanding section 14(12) as not simply removing the balm of section 14(11), so as to remove the peremptory bar on quashing only for postponement procedural error, but as prescribing that an order will, in its absence, be invalidated for such an error. That, however, is not a necessary reading of section 14(12) and it is to give insufficient weight to the quite separate analysis contained in Soneji and Knights. That latter analysis holds as good now as it did at the time of the House of Lords decisions. The court remains under a duty to make a confiscation order, and the question remains whether that duty is removed by procedural error which causes no injustice or unfairness to the defendant. The purpose of the postponement provisions of POCA is, just as the purpose of their predecessors in the Criminal Justice Act 1988 was, to make the sentencing process effective. If anything, the recognition that confiscation will frequently, and in reality generally, follow sentence, is clearer in POCA than it was in the predecessor legislation. The need to found postponement on the absence of necessary information has gone, and the permitted period for postponement has been increased fourfold. It should be noted that the judge and the Court of Appeal both dealt with the case on the agreed basis that the original postponement order had expired by December 2012 and that there was a breach of section 14(8) in the failure of the Crown to seek a further extension before that time. In this court, Mr Hall QC for the Crown offered an alternative analysis, namely that the original (valid) postponement order ran until two weeks after the service of both parties statements of information, and therefore survived until the Crowns was served in late 2013. On the correct view of the law, it is not necessary to resolve this issue. Subject, however, to any further argument and evidence of accepted practice, the better view would appear to be that the original postponement was valid, being for a specified period until December, but would not have been valid (because not for a specified period) if it had been open ended and dependent on the uncertain event of service of a partys statement of information. Whatever the correct technical view, it may be sensible for a court which needs to give directions such as those given initially in the present case to postpone confiscation to a fixed date somewhat beyond the hoped for date, or earlier by liaison with the parties. In any event it is clear that the listing officer needs to keep the situation under review see para 37 below. The Court of Appeals reasoning treated the breach of section 14(8) as the critical matter which, once section 14(11) was removed from consideration by the inadvertent making of the forfeiture orders, led in its view to the loss of jurisdiction to make a confiscation order. But although section 14(8) certainly contemplates that an application by a party for a further postponement will be made before the expiry of a previous postponement, it is difficult to see a failure to meet this requirement as going to so fundamental a matter as jurisdiction. If it did, it would indeed mean, as the judge held, that an extension application which is a day late would be fatal, and even if there were an acceptable excuse for it, and maybe even if it were made by the defendant or had been consented to by him. There is simply no reason at all why this should be so. It is also to be observed that a postponement or extension may, under section 14(7), be made not only on an application by a party, but also by the court of its own motion. Given the courts statutory duty under section 6 to make a confiscation order, it would plainly not be improper for the court to order an extension without any application from a party, if satisfied that no injustice or unfairness would thereby be occasioned. If it did so, section 14(8) would appear to have no application. In arriving at its conclusion the Court of Appeal described section 14(12) as containing a mandatory prohibition. That was understandably based on an obiter passage in the judgment of Lord Judge CJ in R v Neish [2010] EWCA Crim 1011; [2010] 1 WLR 2395. The initial postponements of confiscation in that case had been to a fixed date about five months after sentence. There was plainly nothing wrong with that. Before that date arrived, the judge learned that, unexpectedly, he was double booked in court that day. He immediately instructed the listing officer to vacate that date and to re list on a date convenient to both parties. The listing officer did so and, before the originally fixed date was reached, had re listed the case about three weeks later. The point taken on behalf of the defendant was that this process involved no judicial decision to postpone for a specific period, because the judge had left it to the listing officer to find a convenient date. The judge had felt obliged to accept this point, but the Court of Appeal rightly held that there was nothing at all in it. The revised date was still only six months after sentence. It had been fixed on judicial direction. The judge acted via the listing officer, exercising the judicial function of listing, and through him adjourned the hearing to the revised fixed date. There had been a perfectly legitimate postponement. The court added an analysis based upon Soneji and Knights, correctly pointing out that those cases, and in particular the latter, decided that an adjournment may be a valid postponement for a specific period without fixing a date, so long as it was not simply an adjournment generally. The court then offered this summary: 18. In short, the conclusion to which the reasoning in the House of Lords in R v Soneji [2006] 1 AC 340 and R v Knights [2006] 1 AC 368 drives us is the comforting one that unless the continuation of confiscation proceedings would contravene an unequivocal statutory provision, there is no reason why technical errors which cause no prejudice to the defendant should prevent their continuation. The position is exemplified by section 14(11) and section 14(12) of the 2002 Act. Section 14(11) states in express language that a confiscation order must not be quashed only on the ground that there was a defect or omission in the procedure connected with the application for or the granting of a postponement. That language is clear, but by section 14(12) it is not to apply if, before the confiscation order was made, the court had already, for example, imposed a fine on the defendant. That is an express statutory prohibition which it is not open to the court to ignore. However what happened here did not contravene any statutory provision. Since the court had found, correctly, that there had been a valid postponement to a fixed date, Neish was a case in which there was no procedural error at all. Neither Soneji nor section 14(11) were engaged. The observations set out above were obiter, albeit an entirely understandable reinforcement of the inevitability of the decision that the court could and should continue in that case to deal with confiscation. The court was plainly not attempting to provide a comprehensive statement of the law. The expressions unequivocal statutory provision and express statutory prohibition do not derive directly from the speeches in Soneji; indeed in that case the complaint had been that the postponement did contravene an express statutory provision which prevented adjournment beyond six months unless in exceptional circumstances. It is possible that in the penultimate sentence of the passage quoted above the expression used in the first was repeated, and that prohibition is a transcription error for provision. However that may be, section 14(11) does contain a prohibition: it says that the court must not quash a confiscation order only on the grounds of procedural defect or omission connected with postponement. Section 14(12) is less obviously to be described as a prohibition. It is certainly an express provision, and it disapplies section 14(11). It certainly cannot be ignored. But to say that it disapplies section 14(11) is the beginning of the exercise, not the end. The judgment of the Court of Appeal in the present case also considered the earlier case of R v Donohoe [2006] EWCA Crim 2200; [2007] 1 Cr App R (S) 88 at 548. There, the postponements were not criticised, but they had followed sentencing in which the judge had fallen into precisely the same trap as did the judge in the present case: he had made a forfeiture order. It was only of the drugs seized. It could not conceivably have been resisted, and it is difficult to see how its making could have been affected by the confiscation process. But to make it was, there as here, a breach of section 15(2). The decision of the Court of Appeal (Criminal Division) (Sir Igor Judge P, Gray and McCombe JJ) was that that breach did not render the confiscation order invalid. The court said this, of sections 14(11) and (12): 15. There is nothing in the remaining provisions of the Act which say that if the court makes an order in contravention of section 15(2), it may no longer proceed to hear the application for a confiscation order under section 6. What the Act does say in sections 14(11) and (12) is that a confiscation order must not be quashed on the grounds that the procedural defect or error, except if that error was the imposition of a fine, compensation order, forfeiture order or the like within section 13(3). When the Act speaks of quashing of an order it seems to propose an order has been made and an application is made to quash it, presumably on an appeal. On their face, therefore, these two subsections appear to provide that an appellate court may quash a confiscation order even on procedural grounds if, for example, an order for forfeiture has been made under section 27 of the 1971 Act, before the making of the confiscation order. The subsections do not say directly that the court at first instance cannot make a confiscation order in such circumstances. Are they however saying so indirectly? 16. It seems to us that these two subsections are allowing the appellate court, if it sees fit, to quash a compensation [sic: but McCombe J must have said confiscation] order on procedural grounds where, for example, there is a danger of double counting or double penalty because the court had made an earlier order of an expropriating nature against a defendant and it should not have done so. The subsections are not imposing a prohibition on the trial court from proceeding with the confiscation proceedings which it has validly postponed 17. We do not consider therefore that either section 15(2), or sections 14(11) and (12) had the effect of depriving the court of jurisdiction to make a confiscation order when there had been a failure to observe the prohibition in section 13(2). None of these provisions state this to be the consequence. It would, in our view, be frustrating the object of the 2002 Act to hold that the erroneous imposition of a trivial fine or, for example, the forfeiture of drug dealing paraphernalia rendered the court powerless to proceed with the substantive confiscation proceedings. A technically erroneous order for forfeiture of illegal drugs is, in our view, an a fortiori case. Such an approach is, we consider, consistent with that of the House of Lords in the recent case of Soneji [2005] UKHL 49; [2006] 1 Cr App R (S) 79 (p 430) The reasoning there set out, which was ex tempore, appears, with respect, to have overlooked the fact that in a case where the postponements were not criticised, sections 14(11) and (12) had no application. But on the direct question whether section 15(2) mandated invalidity, the application of the principle of Soneji to a non postponement procedural error was plainly correct. The court went on to consider ways in which any injustice or unfairness to a defendant arising from making a confiscation order after a premature forfeiture order might be corrected. That was the right approach. A similar result ensued in R v Paivarinta Taylor [2010] EWCA Crim 28; [2010] 2 Cr App R (S) 64, para 42, where a confiscation order was held not automatically to be invalidated by the fact that the court had imposed a fine in advance of the confiscation proceedings, contrary to section 72A(9) of the then applicable Criminal Justice Act 1988. Whatever the position might have been if the confiscation order could conceivably have impacted on the fine, in that case it could not have done so. True it is, as the Court of Appeal said in the present case, that Donohoe (and Pairvarinta Taylor) differ from this case because there was no postponement error suggested. But Donohoe was cited to the court in Neish and the latter judgment did not question it in any way. That is a further reason why it is not possible to read into the obiter passage cited above from Neish any implied suggestion that once an express statutory provision outside section 14(11) is contravened, invalidity must follow. The decision in the Court of Appeal in the present case raises the question when a postponement or other procedural error will have the effect of invalidating confiscation proceedings in the absence of the availability of section 14(11). As already demonstrated, for non postponement errors, section 14(11) is irrelevant. In the case of a postponement error, such as the infringement of section 14(8) in the present case, the Court of Appeal decision is that invalidity necessarily follows from any breach, however venial, if section 14(11) is unavailable, because jurisdiction to make an order is lost. For the respondent in this court, Mr Farrell QC realistically shrank from so absolutist a proposition. He concentrated his fire upon the fact that the Act has among its plain objectives the prompt despatch of confiscation proceedings, and on the tendency for them to drift unless firmly controlled. He submitted that if the Crowns argument were to succeed, there would be nothing to prevent confiscation proceedings being resurrected after a much longer period of inactivity than the year which disfigured the present case, and that section 14(12) would then have no effect at all. He submitted that the purpose of section 14(12) was to permit the invalidation of an order where there has been both a breach of section 15(2) by making the forfeiture order and a flagrant procedural error (the emphasis is ours). In such a case, he contended, the court has no jurisdiction to make the order. He submitted that it is necessarily a matter of degree when the breach is sufficiently flagrant for this conclusion to follow, and that there ought to be a factual enquiry in each case into what has occurred. But once that is the argument, it must follow that a procedural error does not go to jurisdiction. What, then, is the answer to the question: If section 14(11) is unavailable, when does a procedural error prevent the making of a confiscation order, or invalidate such an order if it is made? Consistently with Soneji and with the dominant purpose of POCA that confiscation is the duty of the court, to which a significant priority is to be given, the answer is not that every procedural defect does so. The correct analysis is not that a procedural defect deprives the court of jurisdiction, which would indeed mean that every defect had the same consequence. Rather, it is that a failure to honour the procedure set down by the statute raises the very real possibility that it will be unfair to make an order, although the jurisdiction to do so remains, and that unless the court is satisfied that no substantial unfairness will ensue, an order ought not to be made. This is not to deprive section 14(12) of effect; it remains effective to remove the peremptory bar of section 14(11) upon quashing confiscation orders on grounds only of procedural defect connected with postponement. Where section 14(11) applies, no such defect can alone justify quashing. Resulting unfairness, on the other hand, may, but such unfairness cannot be inferred merely from the procedural breach. Where section 14(11) does not apply, a procedural defect, not limited to postponement, will have the effect of making it wrong to make a confiscation order if unfairness to the defendant would thereby ensue. If, however, the defect gives rise to no unfairness, or to none that cannot be cured, there can be no obstacle to the making of the order, and this is what the duty of the court under POCA requires. The present case is one where no unfairness can be or is suggested; cure does not arise. If it were to arise, in another case, it is possible that there might be ways in which a potential unfairness could be cured. They might include, for example, determining in accordance with R v Waya [2012] UKSC 51; [2013] 1 AC 294, that the confiscation order must be adjusted to achieve proportionality. In a few instances, it might be possible to vary an inadvertently imposed sentence within the 56 days permitted by section 155 of the Powers of Criminal Courts (Sentencing) Act 2000. In others, the correct outcome may be that it is the forfeiture order which ought to be quashed, by way of appeal, rather than the confiscation order; priority for the latter is after all built into POCA. Each case, however, must depend on its own facts. In the event of a very long period of inactivity, the correct inference may well be that unfairness to the accused has ensued; his own affairs and, importantly, those of others may have been on hold, or may even have been conducted on the basis that the threat of confiscation had gone away, to the extent that to resume the process is unfair. The statutes intention is clearly that although confiscation may follow sentence, it is to be dealt with promptly. The duty to remove assets falling within the proceeds of crime legislation is clearly a legislative priority. The present case does not involve any exceeding of the statutory permitted period of two years, for which see sections 14(3) (5). The order was eventually made well within that time. There are inconsistent expressions of view in decisions of the Court of Appeal on the effect of exceeding the permitted period. In R v Iqbal [2010] EWCA Crim 376; [2010] 1 WLR 1985 the court held that the effect of section 14(8), read with section 14(3), is that unless an application for an extension is made before the expiry of the two year period, no further postponement is possible and no order can be made. But that decision, whilst it referred to Soneji, did not explain why the rule should be different when the permitted period (six months previously and now two years) is exceeded after an application has been made but there has been no consideration (as is required) of the existence of exceptional circumstances, as happened in Soneji. It is moreover inconsistent with R v T [2010] EWCA Crim 2703, where there were undoubtedly exceptional circumstances (the defendant several times failed to appear, at one stage having absconded abroad) but no application had been made within the two years for extension of time; the court there held that there was no obstacle to the confiscation process continuing. A similar decision was reached in R v Johal [2013] EWCA Crim 647; [2014] 1 WLR 146. There, the court had, of its own motion, adjourned anticipated confiscation proceedings on the day before the two year period expired, but had neither considered exceptional circumstances nor set any kind of period, whether by way of fixed date or otherwise. The court made the assumption in favour of the defendant that section 14(11) did not apply where the order of adjournment was not a proper postponement because of failure to specify any period, but nevertheless held that the Crown Court Recorder had been entitled subsequently to decide that there were exceptional circumstances, and that in consequence the confiscation order was valid. Since the two year period is not in question in this case, it is unnecessary to say more than that it must be especially likely that unfairness will ensue if it is exceeded without there being exceptional circumstances. Conclusion It follows that the judge applied the correct test. In this case it is not suggested that any unfairness at all has befallen the defendant in consequence of the irregularities which occurred. There was no obstacle to the making of the confiscation order, and it ought to have been made. The Crowns appeal must be allowed and the order restored. Two further matters Enough has been said to show that Lord Steyns prediction in Soneji (see para 1 above) was sadly entirely accurate. The Law Commission has expressed interest in reviewing the confiscation legislation. It may be that amongst the topics which would merit review are (1) the best way of providing realistically for the sequencing of sentencing and confiscation and (2) the status of procedural requirements in the Act. We re emphasise the message given at para 13 by this court in R v T [2010] EWCA Crim 2703. The fact that the courts will not wish to see the intention of Parliament defeated by technical points taken to stave off meritorious confiscation orders, does not mean that the obligations under the Act can be taken lightly. It is essential that listing officers, acting as they do on behalf of judges and discharging a judicial function delegated to them for day to day administration, pay close regard to the procedural steps laid down in section 14. Listing officers should be aware of the necessity to adhere to the two year limit. They should be alive to the risk that the parties may not alert them to such a problem. They should be aware of the requirement to consider whether there are exceptional circumstances before a postponement beyond two years is granted. They should be aware of the obligation not to postpone generally but to specify a date when there is to be a postponement. It would be wise for listing officers to consult the resident judge when any such problem is likely to arise. It would also be wise to keep a record of what was taken into consideration at the time, and in particular whether any exceptional circumstances arose which justified postponement. The Act must, however, be obeyed as it stands. Confiscation proceedings are particularly susceptible to drift. They must not be allowed to suffer it. They need not always be complicated, and efforts should be made by the Crown, as well as the courts, to simplify them. It will often be in the interests of defendants to delay. In overstretched police and CPS offices it may often be tempting to give priority to something other than confiscation. Courts have got to be alive to these realities. It may help to echo the useful practical guidance offered by Irwin J, giving the judgment of the Court of Appeal (Criminal Division) in Johal: |
The respondents to the Lord Advocates appeal in these three cases are Raymond Jude, Michael Hodgson and Josh Birnie. They were each detained as suspects for questioning at a police station under sections 14 and 15 of the Criminal Procedure (Scotland) Act 1995. Their detentions took place prior to the decision of this court in Cadder v HM Advocate [2010] UKSC 43, 2011 SC(UKSC) 13; [2010] 1 WLR 2601. As was the practice at that time, they did not have access to legal advice either before or during their police interviews. In the course of their interviews they said things in reply to questions put to them by the police on which the Crown relied at their trials. They were convicted and sentenced to various periods of imprisonment. They then appealed against these convictions. Their appeals were still current when the judgment in Cadder was delivered on 26 October 2010. Among other grounds of appeal in the High Court of Justiciary the respondents advanced submissions which raised a devolution issue. This was that the leading of evidence of statements which they made during their police interviews was a breach of their rights under articles 6(3)(c) and 6(1) of the European Convention on Human Rights and that, in terms of section 57(2) of the Scotland Act 1998, the Lord Advocate had no power to lead that evidence. They referred to the decision in Cadder in support of this ground of appeal. For Birnie it was also submitted that the reliance by the Crown upon his admissions in these circumstances deprived him of a fair trial, to which he was entitled under article 6(1) of the Convention and at common law. The Crowns response to these submissions was that, for various reasons, the principle that was established in Cadder did not apply in these cases. The High Court of Justiciary decided to deal with this response as a preliminary issue, and it was referred to a court of five judges. On 11 May 2011 the Appeal Court (the Lord Justice-Clerk (Gill) and Lords Osborne, Eassie, Clarke and Mackay of Drumadoon) repelled the Crowns objections and continued the appeals for hearing on the remaining grounds of appeal: [2011] HCJAC 46, 2011 SLT 722. The Crown was given leave to appeal against that decision to this court under para 13 of Schedule 6 to the Scotland Act 1998. The issues raised by the Crowns response to the devolution issue were as follows: (1) that in the case of each respondent section 118(8) of the Criminal Procedure (Scotland) Act 1995 was an absolute bar to any challenge to the evidence of the police interviews, as objection was not taken at or before the trial to the leading of that evidence; (2) that each of the respondents had waived their right of access to a lawyer when they were interviewed; (3) that by failing to object to the evidence through their respective legal representatives they had waived the right to take the point as a ground of appeal; and (4) in Judes case only, that the point had been taken too late as section 100(3B) of the Scotland Act 1998, as amended by section 1 of the Convention Rights Proceedings (Amendment) (Scotland) Act 2009, provides that any proceedings brought on the ground that an act of a member of the Scottish Executive is incompatible with the Convention rights must be brought before the end of the period of one year beginning with the date on which the act complained of took place. The Crown did not seek leave to appeal from the Appeal Courts decision in relation to the application of section 118(8) of the 1995 Act. Leave was sought and granted in relation to the issues of waiver and the application to Judes case of section 100(3B) of the Scotland Act. In his written case to this court the Lord Advocate made it clear that he did not intend to pursue the point that the respondents had waived their right to object to the admissibility of the evidence of the police interviews because their legal representatives did not object to that evidence at the trial. This was because he accepts that, at the time when the respondents were tried, a person who was detained under section 14 of the 1995 Act did not have an express right in Scots law to legal advice before or during his police interview. As for the issue of individual waiver, his position was that the only point in these appeals which was likely to be of importance for future cases was that raised in the case of Birnie. Unlike the other two respondents Birnie made an unsolicited statement following his police interview, having declined the opportunity to have access to a lawyer prior to and while making it. The advocate depute, Miss Cherry QC, confined her submissions about waiver in these three cases to the question whether Birnie waived his right to a lawyer when he made his unsolicited statement. She made no submissions in support of the proposition that the respondents had waived their right to a lawyer at their police interviews. That issue was however the subject of detailed submissions in the Lord Advocates reference in McGowan (Procurator Fiscal, Edinburgh) v B, which was heard at the same time as these appeals. The court has issued a separate judgment in that case: [2011] UKSC 54. In the result the only matters which remain for consideration in relation to these three appeals are (1) whether the time bar referred to in section 100(3B) of the Scotland Act 1998, as amended, applies to Judes appeal, (2) whether Birnie waived his right of access to a lawyer when he made his unsolicited statement following his police interview and (3) whether the reliance by the Crown upon his admissions in these circumstances deprived him of his right to fair trial under article 6(1) of the Convention. No issue now arises in regard to the preliminary points that were taken by the Crown in Hodgsons appeal. Section 100(3B) Jude went to trial in the High Court of Justiciary at Aberdeen on an indictment which libelled one charge of breach of the peace, one charge of lewd and libidinous conduct, three charges of indecent assault and two charges of assault with intent to rape. On 5 June 2008 he was convicted of one charge of indecent assault and of both charges of assault with intent to rape. On 28 August 2008 he lodged a notice of his intention to appeal against his conviction. On 17 February 2009 his appeal was deemed to have been abandoned because his note of appeal had not been lodged within the period referred to in section 110(1)(a) of the 1995 Act. On 5 October 2010 he lodged an application for extension of time under section 111(2) of that Act along with a note of appeal. His application for extension of time was granted on 6 October 2010 and his note of appeal was received on the same date. It is plain, and not disputed, that the time bar which would have otherwise have applied under section 110 of the 1995 Act was removed when the Appeal Court decided on 6 October 2010 to grant Judes application for an extension of time under section 111(2). At the end of his judgment in Cadder Lord Rodger drew attention to the provisions of section 100 of the Scotland Act, as amended by the Convention Rights Proceedings (Amendment) (Scotland) Act 2009: 2011 SC(UKSC) 13, paras 104-106. In its amended form, the relevant provisions of that section are as follows: (1) This Act does not enable a person (a) to bring any proceedings in a court or tribunal on the ground that an act is incompatible with the Convention rights, or (b) to rely on any of the Convention rights in any such proceedings, unless he would be a victim for the purposes of article 34 of the Convention (within the meaning of the Human Rights Act 1998) if proceedings in respect of the act were brought in the European Court of Human Rights. (3) This Act does not enable a court or tribunal to award any damages in respect of an act which is incompatible with any of the Convention rights which it could not award if section 8(3) and (4) of the Human Rights Act 1998 applied. (3A) Subsection (3B) applies to any proceedings brought on or after 2 November 2009 by virtue of this Act against the Scottish Ministers or a member of the Scottish Executive in a court or tribunal on the ground that an act of the Scottish Ministers or a member of the Scottish Executive is incompatible with the Convention rights. (3B) Proceedings to which this subsection applies must be brought before end of (a) the period of one year beginning with the date on which the act complained of took place, or (b) such longer period as the court or tribunal considers equitable having regard to all the circumstances, but that is subject to any rule imposing a stricter time limit in relation to the procedure in question. (3E) The reference in subsection (3A) to proceedings brought on or after 2 November 2009 includes proceedings relating to an act done before that date. As Lord Rodger observed in para 104 of his judgment in Cadder, the effect of these provisions was not mentioned by any of the counsel who appeared to argue that case in the Supreme Court. Nevertheless he went on to express his opinion on it. He referred in the following paragraph to the fact that the amendment to section 100 was made in response to the decision of the House of Lords in Somerville v Scottish Ministers [2007] UKHL 44, 2008 SC (HL) 45, [2007] 1 WLR 2734, in which it was held that the time limit in section 7(5) of the Human Rights Act 1998 did not apply to proceedings in relation to Convention rights brought by reference to the Scotland Act 1998. Having set out the terms of the section in its amended form, he said that the proceedings in Cadders case were proceedings to which that section applied. So, by reason of section 100(3B), to be competent any such proceedings would need to have been commenced before the end of a year beginning with the date on which the Crown led the evidence, or within such longer period as the court considered equitable having regard to all the circumstances: paras 105-106. I endorsed what he said in those paragraphs in para 60 of my own judgment, when I included appeals that had been brought timeously among the list of cases that would have to be dealt with in the light of Cadder on the basis that a person who was detained must have had access to a lawyer before being questioned by the police. The Crowns attempt to rely on Lord Rodgers analysis in support of its argument that Judes appeal was out of time because the act that was relied on took place more than one year before the lodging of his note of appeal was rejected by the Appeal Court. The Lord Justice Clerk said that he could not follow why Lord Rodger should have taken the view that section 100(3B) applied to these proceedings. In his opinion it applied only to claims made in civil proceedings and then only when they were brought by virtue of the Scotland Act. That was not so in Judes case, as his appeal had been brought under the 1995 Act: 2011 SLT 722, paras 37-38. Lord Rodgers observations in paras 105-106 of Cadder were of course obiter. They must nevertheless be treated with respect. He was, after all, a master of the art of statutory construction. As he declared in one of his unpublished lectures, for him the subject of attention in these matters always was the text of the statute. His hope was that, by immersing himself in the text and the scheme of the legislation, he would be able to see what the experts who had devoted months and months to preparing and adjusting the text saw and, more importantly, what they meant and how it should be applied. His dissenting judgment in Martin v Most [2010] UKSC 10, 2010 SC (UKSC) 40 provides ample evidence of his concern for accuracy and for attention to the detail of the language used by the draftsmen and women when carrying out this exercise. He brought to the question as to the meaning and effect of section 100(3B) his deep familiarity with the provisions of the Human Rights Act 1998 which he had developed since he first engaged with the subject in Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank [2003] UKHL 37, [2004] 1 AC 546, paras 157-163, and his participation in the carefully argued decision of the House of Lords in Somerville. As Lord Hamilton points out (see para 40, below), he referred to the Somerville case in para 105 of his judgment in Cadder when he was describing the context in which the amendments to section 100 were made. The challenge to the accuracy of his conclusion that section 100(3B) applies to proceedings brought by way of an appeal under the 1995 Act raises two questions. The first is whether, as the Lord Justice Clerk indicated in para 38 of his opinion, that section is rendered inapplicable simply because criminal appeals are brought under the 1995 Act and not under the Scotland Act. The second is whether the wording of the amended section 100 of the Scotland Act itself shows that it has no application to any criminal proceedings, even at the stage of an appeal. I do not think that it is difficult to see why it did not occur to Lord Rodger that the fact criminal appeals are brought under the 1995 Act of itself meant that these appeals lay outside the scope of section 100(3B) of the Scotland Act. He would have concentrated on the wording of the Scotland Act, as I would too. Section 100(3B) refers to proceedings brought by virtue of this Act against the Scottish Ministers or a member of the Scottish Executive. As I said in Somerville, 2008 SC (HL) 45, para 10, anybody who wishes to bring proceedings against a member of the Scottish Executive on the ground that an act or a failure to act is incompatible with the Convention rights, or to rely on the Convention rights in any proceedings, needs to know whether he must do this under sections 6 to 8 of the Human Rights Act or whether he must do so, or can do so only, on the ground that the act or the failure to act is contrary to the provisions of the Scotland Act. This is so whether the proceedings in question are civil or criminal, as issues about Convention rights may arise irrespective of the nature of the jurisdiction that the court or tribunal is being called upon to exercise. A criminal appeal in which it is said that the leading and relying on evidence by the Lord Advocate was contrary to the appellants Convention rights, and that in terms of section 57(2) of the Scotland Act he had no power to lead that evidence, falls plainly into the category of a proceeding that is by virtue of the Scotland Act. It is the Scotland Act which provides the basis for the appeal. The fact that the procedure under which the complaint is made is provided by the 1995 Act is neither here nor there so far as this point is concerned. So I think that the key to the soundness or otherwise of Lord Rodgers reasoning lies in the answer that is to be given to the second question. Section 100(3A) of the Scotland Act refers to any proceedings brought on or after 2 November 2009 by virtue of that Act. In para 106 of his judgment Lord Rodger said that the proceedings in Cadder were proceedings brought on the ground that it was incompatible with articles 6(1) and (3)(c) for the Lord Advocate to lead evidence of answers elicited by the police questioning. In my opinion it would not be a misuse of language to use the word brought in relation to proceedings which take the form of an appeal under section 106 of the 1995 Act. After all, section 106(3) of that Act states that by an appeal under subsection (1) of that section a person may bring under review of the High Court any alleged miscarriage of justice in the proceedings in which he was convicted. The word bring is not used in section 175 which provides for appeals in summary proceedings, but the idea that the appellant is bringing appeals under that procedure is not unreasonable. The wording of section 106(3) also suggests that it would not be a misuse of language to say that the appeal was a separate proceeding from the proceedings in which the appellant was convicted. But that is not an end to the problems that have to be solved in order to understand what is meant by the word proceedings in section 100(3A). One must go back to the opening subsection, which Lord Rodger did not mention in para 106 of his judgment in Cadder. It makes the same distinction as that which is to be found in section 7(1) of the Human Rights Act 1998 between (a) bringing proceedings in a court or tribunal on the ground that an act is incompatible with the Convention rights and (b) relying on any of the Convention rights in any such proceedings. Section 100(1)(a) of the Scotland Act does not reproduce exactly the wording of section 7(1)(a) of the Human Rights Act, as it does not refer to the appropriate court or tribunal which section 7(2) explains as meaning such court or tribunal as may be determined in accordance with rules. The words in any such proceedings do not reproduce exactly the wording of section 7(1)(b) of the Human Rights Act either, as the equivalent phrase in that Act is in any legal proceedings. But I think that they have the same effect. I read the word such in subsection (1)(b) as referring back to the words in a court or tribunal in subsection (1)(a). The distinction between subsections (1)(a) and (1)(b) of section 7 of the Human Rights Act is maintained by section 7(5) of that Act, which provides expressly that proceedings under subsection (1)(a) must be brought before the end of the period to which it refers. It does not impose any time bar on proceedings of the kind referred to in section 7(1)(b). The question then comes to be whether the reference in section 100(3A) of the Scotland Act to any proceedings brought must be taken to refer to proceedings of the former kind only, and not to proceedings of the kind referred to in section 100(1)(b). It seems to me, although it does not of course say so expressly, that the wording of section 100(3A) shows that it has that effect and that the time bar in section 100(3B) does not apply to proceedings of the kind referred to in section 100(1)(b). The point is that proceedings of the kind referred to in subsection (1)(b) are proceedings that have been brought by someone other than the person who maintains that the act in question is incompatible with the Convention rights. In the case of the proceedings referred to in subsection (1)(a), the person to whom the time bar is applied is the person who has brought those proceedings before the court or tribunal in order to obtain a remedy. It is the civil courts that have jurisdiction in cases of that kind, as the rules to which I referred in R v Kansal (No 2) [2002] 2 AC 69, para 63 make clear in the case of the Human Rights Act. The absence of a time bar on the bringing of proceedings of the kind referred to in section 100(1)(a) of the Scotland Act was the problem that was addressed in Somerville, where it was held that the limitations which section 7(5) of the Human Rights Act imposed on remedies sought under that Act did not apply where the case that was brought was that the act or failure to act was outside competence under the Scotland Act: 2008 SC (HL) 45, para 38. The question then is, into which category do appeals that are brought under the 1995 Act fall for the purposes of the Scotland Act? By whom are these proceedings brought? The Lord Justice Clerk said an appeal is part of the prosecution process brought against the appellant by a member of the Scottish Executive: para 38. There is no doubt that this is a correct description of the proceedings up to and including the trial in which the appellant was convicted. The Advocate Depute, Mr Brodie QC, conceded that this was so, and I think that he was right to make this concession. But that is not an end of the matter. The Lord Advocate is the master of the instance. The proceedings are brought in his name. He remains in control of them even after they have been brought into court, and this is so even after the verdict has been returned: Hume, Commentaries on the Law of Scotland Respecting Crimes, (1844), vol II at p 134; Montgomery v HM Advocate 2001 SC (HL) 1, pp18-19. The focus of attention changes when there is an appeal, but the proceedings remain throughout under the ultimate control of the Lord Advocate. The purpose of those proceedings is to secure the conviction and punishment of those who are guilty of committing acts of the kind that the law regards as criminal. That is their only purpose, and it remains their purpose from the start to the very end. The conclusion that an appeal against conviction or sentence, like any other proceeding in any of the criminal courts in Scotland, is still part of the prosecution process that has been brought in the public interest by the Lord Advocate seems to me to be inescapable. It is only fair to Lord Rodger to point out that he mentioned section 100(3B) because he was concerned, as I was too, to try to minimise the effect of the decision in Cadder: see para 60, where to assist this process I invoked the principle of legal certainty. But I am persuaded that the advice which he was offering in paras 105-106 of his judgment was mistaken. I agree with the Appeal Court that the time bar in section 100(3B) of the Scotland Act has no bearing on Judes appeal. I am fortified in this view by the fact the 1995 Act contains in sections 109 and 110 its own system of time limits for the bringing of solemn appeals, as it does in section 176 for an application by stated case. It would be very odd to find, in a case where the High Court had already granted an extension under section 111(2) of the period referred to in section 110(1)(a) of the 1995 Act or under section 181(1) of that Act in an appeal by stated case, that it was open to the Crown to invoke another time limit under another section in a different Act. It is not easy to identify the precise scope or ambit of the mischief which the amendment that section 100(3B) introduced into the Scotland Act was intended to remedy: see Bennion on Statutory Interpretation, 5th ed (2008), p 929, where the importance of achieving precision on this point is emphasised. The fact that the amendment was enacted in response to the decision in Somerville does not exclude the possibility that the time bar was intended to have a wider application than the facts of that case, by themselves, might suggest. But the concluding words of section 100(3B) show that the draftsman was aware that stricter time limits might be found in legislation relating to the procedure in question and that it was not the intention that it should override those other time limits or decisions made under a dispensing power to extend them. So I think that one can be reasonably confident that the view which I have arrived at by studying the language of these provisions is not contrary to what Parliament had in mind when it introduced this amendment. Birnies unsolicited statement According to the agreed statement of facts and issues, two issues arise in Birnies appeal. The first is whether he was offered rights of access to a solicitor prior to and during the taking of his unsolicited statement after his police interview. The second is whether, if he was offered them, he expressly waived those rights. But an examination of the facts shows that this formulation of the issues does not accurately focus the real point which is at issue on this branch of the case. This is because Birnie was offered access to a solicitor before he made his unsolicited statement and he did decline the offer expressly. It is best focused by the additional ground of appeal that was advanced in his case in the High Court of Justiciary: see para 2, above. The question that it poses is whether reliance by the Crown upon the admissions that he made in his unsolicited statement deprived him of the fair trial to which he was entitled under article 6(1) of the Convention. Reference was also made in that ground of appeal to his right to a fair trial at common law. That, of course, does not raise an issue which can be considered by this court, as it is not a devolution issue. But there is, in practice, no difference between these two bases for invoking the right to a fair trial. Birnie went to trial in the Sheriff Court at Aberdeen on 7 December 2009 charged with abduction and assault with intent to rape, a breach of the peace and a contravention of section 127(1)(a) of the Communications Act 2003 by sending sexually explicit messages to a female complainer. He pled guilty to the statutory offence during the trial, and his plea of not guilty to the charge of breach of the peace was accepted at that stage. The Crown led evidence at his trial of answers he gave to the police while he was being questioned as a detainee under section 14 of the 1995 Act without access to a solicitor. It also led evidence of an unsolicited statement which he made to the police following that interview. The jury found him guilty of the first charge under deletion of various averments including that of intent to rape. The facts which provide the background to the argument in Birnies case are as follows. He was interviewed under caution in a police station on Friday 14 August 2009 between 1034 and 1220 hrs with a break between 1118 and 1206 hrs. At the time of his interview he was 18 years of age. He had been on probation since 2008 in respect of a charge of breach of the peace with a sexual aggravation, and he was a registered sex offender. He had been convicted on two occasions of a breach of the notification requirements of sections 83 and 94 of the Sexual Offences (Scotland) Act 2003. He had also previously been interviewed by the police as a suspect. As already mentioned in para 1, above, he was not told that he had a right of access to legal advice prior to or during his police interview as it was not the practice at that time for this to be offered to persons detained under section 14 of the 1995 Act. Birnie made no admissions during the first stage of his interview apart from being at the locus with the female complainer [AR] referred to in the abduction charge and kissing her. He said that this was consensual. He was asked during his interview what expression he would use to describe touching his girl friends private parts, to which he replied with a question: fit like poking her? When asked to explain what he meant by this, he said that it meant putting his fingers in her vagina. After they had completed their questioning about the abduction the interviewing officers charged Birnie with abducting the complainer [AR], with indecent assault and with two charges of breach of the peace, and they arrested him. He was then cautioned and interviewed in relation to another female complainer, to whom he admitted sending a series of text and email messages. After further questioning he was charged with sending indecent messages to that complainer. Following the interview Birnie was, according to an entry in a police notebook, on the verge of tears. At 1223 hrs he asked what was happening to him. He was told that he was to be kept in custody over the weekend to appear in Aberdeen Sheriff Court on Monday 17 August 2009. On being advised of this he burst into tears and said spontaneously I poked her. He was asked by one of the interviewing officers whether he was referring to the complainer [AR], to which he replied Yes. He was told to say nothing further but that other officers would attend later to speak to him if he wished to make any further comments. At 1235 hrs he was asked if he wished a solicitor informed of his arrest and was told that a duty solicitor could be contacted on his behalf. He gave the name of a solicitor. It was not until about two hours later, at 1428 hrs, that a message was left with the solicitors secretary to advise him of the arrest. Birnie also asked that his mother be told of his arrest, but this was not possible as she was apparently not available to answer the telephone. Birnie then told the police that he wished to make a further statement, which he did at about 1345 hrs on 14 August 2009 to two police officers who had not had any prior involvement in the inquiry. Before he made his statement, which it is agreed was unsolicited, he was asked whether he wished to consult a solicitor before making it. He replied that he did not. He was asked whether he wished a solicitor to be present while he was making it. He again said that he did not. He was then cautioned and asked whether he understood the caution, to which he replied Yeah. He then said: I want to admit poking [AR]. She asked me to do it and we did give each other love bites. He was asked to say what he meant by poking, to which he replied that meant putting your fingers in her vagina. He then said: I never locked her in. I never locked her in her house. I asked her several times if she wanted to leave but she says No. I didnt threaten her in any way. It is plain from this narrative that Birnie was offered rights of access to a solicitor before he made his statement and he was also asked whether he wished to have a solicitor present while he was making it. He expressly declined both of these offers. The question is whether, on these facts, his statement was admissible. The Crown submits that it was. This is because the statement was severable from the prior police interview on two grounds: first, it was preceded by a valid waiver of the right of access to a solicitor and, second, because it was voluntary and not elicited by police questioning. The Appeal Court did not address its reasoning to these points, although it had been addressed on them in the course of the hearing of the appeal. The Lord Justice Clerk said in para 32 of his opinion that he accepted that the rights of a detainee or of an accused person under article 6 were capable of being waived, but that the argument for the Crown failed in the case of each of the three respondents. This was because the law at the time did not allow the accused to have access to a lawyer at the time of the pre-trial procedure and because the consent to be interviewed in each case was not informed by legal advice. He dealt more fully with the latter ground for rejecting the Crowns argument in para 34, where he said: Furthermore, a valid waiver can proceed only on the basis of an informed decision. Since the right allegedly waived was that of access to legal advice, I cannot see how any of the appellants could waive that right when, ex hypothesi, he had not reason to think that he had any such right and had not had access to legal advice on the point The agreed facts show that Birnie was told that he had this right before he made his unsolicited statement following his police interview. As for the objection that he did not have access to legal advice on the point before he declined the offer of access to a solicitor, I would hold that the answer to it is that there is no absolute rule that the accused must have been given legal advice on question whether or not he should exercise his right of access to a lawyer before he can be held to have waived it: see my judgment in McGowan (Procurator Fiscal, Edinburgh) v B [2011] UKSC 54. Lord Kerr says that it is an indispensible prerequisite that there must be some means of ascertaining the reason why the accused did not avail himself of this right: para 53, below. But it was not suggested at any time in the course of the argument that an absolute rule to that effect is to be found in the jurisprudence of the Strasbourg court nor do I find this in Lord Kerrs analysis of the authorities in McGowan. This point is of crucial importance to the proper exercise of the jurisdiction that has been given to this court by the Scotland Act. The only question for us is whether the absence of such an inquiry amounted in itself to a breach of a Convention right. That is the limit of our jurisdiction. A rule of the kind that Lord Kerr has suggested might perhaps be recognised at common law. But it is not for us to say how the law and practice respecting crimes should be developed by the common law in Scotland. That must be left to the High Court of Justiciary, whose decisions on all matters relating to the domestic criminal law of Scotland are final. The fact that the accused did not receive legal advice on the point and was not asked why he did not want to speak to a lawyer need not be left out of account altogether for the purposes of article 6. These are circumstances which can be taken into account in the assessment as to whether he understood the right that was being waived. But they are no more than that. I do not think that the Strasbourg jurisprudence requires us to hold that it would necessarily be incompatible with articles 6(1) and 6(3)(c) of the Convention for the Lord Advocate to lead and rely on evidence of answers given by a suspect during a police interview just because it was not ascertained why he did not want to speak to a lawyer. A descent to that level of detail in the laying down of incontrovertible rules is contrary to the approach that the court itself has adopted. The President of the court, Sir Nicolas Bratza, said in a paper which he gave in Edinburgh in March 2011 that the Strasbourg court has been careful, in general, to leave the national authorities to devise a more Convention-compliant system without itself imposing specific requirements on the State: [2011] EHRLR 505, 510. The Supreme Court should, I believe, be no less careful in the way that it deals with Scottish criminal law and procedure. There remains the question whether the statement is properly to be regarded as severable from the police interview so that it can be held to be voluntary and not elicited by the previous police questioning. It is not in doubt that an unsolicited admission which is truly spontaneous and voluntary is admissible. In Cadder Lord Rodger observed that it is quite common for those who have been arrested to decide to make admissions to the police and not to exercise their right to obtain legal advice before doing so: 2010 SLT 1125, para 96. A person can confess if he is willing to do so, and his confession will be admissible if it is truly voluntary. The common law test as to what may be regarded as voluntary was described in Manuel v HM Advocate 1958 JC 41, 48 by Lord Justice General Clyde. He said that, to be voluntary, the statement must have been freely given and not given in response to pressure or inducement and not elicited by questioning other than what is directed simply to elucidating what has been said. The crucial question then is whether this statement freely given? Or was it the result of some kind of pressure or inducement by the police? We were not referred to any jurisprudence of the Strasbourg court on this precise point. But in Oregon v Elstad 470 US 298 (1985), pp 317-318 Justice OConnor, giving the opinion of the US Supreme Court, observed that some courts had applied that courts precedents, including Miranda v State of Arizona 384 US 436 (1966), relating to confessions obtained under coercive circumstances to situations involving wholly voluntary admissions, requiring a passage of time or break in events before a second, fully warned statement can be deemed voluntary. She went on to add these words: Far from establishing a rigid rule, we direct courts to avoid one; there is no warrant for presuming coercive effect where the suspects initial inculpatory statement, though technically in violation of Miranda, was voluntary. The relevant inquiry is whether, in fact, the second statement was also voluntarily made. In Missouri v Seibert (2004) 542 US 600, where the suspect made an initial confession without having been given a Miranda warning, a majority of the court held that his second statement after a Miranda warning was inadmissible. They rejected the minoritys criticism that this was inconsistent with Elstad, on the ground that the failure to give the warning in Elstad was a good-faith mistake which was open to correction by careful warnings before systemic questioning in that particular case took place: p 615. In R v Cherie McGovern (1990) 92 Cr App R 228 the Court of Appeal held that a second interview, where a solicitor was present, was tainted by the fact that at her first interview which took place the previous day the appellant had been denied access to a solicitor. There were special features in that case. The appellant, who was aged 19, pregnant and of limited intelligence, was said to have been particularly vulnerable. Farquharson LJ said at p 234 that if the solicitor who was present at the second interview had known that the appellant had been wrongfully denied access to a solicitor at the first interview he would in all probability not have allowed the second interview to take place. Such authorities as there are on this issue suggest that each case must be examined carefully on its own facts. There are signs in this case, as in R v Cherie McGovern, that Birnie was particularly vulnerable when he made what I have referred to as his statement. It was unsolicited. He was no longer being interviewed. But the interval between his making it and the end of the police interview was very short. He had just been told that he was to be detained over the weekend, and he had been crying. It is at least questionable whether he would have made this statement if he had said that he wished to consult a solicitor and he had then received the legal advice to which he was entitled before making it. This is not a question that needs to be answered in every case. But in the circumstances of this case it is not one that can be left out of account in considering whether there was a breach of the right to a fair trial. I think that it is plain that there is room for argument as to whether the statement that Birnie made was truly voluntary and in any event whether, taking all the circumstances into account, it was fair to admit this evidence. Lord Kerr says that on the available evidence the only possible conclusion is that that it has not been established that Birnies decision not to consult a solicitor was an effective waiver of his right to legal consultation: see para 57, below. But here again the limits of our jurisdiction must be respected. It is not our function to act as a second court of appeal on matters that depend on the application of the domestic law. The question whether there has been a breach of the fundamental Convention right to a fair trial is within our jurisdiction. But, as I would hold that it was not necessarily incompatible with articles 6(1) and 6(3)(c) of the Convention for the Lord Advocate to lead and rely on this evidence, I consider that the question of fairness for the purposes of article 6(1) must be examined in the light of all the facts and circumstances. This is pre-eminently a matter for determination in the first instance by the High Court of Justicary. As the Appeal Court has not yet addressed itself to this issue, I would remit it to that court for determination as part of the continued hearing of Birnies appeal. Conclusion I would dismiss the Crowns appeal on the question whether section 100(3B) of the Scotland Act 1998 applies in this case. I would dismiss its appeals on the issue as to waiver in regard to the police interviews in all three cases. I would allow its appeal on the question whether it was incompatible with Birnies right to a fair trial under article 6 of the Convention for the Crown to lead and rely on the evidence of the statement which he made following his police interview and remit that matter for determination by the High Court of Justiciary. I am in full agreement with the judgments of Lord Hope and Lord Hamilton on these appeals and would dispose of them as Lord Hope proposes. I am in full agreement with the judgments of Lord Hope and Lord Hamilton on these appeals and would dispose of them as Lord Hope proposes. I agree with Lord Hope as to the disposal of all three of these appeals and adopt his narrative of the pertinent circumstances. I also adopt his reasoning in relation to Birnies unsolicited statement. I add a few words of my own on the issue of interpretation of section 100(3B). The question is whether an appeal against a conviction, obtained on indictment or on complaint, is proceedings brought by virtue of [the Scotland Act] against [the Lord Advocate] within the meaning of subsection (3A) of the Scotland Act (as amended by the Convention Rights Proceedings (Amendment) (Scotland) Act 2009). The scope of subsection (3A) must ultimately be determined by the statutory language used. But it is necessary to have regard to that language in the context of the legislation in which it appears and, in my view, in the context also of such other legitimately available material as may assist in the exercise of interpretation. This may involve identifying the mischief at which the enactment was directed. In Bennion on Statutory Interpretation, 5th ed (2008), p 938 it is stated: These presumptions [that Parliament intended to suppress the mischief and that it did not intend to apply coercive measures going wider than was necessary to remedy the mischief in question] as to Parliaments intention may help in construing an enactment whose wording is doubtful. The importance of the mischief goes further than this, however. We cannot be sure whether there is real doubt or not unless we have the mischief in mind. This is one function of the informed interpretation rule. In the consideration of opposing constructions of an enactment in relation to a particular factual situation, we may find that bringing the mischief into account helps to decide whether the enactment is intended to be given a wider or narrower construction. The first thing to notice is that the amendment made by the 2009 Act is an amendment to section 100 itself by adding two subsections to it. That suggests that the intendment of the legislature was to make an improvement, as it saw it, to the effect of section 100 as originally enacted. The nature of that intended improvement is not difficult to find. As Lord Rodger himself said in Cadder v HM Advocate 2011 SC (UKSC) 13, at para 105: In Somerville v Scottish Ministers [2008 SC (HL) 45] the House of Lords held that the time limit in section 7(5) of the Human Rights Act 1998 did not apply to proceedings in relation to Convention rights brought by reference to the Scotland Act 1998. It followed that, subject to any common law limitations or any specific statutory time limit, such proceedings could be brought at any time. The Scottish Parliament eventually responded to that decision by passing the Convention Rights Proceedings (Amendment) (Scotland) Act 2009, which amended section 100 of the Scotland Act so as to introduce a one-year time-limit like the one in section 7(5) of the Human Rights Act. Somerville was a civil case in which the House of Lords relied significantly upon section 100 of the Scotland Act (as originally enacted) as well as on the other provisions of that statute. Of course, the statutory response may, intentionally or inadvertently, have been wider than to deal with the prior statutory effect which was thought to be undesirable. But all the indications are the other way. The limitation on the bringing of proceedings provided for by section 100(3B) is for practical purposes identical to that provided by section 7(5) of the Human Rights Act 1998. That subsection applies, and applies only, to proceedings brought under section 7(1)(a). Such proceedings are civil proceedings (R v Kansal (No 2) [2002] 2 AC 69, per Lord Hope of Craighead at paras 58-63). This is to be contrasted with section 7(1)(b) which allows for reliance on the Convention right or rights concerned in any legal proceedings a term defined comprehensively by section 7(6). Such reliance can accordingly be had in criminal as well as in civil proceedings. It is difficult to suppose that the Scottish Parliament would have, in effect, adopted the exact language used for civil proceedings in the Human Rights Act if it had intended to provide for criminal as well as for civil proceedings. Further, it is difficult to conceive why the Scottish Parliament should think it appropriate to provide for criminal appeals a limitation period such as that made by section 100(3A) and (3B). The Criminal Procedure (Scotland) Act 1995 makes its own provision for the timeous taking of appellate steps. Section 106 allows a person convicted on indictment, with leave granted in accordance with section 107, to appeal in accordance with that Part of the Act to the High Court against various things, including conviction and sentence. Section 109(1) prescribes that, where a person desires to appeal against any of the things referred to in section 106(1), he shall within two weeks of the final determination of the proceedings, lodge with the Clerk of Justiciary written intimation of intention to appeal . Section 110(1)(a) provides that, in the case of an appeal against conviction, the convicted person may, subject to section 111(2), within eight weeks of lodging intimation of intention to appeal lodge a written note of appeal . A shorter (four weeks) period is allowed for appeals other than appeals against conviction (section 110(1)(b)). Section 111(2) provides: Any period mentioned in section 109(1) or 110(1)(a) of this Act may be extended at any time by the High Court in respect of any convicted person . Thus, as regards proceedings on indictment, the 1995 Act provides its own (much shorter) temporal restrictions on bringing appeals with a similar power in the court to extend the period on equitable grounds. As regards summary proceedings, section 175 allows a convicted person to appeal with leave to the High Court. The more usual mode of appeal is by stated case (section 176), for which again a short timetable is prescribed. Section 181(1) empowers the High Court to direct that such further time as it may think proper be afforded to the applicant to comply with the requirements as to time. The statute recognises other common law modes of appeal (by, for example, bill of suspension). At common law there was no time limit for the bringing of a suspension but acquiescence in the judgment complained of might be inferred from undue delay (Renton and Brown Criminal Procedure, para 33-09). A statutory time limit (three weeks) for bringing a bill of suspension was introduced by section 6(1) of the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010. It is difficult to suppose that, in inserting section 100(3)(A) and (3B) into the Scotland Act in 2007, the Scottish Parliament had in mind common law remedies in summary matters. Accordingly, there are persuasive reasons, in my view, for concluding that subsections (3A) and (3B) of section 100 (as amended) were designed to apply only to civil proceedings. Although not spelt out in the legislation, that restriction is consistent with the statutory language used. Against that background the expression any proceedings brought by virtue of this Act against [the Lord Advocate] is to be construed. It is conceded, inevitably, that criminal proceedings at first instance are not within the ambit of section 100(3A). While Part VII of the 1995 Act (headed Solemn Proceedings) is dealt with distinctly from Part VIII (headed Appeals from Solemn Proceedings), it involves, in my view, some artificiality of language to construe any proceedings brought as apt to include an appeal taken against conviction or sentence. In effect, there are single proceedings initiated by service of the indictment or complaint, the appeal by a convicted person being a step taken within these single proceedings. I am not persuaded that the terms of section 106(3) (By an appeal under subsection (1) above a person may bring under review of the High Court any alleged miscarriage of justice) assist in determining whether an appeal is proceedings (distinct from the prosecution) brought by the convicted person. More importantly, in my view, the expression any proceedings brought in subsection (3A) appears to pick up the language to bring any proceedings in subsection (1)(a), which in turn reflects the language of section 7(1)(a) of the Human Rights Act a provision concerned with civil proceedings (supra). In any event, if there is ambiguity about the interpretation of subsection (3A), the considerations referred to earlier would, in my view, conclusively point to a criminal appeal not being within the scope of this provision. There remains for consideration by virtue of this Act. Some elaboration of that phrase is provided by section 126(11) which tells us that by virtue of includes by and under. In Somerville an issue was whether the obiter observations by Lord Hope and by Lord Rodger in R v HM Advocate 2003 SC (PC) 21 as to the effect of the Scotland Act (and in particular section 100(1) of it) were well founded. In R Lord Rodger had said at para 123: Section 100 has a counterpart in section 7 of the Human Rights Act, subsection (1) of which is expressed slightly more fully: (1) A person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1) may (a) bring proceedings against the authority under this Act in the appropriate court or tribunal, or (b) rely on the Convention right or rights concerned in any legal proceedings, but only if he is (or would be) a victim of the unlawful act. Especially in the light of that provision, I would infer from section 100(1) of the Scotland Act that the Act itself enables a person, who claims that an act or proposed act of a member of the Scottish Executive is incompatible with his Convention rights, to bring proceedings in a court or tribunal or to rely on his Convention rights in any proceedings in a court or tribunal. Convention rights and the remedies for vindicating them belong in the sphere of public rather than private law. What particular form the remedy or reliance will take depends on the court or tribunal, and on the jurisdiction, in which the matter arises. In an appropriate court the person affected can seek damages under the Scotland Act in respect of an incompatible act. . The majority in Somerville in effect approved that approach namely, that section 100 was, by inference, an enabling provision which, among other things, allowed a victim of an infringement of section 57(2) to rely on the Convention right or rights concerned in any legal proceedings, including criminal proceedings. Thus, while the procedural vehicle by which a person convicted in solemn proceedings brings his conviction or sentence under review is by an appeal under section 106 of the 1995 Act, it is the Scotland Act which enables him in that appeal to rely upon the alleged infringement of that right or those rights. Both statutes have thus a part to play. While I think it is a nice question, I have come with hesitation to the view that it can meaningfully be said that an appeal which relies upon an alleged infringement of a Convention right is one brought by virtue of the Scotland Act. I would accordingly not support the High Courts reasoning in this respect. As Lord Hope has pointed out (in para 5 of his judgment), the advocate depute has confined her challenge to the outcome of the appeals in Jude, Hodgson and Birnie to the claim that Birnie had waived his right to a lawyer when he made an unsolicited statement following his police interview, having declined the opportunity to have access to a lawyer prior to and while making it. It is not now argued that Jude or Hodgson waived their right to a lawyer. It is, of course, suggested that the Appeal Court was wrong in each of the cases in concluding that an effective waiver of their rights under article 6 of ECHR could only be made after they had received legal advice. A further discrete ground was advanced on behalf of the Lord Advocate in the case of Jude to the effect that section 100(3B) of the Scotland Act 1998, as amended by section 1 of the Convention Rights Proceedings (Amendment) (Scotland) Act 2009, precluded a challenge to the Lord Advocates leading evidence of the statement which Jude made because that challenge was made too late. I agree with all that Lord Hope and Lord Hamilton have had to say on that subject and do not propose to expatiate further on it. As I stated in my judgment in the reference (McGowan, Procurator Fiscal v B) I agree with Lord Hope that there is no absolute rule to be derived from the case-law of the European Court of Human Rights (ECtHR) that an effective waiver of the right to legal assistance can only take place after the person purporting to waive the right has received legal advice on whether that course should be followed. I believe that generally this will be the most effective way of ensuring that there has been an effective waiver but Strasbourg jurisprudence has not yet developed to the point where that is an essential prerequisite. That fact alone would not have deterred me from concluding that this was necessary if I had felt that the article 6 rights of the respondents could not otherwise be secured see my judgment in Ambrose v Harris (Procurator Fiscal, Oban) [2011] UKSC 43, 2011 SLT 1005. But I am not persuaded that the only possible means of ensuring that there has been an effective waiver is by having the suspect who waives the right receive legal advice on that course before he does so. I have explained in my judgment in McGowan why I consider that such safeguards as are currently available in Scottish law to protect the interests of a suspect are not efficacious to ensure that a decision not to have legal assistance constitutes an effective waiver. In particular, I have pointed out that it is an indispensable prerequisite that there must be some means of ascertaining the reason that a decision not to avail of this fundamental right has been taken. Birnies case strikingly illustrates the elementary need for some inquiry to be made of a suspect as to why he has decided not to have the advice of a solicitor before interview unless the reasons for that are otherwise clearly obvious. Although he was no stranger to the criminal law, Birnie was only eighteen years old when he was interviewed by police. Following interview he was on the verge of tears. When he was told that he was going to be kept in custody he broke down and made what has been said to be an unsolicited admission. It is difficult to imagine that this admission and Birnies breaking down were unrelated to his being told that he was going to be detained over the weekend. At 12.35 pm, some twelve minutes after he had made the admission, he was asked whether he wished to have a solicitor contacted on his behalf. He nominated a firm of solicitors to contact but a message was not left with that firm until some two hours later. He also wanted his mother to be informed of his arrest but that proved impossible. The fact that he wanted both his solicitors and his mother to be informed that he was in detention is at least relevant to his state of mind at that time and his ability to cope without legal assistance during any further questioning. Birnie told police that he wanted to make a statement some time before 1.45 pm notably, some 43 minutes before the solicitors whom he had been asked to be informed of his arrest were given that information. Before he made his further statement at 1.45 pm he was asked whether he wished to consult his solicitor before making it and he replied that he did not, and when asked whether he wished to have a solicitor present while he was making it, again said that he did not. In the circumstances the second inquiry might seem otiose but it was the product of a pro forma procedure. Some such procedure is, of course, required to ensure that a consistent practice is followed but, because of the routine way in which it must be applied, it is hardly the most efficient way to examine whether a suspect has fully understood the importance of the right which is being relinquished. Lord Hope has observed that Birnie expressly declined both offers of legal assistance. This is true but it seems to me inescapable that his decision to do so could not in any circumstance be regarded as an effective waiver of his right to legal counsel and I believe that it is inconceivable that any court could be satisfied of that to the requisite standard. Birnie was not asked why he did not want to speak to a lawyer, notwithstanding that he had nominated a firm of solicitors something over an hour before. He was not told that he could speak to a solicitor by telephone. No inquiry was made as to whether the decision to make a statement at that time was related to the intention of police to detain him over the weekend. That this was, at the very least, a distinct possibility must have been obvious to the police officers who interviewed him. Quite apart from the fact that the unsolicited statement was made shortly after he had been interviewed without having been informed of his right to legal assistance and leaving aside the possible impact that this might have on the admissibility of his later statement, the circumstances in which his unsolicited statement was made raise substantial and inevitable doubts that his waiver of the fundamental right to legal assistance was effective. For these reasons I would hold that it is unnecessary to remit Birnies case to the Appeal Court. I am of the view that, on the available evidence, the only possible conclusion is that it has not been established that Birnies decision not to consult a solicitor was an effective waiver of his right to legal consultation. For these reasons I consider that it has not been - and on the available evidence cannot be - established that Birnies decision not to consult a solicitor constituted an effective waiver of his right to legal consultation. On that account, I would dismiss the appeal in his case. I would dismiss the appeals in Jude and Hodgson for the reasons given by Lord Hope. In para 29 of his judgment Lord Hope has fastened on my statement (at para 53 above) that it is an indispensable prerequisite that there must be some means of ascertaining the reason that an accused did not wish to avail himself of the right to legal assistance and has characterised this as an absolute or incontrovertible rule. I had not intended to propound any new principle, much less an inflexible rule. In saying that a means must exist for understanding why someone has declined to exercise his right to legal assistance before finding that there has been an effective waiver, I was merely reflecting what I understand to be the unmistakable effect of current Strasbourg jurisprudence. I was not constructing some unheralded, disquieting rule. This can be demonstrated by a few simple propositions: (i) For a waiver to the right to legal assistance to be effective, there must be a knowing and intelligent decision to waive the right. I do not understand the majority in this case to suggest otherwise; (ii) In a case where the effectiveness of the waiver is in dispute, it is for the prosecution to prove that it is effective. Again I do not believe that this is controversial; (iii) It is well recognised that reasons other than those which would qualify as sufficient to support the conclusion that a knowing and intelligent decision has been made will frequently motivate a suspect to decline the right to legal assistance; (iv) In order for the prosecution to show that such reasons do not obtain and that a knowing and intelligent decision has been made, it is necessary to have some insight into why the right has been declined. The requirement that a means exist of obtaining that insight does not involve the creation of some startling new rule. It merely follows the flight of the arrow of logic to its obvious destination. In these circumstances, I respectfully question whether the passage from the paper by the President of ECtHR, Sir Nicolas Bratza, quoted by Lord Hope has any relevance to the current debate. Sir Nicolas had made the entirely unexceptionable statement that the Strasbourg court has been careful to refrain from imposing specific requirements on the State. Quite so but that does not impinge on the conclusion that I have reached about the effect of the case-law of the European Court of Human Rights. I have merely indicated where I believe the jurisprudence of that court in this area leads. It was not my intention to descend to a level of detail in laying down an incontrovertible rule. Indeed, I have made it clear that an inquiry into the reasons for a purported waiver is required only when those reasons are not obvious from the circumstances in which it was made. |
This is an appeal under paragraph 13(a) of Schedule 6 to the Scotland Act 1998, which provides that an appeal lies to this court against a determination of a devolution issue by a court of two or more judges of the High Court of Justiciary. But the circumstances that have led to its coming here cannot be regarded as satisfactory. It is far from clear that the issue identified in the devolution minute is a devolution issue within the meaning of paragraph 1(d) of Schedule 6. As the determination against which the appeal has been brought was taken on paper at the second sift, we do not have a fully reasoned opinion of the judges for the decision that they took to refuse to grant leave to appeal. The motion for leave to appeal to the Supreme Court against their determination was not opposed by the Lord Advocate on the question of jurisdiction, although he did oppose it on the ground that it did not raise a matter of general public importance. The Appeal Court in its turn did not give any reasons when it gave leave to appeal to this court. As a result we are, in effect, having to deal with this case at first instance without having the benefit of the views of the judges of the High Court of Justiciary as to whether a devolution issue has been raised and, if so, how it should be determined. In Follen v HM Advocate 2001 SC (PC) 105, para 10 the Judicial Committee observed that, where the Appeal Court refused leave without giving reasons, the Board might find it difficult to appreciate that a petition for special leave to appeal was without merit from the information given on paper by the petitioner. This is not such a case, and there are no grounds for criticising the judges for the fact that no reasons were given. The motion for leave was not opposed on this point. But it is unfortunate that, as there has been no reasoned judgment because of the procedural route the case has followed, the question whether a devolution issue has truly been raised appears to have been overlooked until now. The facts On 16 December 2010 the appellant James Kinloch was found guilty on indictment in the Sheriff Court at Glasgow of, on 6 February 2007 at various addresses in Glasgow including the appellants home at 32 Prospecthill Crescent, converting and transferring criminal property consisting of large sums of money in breach of sections 327(1)(a), (b), (c) and (d) and 329(1)(a), (b) and (c) of the Proceeds of Crime Act 2002. He was, in short, convicted of money laundering. At a diet held on 13 September 2010 a preliminary plea was taken on the appellants behalf that the police had acted unlawfully when they kept him under observation on 6 February 2007, as they had failed to obtain authorisation under the Regulation of Investigatory Powers (Scotland) Act 2000 (the 2000 Act) to conduct covert surveillance on him and his associates. A devolution minute was moved in support of this argument. The sheriff refused the devolution minute. He also refused leave to appeal, and the case went to trial before another sheriff. The devolution minute began by stating that the appellant intended to raise a devolution issue within the meaning of Schedule 6 to the Scotland Act 1998. The charges which had been brought against him were referred to, as were production 1 which was a copy of a form purporting to authorise directed surveillance on a group of individuals and production 2 which was a police surveillance log dated 6 February 2007. The observations which the police carried out from about 0835 hours to about 1200 hours were described. The appellant was seen leaving his car and entering the block of flats in which he lived, leaving the block carrying a bag and entering a car which then drove off. He was observed leaving various other locations and cars in Glasgow and then entering a taxi carrying a bag which appeared to be heavy which was later seen parked outside his brothers home. The police approached the taxi, and the appellant and his brother were detained. Various searches were carried out and large sums of money were recovered by the police. Reference was made in the minute to article 8 of the European Convention on Human Rights. Article 8(1) provides that everyone has a right to respect for his private and family life, his home and his correspondence. Article 8(2) states that there shall be no interference by a public authority with the exercise of this right except such as is, among other things, in accordance with the law. Reference was also made to section 1(2) of the 2000 Act which defines what amounts to directed surveillance for the purposes of that Act, and to section 5(1) which provides that such conduct is lawful for all purposes if an authorisation under the Act confers entitlement to engage in it on the person whose conduct it is and that persons conduct is in accordance with the authorisation. The Crown conceded that no authorisation had been granted for the surveillance of the appellant, any associate of his or anyone else who was the subject of the observations by the police which were referred to in evidence at the trial. The issue that the Minute sought to raise was described in these terms: That the police have acted unlawfully in that they failed to obtain authorisation to conduct covert surveillance upon the minuter or his associates. That all of the subsequent actions by the police officers and the materials recovered under search warrants obtained by the police flowed from the said unlawful acts. That as a consequence the surveillance and the searchers (sic) and seizures which followed upon the minuters arrest were unlawful and any evidence in respect of said surveillance or items seized is inadmissible in evidence. The prayer at the end of the Minute invites the court: to hold that the surveillance carried out on James Kinloch on 6 February 2007 was unlawful and that the productions 1 and 2 are inadmissible and that all subsequent action by the police including the obtaining of a warrant and the seizing of various items as described in crown production 5 was unlawful and, as a consequence, inadmissible as evidence. In Gilchrist v HM Advocate 2005 (1) JC 34 there was an invalid authorisation for the directed surveillance that the police carried out because it lacked the necessary detail. A devolution minute was lodged by the second appellant in which it was contended that his rights under article 8 had not been properly protected, and that for the Crown to lead evidence obtained by that infringement would compromise his right to a fair trial under article 6. The High Court of Justiciary rejected the submission that the events in question involved the obtaining of private information, which is defined by section 1(9) of the 2000 Act as including any information relating to a persons private or family life. It also rejected the submission that, because the surveillance operation was being carried out under an invalid authorisation, there was an infringement of the second appellants rights under article 8. The effect of the decision was that the leading of the evidence was not incompatible with his rights under article 6 either. Giving the opinion of the Appeal Court, Lord Macfadyen said in para 21: What took place in Albion Street at the relevant time was that a plastic bag was handed by the first appellant to the second appellant. That was done in a public place. The event was there to be observed by anyone who happened to be in the vicinity, whatever the reason for their presence might be. It was in fact observed by police officers. They had reason to suspect that criminal activity was taking place. They therefore detained the appellants. On further investigation it was found that the bag contained controlled drugs. That sequence of events did not involve the obtaining of private information about the second appellant, in the sense mentioned in section 1(9) or in any broader sense. Nor did it involve any lack of respect for the second appellants private life. What was done did not, in our opinion, amount to an infringement of the second appellants rights under article 8. A note of appeal was lodged following the appellants conviction in which it was narrated, among other things, that the Crown relied on the decision in Gilchrist when opposing the devolution minute. It was submitted that the case of Gilchrist was wrongly decided. It was conceded that the sheriff was bound by that decision, but the sheriff was said to have erred in law by refusing to allow leave to appeal his decision. The sheriff said in his report that, as it was not in dispute that he was bound by Gilchrist, the only appropriate course was for him to refuse the minute and that, as he did not find his decision to be a matter of fine balance, he refused leave to appeal. It was also submitted that the sheriff who presided at the trial erred in repelling a submission of no case to answer. The judge who dealt with the application at the first sift refused leave to appeal on both grounds. With regard to the point raised in the devolution minute, he said that the sheriff was entitled to refuse leave to appeal and that the note of appeal contained no adequate basis upon which to advance an argument that the case of Gilchrist was wrongly decided. An opinion was then obtained from counsel as to whether the appeal was arguable. Various reasons were given for criticising the approach that was taken in Gilchrist to the question whether there had been a violation of article 8. It was said that the relevant decisions of the European Court supported the appellants argument. The second sift panel, having considered that opinion, also refused to grant leave to appeal. In relation to the devolution minute all it said was that it agreed with the sheriff that he was bound by the decision in Gilchrist and that he did not err in refusing leave to appeal. On 2 November 2011 the Appeal Court, having heard counsel for the appellant and without giving reasons, granted leave to appeal to the Supreme Court. is stated that the issues in the appeal are as follows: In the statement of facts and issues lodged for the purposes of this appeal it i) Whether the observations by the police, not having been authorised under the Regulation of Investigatory Powers (Scotland) Act 2000, breached the appellants rights under article 8(1). The appellant maintains that the following second issue also arises and should be considered by the Supreme Court. ii) If so, whether the act of leading the evidence derived from that surveillance was incompatible with the appellants rights under article 8(1) et separatim article 6(1) and thus ultra vires in terms of section 57(2) of the Scotland Act 1998? The respondent does not accept that the second issue arises in the appeal. Is there a devolution issue? Of the various questions listed in paragraph 1 of Schedule 6 to the Scotland Act 1998, the only one that is relevant to this appeal is that listed in sub paragraph (d), as amended by section 12(2) of the Scotland Act 2012: a question whether a purported or proposed exercise of a function by a member of the Scottish Government is incompatible with any of the Convention rights or with EU law. That provision has to be read together with section 44(1), which provides that there shall be a Scottish Government whose members shall be (a) the First Minister, (b) such Ministers as the First Minister may appoint and (c) the Lord Advocate and the Solicitor General for Scotland. Section 57(2) of the 1998 Act provides: A member of the Scottish Government has no power to make any subordinate legislation, or to do any other act, so far as the legislation or act is incompatible with any of the Convention rights or with EU law. It is unlawful under section 6(1) of the Human Rights Act 1998 for the police to act in a way which is incompatible with a Convention right, as they are a public authority. But they are not members of the Scottish Government. So the question whether they have acted in a way that is incompatible with any of the Convention rights is not a devolution issue within the meaning of paragraph 1(d). The first issue in the statement of facts and issues is a reasonably accurate summary of the contents of the devolution minute. It refers to the actions of the police, and it raises the issue whether their observations were in breach of the appellants rights under article 8. As the proceedings below indicate, what the appellant was seeking to do was to argue that Gilchrist v HM Advocate was wrongly decided. His argument at the first sift was that the sheriff erred in refusing him leave to appeal on that matter. But, in contrast to what was submitted in Gilchrist, no mention was made at any stage of the question whether the act of the Lord Advocate in leading evidence obtained by the surveillance would compromise the appellants rights under article 6. Taking it on its own terms, therefore, the devolution minute does not appear to raise a devolution issue at all. The question which it does raise is not one that can be determined by this court under the jurisdiction that it has been given by Schedule 6. The appellant seeks to remedy this defect by the second question raised in the statement of facts and issues. But the respondent objects to that question because the appellant gave no notice of an intention to raise that issue in his devolution minute. So there was no determination of that issue in the High Court of Justiciary as the question it raises was not before it, and this court does not have an original jurisdiction in these matters: Follen v HM Advocate 2001 SC (PC) 105, para 9. Except in regard to devolution issues as defined by paragraph 1 of Schedule 6 to the Scotland Act 1998, every interlocutor of the High Court of Justiciary such as that pronounced by the judges at the second sift is final and conclusive and not subject to review by any court whatsoever: Criminal Procedure (Scotland) Act 1995, section 124(2); Hoekstra v HM Advocate (No 3) 2001 SC (PC) 37, 41. The decision at the second sift was that the sheriff was bound by the decision in Gilchrist. It does not appear from the reasons that were given that the panel gave any consideration to the question whether the act of the Lord Advocate in leading the evidence was incompatible with the appellants rights under article 6(1). The proper course, in view of the limits to the jurisdiction of this court under the statute, might well have been to dismiss this appeal as incompetent. But, with considerable hesitation, we decided that we should hear argument on the second issue. Three factors in particular have led us to this conclusion. The first is the fact that the Crown did not oppose the appellants motion for leave to appeal to this court on this point. The second is the fact that the Appeal Court took the view that it should give leave to appeal. The third is that, as noted in para 12 above, what the appellant was really seeking to do was to enable the correctness of the decision in Gilchrist that the evidence led by the Lord Advocate was admissible to be re examined. As Mr McConnachie QC for the appellant pointed out, that was the only court to have heard any submissions at all on the matter. It must be taken to have been satisfied that it was proper for it to give leave. Our decision to allow this appeal to proceed should not be taken, however, as an indication that this Court is not aware of the limits to its jurisdiction, or of its responsibility to ensure that those limits are respected. Devolution minutes should say what they mean. Was the act of leading the evidence incompatible with article 6? The starting point for an examination of this issue, as it was in Gilchrist, is the question whether there was a breach of the appellants right to respect for his private life under article 8. The fact that evidence was irregularly obtained as the surveillance was not authorised under section 6 of the 2000 Act does not, of course, of itself make that evidence inadmissible at common law: see Lawrie v Muir 1950 JC 19. Nor does the fact that evidence was obtained in breach of article 8 necessarily mean that it would be incompatible with article 6 for that evidence to be led at the trial: Khan v United Kingdom (2000) 31 EHRR 1016, para 40; PG and JH v United Kingdom (2001) 46 EHRR 1272, para 81. It has also to be noted that any breach of article 8 in the obtaining of the evidence was due to acts of the police, not the Lord Advocate. It was so held in McGibbon v HM Advocate 2004 JC 60, where it was conceded that there had been a breach of article 8 in the obtaining of covert video and audio recordings of the appellants incriminating conversations. Lord Justice Clerk Gill said in para 20 that the act that was relevant to section 57(2) of the Scotland Act 1998 was the act of the Lord Advocate in leading the evidence. The appellant in this case suggested that the distinction which the Lord Justice Clerk drew in McGibbon between the acts of the police and the Lord Advocate was unsound. I think that the Lord Justice Clerk was well founded in holding that the functions of the police and the Lord Advocate are constitutionally separate. The Lord Advocate was, however, responsible for the leading of the evidence. It should be noted too that issues relating to the lawfulness of an interference with private life must be distinguished from those about the fairness of the use of evidence in the trial: Perry v United Kingdom (2003) 39 EHRR 76, para 48; also HM Advocate v P 2012 SC (UKSC) 108, para 18 for the test of fairness in this context. The tests as to whether there was a breach of these two articles are different, as are the remedies if they are held to have been breached. So the way the evidence was obtained may infringe article 8, yet the leading of that evidence may be held not to be incompatible with article 6. Nevertheless it would not be right to examine the issue as to whether the leading of the evidence in this case was incompatible with article 6 without examining the underlying question whether the appellants article 8 right to respect for his private life was interfered with. The key to the whole argument lies in what one makes of the article 8 issue. Decisions of the Strasbourg court on the question whether there has been an interference with the right to respect for a persons private life indicate that the answer to it will depend in each case on its own facts and circumstances. Private life is regarded by that court as a broad term not susceptible to exhaustive definition: PG and JH v United Kingdom (2001) 46 EHRR 1272, para 56. The extent of the intrusion into the individuals private space will always be relevant, as will the use that is made of any evidence that results from it. The use of covert listening devices installed in the persons home or other premises where he has a reasonable expectation of privacy will require to have a clear basis in domestic law if it is to be held not to amount to an interference in breach of article 8: Malone v United Kingdom (1984) 7 EHRR 14, para 67; Khan v United Kingdom (2000) 31 EHRR 1016, para 27. There may also be a violation if the information that has been gathered by covert methods about a persons private life is systematically collected and stored in a file held by agents of the state: Amann v Switzerland (2000) 20 EHRR 843, paras 65 67; Rotaru v Romania (2000) 8 BHRC 449, paras 43 44. This case is not concerned with interferences of that kind. There is a zone of interaction with others, even in a public context, which may fall within the scope of private life: PG and JH v United Kingdom (2001) 46 EHRR 1272, para 56. But measures effected in a public place outside the persons home or private premises will not, without more, be regarded as interfering with his right to respect for his private life. Occasions when a person knowingly or intentionally involves himself in activities which may be recorded or reported in public, in circumstances where he does not have a reasonable expectation of privacy, will fall into that category: PG and JH v United Kingdom, para 57. A person who walks down a street has to expect that he will be visible to any member of the public who happens also to be present. So too if he crosses a pavement and gets into a motor car. He can also expect to be the subject of monitoring on closed circuit television in public areas where he may go, as it is a familiar feature in places that the public frequent. The exposure of a person to measures of that kind will not amount to a breach of his rights under article 8. The Strasbourg court has not had occasion to consider situations such as that illustrated by the present case, where a persons movements in a public place are noted down by the police as part of their investigations when they suspect the person of criminal activity. But it could not reasonably be suggested that a police officer who came upon a person who has committed a crime in a public place and simply noted down his observations in his notebook was interfering with the persons right to respect for his private life. The question is whether it makes any difference that notes of his movements in public are kept by the police over a period of hours in a covert manner as part of a planned operation, as happened in this case. I think that the answer to it is to be found by considering whether the appellant had a reasonable expectation of privacy while he was in public view as he moved between his car and the block of flats where he lived and engaged in his other activities that day in places that were open to the public. Although Lord Macfadyen did not say so in as many words, it is plain that this was the basis for the decision in Gilchrist v HM Advocate. I would hold that it was rightly decided on this issue. There is nothing in the present case to suggest that the appellant could reasonably have had any such expectation of privacy. He engaged in these activities in places where he was open to public view by neighbours, by persons in the street or by anyone else who happened to be watching what was going on. He took the risk of being seen and of his movements being noted down. The criminal nature of what he was doing, if that was what it was found to be, was not an aspect of his private life that he was entitled to keep private. I do not think that there are grounds for holding that the actions of the police amounted to an infringement of his rights under article 8. For these reasons I would answer the first issue in the statement of facts and issues in the negative. As the only ground for the submission that the leading of the evidence was incompatible with the appellants rights under article 6(1) was that it had been obtained in a way that infringed his rights under article 8, the question raised by the second issue must be answered in the negative too. I would only add that it has not been suggested that there was any coercion or trickery by the police which, if it had been present, might have led to the conclusion that the appellant did not receive a fair trial: see Bykov v Russia, (Application No 4378/02), given 10 March 2009 (GC), paras 99 and 102. Conclusion I would dismiss the appeal. |
This case is concerned with the right of a trader (in this case, Zipvit) to deduct input VAT due or paid by it on supplies of services to it by a supplier (in this case, Royal Mail), so far as those supplies are used for the traders own supplies of goods or services to an ultimate consumer. The issue arises in a specific set of circumstances. The general terms and conditions governing the supply contract between the supplier and the trader provided that the trader should pay the commercial price for the supply plus such amount of VAT (if any) as was chargeable in respect of the supply. As determined by a subsequent judgment of the Court of Justice, the supply should in fact have been treated as standard rated for VAT, so that the trader should have been charged VAT assessed at the relevant percentage of the commercial price for the supply. However, at the time of the supply both the supplier and the trader, acting in good faith and on the basis of a common mistake, understood that the supply was exempt from VAT, so the trader was only charged and only paid a sum equal to the commercial price for the supply. The invoices relating to the supplies in question denoted the supplies as exempt and hence indicated that no VAT was due in respect of them. The tax authorities (Her Majestys Revenue and Customs Commissioners, HMRC) made the same mistake in good faith. HMRC had inadvertently contributed to the mistake by the parties, by issuing tax guidance containing statements to the same effect. The effect of the mistake has been that the trader has only paid the amounts equivalent to the commercial price for each supply and there is now no prospect that it can be made to pay, or will pay, the additional amount equivalent to the VAT element of the total price (ie the commercial price plus the VAT due in respect of it) which ought to have been charged and paid in respect of such supplies. Likewise, the supplier has not accounted to HMRC for any VAT due or paid in respect of such supplies, and there is no prospect that it can now be made to account, or will account, to HMRC for such VAT. Notwithstanding this, the trader now maintains that under article 168(a) of the Principal VAT Directive (2006/112/EC the Directive) it is entitled as against HMRC to make a claim to deduct as input VAT the VAT due in respect of the supplies in question or a VAT element deemed by law to be included in the price charged by the supplier for each supply (and hence deemed by law to be VAT in fact paid in respect of such supply when the trader paid what the parties believed to be the commercial price of the supply). Against this, HMRC contend that in the circumstances of this case, on the proper interpretation of the Directive: (1) there is no VAT due or paid in respect of the supplies in question, so no claim can be made to recover input tax in relation to them, and/or (2) the invoices relating to the supplies in question did not show that VAT was due in respect of the supplies, and since the trader at no stage held invoices which showed that VAT was due and its amount, in compliance with article 226(9) and (10) of the Directive, for this reason also the trader is not entitled to recover input tax in relation to the supplies. The trader responds on point (1) that VAT must be treated as having been paid as part of the price (or as due) and on point (2) that all relevant facts are now known and it can prove by other means the amount of the VAT due or paid on each supply. The sums claimed by Zipvit as input VAT on the relevant supplies amount to 415,746 plus interest. The present proceedings are a test case in respect of supplies of services by Royal Mail where the same mistake was made. The court has been provided with estimates of between about 500m and 1 billion as the total value of the claims against HMRC. The factual background Royal Mail is the public postal service in the United Kingdom. Article 132(1)(a) of the Directive (and equivalent provisions which preceded it) provides that member states shall exempt the supply by the public postal services of services other than passenger transport and telecommunications services, and the supply of goods incidental thereto. In implementing this provision, Parliament and HMRC interpreted it as covering all postal services supplied by Royal Mail. The implementing national legislation, the Value Added Tax Act 1994 (VATA), contained a provision to this effect (Schedule 9, Group 3, paragraph 1) and HMRC issued guidance notes to the same effect. Zipvit carries on the business of supplying vitamins and minerals by mail order and used the services of Royal Mail. During the period 1 January 2006 to 31 March 2010, Royal Mail supplied Zipvit with a number of business postal services under contracts which had been individually negotiated with Zipvit. The present proceedings concern supplies of one such service, Royal Mails multimedia service (the services). The contract under which Royal Mail supplied the services incorporated Royal Mails relevant general terms of business which provided that all postage charges specified as payable by the customer (ie Zipvit) were exclusive of VAT, that the customer shall pay any VAT due on Postage and other charges at the appropriate rate, and that VAT shall be calculated and paid on [the commercial price of the services]. Accordingly, insofar as VAT was due in respect of the supply of the services, the total price payable by Zipvit for such supply under the contract was the commercial price plus the VAT element. However, on the basis of the domestic legislation and guidance and the common mistaken view that the services were exempt from VAT, the invoices issued by Royal Mail to Zipvit in relation to the services were marked E for exempt, showed no sum attributable to VAT to be due, and charged Zipvit only the commercial price of the services. Zipvit duly paid to Royal Mail the sums set out in the invoices. Zipvit did not at the time of the supplies make any claim to recover input VAT in respect of them. Since Royal Mail understood the services to be exempt, and since it had set out no charge for VAT in its invoices, it did not account to HMRC for any sum relating to VAT in respect of the supply of the services. HMRC likewise believed the services to be exempt and did not expect or require Royal Mail to account to them for any such sum. Things proceeded in this way for several years, until the judgment of the Court of Justice of 23 April 2009 in R (TNT Post UK Ltd) v Revenue and Customs Comrs (Case C 357/07) EU:C:2009:248; [2009] ECR I 3025. The Court of Justice held that the postal services exemption applied only to supplies made by the public postal services acting as such, and did not apply to supplies of services for which the terms had been individually negotiated. On the basis of this interpretation of the Directive and its predecessor by the Court of Justice, in the relevant period the services in the present proceedings should have been treated as standard rated. Royal Mail should have charged Zipvit a total price for the supply of the services equal to the commercial price plus VAT at the relevant rate, and Royal Mail should have accounted to HMRC for that VAT element. As it was, however, Zipvit was not charged and did not pay that VAT element, and Royal Mail did not account to HMRC for any sum representing VAT in respect of the services. In the light of the TNT Post judgment, Zipvit made two claims against HMRC for deduction of input VAT in respect of the services by a procedure called voluntary disclosure: (i) on 15 September 2009 in the amount of 382,599 plus In the meantime, HMRC was making inquiries with Royal Mail to establish interest, in respect of input tax paid from the quarter ended 31 March 2006 (due after 1 April 2006) to the quarter ended 30 June 2009, and (ii) on 8 April 2010 in the amount of 33,147, relating to the periods to December 2009 and to March 2010. These claims were calculated on the basis that the prices actually paid for the supplies must be treated as having included a VAT element. precisely which of its services were affected by the TNT Post judgment. HMRC rejected Zipvits claims by letter dated 12 May 2010. This was on the basis that Zipvit had been contractually obliged to pay VAT in relation to the commercial price for the services, but it had not been charged VAT in the relevant invoices and had not paid that VAT element. After review, HMRC upheld that decision by letter dated 2 July 2010. At this time, the national limitation period of six years under section 5 of the Limitation Act 1980 for a contract claim by Royal Mail to claim the balance of the total price due to it in respect of the supply of the services (ie a sum equal to the amount of the VAT due in respect of such supply, calculated by reference to the commercial price of the services) had not expired. But issuing claims against all Royal Mails relevant customers affected by the TNT Post judgment, including Zipvit, would have been costly and administratively burdensome for Royal Mail and it had no commercial interest in doing this, and so did not pursue such claims. At this time, HMRC were within the time limits set out in section 73(6) and section 77(1) of VATA to issue assessments against Royal Mail for VAT in respect of at least some of the supplies of the services. However, HMRC considered that they should not issue such assessments because national law in the form of VATA had provided at the relevant time that the supply of the services was exempt and, moreover, Royal Mail had not in fact received from Zipvit the VAT due in respect of the supplies. Furthermore, HMRC considered that they had created an enforceable legitimate expectation on the part of Royal Mail that it was not required to collect and account for VAT in respect of the services, so that Royal Mail would have a good defence to any attempt to issue assessments against it to account for VAT in respect of the services. Zipvit appealed against HMRCs review decision to the First tier Tribunal (Tax Chamber). The hearing of the appeal took place on 14 and 15 May 2014. By this time, the limitation period for a contract claim by Royal Mail against Zipvit for the payment of the balance of the total price due for the supply of the services had expired in relation to the greater part of the supplies which had been made. HMRC were also largely if not entirely out of time to issue an assessment against Royal Mail, as noted in para 140 of the First tier Tribunals judgment. The First tier Tribunal held that the services were standard rated as a matter of EU law, as the judgment in TNT Post indicated, and that the postal service exemption in national law could and should be interpreted in the same way, so that the services were properly to be regarded as standard rated as a matter of national law. This is now common ground. The First tier Tribunal dismissed Zipvits appeal, in a judgment dated 3 July 2014. It held that HMRC had no enforceable tax claim against Royal Mail because Royal Mail had not in its VAT returns declared any VAT in respect of its supply of the services, had made no voluntary disclosure of underpaid VAT, had not issued any invoice showing the VAT as due, and HMRC had not assessed Royal Mail as liable to pay any VAT: para 137. In those circumstances there was no VAT due or paid by Royal Mail in respect of the supply of the services, for the purposes of article 168(a) of the Directive: paras 138 146. The question whether HMRC would have been prevented by principles of public law, including the principle of legitimate expectation, from issuing an assessment against Royal Mail was left to one side, as unnecessary for determination: paras 147 148. In any event, since Zipvit did not hold valid tax invoices in respect of the supply of the services, showing a charge to VAT, it had no right to claim deduction of such VAT as input tax: paras 149 153. Although HMRC have a discretion under national law to accept alternative evidence of payment of VAT in place of a tax invoice (under regulation 29(2) of the Value Added Tax Regulations 1995 (SI 1995/2518) regulation 29(2)), which they had omitted to consider in their decisions, the First tier Tribunal found that on due consideration whether to accept alternative evidence, HMRC would inevitably and rightly have decided in the exercise of their discretion not to accept Zipvits claim for a deduction of input VAT in respect of the services: paras 192 198. The important point in that regard was that repayment of notional input VAT to Zipvit in respect of the services would constitute an unmerited windfall for Zipvit: paras 189 and 195 198. Zipvit had in fact paid only the commercial price for the services, exclusive of any element of VAT, so repayment to it of a notional element of VAT in respect of the supply of those services would mean that in economic terms it would have received the services for considerably less than their true commercial value, and there was no good reason why HMRC should in their discretion dedicate large sums of public money to achieve such an unmeritorious benefit for Zipvit. Zipvit appealed. The Upper Tribunal (Tax Chamber) dismissed the appeal. Its reasoning on the due or paid issue (article 168(a) of the Directive) differed from that of the First tier Tribunal which was later disapproved by the Court of Appeal and is not now supported by HMRC. It is now common ground that due or paid means due or paid by the trader to the supplier. The Upper Tribunal upheld the First tier Tribunals decision on the invoice issue and on the question of the exercise of discretion under regulation 29(2). Zipvit appealed to the Court of Appeal. It was only in the Court of Appeal that the underlying factual position regarding the obligations of Zipvit under its contract with Royal Mail was finally fully investigated and the findings of fact in that respect set out above were made. These are now common ground. The Court of Appeal dismissed Zipvits appeal. After an extensive review of the case law of the Court of Justice in relation to the due or paid point as it arose in the light of the factual position regarding Zipvits contractual obligations, the Court of Appeal found that the position was not acte clair: [2018] 1 WLR 5729, para 86. However, the Court of Appeal reached the same conclusion as the Tribunals below on the invoice issue: paras 91 119. After reviewing the case law of the Court of Justice, the Court of Appeal held that it was a necessary precondition for Zipvit to be able to exercise any right of deduction of input VAT in respect of the services that it should be able to produce VAT invoices which showed that VAT had been charged in respect of the supplies of the services, in compliance with article 226(9) and (10) of the Directive, or supplementary evidence showing payment of the relevant tax by Royal Mail to HMRC, which Zipvit could not do: paras 113 115. The Court of Appeal agreed with the Tribunals below on the question of the exercise of discretion by HMRC under regulation 29(2): paras 116 117. If HMRC treated Zipvit as having paid input VAT in respect of the services, Zipvit would receive an unmerited windfall (uncovenanted bonus), by obtaining in effect a reduction in the commercial price it had had to pay for the services, paid for out of public funds, even though that VAT had not been paid into the public purse: para 116. The Court of Appeal considered the position regarding the invoice issue to be acte clair, so that no reference was required to the Court of Justice: para 119. The appeal to the Supreme Court Zipvit has now appealed to this court. Zipvit contends that it should succeed on both the due or paid issue and the invoice issue, including so far as necessary on the question of the exercise of discretion by HMRC under regulation 29(2). After full argument, the court has decided that neither the due or paid issue nor the invoice issue can be regarded as acte clair, and that a reference should be made to the Court of Justice to ask the questions set out at the end of this judgment. In brief outline, the parties submissions on the appeal are as follows. (1) The due or paid issue Article 168(a) of the Directive provides that a trader who is a taxable person has an entitlement to deduct from VAT which he is liable to pay the VAT due or paid in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person. Zipvit contends that in the circumstances of this case, on each occasion when (although contractually liable for VAT in addition) it only paid the commercial price charged to it in Royal Mails invoice it (Zipvit) must be treated as having paid an element of VAT to be regarded as embedded in the sum paid. The sum charged by Royal Mail and paid by Zipvit should be treated as a total price comprising a (lesser) taxable amount and the VAT at standard rate on that taxable amount. Thus, if Royal Mail charged Zipvit 120 in an invoice for the services, that being the commercial price for the services, and Zipvit only paid that amount, then even though the invoice purported to say that the services were exempt from VAT, the taxable amount (within the meaning of articles 73 and 78 of the Directive) should (after the elapse of six months under article 90 and section 26A of VATA) be treated as having been only 100 and the additional 20 (assuming a 20% rate of VAT) should be treated as VAT, which Zipvit is now entitled to claim as input VAT relating to supplies made by it to its customers. This embedded VAT element of each payment constitutes VAT which has been paid, in the requisite sense, and thus falls within article 168(a). In support of this submission, Zipvit relies in particular on articles 73, 78 and 90 of the Directive (reflected in national law in sections 19(2) and 26A of VATA) and the judgment in Tulic v Agenia Naional de Administrare Fiscal (Joined Cases C 249/12 and C 250/12) EU:C:2013:722; [2013] BVC 547. Alternatively, even if the embedded element of VAT on which Zipvit relies is not to be regarded as having been paid for the purposes of article 168(a), VAT should be regarded as being due for the purposes of that provision, so that Zipvit is entitled to claim to deduct it as input VAT on that basis. To the extent that HMRC say that they cannot compel Royal Mail to account to them for VAT in respect of its supply of the services to Zipvit, that is HMRCs own fault (either because of their actions in creating any legitimate expectation or other defence on which Royal Mail could rely against enforcement action taken by HMRC it not being admitted that there is any such defence or by reason of allowing time to elapse so that they are now out of time to take enforcement action), and is not in any event a matter which can prevent Zipvit from relying on its entitlement under article 168(a) to deduct input VAT due or paid. Against these submissions, HMRC contend that in the circumstances of this case there is nothing in the Directive which requires or justifies the retrospective re writing of the commercial arrangements between Royal Mail and Zipvit, according to which the invoices from Royal Mail referred only to the commercial price to be paid by Zipvit for the services and Zipvit remained contractually obliged to pay Royal Mail an additional sum in respect of VAT at the standard rate in respect of that commercial price (as became clear only after the TNT Post judgment). As events transpired, Royal Mail did not issue further invoices to demand payment of that VAT; it could not be compelled to issue such further invoices (and is now out of time to do so, under the national law of limitation in relation to contract claims); it has not accounted to HMRC for any VAT in respect of the services (whether embedded VAT on a lower notional commercial price as referred to by Zipvit or VAT chargeable on the true commercial price); and HMRC could not take action to compel Royal Mail to account for any VAT in respect of the supply of the services (either for reasons of public law, including respect for the legitimate expectations of Royal Mail, or by reason of limitation). HMRC say that to allow Zipvit to claim an element of VAT notionally embedded in the payments it made to Royal Mail would be to re write history in an entirely theoretical manner divorced from reality, which is not required by any provision of the Directive. As the Tribunals and the Court of Appeal rightly found, it would mean that Zipvit gained an unmerited financial windfall at the expense of the taxpayer (and which would give it an advantage against its commercial competitors), which cannot be justified under the Directive. It would also produce a result which would violate the principle of neutrality which is fundamental to the Directive, in that the input VAT which Zipvit claims to deduct has never been paid into the public purse and Royal Mail would not have acted as collecting agent for the tax authorities in the manner required to give effect to that principle (relying in that regard, in particular, on the judgments in Elida Gibbs Ltd v Customs and Excise Comrs (Case C 317/94) [1997] QB 499, para 22, and in Minister Finansw v MDDP (Case C 319/12) [2014] STC 699, paras 41 43). HMRC submit that the present case is to be distinguished from the circumstances under consideration in Tulic. At para 37 of the judgment in that case, the Court of Justice expressly said that it was not dealing with the type of contractual arrangement which has been found to exist in this case. In a case where the contract between the supplier (Royal Mail) and the trader (Zipvit) obliges the trader to pay the commercial price for the services supplied plus a supplement covering the VAT due in respect of that commercial price, the case law indicates that on the proper interpretation of article 168(a) of the Directive VAT can only be regarded as having been paid when the VAT due in respect of the commercial price is actually paid, which it has not been here. The case law also indicates that VAT can only be regarded as being due when there is an enforceable claim to collect it from Zipvit and to ensure that it is passed on to the tax authorities, which there is not here. HMRC rely, in particular, on Vleclair SA v Ministre du budget, des comptes publics et de la rforme de lEtat (Case C 414/10) [2012] STC 1281; Volkswagen AG v Financn riaditelstvo Slovenskej republiky (Case C 533/16) EU:C:2017:823; [2018] BVC 15; and Biosafe Indstria de Reciclagens SA v Flexipiso Pavimentos SA (Case C 8/17) EU:C:2017:927; [2018] BVC 17. HMRC say that the case law does not suggest that the conduct of the tax authority is a relevant consideration in the application of the Directive in a case of this kind. Usually, in the absence of a declaration by the supplier or the presentation of tax invoices which comply with article 226(9) and (10), the tax authority will not know what supplies have been made and whether it is in a position to issue a tax assessment against the supplier. Further and in any event, there is nothing in the conduct of HMRC which could justify disregarding the principles of EU law referred to in this jurisprudence. As in the Volkswagen and Biosafe Indstria cases, the situation under review has arisen as a result of a simple mistake made in good faith by all of Zipvit, Royal Mail and HMRC. HMRC also rely on the principle that asymmetrical reliance on the Directive is not permitted, whereby a trader both takes advantage of an exemption in national law (which is not in fact authorised by the Directive) in relation to supplies and seeks to deduct input VAT in relation to those supplies. In that regard, HMRC refer in particular to the MDDP case. They contend that in substance Zipvit is seeking both to take advantage of the fact that national law mistakenly treated the supply of the services in this case as exempt and to rely on the Directive in support of its claim to deduct input VAT in relation to such supply, in breach of that principle. Zipvit denies this. (2) The invoice issue Zipvit submits that the case law of the Court of Justice indicates that there is an important difference between the substantive requirements to be satisfied for a claim for input tax (including those in article 168(a)) and the formal requirements which apply in relation to such a claim (including those in relation to the production of a VAT invoice in accordance with article 226). The approach is strict in relation to the substantive requirements, but departure from the formal requirements is permissible if alternative satisfactory evidence of the VAT which was paid or is due can be produced by the trader. Zipvit relies in particular on the judgments in Barlis 06 Investimentos Imobilirios e Tursticos SA v Autoridade Tributria e Aduaneira (Case C 516/14) [2016] BVC 43, SC Paper Consult SRL v Direcia Regional a Finanelor Publice Cluj Napoca (Case C 101/16) EU:C:2017:775; [2017] BVC 52 and Vdan v Agenia Naional de Administrare Fiscal (Case C 664/16) EU:C:2018:933. In this case, Zipvit contends that it has produced alternative satisfactory evidence of the VAT which was paid (in the form of the payment of embedded VAT which Zipvit contends was included in the price paid by it to Royal Mail) or which was due, since with the benefit of the judgment in the TNT Post case this can readily be worked out from the invoices which Royal Mail in fact sent to Zipvit together with an understanding of the contractual arrangements for the provision of the services to which the invoices related. HMRC could not, in the exercise of their discretion under regulation 29(2), refuse to accept the alternative evidence produced by Zipvit in support of its claim. Zipvit contends that the judgments in the Volkswagen and Biosafe Indstria cases do not have the significance for the invoice issue which HMRC say they have. According to Zipvit, the better explanation of the reasoning in those cases is that they were concerned to ensure that a trader should not be prevented from being able to give practical effect to its right to claim deduction of input VAT in circumstances where it had been misled by receipt of an invoice which purported to show that no VAT was due in respect of a supply. Against this, HMRC submit that the regime in the Directive for collection of VAT in accordance with the principle of neutrality requires particular importance to be attached to the requirements in article 226(9) and (10) regarding production of an invoice which shows that VAT is due in respect of a supply and in what amount. Under the VAT regime, several parties need to know these matters in order for the regime to function effectively; and the tax authorities need to be presented with invoices which deal properly with these requirements so that they can monitor the position and ensure that the supplier has properly accounted to them for the VAT charged. Therefore, according to HMRC, a valid claim for deduction of input tax cannot be made in the absence of a VAT invoice which satisfies these particular requirements. HMRC support the reasoning of the Court of Appeal. They also rely, in particular, on the Advocate Generals opinions and the judgments in the Volkswagen and Biosafe Indstria cases, which they contend support their submission that a valid claim for deduction of input VAT in respect of the supply of the services would have to be supported by a VAT invoice from Royal Mail which complied with article 226(9) and (10) of the Directive. Zipvit had never asked Royal Mail to send invoices charging it with the VAT due in respect of the commercial price charged for the supply of the services and evidently had no intention of asking for such invoices or of paying the charge for VAT which they would contain. Since Zipvit could not produce relevant VAT invoices in support of its claim to deduct input VAT in respect of the services, that claim must fail. There is nothing in EU law which can be relied on to impugn the conclusion of the Tribunals and the Court of Appeal regarding the exercise of HMRCs discretion under regulation 29(2). Copies of the provisions of national law referred to above are annexed to this reference. The reference to the Court of Justice In these circumstances, the court refers the following questions to the Court (1) Where (i) a tax authority, the supplier and the trader who is a taxable person misinterpret European VAT legislation and treat a supply, which is taxable at the standard rate, as exempt from VAT, (ii) the contract between the supplier and the trader stated that the price for the supply was exclusive of VAT and provided that if VAT were due the trader should bear the cost of it, (iii) the supplier never claims and can no longer claim the additional VAT due from the trader, and (iv) the tax authority cannot or can no longer (through the operation of limitation) claim from the supplier the VAT which should have been paid, is the effect of the Directive that the price actually paid is the combination of a net chargeable amount plus VAT thereon so that the trader can claim to deduct input tax under article 168(a) of the Directive as VAT which was in fact paid in respect of that supply? (2) Alternatively, in those circumstances can the trader claim to deduct input tax under article 168(a) of the Directive as VAT which was due in respect of that supply? (3) Where a tax authority, the supplier and the trader who is a taxable person misinterpret European VAT legislation and treat a supply, which is taxable at the standard rate, as exempt from VAT, with the result that the trader is unable to produce to the tax authority a VAT invoice which complies with article 226(9) and (10) of the Directive in respect of the supply made to it, is the trader entitled to claim to deduct input tax under article 168(a) of the Directive? (4) In answering questions (1) to (3): (a) is it relevant to investigate whether the supplier would have a defence, whether based on legitimate expectation or otherwise, arising under national law or EU law, to any attempt by the tax authority to issue an assessment requiring it to account for a sum representing VAT in respect of the supply? (b) is it relevant that the trader knew at the same time as the tax authority and the supplier that the supply was not in fact exempt, or had the same means of knowledge as them, and could have offered to pay the VAT which was due in respect of the supply (as calculated by reference to the commercial price of the supply) so that it could be passed on to the tax authority, but omitted to do so? of Justice: |
This appeal concerns the effect of the default clause in a standard form of contract which is widely used in the grain trade. On 10 June 2010 the respondents, Nidera BV, whom I shall call the buyers, entered into a contract with the appellants, Bunge SA (the sellers), to buy 25,000 metric tonnes (+/ 10% in buyers option) of Russian milling wheat crop 2010, FOB Novorossiysk. The shipment period was August 2010, but there were provisions for narrowing that period by notice. In the event it was narrowed to 23 30 August 2010. The contract incorporated GAFTA Form 49 (as in effect from 1 January 2006), which is the standard form of FOB sale contract of the Grain and Feed Trade Association, for goods delivered from central or Eastern Europe in bulk or bags. Clauses 13 and 20 of GAFTA 49 are the main provisions relevant to the present dispute. They provided: 13. PROHIBITION In case of prohibition of export, blockade or hostilities or in case of any executive or legislative act done by or on behalf of the government of the country of origin of the goods, or of the country from which the goods are to be shipped, restricting export, whether partially or otherwise, any such restriction shall be deemed by both parties toapply to this contract and to the extent of such total or partial restriction to prevent fulfilment whether by shipment or by any other means whatsoever and to that extent this contract or any unfulfilled portion thereof shall be cancelled. Sellers shall advise buyers without delay with the reasons therefor and, if required, Sellers must produce proof to justify the cancellation. 20. DEFAULT In default of fulfilment of contract by either party, the following provisions shall apply: (a) The party other than the defaulter shall, at their discretion have the right, after serving notice on the defaulter, to sell or purchase, as the case may be, against the defaulter, and such sale or purchase shall establish the default price. (b) If either party be dissatisfied with such default price or if the right at (a) above is not exercisedand damages cannot be mutually agreed, then the assessment of damages shall be settled by arbitration. (c) The damages payable shall be based on, but not limited to the difference betweenthe contract price and either the default price established under (a) above or upon the actual or estimated value of the goods on the date of default established under (b) above. (d) In all cases the damages shall, in addition, include any proven additional expenses which would directly and naturally result in the ordinary course of events from the defaulter's breach of contract, but shall in no case include loss of profit on any sub contracts made by the party defaulted against or others unless the arbitrator(s) or board of appeal, having regard to special circumstances, shall in his/their sole and absolute discretion think fit. (e) Damages, if any, shall be computed on the quantity called for, but if no such quantity has been declared then on the mean contract quantity and any option available to either party shall be deemed to have been exercised accordingly in favour of the mean contract quantity. On 5 August 2010 Russia introduced a legislative embargo on exports of wheat from its territory, which was to run from 15 August to 31 December 2010. On 9 August 2010, the sellers notified the buyers of the embargo and purported to declare the contract cancelled. The buyers did not accept that the sellers were entitled to cancel the contract at that stage. They treated the purported cancellation as a repudiation, which they accepted on 11 August 2010. On the following day, the sellers offered to reinstate the contract on the same terms, but the buyers would not agree. Instead, they began arbitration proceedings under the GAFTA rules, in support of a claim for damages of US$3,062,500. The proceedings below At the hearing of the arbitration, there was a measure of common ground about the basis for assessing damages. It was agreed (i) that clause 20 applied to anticipatory repudiation, (ii) that the buyers had not bought against the sellers pursuant to sub clause (a); (iii) that the date of default for the purpose of clause 20(c) was 11 August 2010, when the sellers repudiation was accepted, and (iv) that the difference between the contract and the market price at that date was US$3,062,500. The sellers case was that they had been entitled to terminate the contract under clause 13 upon the announcement of the export ban, and that even if the termination was premature, the fact that shipment under the contract would have been subject to the ban when the time for shipment came meant that no loss had been suffered. GAFTAs first tier arbitration tribunal issued its award on 1 November 2011. It held that the sellers had repudiated the contract because their notice of cancellation was premature. The embargo might have been lifted in time to permit shipment within the laycan period. It was therefore impossible to say, as at the date when the sellers cancelled, that shipment would necessarily be prevented by the embargo. But the tribunal declined to award substantial damages. They held, in agreement with the sellers, that none had been suffered because in fact the embargo was not lifted. It followed that the contract would have been cancelled in any event when the time came for delivery. Both parties appealed to the GAFTA Appeal Board, which issued its own award on 22 June 2012. The Board agreed with the first tier tribunal that the sellers had repudiated the contract by cancelling too early. It accepted that if the contract had not been repudiated on 9 August 2010 it would have been cancelled because of the embargo. But it awarded damages of US$3,062,500, representing the difference between the contract and the market price on 11 August 2010, the date that the repudiation was accepted. In the Appeal Boards view, such an award was required by clause 20(c) of GAFTA 49. The sellers argument, as summarised in the Appeal Boards award, was that at common law it was necessary to take account of events occurring after the breach which showed that the same loss would have been suffered even without the repudiation. They relied on Maredelanto Compania Naviera SA v Bergbau Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164, and Golden Strait Corporation v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] 2 AC 535. The issues were (i) whether that was indeed the position at common law in the case of a contract of this kind; and (ii) if so, whether the common law principle had any application to a contract containing clause 20. The Appeal Board doubted whether at common law subsequent events would be relevant to the assessment of damages under a contract for the sale of a single cargo, as opposed to a contract for delivery by instalments. But they considered that the issue on damages turned wholly on the effect of clause 20 as that clause was commonly understood in the trade. They concluded that sub clause (c) was intended to produce an easily understood and readily applied formula for computing damages in a case where agreement was not reached under sub clauses (a) and (b). That formula might produce a figure more or less than the actual loss. Proceeding from the common ground that the default date for the purpose of sub clause (c) was 11 August 2010 and from the parties agreement on figures, they awarded the full amount of the buyers claim. This conclusion was also determinative, in the view of the Appeal Board, of the sellers further argument that the buyers had failed to mitigate their loss by accepting the sellers offer to reinstate the contract on the same terms. As the Appeal Board saw it, the buyers acted reasonably in rejecting the offer, because at the time it was made they had a vested right to a large sum by way of damages and acceptance of the offer would have substituted a right to delivery that would probably have been defeated by the embargo. On 10 October 2012, Andrew Smith J gave permission to appeal against the award under section 69 of the Arbitration Act 1996, limited to the following issues: 2.1. Is the application of the GAFTA prohibition clause limited to a case where it can be seen after the event that performance of the contract has in fact been prevented by the prohibition in question? 2.2. Does the GAFTA default clause exclude common law principles for the assessment of damages for anticipatory repudiatory breach and in particular (i) the principle of mitigation and/or (ii) the compensation principle identified in The Golden Victory [2007] 2 AC 353? 2.3. Is the overriding compensatory principle established by The Golden Victory limited to instalment contracts? 2.4. Was the board wrong in law to conclude that the buyers rejection of the sellers offer to reinstate the contract did not constitute a failure to mitigate on the ground that the sellers did not offer to reinstate the contract on different and more favourable terms than contained in the original contract? Hamblen J, who heard the appeal in the Commercial Court, dismissed the appeal on issues 2.1, 2.2 and 2.4: [2013] EWHC 84 (Comm); [2013] 1 Lloyds Rep 621. Since he agreed with the Appeal Board that clause 20 determined the measure of damages whether or not it produced a result corresponding to the common law, he held that issue 2.3 did not arise. But he shared the doubts of the Appeal Board about the application of The Golden Victory to a contract for a single cargo, observing that this was very much an open question. In the Court of Appeal, the sellers abandoned their arguments on mitigation (issues 2.2(i) and 2.4). On the remaining issues, the Court of Appeal (Moore Bick, Floyd and Clarke LJJ) affirmed the decision of Hamblen J: [2013] EWCA Civ 1628; [2014] 1 Lloyds Rep 404. The common law Anticipatory breach of contract, probably more accurately referred to as renunciation, is a concept which can be traced back to the earliest years of the common law but was first coherently formulated in terms of legal principle in Hochster v De la Tour (1853) 2 E & B 678 in England and Howie v Anderson (1848) 10 D 355 in Scotland. In its modern form it is a response to the pragmatic concern of Victorian judges to avoid the waste of economic resources implicit in any inflexible rule which required the parties to go through the motions of performing a contract which was for practical purposes dead. The same concern informs much of the law of contract, notably in the area of frustration and remedies. The early rules of pleading, reflecting the terms of the contract, had required the plaintiff in an action for damages to plead that he had tendered performance of any obligation to be performed by him as a condition precedent to the defaulting partys obligation. But as Lord Campbell explained in Hochster v De la Tour, the effect of the renunciation of a contract in advance of the time agreed for performance was (i) to confer on the injured party an option to accept the renunciation as bringing the contract to an end and to treat himself as discharged from that time onward from further performance; (ii) to enable the injured party to deal with the financial consequences by suing for damages at once, without waiting for the time fixed for performance; and (iii) to bring forward the injured partys duty to mitigate to the time when the renunciation was accepted. An accepted renunciation gives rise to particular problems of legal analysis when it comes to the assessment of damages. As Lord Mustill observed in a characteristically sardonic comment on recent case law: there is every reason to be wary about applying the ordinary rules of damages for breach of contract to this special type of breach unlike the position regarding actual breach I do not see how damages for an anticipatory breach can be awarded with any semblance of intellectual rigour without at least an attempt to inquire into what was the breach to which the damages are attached, and what kind of breach it was which could be committed before there was any present obligation to perform. the common law has never succeeded in finding a solution which is both theoretically sound and capable of producing sensible results in practice. The attempt was, to all intents and purposes, given up a long time ago, and the courts have been content to employ that powerful but dangerous weapon of the common law, a fiction. in the field of anticipatory repudiation, a breach was simply assumed to have occurred when the repudiatory conduct took place, and at least where there was an available market for the goods or services in question those responsible for assessing damages were content to look directly to a comparison between the current market prices or rates and those prescribed by the contract, without any inquiry into why this comparison was being made. M Mustill, The Golden Victory Some Reflections (2008) 124 LQR 569, 571 572. The fundamental principle of the common law of damages is the compensatory principle, which requires that the injured party is so far as money can do it to be placed in the same situation with respect to damages as if the contract had been performed: Robinson v Harman (1848) 1 Exch 850, 855 (Parke B). In a contract of sale where there is an available market, this is ordinarily achieved by comparing the contract price with the price that would have been agreed under a notional substitute contract assumed to have been entered into in its place at the market rate but otherwise on the same terms. Section 51 of the Sale of Goods Act 1979 provides: 51. Damages for non delivery (1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for non delivery. (2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract. (3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or (if no time was fixed) then at the time of the refusal to deliver. Section 50 contains corresponding provisions for non acceptance by the buyer. Sections 50 and 51 reproduce the corresponding provisions of the Sale of Goods Act 1893, and reflect common law principles which had already been established at the time of the earlier Act. Section 51(2) states the compensatory principle in the context of a sellers non delivery. Subsection (3) states the prima facie measure of damages where there is an available market, but it is not so much a rule as a technique which is prima facie to be treated as satisfying the general principle expressed in subsection (2). It is not obvious from the terms of the section how it is to apply to a case where by reason of an accepted renunciation the contract has come to an end in advance of the contractual time for delivery. That situation gives rise to two potential questions which are not always sufficiently distinguished in the case law. The first question is: assuming that there is an available market, as at what date is the market price to be determined for the purpose of assessing damages? It is clear that once that date is determined, any subsequent change in the market price is irrelevant. Most of the case law on the measure of damages for the repudiation of a contract of sale arises out of disputes about the relevant market price, and this is what judges speaking of the breach date rule are usually referring to. The second question is: in what if any circumstances will it be relevant to take account of contingencies (other than a change in the market price) if subsequent events show that they would have reduced the value of performance, perhaps to nothing, even without the defaulters renunciation? This may happen, for example, if the injured party would have been unable to perform it when the time for performance arrived, or if the defaulter would have been relieved of the obligation to perform by frustration or under the express terms. The answer to the first question, although like section 51(3) it is only a prima facie answer, is that where there is an available market for the goods, the market price is determined as at the contractual date of delivery, unless the buyer should have mitigated by going into the market and entering into a substitute contract at some earlier stage: Garnac Grain Co Inc v HMF Faur & Fairclough Ltd [1968] AC 1130, 1168; Tai Hing Cotton Mill Ltd v Kamsing Knitting Factory [1979] AC 91, 102. Normally, however, the injured party will be required to mitigate his loss by going into the market for a substitute contract as soon as is reasonable after the original contract was terminated. Damages will then be assessed by reference to the price which he obtained. If he chooses not to do so, damages will generally be assessed by reference to the market price at the time when he should have done: Koch Marine Inc v dAmica Societa di Navigazione (The Elena DAmico) [1980] 1 Lloyds 75, 87, 89. The result is that in practice where there is a renunciation and an available market, the relevant market price for the purposes of assessing damages will generally be determined not by the prima facie measure but by the principles of mitigation. The answer to the second question was given initially by the Court of Appeal in Maredelanto Compania Naviera SA v Bergbau Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164 and then by the House of Lords in Golden Strait Corpn v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] 2 AC 353. In the first of these cases the Court of Appeal held that on the assumption that the voyage charterers of The Mihalis Angelos had repudiated the contract they were nevertheless not liable for substantial damages. This was because if the contract had continued they would have terminated it lawfully for breach of a condition as to the time of the vessels arrival at the port of delivery. Lord Denning and Edmund Davies LJ put the matter entirely generally. In Lord Dennings words (at p 196), You must take into account all contingencies which might have reduced or extinguished the loss. But difficulty arose from the suggestion of Megaw LJ (at pp 209 210) that the result turned on the fact that the vessel was predestined to arrive late at the port of delivery. The subsequent decision in The Golden Victory disposed of the argument, based on Megaw LJs dictum, that a subsequent event which would have reduced or extinguished the loss had to be inevitable, viewed at the time when the repudiation was accepted. The facts were that a seven year time charter had been brought to an end by the charterers repudiation in the course of performance some four years before its contractual terms but only fourteen months before it would have been cancelled in any event under a war clause. At the time when the charterers repudiation was accepted, war was far from inevitable. It was found to be no more than a possibility. The question was how long it should be assumed, in those circumstances, that the charterparty would have lasted if it had not been wrongfully terminated. The House held by a majority that the overriding principle (or lodestar) was the compensatory principle. Irrespective of the date as at which the market price was ascertained, it was necessary to take account of contingencies known at the date of the arbitrators assessment to have occurred, if their effect was that the contract would have been lawfully terminated at or before its contractual term. It followed that damages were to be assessed on the assumption that the charter would have lasted for another 14 months. The reasoning has to some extent been obscured by the focus on the implications of the so called breach date rule and on the competing demands of certainty and compensation. The real difference between the majority and the minority turned on the question what was being valued for the purpose assessing damages. The majority were valuing the chartered service that would actually have been performed if the charterparty had not been wrongfully brought to a premature end. On that footing, the notional substitute contract, whenever it was made and at whatever market rate, would have made no difference because it would have been subject to the same war clause as the original contract: see Lord Scott of Foscote at para 37, and Lord Brown of Eaton under Heywood at paras 76 78 and 82. The minority on the other hand considered that one should value not the chartered service which would actually have been performed, but the charterparty itself, assessed at the time that it was terminated, by reference to the terms of a notional substitute concluded as soon as possible after the termination of the original. That would vary, not according to the actual outcome, but according to the outcomes which were perceived as possible or probable at the time that the notional substitute contract was made. The possibility or probability of war would then be factored into the price agreed in the substitute contract: see Lord Bingham of Cornhill at paras 22 and Lord Walker of Gestingthorpe at paras 45 46. I think that the majoritys view on this point was correct. Sections 50 and 51 of the Sale of Goods Act, like the corresponding principles of the common law, are concerned with the price of the goods or services which would have been delivered under the contract. They are not concerned with the value of the contract as an article of commerce in itself. As Lord Brown observed at paras 82 83, even if the charterparty rights could have been sold for a capital sum, this was not a proper basis for assessing loss, and an assessment which proceeded as if it were would extend the effect of the available market rule well beyond its proper scope. The leading speech for the majority, which was delivered by Lord Scott of Foscote, contains dicta which have sometimes been taken to suggest a distinction between a contract for a one off sale and a contract for the supply of goods or services over a period of time: see paras 34 35. These dicta influenced both the Appeal Board and Hamblen J in the present case. But I do not think that Lord Scott was suggesting that the underlying principle was any different in the case of a one off sale. Where the only question is the relevant date for taking the market price, the financial consequences of the breach may be said to crystallise at that date. But where, after that date, some supervening event occurs which shows that that neither the original contract (had it continued) nor the notional substitute contract at the market price would ever have been performed, the concept of crystallising the assessment of damages at that price is unhelpful. The occurrence of the supervening event would have reduced the value of performance, possibly to nothing, even if the contract had not been wrongfully terminated and whatever the relevant market price. The nature of that problem does not differ according to whether the contract provides for a single act of performance or several successive ones. Nor, as it seems to me, is there any principled reason why the majoritys solution should be any different in the two cases. If a distinction were to be made between them, it is difficult to see how The Mihalis Angelos, which concerned a contract for a single voyage, could have been decided as it was. As Lord Scott observed in The Golden Victory at para 36, the compensatory principle would be equally offended by disregarding subsequent events serving to reduce or eliminate the loss under any anticipatory breach the acceptance of which had terminated an executory contract. The most that can be said about one off contracts of sale is that the facts may be different. In particular, if the injured party goes into the market and enters into a substitute contract by way of mitigation, it will not necessarily be subject to the same contingencies as the original contract. The principle upheld in The Golden Victory has come in for a certain amount of academic criticism and judicial doubt. To my mind both the criticism and the doubt are unjustified. The most comprehensive and influential critic has been Professor Treitel. His views were set out in their fullest form in a case note on the decision of the Court of Appeal, which had reached the same conclusion as the majority of the Appellate Committee: see Assessment of Damages for Wrongful Repudiation, (2007) 123 LQR 9. Professor Treitels case note was cited to the Appellate Committee but evidently did not move them. His main criticisms were, first, that the decision failed to distinguish between the different supervening events (successful mitigation by the defaulting party, inability of the innocent party to perform, cancellation under an express provision) which may serve to reduce or extinguish the loss; secondly, that it took no account of the collateral motives that might have moved the party who had repudiated the contract to cancel it lawfully at a later stage if it had continued; and, thirdly, that it attached insufficient weight to the commercial value of certainty. I am no more convinced by these criticisms than the Appellate Committee was in The Golden Victory. The principle which the Committee applied was neither new nor heterodox. There is no principled reason why, in order to determine the value of the contractual performance which has been lost by the repudiation, one should not consider what would have happened if the repudiation had not occurred. On the contrary, this seems to be fundamental to any assessment of damages designed to compensate the injured party for the consequences of the breach. If the contract had not been repudiated, it would have been lawfully cancellable. If it was lawfully cancellable, the charterer would have been entitled to avail himself of that right regardless of his motive. The only question is whether he would in fact have done so, a question which in practice would probably have been determined by his financial interest. Commercial certainty is undoubtedly important, although its significance will inevitably vary from one contract to another. But it can rarely be thought to justify an award of substantial damages to someone who has not suffered any. As Lord Mance pointed out in the Court of Appeal in The Golden Victory [2006] 1 WLR 533, para 24, the degree of uncertainty involved in that case was no greater than the uncertainty inherent in the contract itself. The parties obligations were always defeasible in the uncertain event of war, just as their obligations under the contract presently in issue were always defeasible in the uncertain event of an export embargo. Clause 20 of GAFTA 49 Mr Rainey QC, who appeared before us for the sellers, submitted that there was a strong presumption that an express damages clause was not intended to depart from the compensatory principle applied in The Golden Victory. Unless the contract provided otherwise in clear terms, damages would not be awarded where no loss had been sustained. This was not, he said, inconsistent with clause 20, which only required the assessment of damages to be based on the difference between the contract price and the market price or value at the relevant time. He proposed that effect should be given to the parties presumed intention to adhere to the compensatory principle by distinguishing between two stages of the inquiry, namely (i) whether any loss has been sustained as a result of the breach, and (ii) if so, how much loss had been suffered. Clause 20, he suggested, was concerned with stage (ii) but not stage (i). Two preliminary observations are called for. The first is that damages clauses are commonly intended to avoid disputes about damages, either by prescribing a fixed measure of loss (as in the case of a liquidated damages clause) or by a providing a mechanical formula in place of the more nuanced and fact sensitive approach of the common law (as in clause 20 of GAFTA 49). In either case, it is inherent in the clause that it may produce a different result from the common law. For that reason there can be no scope for a presumption that the parties intended the clause to produce the same measure of damages as the compensatory principle would produce at common law. The mere fact that in some cases its application will over or under estimate the injured partys loss is nothing to the point. Such clauses necessarily assume that the parties are willing to take the rough with the smooth. However, I would accept a more moderate version of Mr Raineys presumption. A damages clause may be assumed, in the absence of clear words, not to have been intended to operate arbitrarily, for example by producing a result unrelated to anything which the parties can reasonably have expected to approximate to the true loss. The second preliminary observation is that such clauses are not necessarily to be regarded as complete codes for the assessment of damages. A damages clause, like any other contractual provision, is conclusive of the matters with which it deals. It may also implicitly exclude considerations which, although not directly within its scope, cannot be applied consistently with its terms. But it is a question of construction whether the mere fact that it deals with damages means that it must have been intended to do so exhaustively, thereby impliedly excluding any considerations which it has not expressly addressed. To treat a damages clause as a complete code in this all embracing sense is to tax the foresight of the draftsman in a way which is rarely appropriate unless the alternative is to undermine the coherence or utility of the clause. Clause 20(a) (c) of GAFTA 49 is concerned with the determination of the difference between the contract price of the goods and their market price or value. Detailed analysis of the way that it works does not affect the outcome of this appeal, and argument on the point was largely foreclosed by the way that the case was put to the arbitrators. But given the importance of the GAFTA default clause, it is right to deal with it. The position may in my view be summarised as follows: (1) The clause applies, as its opening words declare, in default of fulfilment of contract by either party. As a matter of ordinary language, the fulfilment of the contract means its performance, and default of fulfilment means its non performance. This is the sense in which fulfilment is used throughout GAFTA 49. Thus clause 4 deals with brokerage, and provides that it is payable contract fulfilled or not fulfilled, but not if such non fulfilment is due to the (lawful) cancellation of the contract under the prohibition or force majeure clauses. Clause 13, the prohibition clause, provides that prohibition of export, blockade or of hostilities will cause the contract to be cancelled if and so far as it prevents fulfilment whether by shipment or by any other means whatsoever. Clause 14 is a more general force majeure clause applicable to cases where the execution of this contract or any unfulfilled portion thereof is prevented by specified categories of event. Clause 22 provides for the closing out of the contract in the event of insolvency supervening before fulfilment of this contract. In each of these contexts the fulfilment of the contract clearly refers to the performance of the parties contractual obligations, and non fulfilment or default of fulfilment to their non performance. The use of the same term in the opening words of clause 20 indicates that that clause is concerned with non performance. For this purpose, it does not matter whether the contract has not been performed because it was repudiated in advance of the time for performance, or because it was simply not performed when that time arrived. In either case, there is nothing other than contractual performance which can be said not to have been fulfilled. (2) Clause 20(a) gives the injured party the option, at its discretion, of selling or buying (as the case may be) against the defaulter, in which case the sale or purchase price will be the default price. Either party is at liberty to reject the default price, if there is one, as the basis for assessing damages. If either (i) there is no default price, because the injured party did not go into the market to buy or sell against the defaulter, or else (ii) there is a default price but one of the parties is dissatisfied with it, then damages must go to arbitration in accordance with sub clause (c). (3) Sub clause (c) provides for two alternative bases of assessment by the arbitrators. The first, which applies if a default price has been established but not accepted, is the difference between the default price and the contract price. In other words, if the injured party has gone into the market and bought or sold against the defaulter, the arbitrators may accept that the default price should be used to calculate damages, notwithstanding the objections of one or other party or even both of them. The second basis of assessment is the difference between the contract price and the actual or estimated value of the contract goods at the date of default. This means the date of the default of fulfilment referred to in the opening words of clause 20, ie the date on which the contract should have been fulfilled by performance in accordance with its terms. (The words established under (b) above merely refer to the value settled by arbitration, that being the only basis on which (b) provides for a value to be fixed.) (4) The combined effect of sub clauses (a), (b) and (c) is therefore to produce a measure of damages which differs in two main respects from the common law paradigm. The first is that the injured party is not required to mitigate by going into the market and buying or selling against the defaulter, but has a discretion whether to do so. Damages can be assessed as at the date when the injured party accepted the repudiation only if he actually went into the market to fix a price at that date. The second is that if the injured party has not in fact gone into the market and made a substitute contract the contract price falls to be compared not with the market price of the goods but with their actual or estimated value. This may be assessed by reference to the market price of different but comparable goods, for example goods of different origin or shipment date. Mr Rainey submits that this careful scheme is concerned only with the question how much loss has been suffered, and that it applies only once it has been determined on a preliminary inquiry that there has been at least some loss. It does not apply if at common law there has been none. I do not accept this. In my view there is one question, namely how much loss has been suffered. Zero is simply one possible answer to that question. Mr Raineys approach does not even secure the consistent application of the compensatory principle which is said to be its justification. If the clause produces a high figure for the injured partys loss, it would fall to be applied if the figure calculated in accordance with the compensatory principle was low but not if it was zero. If, for example, the injured party had suffered some modest out of pocket expenses recoverable under sub clause (d), that would result in the application of the clause to the whole of the rest of the claim, however much its effect was to overstate the actual loss. These consequences seem at least as arbitrary and anomalous as those of which Mr Raineys clients complain. The real distinction in my opinion is not between cases where there would be some damage at common law and cases where there would be none. It is between the two questions which I have identified at para 16 above. As applied to facts like these, they are, first, what is the relevant market price or value of the goods for the purposes of assessing damages? And, secondly, in what circumstances is it relevant to take account of contingencies, other than changes in the market price or value of the goods, which would have prevented the goods from being delivered whatever the market price or value, with the result that the buyer would have suffered the same loss in any event? Leaving aside the provisions of sub clause (d) relating to additional expenses and losses on sub contracts, which have no bearing on the present issue, clause 20 is concerned only with the first of these questions. Sub clauses (a) to (c) constitute an elaborate, indeed a complete, code for determining the market price or value of the goods that either were actually purchased by way of mitigation or might have been purchased under a notional substitute contract. The clause does not deal at all with the effect of subsequent events which would have resulted in the original contract not being performed in any event. The effect of these events could be excluded from consideration only if clause 20 were treated as a complete code not just for determining the relevant market price or value but for every aspect of the assessment of damages. In my opinion clause 20 cannot be viewed in that way. In the first place, it neither provides nor assumes that assessment will depend only on the difference between the contract price and the relevant market price or value. It provides that the damages payable shall be based on that difference. It does not exclude every other consideration which may be relevant to determine the injured partys actual loss. The clause is consistent with a conclusion that because of a subsequent supervening event the contract would never have been performed and the same loss would have been suffered even if it had not been renounced. Secondly, this is what one would in any event infer from the limited subject matter of the clause. Clause 20 is not sufficiently comprehensive to be regarded as a complete code covering the entire field of damages. Sub clause (c) covers the same territory as sections 50(3) and 51(3) of the Sales of Goods Act, and sub clauses (a) and (b) cover the territory occupied by the common law principles concerning the mitigation of losses arising from price movements. But this is very far from the entire field. These provisions bring a valuable measure of certainty to issues arising from price movements which have given rise to difficulty and dispute at common law for 150 years. That is a valuable purpose which the clause achieves whatever the answer to the question now before us. But clause 20 is not concerned with bases of assessment which do not depend on the terms of a notional substitute contract or on any determination of the market price: for example expenses incurred by the buyer in the course of performance, which are not occasioned by the breach of contract but have been rendered futile by it, and would normally be recoverable as an alternative to the prima facie measure. Moreover, although the clause deals with the injured partys duty to mitigate by going into the market to buy or sell against the defaulter, it does not deal with any other aspect of mitigation. It therefore leaves open the possibility that damages may be affected by a successful act of mitigation on the part of the injured party or by an offer from the defaulter which it would have been reasonable for the injured party to accept. Likewise, in my opinion, clause 20 neither addresses nor excludes the consideration of supervening events (other than price movements) which operate to reduce or extinguish the loss. A similar conclusion was reached in two decisions concerning similar default clauses, both of which I respectfully regard as consistent with principle. Bem Dis A Turk S/A TR v International Agri Trade Co Ltd (The Selda) [1998] 1 Lloyds Rep 416 (Clarke J), [1999] 1 Lloyds Rep 729 (CA) arose out of the sellers repudiation of a C&F contract containing an earlier version of the GAFTA default clause, which was similar to clause 20 but did not include the provision of sub clause (d) allowing the recovery of expenses occasioned by the breach. The buyers made no claim for damages based on the difference between the contract price and the market price or value, presumably because the market had moved in their favour since the original contract was made. They claimed only the expenses occasioned by the repudiation. They recovered them from the arbitrators, and the award was affirmed by both Clarke J and the Court of Appeal. Among the arguments which were rejected at all three stages was that the default clause was a complete code covering the whole field of damages. This was because it was concerned only with the computation of damages based on the difference between the contract price and the market price or value, or on the losses incurred on sub contracts. A claim for expenses lay outside its scope and was not therefore implicitly excluded. The argument rejected in The Selda was that the default clause impliedly excluded any head of loss which it did not expressly allow, and some significance was attached to the analogy with exclusion clauses drawn by Lord Diplock in Gilbert Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689, 717 718. But I think that the analysis would have been the same in the converse case, where it was suggested that the clause impliedly required the award of a head of damage which has not been suffered. This was the position in Novasen SA v Alimenta SA [2013] 1 Lloyds Rep 647, the facts of which were indistinguishable from those of the present case. The contract incorporated a standard form of the Federation of Oil, Seeds and Fats Associations which included a default clause similar to clause 20(a) (c) and (e) of GAFTA 49, except that the difference between the contract and the market price was expressed to be the maximum measure of damages. The issue was whether a loss computed in accordance with the clause had been extinguished by the later operation of an export ban at the contractual point of shipment. Popplewell J held that it had, on the ground that nothing in the clause required a loss calculated in accordance with the default clause to be awarded to the injured party if supervening events showed that it had not been suffered. This result seems to me to be consistent with principle. The alternative is to allow the clause to operate arbitrarily as a means of recovering what may be very substantial damages in circumstances where there has been no loss at all. In the present case, the sellers jumped the gun. They repudiated the contract by anticipating that the Russian export ban would prevent shipment at a time when this was not yet clear. But fortunately for them their assumption was in the event proved to have been correct. The ban would have prevented shipment when the time came. The buyers did nothing in consequence of the termination, since they chose not to go into the market to replace the goods. They therefore lost nothing, and the arbitrators should not have felt inhibited from saying so. Conclusion In my opinion the answer to question 2.3 in Andrew Smith Js order granting permission to appeal from the award is that the compensatory principle established in The Golden Victory is not limited to instalment contracts, and that the GAFTA Appeal Board was in error in thinking that it was. The answer to question 2.2(ii) in the order is that the default clause in GAFTA 49 does not exclude the principle identified in The Golden Victory [2007] 2 AC 353. In both respects, the correct conclusion had been reached in the first tier award. It follows that I would allow this appeal and vary the award of the Appeal Board by excising so much of it as awards substantial damages to the buyers and substituting an award of nominal damages in the sum of US$5. The parties should be directed to deal in writing with the question whether the award should also be varied so far as it awarded costs against the sellers (para 6.4), and with the incidence of costs of the proceedings following the award. LORD TOULSON: (with whom Lord Neuberger, Lord Mance and Lord Clarke agree) The appellants (the sellers) contracted to sell to the respondents (the buyers) 25,000 metric tonnes of Russian milling wheat FOB Novorossiysk. The contract incorporated the GAFTA 49 form of contract designed for the delivery of goods from central and Eastern Europe in bulk or bags on FOB terms. The appeal raises questions about the construction of a clause of the contract and about the applicability and correctness of the decision of the majority of the House of Lords in Golden Strait Corporation v Nippon Yusen Kubisha Kaisha (The Golden Victory) [2007] UKHL 12, [2007] 2 AC 353. I agree with the conclusions of Lord Sumption, but because we are disagreeing with the judgments of the Court of Appeal, Hamblen J and the GAFTA Appeal Board, and the decision in The Golden Victory has generated much debate, I will set out my reasoning in my own words. GAFTA 49 includes these terms: 13. PROHIBITION In case of prohibition of export, blockade or hostilities or in case of any executive or legislative act done by or on behalf of the government of the country of origin of the goods, or the country from which the goods are to be shipped, restricting export, whether partially or otherwise, any such restriction shall be deemed by both parties to apply to this contract and to the extent of such total or partial restriction to prevent fulfilment whether by shipment or by any other means whatsoever and to that extent this contract or any unfulfilled portion thereof shall be cancelled. Sellers shall advise buyers without delay with the reasons therefor and, if required, Sellers must produce proof to justify the cancellation. 20. DEFAULT In default of fulfilment of contract by either party, the following provisions shall apply: (a) The party other than the defaulter shall, at their discretion have the right, after serving notice on the defaulter, to sell or purchase, as the case, may be, against the defaulter, and such sale or purchase shall establish the default price. (b) If either party shall be dissatisfied with such default price or if the right at (a) above is not exercised and damages cannot be mutually agreed, then the assessment of damages shall be settled by arbitration. (c) The damages shall be based on, but not limited to, the difference between the contract price and either the default price established under (a) above or upon the actual or estimated value of the goods on the date of default established under (b) above. (d) In all cases the damages shall, in addition, include any proven additional expenses which would directly and naturally result in the ordinary course of events from the defaulters breach of contract, but shall in no case include loss of profit on any sub contracts made by the party defaulted against or others unless the arbitrator(s) or board of appeal, having regard to special circumstances, shall in his/their sole and absolute discretion think fit. (e) Damages, if any, shall be computed on the quantity called for, but if no such quantity has been declared then on the mean contract quantity and any option available to either party shall be deemed to have been exercised in favour of the mean contract quantity. 24. ARBITRATION (a) Any and all disputes arising out of or under this contract or any claim regarding the interpretation or execution of this contract shall be determined by arbitration in accordance with the GAFTA Arbitration Rules The contract was made on 10 June 2010 and provided for delivery in August 2010. The delivery period was later narrowed to between 23 and 30 August 2010. On 5 August 2010 the buyers nominated a vessel to take delivery, but on the same day the Russian government announced the passing of a resolution imposing a prohibition on the export of agricultural products including wheat from the territory of the Russian Federation between 15 August and 31 December 2010. On 9 August 2010 the sellers sent an email to the buyers notifying them of the export ban and saying that the contract was therefore cancelled under GAFTA 49, clause 13. This was a mistake. The notification was sent six days before the ban was due to come into effect and 14 days before the start of the contractual delivery period. It was not beyond the bounds of possibility that the ban might in the meantime be lifted, and the sellers therefore jumped the gun by their unqualified statement that the contract was cancelled. On 11 August 2010 the buyers responded by saying that the sellers email was a repudiation of the contract, which the buyers accepted; that the sellers were now in default; and that the buyers claim would follow shortly. On 12 August 2010 the sellers replied expressing puzzlement over the buyers position. They said that their earlier email had been sent in accordance with the prohibition clause, since under the ban it would not be possible to deliver the goods, and they stated that they would perform the contract if the ban were lifted or changed. They queried whether the buyers truly believed that it was sensible to incur the costs of chartering a vessel and presenting it for loading, but they stated that they formally offered to reinstate the contract on all its terms including the prohibition clause. The buyers declined the sellers offer. The export ban was not lifted but was later extended. It is not now in dispute that the buyers were entitled as a matter of law to treat the sellers email of 9 August 2010 as a wrongful repudiation of the contract. A fair minded outsider would say that the buyers suffered no loss from the sellers mistake in prematurely treating the export ban as making the performance of the contract impossible. As soon as the sellers received the buyers email on 11 August 2010 treating the contract as repudiated, the sellers immediately made it plain that the original terms remained available to the buyers (not that it would have made the slightest commercial difference to the buyers whether they accepted them since the ban remained in place, as both parties no doubt expected). By contrast, arbitration proceedings have resulted in an award to the buyers of US$3,062,500, which has been upheld by judgments of Hamblen J and the Court of Appeal (respectively [2013] EWHC 84 (Comm); [2013] 1 Lloyds Rep 621 and [2013] EWCA Civ 1628; [2014] 1 Lloyds Rep 404). It is necessary to explain how this has happened in order to understand the issues before this court. The contract price of the wheat was $160 per metric tonne. Before the first tier GAFTA arbitration panel the buyers relied on statements from two brokers putting the market value of wheat at the termination of the contract as $285 and $280 respectively. The buyers contended for a midway figure of $282.50. The sellers did not contest that evidence but they argued that the buyers had suffered no loss since the contract would have been cancelled in any event. The first tier panel accepted the sellers argument and rejected the buyers claim. The GAFTA Appeal Board allowed the buyers appeal. It is important to understand what was agreed and what was in issue. Paragraph 5.7 of the appeal award recorded the following points, which I will break up into sub paragraphs: i) It was common ground that an anticipatory repudiatory breach of a contract for the sale of goods on GAFTA terms is a default within the meaning of the default clause. ii) It was also common ground that the date of the default for the purposes of the default clause was the date on which the repudiation is accepted as bringing the contract to an end. iii) Here the relevant date was 11 August 2010. iv) The buyers market evidence was not challenged by the sellers. v) Neither side suggested any other figure as the correct measure of damages and it was a question whether the buyers recover the full sum claimed, ie $3,062,500, or whether they recover nothing. In its award the appeal panel said that the default clause is designed to achieve certainty and it observed that this object is reinforced by clause 20(e), which avoids inquiry as to the quantity that would have been shipped but for the default. The sellers argued that the first tier tribunal had been right to reject the buyers claim for the reasons given by it, that is to say, because the ban remained in place and the lost contract would therefore have been cancelled in due course in any event. The sellers relied in support of their argument on the decision of the majority of the House of Lords in The Golden Victory. The appeal panel held that the fact that the contract would subsequently have been cancelled was irrelevant, since the default clause required the loss to be assessed on the date of default, which was agreed to be 11 August 2010. The sellers applied for and were given permission to appeal to the High Court on the following points of law: i) Is the application of the GAFTA prohibition clause limited to a case where it can be seen after the event that performance of the contract has in fact been prevented by the prohibition in question? ii) Does the GAFTA default clause exclude common law principles for the assessment of damages for anticipatory breach and in particular (i) the principle of mitigation and/or (ii) the compensation principle identified in The Golden Victory? iii) Victory limited to instalment contracts? iv) Was the Board wrong in law to conclude that the buyers rejection of the sellers offer to reinstate the contract did not constitute a failure to mitigate on the ground that the sellers did not offer to reinstate the contract on different and more favourable terms than contained in the original contract? Is the overriding compensatory principle established by The Golden The first question related to liability. Hamblen J decided it in the buyers favour and it is no longer in issue. The other questions related to damages. The sellers argued that on common law principles the buyers had suffered no loss and were entitled to no more than nominal damages for two reasons. First, The Golden Victory established that whether loss had been suffered as a result of the early termination of a contract depends on what would have happened in the absence of that termination. Secondly, by offering to reinstate the contract on its original terms the sellers had offered to restore to the buyers precisely what any damages claim would assert had been lost. The buyers rejection of the offer was a failure properly to mitigate. The sellers further argued that the operation of those common law principles was not excluded by the default clause. First, there was a distinction to be drawn between proof of loss and the assessment of its amount. The default clause went only to the assessment of quantum. It did not displace the application of common law principles in deciding whether there was a loss to be assessed. Secondly, the words based on in clause 20(c) did not exclude the operation of common law principles of compensation or the doctrine of mitigation. Hamblen J rejected the sellers argument about the effect of the default clause. He did not accept that there was a clear dividing line between the causation and assessment of loss. The default clause prescribed how damages were to be assessed and the Appeal Board had correctly applied it. On the mitigation issue he added that the Board had found that the buyers had acted reasonably and their finding was a finding of fact which could not be appealed. He described it as an open question whether The Golden Victory approach was applicable to a one off contract of sale of goods, but it was not necessary for him to decide the third question on which permission to appeal had been given. The judgment of the Court of Appeal was given by Moore Bick LJ, with whom Floyd and Christopher Clarke LJJ agreed. He dealt with the issue of damages quite briefly. Counsel who appeared for the sellers (not Mr Simon Rainey, QC) raised the issue whether the opening words of the default clause In default of fulfilment of contract limited the operation of the clause to breaches by non delivery or non acceptance, rather than a default resulting from an accepted repudiation of the contract. He recognised that this argument had not been advanced before the Appeal Board or the judge, but he reserved his position on it. His main argument was that the default rule was to be read as being subject to the compensatory principle applied in The Golden Victory and that, since the export ban had remained in force throughout the contractual shipment period, the sellers would have been unable to perform the contract in any event and the buyers had suffered no loss. He also repeated the argument advanced before Hamblen J about the distinction between the proof of loss and measurement of loss. Moore Bick LJ recorded that the sellers did not challenge the judges decision on mitigation. On the points about damages which the sellers argued, the Court of Appeal upheld the reasoning and conclusions of Hamblen J. Like him, it expressed no view about the effect of the decision in The Golden Victory. The parties have agreed that the issues on this appeal can be summarised as follows: Issue 1: On the assumption, in the sellers favour, that The Golden Victory applies to the present case and that the buyers on the facts of the present case would be entitled only to recover nominal damages for the sellers default absent the GAFTA default clause, does that clause entitle the buyers to recover damages in the sum awarded by the GAFTA Appeal Board? Issue 2: If not, is the assumption valid (it being the buyers contention that it is not valid, but the sellers contention that it is valid)? I will take issue 1 first. The question turns on the meaning to be given to the words of clause 20(c) The damages shall be based on, but not limited to, the difference between . According to the buyers argument, clause 20 is a complete code; and these words set a minimum level of damages equal to the difference between a) the contract price and b) the default price or estimated value of the goods, in addition to which the claimant may recover other expenses provided that they are not too remote and do not include loss on a subcontract save in exceptional circumstances. According to the sellers argument, the words based on are not to be read as fixed at or consist of but permit a more flexible approach. On this construction, the provision does not set a floor below which damages may not fall; it prescribes one or other method of valuation of the goods as a baseline for the calculation of damages but no more. It therefore does not preclude a tribunal from adopting the approach which was taken by the first tier panel. Before considering the particular problem in the present case, it is instructive to consider a situation in which at the time of the breach there is no available market for the purchase or sale of goods answering precisely to the description of the contract goods. Mr Philip Edey QC on behalf of the buyers submitted that under clause 20(a) the party which is not in breach may decide to sell or purchase against the defaulter goods which are not identical to the contract goods. Mr Rainey on behalf of the sellers submitted the opposite. One answer would be that the innocent party, if he is a buyer, is entitled to purchase non identical goods and hold the seller liable for damages equal to the difference in price, without any adjustment even if the replacement goods are of a higher quality than the contract goods. Another answer would be that under clause 20(a) the replacement goods have to be precisely the same. A third answer would be that the price of goods bought as a replacement, even if not identical, provides the basis or foundation for calculating damages, but that adjustment should be made for the superior quality of the replacement goods in order to avoid over compensation and to achieve a just result. The first answer is not one which the parties could reasonably have intended. The second and third answers would lead to the same practical result. Either the clause was premised on there being an available market for identical goods, in the absence of which ordinary common law principles would apply for the assessment of damages, or else the clause accommodates the situation by the words based on affording the necessary flexibility to make a fair adjustment. I prefer the former interpretation, because it seems most likely that the purpose of this part of the clause is to provide a surrogate for the valuation of the contract goods, which presupposes that they are identical, but the point is academic. In the present case the hypothetical contract on which the buyers claim for damages was based was on identical terms, save as to price, but the contract and its notional substitute were extremely unlikely to be capable of fulfilment for reasons beyond the control of the parties. The contract stood to be automatically cancelled unless the Russian government ban was raised. The clause does not in terms address such a situation. As in the previous example there are three possible answers. One is that however improbable it may have been that the ban would be lifted, the language of the clause precludes that factor from being taken into consideration. The second is that the clause is concerned only with placing a mathematical value on the goods, assuming the contract to be capable of performance, and that it is not intended to oust the application of ordinary common law principles where that assumption is inappropriate. The third is that the language of the clause has sufficient flexibility to make a fair adjustment in the assessment of what the buyers have lost. Again, the second and third answers would lead to the same outcome. In disagreement with the appeal panel, the judge and the Court of Appeal, I do not consider that the language of the clause is sufficiently clear to have the preclusive effect for which the buyers contend. In my view the second, or (if I am wrong) the third, is a more reasonable interpretation. The first construction would require the tribunal to adopt a blinkered approach to the facts, which would place the buyers financially in a far better position than if the breach had not occurred. This is most unlikely to have been the drafters intention. It is far more likely that the drafter had in mind the usual situation of a non delivery or non acceptance of goods for which there was an available market. I am reinforced in this view by the judgment of Clarke J in Bem Dis A Turk S/A TR v International Agri Trade Co Ltd (The Selda) [1998] 1 Lloyds Rep 416, where he held that the words shall be based on were not to be construed as synonymous with shall consist exclusively of or shall be limited to. (His judgment was approved by the Court of Appeal at [1999] 1 Lloyds Rep 729). I also reject the argument that the clause precludes the operation of the common law principle regarding mitigation of loss, but, perhaps unfortunately, the I would therefore answer issue 1 in the sellers favour and turn to issue 2 application of the principle to the facts of this case has not been the subject of argument before this court. concerning The Golden Victory. The Golden Victory was a case of wrongful repudiation of a time charter by the charterers. The charter contained a war clause entitling either party to cancel the charter if war or hostilities broke out between any of a number of countries including the USA, UK and Iraq. At the time of the repudiation in December 2001 there was a minimum period of nearly four years to run under the contract. A reasonably well informed person would have regarded the outbreak of hostilities between the USA or UK and Iraq as a possibility but no higher. In fact, hostilities began in March 2003. In October 2004 the arbitrator delivered an award declaring that no damages were recoverable in respect of the period from March 2003 onwards. His decision was upheld on appeal by the judge, the Court of Appeal and a majority of the House of Lords. Their decisions are reported at [2005] EWHC 161 (Comm), [2005] 1 Lloyds Rep 443; [2005] EWCA 1190, [2006] 1 WLR 533; and [2007] UKHL 12, [2007] 2 AC 353. In a succinct judgment Langley J held that the arbitrators award accorded with the basic compensatory rule for the assessment of damages. The charterparty which the owners lost was subject to the uncertainty of the war clause. If the owners recovered damages for the period after the outbreak of hostilities they would be recovering more than the charterparty was worth to them. That essential reasoning was affirmed by the Court of Appeal and a majority of the House of Lords. In giving the judgment of the Court of Appeal, Lord Mance (with whom Auld and Tuckey LJJ agreed) said about the available market rule at para 27: The purpose of that rule is to fix a rate which then falls to be compared with the original charter rate. In this way, the owners are put back notionally in the same position as they would have been under the original charter. Assuming that the owners grant a substitute charter, they can operate the vessel subject to that charter or dispose of her with it, as they like. But the aim in assessing damages on such an assumption is not to eliminate from consideration any of the original charter terms, or any effect which they might have had. Indeed, the market rate for a substitute charter must be ascertained by postulating a charterparty which corresponds as closely as possible with the actual charterparty: cf Arta Shipping Co Ltd v Thai Europe Tapioca Service Ltd (The Johnny) [1977] 2 Lloyds Rep 1, 4, per Sir David Cairns. In the House of Lords the majority comprised Lords Scott, Carswell and Brown. Lords Bingham and Walker dissented. Lord Scott, at para 36, described the lodestar as being that the damages should represent the value of the contractual benefits of which the claimant had been deprived by the breach of contract, no less but also no more. It had been accepted in argument that the owners charterparty rights would not in practice have been marketable for a capital sum. The contractual benefit to the owners, of which they were deprived by the repudiatory breach, was the right to receive the hire rate during the currency of the charterparty, but that right was subject to the war clause. The owners were seeking compensation exceeding the value of the benefits of which they were deprived. Lord Scott contrasted the case with that of a contract for a one off sale. He said, at para 34, that the assessment at date of breach rule is particularly appropriate in such a case where there is an available market, by reference to which the amount of the loss can be fixed, but he noted that even here some period must normally be allowed for arrangements for a substitute sale to be made (Kaines (UK) Ltd v Osterreichische Warrenhandelgesellschaft [1993] 2 Lloyds Rep 1). But, he said at paras 35 and 36, in a case of a contract for the supply of goods over an extended period, or any anticipatory breach the acceptance of which terminated an executory contract, the application of the breach date rule may not be apt because [t]he contractual benefit for the loss of which the victim of the breach can seek compensation cannot escape the uncertainties of the future. Lord Brown, agreeing with Lord Scott, emphasised that any hypothetical substitute contract would have been subject to the same conditions as the repudiated contract. Although the arbitrator had said that if the owners had sold the vessel with the benefit of a four year charter the value of that charter would have been taken into account with war being regarded as no more than a possibility, the measure of loss did not fall to be crystallised on the basis of a hypothetical sale of the vessel herself. Lord Bingham (with whom Lord Walker agreed) took as his starting point that an injured party such as the owners may not, generally speaking, recover damages against a repudiator such as the charterers for loss which he could reasonably have avoided by taking reasonable commercial steps to mitigate his loss. Thus, where there was an available market for the chartering of vessels, the injured partys loss would be calculated on the assumption that he had, within a reasonable time of accepting the repudiation, taken reasonable commercial steps to obtain alternative employment for the vessel for the best consideration reasonably available, and damages would ordinarily be assessed at that date. In support of this approach he referred to the decision of Robert Goff J in The Elena DAmico [1980] 1 Lloyds Rep 75, which he described as authoritative. Lord Bingham accepted that the courts had been willing to depart from the general rule about the date of assessment if the court judged it necessary or just to do so in order to give effect to the compensatory principle. He accepted too that if at the date of acceptance of a repudiatory breach the court judged that the contract was bound to be lawfully cancelled in the near future it would be proper to award only nominal damages. This would not involve taking into account later events, but merely recognising that the value of the contract in such circumstances was nil. In that respect he regarded the Court of Appeals decision in Maredelanto Cia Naviera SA v Bergbau Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164 as entirely orthodox. He also accepted that the value of a contract in the market may be reduced if terminable on an event which the market judges to be likely but not certain. Lord Bingham attached critical significance to what he said was the clear and crucial finding of the arbitrator that what the owners lost was a charterparty with slightly less than four years to run and that on the arbitrators finding it was marketable on that basis (para 22). While acknowledging that the value of a contract in the market may be reduced if terminable on an event which the market judges to be likely, he said but that was not what the arbitrator found to be the fact in this case. I have difficulty with this part of Lord Binghams reasoning. According to the law reporters note, counsel for the owners had submitted that they had lost a charterparty with slightly less than four years to run and that had they sold the vessel on that day the value which they would have received would have been calculated on that basis. But that value would have been undiminished if the owners had re chartered the vessel on identical terms, and there was no suggestion that the owners could not have done so. Indeed, Lord Mance noted in his judgment in the Court of Appeal, at para 12, that counsel for the owners submitted that it had to be assumed for present purposes that the owners could, within a relatively short time, have arranged a substitute charter for the balance of the charter period. So the charterers repudiation would not have brought about a loss in the marketable value of the vessel with a substitute charter. Nor would the repudiation have affected the potential duration of the charterparty. In neither respect, therefore, were the owners financially worse off by reason of the charterers repudiation. Because the issue raised by the arbitrators award was confined to whether the assessment of damages should take account of the period after the outbreak of hostilities in Iraq, the House of Lords was not directly concerned with the supplementary question how damages in respect of that period were to be assessed. Lord Bingham did not address that question beyond observing that it would of course be very difficult to calculate loss of profit prospectively over a four year period, but an injured party could recover damages for loss of a chance of obtaining a benefit and that the difficulty of accurate calculation was not a bar to recovery. In his review of the authorities Lord Bingham referred with approval to a decision of mine in Dampskibsselskabet Norden A/S v Andre & Cie (Norden v Andre) [2003] EWHC 84 (Comm), [2003] 1 Lloyds Rep 287, as an example of the application of the general principle. In that case a forward freight agreement (FFA) for a period of 12 months was terminated by reason of the defendants breach in the third month. The claimant sought damages equal to the amount to which it would have been entitled under the contract if it had run its full course, amounting to over US$750,000. The evidence established that there was an available market in which the claimant could have obtained a substitute contract or contracts at average price amounting to a little over $185,000. I held that the amount recoverable was the lesser figure, following the analysis of the relevant legal principles in the judgment of Robert Goff J in The Elena DAmico. The fundamental principle for the assessment of damages in cases of breach of contract (reiterated in The Elena DAmico) is the principle of restitutio in integrum within the limits expressed in Hadley v Baxendale (1854) 9 Exch 341. In the present case the sellers offered the buyers total restitution in integrum immediately upon the termination of the contract. There was no finding by the Appeal Board that the offer was not genuine, and on the fundamental compensatory principle it provides a full answer to the claim. Secondary to the fundamental restitutionary principle, in various types of case there is a normal measure of recovery which the courts have developed to give effect to that principle. The Elena DAmico, like The Golden Victory, involved the premature wrongful repudiation of a charterparty. The judge held that if there was at the time of termination an available market for chartering in a substitute vessel, damages would normally be assessed on the basis of the difference between the contract rate for the balance of the contract period and the market rate for a substitute charter. He arrived at this result by analogy with cases of sale of goods or shares in which either the seller failed to deliver or the buyer failed to accept delivery: Jamal v Moolla Dawood Sons and Co [1916] 1 AC 175 and Campbell Mostyn (Provisions) Ltd v Barnett Trading Co [1954] 1 Lloyds Rep 65. The broad principle deducible from The Elena DAmico and the cases there considered is that where a contract is discharged by reason of one partys breach, and that partys unperformed obligation is of a kind for which there exists an available market in which the innocent party could obtain a substitute contract, the innocent partys loss will ordinarily be measured by the extent to which his financial position would be worse off under the substitute contract than under the original contract. The rationale is that in such a situation that measure represents the loss which may fairly and reasonably be considered as arising naturally, ie according to the ordinary course of things, from the breach of contract (Hadley v Baxendale). It is fair and reasonable because it reflects the wrong for which the guilty party has been responsible and the resulting financial disadvantage to the innocent party at the date of the breach. The guilty party has been responsible for depriving the innocent party of the benefit of performance under the original contract (and is simultaneously released from his own unperformed obligations). The availability of a substitute market enables a market valuation to be made of what the innocent party has lost, and a line thereby to be drawn under the transaction. Whether the innocent party thereafter in fact enters into a substitute contract is a separate matter. He has, in effect, a second choice whether to enter the market similar to the choice which first existed at the time of the original contract, but at the new rate prevailing (the difference being the basis of the normal measure of damages). The option to re enter or stay out of the market arises from the breach, but it does not follow that there is a causal connection between the breach and his decision whether to re enter or to stay out of the market, so as to make the guilty party responsible for that decision and its consequences. The guilty party is not liable to the innocent party for the adverse effect of market changes after the innocent party has had a free choice whether to re enter the market, nor is the innocent party required to give credit to the guilty party for any subsequent market movement in favour of the innocent party. The speculation which way the market will go is the speculation of the claimant. It is well recognised that the so called duty to mitigate is not a duty in the sense that the innocent party owes an obligation to the guilty party to do so (Darbishire v Warran [1963] 1 WLR 1067, 1075, per Pearson LJ). Rather, it is an aspect of the principle of causation that the contract breaker will not be held to have caused loss which the claimant could reasonably have avoided. There are three important things to note about measurement of damages by reference to an available market. First it presupposes the existence of an available market in which to obtain a substitute contract. Secondly, it presupposes that the substitute contract is a true substitute. The claimant is not entitled to charge the defendant with the cost of obtaining superior benefits to those which the defendant contracted to provide. Thirdly (and in the present case most importantly), the purpose of the exercise is to measure the extent to which the claimant is (or would be) financially worse off under the substitute contract than under the original contract. Depending on the nature of the market, cases in which this method is appropriate may include an anticipatory repudiatory breach of a one off contract of sale, a contract of sale in instalments or a period contract. A single unconditional contract of purchase or sale of a commodity in the futures market is an example of the first. The accepted repudiation by the buyer or seller amounts to the premature closing out of the transaction. The innocent party can then use the market to put himself back in the same position at a price which will reflect the markets assessment of the value of the contract. The same may apply equally in the case of a periodic futures agreement (Norden v Andre). However, in this case the lost contract and its hypothetical substitute were subject to automatic cancellation unless the Russian government ban was lifted, and the extent to which the buyers were worse off by loss of the original contract could not be measured by a simple comparison of the contract price with the price of a hypothetical substitute contract. The fundamental compensatory principle makes it axiomatic that any method of assessment of damages must reflect the nature of the bargain which the innocent party has lost as a result of the repudiation. In this case the bargain was subject to a high risk of cancellation. Leaving aside for the purposes of this discussion the sellers offer to reinstate the contract, what the buyers lost was the chance of obtaining a benefit in the event of the export ban being lifted before the delivery period, only in which case would the contract have been capable of lawful performance. In The Golden Victory Lord Bingham observed, uncontroversially, that although it may be difficult to calculate a loss prospectively, an injured party can recover damages for the loss of a chance of obtaining a benefit. He also acknowledged that the market value of a contract may be reduced if terminable on an event which the market judges to be likely but not certain. But how is the chance to be valued if there is no market risk index to which the court can refer? (In this case the Appeal Board merely found that there was a possibility that the ban might be lifted or relaxed in some way.) The assessment would have to be made by the arbitrator or judge doing the best he can. Should the assessment be made on the facts as known at the date of the assessment or should the tribunal apply a retrospective assessment of how the chances would have appeared at the date of the repudiation? I see no virtue in such circumstances in the court attempting some form of retrospective assessment of prospective risk when the answer is known. To do so would run counter to the fundamental compensatory principle. In The Golden Victory Lord Bingham acknowledged that the saying you need not gaze into the crystal ball when you can read the book is in many contexts a sound approach in law as in life. He did not consider that approach to be appropriate in that particular context because of the available market rule. I have given my reasons for not regarding that rule as apt for the circumstances of this case, by contrast with cases such as The Elena DAmico and Norton v Andre. Mr Edey submitted that the present case is distinguishable from The Golden Victory because it involved a single sale rather than a period contract, but I can see no logical foundation for the distinction. It is founded on the passage in Lord Scotts judgment where he distinguished the charterparty in that case with a simple contract for a one off sale, but I take him to have been referring to the simple case of repudiation by non delivery or non acceptance. It makes no sense to differentiate between a contract for a single sale or for more than one sale. The relevant criterion is whether the contract is reasonably replaceable by a substitute contract at a readily ascertainable market price, in which case it will ordinarily be right to measure the innocent partys loss by reference to the substitute contract. Alternatively, Mr Edey submitted that the majority of the House of Lords were wrong in The Golden Victory. He suggested that it was inconsistent with the decisions of the House of Lords in Gill and Duffus SA v Berger and Co Inc (No 2) [1984] AC 382 and Fercometal SARL v Mediterranean Shipping Co SA (The Simona) [1989] AC 788. Neither of those cases was directly concerned with the assessment of damages for the anticipatory breach of a contract which was subject to a condition likely to cause its cancellation. It was common ground in The Golden Victory that the risk of cancellation was potentially relevant to the assessment of damages. The difference was whether (as the minority held) it was irrelevant on the facts because it did not affect the market value of the contract at the date of breach, or (as the majority held) proper application of the compensatory principle made it right to take into account the facts known at the date of assessment. For the reasons given I support the decision of Langley J, the Court of Appeal and the majority of the House of Lords. Accordingly, I agree with Lord Sumption as to the disposal of this appeal. |
These three appeals raise a number of issues concerning the duty of local housing authorities towards homeless people who claim to be vulnerable, and therefore to have a priority need for the provision of housing accommodation under Part VII of the Housing Act 1996. Those issues turn on the interpretation of the 1996 Act, but some of them also involve consideration of the Equality Act 2010. Part VII of the Housing Act 1996 As its title indicates, Part VII of the 1996 Act is concerned with homelessness, and it imposes duties on local housing authorities to provide assistance and advice, or suitable accommodation, to those who are homeless or threatened with homelessness. By virtue of subsections (1) (3) of section 175, a person is homeless if there is no accommodation (i) which is available for his occupation, (ii) which he is entitled to occupy by virtue of an interest, by virtue of a court order, under a licence, a statute or rule of law, (iii) to which he can secure entry or (in the case of mobile accommodation) which he can place and reside in, and (iv) which it would be reasonable for him to continue to occupy. Section 176 explains that accommodation is only to be treated as available for a person if it is also available for any other person who normally resides, or who might reasonably be expected to reside with him. Section 177 contains examples of circumstances in which it would not be reasonable for a person to occupy accommodation which would otherwise be available to him. By virtue of section 175(4) a person is threatened with homelessness if it is likely that he will become homeless within 28 days. If a person (referred to as an applicant) applies to a local housing authority (an authority) for accommodation or assistance in obtaining accommodation, and the authority have reason to believe that he is or may be homeless or threatened with homelessness, then, subject to certain exceptions which are irrelevant for present purposes, section 183 provides that the subsequent sections of Part VII apply. If the authority have reason to believe that an applicant may be homeless or Priority need is of central relevance to these appeals, and section 189(1) threatened with homelessness, section 184 requires them to make inquiries whether an applicant is eligible for assistance and if so what duties are owed to him (and to inform the applicant of their decision). Sections 188, 190, 192 and 193 impose duties on authorities depending on the status of the applicant. There are three statuses of importance when deciding on the extent of an authoritys duties, namely eligibility for assistance, priority need, and intentional homelessness. Eligibility for assistance and intentional homelessness are respectively defined in sections 183(2) and 191, and neither is in point for the purposes of the instant appeals. identifies those who have priority need for accommodation as being: (a) a pregnant woman or a person with whom she resides or might reasonably be expected to reside; (b) a person with whom dependent children reside or might reasonably be expected to reside; (c) a person who is vulnerable as a result of old age, mental illness or handicap or physical disability or other special reason, or with whom such a person resides or might reasonably be expected to reside; (d) a person who is homeless or threatened with homelessness as a result of an emergency such as flood, fire or other disaster. Section 189(2) enables the Secretary of State to specify further descriptions of priority need and to amend or repeal any part of subsection (1). By the Homelessness (Priority Need for Accommodation) (England) Order 2002 (SI 2002/2051), the Secretary of State added four new priority need categories. They are (i) children between 16 and 18, other than certain children for whom local authority childrens services have responsibility, (ii) those under 21 who were between 16 and 18, in care or fostered (other than certain students), (iii) those over 21 who are vulnerable as a result of having been in care (other than certain students), or having served in the armed forces or having been in custody, and (iv) those who are vulnerable as a result of leaving accommodation on account of violence or threats of violence. Under section 188, if the authority have reason to believe that an applicant may be homeless and have a priority need, they must secure that accommodation is available for his occupation pending a decision as to the duty owed to him. Section 190 is concerned with cases where an authority are satisfied that an applicant is homeless but became homeless intentionally. If such an applicant also has priority need, the authority must provide him with (a) accommodation for a period which is sufficient to give him a reasonable opportunity to find alternative accommodation, and (b) advice and assistance in securing such accommodation section 190(2). Section 190(3) provides that, if such an applicant does not have priority need, he shall only be provided with such advice and assistance. Sections 192 and 193 are concerned with cases where an authority are satisfied that an applicant is homeless, but did not become homeless intentionally. Section 192 applies where the authority are satisfied that such an applicant does not have priority need. In such a case, the authority must provide the applicant with advice and assistance in attempting to secure accommodation, and they may (but not must) secure that accommodation is available to him section 192(2) and (3). Section 193 applies where the authority are satisfied that such an applicant has priority need. In such a case, subject to exceptions which are irrelevant for present purposes, the authority must secure that accommodation is available for the applicant. Sections 195 and 196 are concerned with cases where the authority are satisfied that an applicant is threatened with homelessness, and for present purposes it suffices to say that an authoritys obligations in such a case reflect the obligations in sections 190, 192 and 193 in relation to the actual homeless. Section 202 entitles an applicant to seek an internal review of an authoritys decision, inter alia, under sections 190 to 193 and 195, or as to the suitability of any accommodation offered to him. The procedure under any such review is governed by section 203. Section 204 permits any applicant who is dissatisfied with the outcome of any such review to appeal to the County Court on a point of law. An appeal lies from the decision of the County Court to the Court of Appeal, and from there to the Supreme Court, but in each case permission to appeal is needed in the normal way. The Equality Act 2010 Section 4 of the 2010 Act lists the protected characteristics, and they include disability, which is itself defined in section 6 as including mental or physical impairment, whose nature is further explained in Schedule 1. Section 13 deals with direct discrimination generally, and it involves A treat[ing] B less favourably than A treats or would treat others because of a protected characteristic. By virtue of section 15(1), discrimination against a disabled person also occurs if (a) A treats B unfavourably because of something arising in consequence of Bs disability, and (b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim. (This definition effects a statutory reversal of the majority House of Lords decision in Lewisham LBC v Malcolm [2008] UKHL 43, [2008] 1 AC 1399.) Section 19 deals with indirect discrimination. Section 29(1) and (2) provides that a person concerned with providing a service to the public must not discriminate against a person by not providing the service or as to the terms on which the service is provided. Section 29(6) specifically outlaws discrimination by [a] person in the exercise of a public function which is not the provision of a service. Section 29(7) imposes a duty to make reasonable adjustments on a person who provides a service to the public or who exercises another public function. Section 20(1) and (2) states that where a person, A, has to make adjustments, the obligation involves satisfying three requirements, of which only one is potentially relevant in the present context, namely that identified in section 20(3) which provides: The first requirement is a requirement, where a provision, criterion or practice of As puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage. Section 149 contains the public sector equality duty (the equality duty) and it provides: A public authority must, in the exercise of its functions, have due regard to the need to (a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act; (b) advance equality of opportunity between persons who share a relevant protected characteristic [which by subsection (7) includes disability] and persons who do not share it; (c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it. (3) Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to (a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic; (b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it; (c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low. (4) The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons disabilities. Pursuant to various provisions of the Act, the Secretary of State has power to make regulations as to the determination of disability, and that power has been exercised through the Equality Act 2010 (Disability) Regulations 2010 (2010/2128). Regulation 3 provides that, unless the addiction was the result of medically prescribed drugs or other medical treatment, addiction to alcohol, nicotine or any other substance is to be treated as not amounting to an impairment for the purposes of the [2010] Act. Regulation 4 provides that certain other conditions, including a tendency to steal should not be treated as amounting to an impairment under the 2010 Act, but that this should not prevent them from being taken into account where it aggravates the effect of any other condition. The facts of the three appeals in summary Johnson v Solihull Metropolitan Borough Council. Craig Johnson was born in 1975 and has been a persistent offender since 1991. He has been convicted of 78 offences, mostly stealing, and has been in and out of prison. Shortly following his most recent release in April 2010, he made an unsuccessful application to Solihull Metropolitan Borough Council (Solihull) for accommodation under Part VII, on the ground that he had priority need under section 189(1)(c). He made a further application in October 2011. He claimed to be vulnerable because (i) he had become addicted to heroin while in prison, (ii) he had lower back trouble and cant climb up stairs, (iii) he suffered from sleeping problems, depression and paranoia, and (iv) he suffered from asthma. Solihull considered his application and rejected his contention that he was vulnerable and therefore in priority need. He exercised his right to seek a review. On 8 May 2012, Gemma Thompson of Solihulls Housing Strategy, Policy and Spatial Planning Services Department notified him of the outcome of the review. She rejected his claim to be vulnerable and therefore in priority need. In the review letter, Ms Thompson said: i) She should ask herself whether [Mr Johnson], when homeless, would be less able to fend for [himself] than an ordinary homeless person so that injury or detriment to [him] would have resulted when a less vulnerable person would be able to cope without harmful effect, and explained that her conclusion was that he would not be less able to fend for [himself] than an ordinary homeless person for reasons she proceeded to give. ii) She was not satisfied that [Mr Johnson is] suffering from depression or had suffered from depression. iii) She also highlight[ed] that research from Homeless Link has shown that mental health problems and homelessness are closely linked both as a cause and as a result of homelessness, and after quoting some figures continued [t]his clearly shows that the fact that [Mr Johnson is] suffering from depression does not necessarily mean that [he is] vulnerable. Given that [he is] not receiving any treatment for depression, [she was] not satisfied that [he] suffer[ed] from a particular form of depression that would make [him] vulnerable. Despite suffering from knee and back pain it has no significant impact upon [Mr Johnson] and [he] would be able to continue with treatment provided by [his] GP and/or physiotherapist. iv) v) So far as drug use is concerned, [a]lthough [he is] taking heroin at present [he does] not appear to have suffered any irreversible secondary medical problems. The evidence shows that [Mr Johnson has] the ability to remain abstinent from drugs [and] whilst it may be harder for [Mr Johnson] to remain off drugs while street homeless, nevertheless [he] can maintain the support that [he] currently ha[s] and would reasonably be able to remain off drugs, and [e]ven if [he does] slip back into using drugs, this would not necessarily be anything unusual in relation to homeless people, as shown by a survey. vi) She acknowledged that Mr Johnson had been in and out of prison since the age of 16, but she was not satisfied either that he had been instititutionalised, having been out of prison for two years and managed [his] affairs, or that he would suffer injury or detriment if [he was] street homeless. vii) Finally, she consider[ed] whether [his] circumstances taken as a whole [made him] vulnerable, and stated that his ability to fend for [himself] is not significantly compromised, and that she was satisfied that there is nothing that differentiates you from other homeless people. Mr Johnson appealed to the Birmingham County Court and His Honour Judge Oliver Jones QC dismissed his appeal, on the ground that the review did not include any significant misdirection of law and resulted in a conclusion which a reasonable reviewer could have arrived at. Mr Johnsons appeal to the Court of Appeal was also dismissed effectively on the same ground [2013] EWCA Civ 752, [2013] HLR 524. In the course of her ex tempore judgment (with which Jackson and McCombe LJJ agreed), Arden LJ said at para 6 that, when determining whether a person is vulnerable within the meaning of section 189(1)(c), a local housing authority must pay close attention to the particular circumstances of the individual, but also was bound to discharge its obligations by taking into account its own burden of homeless persons and finite resources. Hotak v Southwark London Borough Council. Sifatullah Hotak was born in Afghanistan 25 years ago and was granted leave to remain in the UK as a refugee in 2011. He has significant learning difficulties, with a measured IQ on one test of 47, a history of self harming, and symptoms of depression and post traumatic stress disorder. His brother, Ezatullah, entered the UK in 2006, and has recently been granted leave to remain, albeit for a limited period. Sifatullah Hotak is reliant on his brother to prompt him to carry out such routine activities as washing, changing his clothes, and undertaking personal care routines, and to organise health appointments, meals, the making of benefit claims, and the finding of accommodation. The two brothers lived in a room in a flat in Peckham, Southwark, from July 2010, until they had to vacate in March 2011 because the flat was overcrowded. Ezatullah Hotak was ineligible under Part VII owing to his immigration status, but he arranged for his brother, who was not ineligible, to apply to Southwark London Borough Council (Southwark) for accommodation for both of them on the ground that Sifatullah Hotak was in priority need, by virtue of section 189(1)(c), and his brother was a person with whom he resided and indeed could reasonably be expected to reside. Southwark provided the brothers with temporary accommodation under section 188, but in due course rejected the application for accommodation under section 193 on the ground that, while Sifatullah Hotak was homeless, eligible for assistance, and had not become homeless intentionally, he was not in priority need because, if homeless, he would be provided with the necessary support by his brother. Southwark nonetheless rightly accepted that they were obliged to provide advice and assistance to Sifatullah Hotak under section 192. Sifatullah Hotak, through his brother, sought a review of that decision, and the review, carried out by Kojo Sarpong, Southwarks Review Team Leader, confirmed the decision, and declined to exercise the discretionary power to provide accommodation under section 192(3). The review letter is dated 30 June 2011, and it runs to almost six fairly closely typed pages. It includes the following statements: i) [T]he Council must ask itself whether the applicant, when street homeless, is less able to fend for himself/herself so that injury or detriment will result where a less vulnerable street homeless person would be able to cope without harmful effect. ii) [W]e do not believe [that under] section 189 an authority is required to make provisions for households who are comprised of adults in reasonable physical health. v) iv) iii) [I]t is reasonable to expect a fit and healthy adult to attempt to house and support his brother whilst they are homeless together. In addition [Ezatullah Hotak] has confirmed that he currently looks after [his brother] and he would continue to do so if they were street homeless together. We acknowledge that [Sifatullah Hotak] has learning difficulties and disabilities and it would be reasonable to assume that he may find difficulty in finding and maintaining accommodation. If on his own and street homeless [he] may also be at risk . However, we are satisfied that his brother is capable of providing him with continued housing and support if they were street homeless together. Even though we acknowledge that he has learning disabilities and difficulties, we are satisfied that Ezatullah [Hotak] would assist him if street homeless and his circumstances do not confer priority need Sifatullah Hotak, again acting through his brother, appealed against this review to the Lambeth County Court. His Honour Judge Blunsdon dismissed his appeal, and his decision was upheld by the Court of Appeal for reasons given by Pitchford LJ, with whom Moore Bick and Richards LJJ agreed [2013] EWCA Civ 515, [2013] PTSR 1338. The sole point in the Court of Appeal, as in this Court, was whether, as a matter of law, the reviewing officer was entitled to take into account the fact that Sifatullah Hotak could be expected to receive help and support from his brother if he was homeless. If, as the Court of Appeal held, that fact could be taken into account, then it is conceded on Sifatullah Hotaks behalf that this appeal must fail whereas, if it could not be taken into account, Southwark concedes that Sifatullah Hotak would be vulnerable and his appeal must succeed. Kanu v Southwark London Borough Council. Patrick Kanu is currently aged 48, and has physical problems, including back pain, hepatitis B, hypertension and haemorrhoids, as well as psychotic symptoms and suicidal ideation. His wife assists him in taking the necessary drugs, but stress raises his hypertension to what his doctors characterise as quite dangerous levels, which requires an increase in the dose of the relevant drugs. An order for possession had been made against Mr Kanu in respect of his home, a flat in Devonshire House, London SE1, in January 2011. Having made an initial application (which was rejected by Southwark on grounds which were subsequently found to be bad), Mr Kanu applied in early November 2011 to Southwark for accommodation on the ground that he had not become homeless intentionally and in priority need under section 189(1)(c). Although their Medical Assessment Service advised that he should be treated as having priority need because he was at risk of self harming and of harming others, Southwark decided that while Mr Kanu had not become homeless intentionally and was eligible for advice and assistance, he was not in priority need. Mr Kanu sought a review of this decision, and a review dated 17 April 2012 confirmed the decision. However this review was quashed by an order made by HHJ Blunsdon in the Lambeth County Court. This led to a further review, contained in a letter dated 21 March 2013 which also confirmed the decision, and went on to consider and reject the possibility of voluntarily providing Mr Kanu with accommodation under section 192(3). The review, which was carried out by Bernadette Emmanuel, a Reviews Officer of Southwark, runs to no less than 14 fairly closely typed pages. The letter includes the following: i) While accepting that Mr Kanu may be vulnerable, Ms Emmanuel noted that [he] has a wife and adult son included on his homelessness application, who form members of his household and it has been confirmed during interviews with [Mr Kanu] and his wife that he relies upon both his wife and son to provide him with assistance needed for him to perform the tasks of daily living that he is unable to perform for himself. ii) Ms Emmanuel was not satisfied that if [Mr Kanus] household was faced with street homelessness they would be at risk of injury or detriment greater than another ordinary street homeless person due to Mr Kanus wife and son's ability to fend for the whole household, including [Mr Kanu]. iii) She did not believe that an authority is required to make provisions for households who are comprised of or include adults in reasonable physical health. iv) Mr Kanu has been able to continue any treatment even when he was threatened with homelessness, when he became homeless and during periods when he stated that his illness was severe enough to require him to visit hospital on an emergency basis. v) Ms Emmanuel referred to the medical evidence that Mr Kanu had thoughts of self harming but had not done so, and said that she was not satisfied that [he] would be more at risk of committing suicide than another ordinary homeless street person, and she also considered that Mrs Kanu has already demonstrated an ability to prevent him from self harming. vi) Mr Kanu had not encountered any significant difficulties maintaining his present accommodation and that he has been actively seeking employment, and that he would be able to fend for himself if street homeless. vii) As to the haemorrhoids, Ms Emmanuel said that he was not being treated for them and they would not lead to problems. viii) In respect of the hepatitis B and high blood pressure, the doctors had prescribed medication and medical treatments and the information available shows that [Mr Kanu] with assistance from his family has been compliant with his treatments and [Ms Emmanuel was] satisfied that he could continue to do so if street homeless. ix) The letter also stated that consideration had been given to the Disability and Equality Act 2010 and that the public sector equality duty informs the decision making process; however it does not override it. Mr Kanu appealed to the Lambeth County Court, where Mr Recorder Matthews allowed his appeal. This was mainly on the ground that the review had wrongly proceeded on the basis that the view that, if homeless, Mr Kanu would be looked after by his family was not on its own sufficient to prevent him from being vulnerable: Ms Emmanuel should have gone on to ask herself whether he would nonetheless be vulnerable, and she failed to do so. The Recorder also considered there was no evidence that Mr Kanu would get adequate access to treatment when street homeless, as well as thinking that the review had not taken into account the evidence that Mr Kanus condition had worsened in certain respects. He also considered that the references to the equality duty were so perfunctory that they showed that no real regard had been had to it. Southwark appealed to the Court of Appeal and their appeal was successful [2014] EWCA Civ 1085, [2014] PTSR 1197. In his judgment (with which Aikens and Kitchin LJJ agreed), Underhill LJ considered each of the grounds upon which the Recorder had allowed Mr Kanus appeal and held that they were ill founded. Essentially, he considered that the main ground amounted to a criticism that Ms Emmanuel should have checked with the medical experts before concluding that Mr Kanu would, when homeless, not be vulnerable if looked after by his wife. However, said Underhill LJ, there was ample evidence in relation to his physical health and a good deal of evidence as to his mental health to enable Ms Emmanuel to reach a conclusion on an issue which doctors were [not] peculiarly qualified to answer (para 42). He was similarly unimpressed with the other grounds, holding that the public sector equality duty add[ed] nothing to the duty under section 193(2) so far as the issue of priority need is concerned (para 55), and that, in the particular circumstances of this case, it add[ed] nothing to the enquiry under section 189(1)(c) (para 57). The principal issues raised in these appeals These three appeals all thus concern the assessment of an applicants vulnerability for the purpose of determining whether he can claim to have a priority need under section 189(1)(c) of the 1996 Act. The issues which section 189, and in particular subsection (1)(c), throws up were well described by Lord Walker of Gestingthorpe in Runa Begum v Tower Hamlets London Borough Council [2003] UKHL 5, [2003] 2 AC 430, para 114. He said that [e]stablishing priority need may call for the exercise, and sometimes for a very difficult exercise, of evaluative judgment and the identification of a vulnerable person may present real problems. The three principal issues which have been discussed in these appeals are as follows: i) Does the assessment of whether an applicant is vulnerable for the purposes of section 189(1)(c) of the 1996 Act involve an exercise in comparability, and, if so, by reference to which group of people is vulnerability to be determined? ii) When assessing vulnerability, is it permissible to take into account the support and assistance which would be provided by a member of his family or household to an applicant if he were homeless? iii) What effect, if any, does the public sector equality duty under section 149 of the 2010 Act have on the determination of priority need under section 189 of the 1996 Act in the case of an applicant with a disability or any other protected characteristic? Although these were the three issues which were identified as being in dispute on these appeals, a number of other points emerged during the hearing which should also be mentioned, and I shall turn to them before addressing the three main issues. Some points of significance First, the vulnerability with which section 189(1)(c) is concerned is an applicants vulnerability if he is homeless. It is true that para (c) uses the present tense and does not expressly link the word vulnerable to any specific situation. However, the context of the word renders it clear that it is concerned with an applicants vulnerability if he is not provided with accommodation. Part VII is concerned with the provision of accommodation, and section 189 is directed to those who are entitled to accommodation rather than advice and assistance in finding it. Thus, the plain inference is that section 189(1)(c) directs an enquiry as to the applicants vulnerability if he remains or becomes a person without accommodation. As was said by Lord Griffiths in R v Oldham Metropolitan Borough Council, Ex p Garlick [1993] AC 509, 519E, when referring to Part III of the Housing Act 1985, the predecessor of Part VII of the 1996 Act, it is primarily to do with the provision of bricks and mortar and not with care and attention for the gravely disabled which is provided for in other legislation and see the fuller discussion in R (M) v Slough Borough Council [2008] UKHL 52, [2008] 1 WLR 1808, paras 7 29 per Lady Hale. Secondly, when assessing whether or not an applicant is vulnerable, an authority must, as Arden LJ said in para 6 of her judgment in the Johnson case, pay close attention to the particular circumstances of the applicant. Indeed, as Ms Thompson, the reviewing officer in Mr Johnsons case rightly said (see para 21(vii) above), the issue of vulnerability must be determined not so much by reference to each of the applicants problems, but by reference to them when taken together. Thus, the question whether an applicant is vulnerable must involve looking at his particular characteristics and situation when homeless in the round. Thirdly, Arden LJ was not right to go on to say that the authority must, or even can, tak[e] into account its own burden of homeless persons and finite resources when assessing whether an applicant is vulnerable. In making that observation it may well be that Arden LJ thought that she was following earlier guidance given by Auld LJ in Osmani v Camden London Borough Council [2004] EWCA Civ 1706, [2005] HLR 325, para 38(4) which she had quoted in the preceding paragraph of her judgment. However, as all counsel in these appeals rightly agreed, an authoritys duty under Part VII of the 1996 Act is not to be influenced or affected by the resources available to the authority. Once they have determined the status of an applicant under Part VII of the 1996 Act, their duty to that applicant is as defined in the Act: the fact that the authority may be very short of money and/or available accommodation cannot in any way affect whether an applicant is in priority need. In so far as a balancing exercise between housing the homeless and conserving local authority resources is appropriate, it has been carried out by Parliament when enacting Part VII. Of course, an authoritys resources may be relevant in relation to a number of aspects of its duty under Part VII of the 1996 Act (see eg per Lord Hoffmann in Holmes Moorhouse v Richmond upon Thames London Borough Council [2009] UKHL 7, [2009] 1 WLR 413, para 13), but they can have no part to play when assessing whether an applicant is vulnerable. Fourthly, certain expressions seem to have entered the vocabulary of those involved in homelessness issues, which can lead to difficulties when they are applied to strictly legal problems. In particular, for instance, street homelessness and fend for oneself are expressions which one finds, in one or more of the review letters in the present appeals. Such expressions may be useful in discussions, but they can be dangerous if employed in a document which is intended to have legal effect. There are obvious dangers of using such expressions. They may start to supplant the statutory test, which is normally inappropriate in principle, and, when they originate from a judgment, they may be apt for the particular case before the court, but not necessarily for the general run of cases. Additionally, they may mean different things to different people. The expression fend for oneself was used by Waller LJ in R v Waveney District Council, Ex p Bowers [1983] QB 238, 244H, and no doubt was a useful way of expressing oneself in the context of that case (which was concerned with section 2(1)(c) of the Housing (Homeless Persons) Act 1977, which was effectively identical to section 189(1)(c) of the 1996 Act). However, it is not the statutory test, and at least to some people a person may be vulnerable even though he can fend for himself. Furthermore, the expression could mislead. For instance, where, as in two of the instant appeals, the issue is whether an applicant is vulnerable if he will be fully supported by a family member, the answer most people would give would be no, if the test is literally whether he could fend for himself. The expression street homeless is also much used, but it is not to be found in the 1996 Act (although it is to be found, and indeed defined in section 71 of the Housing (Wales) Act 2014, which is concerned with the meaning of vulnerable). It seems to have entered into the Court of Appeals vocabulary in the judgment of Auld LJ, in Osmani see paras 23 28 and para 38(7). When Lord Hughes raised the question of the precise meaning of street homeless with counsel during argument, it took until the following day before he got a clear answer. The expression can plainly mean somewhat different things to different people. Homeless, as defined in the 1996 Act, is an adjective which can cover a number of different situations, and the very fact that the statute does not distinguish between them calls into question the legitimacy of doing so when considering the nature or extent of an authoritys duty to an applicant. Fifthly, as Ms Rhee pointed out, the use of statistics to determine whether someone is vulnerable is a very dangerous exercise whatever the correct test of vulnerability under section 189(1)(c) may be. The point was very well put by Underhill LJ in Ajilore v Hackney London Borough Council [2014] EWCA Civ 1273, para 58, where he was discussing statistical evidence relied on in a section 202 review in relation to an applicant who was said to be a suicide risk if he was made homeless: [E]ven if it is right, as seems plausible enough even in the absence of statistics, that the incidence of suicide is higher among homeless people than in the remainder of the population, I am not sure how that is relevant to the question which the reviewing officer had to decide. It might show only that a disproportionate number of people with the kind of history or personality that renders them specially liable to attempt suicide tend to be made homeless. The fact that there might be disproportionately many such people in the homeless population would not in itself mean that they were any the less vulnerable within the meaning of section 189 (1)(c) any more than it would if there were a disproportionately large number of homeless people suffering from severe mental illness. The question of who constitutes the ordinary homeless person cannot be answered purely statistically. Sixthly, to characterise those who fall within paragraphs (a), (b) and (d) of section 189(1) as vulnerable is a mistake. I mention that because it was suggested that this was a helpful approach when deciding how to interpret paragraph (c). The linking characteristic of the people who fall within the four paragraphs is that they have priority need, not that they are vulnerable. The statute only uses the word vulnerable in paragraph (c), and that is because not all those who fall within the specific classes referred to in that paragraph, namely old age, mental illness or handicap or physical disability, are within the scope of the paragraph: it is only those who are vulnerable. On the other hand, Parliament has decided that everyone who is pregnant, living with dependent children, or is homeless as a result of an emergency is in priority need. The Secretary of State drew the same distinction between the first two and the last two of the additional categories added by the Order referred to at para 9 above. Seventhly, the reviews in the Hotak and Kanu cases reveal a belief on the part of some reviewing officers which is quite mistaken and should be recorded as such. Thus, in her review in the Kanu case, Ms Emmanuel suggested that a local housing authority was not required to make provisions for households who are comprised of or include adults in reasonable physical health see para 31(iii) above and the same point was made (I think) in the Hotak review see para 26(ii) above. This is plainly wrong. It is clear from the wording of section 189(1)(c) that (i) an applicant can be vulnerable even if he resides or can be expected to reside with a third party, and (ii) once an authority has decided that an applicant is vulnerable, then the duty to house him extends to such a third party. It is nothing to the point that the third party is not vulnerable. Of course, if the support which the third party would give to the applicant can be taken into account when deciding whether the applicant is vulnerable (the second issue identified in para 35(ii) above), then the fact that the third party is in good physical and mental health may be of some relevance, but that is as far as the third partys state of health can go in playing any part in determining an applicants vulnerability. Eighthly, the cases reveal a disagreement as to whether section 189(1)(c) gives rise to a two stage test (i) whether the applicant is vulnerable, and (ii) whether it is as a result of old age, mental illness or handicap or physical disability or other special reason or whether there is a single, composite test. This is a somewhat arid argument, and I am unconvinced that it is sensible to force housing authorities and reviewing officers into a straitjacket on this sort of issue. In any event, the correct answer may depend on the facts of the particular case. However, given the reference to other special reason , and given the fact that in many cases there will be a mixture of reasons as to why an applicant is said to be vulnerable, I suspect that the one stage test will probably be more practical in most cases. and, having considered them, I will deal with the three appeals. Vulnerability: a comparative concept, but compared with what? There have been a number of decisions of the Court of Appeal on the issue of whether or not an applicant was vulnerable within the meaning of section 189(1)(c) or its statutory predecessor. When it comes to the proper approach to the issue, there are two decisions which have been frequently referred to. The first is Ex p Bowers [1983] QB 238, where at pp 244H 245A, Waller LJ said vulnerable in the context of this legislation means less able to fend for oneself so that injury or detriment will result when a less vulnerable man will be able to cope without harmful effects. The second, which has proved particularly influential, is R v Camden London Borough Council, Ex p Pereira (1998) 31 HLR 317, where at p 330 in the last paragraph of his judgment, Hobhouse LJ gave fuller guidance. In a passage similar to that in Bowers, but with an important addition, he said that the authority must ask themselves whether the applicant when homeless [will be] less able to fend for himself than an ordinary homeless person so that injury or detriment to him will result when a less vulnerable man would be able to cope without harmful effects (emphasis added). To the same effect, he said this a little later: It must appear that his inability to fend for himself whilst homeless will result in injury or I turn now to the three issues which have been argued between the parties, detriment to him which would not be suffered by an ordinary homeless person who was able to cope. Waller LJs formulation suffers from the rather fundamental defect that it seeks to explain who is a vulnerable person by reference to a less vulnerable one, which is logically circular and therefore highly questionable. Although the first of the two sentences I have quoted from Hobhouse LJs judgment suffers from the same problem, his guidance is potentially more helpful. However, I think that it should be approached with caution essentially for two reasons. First, it has been treated in some decisions of courts and reviewing officers almost as a statutory definition, when it was simply intended to be guidance to Camden housing authority as to how to approach Mr Pereiras application, which was being remitted for reconsideration. Thus, no doubt because there was no question of Mr Pereira being supported by a family member, Hobhouse LJ used the expression fend for himself, which I have discussed above. The second reason for treating Hobhouse LJs guidance with caution is that the term ordinary homeless person can plainly be interpreted in more than one way, as Mr McGuire QC rightly submitted. One feature which the reasoning in all the previous cases share in this connection is the notion that vulnerability has to be assessed comparatively as is clear from the two cases just referred to. However, in these appeals, it is argued on behalf of Mr Johnson that this is wrong, and that there is no need for a comparable against which to judge whether an applicant is vulnerable for the purposes of section 189(1)(c). Although the argument was advanced by Mr Luba QC with his usual ability and fluency, it is not right. As Lord Wilson pointed out in argument, vulnerable, like virtually all adjectives, carries with it a necessary implication of relativity. In the very type of case under consideration, it can fairly be said that anyone who is homeless is vulnerable, as Lord Glennie pointed out in Morgan v Stirling Council [2006] CSOH 154, [2006] HousLR 95, para 4. Accordingly, as he went on to suggest, it follows that section 189(1)(c) must contemplate homeless people who would be more vulnerable than many others in the same position (especially given the words or other special reason which show that vulnerability arising from many causes is covered). Mr Luba contended that anyone who cannot cope without harm with homelessness is vulnerable. But that formulation merely restates the problem and does so by reference to non statutory wording (including the word cope which may have similar problems to the expression fend for himself). Virtually everyone who is homeless suffers harm by undergoing the experience, and therefore one is thrown back on the notion of a homeless person who suffers more harm than many others in the same position. Accordingly, I consider that the approach consistently adopted by the Court of Appeal that vulnerable in section 189(1)(c) connotes significantly more vulnerable than ordinarily vulnerable as a result of being rendered homeless, is correct. But that leaves open the question of the comparator group. In Ex p Pereira 31 HLR 317, 330, as explained above, Hobhouse LJ suggested that the comparator was the ordinary homeless person, which is, as I have mentioned, an uncharacteristically imprecise expression. It could mean (i) the ordinary person if rendered homeless, or (ii) the ordinary person who is actually homeless (a) viewed nationally, or (b) viewed by reference to the authoritys experience. At least judging from the decisions to which we were referred, this uncertainty was initially not resolved thus, it seems to have been left open in Auld LJs summary of the legal principles in Osmani, at para 38(4) and (5). However, shortly thereafter, in Tetteh v Kingston upon Thames London Borough Council [2004] EWCA Civ 1775, [2005] HLR 21, para 21, Gage LJ seems to have assumed that the ordinary homeless person was a notional homeless person based on the particular authoritys experience. That also seems to have been the approach of Arden LJ in Johnson [2013] HLR 524, at paras 18 and 20, as pointed out by Gloster LJ in Ajilore, at para 14, an approach which she also adopted. While it is not entirely clear, this suggests that the test being adopted is possibility (ii)(b), but it may be (ii)(a). Despite the argument of Mr Rutledge QC to the contrary, in my judgment that is not the right approach. I do not consider that it would be right for the comparison to be based on the group of people in England and Wales who are homeless ie possibility (ii)(a); still less do I consider that the comparison should be based on the group of people who are homeless in the area of the relevant authority ie possibility (ii)(b). In my view, possibility (i) is correct. It does not seem probable that Parliament intended vulnerability to be judged by reference to what a housing officer thought to be the situation of an ordinary actual homeless person. Such an assessment would be more likely to lead to arbitrary and unpredictable outcomes than if one takes the ordinary person if rendered homeless, and considers how the applicant would fare as against him. Equally importantly, if the comparison is with the ordinary actual homeless person, then especially if possibility (ii)(b) were correct as Sedley J pointed out in R v Hammersmith & Fulham London Borough Council, Ex p Fleck (1997) 30 HLR 679, 681, there would be a real risk that a sick and vulnerable individual (and I do not use the word vulnerable in its statutory sense) is going to be put out on the streets, which he described as a reproach to a society that considers itself to be civilised. In my opinion, properly understood, both Waller LJ in Bowers and Hobhouse LJ in Pereira intended the vulnerability comparison under section 189(1)(c) to be with an ordinary person if made homeless, not with an ordinary person actually homeless. That seems to me to be apparent from Waller LJs reference to a less vulnerable man, as opposed to a less vulnerable homeless man. I think it also follows from Hobhouse LJs reference (in a passage at p 330 which I have not so far quoted) to an individual who suffer[s] from some mental or physical handicap which makes him unable to cope with homelessness as someone who would fall within section 189(1)(c). There was no suggestion that, if such a person could be said to be ordinary in the context of the actual homeless, he would fall outside the section. Accordingly, I consider that, in order to decide whether an applicant falls within section 189(1)(c), an authority or reviewing officer should compare him with an ordinary person, but an ordinary person if made homeless, not an ordinary actual homeless person. In fact as Lady Hale has pointed out, comparing an applicant with other homeless people is not the precisely accurate comparison. Section 189 is concerned with those who have need for accommodation. Accordingly, strict accuracy suggests that, when assessing his vulnerability for the purposes of section 189(1)(c), an applicant should be compared with an ordinary person who is in need of accommodation. I am unpersuaded that that could ever lead to a different result from a comparison with an ordinary person who is homeless, but, given that I have been anxious to emphasise the primacy of the statutory words, it would be wrong not to acknowledge this point. Before leaving this point, I should mention that Mr Rutledge argued that Parliament had impliedly approved what was said by Hobhouse LJ in Pereira by having made subsequent amendments to Part VII of the 1996 Act without in any way amending section 189(1)(c). This is a useful opportunity to emphasise that this is a misconceived argument for the reasons which Lady Hale and I gave in R (N) v Lewisham London Borough Council [2014] UKSC 62, [2014] 3 WLR 1548, paras 167 168 and 143 148, which, albeit in dissenting judgments, represent the law on this topic. As Mr Luba rightly said, there is a stronger argument that the substantial re enactment of section 21(1)(c) of the 1977 Act as section 189(1)(c) of the 1996 Act can be said to suggest Parliamentary approval of Bowers, but even that is a weak argument, as (i) it is not a powerful point of principle (see the citations in paras 145 146 of R (N) v Lewisham London Borough Council), (ii) the re enactment was not in identical language, (iii) there is nothing to suggest that Bowers had been viewed by the courts as laying down a definition of universal application, (iv) there is nothing to suggest that Parliament was aware of the decision as laying down a principle, and (v) in any event, the passage relied on is logically flawed in so far as it is said to be a definition (see para 49 above). Vulnerability: the relevance of support from family members In Hotak, the reviewing officer, His Honour Judge Blunsdon, and the Court of Appeal all came to the conclusion that an applicant who would otherwise be vulnerable within section 189(1)(c) might not be vulnerable if, when homeless, he would be provided with support and care by a third party (often no doubt a family member with whom he was living). In my judgment, that conclusion, which was subsequently followed in Kanu, is correct, but it has to be applied with considerable circumspection. As explained in para 37 above, an applicants vulnerability under section 189(1)(c) has to be assessed by reference to his situation if and when homeless. In other words, it is not so much a clinical assessment of his physical and mental ability (to use a shorthand expression): it is a contextual and practical assessment of his physical and mental ability if he is rendered homeless (which, as just explained, must be compared with the ability of an ordinary person if rendered homeless). The fact that it is a contextual and practical question points strongly in favour of the conclusion that, when deciding if he is vulnerable, one must take into account such services and support that would be available to the applicant if he were homeless. Such a conclusion is also supported by consideration of the purpose of Part VII of the 1996 Act generally and section 189 in particular. Part VII is aimed at assisting the homeless, and as Lord Hoffmann observed in ORourke v Camden London Borough Council [1998] AC 188, 193, it involves public money [being] spent on housing the homeless not merely for the private benefit of people who find themselves homeless but on grounds of general public interest. As he went on to explain, for example, proper housing means that people will be less likely to suffer illness, turn to crime or require the attention of other social services. Virtually everyone is better off housed than homeless, but it is those people who will be more vulnerable in practice if they are homeless who could be expected to receive priority treatment. It would seem contrary to common sense if one were to ignore any aspect of the actual or anticipated factual situation when assessing vulnerability. It is also relevant to note that paras (a), (b) and (d) of section 189(1) are all concerned with practical situations. As Lord Wilson pointed out, this conclusion is supported by considering an applicant with a physical or mental condition which, if not treated, would render him vulnerable, but which can be satisfactorily treated by regular medication. If such an applicant, when homeless, would be perfectly capable of visiting a doctor to obtain a prescription and a pharmacist to collect his medication, and then of administering the medication to himself, it would be unrealistic to describe him as vulnerable, when compared with an ordinary person when homeless. Mr Brown QC tried valiantly to meet that point, but it does not appear to me that it is answerable. Once one accepts that point, it is very hard to see any logical reason for ignoring any support or assistance which an applicant would receive when homeless. For similar reasons, it is also very hard to see any principled basis for disregarding support or assistance simply because it would come from the authority (eg through its social services department) or from a family member. Unlike Lady Hale, I do not consider that it matters, at least in principle, whether the support is provided pursuant to a legal obligation. As I see it, although I have sympathy with the notion in terms of policy, the conclusion that support only qualifies if provided pursuant to a legal obligation involves implying a limitation into the statute. Having said that, I agree with Lady Hale that housing authorities can only take third party support into account where they are satisfied that, as a matter of fact, the third party will provide such support on a consistent and predictable basis. In that connection, the question whether there is a legal obligation on the third party to provide the support could sometimes be relevant, in that it may be said to be intrinsically more likely that a person will continue to provide support if he or she has a legal obligation to do so. So, where an otherwise vulnerable applicant would not be vulnerable if he was receiving third party support, the question is simply one of fact: will the third party provide the support on a consistent and predictable basis? Mr Brown did, however, make one very powerful point. Section 189(1)(c) extends priority need not only to a vulnerable applicant but also to a person with whom he resides or could be expected to reside. If such a person is prepared to look after the applicant when they are both homeless, then the applicant may not qualify as having priority need and they will not receive accommodation, whereas if that person refuses to look after the applicant, they will both qualify under section 189(1)(c) and receive accommodation. That indeed is the effect of the decisions in Hotak and Kanu. Further, as Lady Hale pointed out, an even starker example could arise where a mother, who has been provided with accommodation for herself and her disabled child under section 189(1)(b), loses priority status when her child comes of age. In such circumstances, her child might only be vulnerable if she was not prepared to look after him if homeless, so they would both be housed if she refused to care for the child, but they would not be housed if she acted as any caring mother would be expected to act. This point gives rise to a real concern whether the view I have expressed in paras 62 64 above can be correct. However, in the end, I do not consider that it undermines it. The curious, indeed somewhat distasteful, consequence of that conclusion where it is a family member (as it normally would be) residing with the applicant who provides the support cannot justify changing that conclusion generally: it would involve the tail wagging the dog. Nor can one imply an exception into the general principle that support is to be taken into account when assessing vulnerability: at least on its own, the fact that a statutory provision is capable of producing a distasteful result in some circumstances cannot justify some sort of judicially created legislative exception. While it cannot be denied that Mr Browns point has force, I think that the apparent paradox which he identifies is, on analysis readily explicable. The primary focus of section 189(1)(c) is on the putative vulnerable applicant, and the inclusion of a third party in the provision of accommodation is either to avoid breaking up the household or family unit or to benefit the vulnerable person, and not to benefit the third party. If one is looking at the applicant, the only relevant factual question when it comes to the issue of support is what support he would receive; the fact that the answer to this question may produce counter intuitive results in relation to a third party with whom he lives is therefore not as surprising as it seems at first blush. The purpose of Part VII of the 1996 Act is not to reward the virtuous, but to deal with a practical problem. In any event, it is by no means obvious that the curious outcome identified by Mr Brown is attributable to a Parliamentary oversight. While some may think that it would be appropriate to make an exception for care when provided by a family member, it may equally be thought that, if such care is provided, it would place an excessive burden on housing authorities and work unfairly on other applicants, if it was disregarded when assessing the applicants vulnerability, however perverse the result may seem when viewed from the perspective of the family members position. While an otherwise vulnerable applicant may not be vulnerable if he would be provided with care and support when homeless, it is very important indeed to emphasise that the mere fact that such support would be available may not prevent the applicant from being vulnerable. Thus, the observation in the Hotak review that, because Ezatullah Hotak looks after his brother and he would continue to do so if they were street homeless together (see para 26(iii) above) does not of itself mean that Sifatullah Hotak would therefore not be vulnerable. It is still incumbent on the reviewing officer to ask whether, even when looked after by his commendable brother, he would be vulnerable. The same point applies in Kanu, where the review letter relied on Mr Kanus wife and son's ability to fend for the whole household, including [Mr Kanu] see para 31(ii) above: this conclusion does not of itself necessarily mean that Mr Kanu would not be vulnerable. Equally dangerous is the preceding sentence in the Hotak letter, namely it is reasonable to expect a fit and healthy adult to attempt to house and support his brother while they are homeless together, at least if it is intended to suggest that there was an irrebuttable, or even a strong, presumption that a person will do what it is reasonable to expect him to do. I accept that it is not unreasonable to expect members of the same family to support each other if they are living together, but (i) whether a particular applicant will in fact receive support and if so what support, must be a case specific question, to which the answer must be based on evidence (which can of course include appropriate inferences), (ii) in a particular case, the level of support may have to be so high to obviate vulnerability that it goes beyond what can be expected on any view, and (iii) as already explained, the fact that there may very substantial support does not of itself necessarily mean that the applicant will not be vulnerable. Thus, in some cases, the support may be every bit as good as the applicant would receive if he were housed, but it would still not prevent him from being vulnerable. Accordingly, the reviewing officer must always consider very carefully whether the applicant would be vulnerable, after taking into account any support which would be available. The point was very well made by Pitchford LJ in para 42 of his judgment in Hotak, where he said this (albeit that it must be corrected to allow for the fact that fending for oneself is not quite the appropriate test): Even if the reviewing officer is satisfied that the support network would remain in place it may not, in a situation of homelessness, be sufficient to enable the applicant to fend for himself as would the average homeless person. For example, the old age or mental ill health or physical disability of the applicant may be such that no amount of support will enable the applicant to cope with homelessness as would a robust and healthy homeless person. The Equality Act 2010 The complaint raised under the 2010 Act against the review in the Kanu case by Ms Mountfield QC is that it failed to comply with the equality duty in that Ms Emmanuel accorded insufficiently careful or critical scrutiny to Mr Kanus disability, and to the consequences to him of the adverse decision that he was not vulnerable. The equality duty has been the subject of a number of valuable judgments in the Court of Appeal. Explanations of what the duty involves have been given by Dyson LJ (in relation to the equivalent provision in the Race Relations Act 1976) in Baker v Secretary of State for Communities and Local Government [2008] EWCA Civ 141, [2009] PTSR 809, paras 30 31,Wilson LJ (in relation to section 49A of the Disability Discrimination Act 1995, as inserted by section 3 of the Disability Discrimination Act 2005, the predecessor of section 149 of the 2010 Act) in Pieretti v Enfield London Borough Council [2010] EWCA Civ 1104, [2011] PTSR 565, paras 28 and 32, and McCombe LJ in Bracking v Secretary of State for Work and Pensions [2013] EWCA Civ 1345, [2014] Eq LR 40, para 26 which pulls together various dicta, most notably those of Elias LJ in R (Hurley & Moore) v Secretary of State for Business, Innovation and Skills [2012] EWHC 201 (Admin), paras 77 78 and 89. I do not propose to quote those passages in extenso: they are not challenged in these appeals, and in my view, at least as at present advised, rightly so. As Dyson LJ emphasised, the equality duty is not a duty to achieve a result, but a duty to have due regard to the need to achieve the goals identified in paras (a) to (c) of section 149(1) of the 2010 Act. Wilson LJ explained that the Parliamentary intention behind section 149 was that there should be a culture of greater awareness of the existence and legal consequences of disability. He went on to say in para 33 that the extent of the regard which must be had to the six aspects of the duty (now in subsections (1) and (3) of section 149 of the 2010 Act) must be what is appropriate in all the circumstances. Lord Clarke suggested in argument that this was not a particularly helpful guide and I agree with him. However, in the light of the word due in section 149(1), I do not think it is possible to be more precise or prescriptive, given that the weight and extent of the duty are highly fact sensitive and dependant on individual judgment. As was made clear in a passage quoted in Bracking, the duty must be exercised in substance, with rigour, and with an open mind (per Aikens LJ in R (Brown) v Secretary of State for Work and Pensions [2008] EWHC 3158 (Admin), [2009] PTSR 1506, para 92. And, as Elias LJ said in Hurley and Moore, it is for the decision maker to determine how much weight to give to the duty: the court simply has to be satisfied that there has been rigorous consideration of the duty. Provided that there has been a proper and conscientious focus on the statutory criteria, he said that the court cannot interfere simply because it would have given greater weight to the equality implications of the decision. Pieretti is particularly in point as it concerned the interrelationship of Part VII of the 1996 Act and what is now the 2010 Act, and the Court of Appeal rightly held that what is now the public sector equality duty applied to a housing authority when performing its functions under Part VII. At para 28, Wilson LJ referred to the six specified aspects of the duty in the predecessor to subsections (1) and (3) of section 149 as complement[ing] the duties of local authorities under Part VII. The specific issue in the case was whether the reviewing officer had complied with what was the statutory predecessor of the equality duty, when deciding that the applicant and his wife were voluntarily homeless because they had failed to pay the rent due on their previous home as a result of which they were evicted. The Court of Appeal held that, on the specific facts of the case, the reviewing officer was in breach of her duty under section 49A(1)(d), because she fail[ed] to make further inquiry in relation to some such feature of the evidence presented to her as raised a real possibility that the applicant was disabled in a sense relevant to whether he acted deliberately and in particular to whether he acted in good faith per Wilson LJ at paras 35 36. In cases such as the present, where the issue is whether an applicant is or would be vulnerable under section 189(1)(c) if homeless, an authoritys equality duty can fairly be described as complementary to its duty under the 1996 Act. More specifically, each stage of the decision making exercise as to whether an applicant with an actual or possible disability or other relevant protected characteristic falls within section 189(1)(c), must be made with the equality duty well in mind, and must be exercised in substance, with rigour, and with an open mind. There is a risk that such words can lead to no more than formulaic and high minded mantras in judgments and in other documents such as section 202 reviews. It is therefore appropriate to emphasise that the equality duty, in the context of an exercise such as a section 202 review, does require the reviewing officer to focus very sharply on (i) whether the applicant is under a disability (or has another relevant protected characteristic), (ii) the extent of such disability, (iii) the likely effect of the disability, when taken together with any other features, on the applicant if and when homeless, and (iv) whether the applicant is as a result vulnerable. Mr Underwood QC argued that the equality duty added nothing to the duty of an authority or a reviewing officer when determining whether an applicant is vulnerable. I quite accept that, in many cases, a conscientious reviewing officer who was investigating and reporting on a potentially vulnerable applicant, and who was unaware of the fact that the equality duty was engaged, could, despite his ignorance, very often comply with that duty. However, there will undoubtedly be cases where a review, which was otherwise lawful, will be held unlawful because it does not comply with the equality duty. In Holmes Moorhouse [2009] 1 WLR 413, at paras 47 52, I said that a benevolent and not too technical approach to section 202 review letters was appropriate, that one should not search for inconsistencies, and that immaterial errors should not have an invalidating effect. I strongly maintain those views, but they now have to be read in the light of the contents of para 78 above in a case where the equality duty is engaged. Ms Monaghan QC supported Ms Mountfields case that the equality duty would apply in a case where an applicant had a relevant protected characteristic. She also suggested that the effect of section 15 of the 2010 Act was to render unlawful a decision that such an applicant was not vulnerable because he could rely on the support of a third party. I do not accept that submission. Even assuming that it can be said that section 15(1)(a) is satisfied and such a decision amounted to what may be characterised as prima facie unlawful discriminatory treatment (which I would leave open, not least because it was not fully argued before us or even raised below), it seems to me that the treatment would be lawful pursuant to section 15(1)(b) on the basis that it was a proportionate means of achieving a legitimate aim. Section 189(1)(c) is part of a scheme whose aim is to assist homeless people generally, and in particular to allocate the scarce resource of accommodation available to an authority to particular classes of homeless people. In section 189(1), Parliament has decided the principles by reference to which that allocation is to be effected, and those principles cannot possibly be described as unreasonable. When an authority assesses what support and care would be available to an applicant with a relevant protected characteristic, and whether that would, as it were, take him out of section 189(1)(c), it is simply putting Parliaments decision into effect. Conclusions on these appeals Mr Kanus appeal should be allowed, and Southwarks decision quashed. The review letter is a full and considered document, but it suffers from the errors of (i) assessing Mr Kanus vulnerability by reference to another ordinary street homeless person, and (ii) assuming that an authority is entitled to treat members of a household as not vulnerable if one of them is mentally and physically healthy see paras 31(ii) and (iii) above. It is plain that an appeal against a review cannot succeed in every case where the wrong comparator has been invoked or a wrong legal assumption is made. Indeed, I do not think that Mr Kanus appeal could succeed if the only error was the reference to street homeless. But in this case, the important factor to my mind is that Mr Kanu had and has what appears to be a pretty strong case for claiming to be vulnerable. It is therefore quite conceivable that the review would have gone the other way if the right comparator had been used. I would not, however, have allowed his appeal based on the equality duty. While some might find the outcome of the review surprising, in my view, albeit in a rather prolix and slightly confusing way, Ms Emmanuel did approach the question of Mr Kanus vulnerability in a sufficiently full and considered way to satisfy the equality duty. The letter appears to identify each aspect of his disability; to address with care the questions of how they would be dealt with if he was homeless; how they would affect him, if he was homeless; whether he would therefore be vulnerable; and why, in Ms Emmanuels view, he would not. In forming this view, I do not place significant weight on the fact that she specifically mentioned the equality duty (although she gave the 2010 Act the wrong name) see para 31(ix) above. If the earlier part of the letter had not complied with the duty, I doubt very much that the throw away reference to the equality duty could have saved it. We were told that Mr Kanus medical condition had deteriorated since the review decision had been made, and that he was in hospital. We were also told that, to their credit, Southwark had written to his solicitors indicating that he should make a fresh application as his deteriorating health justified a fresh Part VII application being made (following the guidance in Tower Hamlets London Borough Council v Rikha Begum [2005] EWCA Civ 340, [2005] 1 WLR 2103). Mr Johnson can raise the same argument as Mr Kanu as to the use of the wrong comparator, and he can also raise the argument that the reviewing officer, Ms Thompson, wrongly relied on statistical evidence see para 21(i) and (iii) above. Nonetheless, I would dismiss his appeal. The review letter in his case is in my opinion a clear example of a review whose conclusion is not impeached by the fact that the proper comparator was not invoked nor indeed by the fact that the reviewing officer inappropriately relied on statistical evidence. Thus, it appears clear from the review letter that Ms Thompson concluded that Mr Johnson did not suffer from depression, and therefore her comparison with ordinary actually homeless people and her reliance on the statistics were irrelevant as they would only come into play if he did suffer from depression see para 21(ii) above. She also found that his physical ailments were irrelevant to the issue of vulnerability, for reasons which seem to me to be unexceptionable see para 21(iv) above. Similarly, she concluded that his experiences in prison did not render him vulnerable see para 21(vi) above. As to Mr Johnsons heroin problem, assuming (without deciding) that actual or potential problems with drugs fall within the expression other special reason, it appears to me that the finding that Mr Johnson was not vulnerable on this ground cannot be faulted. It is true that the passages from the review letter quoted at para 21(v) above include references to the wrong comparator and statistical evidence. However, as with the depression and physical complaints, I consider that those references are irrelevant. That is because the earlier passages, read fairly, amount to a finding that his drug problems would have no significant effect on Mr Johnsons situation if he was homeless as he was not misusing drugs, and, even if he did misuse them, he [would] maintain the support that he currently [had]. It is fair to say that the passage dealing with Mr Johnsons drugs problem is not conspicuous for its clarity, but that appears to be its effect. It is also germane to bear in mind that the equality duty does not extend to Mr Johnsons misuse of drugs (or to his predilection for thieving) in the light of the Regulations referred to in para 18 above I turn, finally to Mr Hotak. It is clear that his appeal must be dismissed as it was agreed between counsel that the outcome of the appeal turned entirely on the answer on the second main issue, and, as I am against Mr Hotak in relation that point, his appeal must fail. However, I must confess to real disquiet about that conclusion. It does appear to me that the reviewing officer in his case went wrong in the same way as the reviewing officer in Mr Kanus case compare paras 26(i) and (ii) with paras 31(ii) and (iii) above and he also appears to have proceeded on the basis that he was entitled to assume that Ezatullah Hotak would continue to support Sifatullah Hotak if he was homeless see para 26(iii) above. I readily accept that even the combination of the errors of (i) using a comparator based on the ordinary actual homeless person, (ii) referring to street homeless, (iii) apparently thinking that there was no duty to provide accommodation, and (iv) apparently thinking that a person could be assumed to support a vulnerable brother may not render a review decision bad in law. Thus, there is a powerful case for saying that the third and fourth points were merely badly expressed (as otherwise it is unclear why the letter went on to consider Sifatullah Hotaks situation). However, given the fact that Sifatullah Hotak appears to have had a strong case for saying that he did fall within section 189(1)(c), I would have taken the same view of his appeal as that of Mr Kanu. However, I do not think that it would be right to allow Mr Hotaks appeal on a ground which has not been raised on his behalf at any stage of these proceedings not even in writing or orally on his appeal to this court. We were told that, very properly, Southwark were continuing to house the Hotak brothers pending the outcome of this appeal. I am well aware of the pressures on both the personnel and the financial resources of housing authorities in general, and of Southwark in particular. However, in the light of his unusual degree of disability and concerning circumstances, I would very much hope that, despite the fact that we are dismissing his appeal, Sifatullahs potential homelessness will be reconsidered by Southwark. Since we made this judgment available in draft to counsel for the parties, an application was made on behalf of Mr Hotak requesting the court to consider whether to quash the review letter in his case in the light of what is said in paras 87 and 88 above and by Lady Hale in para 102 below. Rather than delay handing down the decision, we have asked Southwark to make submissions on this application, whereupon we will decide how to dispose of it. In the event, however, I would dismiss the appeals in Hotak v Southwark London Borough Council (subject to what I say in para 89 above) and in Johnson v Solihull Metropolitan Borough Council, and would allow the appeal in Kanu v Southwark London Borough Council. Counsel can no doubt agree appropriate forms of order. LADY HALE: (dissenting in part) Glossing the plain words of statutory provisions is a dangerous thing, as these cases show only too clearly. The statutory provision says simply that: The following have a priority need for accommodation . (c) a person who is vulnerable as a result of old age, mental illness or handicap or physical disability or other special reason, or with whom such a person resides or might reasonably be expected to reside. Yet we had reached the point where decision makers were saying, of people who clearly had serious mental or physical disabilities, that you are not vulnerable, because you are no more vulnerable than the usual run of street homeless people in our locality; and further, that if a person living with you, or who might reasonably be expected to live with you, is able and willing to look after you on the streets then you are not vulnerable. In my view, both of those propositions are wrong. The first question is whether it is necessary to introduce any comparison into the word vulnerable. Adjectives are capable of bearing an objective meaning: one can say that a person is mentally ill without setting a comparative standard. But I appreciate that there usually is some comparative standard implicit if I say that a person is tall, I probably mean that he is taller than average or perhaps taller than me. It is also the case that many old people and most people who suffer from mental illness or handicap or physical disability are for that reason alone vulnerable in the dictionary sense of being susceptible to harm. But the legislator did not provide that they were all in priority need, only that they are in priority need if they are vulnerable as a result. The concept of being vulnerable must therefore have been intended to add something to those other characteristics. But what? To answer that, one needs to know what they will be vulnerable to or at risk of harm from. The obvious answer is that they must be at risk of harm from being without accommodation: the object of the section is to identify those groups who have a priority need for accommodation. Is that enough by itself? The problem, of course, is that we are all to some extent at risk of harm from being without accommodation women perhaps more than men, but it is easy to understand how rapidly even the strongest person is likely to decline if left without anywhere to live. So this is why a comparison must be implied. The person who is old, mentally disordered or disabled, or physically disabled, must as a result be more at risk of harm from being without accommodation than an ordinary person would be. This is what I understand Lord Neuberger to mean by an ordinary person if homeless. I agree. The comparison is with ordinary people, not ordinary homeless people, still less ordinary street homeless people. And it is ordinary people generally, not ordinary people in this locality. It is when we come to the second proposition that I venture to disagree with Lord Neubergers view. In my view, the source of the predicted third party support makes a difference. I accept that, when considering whether the person concerned is more at risk of harm from being without accommodation than others, it is right and proper to take into account the statutory services which will be available to him in any event. He will still be able to get the medication he needs. He should still be able to obtain medical and nursing care from the National Health Service. He should still be able to obtain counselling and other community services available for people with mental disorders or disabilities. There is a statutory duty to supply such services and a corresponding right to receive them. Charitable services are another matter, unless these are provided by arrangement with the statutory services in fulfilment of their statutory duties. There is no legal obligation to provide charitable services. Charitable services may come and go there may be a regular soup or sandwich run in some places at some times but not everywhere always. Charitable services will set their own criteria for whom they will help and whom they will turn away. Charitable services may run out of money. I appreciate that the days are long gone when we could even think that the statutory services have a bottomless pit of money. But we are all agreed that this is not a context in which local authorities are entitled to take their own resources into account. But if they are entitled to take third party support into account, it must at the very least be consistent and predictable and reasonable to expect the third party to provide it for this particular person. That is one reason for doubting whether it is appropriate to take family support into account but there is another more important one. I do not see how it can be consistent with the intention of the statute to take into account help which may be available from other members of the household, that is, those already living with the vulnerable person or those who might reasonably be expected to do so. These will usually be other family members, including cohabitants, although they might be friends who have been sharing a home together. Most people who live together help one another to some extent, and especially if the person who needs help is old, mentally disordered or disabled, or physically disabled. It would be a sad world indeed if they did not. I do not believe that this provision was catering only for that sad world. It is premised on there being at least one member of the household who is vulnerable and one or more others who are not. Both the vulnerable and the non vulnerable qualify as being in priority need. The non vulnerable can apply on behalf of them both. It is difficult to think that Parliament contemplated that the non vulnerable could only apply on behalf of them both if he was not looking after the vulnerable one. Why on earth would Parliament want to give such a heartless person priority and priority over the person who was fulfilling his familial duties? This is a separate point from the perverse incentive that taking into account help from household members would produce. It is a point about the people whom Parliament is most likely to have wanted to single out as having a priority need. The section draws no distinction between those who are and those who are not providing help to their old or disabled house mate, but if Parliament had wanted to distinguish between the two, it would surely have found the helpful one more worthy of priority than the unhelpful. This view of the matter is at least consistent with that of all members of the House of Lords in R v Tower Hamlets London Borough Council, Ex p Ferdous Begum, reported with R v Oldham Metropolitan Borough Council, Ex p Garlick [1993] AC 509. The applicant was a 24 year old Bangladeshi woman who lacked all hearing, speech and education. She could communicate only through a form of sign language unique to her. She arrived in the United Kingdom with her parents, sisters and a brother. Her fathers application for accommodation under the forerunner to the 1996 Act was declined on the ground that the family had become homeless intentionally, having left accommodation in Bangladesh which it was reasonable for them to continue to occupy. The daughter, with the help of her father and solicitor, then made her own application, contending that because of her incapacity she could not have acquiesced in any act or omission of her father rendering her homeless. The local authority held that if she could not acquiesce in her fathers behaviour, neither could she acquiesce in making her own application. The majority of the House of Lords accepted, not only that she could not apply, but also that her father could not apply on her behalf. But this was very clearly on the basis that, had the family not become homeless intentionally, the father would have been in priority need because of his daughters vulnerability. Lord Griffiths said this (p 519G): Many vulnerable people are cared for in the community by their relatives or other good hearted people with whom they live. If such a carer should have the misfortune to become homeless then [section 189(1)(c)] gives him the status of priority need, and provided his homelessness was not intentional, he will qualify for an offer of accommodation which will enable him to continue to look after the vulnerable person. Lord Slynn of Hadley disagreed with the majority. In his view the father could apply on behalf of the daughter who lacked the capacity to do so. But he agreed with them on the point made above, at p 522E: If the vulnerable person is alone with no existing carer, he may need special accommodation. If he is not alone but has an existing carer or family who might reasonably be expected to reside with him then the accommodation must be available for their occupation also. It might, of course, be said that no one took the point which is now taken in this case. In fact the reverse was the case. It was an essential part of the argument of counsel for the local authority, Mr Underwood QC, that, if a homeless person was mentally incapable of making an application, but had a carer in the same household who was unintentionally homeless, the carer would be entitled to accommodation (under the predecessor to section 189(1)(c)) for them both. Counsel in this case has cited no authority at all for the proposition that the existence of a carer within the same household can mean that a person who is otherwise obviously vulnerable is not to be so taken. Ex p Ferdous Begum is the closest the cases get to discussing the point and it is all the other way. In my view, therefore, Sifatullah Hotak remains vulnerable for the purpose of section 189(1)(c) of the 1996 Act despite the devoted care which he receives from his brother Ezatullah. As it is clear that the authority would have accepted that he was vulnerable were it not for his brothers support, I would allow the appeal and declare that the appellant is in priority need. But even if I were wrong about that, I would allow his appeal. It is true that the issue of law upon which Mr Hotak was given permission to appeal to this court was whether the local authority was entitled to take into account the existence of third party support and assistance. But within the grounds of appeal was an attack upon the courts application of the principles laid down in R v Camden London Borough Council, Ex p Pereira (1998) 31 HLR 317 and Osmani v Camden London Borough Council [2004] EWCA Civ 1706. This court has agreed upon a substantial modification of those principles, with the result that the local authority misdirected themselves in law in at least two respects: We do not believe . that an authority is required to make provisions for households who are comprised of adults in reasonable physical health, and we are not satisfied that he will be at more risk of harm, injury or detriment than another ordinary street homeless person if he were street homeless . There is, as it seems to me, good reason to predict that, even taking into account his brothers help, the local authority would now conclude that Mr Hotak remained more vulnerable than an ordinary person. To decline to give him the same relief as we have given for those reasons to Mr Kanu is surely the triumph of form over substance. Had his counsel been asked whether he also adopted the argument of counsel for Mr Kanu, should he fail on his main point, he would, I am sure, have said yes. |
The seventh chapter of Deuteronomy records the following instructions given by Moses to the people of Israel, after delivering the Ten Commandments at Mount Sinai: 1. When the Lord thy God shall bring thee into the land whither thou goest to possess it, and hath cast out many nations before thee, the Hittites, and the Girgashites, and the Amorites, and the Canaanites, and the Perizzites, and the Hivites, and the Jebusites, seven nations greater and mightier than thou; 2 And when the Lord thy God shall deliver them before thee; thou shalt smite them, and utterly destroy them; thou shalt make no covenant with them, nor show mercy unto them: 3. Neither shalt thou make marriages with them; thy daughter thou shalt not give unto his son, nor his daughter shalt thou take unto thy son. 4. For they will turn away thy son from following me, that they may serve other gods: so will the anger of the Lord be kindled against you, and destroy thee suddenly. The third and fourth verses appear to be a clear commandment against intermarriage lest, at least in the case of a Jewish man, the foreign bride persuade her husband to worship false gods. It is a fundamental tenet of Judaism, or the Jewish religion, that the covenant at Sinai was made with all the Jewish people, both those then alive and future generations. It is also a fundamental tenet of the Jewish religion, derived from the third and fourth verses that I have quoted, that the child of a Jewish mother is automatically and inalienably Jewish. I shall describe this as the matrilineal test. It is the primary test applied by those who practise or believe in the Jewish religion for deciding whether someone is Jewish. They have always recognised, however, an alternative way in which someone can become Jewish, which is by conversion. Statistics adduced in evidence from the Institute for Jewish Policy Research (the Institute) show that in the first half of the 20th century over 97% of the Jews who worshipped in this country did so in Orthodox synagogues. Since then there has been a diversification into other denominations, and a minority of Jews now worship in Masorti, Reform and Progressive synagogues. The Institute records a significant decline in the estimated Jewish population in the United Kingdom, which now numbers under 300,000, of which about 70% are formally linked to a synagogue and 30% unaffiliated. Those who convert to Orthodox Judaism in this country number only 30 or 40 a year. The requirements for conversion of the recently formed denominations are less exacting than those of Orthodox Jews. Lord Jonathan Sacks, Chief Rabbi of the United Hebrew Congregation of the Commonwealth and leader of the Orthodox Jews in this country, issued a paper about conversion, through his office (the OCR) on 8 July 2005. In it he stated that conversion was irreducibly religious. He commented: Converting to Judaism is a serious undertaking, because Judaism is not a mere creed. It involves a distinctive, detailed way of life. When people ask me why conversion to Judaism takes so long, I ask them to consider other cases of changed identity. How long does it take for a Briton to become an Italian, not just legally but linguistically, culturally, behaviourally? It takes time. A Jew by conversion is a Jew for all purposes. Thus descent by the maternal line from a woman who has become a Jew by conversion will satisfy the matrilineal test. JFS is an outstanding school. For many years far more children have wished to go there than there have been places in the school. In these circumstances it has been the policy of the school to give preference to those whose status as Jews is recognised by the OCR. That is to children whose mothers satisfy the matrilineal test or who are Jews by conversion by Orthodox standards. The issue raised by this appeal is whether this policy has resulted in an infringement of section 1 of the Race Relations Act 1976 (the 1976 Act). These proceedings were brought on the application of E in relation to M, his 13 year old son. E wished to send M to JFS and M wished to go there. He was refused admission because he was not recognised as a Jew by the OCR. His father is recognised as such but the OCR does not regard that as relevant. What matters is whether his mother was a Jew at the time of his birth. She is Italian by birth. As she was not born of a Jewish mother she could only have been recognised by the OCR as a Jew and as capable of conferring Jewish status on M if she had converted to Judaism before M was born. She had undergone a course of conversion to Judaism before Ms birth under the auspices of a non Orthodox Synagogue, not in accordance with the requirements of Orthodox Jews. The result is that, while her conversion is recognised by Masorti, Reform and Progressive Jews, it is not recognised by the OCR. E and his wife are divorced. They practise the Jewish faith and worship at a Masorti synagogue. E failed in these judicial review proceedings in which he challenged the admissions policy of JFS before Munby J, but succeeded on an appeal to the Court of Appeal. The question of Ms admission has already been resolved between the parties, but the Governing Body of JFS is concerned at the finding of the Court of Appeal that the schools admissions policy infringes the 1976 Act, as are the United Synagogue and the Secretary of State for Children, Schools and Families. Indeed this case must be of concern to all Jewish faith schools which have admissions policies that give preference to Jews. While the court has appreciated the high standard of the advocacy addressed to it, it has not welcomed being required to resolve this dispute. The dissatisfaction of E and M has not been with the policy of JFS in giving preference in admission to Jews, but with the application of Orthodox standards of conversion which has led to the OCR declining to recognise M as a Jew. Yet this appeal necessarily raises the broader issue of whether, by giving preference to those with Jewish status, JFS is, and for many years has been, in breach of section 1 of the 1976 Act. The implications of that question extend to other Jewish faith schools and the resolution of the bone of contention between the parties risks upsetting a policy of admission to Jewish schools that, over many years, has not been considered to be open to objection. This demonstrates that there may well be a defect in our law of discrimination. In contrast to the law in many countries, where English law forbids direct discrimination it provides no defence of justification. It is not easy to envisage justification for discriminating against a minority racial group. Such discrimination is almost inevitably the result of irrational prejudice or ill will. But it is possible to envisage circumstances where giving preference to a minority racial group will be justified. Giving preference to cater for the special needs of a minority will not normally involve any prejudice or ill will towards the majority. Yet a policy which directly favours one racial group will be held to constitute racial discrimination against all who are not members of that group see, for instance, Orphanos v Queen Mary College [1985] AC 761 at p. 771. Nothing that I say in this judgment should be read as giving rise to criticism on moral grounds of the admissions policy of JFS in particular or the policies of Jewish faith schools in general, let alone as suggesting that these policies are racist as that word is generally understood. Direct discrimination I propose in the first instance to consider whether the admissions policy of the JFS has led it to discriminate directly against M on racial grounds. The relevant provisions of the 1976 Act are as follows. Racial discrimination (1) A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if (a) On racial grounds he treats the other less favourably than he treats or would treat other persons 3. Meaning of racial grounds (1) In this Act, unless the context otherwise requires racial grounds means any of the following grounds, namely colour, race, nationality or ethnic or national origins; racial group means a group of persons defined by reference to colour, race, nationality, or ethnic or national origins; (2) The fact that a racial group comprises two or more distinct racial groups does not prevent it from constituting a particular racial group for the purposes of this Act. Section 17 deals with educational establishments and provides that it is unlawful for the governors of a maintained school, such as JFS, to discriminate against a person in the terms on which it offers to admit him to the establishment as a pupil. It is common ground that JFS discriminated against M in relation to its terms of admission to the school. The issue of whether this amounted to unlawful direct discrimination on racial grounds depends on the answer to two questions: (1) What are the grounds upon which M was refused entry? (2) Are those grounds racial? Grounds In the phrase grounds for discrimination, the word grounds is ambiguous. It can mean the motive for taking the decision or the factual criteria applied by the discriminator in reaching his decision. In the context of the 1976 Act grounds has the latter meaning. In deciding what were the grounds for discrimination it is necessary to address simply the question of the factual criteria that determined the decision made by the discriminator. This approach has been well established by high authority. In R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] AC 1155 the entry criteria applied by the Council for admission to selective single sex grammar schools was in issue. More places were available in boys schools than in girls schools. The result was that girls had to obtain higher marks in the entry examination than boys. The motive for the disparity was, no doubt, that this was necessary to ensure that entry to the schools was determined on merit. The House of Lords held, none the less, that the disparity constituted unlawful discrimination contrary to the Sex Discrimination Act 1975 which prohibited discrimination against a woman on the ground of her sex. Lord Goff of Chieveley, with whom the other members of the Committee agreed, said at p. 1194: There is discrimination under the statute if there is less favourable treatment on the ground of sex, in other words if the relevant girl or girls would have received the same treatment as the boys but for their sex. The intention or motive of the defendant to discriminate, though it may be relevant so far as remedies are concerned (see section 66(3) of the Act of 1975), is not a necessary condition of liability; it is perfectly possible to envisage cases where the defendant had no such motive, and yet did in fact discriminate on the ground of sex. Indeed, as Mr. Lester pointed out in the course of his argument, if the councils submission were correct it would be a good defence for an employer to show that he discriminated against women not because he intended to do so but (for example) because of customer preference, or to save money, or even to avoid controversy. In the present case, whatever may have been the intention or motive of the council, nevertheless it is because of their sex that the girls in question receive less favourable treatment than the boys, and so are the subject of discrimination under the Act of 1975. The difference between the motive for discrimination and the factual criteria applied by the discriminator as the test for discrimination lay at the heart of the division between the majority and the minority of the House of Lords in James v Eastleigh Borough Council [1990] 2 AC 751, another case where sex discrimination was in issue. The Council discriminated between men and women, aged between 60 and 65, in relation to the terms on which they were admitted to swim in a leisure centre run by the Council. Women in this age band were admitted free whereas men had to pay an entry charge. The motive for this discrimination could perhaps be inferred by the manner in which this rule was expressed, namely that those of pensionable age were to be admitted free of charge; women became of pensionable age when they were 60, men when they were 65. Counsel for the Council explained at p. 758 that the councils reason for giving free access to those of pensionable age was that their resources were likely to have been reduced by retirement. The Court of Appeal had treated this motive as being the relevant ground for discriminating in favour of women and against men rather than the factual criterion for discrimination, which was plainly the sex of the person seeking admission to the centre. Lord Bridge, delivering the first opinion of the majority, held that the reasoning of the Court of Appeal was fallacious and that the Councils policy discriminated on the ground of sex. At p. 764 he said of their judgment: The Court of Appeals attempt to escape from these conclusions lies in construing the phrase on the ground of her sex in section 1(1)(a) as referring subjectively to the alleged discriminators reason for doing the act complained of. As already noted, the judgment had earlier identified the councils reason as to give benefits to those whose resources would be likely to have been reduced by retirement and to aid the needy, whether male or female. But to construe the phrase, on the ground of her sex as referring to the alleged discriminators reason in this sense is directly contrary to a long line of authority confirmed by your Lordships House in Reg. vs Birmingham City Council, Ex parte Equal Opportunities Commission. Having cited the passage from Lord Goffs judgment that I have set out at paragraph 12 above, he commented, at p 765: Lord Goffs test, it will be observed, is not subjective, but objective. Adopting it here the question becomes: Would the plaintiff, a man of 61, have received the same treatment as his wife but for his sex? An affirmative answer is inescapable. This but for test was another way of identifying the factual criterion that was applied by the Council as the basis for their discrimination, but it is not one that I find helpful. It is better simply to ask what were the facts that the discriminator considered to be determinative when making the relevant decision. Lord Ackner, concurring, remarked at pp. 769 770: There might have been many reasons which had persuaded the council to adopt this policy. The Court of Appeal have inferred that the councils reason for giving free swimming to those of pensionable age was to give benefits to those whose resources would be likely to have been reduced by retirement: per Sir Nicolas Browne Wilkinson V. C. [1990] 1 Q.B. 61, 73D. I am quite prepared to make a similar assumption, but the councils motive for this discrimination is nothing to the point: see the decision of this House in Reg. vs Birmingham City Council, Ex parte Equal Opportunities Commission [1989] AC 1155. Lord Griffiths, giving the first of the minority opinion, took a different view. He said at p. 768: The question in this case is did the council refuse to give free swimming to the plaintiff because he was a man, to which I would answer, no, they refused because he was not an old age pensioner and therefore could presumably afford to pay 75p to swim. In a lengthy opinion Lord Lowry concurred with Lord Griffiths. The essence of his reasoning appears in the following passage at pp. 775 776: section 1(1)(a) refers to the activities of the discriminator: the words on the ground of his sex provide the link between the alleged discriminator and his less favourable treatment of another. They introduce a subjective element into the analysis and pose here the question Was the sex of the appellant a consideration in the councils decision? Putting it another way, a ground is a reason, in ordinary speech, for which a person takes a certain course. He knows what he is doing and why he has decided to do it. In the context of section 1(1)(a) the discriminator knows that he is treating the victim less favourably and he also knows the ground on which he is doing so. In no case are the discriminators thought processes immaterial. The contrast between the reasoning of the majority and of the minority in this case is, I believe, clear. I find the reasoning of the majority compelling. Whether there has been discrimination on the ground of sex or race depends upon whether sex or race was the criterion applied as the basis for discrimination. The motive for discriminating according to that criterion is not relevant. The observations of Lord Nicholls in Nagarajan v London Regional Transport [2000] 1 AC 501 and Chief Constable of West Yorkshire Police v Khan [2001] 1 WLR 1947, cited by Lord Hope at paragraphs 193 and 194 of his judgment, throw no doubt on these principles. Those observations address the situation where the factual criteria which influenced the discriminator to act as he did are not plain. In those circumstances it is necessary to explore the mental processes of the discriminator in order to discover what facts led him to discriminate. This can be illustrated by a simple example. A fat black man goes into a shop to make a purchase. The shop keeper says I do not serve people like you. To appraise his conduct it is necessary to know what was the fact that determined his refusal. Was it the fact that the man was fat or the fact that he was black? In the former case the ground of his refusal was not racial; in the latter it was. The reason why the particular fact triggered his reaction is not relevant to the question of the ground upon which he discriminated. In Nagarajan, Lord Nicholls approved the reasoning in both the Birmingham City Council case and the Eastleigh Borough Council case. At p. 511 he identified two separate questions. The first was the question of the factual basis of the discrimination. Was it because of race or was it because of lack of qualification? He then pointed out that there was a second and different question. If the discriminator discriminated on the ground of race, what was his motive for so doing? That question was irrelevant. When, at para 29 in Khan, Lord Nicholls spoke of a subjective test he was speaking of the exercise of determining the facts that operated on the mind of the discriminator, not his motive for discriminating. The subjective test, described by Lord Nicholls, is only necessary as a seminal step where there is doubt as to the factual criteria that have caused the discriminator to discriminate. There is no need for that step in this case, for the factual criteria that governed the refusal to admit M to JFS are clear. The JFS Admissions Policy The admissions policy published by JFS for the 2007/8 academic year began as follows: 1.1 It is JFS (the School) policy to admit up to the standard admissions number children who are recognised as being Jewish by the Office of the Chief Rabbi of the United Hebrew Congregation of the Commonwealth (OCR) or who have already enrolled upon or who have undertaken, with the consent of their parents, to follow any course of conversion to Judaism under the approval of the OCR. The passage that I have placed in italics was introduced in the 2007/8 year for the first time. No candidate has yet satisfied that criterion, and for present purposes it can be disregarded. In recent years there have been more applicants for entry to JFS who were recognised as Jewish by the OCR than there were places in the school. The admissions policy, somewhat confusingly, describes this as a situation where the school is oversubscribed. Further criteria are laid down for establishing priority in this situation. Here also there has recently been a significant change. Children in care and children with a sibling in the school were and are given priority; the change comes at the next stage. Up to the 2007/8 year priority was next given to applicants who had attended a Jewish primary school. This has now been changed so that these are pro rated with children who have attended a non Jewish primary school. The former criterion would have been likely to favour Jewish children who were being brought up in the Jewish faith. We were not told the reason for this change, and it has no direct bearing on the issues raised by this appeal. The criteria whose application debarred M from entry to JFS are readily identified. They are the criteria recognised by the OCR as conferring the status of a Jew. The child will be a Jew if at the time of his birth his mother was a Jew. His mother will be a Jew if her mother was a Jew or if she has converted to Judaism in a manner that satisfies the requirements of the Orthodox religion. M does not satisfy those criteria because of his matrilineal descent. His mother was not born of a Jewish mother and had not at the time of his birth complied with the requirements for conversion, as laid down by the OCR. Accordingly M does not satisfy the Orthodox test of Jewish status. Are the grounds racial? In answering this question it is important to distinguish between two different, albeit not wholly independent, considerations. The first is the reason or motive that leads the OCR to impose these criteria. The second is the question of whether or not the criteria are characteristics of race. The reason why the OCR has imposed the criteria is that the OCR believes that these are the criteria of Jewish status under Jewish religious law, established at and recognised from the time of Moses. This is not the end of the enquiry. The critical question is whether these requirements of Jewish law are racial, as defined by section 3 of the 1976 Act. Do the characteristics define those who have them by reference to colour, race, nationality or ethnic or national origins? The JFS case I shall summarise the case advanced by Lord Pannick QC for JFS in my own words. There exists a Jewish ethnic group. Discrimination on the ground of membership of this group is racial discrimination. The criteria of membership of this group are those identified by Lord Fraser of Tullybelton in Mandla v Dowell Lee [1983] 2 AC 548. In that case a declaration was sought that refusing admission to a school of a Sikh wearing a turban was indirect racial discrimination. The critical question was whether Sikhs comprised a racial group for the purposes of the 1976 Act. It was common ground that they were not a group defined by reference to colour, race, nationality or national origins. It was contended, however, that they were a group defined by ethnic origins. In considering the meaning of this phrase, Lord Fraser at pp 561 562 referred to a meaning of ethnic given by the Supplement to the Oxford English Dictionary (1972): pertaining to or having common racial, cultural, religious, or linguistic characteristics, esp. designating a racial or other group within a larger system. His comments in relation to this definition have been set out in full by Lord Mance at paragraph 83 of his judgment and as Lord Mance remarked they merit reading in full. It suffices, however, to cite the passage at p. 562 where Lord Fraser set out the seven characteristics, some of which he held would be shared by, and would be the touchstone of, members of an ethnic group: The conditions which appear to me to be essential are these: (1) a long shared history, of which the group is conscious as distinguishing it from other groups, and the memory of which it keeps alive; (2) a cultural tradition of its own, including family and social customs and manners, often but not necessarily associated with religious observance. In addition two essential characteristics the following characteristics are, in my opinion, relevant; (3) either a common geographical origin, those to or descent from a small number of common ancestors; (4) a common language, not necessarily peculiar to the group; (5) a common literature peculiar to the group; (6) a common religion different from that of neighbouring groups or from the general community surrounding it; (7) being a minority or being an oppressed or a dominant group within a larger community, for example a conquered people (say, the inhabitants of England shortly after the Norman conquest) and their conquerors might both be ethnic groups. A group defined by reference to enough of these characteristics would be capable of including converts, for example, persons who marry into the group, and of excluding apostates. Provided a person who joins the group feels himself or herself to be a member of it, and is accepted by other members, then he is, for the purposes of the Act, a member. The Orthodox test of who is a Jew focuses on matrilineal descent. Discrimination on the basis of descent simpliciter is not necessarily discrimination on racial grounds. To discriminate against someone because he is not the son of a peer, or the son of a member of the SOGAT printing union, is not racial discrimination. Under the Orthodox test the Jewish woman at the head of the maternal line may be a convert of any nationality and from any ethnic background. Furthermore, because the Orthodox test focuses exclusively on the female line, any Jewish national or ethnic blood can become diluted, generation after generation, by the blood of fathers who have no Jewish characteristics of any kind. This is likely to happen if a Jewish woman marries out of and abandons the Jewish faith. It is possible today to identify two different cohorts, one by the Mandla criteria and one by the Orthodox criteria. The cohort identified by the Mandla criteria forms the Jewish ethnic group. They no longer have a common geographical origin or descent from a small number of common ancestors, but they share what Lord Fraser regarded as the essentials, a long shared history, of which the group is conscious as distinguishing it from other groups and the memory of which it keeps alive and a cultural tradition of its own, including family and social customs and manners, often but not necessarily associated with religious observance. The man in the street would recognise a member of this group as a Jew, and discrimination on the ground of membership of the group as racial discrimination. The Mandla group will include many who are in the cohort identified by the Orthodox criteria, for many of them will satisfy the matrilineal test. But there will be some who do not. So far as the cohort identified by the Orthodox test is concerned, many of these will also fall within the Mandla group. But there will be some, indeed many, who do not. Most of these will be descendants from Jewish women who married out of and abandoned the Jewish faith. They will not satisfy the two vital criteria identified by Lord Fraser. Indeed, they may be unaware of the genetic link that renders them Jewish according to the Orthodox test. Thus, in Lord Pannicks submissions the Orthodox test is not one that necessarily identifies members of the Jewish ethnic group. It is a test founded on religious dogma and discrimination on the basis of that test is religious discrimination, not racial discrimination. Discussion Initially I found Lord Pannicks argument persuasive, but on reflection I have concluded that it is fallacious. The fallacy lies in treating current membership of a Mandla ethnic group as the exclusive ground of racial discrimination. It ignores the fact that the definition of racial grounds in section 3 of the 1976 Act includes ethnic or national origins (my emphasis). Origins require one to focus on descent. Lord Pannick is correct to submit that descent simpliciter is not a ground of racial discrimination. It will only be such a ground if the descent in question is one which traces racial or ethnic origin. This leads me to a further argument advanced on behalf of JFS, which found favour with Munby J and is accepted by Lord Hope. This is that the matrilineal test is a religious test and that discrimination on the basis of that test is religious, not racial. This argument falls into two parts: (i) the matrilineal test is a test laid down by Jewish religious law; (ii) the matrilineal test is not a test of ethnic origin or ethnic status but a test of religious origin and religious status. The first part of this argument focuses, as has Lord Hope, on the reason why the matrilineal test is applied. The reason is that the JFS and the OCR apply the test for determining who is a Jew laid down by Orthodox Jewish religious law. What subjectively motivates them is compliance with religious law, not the ethnicity of the candidates who wish to enter the school. My reaction to this argument will already be clear. It is invalid because it focuses on a matter that is irrelevant the motive of the discriminator for applying the discriminatory criteria. A person who discriminates on the ground of race, as defined by the Act, cannot pray in aid the fact that the ground of discrimination is one mandated by his religion. The second argument requires more detailed analysis. It is that the criteria applied by the matrilineal test are religious criteria. They identify the religious status of the woman at the head of the maternal line and the religious status of the child at the end of the line. They have nothing to do with ethnicity. Lord Hope suggests that the validity of this argument can be demonstrated by contrasting the position of a person descended from a woman converted a century ago in an Orthodox synagogue with the position of a person descended from a woman converted a century ago in a non Orthodox synagogue. JFS would recognise the former as having Jewish status, but not the latter but the discrimination would result from the application of religious criteria. This example illustrates the fact that today, although not a century ago, in the very small number of cases where the question of whether someone is Jewish depends upon conversion, there is a possibility that different denominations will, as a result of differences between the criteria that they require for conversion, differentiate between them. If so, identifiable sub groups of Jews may develop, distinguished by religious criteria. This does not, however, help to determine whether the sub groups are sub groups of those who share the Jewish religion or sub groups of those who share Jewish ethnicity, or indeed both. Conversion has, for millennia, been accepted by all Jews as one of the ways in which a person can become a Jew, and the evidence that we have seen does not suggest that different tests of conversion have been applied until recent times. One of the difficulties in this case lies in distinguishing between religious and ethnic status. One of the criteria of ethnicity identified by Lord Fraser is a shared religion. In the case of Jews, this is the dominant criterion. In their case it is almost impossible to distinguish between ethnic status and religious status. The two are virtually co extensive. A woman who converts to Judaism thereby acquires both Jewish religious status and Jewish ethnic status. In the Chief Rabbis paper about conversion that I quoted at the beginning of this judgment he says: What is conversion? People often refer to the case of Ruth the Moabite, whose story is told with such beauty in the book that bears her name. It is from Ruths reply to her mother in law Naomi that the basic principles of conversion are derived. She said: Where you go, I will go. Where you stay, I will stay. Your people will be my people, and your God my God. That last sentence a mere four words in Hebrew defines the dual nature of conversion to this day. The first element is an identification with the Jewish people and its fate (Your people will be my people). The second is the embrace of a religious destiny, the covenant between Israel and God and its commands (Your God will be my God). I also found helpful in this context a passage in the response to a request for information from the Treasury Solicitor by Rabbi Dr Tony Bayfield, the head of the movement for Reform Judaism. It is headed Background Information and I do not believe it to be controversial: I believe that you are correct in your understanding of the OCRs criteria for determining whether a child is Jewish. This definition is, in essence, shared by the entire Jewish world both in Britain and globally. There are nuances the most significant of which is that the Liberal Movement (Liberal Judaism) in Britain regards as Jewish a child either of whose parents is Jewish (Liberal Judaism represents about 8% of synagogue affiliations; the other 92% of affiliations are to groupings which follow the tradition of the maternal line). However, all Jewish institutions worldwide as far as I know would say that Jewish identity is determined by either descent or conversion. There is a verse in the Book of Deuteronomy (Ch 29 v14) which describes the covenant between God and the Jewish people made at Sinai as being made both with those who stood there [at the foot of Sinai on] that day and also with those who were not there that day. Tradition defines those who were not there as descendants and converts. Conversion has been a feature of Jewish life for thousands of years. It has been most prolific when Jews have lived in tolerant, open societies and least prolific when Jews have been persecuted and state law has prohibited conversion to Judaism. But it has always taken place and means that Jews exhibit a range of facial features any visit to Israel will reveal Jews of different skin colours and appearance. Jews are not a race within any accepted or acceptable definition of the word. The phrase ethnic group is sometimes suggested but since ethnic can mean either cultural or racial or a mixture of the two, it is not very helpful. The best definition or description that I know is that Jews are a people bound together by ties of history and culture. Which brings us back to the verse from Deuteronomy. Jews are a people defined by the Sinai myth (not a pejorative term) of descent, of a continuous chain made up of descendants and converts, the latter becoming parts of the chain, indistinguishable from those who are Jewish by descent, inheriting the history, the culture (at core a religious culture) and at once becoming part of it. So, the OCRs definition of Jewish status is, in its essence, universal descent or conversion. This passage demonstrates a number of matters. First that the test of descent is not restricted to Orthodox Jewry but is a universal test applied by those who consider themselves to be Jews. Secondly that, whatever their racial, national and ethnic background, conversion unquestionably brings the convert within the Mandla definition of Jewish ethnicity. She becomes a member of the Jewish people. See also the comparison made by the Chief Rabbi between conversion and changing nationality in my earlier quotation. Thirdly the passage demonstrates that the religious test of matrilineal descent does not apply an idiosyncratic criterion that has no connection to race. It is a test which focuses on the race or ethnicity of the woman from whom the individual is descended. Where a Jew is descended by the maternal line from a woman who has converted to Judaism, the matrilineal link is with an ethnic Jew. There is this further important point. Focusing on conversion ignores the fact that the matrilineal test is not restricted to descent from Jews by conversion. The Jews to whom Moses spoke at Mount Sinai would have shared all seven of the characteristics of ethnic identity itemised by Lord Fraser in Mandla. The passage in Deuteronomy to which Jews look as the basis of the matrilineal test plainly focuses on race. Many Jews are highly conscious of their particular geographical and national roots. We had evidence of Cohens who trace their ancestry back to the servants at the Temple and who, for that reason, are prohibited from marrying a convert. For these reasons it is plain that the relevant characteristics of the relative to whom the maternal line leads are not simply religious. The origin to which the line leads can be racial and is, in any event, ethnic. Thus we are not here dealing with descent from a peer, or from a member of SOGAT, but a woman whose race, possibly, and her ethnicity, certainly, as well as her religion, are Jewish. David Frei, the Registrar of the London Beth Din, states in his witness statement that matrilineal descent is a criterion of Jewish identity, that being Jewish is a matter of religious status under Jewish religious law and that in orthodoxy, Jewish status is solely and irreducibly a religious issue. I take these statements to mean that the test of Jewish status is a test laid down exclusively by religion. It would not be right to read them as meaning that the only thing that matrilineal descent does is to identify religious status, whether of the ancestor at the head of the line or of the descendant at the other. This would not be consistent with the first element of the dual nature of conversion, as described by the Chief Rabbi. Nor would it be consistent with the fact that the matrilineal test embraces racial origin. To the Jew the matrilineal descendant is a member of the Jewish family and a member of the Jewish religion. The two are inextricably intertwined. The descendant will not necessarily be a member of a Mandla Jewish ethnic group; that is the group that has the essential criteria identified by Lord Fraser. He may, indeed, have none of the seven criteria in the list. The gentile in the street would not identify such a person as a Jew. Equally, he would not identify such a person as a member of the Jewish religion. Membership of a religion or faith normally indicates some degree of conscious affiliation with the religion or faith on the part of the member. The question of the status of the matrilineal descendant may thus depend upon whether one is applying the subjective viewpoint of a Jew or the objective Mandla test. But one thing is clear about the matrilineal test; it is a test of ethnic origin. By definition, discrimination that is based upon that test is discrimination on racial grounds under the Act. Lord Pannick is correct to say that it is possible to identify two different cohorts, or groups, with an overlapping membership, those who are descended by the maternal line from a Jew, and those who are currently members of the Jewish ethnic group. Discrimination against a person on the grounds that he or she is, or is not, a member of either group is racial discrimination. JFS discriminates in its admission requirements on the sole basis of genetic descent by the maternal line from a woman who is Jewish, in the Mandla as well as the religious sense. I can see no escape from the conclusion that this is direct racial discrimination. The consequences of the majority decision. The website of the JFS states that Whilst two thirds or more of our students have attended Jewish primary schools, a significant number of our year 7 intake has not attended Jewish schools and some enter the school with little or no Jewish education. Many come from families who are totally committed to Judaism and Israel; others are unaware of Jewish belief and practice. Initially this gave me the impression that successful candidates for entry to JFS included a significant number who had no connection with Judaism other than a matrilineal link with a Jewish woman, so that they fell outside the Mandla ethnic Jewish group. On reflection I found this an unlikely scenario. Any parents who apply to send their children to JFS relying on matrilineal Jewish descent must, at least, have an awareness of that link with Judaism. Evidence from the JFS suggests rather more than this. The schools information sheet which is sent to prospective teaching staff states: The modern JFS serves almost the whole breadth of the Anglo Jewish community in Greater London. About 85% of its students come from Barnet, Harrow, Brent and Hertsmereour students come from the widest possible range of social, economic and religious backgrounds. Our parents represent a very broad range of society. They all, however, share two things in common; a strong sense of Jewish identity and, in almost all cases, a keen sense of ambition for their children (emphasis added). This suggests that those who decide to send their children to JFS satisfy the Mandla criteria for belonging to an ethnic group, even though some of them do not attend a synagogue. They live in the same part of London, they are conscious of the wifes Jewish descent, and they have a strong sense of Jewish identity. This is likely to include an appreciation of Jewish history and culture. If this is correct, then the reality is that the JFS, in common with other Jewish faith schools, is in practice discriminating in favour of a sub group of Mandla ethnic Jews, who also satisfy the matrilineal requirement. The fact that the JFS conditions of admission would give precedence to candidates who satisfy the descent requirement but do not satisfy the Mandla test of Jewish ethnicity is of no practical significance. This appeal has been concerned with what has, in practice, been only the threshold test for admission to the JFS; matrilineal descent. For at least the last ten years the JFS has been oversubscribed with candidates for admission who satisfy this test. The problem has been how to choose between them. The evidence does not suggest that anyone has challenged the matrilineal test in principle. It is, after all, a test that has general acceptance as the criterion of being a Jew. Apart from Ms challenge, evidence has been given of two others, but each of these was a challenge on the ground of a failure to recognise the mothers conversion, not a challenge against the admission criteria themselves. Concern has been expressed that the majority decision will compel Jewish faith schools to admit children whom the Jewish religion does not recognise as being Jewish, that is children who are not descended from Jews by the maternal line. It is not clear that this is so. As a result of the decision of the Court of Appeal the JFS has published a new admission policy for admission in September 2010. This applies a test of religious practice, including synagogue attendance, Jewish education and/or family communal activity. As matrilineal descent or conversion is the requirement for membership of the Jewish faith according to the law of that faith, those who satisfy a practice test are likely to satisfy this requirement. Thus, instead of applying the matrilineal descent test by way of direct discrimination, the school will be applying a test that will indirectly discriminate in favour of those who satisfy the matrilineal descent test. It is not clear that the school will now be faced with applications from those who do not satisfy the test. Indirect discrimination Having decided that there has been in this case direct racial discrimination, it would be possible to go on to consider the hypothetical question of whether, if JFSs admissions policy had constituted indirect discrimination, it would have been justifiable. I do not propose to embark on that exercise, which would involve, among other considerations, an analysis of the policy underlying the exception made for faith schools in relation to religious discrimination by section 50 of the Equality Act 2006. I have not found it necessary to consider the provisions of that Act, for they have no bearing on the issue of direct racial discrimination. For the reasons that I have given I would dismiss the substantive appeal. The United Synagogue has appealed against the order for Costs made by the Court of Appeal. I concur in the basis upon which Lord Hope has held that this appeal should be allowed. Submissions in writing as to the appropriate order in respect of the costs of both appeals to the Supreme Court should be submitted within 14 days. LADY HALE No one in this case is accusing JFS (as the Jews Free School is now named) or the Office of the Chief Rabbi of discrimination on grounds of race as such. Any suggestion or implication that they are racist in the popular sense of that term can be dismissed. However, the Race Relations Act 1976 caters also for discrimination on grounds of colour, nationality or ethnic or national origins: see s 3(1). This case is concerned with discrimination on account of ethnic origins. And the main issue is what that means specifically, do the criteria used by JFS to select pupils for the school treat people differently because of their ethnic origins? My answer to that question is the same as that given by Lord Phillips, Lord Mance, Lord Kerr and Lord Clarke and for the same reasons. That we have each written separate opinions underlines the fact that we have each reached the same conclusion through a process of independent research and reasoning. It is only because the debate before us and between us has called in question some fundamental principles of discrimination law that I feel it necessary to underline them yet again. First, the Race Relations Act 1976 creates two different statutory torts, direct and indirect discrimination. It also creates two different forms of indirect discrimination, the original form provided for in section 1(1)(b) and the later form derived from the European Directive (2000/43 EC), provided for in section 1(1A). The later form applies to the discrimination prohibited by section 17, in admission to educational establishments, which is the context here: see s 1(1B)(b). If the later form applies, the original form does not: see s 1(1C). The basic difference between direct and indirect discrimination is plain: see Mummery LJ in R (Elias) v Secretary of State for Defence [2006] EWCA 1293, [2006] 1 WLR 3213, para 119. The rule against direct discrimination aims to achieve formal equality of treatment: there must be no less favourable treatment between otherwise similarly situated people on grounds of colour, race, nationality or ethnic or national origins. Indirect discrimination looks beyond formal equality towards a more substantive equality of results: criteria which appear neutral on their face may have a disproportionately adverse impact upon people of a particular colour, race, nationality or ethnic or national origins. Direct and indirect discrimination are mutually exclusive. You cannot have both at once. As Mummery LJ explained in Elias, at para 117, The conditions of liability, the available defences to liability and the available defences to remedies differ. The main difference between them is that direct discrimination cannot be justified. Indirect discrimination can be justified if it is a proportionate means of achieving a legitimate aim. But it is significant that section 57(3) provides that, in respect of the earlier form of indirect discrimination under section 1(1)(b), no award of damages shall be made if the respondent proves that the requirement or condition in question was not applied with the intention of treating the claimant unfavourably on racial grounds. We are concerned with the later form of indirect discrimination, under section 1(1A), to which section 57(3) does not apply, but the fact that this exception to the available remedies was made suggests that Parliament did not consider that an intention to discriminate on racial grounds was a necessary component of either direct or indirect discrimination. One can act in a discriminatory manner without meaning to do so or realising that one is. Long standing authority at the highest level confirms this important principle. The leading case on direct discrimination is R v Birmingham City Council, ex p Equal Opportunities Commission [1989] 1 AC 1155. So far as I am aware, it has never previously been suggested that it set the law on the wrong track: quite the reverse. As is well known, there were more grammar school places for boys than for girls in Birmingham with the result that girls had to do better than boys in the entrance examination in order to secure a place. The council did not mean to discriminate. It bore the girls no ill will. It had simply failed to correct a historical imbalance in the places available. It was nevertheless guilty of direct discrimination on grounds of sex. Lord Goff of Chieveley said this, at p 1194A: There is discrimination under the statute if there is less favourable treatment on the ground of sex, in other words if the relevant girl or girls would have received the same treatment as the boys but for their sex. The intention or motive of the defendant to discriminate, although it may be relevant so far as remedies are concerned . is not a necessary condition of liability; it is perfectly possible to envisage cases where the defendant had no such motive, and yet did in fact discriminate on the ground of sex. Indeed, . if the councils submission were correct it would be a good defence for an employer to show that he discriminated against women not because he intended to do so but (for example) because of customer preference, or to save money, or even to avoid controversy. In the present case, whatever may have been the intention or motive of the council, nevertheless it is because of their sex that the girls in question receive less favourable treatment than the boys, and so are the subject of discrimination under the Act of 1975. He went on to point out that this was well established in a long line of authority, citing Jenkins v Kingsgate (Clothing Productions) Ltd [1981] 1 WLR 1485, 1494, per Browne Wilkinson J; R v Secretary of State for Education and Science, Ex parte Keating (1985) 84 LGR 469, 475, per Taylor J; and Ministry of Defence v Jeremiah [1980] QB 87, 98, per Lord Denning MR. The but for test was endorsed again by the House in the rather more controversial case of James v Eastleigh Borough Council [1990] 2 AC 751. Again, the facts are well known. A husband and wife, both aged 61, went to their local swimming pool. The husband was charged 75 pence and the wife was let in free. Once again the council had the best of motives. People who had reached pensionable age were let in free. But pensionable age directly discriminated between men and women on grounds of their sex. It followed that the swimming pool admission charges did so too. As Lord Bridge of Harwich said, at pp 765 6, the purity of the discriminators subjective motive, intention or reason for discriminating cannot save the criterion applied from the objective taint of discrimination on the ground of sex. Lord Ackner was to the same effect, at p 769: The policy itself was crystal clear if you were a male you had, vis vis a female, a five year handicap. The reason why this policy was adopted can in no way affect or alter the fact that the council had decided to implement and had implemented a policy by virtue of which men were to be treated less favourably than women, and were to be so treated on the ground of, i.e. because of, their sex. Lord Goff of Chieveley amplified what he had said in Birmingham, at p 774: Whether or not the treatment is less favourable in the relevant sense, i.e. on the ground of sex, may derive either from the application of a gender based criterion to the complainant, or from selection by the defendant of the complainant because of his or her sex; but, in either event, it is not saved from constituting unlawful discrimination by the fact that the defendant acted from a benign motive. However, in the majority of cases, I doubt if it is necessary to focus upon the intention or motive of the defendant in this way. This is because, as I see it, cases of direct discrimination under section 1(1)(a) can be considered by asking the simple question: would the complainant have received the same treatment from the defendant but for his or her sex. Although this decision was clearly on all fours with the Birmingham case, it was reached only by a majority. Lord Lowry preferred a subjective rather than an objective approach to on grounds of sex. Lord Griffiths, interestingly, pointed out that to impose a retirement age of 60 on women and 65 on men was discriminatory on the grounds of sex. It would result in women being less well off than men at 60. But what I do not accept is that an attempt to redress the result of that unfair act of discrimination by offering free facilities to those disadvantaged by the earlier act of discrimination is, itself, necessarily discriminatory on grounds of sex (p 768). Lord Griffiths was there challenging the concept of symmetrical formal equality: that it is just as discriminatory to treat a man less favourably than a woman, even though the object is to redress the impact of previous less favourable treatment of a woman. But there can be no doubt that the original sex and race discrimination legislation intended, through the mechanism of direct discrimination, to achieve symmetrical formal equality between men and women, black and white, rather than to redress any historic disadvantage of one against the other. Attempts to do so, for example by quotas or all women shortlists, are still highly controversial. Despite this difference of opinion, the decisions in Birmingham and James have been applied time and time again. They were affirmed by the House of Lords in the victimisation case of Nagarajan v London Regional Transport [2000] 1 AC 501. As Lord Nicholls of Birkenhead said, at p 511: Racial discrimination is not negatived by the discriminators motive or intention or reason or purpose (the words are interchangeable in this context) in treating another person less favourably on racial grounds. In particular, if the reason why the alleged discriminator rejected the complainants job application was racial, it matters not that his intention may have been benign. However, Lord Nicholls had earlier pointed out that there are in truth two different sorts of why question, one relevant and one irrelevant. The irrelevant one is the discriminators motive, intention, reason or purpose. The relevant one is what caused him to act as he did. In some cases, this is absolutely plain. The facts are not in dispute. The girls in Birmingham were denied grammar school places, when the boys with the same marks got them, simply because they were girls. The husband in James was charged admission to the pool, when his wife was not, simply because he was a man. This is what Lord Goff was referring to as the application of a gender based criterion. But, as Lord Goff pointed out, there are also cases where a choice has been made because of the applicants sex or race. As Lord Nicholls put it in Nagarajan, in every case it is necessary to inquire why the complainant received less favourable treatment. This is the crucial question. Was it on grounds of race? Or was it for some other reason, for instance, because the complainant was not so well qualified for the job? Save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator (pp 510 511). In James, Lord Bridge was not to be taken as saying that the discriminators state of mind is irrelevant when answering the crucial, anterior question: why did the complainant receive less favourable treatment? The distinction between the two types of why question is plain enough: one is what caused the treatment in question and one is its motive or purpose. The former is important and the latter is not. But the difference between the two types of anterior enquiry, into what caused the treatment in question, is also plain. It is that which is also explained by Lord Phillips, Lord Kerr and Lord Clarke. There are obvious cases, where there is no dispute at all about why the complainant received the less favourable treatment. The criterion applied was not in doubt. If it was based on a prohibited ground, that is the end of the matter. There are other cases in which the ostensible criterion is something else usually, in job applications, that elusive quality known as merit. But nevertheless the discriminator may consciously or unconsciously be making his selections on the basis of race or sex. He may not realise that he is doing so, but that is what he is in fact doing. As Lord Nicholls went on to say in Nagarajan, An employer may genuinely believe that the reason why he rejected an applicant had nothing to do with the applicants race. After careful and thorough investigation of a claim members of an employment tribunal may decide that the proper inference to be drawn from the evidence is that, whether the employer realised it at the time or not, race was the reason why he acted as he did . Conduct of this nature by an employer, when the inference is legitimately drawn, falls squarely within the language of section 1(1)(a) (p 512). This case is not in that category. There is absolutely no doubt about why the school acted as it did. We do not have to ask whether they were consciously or unconsciously treating some people who saw themselves as Jewish less favourably than others. Everything was totally conscious and totally transparent. M was rejected because he was not considered to be Jewish according to the criteria adopted by the Office of the Chief Rabbi. We do not need to look into the mind of the Chief Rabbi to know why he acted as he did. If the criterion he adopted was, as in Birmingham or James, in reality ethnicity based, it matters not whether he was adopting it because of a sincerely held religious belief. No one doubts that he is honestly and sincerely trying to do what he believes that his religion demands of him. But that is his motive for applying the criterion which he applies and that is irrelevant. The question is whether his criterion is ethnically based. So at long last I arrive at what, in my view, is the only question in this case. Is the criterion adopted by the Chief Rabbi, and thus without question by the school, based upon the childs ethnic origins? In my view, it clearly is. M was rejected because of his mothers ethnic origins, which were Italian and Roman Catholic. The fact that the Office of the Chief Rabbi would have over looked his mothers Italian origins, had she converted to Judaism in a procedure which they would recognise, makes no difference to this fundamental fact. M was rejected, not because of who he is, but because of who his mother is. That in itself is not enough. If M had been rejected because his mother shopped in Waitrose rather than Marks and Spencer, that would not have been because of her or his ethnicity. But it was because his mother was not descended in the matrilineal line from the original Jewish people that he was rejected. This was because of his lack of descent from a particular ethnic group. In this respect, there can be no doubt that his ethnic origins were different from those of the pupils who were admitted. It was not because of his religious beliefs. The school was completely indifferent to these. They admit pupils who practise all denominations of Judaism, or none at all, or even other religions entirely, as long as they are halachically Jewish, descended from the original Jewish people in the matrilineal line. There is no doubt that the Jewish people are an ethnic group within the meaning of the Race Relations Act 1976. No Parliament, passing legislation to protect against racial discrimination in the second half of the twentieth century, could possibly have failed to protect the Jewish people, who had suffered so unspeakably before, during and after the Holocaust. If Parliament had adopted a different model of protection, we would not be here today. Parliament might have adopted a model of substantive equality, allowing distinctions which brought historically disadvantaged groups up to the level of historically advantaged groups. But it did not do so. It adopted a model of formal equality, which allows only carefully defined distinctions and otherwise expects symmetry. A man must be treated as favourably as a woman, an Anglo Saxon as favourably as an African Caribbean, a non Jew as favourably as a Jew. Any differentiation between them, even if it is to redress historic disadvantage, must be authorised by legislation. This means that it is just as unlawful to treat one person more favourably on the ground of his ethnic origin as it is to treat another person less favourably. There can be no doubt that, if an employer were to take exactly the same criterion as that used by the Office of the Chief Rabbi and refuse to employ a person because the Chief Rabbi would regard him as halachically Jewish, the employer would be treating that person less favourably on grounds of his ethnic origin. As Lord Kerr explains, there can be no logical distinction between treating a person less favourably because he does have a particular ethnic origin and treating him less favourably because he does not. Some may feel that discrimination law should modify its rigid adherence to formal symmetry and recognise a greater range of justified departures than it does at present. There may or may not be a good case for allowing Jewish schools to adopt criteria which they believe to be required by religious law even if these are ethnically based. As far as we know, no other faith schools in this country adopt descent based criteria for admission. Other religions allow infants to be admitted as a result of their parents decision. But they do not apply an ethnic criterion to those parents. The Christian Church will admit children regardless of who their parents are. Yet the Jewish law has enabled the Jewish people and the Jewish religion to survive throughout centuries of discrimination and persecution. The world would undoubtedly be a poorer place if they had not. Perhaps they should be allowed to continue to follow that law. But if such allowance is to be made, it should be made by Parliament and not by the courts departing from the long established principles of the anti discrimination legislation. The vehicle exists in the Equality Bill, which completed its committee stage in the House of Commons in the 2008 09 session and will be carried over into the 2009 10 session. The arguments for and against such a departure from the general principles of the legislation could then be thoroughly debated. The precise scope of any exception could also be explored. We know from the helpful intervention of the Board of Deputies of British Jews that the Masorti, Reform and Liberal denominations of Judaism have welcomed the result, if not the reasoning, of the decision of the Court of Appeal and would not wish for the restoration of the previous admission criteria. That is a debate which should not be resolved in court but by Parliament. We must not allow our reluctance to enter into that debate, or to be seen to be imposing our will upon a well meaning religious body, to distort the well settled principles of our discrimination law. That is to allow the result to dictate the reasoning. This was, in my view, a clear case of direct discrimination on grounds of ethnic origin. It follows that, however justifiable it might have been, however benign the motives of the people involved, the law admits of no defence. It also follows that it cannot be a case of indirect discrimination. There is indeed some difficulty in fitting this case into the model of indirect discrimination. The discriminator has to apply to the complainant a provision, criterion or practice which he applies or would apply equally to persons not of the same race or ethnic or national origins as [the complainant]. But if the criterion we are talking about is being halachically Jewish, then it is not applied equally between those who are and those who are not. And there is no question of those who are not being at a particular disadvantage when compared with others persons in the sense that more of the others can comply than they can. None of the non halachically Jewish can comply, while all of the halachically Jewish can do so. There is an exact correspondence between compliance and the criterion, just as there was in the Birmingham and James cases. This too suggests, although it does not prove, that the criterion is itself ethnically based. If not, I would agree with Lord Mance on this issue. I have tried only to explain how the long established principles of discrimination law apply in this case. In agreement with the more ample reasoning of Lord Phillips, Lord Mance, Lord Kerr and Lord Clarke on the facts of the case, I would dismiss the appeal of JFS on the main issue. On the United Synagogues costs appeal, I agree with the reasoning and conclusions of Lord Hope. LORD MANCE Introduction Two issues arise: whether the admissions policy adopted by JFS for 2007/08 involved direct discrimination, and, if not, whether it involved indirect discrimination, in each case against M, represented by his respondent father, E. M applied for admission to year 7 at JFS commencing in September 2007. The school was over subscribed and by letter dated 13 April 2007 it refused, because the school has not received evidence of [Ms] Jewish status, to consider M for a place unless and until all those applicants whose Jewish status has been confirmed have been offered places. An appeal to the independent admission appeal panel for JFS failed on 11 June 2007. The schools admissions policy (determined by its governing body pursuant to the School Standards and Framework Act 1998, ss.88 and 88C) treated an applicant in Ms position less favourably than other persons. The policy was to admit children recognised as being Jewish by the Office of the Chief Rabbi of the United Hebrew Congregation of the Commonwealth (OCR) or who have already enrolled upon or who have undertaken, with the consent of their parents, to follow any course of conversion to Judaism under the approval of the OCR. In the event of oversubscription, only children satisfying this test were to be considered for admission, in the following order: looked after children, those with one or more siblings attending JFS and then other applicants (the last category on a pro rata basis within each ability band according to the numbers of applicants attending respectively Jewish and non Jewish primary schools). The OCR, applying the Orthodox Jewish test, recognises as Jewish children who can show an Orthodox Jewish mother or ancestress in the matrilineal line. The mother or matrilineal ancestress can be Orthodox Jewish by birth or by conversion prior to the birth of her relevant child. The respondent is unable to show such descent, because his mother was a non Jewish Italian by birth and converted to Judaism before Ms birth not in the Orthodox tradition, but with the assistance of a non Orthodox Rabbi. The respondent and his father, with whom he now lives, practise Masorti Judaism, and M is recognised as Jewish by Reform and Masorti synagogues. (Before the late eighteenth century, the Court was told, these distinctions in Jewish observance did not exist.) The first question is whether the respondents less favourable treatment was on the grounds of his ethnic origins within s.1(1)(a) of the Race Relations Act 1976. JFS supported by the United Synagogue and the Secretary of State for Children, Schools and Families as interveners submit that M was treated as he was not on ethnic, but on purely religious grounds, while E and M, supported by the Equality and Human Rights Commission and the British Humanist Association as interveners submit that, although the schools motivation was and is religious, the treatment derived from a test which was, or was substantially, based on inherently ethnic grounds. JFS is a school designated as having a religious (Jewish) character under the School Standards and Framework Act 1998, s.69(3), and is accordingly exempted by the Equality Act 2006, s.50(1) from the prohibition against discrimination on the grounds of religion or belief which would otherwise apply under ss.45 and 47 of that Act. But this exemption does not affect the pre existing prohibition of discrimination on the grounds of ethnic origin, under the 1976 Act. The difficulty of the present case is that the word Jewish may refer to a people, race or ethnic group and/or to membership of a religion. In the case of JFS, JFS submits that it refers only to the latter. Munby J found that common to all Jewish denominations is a belief that being Jewish is a matter of status, defined in terms of descent or conversion, and not a matter of creed or religious observance (para. 21). However, JFS exists as an Orthodox Jewish institution, and (while Judaism is not a proselytising religion those who are not Jews can still earn salvation) Education about the Jewish faith is considered by Orthodox Jews to be a fundamental religious obligation on all Jews . An understanding and appreciation of the Jewish faith takes many years . This is one of the primary purposes of schools such as JFS, which seek to help those who are Jewish (or who are undergoing conversion) understand, learn about and follow their faith (the words come from a statement of Dayan Gelley dated 26 February 2008 approved by the Chief Rabbi, and were quoted by Munby J in para. 13). JFSs Instrument of Government, with which its governing body, when determining its admissions policy, was obliged to comply under Education Act 2002 s.21(4), records the schools ethos as being to preserve and develop its religious character in accordance with the principles of Orthodox Judaism, under the guidance of the Chief Rabbi of the United Hebrew Congregations . JFS has further explained in answers dated 17 December 2007 (to questions put by Ms solicitors in a letter dated 17 August 2007 written pursuant to the judicial review protocol and s.65(2) of the Race Relations Act) that JFSs admission criteria seek to maintain the schools religious ethos. In his statement dated 8 February 2008, para. 27, the chair of JFSs admissions committee described the admissions policy as pursuing a legitimate aim because it is developing the religious character of JFS in accordance with the principles of Orthodox Judaism. The same aim was reflected in para. 14 of a determination dated 27 November 2007, made by an Adjudicator appointed under the School Standards and Framework Act 1998 to consider Es objection to JFSs admissions policy. The Adjudicator added the further explanation that the legitimate aim being pursued is seeking to ensure that those children who are Jewish (applying Orthodox Jewish principles) are admitted to the school. While many who are eligible for and obtain admission to JFS as Orthodox Jews do not practise and may profess no or a different religious faith, the schools aim is to inculcate the ethos and, so far as possible, encourage the practice and observance of Orthodox Judaism in and by all who attend. In formulating the schools admissions policy, it was also the governing bodys duty under s.84(3) of that Act to act in accordance with the relevant provisions of the code for school admissions prepared under s.84(1) by the Secretary of State. The Secretary of States Schools Admissions Code for 2003 stated that schools like JFS designated as having a religious character might give preference in their admission arrangements to members of a particular faith or denomination , providing this does not conflict with other legislation, such as race relations legislation (para. 3.9), and that, where they do, their admissions arrangements should make clear whether a statement of religious affiliation or commitment would be sufficient, or whether it is to be tested and if so how and what if any references from a religious leader will be required. The Code for 2007 permits priority in case of over subscription to children who are members of, or who practise, their faith or denomination (para. 2.41) and states that It is primarily for the relevant faith provider group or religious authority to decide how membership or practice is to be demonstrated (para 2.43). Quite apart from the fact that they are subject to the application of the Race Relations Act 1976, the references to membership in the Codes do not specifically address descent based membership which may exist in the eyes of the faith provider or religious authority, while not doing so in the eyes of the child or his or her parents. Direct discrimination Direct discrimination can arise in one of two ways: because a decision or action was taken on a ground which was, however worthy or benign the motive, inherently racial within the meaning of s.1(1)(a), or because it was taken or undertaken for a reason which was subjectively racial: R v Birmingham City Council, ex p Equal Opportunities Commission [1989] AC 1155, 1194C D per Lord Goff of Chieveley, James v Eastleigh Borough Council [1990] 2 AC 751, 772B G per Lord Goff, and Nagarajan v London Regional Transport [2000] 1 AC 501, 511A per Lord Nicholls of Birkenhead and 520H 521B per Lord Steyn. In the Birmingham City Council case, girls were required to achieve a higher standard than boys for grammar school entry because of a disparity in the number of grammar school places available for boys and girls. Whatever may have been the intention or motive of the council, nevertheless it [was] because of their sex that the girls in question receive[d] less favourable treatment than the boys, and so [were] the subject of discrimination: per Lord Goff at p.1194C D. It was for the council to find some way of avoiding this, e.g. by balancing the places available. In James the motive for adopting as the test for free entry to the swimming pool to people who had reached state pension age was no doubt benign (it was probably because they were perceived as more likely to be needy). But being of pensionable age is not to be equated with ceasing to work or being in receipt of a pension, and the difference between the ages (65 and 60 respectively) at which men and women became of pensionable age made the test inherently discriminatory on the ground of sex. In Nagarajan at p.511A Lord Nicholls noted that Save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator, while Lord Steyn at pp.520H 521B approved the statements in the Birmingham City Council and James cases. The allegation in the present case is that a decision or action was taken on inherently ethnic grounds within s.1(1)(a), although the schools subjective motivation was its purely religious convictions. I appreciate that even the first part of this allegation involves what may be described as a subjective element a question of fact in Lord Nicholls words in Chief Constable of West Yorkshire Police v Khan [2001] UKHL 48, [2001] 1 WLR 1947, para, 29 in so far as it requires an answer to the question: why in fact was M refused a place? But there is here no room for doubt about the answer. He was refused a place by reason of the application of the admissions policy set out in para 74 above. With that answer, the next, relevant question is simply whether that policy, religiously motivated as it was, involved grounds for admission or refusal of admission which were in their nature inherently ethnic. Lord Pannick submits that, taking the test of an ethnic group recognised by the House of Lords in Mandla v Dowell Lee [1983] 2 AC 548, Jews constitute an ethnic group, but a group which embraces, on the one hand, a wide spectrum of Jewish observance (including that practised by the respondent) and excludes, on the other hand, many individuals who would, on Orthodox Jewish principles, be regarded as Jewish (e.g. a lapsed Jew who had converted to Catholicism or an atheist with a matrilineal Orthodox Jewish ancestress). There is thus no complete identity between a Jew in the sense suggested by that test and an Orthodox Jew according to Orthodox Jewish principles. He relies upon this as reinforcing his submission that JFSs admissions policy is based, and based solely, on religious grounds. I do not, however, consider that this submission resolves the issue. First, Mandla was a case of alleged indirect discrimination under s.1(1)(b) of the Act, which addresses differential treatment between persons of different racial groups. The test under s.1(1)(a) is whether a person has treated another person less favourably on racial grounds, defined by s.3 as meaning on any of the following grounds, namely colour, race, nationality or ethnic or national origins. This test is not expressed to be limited by reference to a need to identify a difference in treatment of persons currently members of different ethnic groups. Further, subsequent to the enactment by the European Community of Council Directive 2000/43/EC of 29th June 2000, which addresses both direct and indirect discrimination without using the concept of racial group in either connection, and since the consequent introduction of s.1(1A) of the Race Relations Act 1976 which equally omits any such concept, it seems to me inappropriate to read s.1(1)(a) as importing any such concept. All that is required is discrimination on grounds of a persons ethnic origins. A second, point, based on the international legal background and of possible relevance to the construction of s.1(1)(a), derives from the International Convention on the Elimination of All Forms of Racial Discrimination (CERD), in force since 1969, to which the United Kingdom is party and to which Directive 2000/43/EC recites that it was intended to give effect. Article 1(1) of CERD defines racial discrimination to mean any distinction, exclusion, restriction or preference based on race, colour, descent, or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life. The reference to descent (although not explicitly repeated after the general prohibition on racial discrimination in article 5) is, on its face, very pertinent in the present case. However, it is suggested that, having been introduced on a proposal by India, the word descent is limited to caste, but India itself disputes this, and it has been forcefully suggested that the background to its introduction indicates that it was not concerned with caste at all: Caste based Discrimination in International Human Rights Law, David Keane (Brunel University, Ashgate Publishing Ltd., 2007, chap. 5). Nevertheless, the Committee established to monitor implementation of CERD under article 8 has itself treated descent as including caste in its General Recommendation XXIX A/57/18 (2002) 111, where it recommended, in para 1, that states take steps to identify those descent based communities under their jurisdiction who suffer from discrimination, especially on the basis of caste and analogous systems of inherited status. Whether or not descent embraces caste, the concepts of inherited status and a descent based community both appear wide enough to cover the present situation. That in turn tends to argue for a wide understanding of the concept of discrimination on grounds of ethnic origins, although the point is a marginal one. Thirdly, and in any event, the Mandla test is broad, flexible and judgmental. It was adopted in order to embrace a group such as the Sikhs, of whom it could not be said that they were a different race in any narrow sense. There is some irony in the fact that, prior to the decision of the House in Mandla, there would have been little doubt that a narrow test based on birth or descent would have been regarded as required in order for there to be discrimination on the ground of ethnic origins. That was the gist of the judgments in the early case of Ealing London Borough Council v Race Relations Board [1972] AC 342. Unlike Mandla, the Ealing case was a case of alleged direct discrimination under s.1(1)(a), and in it statements were made to the effect that discrimination on account of race, or ethnic or national origins involved consideration of a persons antecedents (per Viscount Dilhorne at p.359E), that Origin, in its ordinary sense, signifies a source, someone or something from which someone or something has descended (per Lord Simon of Glaisdale at p.363H) and that national origins normally indicated a connection arising because the parents or one of the parents are or is identified by descent with the nation in question, but it may also sometimes arise because the parents have made their home among the people in question (per Lord Cross of Chelsea at p.365E F). The Court of Appeal in Mandla [1983] QB 1 picked up this approach in relation to indirect discrimination. It identified an ethnic group as one with common ancestral origins, however remote (see per Lord Denning MR at p.10A B and p.11B, expressly instancing Jews as an ethnic group, and per Kerr LJ at p.22B E), and on that basis excluded Sikhs on the ground that they constituted essentially a religious and cultural group. The House disagreed and developed the wider test, but there may still, in my view, be discrimination on grounds of ethnic origin in the narrower and more traditional sense, even under s.1(1)(b), let alone under the differently worded s.1(1)(a). The following passage in which Lord Fraser of Tullybelton developed the test in Mandla [1983] 2 AC 548, 561 563 is also worth quoting in full: I turn, therefore, to the third and wider meaning which is given in the Supplement to the Oxford English Dictionary (1972). It is as follows: 'pertaining to or having common racial, cultural, religious, or linguistic characteristics, esp. designating a racial or other group within a larger system . ' Mr Irvine, for the appellants, while not accepting the third (1972) meaning as directly applicable for the present purpose, relied on it to this extent, that it introduces a reference to cultural and other characteristics, and is not limited to racial characteristics. The 1972 meaning is, in my opinion, too loose and vague to be accepted as it stands. It is capable of being read as implying that any one of the adjectives, 'racial, cultural, religious or linguistic', would be enough to constitute an ethnic group. That cannot be the sense in which 'ethnic' is used in the Act of 1976, as that Act is not concerned at all with discrimination on religious grounds. Similarly, it cannot have been used to mean simply any 'racial or other group'. If that were the meaning of 'ethnic', it would add nothing to the word group, and would lead to a result which would be unacceptably wide. But in seeking for the true meaning of 'ethnic' in the statute, we are not tied to the precise definition in any dictionary. The value of the 1972 definition is, in my view, that it shows that ethnic has come to be commonly used in a sense appreciably wider than the strictly racial or biological. That appears to me to be consistent with the ordinary experience of those who read newspapers at the present day. In my opinion, the word 'ethnic' still retains a racial flavour but it is used nowadays in an extended sense to include other characteristics which may be commonly thought of as being associated with common racial origin. For a group to constitute an ethnic group in the sense of the Act of 1976, it must, in my opinion, regard itself, and be regarded by others, as a distinct community by virtue of certain characteristics. Some of these characteristics are essential; others are not essential but one or more of them will commonly be found and will help to distinguish the group from the surrounding community. The conditions which appear to me to be essential are these: (1) a long shared history, of which the group is conscious as distinguishing it from other groups, and the memory of which it keeps alive (2) a cultural tradition of its own, including family and social customs and manners, often but not necessarily associated with religious observance. In addition to those two essential characteristics the following characteristics are, in my opinion, relevant; (3) either a common geographical origin, or descent from a small number of common ancestors (4) a common language, not necessarily peculiar to the group (5) a common literature peculiar to the group (6) a common religion different from that of neighbouring groups or from the general community surrounding it (7) being a minority or being an oppressed or a dominant group within a larger community, for example a conquered people (say, the inhabitants of England shortly after the Norman conquest) and their conquerors might both be ethnic groups. A group defined by reference to enough of these characteristics would be capable of including converts, for example, persons who marry into the group, and of excluding apostates. Provided a person who joins the group feels himself or herself to be a member of it, and is accepted by other members, then he is, for the purposes of the Act, a member. That appears to be consistent with the words at the end of section 3(1) 'references to a person's racial group refer to any racial group into which he falls.' In my opinion, it is possible for a person to fall into a particular racial group either by birth or by adherence, and it makes no difference, so far as the Act of 1976 is concerned, by which route he finds his way into the group. This view does not involve creating any inconsistency between direct discrimination under paragraph (a) and indirect discrimination under paragraph (b). A person may treat another relatively unfavourably 'on racial grounds' because he regards that other as being of a particular race, or belonging to a particular racial group, even if his belief is, from a scientific point of view, completely erroneous. This passage makes clear that Lord Fraser was not excluding the relevance of descent from a small number of common ancestors. It was one among a number of factors which included, he considered essentially, a long shared history distinguishing a group from other factors and a shared cultural tradition, but which could also include a common geographical origin, language and/or religion and a status as a minority group. The whole passage emphasises the flexibility of the test adopted, and it is consistent with this that its application should depend on the context. A fourth, important point appears from the final sentence in the passage quoted from Lord Frasers speech: A person may treat another relatively unfavourably 'on racial grounds' because he regards that other as being of a particular race, or belonging to a particular racial group, even if his belief is, from a scientific point of view, completely erroneous. Lord Fraser probably had in mind a situation such as that where A, who dislikes Sikhs, discriminates against B in the (in fact erroneous) belief that B is a Sikh. Whether the victim actually has the sexual orientation or racial origins on the ground of which he or she is treated less favourably is irrelevant: English v Thomas Sanderson Blinds Ltd. [2008] EWCA Civ 1421; [2009] ICR 543 (where the majority also held it to be irrelevant whether the discriminator believed the victim to have, or whether the victim thought that the discriminator believed the victim to have, the relevant sexual orientation on the ground of which he was harassed). If A, applying his own view of the relative significance of the various factors mentioned by the House in Mandla, identifies a particular group of people as an ethnic group and discriminates against them on that ground that would, in my view (and as Lord Pannick accepted, with the proviso that there would have to be some basis in the Mandla criteria) be embraced by s.1(1)(a) of the Act. Any definition of an ethnic group applying the Mandla criteria is on this basis also flexible, whether the definition is undertaken for religious, charitable or educational purposes or, as happened only too terribly in Nazi Europe, for entirely malign purposes. In the present case, many of Lord Frasers factors could be seen as pointing without more to a conclusion that Orthodox Judaism should be regarded as a separate ethnic group or sub group including the sharing of a long history distinguishing themselves from other groups, a shared cultural tradition, a common religion and a separate status within any wider Jewish community. Others, such as a common geographical origin and a common language, they share with that wider community. Munby Js reasons for rejecting any suggestion that Orthodox Jews could be regarded as a separate ethnic group or sub group were that there was no evidence that they had separate ethnic origins from other, or most other, Jews. That may be said to focus purely on ethnic origins in a way which the Mandla test was intended to discourage. But, assuming that Orthodox Jews are not a separate ethnic group or sub group for the purposes of indirect discrimination (the relevant subsection for that purpose being now s.1(1A), rather than s.1(1)(b)), I consider that the Orthodox Jewish test of descent in the matrilineal line must still be regarded as a test based on ethnic origins, for the purposes of direct discrimination under s.1(1)(a) of the Act. On the evidence, it is at its core a test by which Orthodox Judaism identifies those to be regarded today as the descendants of a particular people, enlarged from time to time by the assimilation of converts, that is the Jewish people whose ancestor was the patriarch Jacob (Israel) and with whom the covenant of Mount Sinai was made through Moses upon the Exodus from Egypt. That the Jewish people was from its outset also defined by its religion does not lead to a different conclusion. A test of membership of a religion that focuses on descent from a particular people is a test based on ethnic origins. Whether matrilineal descent was originally chosen because it was an easy and secure way of identifying ancestry or because some other special significance was attached to womens role is not relevant. Other tests identifying a people by drawing on descent or ancestry can of course exist, for example, a test based on patrilineal origins, or on the origins of both parents. Some other Jewish denominations, the Court was told, have other tests, e.g. looking, or looking also, at the patrilineal line. But all such tests look, in one way or another, at ethnic origins. They merely take different views as to the form of descent or birth link by reference to which a persons origins in a particular (here biblical) people can be defined. I find instructive in this connection and generally the Background Information provided by Rabbi Dr Tony Bayfield which Lord Phillips quotes in paragraph 40. If a school admissions policy identifying Jews by descent is inadmissible, this will be the case in relation to any denomination of Jewish school applying such a policy, however the relevant descent is identified. This case cannot therefore be viewed as a mere disagreement between different Jewish denominations, for example about the criteria for conversion. It turns, more fundamentally, on whether it is permissible for any school to treat one child less favourably than another because the child does not have whatever ancestry is required, in the schools view, to make the child Jewish. Fifthly, there is, not surprisingly in the circumstances, also material tending positively to confirm that there is in the eyes of JFS no distinction between Jewishness in the religious sense and Jewishness on account of ethnic origins. The Agreed Statement of Facts records that M was refused admission for the year 2007 8, on the ground that he was not recognised as being Jewish by the Office of the Chief Rabbi . The same answer (that this child cannot be recognised as Jewish) was given by the OCR in relation to the child of the marriage of a Cohen (member of the Jewish priestly class) and an English woman who had undertaken conversion with an Orthodox Jewish Beth Din in Israel, on the ground that she had intended to marry her future husband at the time of her conversion, contrary to a prohibition on the marriage of Cohens with converts, with the consequence that her conversion could not have been sincere and was accordingly invalid in the eyes of the OCR. By their letter dated 17 August 2007 Ms solicitors asked JFS, with reference to the time when children applied and/or when a decision on admission was taken, how many children were Jewish on account of their race and/or ethnic origins and how many were not. The schools answer given through its solicitors on 17 December 2007 was that Those children confirmed as Halakhically Jewish were treated as Jewish by the school and those not so confirmed were treated as not Jewish. M set out this answer in his further response dated 19 December 2007 to the appellants notice of acknowledgement of service, in support of a plea that the appellants now belatedly, but rightly, accept that Halakhical Jewish status is synonymous with membership of a racial group for the purposes of section 3 of the Act a plea to which there was no response before the matter came to court. Further, according to a statement quoted in the respondents case, which JFS has not challenged or controverted, the Chair of JFSs Governors responded to fears about the opening in future of new Jewish schools (including or consisting of non Orthodox Jewish schools), by saying: If we are going to be able to maintain the three [existing Orthodox Jewish] schools, we are going to need to supply children out of thin air. The only way to fill all of those places would be to open the doors to children who are not Jewish by ethnicity or not at all. The inference is that the school recognises no distinction even today between Jewishness in a religious and in an ethnic sense. The one dictates the other. When Lord Pannick said on behalf of JFS that JFS does not dispute that there are thousands with Jewish ethnic claims in the Mandla sense who fail the test for a religious reason, that may be the effect of the Mandla test, applied objectively; if so, it is a conclusion about English law which no one could sensibly gainsay. But it does not follow that JFS or the Chief Rabbi themselves concur with or take the view of ethnicity which would follow from applying the Mandla test and the passages which I have quoted indicate that they do not (quite apart from the fact that the Mandla test was not directed to the present issue of less favourable treatment on the ground of ethnic origins). Apart from descent a person may become an Orthodox Jew by conversion. Conversion, in accordance with the principles of Orthodox Judaism, is recognised by Orthodox Judaism as making a person an Orthodox Jew. Some of the greatest figures in Jewish history have been converts, starting with Ruth the Moabite, great grandmother of King David, and Onkelos, Rabbi Akiva and other sages. From conversion, a convert is treated as an Orthodox Jew, and so too is any child of a female convert born after the completion of the mothers conversion (although some distinction exists between converts and other Orthodox Jews: witness the prohibition on the former marrying a Cohen, to which reference is made above). The Chief Rabbi has in 2005 compared conversion with acquiring a changed, foreign identity, while adding that the analogy is imperfect: Converting to Judaism is a serious undertaking, because Judaism is not a mere creed. It involves a distinctive, detailed way of life. When people ask me why conversion to Judaism takes so long, I ask them to consider other cases of changed identity. How long does it take for a Briton to become an Italian, not just legally but linguistically, culturally, behaviourally? It takes time. The analogy is imperfect, but it helps to explain the most puzzling aspect of conversion today the sometimes different standards between rabbinical courts in Israel and Britain. Several decades ago an Israeli Chief Rabbi argued that Israeli rabbinical courts should be more lenient than their counterparts in the Diaspora. His reasons were technical, but they make sense. It is easier to learn Italian if you are living in Italy. In Israel, many aspects of Jewish identity are reinforced by the surrounding culture. Its language is the language of the Bible. Its landscape is saturated by Jewish history. Shabbat is the day of rest. The calendar is Jewish. The reason for Ms ineligibility can be said to be that his mother converted to Judaism under a procedure and principles other than those accepted by Orthodox Jews. However, M remains at a disadvantage because of his descent, and, speaking generally, the test for admission of any child to JFS is for practical purposes one of descent. The possibility of a child applying to JFS being him or herself a convert, or even in the course of converting, appears negligible. JFS in its answers dated 17 December 2007 believed there never to have been any such child in the three years preceding the answers. Further, discrimination may be on an ethnic ground, even though this is not the sole ground for the decision, so long as an ethnic ground was a cause, the activating cause, a substantial and effective cause, a substantial reason, an important factor: Nagarajan, per Lord Nicholls at pp.512H 512B. As Miss Rose QC for E pointed out, an organisation which admitted all men but only women graduates would be engaged in direct discrimination on the grounds of sex. Similar reasoning would apply here to any suggestion that the possibility of conversion eliminated any possibility of direct discrimination on ethnic grounds. Finally, I also consider it to be consistent with the underlying policy of s.1(1)(a) of the Act that it should apply in the present circumstances. The policy is that individuals should be treated as individuals, and not assumed to be like other members of a group: R (European Roma Rights Centre) v Immigration Officer at Prague Airport [2005] 2 AC 1, paras 82 and 90, per Baroness Hale of Richmond and R (Gillan) v Commissioner of Police for the Metropolis [2006] 2 AC 307, paras. 44 and 90 per Lords Hope of Craighead and Brown of Eaton under Heywood. To treat individual applicants to a school less favourably than others, because of the happenstance of their respective ancestries, is not to treat them as individuals, but as members in a group defined in a manner unrelated to their individual attributes. JFS, supported on this point by the British Board of Deputies, argue that respect for religious freedom under article 9(1) of the European Convention on Human Rights and the importance attaching to the autonomous existence of religious communities (emphasised for example in Lffelmann v Austria (Application no. 42967/98, 12 March 2009, para 47) militate in favour of a conclusion upholding JFSs admissions policy. But freedom to manifest one's religion or beliefs is, under article 9(2) of the Convention, subject to such limitations as are prescribed by law and are necessary in a democratic society for the protection of the rights and freedoms of others. Under the United Nations Convention on the Rights of the Child 1989, article 3, it is the best interests of the child which the United Kingdom is obliged to treat as a primary consideration. Under Protocol 1, article 2 to the European Convention on Human Rights, it is the right of parents to ensure education and teaching in conformity with their own religions and philosophical convictions that the state must ensure in the exercise of any functions which it assumes in relation to education and to teaching. (I note in parenthesis that this has, since the hearing before the Supreme Court, been emphasised by the second section of the European Court of Human Rights in its judgment in Affaire Lautsi c. Italie (Requte no. 30814/06, 3 November 2009, paras. 47(b) and (c)). I express no further view on the reasoning or decision in that case, which may well go to the Grand Chamber. To treat as determinative the view of others, which an applicant may not share, that a child is not Jewish by reason of his ancestry is to give effect not to the individuality or interests of the applicant, but to the viewpoint, religiously and deeply held though it be, of the school applying the less favourable treatment. That does not seem to me either consistent with the scheme or appropriate in the context of legislation designed to protect individuals from discrimination. I accept that parental responsibility and choice relating to a child can determine the extent to which children are treated as having certain attributes, e.g. membership of a particular religion in the case of Christian baptism. But neither parental birth nor the fact that a mother has not converted to Orthodox Judaism at a time prior to a childs birth can be regarded as within the concept of parental responsibility and choice. Emphasis was put in submissions on difficulties which Orthodox or indeed other Jewish schools face in adopting any admissions policy other than that based on Jewish status. It was not, and could not, be suggested that these present any absolute legal answer to Ms case, but rather that they should cause any court to think very hard about whether the legislation can really require the result for which E and M contend and which the Court of Appeal accepted. How far such difficulties exist is contentious. Just before the hearing in the Supreme Court, statements were tendered by two interveners, in the case of the British Board of Deputies a statement dated 15 October 2009 from its chief executive, Mr Jon Benjamin, and in the case of the United Synagogue a statement dated 18 October 2009 from its chief executive, Mr Jeremy Jacobs. These came too late for proper investigation or answer and their contents are in issue, though there is evidence of Orthodox Jewish schools which in addition to a test based on Orthodox Jewish descent also apply tests based on religious observance. What can be said is that, since the Court of Appeals judgment, JFS and other Orthodox Jewish schools have instituted admissions policies based, in one way or another, on religious observance, but they have done so very reluctantly, and submit that its introduction is inconsistent with such schools missions to all Orthodox Jews. However, as I have said, such considerations cannot be decisive either way. For the reasons I have given, the Court of Appeal in my view reached the correct conclusion, when it held that as a matter of law the admissions policy followed by JFS was inherently discriminatory, contrary to s.1(1)(a) of the 1976 Act, although the policy was adopted by the school for the most benign, religious motives. On that basis, the issue of indirect discrimination cannot arise. However, I will address some words to it. This must, necessarily, be on the hypothesis that a different answer is given on the issue of direct discrimination to that which I have given. Indirect discrimination The relevant statutory provision governing indirect discrimination is s.1(1A). This was introduced into the 1976 Act by the Race Relations Act 1976 (Amendment) Regulations (SI 2003/1626), in order to implement in Great Britain Council Directive 2000/43/EC of 29th June 2000 (which contains a number of references showing its intended application to education). Subsequent Regulations (SI 2008/3008) have added the presently immaterial words or would put in s.1(1A)(b). The first question arising under s.1(1A) is whether JFSs admissions policy involved a provision, criterion or practice which puts persons of the same race or ethnic origins at a particular disadvantage when compared with other persons. Lord Pannick submits not. He accepts that the policy had the effect of putting at a disadvantage applicants with no ethnic link with Judaism. But, in his submission, it did not discriminate against M, because both M and those eligible for admission had the same Jewish ethnic origin, and the distinction drawn between them by the policy was on the basis of their religious, not ethnic status. Here too, the Mandla test of ethnicity is relied upon to assimilate M and those eligible for admission. As I have pointed out, Mandla was decided under s.1(1)(b) of the Race Relations Act 1976. Since the introduction of s.1(1A) to give effect to Council Directive 2000/43/EC of 29th June 2000, Lord Pannick accepts that any allegation of indirect discrimination falls to be considered primarily (and in reality, despite s.1(1C), almost certainly only) under s.1(1A). Assuming, contrary to my view, that the Mandla test of ethnic grouping controls the question whether there has been direct discrimination on ethnic grounds within s.1(1)(a), I do not consider that it can do so under s.1(1A). I see no reason under Community law to suppose that the Directive is limited to discrimination against ethnic groups in the Mandla sense, and s.1(1A) should, so far as possible, be construed consistently with the Directive. The language of s.1(1A) is general (although in one respect, the effect if any of which I need not consider, it adopts less exhaustive terminology than s.1(1)(a) and (b), in so far as it omits express reference to colour and nationality). On any ordinary understanding, Ms ethnic origins differed from those of most Orthodox Jews, because he had a non Jewish Italian mother. As Munby J said (para. 34), M is in Es eyes, and doubtless in the eyes of many who would consider themselves Jews, of mixed Jewish and (through the maternal line) Italian ethnic origins. True, some Orthodox Jews become such by conversion rather than birth, and some children of non Jewish Italian mothers can be Orthodox Jews by virtue of their mothers conversion according to Orthodox Jewish principles before their birth. But, both in general terms and in the case of M in particular, his mothers non Jewish Italian birth and so his ethnic origins led to M being at a particular disadvantage when compared with persons recognised as Orthodox Jews by JFS and by Orthodox Jewish authorities. The next question is whether JFS has shown that the disadvantage at which M was put was a proportionate means of achieving a legitimate end. Munby J in para. 192 of his judgment summarised the aim or objective of JFS as spelled out in the materials before him (and indicated out in paragraph 76 above) as being: to educate those who, in the eyes of the [Office of the Chief Rabbi] are Jewish, irrespective of their religious beliefs, practices or observances, in a school whose culture and ethos is that of Orthodox Judaism. The Court of Appeals reasoning on indirect discrimination appears to have been influenced by this characterisation. The Court of Appeal thought, with some justification, that the aim or objective as so advanced was circular. Sedley LJ, in paras. 45 47, described the schools admissions criteria as explicitly related to ethnicity and as having an ethnic component in character and said that an aim of which the purpose or inevitable effect is to make and enforce distinctions based on race or ethnicity cannot be legitimate. That is no doubt so. But, on the evidence, the truth which Munby Js characterisation can be read as omitting or perhaps obscuring is that, in Orthodox Jewish belief, anyone who is regarded by Orthodox Judaism as a Jew by birth is also regarded as being under a religious duty to educate him or herself about and to observe the tenets of Orthodox Judaism: see the statement of Dayan Gelley dated 26 February 2008 referred to in paragraph 76 above, and also that of Registrar Frei of the London Beth Din dated 6 February 2008. JFSs mission was to encourage and assist children regarded by Orthodox Judaism as being Jews to do this as far as possible. For that reason, the admission to the school of a range of pupils, who are Orthodox Jewish in the schools eyes, but who do not actually practise Orthodox Judaism or necessarily any religion at all, was and would still be regarded as a very positive feature, even if their or their parents actual motivation for seeking their admission to the school were to have been its excellent academic record. On the basis of this explanation of the thinking underlying the schools policy, it is possible to identify a legitimate aim, founded in the schools Orthodox Jewish character and the religious convictions of those responsible for its admissions policy; and the circularity which the Court of Appeal thought existed no longer does. The question thus arises, which the Court of Appeal thought it unnecessary to address, whether JFS as the alleged discriminator can show the differential treatment to be a proportionate means of achieving a legitimate aim: s.1(1A)(c). JFS accepts that its admissions policy treated the schools religious aim as an over riding absolute. Prior to the Court of Appeals decision, it had not considered or sought to weigh the practical implications or effect of adopting either it or any alternative policy, though it was aware both that the school included many non observing pupils and that there were many ineligible pupils who were intensely religious. No information is in these circumstance available as to the extent to which children admitted to the school were or became interested in learning to observe Orthodox Judaism, or to which the schools policy excluded other children who would be deprived of Jewish based schooling which they were keen for religious reasons to pursue. Munby J recorded (para. 8) that until the 1940s over 97% of synagogue membership was of Orthodox (United Synagogue) synagogues, but that by 2000, according to a report A Community of Communities, published under the auspices of the Institute for Jewish Policy Research, current membership of Jews affiliated to a synagogue consisted of 60.7% Orthodox, 10.5% Strictly Orthodox (Haredi), 27.3% Progressive (Reform and |Liberal), and 1.5% Masorti (Conservative), while 30% of all Jews were not affiliated to any synagogue at all. There has been and is a paucity of available and accessible Jewish schools other than Orthodox Jewish schools it appears that 29 of the total of 36 Jewish schools in England are Orthodox Jewish and applied a similar admissions policy to JFSs. JFS also regarded as irrelevant when formulating the admissions policy whether it might lead to unhappiness in relations between adherents to different Jewish denominations. The standard set in s.1(1A)(c) is a high one, adopting the more exacting EC test of proportionality: R (Elias) v Secretary of State for Defence [2006] 1 WLR 3213, para. 151, per Mummery LJ. The Directive also provides, in article 2(2)(b) that any indirectly discriminatory provision, criterion or practice is only justifiable if it is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary, but it refers to the European Convention on Human Rights and the language used equates with the test of proportionality which appears in s.1(1A)(c) of the 1976 Act. An ex post facto justification for a measure which is prima facie indirectly discriminatory can prove difficult to show: Elias, para.129 per Mummery LJ. It is for the school to show, in the circumstances, that its aim or objective corresponds to a real need and that the means used are appropriate and necessary to achieving that aim, and any decision on these points must weigh the need against the seriousness of the detriment to the disadvantaged group: Elias, para. 151 per Mummery LJ. The interests of society must also be considered: Huang v Secretary of State for the Home Department [2007] UKHL 11; [2007] 2 AC 167, para. 19, per Lord Bingham of Cornhill. In the case of JFS, as an educational establishment maintained by a local education authority, its general duty was supplemented by specific duties under s.71 of the 1976 Act, according to which it was incumbent on its governing body in carrying out its functions, [to] have due regard to the need (a) to eliminate unlawful racial discrimination; and (b) to promote equality of opportunity and good relations between persons of different racial groups. Munby J held that the school had, despite the good intentions and work which had gone into its race equality policy, failed to comply in full with s.71 of the 1976 Act. The schools race equality policy, which indicated that the school would disregard considerations based upon colour, disability, ethnic or racial origins, gender, marital status, nationality or religion except as provided for in the Schools authorised Admissions Policy, showed that it had in a general sense considered matters of racial discrimination. But it had not specifically considered either of the goals mentioned in s.71(1)(a) and (b) or, more particularly, specific ways in which these goals might be achieved (Munby J, para. 213). Nonetheless, Munby J considered that the schools policy satisfied the requirements of s.1(1A)(c), saying at paras. 199 202, first, that JFSs admissions policy was not, properly analysed, materially different from that which gives preference in admission to a Muslim school to those who were born Muslim or preference in admission to a Catholic school to those who have been baptised and, secondly, that some alternative admissions policy based on such factors as adherence or commitment to Judaism (even assuming that such a concept has any meaning for this purpose in Jewish religious law) would not be a means of achieving JFSs aims and objectives; on the contrary it would produce a different school ethos. JFS exists as a school for Orthodox Jews. If it is to remain a school for Orthodox Jews it must retain its existing admissions policy; if it does not, it will cease to be a school for Orthodox Jews. On that basis, Munby J held that the policy constituted a proportionate means of achieving a legitimate aim, and that the claim of indirect discrimination failed. Munby J also thought it quite idle to imagine that the fullest and most conscientious compliance with s.71 would have led to any difference either in the crucial part of JFSs admissions policy or in its application in Ms case (para. 214). On the evidence before the Court, and in the absence of any actual consideration or weighing of the need [to pursue the schools aim] against the seriousness of the detriment to the disadvantaged group (see Elias [2006] 1 WLR 3213, para 151), I find it impossible to reach the same conclusion. There is, as I have indicated, no information about the extent to which the school succeeds in its stated aim of inculcating Orthodox Judaism in the minds and habits not only of those who already practise it, but also of those pupils who gain admission as Orthodox Jews in the eyes of Orthodox Judaism. The latter may not on entry practise or have any interest in practising Orthodox Judaism. They or their parents may adhere in religious observance to a Jewish denomination other than the Orthodox Jewish and be concerned that their children receive a, rather than no, Jewish education; or they or their parents may be seeking entry for reasons associated with the schools acknowledged educational excellence, and may be themselves agnostic or atheist. The schools policy was formulated without considering the extent to which others professing the Jewish faith, but not in the Orthodox Jewish tradition, were separated by it from friends and from the general Jewish community by the schools admissions policy, or about the extent to which this might cause grief and bitterness in inter or intra community relations matters about which some evidence was tendered before the Court. It would, in parenthesis, also appear difficult to regard a school not considering such matters as complying with the School Admissions Code 2007, para. 2.48, which requires that admission authorities for faith schools should consider how their particular admission arrangements impact on the communities in which they are physically based and those faith communities which they serve. It was submitted that the school would become less diverse in a practising religious sense, if it admitted pupils only by reference to a test of Jewish religious observance. This could be so, but no consideration has been given to any possibility of ensuring continuing diversity on a structured basis, rather than simply excluding, by reference essentially to birth link criteria, all those not regarded by Orthodox Judaism as Orthodox Jews. Paragraph 1.4 of the schools existing admissions policy already provides that The School recruits from the whole range of ability, and this policy has the objective of securing a balanced, comprehensive, co educational intake. The schools Information Sheet for staff describes the modern JFS as serving almost the whole breadth of the Anglo Jewish community in Greater London and its admissions policy (not further detailed in this connection) as reflect[ing] positive selection to ensure a truly comprehensive ability intake. It continues: We aim to achieve a balanced intake across four ability bands. In addition to a thoroughly comprehensive spread of ability, our students come from the widest possible range of social, economic and religious backgrounds. On the information available, it is not shown that inability to select on the basis of birth link criteria will prevent the school from serving the wider community and achieving diversity in accordance with these stated aims. I would also not be as confident as Munby J was with regard to s.71. But, in any event, the test is not what the school would have done in the past if it had fully and properly considered its obligations under s.71. The test is whether objectively it can justify its present policy under s.1(1A)(c), once the test set by that subsection is fully and properly addressed. Munby Js comparison in para. 200 with the position of Catholic or Muslim children would, if exact, be no more than another way of stating the issue, but in reality it is not exact, at least if one takes the parental choice to baptise. His other reason echoes the schools case that its policy of giving preference to those regarded as Orthodox Jews by Orthodox Jews must, in case of over subscription, prevail over all other considerations, with which I have already dealt. It must, furthermore, be an exaggeration to say that the school would cease (or, presumably, with the introduction of its new policy after the Court of Appeals decision, has ceased) to be a school for Orthodox Jews (para. 214). If and when the number of places exceeds the number of those applying who are regarded by the school as Orthodox Jews, the school is anyway obliged under the legislation and paragraph 1.3 of its own admissions policy to admit other pupils. Until the matter came before the Adjudicator, Appendix A to its admissions policy in fact indicated that the remaining places would be filled according to the following criteria in this order: (1) looked after children, (2) children with one Jewish parent, (3) children with one or more Jewish grandparents and, finally, (4) all other applicants. (The Adjudicator by his Determination of 27 November 2007 held that criteria (2) and (3) involved indirect ethnic discrimination by reference to ancestry, which could not be justified by any presumption that children with one Jewish parent or one or more Jewish grandparents were more likely to be receptive or sympathetic to the schools Jewish Orthodox ethos than children of other parentage or grand parentage, and required the deletion of those two criteria on that basis. He rejected a suggestion that criteria (2) and (3) involved direct discrimination on the ground that they were based on religious grounds not racial grounds, despite the absence of any apparent basis in Orthodox Judaism for attaching any significance to fatherhood or grand parentage, except in the matrilineal line. Miss Rose QC for E submits, correctly in my view as I have already indicated, that the Adjudicator should logically have gone further by recognising criteria (2) and (3) as involving direct discrimination). In my view and (I emphasise) on the material before the Court, JFS has not and could not have justified its admissions policy. Accordingly, had the matter arisen for decision, I would have held that its admissions policy discriminated against M in a way which was not justified under s.1(1A), and was invalid accordingly. However, for reasons given earlier, I conclude that the policy was directly discriminatory, because it depended on birth link criteria which led to M being less favourably treated on ethnic grounds within s.1(1)(a) and 3(1) of the 1976 Act, and invalid on that basis. I would therefore dismiss the schools appeal. On the United Synagogues appeal in respect of costs, I agree with the reasoning and conclusions of Lord Hope. LORD KERR This case gives rise to perplexing issues of law. It involves an examination of the interface between religion and legal principle. It requires a close scrutiny of the statutory definition of racial discrimination. At its heart, however, lies the simple issue of a young boys desire to attend a particular school; his familys earnest wish that he be educated there; and the reasons that he was refused admission. That JFS is the school of choice for very many Jewish families is not in the least surprising. As well as achieving excellent academic results for its pupils, it promotes indeed embodies the values that most, if not all, practising Jews regard as central to their faith. It is therefore inevitably and regularly oversubscribed, that is to say, it attracts many more applicants for places than it can accommodate. The criteria for admission to the school are of intense interest to aspiring pupils and their parents. Those who devise and apply those criteria have a formidable, not to say daunting, responsibility. This situation is by no means unique. All over the United Kingdom and, no doubt, in many other parts of the world, every year, conscientious parents, anxious for their childrens continuing education at secondary level, pore over the entrance requirements for schools that they hope their sons and daughters will attend and strive to bring their childrens circumstances and in many instances, their own within the stipulated standards. Where JFS is unique, however, is in its imposition of a criterion that can only be achieved by an accident of birth or by conversion to the Orthodox Jewish faith. Apart from conversion, a child who wishes to be educated at JFS must be born of an Orthodox Jewish mother or have a female antecedent who is recognised as an Orthodox Jew by the Office of the Chief Rabbi (OCR). That condition of Orthodox Jewishness is normally acquired by the female by reason of the circumstances in which she herself was born; less commonly, it arises by her conversion to Judaism before the childs birth. In the latter case the circumstances of her conversion must be such as to satisfy the requirements of the OCR. Common to both situations, however, is the unalterable requirement that, at the moment of birth, the child must be a Jew as the Chief Rabbi, in his application of what he considers to be the requirements of Jewish law, defines that status. Central to the question of direct discrimination in this case is the breadth of meaning to be given to the phrase ethnic origins. The conventional meaning of origin is something from which anything arises or is derived. It also means ancestry, parentage, or extraction. Although ethnic is normally used as pertaining to or characteristic of a people or a group, clearly there can be mixed ethnic origins that do not fall neatly into one group or category. Thus, in this case, it is undeniable that M has mixed ethnic origins. He has derived these, as everyone derives their ethnicity, from his parents. At the moment of birth we are all endowed with characteristics that are as inalienable as they are inevitable. Our DNA is inescapable. Our parentage and the ancestry that it brings are likewise fixed and irreversible. These are part and parcel of our ethnic origins. M is not simply a Jew. His ethnic origins comprehend much more than his Jewishness. He is born of an Italian. He is, in the colloquial, half Italian. He would be recognised indeed, no doubt, claimed as such by his mothers family. He cannot disavow his mothers former Catholicism. That is as much part of his undeniable ethnic make up as is his fathers Masorti Jewishness and Englishness. M is, therefore, half English and half Italian; he is a Masorti Jew with an Italian mother who was once Catholic. All of these are aspects of his ethnic origins. And those origins are defined as much by what they do not contain as they are by what they include. What, of course, Ms ethnic origins do not and can never include is a matrilineal connection to Orthodox Jewry. That is an unchangeable aspect of his parentage, of his origins and of his ethnicity. He cannot be categorised as and can never claim to be born of an Orthodox Jewish mother as recognised by OCR. That this forms part of his ethnic origins can perhaps best be illustrated by comparing his situation with that of someone whose mother is recognised by OCR as Jewish. An assertion by such a person that this matrilineal feature formed part of his ethnic origins could surely not be challenged. Logically, therefore, the absence of such a feature from Ms heritage cannot be denied, and must be accepted, as a defining characteristic of his ethnicity. Direct discrimination The basic question that arises on the issue of direct discrimination can be simply stated. It is, Was M treated less favourably on racial grounds? Racial grounds being defined (in section 3 (1) of the Race Relations Act 1976) as including ethnic origins, and there being no dispute between the parties that he was treated less favourably than those who, by reason of their matrilineal connection to an Orthodox Jewish mother, were admitted to the school, the basic question can be refined to the following formulation, Was M refused admission to the school on grounds of his ethnic origins? It has been strongly asserted that the Chief Rabbi was not remotely interested in Ms ethnic origins for other than religious reasons. This is no doubt true, but the decision to refuse M entry to the school was unquestionably bound up with those origins. It was because of what was missing from Ms ethnic origins; because they did not include the indispensable matrilineal connection to Orthodox Judaism that the less favourable treatment occurred. Does this mean that he was discriminated against on ethnic grounds? Or does the fact that the refusal to admit him to the school was based on a decision on a religious issue remove the case from the sphere of racial discrimination altogether? These questions focus attention on the problematical issue of what is meant by discrimination on racial grounds. As Lord Hope has observed, the opinions in cases such as R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] AC 1155 and James v Eastleigh Borough Council [1990] 2 AC 751 tended to dismiss as irrelevant any consideration of the subjective reasons for the alleged discriminator having acted as he did unless it was clear that the racial or sex discrimination was overt. A benign motivation on the part of the person alleged to have been guilty of discrimination did not divest the less favourable treatment of its discriminatory character if he was acting on prohibited grounds. Later cases have recognised that where the reasons for the less favourable treatment are not immediately apparent, an examination of why the discriminator acted as he did may be appropriate. In Nagarajan v London Transport [2000] 1 AC 501, 511A, Lord Nicholls of Birkenhead, having identified the crucial question as why did the complainant receive less favourable treatment, said this: Save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator. It is, I believe, important to determine which mental processes Lord Nicholls had in mind in making this statement. It appears to me that he was referring to those mental processes that are engaged when the discriminator decides to treat an individual less favourably for a particular reason or on a particular basis. That reason or the basis for acting may be one that is consciously formed or it may operate on the discriminators subconscious. In my opinion Lord Nicholls was not referring to the mental processes involved in the alleged discriminator deciding to act as he did. This much, I believe, is clear from a later passage of his opinion, at p 511B where he said: The crucial question just mentioned is to be distinguished sharply from a second and different question: if the discriminator treated the complainant less favourably on racial grounds, why did he do so? The latter question is strictly beside the point when deciding whether an act of racial discrimination occurred. This latter passage points clearly to the need to recognise the distinction between, on the one hand, the grounds for the decision (what was the basis on which it was taken) and on the other, what motivated the decision maker to make that decision. The need for segregation of these two aspects, vital to a proper identification of the grounds on which the decision was made, is well illustrated, in my view, by the circumstances of this case. The school refused entry to M because an essential part of the required ethnic make up was missing in his case. The reason that they took the decision on those grounds was a religious one OCR had said that M was not a Jew. But the reason that he was not a Jew was because of his ethnic origins, or more pertinently, his lack of the requisite ethnic origins. The basis for the decision, therefore, or the grounds on which it was taken, was Ms lack of Jewishness. What motivated the school to approach the question of admission in this way was, no doubt, its desire to attract students who were recognised as Jewish by OCR and that may properly be characterised as a religious aspiration but I am firmly of the view that the basis that underlay it (in other words, the grounds on which it was taken) was that M did not have the necessary matrilineal connection in his ethnic origin. This conclusion appears to me to be inescapable from Lord Nicholls analysis of the two aspects of decision making and to chime well with a later passage in his speech where he said: Racial discrimination the is not negatived by discriminators motive or intention or reason or purpose (the words are interchangeable in this context) in treating another person less favourably on racial grounds. In particular, if the reason why the alleged discriminator rejected the complainants job application was racial, it matters not that his intention may have been benign. In the present case, the reason why the school refused M admission was, if not benign, at least perfectly understandable in the religious context. But that says nothing to the point. The decision was made on grounds which the 1976 Act has decreed are racial. The recognition of Jewishness a religious question? As Lord Brown has pointed out, all Jews define membership of their religion by reference to descent or conversion. It is therefore quite logical to describe the decision, taken as a matter of Jewish law, as to whether one is or is not a Jew, as a religious one. Descent is employed as a means of determining an essentially religious question. But, when the answer to that religious question has consequences in the civil law sphere, its legality falls to be examined. If the decision has consequences that are not permitted under the law, the fact that it was taken for a religious purpose will not save it from the condition of illegality. In this case the OCR decision that M was not a Jew had profound consequences for him since he was denied admission to an educational establishment that he wished to attend. The fact that the decision not to admit him was based on the determination of a religious issue cannot, of itself, insulate it from the charge of discrimination on racial grounds. Once it is recognised that Ms ethnic origins underpinned the conclusion on the religious issue, it becomes plain that it cannot be characterised as an exclusively religious question. The terminus for OCR was a decision on a matter of religion but the route to that terminus was one of ethnic origin. Ethnic groups It is unquestionably true that Jews, whether they be Orthodox, Masorti, Liberal or Progressive, constitute an ethnic group. It is also undoubtedly the case that M belongs to that ethnic group. He is an ethnic Jew. But, belonging to that group is not comprehensive of his ethnicity. As I have said (at 109 above) Ms ethnic origins extend well beyond the fact that he is a Jew. The circumstance that he is an ethnic Jew in the Mandla [Mandla v Dowell Lee [1983] 2 AC 548] sense does not assist, in my opinion, in determining whether he has been discriminated against on racial grounds. Although those who receive the more favourable treatment (in being admitted to the school) belong to the same racial or ethnic group as M, this does not, of itself, preclude a finding that he has been treated less favourably on account of his ethnic origins. This might be so if his ethnic origins were confined to his Jewishness. They are not. It is because of his lack of the requisite feature of Jewishness that he has received less favourable treatment. That perceived deficiency is as much part of his ethnic make up as is the fact that he is an ethnic Jew in the Mandla sense. Indirect discrimination Since I have reached the conclusion that this is a case of direct discrimination, it is unnecessary to say anything about the alternative case made on Ms behalf on indirect discrimination, particularly in light of Lord Mances discussion of that subject. I find myself in complete agreement with all that he has had to say on that issue and, incidentally, with all that he has had to say on the issue of direct discrimination. Conclusion One can have sympathy with the school authorities in their wish to pursue what must have seemed to them an entirely legitimate religious objective. It is plain that the Chief Rabbi and the governors of JFS are entirely free from any moral blame. That they have fallen foul of the 1976 Act does not involve any reprehensible conduct on their part for it is accepted on all sides that they acted on sincerely and conscientiously held beliefs. Their motives are unimpeachable. The breach of the legislation arises because of the breadth of its reach. The grounds on which the rejection of M was made may well be considered perfectly reasonable in the religious context but it is because they amount to ethnic grounds under the legislation that a finding against the school became, in my opinion, inescapable. I would dismiss the appeal. LORD CLARKE The division of opinion in this court and in the courts below demonstrates that this appeal raises issues which are difficult to resolve. The issues have been discussed in detail in all the above judgments. I have reached the same conclusion as Lord Phillips, Lady Hale, Lord Mance and Lord Kerr, essentially for the reasons they have given. Rather against my general principle, which is that there should be fewer judgments in the Supreme Court and not more, I add a judgment of my own in order to explain my own reasons for agreeing that the appeal should be dismissed. Direct discrimination The facts have been fully set out by others. I therefore refer only to those facts which seem to me to be critical. The policy of JFS, when oversubscribed, was to admit children who are recognised as being Jewish by the Office of the Chief Rabbi (OCR) or who have already enrolled upon or undertaken, with the consent of their parents, to follow a course of conversion to Orthodox Judaism under the approval of the OCR. As I understand it, nobody has ever been enrolled at JFS under the second head. Leaving adopted children on one side, children recognised by the OCR as being Orthodox Jewish are only those with a biological mother who is either Orthodox Jewish by birth or who has converted to Orthodox Judaism before the birth of the child by a process approved by the OCR. As I see it, the sole question for decision is whether those criteria offend section 1(1)(a) of the 1976 Act (as amended) by discriminating against some children (here M) on racial grounds, which, by section 3, include ethnic origin. On the facts of this case I prefer to ask whether the criteria offend against some children on the ground of their ethnic origin. To my mind the answer to that question does not depend upon the subjective state of mind of the Chief Rabbi or anyone else. Moreover, I do not think that the correct question to ask is whether OCRs guidance was given either on grounds of ethnic origin or on grounds of religion. That is because, so formulated, the test suggests that, if the guidance was given on the grounds of religion, it was not given on the grounds of ethnic origin. So formulated, the question could have only one answer because I entirely accept that the guidance was given on grounds of religion. That is clear from the guidance itself and indeed from a wealth of evidence before the court. Moreover, I fully understand that it can in one sense be said that those not recognised by the criteria as Orthodox Jews are, as Lord Brown puts it, being treated less favourably, not because of their ethnic origins, which he says are a matter of total indifference to the OCR, but rather because of their religion because they are not members of the Orthodox Jewish religion. However, again as Lord Brown puts it, the reason they are not members of the Orthodox Jewish religion is that their forbears in the matrilineal line were not recognised as Jewish by Orthodox Jews and in this sense their less favourable treatment is determined by their descent. Thus the ground upon which the OCR criteria defined those children to be admitted was that their forbears in the matrilineal line must be recognised as Jewish by Orthodox Jews. As I see it, in agreement with Lord Phillips, Lady Hale, Lord Mance and Lord Kerr, that is an ethnic ground, so that the discrimination was on both ethnic grounds and religious grounds. It is, in my opinion, wrong in principle to treat the question as an either/or question because that excludes the possibility that there were two grounds for the decision to exclude M, one religious and the other ethnic. If the religious ground was itself based upon an ethnic ground, then in my opinion the question asked by section 1(1)(a) of the 1976 Act, namely, whether M was discriminated against on ethnic grounds must be answered in the affirmative. It would be too narrow a construction of section 1(1)(a) to hold that that was not to discriminate on ethnic grounds. M was excluded because his mother was not Orthodox Jewish, whether by birth or conversion. That conclusion does not depend upon the state of mind of the OCR, but follows from an examination of the criteria laid down by the OCR. The question is not whether the guidance was given on religious grounds but whether the admitted discrimination was on ethnic grounds. In my opinion the answer is that the discrimination was on both religious and ethnic grounds because the criteria were arrived at on religious grounds but, since those religious grounds involved discrimination on ethnic grounds, it follows that the admissions policy of JFS was contrary to section 1(1)(a) because it discriminated against M and others on racial grounds. To hold that there were two grounds for the discrimination, both religious and ethnic, is not in my opinion to reduce, as Lord Rodger suggests, the religious element to the status of a mere motive. It is to recognise that the ethnic element is an essential feature of the religious ground. If Ms mother had been born a Masorti Jew (because someone in her matrilineal line been converted to Masorti Judaism) and had not been converted to Orthodox Judaism before Ms birth, Ms application would have been rejected because his mother was not, in the relevant sense, Jewish by birth. As I see it, for the reasons given in much more detail by others (and in particular Lord Mance) that would be discrimination on the ground of his ethnicity. To my mind the same is true on the facts of this case since at the time of Ms birth his mother was not, in the relevant sense, Jewish because she had not been converted to Orthodox Judaism in the manner accepted by the OCR. In both cases, as Lord Kerr puts it, the problem would be that M does not have the necessary matrilineal connection in his ethnic origin. Again as Lord Kerr puts it, the terminus for the OCR was a decision on a matter of religion but the route to that terminus was one of ethnic origin. In my opinion the state of mind of JFS, the Chief Rabbi and the OCR are all irrelevant to the determination of the critical question under section 1(1)(a). I agree with Lord Mance that there are two ways in which direct discrimination can be established. The first is where, whatever the motive and whatever the state of mind of the alleged discriminator, the decision or action was taken on a ground that was inherently racial and the second is where the decision or action was taken on a ground that was subjectively racial. Until now this distinction has not perhaps been as clearly identified in the authorities as it should be. The first class of case was established by R v Birmingham County Council ex p Equal Opportunities Commission [1989] AC 1155, where (as Lord Mance puts it) girls were required to achieve a higher standard than boys for grammar school entry because of a disparity in the number of grammar school places for boys and girls. Lord Goff, with whom the other members of the appellate committee agreed, made it clear at page 1194B that the question was simply whether there was less favourable treatment on the ground of sex, in other words if the relevant girl or girls would have received the same treatment as the boys but for their sex. The intention or motive of the council was not a necessary condition of liability. That was a question of fact and it was held by Lord Goff in the passage quoted by Lord Mance from page 1194C D that whatever may have been the intention or motive of the council, nevertheless it is because of their sex that the girls in question receive less favourable treatment than the boys, and so are the subject of discrimination under the Act of 1975. In James v Eastleigh Borough Council [1990] 2 AC 751, the swimming pool case, it was held that the test for free entry to the swimming pool at pensionable age unlawfully discriminated against men because men did not reach pensionable age until 65 whereas women reached it at 60. It is true that the House of Lords divided three to two but that seems to me to be irrelevant. The simple question was again a question of fact, namely whether men and women were treated differently. It was held that they were, even though, as Lord Mance has suggested, the test was probably adopted because it was thought that those of pensionable age would be more needy. Lord Goff said much the same as he had said in the Birmingham case. He put it thus at page 772B G: I turn to that part of the Vice Chancellor's reasoning which is based upon the wording of section 1(1)(a). The problem in the present case can be reduced to the simple question did the defendant council, on the ground of sex, treat the plaintiff less favourably than it treated or would treat a woman? As a matter of impression, it seems to me that, without doing any violence to the words used in the subsection, it can properly be said that, by applying to the plaintiff a gender based criterion, unfavourable to men, which it has adopted as the basis for a concession of free entry to its swimming pool, it did on the ground of sex treat him less favourably than it treated women of the same age and in particular Mrs. James. In other words, I do not read the words on the ground of sex as necessarily referring only to the reason why the defendant acted as he did, but as embracing cases in which a gender based criterion is the basis upon which the complainant has been selected for the relevant treatment. Of course, there may be cases where the defendant's reason for his action may bring the case within the subsection, as when the defendant is motivated by an animus against persons of the complainant's sex, or otherwise selects the complainant for the relevant treatment because of his or her sex. But it does not follow that the words on the ground of sex refer only to case where the defendants reason for his action is the sex of the complainant; and, in my opinion, the application by the defendant to the complainant of a gender based criterion which favours the opposite sex is just as much a case of unfavourable treatment on the ground of sex. Such a conclusion seems to me to be consistent with the policy of the Act, which is the active promotion of equal treatment of men and women. Indeed, the present case is no different from one in which the defendant adopts a criterion which favours widows as against widowers, on the basis that the former are likely to be less well off; or indeed, as my noble and learned friend, Lord Bridge of Harwich has pointed out, a criterion which favours women between the ages of 60 and 65, as against men between the same ages on the same basis. It is plain to me that, in those cases, a man in either category who was so treated could properly say that he was treated less favourably on the ground of sex, and that the fact that the defendant had so treated him for a benign motive (to help women in the same category, because they are likely to be less well off) was irrelevant. Lord Bridge and Lord Ackner said much the same. For example, Lord Bridge said at page 763H that the use of the statutory criterion for pensionable age, being fixed at 60 for women and 65 for men, was to use a criterion which directly discriminated between men and women. See also per Lord Bridge at page 765G. Lord Ackner said at page 769F H that the formula used was inherently discriminatory. He noted that no evidence had been given in the county court as to why the council had decided on the policy. He said that such evidence would have been irrelevant because, as he put it, the policy was crystal clear. If you were a woman you could swim at 60 without payment whereas if you were a man you had to wait until you were 65. The reason why the policy was adopted could in no way affect or alter the fact that the council had decided to implement a policy by virtue of which men were to be treated less favourably than women and were to be treated on the ground of, ie by reason of, their sex. In my opinion that analysis applies here. Just as in that case the admissions criteria were gender based and thus discriminatory on the ground of sex contrary to section 1(1)(a) of the Sex Discrimination Act 1975, so here the JFS admissions criteria were based on ethnicity and thus discriminatory on racial grounds as defined in section 1(1)(a) of the 1976 Act. For my part I do not accept that more recent decisions of the House of Lords call for a more nuanced approach than that stated in the Birmingham and Eastleigh cases. As I read the later cases, they simply accept, as Lord Goff accepted in the passage from his speech in the Eastleigh case quoted above, that there may be cases where the defendant's reason for his action may bring the case within the subsection, as when the defendant is motivated by an animus against persons of the complainant's sex, or otherwise selects the complainant for the relevant treatment because of his or her sex or (I am sure he would have added) because of his or her race or ethnicity. As I see it, this is a separate basis on which direct discrimination can be established. It does not involve any alteration to the principle stated by Lord Goff, Lord Bridge and Lord Ackner and set out above. In Nagarajan v London Regional Transport [2000] 1 AC 501 the House of Lords was concerned with an allegation of alleged unlawful victimisation under section 2 of the 1976 Act. It applied the same principles as those applicable under section 1(1)(a). The leading speech was given by Lord Nicholls, Lord Steyn made a concurring speech, Lord Hutton and Lord Hobhouse agreed with Lord Nicholls and Lord Steyn, and Lord Browne Wilkinson dissented. Lord Steyn said at page 520H that the Birmingham and Eastleigh cases established the principle that conscious motivation is not required for direct discrimination. In these circumstances it is inherently unlikely that there is any distinction between the principles established by those cases and the reasoning in Nagarajan. In my opinion there is not. Reliance was placed on part of the speech of Lord Nicholls. Read in context, the relevant passage is in these terms at pages 510H 511E: The first point raised is whether conscious motivation is a prerequisite for victimisation under section 2 of the Act. Section 2 should be read in the context of section 1. Section 1(1)(a) is concerned with direct discrimination, to use the accepted terminology. To be within section 1(1)(a) the less favourable treatment must be on racial grounds. Thus, in every case it is necessary to inquire why the complainant received less favourable treatment. This is the crucial question. Was it on grounds of race? Or was it for some other reason, for instance because the complainant was not so well qualified for the job? Save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator. Treatment, favourable or unfavourable, is a consequence which follows from a decision. Direct evidence of a decision to discriminate on racial grounds will seldom be forthcoming. Usually the grounds of the decision will have to be deduced, or inferred, from the surrounding circumstances. The crucial question just mentioned is to be distinguished sharply from a second and different question: if the discriminator treated the complainant less favourably on racial grounds, why did he do so? The latter question is strictly beside the point when deciding whether an act of racial discrimination occurred. For the purposes of direct discrimination under section 1(1)(a), as distinct from indirect discrimination under section 1(1)(b), the reason why the alleged discriminator acted on racial grounds is irrelevant. Racial discrimination is not negatived by the discriminator's motive or intention or reason or purpose (the words are interchangeable in this context) in treating another person less favourably on racial grounds. In particular, if the reason why the alleged discriminator rejected the complainant's job application was racial, it matters not that his intention may have been benign. For instance, he may have believed that the applicant would not fit in, or that other employees might make the applicant's life a misery. If racial grounds were the reason for the less favourable treatment, direct discrimination under section 1(1)(a) is established. (My emphasis) Lord Nicholls then added at page 511E H that this law, which is well established was confirmed by the House of Lords in the Birmingham and Eastleigh cases as described above. He said that in the Birmingham case the answer to the crucial question was plain because, as a matter of fact, girls received less favourable treatment than boys. It followed that there was direct sex discrimination and the reason for it was irrelevant. The same was true in Eastleigh because the reduction in swimming pool charges was geared to a criterion which was itself gender based. It is true that Lord Nicholls added this: Lord Bridge of Harwich, at p 765, described Lord Goff's test in the Birmingham case as objective and not subjective. In stating this he was excluding as irrelevant the (subjective) reason why the council discriminated directly between men and women. He is not to be taken as saying that the discriminator's state of mind is irrelevant when answering the crucial, anterior question: why did the complainant receive less favourable treatment? The essence of Lord Nicholls view can be seen in the italicised passages in the quotation at para 139 above. If, viewed objectively, the discriminator discriminated against the claimant on racial grounds the reason why he did so is irrelevant. Thus in Birmingham and Eastleigh the sex discrimination was objectively plain from the criteria adopted. Once that was established, the state of mind of the discriminator was, as Lord Nicholls put it, strictly beside the point. That, as I see it, is this case. This is a plain or obvious case of the kind Lord Nicholls had in mind because the position is clear from the OCRs criteria. When he said in the first of the italicised passages that, save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator, he had in mind, not this kind of case, which he would have regarded as obvious, but the kind of case he had just mentioned namely where the claimant was discriminated against but it was not clear whether that was because of unlawful discrimination on the ground of, say, race or sex, or for some other reason, for instance, because the complainant was not so well qualified for the job. This is not such a case. In this connection I cannot agree with Lord Hopes analysis of the passage quoted at para 194 from page 512 of Lord Nicholls speech in Nagarajan. Lord Nicholls was there considering the question of unconscious motivation. He was doing so because that was not a case of discrimination inherent in the relevant rules such as existed in Birmingham, Eastleigh and this case. In these circumstances it is not, in my opinion, possible to draw from that passage in Lord Nicholls speech the proposition that if, after careful and thorough investigation, the tribunal were to conclude that the employers actions were not racially motivated, in the sense that race was not the reason why he acted as he did, it would be entitled to draw the inference that the complainant was not treated less favourably on racial grounds. It would not be so entitled for the reasons given in Birmingham and Eastleigh, namely that this is a case of inherent discrimination. Equally, when Lord Nicholls said in Chief Constable of West Yorkshire Police v Khan [2001] 1 WLR 1947, para 29 that the question was why the discriminator acted as he did or, put another way, what consciously or unconsciously was his reason, Lord Nicholls was not considering this kind of case. For the same reason I do not think that the decision in Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] UKHL 11, [2003] ICR 337, is of any assistance in this kind of case. In these circumstances I agree with Lord Hope at para 195 that at the initial stage, when the question is whether or not the discrimination was on racial grounds, the alleged discriminators motivation may not only be relevant but also necessary, in order to reach an informed decision as to whether or not this was a case of racial discrimination. However, I emphasize the word may because, for the reasons I have already given, the discriminators motivation or subjective reasoning is not in my opinion relevant in every case. The authorities, namely Birmingham, Eastleigh and Nagarajan show that it is not relevant where the criteria adopted or (in Lord Ackners words) the formula used are or is inherently discriminatory on ethnic grounds. Lord Nicholls has however shown that it is relevant in other cases where, without investigating the state of mind of the alleged discriminator, it is not possible to say whether the discrimination was on ethnic grounds or not. The question arises what considerations are relevant in answering the question whether the criteria were inherently racial. I entirely accept (and there is indeed no dispute) that JFS, the Chief Rabbi and the OCR are, as Lord Hope puts it at para 201, thoughtful, well intentioned and articulate and that, as Lord Pannick submitted, the Chief Rabbi was not in the least interested in Ms ethnicity. It is true that, if the Chief Rabbi were asked why he acted as he did, he would say that his reason was that this was what was required of him by fundamental Orthodox Jewish religious law. Again as Lord Hope puts it, Jewishness based on matrilineal descent from Jewish ancestors has been the Orthodox religious rule for many thousands of years, subject only to the exception for conversion. I agree so far. However, I do not agree that to say that his ground was a racial one is to confuse the effect of the treatment with the ground itself. The reason I disagree with Lord Hope (or perhaps the ground on which I do so) is that his opinion depends upon the state of mind of the Chief Rabbi. Thus in the passage in Lord Nicholls speech to which Lord Hope refers Lord Nicholls was considering the kind of case in which it is necessary to consider the mental processes of the alleged discriminator. Lord Hope makes it clear at para 201 that to categorise the criteria as based on racial grounds might be justified if there were reasons for doubting the Chief Rabbis frankness or good faith. However, to my mind it does not follow that the criteria were not based on racial grounds because neither the Chief Rabbi nor the OCR thought that they were. If the religious grounds were themselves based on racial (or ethnic) grounds then one of the grounds upon which there was discrimination based on the criteria was ethnic. This appears from both the Birmingham and the Eastleigh cases. I have already expressed the view that the principles in those cases apply here. Lord Rodger however says that they do not come into the picture. As I see it, that could only be on the basis that the issue is resolved by the subjective state of mind of the Chief Rabbi, the OCR and the governors of JFS. It is said that the governors were not asked to consider and, did not actually consider, Ms ethnic origins and, if they had done so, that they would have regarded them as irrelevant. However, they considered the criteria which Orthodox Judaism had applied for very many years and, although I entirely accept that they did so for religious reasons, I do not accept they were not considering Ms ethnic origins or making a decision on ethnic grounds. Such a view would be to take too narrow a view of the concept of ethnic origins or of the meaning of ethnic origin in sections 1(1)(a) and 3 of the 1976 Act. As I see it, once it is accepted (as Lord Brown does) that the reason M is not a member of the Jewish religion is that his forbears in the matrilineal line were not Orthodox Jews and that, in that sense his less favourable treatment is determined by his descent, it follows that he is discriminated against on ethnic grounds. It makes no difference whether the reason M is not acceptable is that neither his mother nor anyone in his matrilineal line was born Jewish or that his mother was not converted to Orthodox Judaism. The question is, in my opinion, not that espoused by Lord Rodger, but whether it is discrimination on ethnic grounds to discriminate against all those who are not descended from Jewish women. In my opinion it is. Lord Phillips, Lady Hale, Lord Mance and Lord Kerr have explained in detail why in their view the criteria were indeed discriminatory on ethnic and therefore racial grounds. I agree with their reasoning and do not wish further to add to it. In short, it is not in dispute that the decision in Ms case was taken on the basis of the criteria laid down by the OCR and followed by JFS. It follows that, if the criteria involved discrimination based on ethnic grounds, the decision was taken on a ground that was inherently racial and there was direct discrimination within section 1(1)(a) of the 1976 Act. If that is so, as I see it, the fact that the discrimination was also on religious grounds is irrelevant, as are both the fact that the religious grounds have been adopted for thousands of years and the fact that the Chief Rabbi and the OCR (and therefore JFS) concentrated wholly on the religious questions. In the Court of Appeal at para 30 Sedley LJ, with whom Smith LJ and Rimer LJ agreed, expressed the view that if that were not so, a person who honestly believed, as the Dutch Reformed Church of South Africa until recently believed, that God had made black people inferior and had destined them to live separately from whites, would be able to discriminate openly against them without breaking the law. I agree. It is to my mind no answer to say that the discrimination invited by the belief, on the grounds of colour, was overtly racist. It is true that such discrimination would be overtly on racial grounds but that is because the criteria were inherently based on racial grounds and not because of the subjective state of mind of the members of the Dutch Reformed Church or because of some principle of public policy. However, the 1976 Act banning direct discrimination is an application of public policy, rather like the decision of the of the United States Supreme Court in Bob Jones University v United States 461 US 574 (1983). I would however add that if, contrary to the views I have expressed, the state of mind of the Chief Rabbi and the OCR are relevant they must surely have subjectively intended to discriminate against applicants like M on the grounds set out in the criteria so that, again, if the criteria are based on ethnic grounds contrary to section 1(1)(a), they must surely have subjectively intended that result, however much the reason they did so was, as they saw it, religious. Finally, under the heading of direct discrimination, I would like to identify some of the aspects of the argument that I regard as irrelevant to the resolution of the single question whether the OCR criteria discriminate against applicants who do not meet the criteria on ethnic, and thus racial, grounds contrary to section 1(1)(a) of the 1976 Act. They include the following. i) It is suggested that the 1976 Act does not outlaw discrimination by an ethnic group against the same ethnic group. However, as I see it, the question is simply whether the discrimination is on ethnic grounds. The discrimination is not in dispute. I do not see that the identity of the discriminator is of any real relevance to the answer to the question. There is certainly nothing in the language or the context of section 1 of the Act or in its statutory purpose to limit the section in that way. ii) Like any statutory provision, the language of section 1(1)(a) should be construed in its context and having regard to its statutory purpose. Parliament decided to distinguish between direct and indirect discrimination. Adopting that approach, I am not persuaded that it is appropriate to construe section 1(1)(a) narrowly because it is not possible to justify the discrimination outlawed by it. Parliament could, like the European Convention on Human Rights, have permitted justification but, for policy reasons, chose not to. iii) For whatever reason, the question of construction of section 1(1)(a) has not arisen before. I do not, however, think that it can be relevant to that question that, if the respondents argument is correct, JFS has been acting unlawfully for more than thirty years. The question is the same now as it would have been if it had been raised thirty years ago. The provisions of the Equality Act 2006 are irrelevant for the same reasons. I accept that this case is curious in that both M and E are Masorti Jews who, like Orthodox Jews, recognise those whose mothers or others in the matrilineal line were Jews by descent or conversion. The real complaint is that the OCR does not accept conversion as practised by Masorti Jews because otherwise M would have qualified. I take Lord Browns point at para 248, (a) that E is not really seeking to prevent JFS from adopting oversubscription criteria which give priority to Jews but rather for JFS to define Jews more expansively than Orthodox Jews in fact do, and (b) that on the respondents argument it is strictly immaterial that E is Jewish or that Ms mother converted to Judaism, so that the policy could by struck down by anyone excluded by the application of the criteria. I recognise that there is an irony here but I do not see that that fact is relevant in answering the question posed by the statute, namely whether the discrimination is on ethnic grounds. I do not regard the consequences of the conclusion that the OCR criteria discriminate on ethnic grounds as relevant to the question whether they do or not. I am in any event not persuaded that they are anything like as serious as was suggested in argument. iv) v) It follows that I too would dismiss the appeal. Indirect discrimination Like Lord Kerr, I entirely agree with the reasoning and conclusion of Lord Mance on this issue, although if the appeal is dismissed on the direct discrimination issue, the issue of indirect discrimination does not arise. I agree with Lord Hopes reasoning and conclusions on costs. Postscript I wish to stress that nothing in the reasoning which has led me (or I believe others) to the conclusion that the criteria adopted by JFS discriminated against applicants on ethnic grounds is based on the view that the Chief Rabbi, the OCR or JFS acted in a racist way. In this regard I entirely agree with Lord Phillips and Lady Hale that any suggestion that they acted in a racist way in the popular sense of that term must be dismissed. Finally I direct the reader to the final paragraph in the judgment of Lord Kerr, at para 124 above, with which I am in complete agreement. The Minority Judgments LORD HOPE It has long been understood that it is not the business of the courts to intervene in matters of religion. In R v Chief Rabbi of the United Hebrew Congregations of Great Britain and the Commonwealth, ex p Wachmann [1992] 1 WLR 1036, 1042 1043, Simon Brown J observed that the court was hardly in a position to regulate what was essentially a religious function in that case, the determination whether someone was morally and religiously fit to carry out the spiritual and pastoral duties of his office. As he put it, the court must inevitably be wary of entering so self evidently sensitive an area, straying across the well recognised divide between church and state. This too is the approach of the legislature, as Hoffmann LJ said in R v Disciplinary Committee of the Jockey Club, ex p Aga Khan [1993] 1 WLR 909, 932: religion is something to be encouraged but it is not the business of government. It is just as well understood, however, that the divide is crossed when the parties to the dispute have deliberately left the sphere of matters spiritual over which the religious body has exclusive jurisdiction and engaged in matters that are regulated by the civil courts. In Percy v Board of National Mission of the Church of Scotland [2005] UKHL 73, [2006] 2 AC 28, for example, the appellant was employed by the Board of Mission under a contract personally to execute work within the meaning of section 82(1) of the Sex Discrimination Act 1975. The articles declaratory of the constitution of the Church of Scotland set forth in the Schedule to the Church of Scotland Act 1921 contain an assertion that the civil authority has no right of interference in the proceedings and judgments of the Church within the sphere of its spiritual government and jurisdiction. But it was held that by entering into a contract binding under the civil law the parties had put themselves within the jurisdiction of the civil courts and that the appellants claim of sex discrimination could not be regarded as a spiritual matter. The same approach to arguments based on religious doctrine has been adopted by the Supreme Court of Israel. In No'ar K'halacha v The Ministry of Education, HCJ 1067/08, 6 August 2009 the Court held that, although religious affiliation as a basis for treating students differently was recognised by Israeli law, it was not an absolute claim and could not prevail over the overarching right to equality. The school in question had established a two tier, ethnically segregated system by which students of Ashkenazi descent were automatically assigned to one group and those of Sephardi descent were assigned to another. Although this was purportedly on religious grounds, the thinly disguised subtext was that the Ashkenazi group were superior to the Sephardi and that, as they were the elite, their education should be organised accordingly. The Supreme Court rejected the schools argument that this was due to religious considerations, holding that they were a camouflage for discrimination cloaked in cultural disparity. It ordered the school to end all discriminatory practices against students who were of Sephardi ethnic origin. It is accepted on all sides in this case that it is entirely a matter for the Chief Rabbi to adjudicate on the principles of Orthodox Judaism. But the sphere within which those principles are being applied is that of an educational establishment whose activities are regulated by the law that the civil courts must administer. Underlying the case is a fundamental difference of opinion among members of the Jewish community about the propriety of the criteria that the Office of the Chief Rabbi of the United Hebrew Congregation of the Commonwealth (the OCR) applies to determine whether a person is or is not Jewish. It is not for the court to adjudicate on the merits of that dispute. But the discrimination issue is an entirely different matter. However distasteful or offensive this may appear to be to some, it is an issue in an area regulated by a statute that must be faced up to. It must be resolved by applying the law laid down by Parliament according to the principles that have been developed by the civil courts. By far the most important issue in the appeals which are before this court is whether it is unlawful direct or indirect race discrimination for a faith school to adopt oversubscription criteria which give priority to children who are recognised by the OCR to be Jewish according to Orthodox Jewish principles. There is also an appeal by the United Synagogue in relation to a costs order made against it by the Court of Appeal, which I shall deal with briefly at the end of this opinion. Almost everything that I wish to say will be devoted to the main issue. I should make it clear at the outset that I agree with everything that Lord Rodger and Lord Brown say on the issue of direct discrimination. With much regret, I differ from them on the indirect discrimination issue. But I differ from them only when I reach the final step in that part of the argument. On both issues I agree entirely with Lord Walker. As for the facts, I have dealt with them more fully than would normally be appropriate in a minority judgment. I hope that, by doing so, I will have made it easier for all other members of the court to concentrate on the issues of law that arise in this case. The facts JFS, formerly the Jewish Free School, is a voluntary aided comprehensive secondary school which is maintained by the local authority, the London Borough of Brent. It has a long and distinguished history which can be traced back to 1732. It has over 2000 pupils, and for more than the past 10 years it has been over subscribed. It regularly has twice the number of applicants for the places that are available. Clause 8 of its Instrument of Government dated 18 October 2005 provides: Statement of School Ethos Recognising its historic foundation, JFS will preserve and develop its religious character in accordance with the principles of orthodox Judaism, under the guidance of the Chief Rabbi of the United Hebrew Congregations of the Commonwealth. The School aims to serve its community by providing education of the highest quality within the context of Jewish belief and practice. It encourages the understanding of the meaning of the significance of faith and promotes Jewish values for the experience of all its pupils. Further information is given by the school on its website, which states: The outlook and practice of the School is Orthodox. One of our aims is to ensure that Jewish values permeate the School. Our students reflect the very wide range of the religious spectrum of British Jewry. Whilst two thirds or more of our students have attended Jewish primary schools, a significant number of our Year 7 intake has not attended Jewish schools and some enter the School with little or no Jewish education. Many come from families who are totally committed to Judaism and Israel; others are unaware of Jewish belief and practice. We welcome this diversity and embrace the opportunity to have such a broad range of young people developing Jewish values together. The culture and ethos of the school is Orthodox Judaism. But there are many children at JFS whose families have no Jewish faith or practice at all. Prior to the decision of the Court of Appeal in this case the principal admissions criterion of JFS was that, unless undersubscribed, it would admit only children who were recognised as being Jewish by the OCR. Its policy for the year 2008/09, which can be taken to be the same as that for the year in question in this case, was as follows: It is JFS (the School) policy to admit up to the standard admissions number children who are recognised as being Jewish by the Office of the Chief Rabbi of the United Hebrew Congregation of the Commonwealth (OCR) or who have already enrolled upon or who have undertaken, with the consent of their parents, to follow any course of conversion to Judaism under the approval of the OCR. The Chief Rabbi is the head of the largest groups of Orthodox synagogues in the United Kingdom. But he does not represent all Orthodox communities, nor does he represent the Masorti, Reform and Progressive Jewish communities. In accordance with Jewish law, the OCR recognises as Jewish any child who is descended from a Jewish mother. The mother herself must be descended from a Jewish mother or must have been converted to Judaism before the birth of the child in a manner recognised as valid by the OCR. Such a child is recognised by the OCR as Jewish regardless of the form of Judaism practised by the family (Orthodox, Masorti, Reform or Progressive). He is so recognised even if the entire family has no Jewish faith or observance at all. A family may be entirely secular in its life and outlook. Its members may be atheists or even be practising Christians or practising Muslims. Yet, if the child was himself born of a Jewish mother, he will be recognised as Jewish by the OCR and eligible for a place at JFS. These proceedings have been brought in relation to a child, M on the application of his father, E. Ms father is of Jewish ethnic origin. Ms mother is Italian by birth and ethnic origin. Before she married E she converted to Judaism under the auspices of a non Orthodox synagogue. Her conversion is recognised as valid by the Masorti, Reform and Progressive Synagogues. But it was undertaken in a manner that is not recognised by the OCR. She and E are now divorced and M lives mainly with his father. He and his father practise Judaism, and they are both members of the Masorti New London Synagogue. M practices his own Jewish faith, prays in Hebrew, attends synagogue and is a member of a Jewish Youth Group. But the OCR does not recognise him as of Jewish descent in the maternal line. His mother is not recognised as Jewish by the OCR and he has not undergone, or undertaken to follow, a course of approved Orthodox conversion. Consequently he was unable to meet the schools criterion for admission. In April 2007 he was refused a place at JFS for year 7 in the academic year 2007 2008. The effect of this decision on M and his family was profound and it was distressing. There was no other Jewish secondary school in London to which he could be admitted. So he was denied the opportunity of obtaining a Jewish secondary education in accordance with the familys religious beliefs and preference. On 15 April 2007 E notified JFSs Admission Appeals Panel that he wished to appeal. After a hearing on 5 June 2007, the Appeal Panel dismissed his appeal. In its decision letter of 11 June 2007 the Appeal Panel said that a challenge to the admissions criteria was outside its remit. On 2 July 2007 E referred his objection to the Schools Adjudicator, challenging JFSs admissions criteria for both under subscription and oversubscription. On 27 November 2007 the Schools Adjudicator upheld his complaint about the under subscriptions criteria, but he dismissed it in relation to the oversubscription criteria with which this case is concerned. E then raised proceedings for judicial review of JFSs decision to refuse M a place at the school and of the decision of the Appeal Panel to dismiss his appeal. In separate proceedings he sought judicial review of the decision of the Schools Adjudicator. On 3 July 2008 Munby J dismissed both claims for judicial review, except for Es claim that the Governing Body of JFS was in breach of its duty under section 71 of the Race Relations Act 1976 to have due regard to the need to eliminate racial discrimination and to promote equality of opportunity and good race relations: [2008] EWHC 1535 (Admin); [2008] ELR 445. He rejected Es argument that there had been direct discrimination on the grounds of race or ethnic origins, holding that it was based on religion: para 174. He also rejected his argument that there was indirect race discrimination, holding that, as JFS exists as a school for Orthodox Jews, its admissions policy of giving preference to children who were Jewish by reference to Orthodox Jewish principles was a proportionate means of achieving a legitimate aim within the meaning of section 1(1A)(c) of the 1976 Act: paras 201 202. He made a declaration to the effect that JFS was in breach of section 71. But in para 214 of his judgment he said that even the fullest and most conscientious compliance with that section would not have led to any difference in the crucial part of the admissions policy or its application in Ms case. On 25 June 2009 the Court of Appeal (Sedley, Smith and Rimer LJJ) allowed the appeal by E in both sets of proceedings: [2009] EWCA Civ 626; [2009] 4 ALL ER 375. Sedley LJ said that the courts essential difference with Munby J was that what he characterised as religious grounds were, in its judgment, racial grounds notwithstanding their theological motivation: para 48. As that observation indicates, the point at issue in this case is how the grounds are to be characterised. It is, in the end, a very narrow one. But it is by no means a simple one to resolve, as the division of opinion in this court indicates. The Race Relations Act 1976 Section 1 of the Race Relations Act 1976 defines race discrimination. It was amended by the Race Relations Act 1976 (Amendment) Regulations 2003 (SI 2003/1626) which, implementing Council Directive 2000/43 EC of 29 June 2000, rewrote in European terms the concept of indirect discrimination. So far as material it provides as follows: (1) A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if (a) on racial grounds he treats that other less favourably than he treats or would treat other persons (1A) A person also discriminates against another if, in any circumstances relevant for the purposes of any provision referred to in subsection (1B), he applies to that other a provision, criterion or practice which he applies or would apply equally to persons not of the same race or ethnic or national origins as that other, but (a) which puts or would put persons of the same race or ethnic or national origins as that other at a particular disadvantage when compared with other persons, (b) which puts or would put that other at that disadvantage, and (c) which he cannot show to be a proportionate means of achieving a legitimate aim. (1B) The provisions mentioned in subsection (1A) are (b) section 17; (c) section 19B Section 3 of the 1976 Act provides: (1) In this Act, unless the context otherwise requires racial grounds means any of the following grounds, namely colour, race, nationality or ethnic or national origins; racial group means a group of persons defined by reference to colour, race, nationality or ethnic or national origins, and references to a persons racial group refer to any racial group into which he falls. (2) The fact that a racial group comprises two or more distinct racial groups does not prevent it from constituting a particular racial group for the purposes of this Act. (4) A comparison of the case of a person of a particular racial group with that of a person not of that group under section 1(1) or (1A) must be such that the relevant circumstances in the one case are the same, or not materially different, in the other. Section 17 makes it unlawful for the governing body of a maintained school to discriminate against a person in the terms that it offers to admit him to the establishment as a pupil, or by refusing or deliberately omitting to accept an application for his admission to the establishment as a pupil. Section 19B(1) provides that it is unlawful for a public authority in carrying out any functions of the authority to do any act which constitutes discrimination. These provisions make it clear that the sphere within which the OCR was providing guidance to JFS was firmly within the jurisdiction of the civil courts. The admission arrangements The context in which JFSs admissions criteria must be examined is provided by statute. The functioning of publicly funded schools is governed by the School Standards and Framework Act 1998 (the 1998 Act). Schools maintained by local authorities are referred to as maintained schools. They include voluntary aided schools such as JFS: section 20(1)(c). Section 20(1) of the Education Act 2002 provides that for every maintained school there shall be an instrument of government which determines the constitution of the governing body and other matters relating to the school. Section 69 of the 1998 Act imposes duties in regard to the provision of religious education in community, foundation and voluntary schools. Section 69(3) provides that a foundation or voluntary school has a religious character if it is designated as a school having such a character by an order made by the Secretary of State. Section 69(4) requires such an order to state the religion or religious denomination in accordance with whose tenets religious education is, or may be, required to be provided at the school. Under the Religious Character of Schools (Designation Procedure) Regulations 1998 (SI 1998/2535) the Secretary of State is required to designate the religion or religious denomination he considers relevant, following consultation with the schools governing body. By the Designation of Schools Having a Religious Character (England) Order 1999 (SI 1999/2432) the Secretary of State designated JFS as having a religious character which is Jewish. Some other schools have been designated as Orthodox Jewish. By the Designation of Schools Having a Religious Character (Independent Schools) (England) (No 2) Order 2003 (SI 2003/3284) two schools were designated under this description. Part 2 of the Equality Act 2006 introduced a prohibition on discrimination on grounds of religion or belief in the provision of goods and services. Section 49 provides that it is unlawful for the responsible body of, among others, a school maintained by a local education authority to discriminate against any person by, among other things, refusing to accept an application to admit him as a pupil. Section 50 contains a list of exceptions to section 49, among which is one in favour of a school designated under 69(3) of the 1998 Act. As Munby J pointed out, this provision does no more than immunise the school from liability for religious discrimination under the 2006 Act: para 137. It does not immunise it from any liability for racial discrimination that it may have under the Race Relations Act 1976. Section 84 of the 1998 Act provides that the Secretary of State shall issue, and may from time to time revise, a code of practice for the discharge of their functions under Chapter 1 of Part III of the Act by, among others, the governing bodies of maintained schools and that the governing bodies must act in accordance with the code. Paragraphs 2.41 2.43 of the School Admissions Code for 2007 deals with faith based oversubscription criteria. Paragraph 2.41 states that schools designated by the Secretary of State as having a religious character (faith schools) are permitted by section 50 of the Equality Act 2006 to use faith based oversubscription criteria in order to give priority in admission to children who are members of, or who practise, their faith or denomination. It also states that faith based criteria must be framed so as not to conflict with other legislation such as equality and race relations legislation. Paragraph 2.43 of the 2007 Code states: It is primarily for the relevant faith provider group or religious authority to decide how membership or practice is to be demonstrated, and, accordingly, in determining faith based oversubscription criteria, admission authorities for faith schools should only use the methods and definitions agreed by their faith provider group or religious authority. Paragraph 2.47 states: Religious authorities may provide guidance for the admission authorities of schools of their faith that sets out what objective processes and criteria may be used to establish whether a child is a member of, or whether they practise, the faith. The admission authorities of faith schools that propose to give priority on the basis of membership or practice of their faith should have regard to such guidance, to the extent that the guidance is consistent with the mandatory provisions and guidelines of this Code. Section 88C(2) and (3) of the 1998 Act provides that Regulations may prescribe who should be consulted by the admission authority about admission arrangements. Regulation 12 of and Schedule 2 to the School Admissions (Admission Arrangements) (England) Regulations 2008 (SI 2008/3089) provide that the person that the governing body of JFS must consult about the admission arrangements for JFS for the academic year 2010 2011 is the Chief Rabbi. The regulations that were in force in 2007 when M was seeking admission to JFS were the Education (Determination of Admission Arrangements) Regulations 1999 (SI 1999/126) as amended which, by Regulation 5ZA and the Schedule, introduced provisions similar to those in the 2008 Regulations. The Chief Rabbi was the person to be consulted at the time when Ms application for admission was being considered. Provision has been made under section 88H (formerly section 90) of the 1998 Act for parents of a child of primary school age to refer an objection to a schools admission arrangements to the Schools Adjudicator. The procedure for determining admission arrangements is governed by section 88C of the 1998 Act, formerly (as regards England) section 89. It states that the admission arrangements are to be determined by the admission authority. For a voluntary aided school the governing body is the admission authority: see section 88(1). The governing body of JFS adopted an admissions policy which set out the schools over subscription criteria. The policy that was in force in 2007 stated: 1.1 It is JFS (the School) policy to admit up to the standard admissions number children who are recognised as being Jewish by the Office of the Chief Rabbi of the United Hebrew Congregation of the Commonwealth (OCR) or who have already enrolled upon or who have undertaken, with the consent of their parents, to follow any course of conversion to Judaism under the approval of the OCR. 1.2 In the event that the School is oversubscribed then only children who satisfy the provisions of paragraph 1.1 above will be considered for admission, in accordance with the oversubscription criteria set out in Section 2 below. JFS cannot be criticised for basing its oversubscription criteria on the guidance that it received from the OCR. But this does not excuse it from liability for racial discrimination under the Race Relations Act 1976 if the guidance that it received was itself racially discriminatory. The OCR's guidance In connection with JFSs admissions for the year 2009 an application form, Application for Confirmation of Jewish Status, was issued by the OCR. Parents were required to select from the following options: (a) I confirm that the childs biological mother is Jewish by birth. (b) I confirm that the childs biological mother has converted to Judaism. (c) I confirm that the child is adopted [in which case the childs Jewish status must be separately verified]. The guidance notes to the application form state: Jewish status is not dependent on synagogue affiliation per se, though Jewish status will not be confirmed if the child, or any of his/her maternal antecedents, converted to Judaism under non orthodox auspices. If the childs parents were not married under orthodox auspices, further investigation will be necessary before confirmation of Jewish status is issued. This usually entails obtaining additional documentary evidence down the maternal line. If the childs mother was not herself born to a Jewish mother but converted to Judaism before the birth of the child, further inquiries are undertaken by the OCR before it is prepared to recognise the child as Jewish. The OCR does not recognise the validity of conversions carried out by non Orthodox authorities, as they do not require converts to subscribe fully to the tenets of Orthodox Judaism. The exacting process that is indicated by the wording of the application form is firmly rooted in Orthodox Jewish religious law. Religious status is not dependent on belief, religious practice or on attendance at a synagogue. It is entirely dependent upon descent or conversion. It depends on establishing that the person was born to a Jewish mother or has undergone a valid conversion to Judaism. That is a universal rule that applies throughout all Orthodox Judaism. Ms ineligibility for admission to JFS was due to the fact that different standards are applied by the Chief Rabbi from those applied by the Masorti, Reform and Progressive communities in the determining of a persons religious status. Nothing that I say in this opinion is to be taken as calling into question the right of the OCR to define Jewish identity in the way it does. I agree with Lord Brown that no court would ever dictate who, as a matter of Orthodox religious law, is to be regarded as Jewish. Nor is it in doubt that the OCRs guidance as to the effect of Orthodox Jewish religious law was given in the utmost good faith. The question that must now be faced is a different question. It is whether it discriminates on racial grounds against persons who are not recognised by the OCR as Jewish. The Jewish race and ethnicity It is common ground that for the purposes of the Race Relations Act 1976 Jews can be regarded as belonging to a group with common ethnic origins. As Lord Brown says (see paras [245] and [250]), it is possible (leaving aside those with no connection with Judiasm at all) to regard those who are being treated less favourably and those being treated more favourably by JFSs admissions policy as being all in the same ethnic group since they are all Jews. Lord Mance says (see paras 79, 80 and 86) that Orthodox Jews according to Orthodox Jewish principles and Jews who are not Orthodox should be regarded as forming separate ethnic groups or subgroups for present purposes. But the evidence in this case shows that it all depends on the context. Out on the shop floor, for example, all Jews are Jews and an employer who discriminates against them because they are Jews will be in breach of the Act. The problem in this case is that the Chief Rabbi does not recognise as a Jew anyone who is not a Jew according to Orthodox Jewish principles. So far as he is concerned and his concern is only with the Jewish religion there is no division of Jews into separate ethnic groups. I agree with Lord Brown that the difficulty in this case arises because of the overlap between the concepts of religious and racial discrimination and, in the case of Jews, the overlap between ethnic Jews and Jews recognised as members of the Jewish religion. The case does not fit easily into the legislative pattern. It was designed to deal with obvious cases of discrimination on racial grounds. Of course, as we are dealing in this case with faith schools, the religious test has come under scrutiny in the educational context. But the test that is employed is nevertheless a religious one, as that is what faith schools are expected to do. An approach to this case which assumes that Jews are being divided into separate subgroups on the grounds of ethnicity is an artificial construct which Jewish law, whether Orthodox or otherwise, does not recognise. The Act invites this approach, as it is clear that M was being treated less favourably than other persons and this raises the question whether this was on racial grounds. But it must be handled with very great care. As both Lord Phillips in para 9 and Lady Hale in para 54 have emphasised, no one in this case is suggesting that the policy that JFS has adopted is racist. The choice of words is important, and I too would wish to avoid that appalling accusation. The use of the word racial is inevitable, however, although the discrimination that is perceived in this case is on grounds of ethnicity. In DH v Czech Republic (2007) 47 EHRR 59, para 176, the European Court said: Discrimination on account of, inter alia, a persons ethnic origin is a form of racial discrimination. Racial discrimination is a particularly invidious kind of discrimination and, in view of its perilous consequences, requires from the authorities special vigilance and a vigorous reaction. It is for this reason that the authorities must use all available means to combat racism, thereby reinforcing democracys vision of a society in which diversity is not perceived as a threat but as a source of enrichment. One has to ask whether, on the facts of this case, we really are in that territory. The problem is that section 1(1) of the 1976 Act which prescribes direct discrimination does not distinguish between discrimination which is invidious and discrimination which is benign. A defence of justification is not available. In Mandla v Dowell Lee [1983] 2 AC 548 Lord Fraser of Tullybelton discussed the meaning of the word ethnic in the context of the refusal by a private school to admit a Sikh pupil whose religion and culture would not permit him to comply with the schools rules on uniform. At p 562 he said: For a group to constitute an ethnic group in the sense of the 1976 Act, it must, in my opinion, regard itself, and be regarded by others, as a distinct community by virtue of certain characteristics. Some of these characteristics are essential; others are not essential but one or more of them will commonly be found and will help to distinguish the group from the surrounding community. The conditions which appeared to him to be essential were (1) a long shared history, of which the group is conscious as distinguishing it from other groups, and the memory of which it keeps alive; (2) a cultural tradition of its own, including family and social customs and manners, often but not necessarily associated with religious observance. At p 564 he quoted with approval a passage from the judgment of Richardson J in King Ansell v Police [1979] 2 NZLR 531, 543, where he said: a group is identifiable in terms of its ethnic origins if it is a segment of the population distinguishable from others by a sufficient combination of shared customs, beliefs, traditions and characteristics derived from a common or presumed common past, even if not drawn from what in biological terms is a common racial stock. It is that combination which gives them an historically determined social identity in their own eyes and in the eyes of those outside the group. They have a distinct social identity based not simply on group cohesion and solidarity but also on their belief as to their historical antecedents. It is not disputed that the group or groups to which Jews belong are ethnic according to this analysis. They have a shared history which extends back for over three thousand years. Their traditions and practices are maintained with much devotion and attention to detail, in a manner that is designed to keep the memory of that shared history alive. Less favourable treatment of a person because he is, or is thought to be Jewish may therefore be regarded as discrimination against him on racial grounds: see, for example, Seide v Gillette Industries Ltd [1980] IRLR 427, paras 21 22, per Slynn J. In that case the Employment Appeal Tribunal upheld the tribunals decision that the anti semitic comments that were made by Mr Seides fellow worker were made because he was a member of the Jewish race, not because of his religion. The same would be true if he were to be discriminated against because he is, or is thought to be, of a particular Jewish ethnic origin. In Mandla v Dowell Lee at p 562 Lord Fraser said that the 1976 Act is not concerned at all with discrimination on religious grounds. But a finding that a person was treated less favourably on religious grounds does not exclude the possibility that he was treated in that way on racial grounds also. I agree with Lord Clarke that it would be wrong in principle to treat this as an either/or question. Direct discrimination At one level there is no dispute about the reason why M was denied admission to JFS. The schools admissions policy was based on the guidance which it received from the OCR. Thus far the mental processes of the alleged discriminator do not need to be examined to discover why he acted as he did. The dispute between the parties is essentially one of categorisation: was the OCRs guidance given on grounds of race, albeit for a religious reason, or was it solely on religious grounds? For JFS, Lord Pannick QC submits that M failed only because JFS was giving priority to members of the Jewish faith as defined by the religious authority of that faith, which was a religious criterion. That was the ground of the decision. The Court of Appeal was wrong to hold that the ground was that M was not regarded as of Jewish ethnic origin, and that the theological reasons for taking this view was the motive for adopting the criterion: para 29. For E, Ms Rose submits that Lord Pannicks submissions confused the ground for the decision with its motive. The ground spoke for itself. It was that M was not regarded according to Orthodox Jewish principles as Jewish. This meant that he was being discriminated against on grounds relating to his ethnicity. This was racial discrimination within the meaning of the statute. These contradictory assertions must now be resolved. I wish to stress again that the issue is not simply whether M is a member of a separate ethnic group from those who are advantaged by JFSs admissions policy. That is not where the argument in this case stops. I agree with Lord Rodger that the decision of the majority which, as it respectfully seems to me, does indeed stop there leads to extraordinary results. As he puts it in para 226, one cannot help feeling that something has gone wrong. Lord Brown makes the same point when, in para 247 he stresses the importance of not expanding the scope of direct discrimination and thereby placing preferential treatment which could be regarded as no more than indirectly discriminatory beyond the reach of possible justification. The crucial question is whether M was being treated differently on grounds of that ethnicity. The phrase racial grounds in section 1(1)(a) of the 1976 Act requires us to consider what those words really mean whether the grounds that are revealed by the facts of this case can properly be described as racial. Only if we are satisfied that this is so would it be right for this Court to hold that this was discrimination on racial grounds. The development of the case law in this area has not been entirely straightforward. The problem is that, in a new and difficult field, the need for the court to clarify one issue may result in a principle being stated too broadly. This may make it more difficult for it to resolve other different but interlocking issues when they arise at a later date. In Ealing London Borough Council v Race Relations Board [1972] AC 342 the House of Lords considered the phrase on the ground of colour, race or ethnic or national origins in section 1(1) of the Race Relations Act 1968 in the context of an application for housing by a Polish national It held (Lord Kilbrandon dissenting) that national origins meant something different from nationality and that it did not include it since, as Viscount Dilhorne put it at p 358, the word national in national origins means national in the sense of race and not citizenship. There was no discussion of the meaning of the word ethnic. Lady Hale has commented that Lord Simon of Glaisdales speech at p 364 is an interesting example of stereotyping which might raise judicial eyebrows today: The Judicial House of Lords (2009), p 578, fn 32. The House of Lords returned to this topic in Mandla v Dowell Lee [1983] 2 AC 548. By then nationality had been included in the definition of racial grounds in section 3(1) of the Race Relations Act 1976. There was still no statutory prohibition of discrimination on religious grounds. A Sikh schoolboy had been refused a place at a private school because he would not agree to cut his hair and stop wearing a turban. The question was whether this was discrimination on grounds of race as defined in section 3(1). The essential issue was how wide a meaning should be given to ethnic origins. Lord Fraser, with the agreement of the other members of the Appellate Committee, gave these words a wide meaning: see para 185, above. The next important case, which as this case shows may have sent the laws development off in the wrong direction, was R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] AC 1155. The council had three grammar schools for girls and five grammar schools for boys. This was a historical fact, and it was not the councils policy to discriminate. But the House held that it was unlawful for it to provide fewer grammar school places for girls than for boys. The decision was plainly right. But the reasons given by Lord Goff of Chieveley, with whom the other members of the Appellate Committee agreed, have led to difficulty in other cases. At p 1194 he said: The intention or motive of the defendant to discriminate, though it may be relevant so far as remedies are concerned is not a necessary condition of liability; it is perfectly possible to envisage cases where the defendant had no such motive, and yet did in fact discriminate on the ground of sex. That decision was applied in James v Eastleigh Borough Council [1990] 2 AC 751. This was a case about a municipal swimming pool where there was free swimming for children under three years of age and for persons who had reached the state pension age, which was then 65 for men and 60 for women. Mr James and his wife, who were both aged 61, went swimming and he alone was charged a sum of money for doing so. He complained of sex discrimination. The House of Lords, by a majority of three to two, reversed the Court of Appeal and upheld his complaint. It held that the Court of Appeal had been wrong to treat this as a case of indirect discrimination since the councils policy was, as Lord Ackner put it at p 769, inherently discriminatory. Lord Goff in James deprecated the use, in the present context, of words such as intention, motive, reason and purpose: p 773. He added, at pp 773 774, that: taking the case of direct discrimination under section 1(1)(a) of the Act, I incline to the opinion that, if it were necessary to identify the requisite intention of the defendant, that intention is simply an intention to perform the relevant act of less favourable treatment. Whether or not the treatment is less favourable in the relevant sense, ie on the ground of sex, may derive either from the application of a gender based criterion to the complainant, or from selection by the defendant of the complainant because of his or her sex; but in either event, it is not saved from constituting unlawful discrimination by the fact that the defendant acted from a benign motive. More recent decisions of the House of Lords show, however, that where the facts are not so clear cut a more nuanced approach may be called for. The need to establish an objective link between the conduct of the alleged discriminator and the unequal treatment complained of does not exclude the need to explore why the alleged discriminator acted as he did. As the division of Jews into separate subgroups is in itself such an artificial concept (see paras 183 and 184 above), that seems to me to be the real issue in this case. In Nagarajan v London Regional Transport [2000] 1 AC 501, 510 511 Lord Nicholls of Birkenhead made an important statement of principle which has often been cited and applied: Thus, in every case it is necessary to inquire why the complainant received less favourable treatment. This is the crucial question. Was it on grounds of race? Or was it for some other reason, for instance, because the complainant was not so well qualified for the job? Save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator. Treatment, favourable or unfavourable, is a consequence which follows from a decision. Direct evidence of a decision to discriminate on racial grounds will seldom be forthcoming. Usually the grounds of the decision will have to be deduced, or inferred, from the surrounding circumstances. Having thus identified the ground of the decision the reason why as the crucial question, he went on to deal with the question of motive: The crucial question just mentioned is to be distinguished sharply from a second and different question: if the discriminator treated the complainant less favourably on racial grounds, why did he do so? The latter question is strictly beside the point when deciding whether an act of racial discrimination occurred. For the purposes of direct discrimination under section 1(1)(a), as distinct from indirect discrimination under section 1(1)(b), the reason why the alleged discriminator acted on racial grounds is irrelevant. Racial discrimination is not negatived by the discriminators motive or intention or reason or purpose (the words are interchangeable in this context) in treating another person less favourably on racial grounds. In particular, if the reason why the alleged discriminator rejected the complainants job application was racial, it matters not that his intention may have been benign. As for Lord Goffs test in Birmingham, which Lord Bridge had described as objective and not subjective, Lord Nicholls said however that: He is not to be taken as saying that the discriminators state of mind is irrelevant when answering the crucial, anterior question: why did the complainant receive less favourable treatment? [my emphasis] Developing the same point in Chief Constable of West Yorkshire Police v Khan [2001] UKHL 48, 1 WLR 1947, para 29, Lord Nicholls said that the question was: [W]hy did the alleged discriminator act as he did? What, consciously or unconsciously, was his reason? Unlike causation, this is a subjective test. At p 512 in Nagarajan Lord Nicholls, considering the question of subconscious motivation, added these words: Many people are unable, or unwilling, to admit even to themselves that actions of theirs may be racially motivated. An employer may genuinely believe that the reason why he rejected an applicant had nothing to do with the applicants race. After careful and thorough investigation of a claim members of an employment tribunal may decide that the proper inference to be drawn from the evidence is that, whether the employer realised it at the time or not, race was the reason why he acted as he did. Conduct of this nature by an employer, when the inference is legitimately drawn, falls squarely within the language of section 1(1)(a). The employer treated the complainant less favourably on racial grounds. I would draw from this passage the proposition that if, after careful and thorough investigation, the tribunal were to conclude that the employers actions were not racially motivated that race was not the reason why he acted as he did it would be entitled to draw the inference that the complainant was not treated less favourably on racial grounds. The use of the words motivated and reason in the passage which I have just quoted appears at first sight not to be in harmony with the passage which I have quoted from p 511 where he said that racial discrimination is not negatived by the discriminators motive or intention or reason or purpose (the words are interchangeable in this context) in treating another person less favourably on racial grounds. But I do not think that, if these passages taken together are properly analysed, there is any inconsistency. The point that he was making on p 512 was that an examination of the employers motivation, or the reason why he acted as he did, may be highly relevant to a determination of the crucial question: was this discrimination on racial grounds. On the other hand, once that conclusion has been reached, the fact that there may have been a benign reason for the discrimination is beside the point. In other words, the statutory ground of discrimination, once it has been established, is unaffected by the underlying motive for it. This may be misguided benevolence as in James, or passive inertia as in Birmingham or racial hatred as in Seide. In the Birmingham case neither the reason nor the underlying motive left much room for argument. It was enough that the council was responsible for the continuation of the discriminatory system of grammar school education. In James there was a worthy underlying motive but, as the sole criterion that had been chosen was the unequal pension ages for men and women, the reason was clearly gender based. But where the complaint is that a black or female employee has not been selected for promotion, or has been taken off some particular duty, there will usually be a disputed issue as to the reason. This will require the tribunal to inquire more closely into the mind of the alleged discriminator. This is illustrated by Nagarajan and also by Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] UKHL 11, [2003] ICR 337. I would hold therefore that Lord Goffs rejection of a subjective approach was expressed too broadly. The proposition that the alleged discriminators motive, or reason, is irrelevant needs therefore to be reformulated. It all depends on the stage of the enquiry at which these words are being used. At the initial stage, when the question is whether or not this was discrimination on racial grounds, an examination of the alleged discriminators motivation may be not only relevant but also necessary, to reach an informed decision as to whether this was a case of racial discrimination. As the issue is a subjective one, his mental processes will, as Lord Nicholls said at p 511, call for some consideration. Everything that may have passed through his mind that bears on the decision, or on why he acted as he did, will be open to consideration. But once it has been determined that this was a case of racial discrimination, that is an end of the matter. The treatment cannot be excused by looking beyond it to why he decided to act in that way. I regret the fact that Lord Clarke does not agree with this analysis. As I understand his position, he prefers a test which makes the state of mind of the alleged discriminator irrelevant where the criteria he adopts are inherently discriminatory: see paras 127, 132. The question which divides us is whether his approach is supported by Lord Nicholls statements in Nagarajan and later in Khan. Lord Clarkes reading of the passage in Nagarajan which he has highlighted in para 139 of his opinion is that in the obvious cases, where discrimination is inherent, there is a prohibition on looking at the motivation of the alleged discriminator: see also his para 142. But Lord Nicholls does not say this. He makes no mention of any such prohibition. It may be that the tribunal will not need to look at the alleged discriminators mental processes in obvious cases, as his mental state is indeed obvious. But he does not say that the tribunal is precluded from doing so. Lord Steyn said in Nagarajan at pp 520H 521A that conscious motivation is not required. But, as he made clear, this does not mean that the alleged discriminators state of mind is always irrelevant. Confirmation that this is not Lord Nicholls approach is to be found in the last full paragraph on p 511 of Nagarajan, where he explains Lord Bridges description of the test which Lord Goff adopted in Birmingham. Lord Bridge described it as objective. But Lord Nicholls said that he is not to be taken as saying that there is no investigation into the mind of the alleged discriminator. He does not draw any distinctions here between cases like Birmingham and James, which Lord Clarke describes as cases of inherent discrimination (see para 142, above), and other types of cases. The point that he is making is that even in obvious cases such as Birmingham the tribunal is not precluded from looking at the state of mind of the discriminator. The passage from his speech in Khan to which I refer in para 193 supports this conclusion. He describes the test as a subjective one. Here again he does not distinguish between different types of cases. I believe therefore that an accurate reading of what Lord Nicholls actually said, and did not say, supports my analysis. There are few reported cases in which the tribunal has had to decide as between two prohibited reasons, such as race and gender or (since 2006) race and religion or belief. The only authority referred to by the parties was Seide v Gillette Industries Ltd [1980] IRLR 427. The appeal turned on the question of causation relating to the aftermath of a series of incidents of anti Semitic abuse of Mr Seide by a fellow worker. The report does not give any details of the content of the abuse. The only relevant passage in the judgment is at paras 21 22, recording that it was common ground that Jewish could refer to a member of an ethnic group or to a member of a religious faith, and that the tribunals decision, which it was entitled to reach on the facts, was that Mr Seide was subjected to anti Semitic abuse because of his Jewish origin. It is reasonable to infer that it would have been open to the members of the tribunal to conclude that the abuse was as much on the ground of ethnicity as on the ground of religion and that that was enough to constitute discrimination on a prohibited ground. This would be consistent with the principle that this is not an either/or question. As for this case, it is as different from Seide as it is possible to imagine. This was not a case of foul mouthed anti Semitic abuse. Those who are said to have been responsible for the discrimination, whether at the level of the school authorities, the OCR or the Chief Rabbi himself, are thoughtful, well intentioned and articulate. I would accept Lord Pannicks submission that the Chief Rabbi was not in the least interested in Ms ethnicity. The OCR has left us in no doubt as to why it was acting as it did. If the Chief Rabbi were to be asked the question that was framed by Lord Nicholls, he would say his reason was that this was what was required of him by fundamental Orthodox Jewish religious law. The question whether or not M was Jewish in the secular sense was of no interest to him at all. His advice was based simply and solely on his understanding of Jewish law. Jewishness based on matrilineal descent from Jewish ancestors has been the Orthodox religious rule for many thousands of years, subject only to the exception for conversion. To say that his ground was a racial one is to confuse the effect of the treatment with the ground itself. It does have the effect of putting M into an ethnic Jewish group which is different from that which the Chief Rabbi recognises as Jewish. So he has been discriminated against. But it is a complete misconception, in my opinion, to categorise the ground as a racial one. There is nothing in the way the OCR handled the case or its reasoning that justifies that conclusion. It might have been justified if there were reasons for doubting the Chief Rabbis frankness or his good faith. But no one has suggested that he did not mean what he said. As Lord Rodger points out, to reduce the religious element to the status of a mere motive is to misrepresent what he is doing. This case is quite different too from the example of the Dutch Reformed Church that was referred to by Sedley LJ in the Court of Appeal, para 30, and referred to again during the argument in this court. The discrimination that its belief invited, on grounds of colour, was overtly racist. A court would have no difficulty in dismissing the religious belief as providing no justification for it at all; see also Bob Jones University v United States, 461 US 574 (1983), where the US Supreme Court upheld the decision of the Inland Revenue Service to revoke the Universitys tax exempt status because, while permitting unmarried people who were black to enrol as students, it had adopted a racially discriminatory policy of denying admission to applicants engaged in an interracial marriage or known to advocate interracial marriage or dating although it had been based on sincerely held religious beliefs. Beliefs of that kind are not worthy of respect in a democratic society or compatible with human dignity: Campbell and Cosans v United Kingdom (1982) 4 EHRR 293, para 36. Here the discrimination between those who are, and those who are not, recognised as Jewish was firmly and inextricably rooted in Orthodox Jewish religious law which it is the duty of the Chief Rabbi to interpret and apply. The Chief Rabbis total concentration on the religious issue, to the exclusion of any consideration of ethnicity, can be illustrated by two contrasting examples. Several similar examples were referred to in the course of argument. A is the child of parents, and the grandchild of grandparents, all of whom led wholly secular lives similar to those of their largely secular neighbours. They never observed Jewish religious law or joined in the social or cultural life of the Jewish communities where they lived, but there is unimpeachable documentary evidence that more than a century ago the mother of As maternal grandmother was converted in an Orthodox synagogue. To the OCR A is Jewish, despite his complete lack of Jewish ethnicity. By contrast B is the child of parents, and the grandchild of grandparents, all of whom have faithfully observed Jewish religious practices and joined actively in the social and cultural life of the Jewish community, but there is unimpeachable documentary evidence that more than a century ago the mother of Bs maternal grandmother was converted in a non Orthodox synagogue. To the OCR B is not Jewish, despite his obvious Jewish ethnicity. Descent is only necessary because of the need, in these examples, to go back three generations. But having gone back three generations, the OCR applies a wholly religious test to what has been identified as the critical event. For the reasons given by Lord Rodger, the part that conversion plays in this process is crucial to a proper understanding of its true nature. It cannot be disregarded, as Lady Hale suggests in para 66, as making no difference. It shows that the inquiry is about a religious event to be decided according to religious law. For these reasons I would hold that the decision that was taken in Ms case was on religious grounds only. This was not a case of direct discrimination on racial grounds. On this issue, in respectful agreement with Lord Rodger, Lord Walker and Lord Brown, I would set aside the decision reached by the Court of Appeal. Indirect discrimination An examination of the question whether the application of the oversubscription policy to M amounted to indirect discrimination within the meaning of section 1(1A) of the Race Relations Act 1976 falls into two parts: (1) did the policy put persons of the same race or ethnic or national origins as M at a particular disadvantage when compared with other persons: section 1(1A)(a) and (b); and, if so, (2) can JFS show that the policy was a proportionate means of achieving a legitimate aim: section 1(1A)(c). Lord Pannick did not seek to argue that the first question should be answered in the negative. I think that he was right not to do so, as it is clear that M and all other children who are not of Jewish ethnic origin in the maternal line, together with those whose ethnic origin is entirely non Jewish, were placed at a disadvantage by the oversubscriptions policy when compared with those who are of Jewish ethnic origin in the maternal line. They may in theory gain entry to the school by undergoing a process of conversion that is approved by the OCR, but this in itself is a severe disadvantage. It appears that no child has ever been admitted to JFS on this basis. The issue on this branch of the case, therefore, is whether JFS can show that the policy had a legitimate aim and whether the way it was applied was a proportionate way of achieving it. The burden is on JFS to prove that this was so: R (Elias) v Secretary of State for Defence [2006] EWCA Civ 1293, [2006] 1 WLR 3213, per Mummery LJ at paras 131 132. The Court of Appeal accepted the submission that the admission criteria were explicitly related to ethnicity and so incapable of constituting or forming part of a legitimate aim and that it was not possible to justify indirect discrimination by reliance on the very thing that made the test discriminatory: para 45. But I think that is to misapply the test that the Act lays down. I agree with Lord Brown that there was a failure by the Court to address the questions of legitimate aim and proportionality on the assumption that the admissions policy was not directly discriminatory. For E, Ms Rose submitted that if the aim pursued was itself related to the ethnic origins of the pupils it was not capable of being a legitimate aim. This was how Lord Fraser put it in Mandla v Dowell Lee [1983] 2 AC 548, 566; see also Orphanos v Queen Mary College [1985] AC 761, 772. Those were indirect discrimination cases, but they were decided under section 1(1)(b) of the 1976 Act which has now been superseded by section 1(1A): see para [170], above. An aim which is itself discriminatory in character cannot be legitimate for the purposes of sections 1(1A). So the assumption on which the argument about indirect discrimination proceeds is that, for the reasons I have given, JFSs admission criteria did not discriminate on grounds of ethnicity. The question is whether, given that persons of given ethnic origins were at a particular disadvantage when compared with other persons, the school nevertheless had an aim which was legitimate. That is a different question. In the Administrative Court Munby J said that the aim was to educate those who, in the eyes of the OCR, are Jewish, irrespective of their religious beliefs, practices or observances, in a school whose culture and ethos is that of Orthodox Judaism: para 192. Developing this argument, Lord Pannick submitted that it was legitimate for a faith school to give preference to those children who are members of the faith as recognised by the OCR. If children in Ms position were admitted to the school there would inevitably be fewer places for those recognised as Jewish by the OCR. The policy of the government was to allow schools to give priority to those of the religion for which they have been designated. It was open to the school, under the 2007 Code, to adopt criteria based on membership or practice. As its ethos was that of Orthodox Judaism, which the Chief Rabbi seeks to promote, membership was a legitimate criterion. If that criterion was not adopted it would open the door to children who were not recognised as Jewish and virtually exclude those who were. As against this, Ms Rose submitted that it was impossible to ignore the close relationship between the criterion of membership and the ethnic origins of the children. This made it impossible for JFS to justify the criterion as legitimate. In my opinion, however, it is necessary to look at all the circumstances to test the issue of legitimacy. The assumption on which section 1(1A)(c) proceeds it that the treatment is open to the objection that it puts a person at a disadvantage in comparison with persons not of his race or ethnic or national origins. The question is whether treatment which has that effect can nevertheless be shown to have a legitimate aim. Questions about the motive and aims of the alleged discriminator come in at this stage. An aim may be held to be legitimate even though it discriminates in the ways referred to in section 1(1A)(a) and (b). In my opinion, for the reasons that Lord Brown gives in paras 252 253, JFS has shown that its aim is a legitimate one. The essential point is that a faith school is entitled to pursue a policy which promotes the religious principles that underpin its faith. It is entitled to formulate its oversubscriptions criteria to give preference to those children whose presence in the school will make it possible for it to pursue that policy. The legitimacy of the policy is reinforced by the statutory background. It has not emerged out of nowhere. It has been developed in accordance with the Code which permits faith schools to define their conditions for admission by reference either to membership of the faith or to practice. The justification for the Code lies exclusively in a belief that those who practise the faith or are members of it will best promote the religious ethos of the school. In Orphanos v Queen Mary College [1985] AC 761, 772 773 Lord Fraser said that a typical example of a requirement which could be justified without regard to the nationality or race of the person to whom it was applied was Panesar v Nestl Co Ltd (Note) [1980] ICR 144, where it was held that a rule forbidding the wearing of beards in the respondents chocolate factory was justifiable on hygienic grounds notwithstanding that the proportion of Sikhs who could conscientiously comply with it was considerably smaller than the proportion of non Sikhs who could comply with it. It was, he said, purely a matter of public health and nothing whatever to do with racial grounds. I would apply the same reasoning to this case. This leaves, however, the question of proportionality. The Court of Appeal, having concluded that the criterion did not have an aim that was legitimate, did not attempt to examine this issue: para 47. Before Munby J it was submitted by Ms Rose that JFSs admissions policy did not properly balance the impact of the policy on those like M adversely affected by it and the needs of the school: para 199. He rejected this argument for two reasons. One was that the kind of policy that is in question in this case is not materially different from that which gives preference in admission to a Muslim school to those who were born Muslim or preference in admission to a Catholic school to those who have been baptised. The other was that an alternative admissions policy based on such factors as adherence or commitment to Judaism would not be a means of achieving JFSs aims and objectives: paras 200 201. In my opinion these reasons miss the point to which Ms Roses submission was directed. The question is whether putting M at a disadvantage was a proportionate means of achieving the aim of the policy. It was for JFS to show that they had taken account of the effect of the policy on him and balanced its effects against what was needed to achieve the aim of the policy. As Peter Gibson LJ noted in Barry v Midland Bank plc [1999] ICR 319, 335 336 the means adopted must be appropriate and necessary to achieving the objective. I do not think that JFS have shown that this was so. Lord Pannick submitted that there was no other way of giving effect to the policy. If the school were to admit M, this would be to deny a place to a child who was regarded as Jewish by the OCR. This was inevitable as the school was oversubscribed. But what is missing is any sign that the schools governing body addressed their minds to the impact that applying the policy would have on M and comparing it with the impact on the school. As Ms Rose pointed out, the disparate impact of the policy on children in Ms position was very severe. They are wholly excluded from the very significant benefit of state funded education in accordance with their parents religious convictions, whereas there are alternatives for children recognised by the OCR although many in the advantaged group do not share the schools faith based reason for giving them priority. The school claimed to serve the whole community. But the way the policy was applied deprived members of the community such as M, who wished to develop his Jewish identity, of secondary Jewish education in the only school that is available. There is no evidence that the governing body gave thought to the question whether less discriminatory means could be adopted which would not undermine the religious ethos of the school. Consideration might have been given, for example, to the possibility of admitting children recognised as Jewish by any of the branches of Judaism, including those who were Masorti, Reform or Liberal. Consideration might have been given to the relative balance in composition of the schools intake from time to time between those recognised as Jewish by the OCR who were committed to the Jewish religion and those who were not, and as to whether in the light of it there was room for the admission of a limited number of those committed to the Jewish religion who were recognised as Jewish by one of the other branches. Ms Rose said that the adverse impact would be much less if a different criterion were to be adopted. But the same might be true if the criterion were to be applied less rigidly. There may perhaps be reasons, as Lord Brown indicates (see para 258), why solutions of that kind might give rise to difficulty. But, as JFS have not addressed them, it is not entitled to a finding that the means that it adopted were proportionate. There are cases, of which R(SB) v Governors of Denbigh High School [2006] UKHL 15, [2007] 1 AC 100 and Belfast City Council v Miss Behavin Ltd [2007] UKHL 19, [2007] 1 WLR 1420 are the best examples, where it can be said in the human rights context that the fact that the public authority had applied its mind to the issue is immaterial. This is because in that context the issue is one of substance, not procedure. Lord Hoffmann in Governors of Denbigh High School, para 68, gave this explanation: In domestic judicial review, the court is usually concerned with whether the decision maker reached his decision in the right way rather than whether he got what the court might think to be the right answer. But article 9 [of the European Convention on Human Rights] is concerned with substance, not procedure. It confers no right to have a decision made in any particular way. What matters is the result: was the right to manifest a religious belief restricted in a way which is not justified under article 9(2)? The problem that JFS faces in this case is a different one, as the context is different. Under section 1(1A)(c) of the Race Relations Act 1976 the onus is on it to show that the way the admissions policy was applied in Ms case was proportionate. It is not for the court to search for a justification for it: see Mummery LJs valuable and instructive judgment in R (Elias) v Secretary of State for Defence [2006] 1 WLR 3213, paras 131 133. JFS failed to discharge its duty under section 71 of the Act to have regard to the need to eliminate discrimination. It is having to justify something that it did not even consider required justification. The question, as to which there is no obvious answer either way, was simply not addressed. As a result the court does not have the statistical or other evidence that it would need to decide whether or not the application of the policy in Ms case was proportionate. It may well be, as Lord Brown indicates, that devising a new oversubscriptions policy that is consistent with the schools legitimate aim would be fraught with difficulty. But it was for JFS to explore this problem and, having done so, to demonstrate that whatever policy it came up with was proportionate. So, although I do not arrive at this conclusion by the same route as Lord Mance, I agree with him that on the material before the Court the admissions policy cannot be held to have been justified. I would hold that, by applying the oversubscription criteria to M in a way that put him at a particular disadvantage when compared with others not of the same ethnicity by reason of matrilineal descent, JFS discriminated against him in breach of section 1(1A) of the Race Relations Act 1976, and that E is entitled to a declaration to that effect. The appeals on costs In its order for costs the Court of Appeal directed that the United Synagogue and the Secretary of State must each pay 20% of Es costs in the Court of Appeal and below, and that the Schools Adjudicator must pay 10% of those costs. The United Synagogue and the Secretary of State have both appealed, the United Synagogue formally and the Secretary of State informally, against that order to this court. I did not understand Mr Linden QC, who appeared for the Secretary of State, to press his informal appeal and, as it has no merit, I would dismiss it. But Mr Jaffey for the United Synagogue did make submissions in support of its appeal. His point was that the United Synagogue had intervened in the Administrative Court on the express basis that it would not be found liable in costs which was not challenged by any other party, and that the basis for its intervention had been endorsed by Munby J when he allowed it to intervene. He submitted that his client ought not to have been found liable by the Court of Appeal for the costs incurred at first instance, nor should it have been found liable for costs in the Court of Appeal as there was no appeal against the basis on which it had been permitted to intervene. The situation is more complicated than that brief summary might suggest. The nature of the United Synagogues intervention was transformed when the case reached the Court of Appeal. Lord Pannick QC, who had not appeared below, was instructed on its behalf and assumed much responsibility for presenting the case on behalf of JFS so much so, that when the case reached this court, he appeared for JFS and not for the United Synagogue. In that situation, as it had assumed a role that went well beyond that of an intervener, the Court of Appeal cannot be faulted for finding it liable for a share of the costs in that court. But I do not think that what happened in the Court of Appeal should deprive the United Synagogue of the protection against an order for costs that it sought and was granted in the Administrative Court. So I would recall that part of the Court of Appeals order. I would replace it by a finding that the United Synagogue must pay 20% of Es costs in the Court of Appeal but not below, and that 20% of Es costs at first instance must be borne by JFS in addition to the 50% that it has already been ordered to pay. Conclusion I would allow the appeal by JFS against the Court of Appeals finding that the Chief Rabbis criteria discriminated directly against M on racial grounds. I would however dismiss its appeal against the Court of Appeals finding that this was a case of indirect discrimination, although on different grounds. I would allow the appeal by the United Synagogue against the Court of Appeals order for costs to the extent that I have indicated. I would dismiss the Secretary of States appeal. LORD RODGER The claimant, E, is Jewish by matrilineal descent. By conviction, he is a Masorti Jew. Masorti Judaism differs in certain respects from what is generally called Orthodox Judaism. Masorti Jews adhere to a set of beliefs and practices which have their origins in Orthodox Judaism but which are not now the same. In particular, while both Masorti and Orthodox Judaism believe that the written and oral Torah (from which the halakhah is derived) are unchangeable and bind Jews today, they differ in their interpretation of some parts of the halakah. Es wife converted to Judaism in an independent synagogue. At the risk of some slight imprecision, her conversion can be described as having taken place under non Orthodox auspices. Since the requirements for Orthodox conversion reflect Orthodox rather than Progressive or Masorti teachings and practices, her conversion is recognised by the Masorti authorities, but is not recognised by the Office of the (Orthodox) Chief Rabbi. Therefore, while the Masorti authorities recognise her son, M, as Jewish, the Office of the Chief Rabbi does not. But, of course, both E and M consider that M is Jewish, on the basis that his mother was Jewish when he was born. JFS is designated by the Secretary of State under the School Standards and Framework Act 1998 as having a Jewish religious character. The relevant regulations provide that the Schools governing body (the governors) must consult the Chief Rabbi about its admission arrangements. Having done so, the governors adopted an admissions policy which provided that, if the School were oversubscribed, then only children who were recognised as being Jewish by the Office of the Chief Rabbi would be considered for admission. E wanted to get M into the School. It has an excellent reputation and has been oversubscribed for many years. So, when E applied to have M admitted, hardly surprisingly, his application was rejected because the Office of the Chief Rabbi would not have recognised M as being Jewish. Indeed the point was so clear that E did not apply to the London Beth Din for a determination of Ms status in Orthodox Jewish law. In theory, the School would have considered admitting him if he had undertaken to convert under Orthodox auspices. But the process would have taken several years and have involved M adhering to a set of beliefs that are materially different from those of Masorti Judaism. E and M decided not to pursue that option. The purpose of designating schools as having a religious character is not, of course, to ensure that there will be a school where Jewish or Roman Catholic children, for example, can be segregated off to receive good teaching in French or physics. That would be religious discrimination of the worst kind which Parliament would not have authorised. Rather, the whole point of such schools is their religious character. So the whole point of designating the Jewish Free School as having a Jewish character is that it should provide general education within a Jewish religious framework. More particularly, the education is to be provided within an Orthodox religious framework. Hence the oversubscription admission criteria adopted after consulting the Chief Rabbi. The Schools policy is to give priority to children whom the Orthodox Chief Rabbi recognises as Jewish. From the standpoint of Orthodoxy, no other policy would make sense. This is because, in its eyes, irrespective of whether they adhere to Orthodox, Masorti, Progressive or Liberal Judaism, or are not in any way believing or observant, these are the children and the only children who are bound by the Jewish law and practices which, it is hoped, they will absorb at the School and then observe throughout their lives. Whether they will actually do so is, of course, a different matter. The dispute can be summarised in this way. E, who is himself a Masorti Jew, wants his son, whom he regards as Jewish, to be admitted to the School as a Jewish child. He complains because the School, whose admission criteria provide that only children recognised as Jewish by the Office of the (Orthodox) Chief Rabbi are to be considered for admission, will not consider admitting his son, who is recognised as Jewish by the Masorti authorities but not by the Chief Rabbi. If anything, this looks like a dispute between two rival religious authorities, the Office of the Chief Rabbi and the Masorti authorities, as to who is Jewish. But E claims and this Court will now declare that, when the governors refused to consider M for admission, they were actually treating him less favourably than they would have treated a child recognised as Jewish by the Office of the Chief Rabbi on racial grounds: Race Relations Act 1976, section 1(1)(a). The decision of the majority means that there can in future be no Jewish faith schools which give preference to children because they are Jewish according to Jewish religious law and belief. If the majority are right, expressions of sympathy for the governors of the School seem rather out of place since they are doing exactly what the Race Relations Act exists to forbid: they are refusing to admit children to their school on racial grounds. That is what the Courts decision means. And, if that decision is correct, why should Parliament amend the Race Relations Act to allow them to do so? Instead, Jewish schools will be forced to apply a concocted test for deciding who is to be admitted. That test might appeal to this secular court but it has no basis whatsoever in 3,500 years of Jewish law and teaching. The majoritys decision leads to such extraordinary results, and produces such manifest discrimination against Jewish schools in comparison with other faith schools, that one cant help feeling that something has gone wrong. The crux of the matter is whether, as the majority hold, the governors actually treated M less favourably on grounds of his ethnic origins. They say the governors did so, but for a bona fide religious motive. If that is really the position, then, as Lord Pannick QC was the first to accept on their behalf, what the governors did was unlawful and their bona fide religious motive could not make the slightest difference. But to reduce the religious element in the actions of those concerned to the status of a mere motive is to misrepresent what they were doing. The reality is that the Office of the Chief Rabbi, when deciding whether or not to confirm that someone is of Jewish status, gives its ruling on religious grounds. Similarly, so far as the oversubscription criteria are concerned, the governors consider or refuse to consider children for admission on the same religious grounds. The only question is whether, when they do so, they are ipso facto considering or refusing to consider children for admission on racial grounds. Lady Hale says that M was rejected because of his mothers ethnic origins which were Italian and Roman Catholic. I respectfully disagree. His mother could have been as Italian in origin as Sophia Loren and as Roman Catholic as the Pope for all that the governors cared: the only thing that mattered was that she had not converted to Judaism under Orthodox auspices. It was her resulting non Jewish religious status in the Chief Rabbis eyes, not the fact that her ethnic origins were Italian and Roman Catholic, which meant that M was not considered for admission. The governors automatically rejected M because he was descended from a woman whose religious status as a Jew was not recognised by the Orthodox Chief Rabbi; they did not reject him because he was descended from a woman whose ethnic origins were Italian and Roman Catholic. As in any complaint of racial discrimination, the point can be tested by reference to the appropriate comparator. The starting point is that both E and M believe M to be Jewish by descent. So E applied to the School to admit M on the basis that he was Jewish because his Italian Catholic mother had converted to Judaism before he was born. The mothers Jewish status as a result of her conversion was accordingly the only issue which the governors were asked to consider or did consider. They refused Es application because her conversion had been under non Orthodox auspices. Therefore the appropriate comparator is a boy with an Italian Catholic mother whom the governors would have considered for admission. He could only be a boy whose mother had converted under Orthodox auspices. The question then is: did the governors treat M, whose mother was an Italian Catholic who had converted under non Orthodox auspices, less favourably than they would have treated a boy, whose mother was an Italian Catholic who had converted under Orthodox auspices, on grounds of his ethnic origins? Plainly, the answer is: no. The ethnic origins of the two boys are exactly the same, but the stance of the governors varies, depending on the auspices under which the mothers conversion took place. Faced with a boy whose mother had converted under Orthodox auspices, the governors would have considered him for admission without pausing for a single second to enquire whether he or his mother came from Rome, Brooklyn, Siberia or Buenos Aires, whether she had once been a Roman Catholic or a Muslim, or whether he or she came from a close knit Jewish community or had chosen to assimilate and disappear into secular society. In other words, the ethnic origins of the child or his mother in the Mandla v Dowell Lee [1983] 2 AC 548 sense would not have played any part in the governors decision to admit him. All that would have mattered was that his mother had converted under Orthodox auspices. Equally, in Ms case, the governors did not refuse to consider admitting him on grounds of his Mandla ethnic origins. Even supposing that the governors knew about his origins, they were quite irrelevant and played no part in their decision. The governors were simply asked to consider admitting him as the son of a Jewish mother. They declined to do so because his mother had not converted under Orthodox auspices. It was her non Orthodox conversion that was crucial. In other words, the only ground for treating M less favourably than the comparator is the difference in their respective mothers conversions a religious, not a racial, ground. Since, therefore, when applying the religious test, the governors were not asked to consider, and did not actually consider, Ms ethnic origins, James v Eastleigh Borough Council [1990] 2 AC 751 and all the other cases to which the majority refer simply do not come into the picture. For these reasons, which are essentially those set out so clearly in the judgment of Munby J, and in agreement with the opinion of Lord Brown, I would hold that the governors did not discriminate against M directly on racial grounds. So far as indirect discrimination is concerned, again I agree with Lord Brown and indeed with Munby J. The aim of the School, to instil Jewish values into children who are Jewish in the eyes of Orthodoxy, is legitimate. And, from the standpoint of an Orthodox school, instilling Jewish values into children whom Orthodoxy does not regard as Jewish, at the expense of children whom Orthodoxy does regard as Jewish, would make no sense. That is plainly why the Schools oversubscription policy allows only for the admission of children recognised as Jewish by the Office of the Chief Rabbi. I cannot see how a court could hold that this policy is a disproportionate means of achieving the Schools legitimate aim. I would accordingly allow the Governing Bodys appeal and restore the order of Munby J. On the United Synagogues costs appeal, I agree with Lord Hope. LORD WALKER I respectfully agree with Lord Hope that this was a case of indirect, but not direct discrimination on grounds of ethnic origins contrary to section 1 of the Race Relations Act 1976 as amended. I do not wish to make any addition or qualification to the reasons set out in Lord Hopes judgment. But I do wish to express my respectful agreement with much of Lady Hales judgment, although we reach different conclusions. In particular I agree with her references to the conspicuously clear and thoughtful judgment of Mummery LJ in R (Elias) vs Secretary of State for Defence [2006] 1 WLR 3213. Lord Hope has rightly referred to Mummery LJs treatment (at paras 128 to 133, in the context of justification of indirect discrimination) of the significance of a failure to address the issue of potential discrimination, especially when section 71 of the Race Relations Act 1976 applies. But the whole of Mummery LJs discussion of the boundary between direct and indirect discrimination (paras 60 to 123) merits close attention. The division of opinion in this Court illustrates that the separateness and mutual exclusivity of direct and indirect discrimination, although immovably established as part of the law (for all the reasons given by Mummery LJ at paras 114 to 122), is sometimes elusive in practice. In consequence the sharp distinction between the impossibility of justifying direct discrimination in any circumstances, and the possibility of justifying indirect discrimination, sometimes seems a little arbitrary. LORD BROWN Jews of all denominations define membership of the Jewish religion by reference to descent or conversion. The question is one of status: you are a Jew if, whether by descent or conversion, your mother (or anyone else up the matrilineal line) was a Jew or if you yourself convert to Judaism. Orthodox Jews require that the conversion be recognised by the Office of the Chief Rabbi (OCR). Other denominations of Jewry (Masorti, Reform and Liberal) apply less exacting criteria for conversion. It is that which has given rise to the underlying dispute between the parties in this case. JFSs oversubscription admissions policy gives priority to those recognised by the OCR as Jewish. M, because his mother converted to Judaism under the auspices of a non Orthodox rabbi and not an orthodox rabbi, is not so recognised. There is much debate within the Jewish community about the proper standards to apply to conversion and many would like JFS to include within their admissions policy anyone recognised as Jewish by any of the denominations. Ms real complaint here is that in deciding who is a Jew the OCRs approach to conversion is misguided. That, however, is not an issue which is, or ever could be, before the Court. No court would ever intervene on such a question or dictate who, as a matter of orthodox religious law, is to be regarded as Jewish. Thus it is that this legal challenge has nothing to do with the standards of conversion to Judaism and who shall be recognised under religious law as Jews but instead, somewhat surprisingly at first blush, invites the Court to decide questions of racial discrimination. Is JFSs policy of giving priority in admissions to those recognised by the OCR as Jewish to be characterised and outlawed as direct racial discrimination contrary to section 1(1)(a) of the Race Relations Act 1976? Is the school on racial grounds (defined by section 3 of the Act to include the ground of ethnic origins) treating others less favourably? That is the central issue before the Court. Ms father (E), supported by the Equality and Human Rights Commission and the British Humanist Society, submits that those not recognised by JFS as Jews are being treated less favourably than those recognised as Jews (so much is obvious) on the ground of the ethnic origins of those not recognised i.e. because no one in their matrilineal line is recognised as Jewish. Integral to the argument is that any definition of Jewish status based on descent is necessarily dependent on ethnic origin and therefore to be regarded as racially discriminatory. In this case the argument arises in the context of an orthodox Jewish school and at the suit of a child who would be regarded as Jewish according to all other Jewish denominations. But the same argument could arise equally in the context of schools giving priority to children recognised as Jews by any other Jewish denomination. I repeat, all Jews define membership of their religion by reference to descent (or conversion). The contrary argument, advanced by JFS, United Synagogue, the Secretary of State for Children, Schools and Families, and the Board of Deputies of British Jews, is that those not recognised by the school as Jews are being treated less favourably not because of their ethnic origins a matter of total indifference to the OCR but rather because of their religion: they are not members of the Jewish religion whereas those preferred are. Of course, the reason they are not members of the Jewish religion is that their forebears in the matrilineal line (or, in the case of Liberal Jews, either ancestral line) were not Jews and in this sense their less favourable treatment is determined by their descent. The ground for their less favourable treatment, however, is religion, not race. Both arguments are to my mind entirely coherent and entirely respectable. Only one, however, can be correct. The difficulty in the case arises because of the obvious overlap here between the concepts respectively of religious and racial discrimination. If the ground for discrimination is racial, it is unlawful. If however the ground (and not merely the motive) is religious, that is lawful. The Equality Act 2006 for the first time outlawed religious discrimination inter alia with regard to school admissions but not in the case of oversubscribed designated faith schools like JFS. Plainly the 2006 Act cannot operate to legitimise what would otherwise be racial discrimination under the 1976 Act. One may note, however, that if Ms argument is correct, JFS (and all other Jewish schools, whether maintained or independent, whose admissions criteria similarly depend upon the child being recognised under religious law as Jewish) have been operating an unlawful directly racially discriminatory policy for upwards of 30 years. There can be no doubt that Jews, including those who have converted to Judaism, are an ethnic group. That, since the decision of the House of Lords in Mandla v Dowell Lee [1983] 2 AC 548, is indisputable. And it is plain too why the courts have given a wide definition to the phrase ethnic origins so as to provide comprehensive protection to those suffering discrimination on racial grounds. Manifestly Jews and those perceived by discriminators to be Jews have welcomed such an approach and benefit from it. It by no means follows, however, that to discriminate against a person on the ground that he or someone else either is or is not Jewish is therefore to discriminate against him on racial grounds (as the Court of Appeal concluded at paragraph 32 of its judgment). That to my mind is a considerable over simplification of an altogether more difficult problem. This is perhaps best illustrated by reference to Ms position relative to those benefited under JFSs admissions policy. True, M was refused admission because his mother, and therefore he himself, although plainly both ethnically Jewish in the Mandla sense, were not recognised by the OCR as Jewish. But those granted admission under the policy were admitted for the very reason that they were recognised as Jewish. Does the 1976 Act really outlaw discrimination in favour of the self same racial group as are said to be being discriminated against? I can find no suggestion of that in any of the many authorities put before us. Nor can I see a parallel between the present case and the example apparently thought indistinguishable by the Court of Appeal of the Dutch Reformed Church of South Africa who until recently honestly believed that God had made black people inferior and had destined them to live separately from whites. The discrimination there was plainly against blacks and in favour of whites self evidently, therefore, on the ground of race and irredeemable by reference to the Churchs underlying religious motive. Ethnic Jews and Jews recognised as members of the religion, distinguishable as groups though they are, clearly overlap. Not so blacks and whites. What I am suggesting here is that it is quite unrealistic, given that those being treated less favourably and those being treated more favourably by JFSs policy are all (save, of course, for those who have no connection with Judaism whatsoever) in the same ethnic group, to regard the policy as discriminatory on racial rather than religious grounds. I recognise, of course, that under section 3(2) of the 1976 Act a particular racial group within a wider racial group still enjoys protection under the Act. The point I am making, however, is that the differential treatment between Jews recognised by the OCR and those not so recognised within the wider group of ethnic Jews (no less obviously than the differential treatment between the former and those with no connection whatever to Judaism) is plainly on the ground of religion rather than race. Still less does it seem to me that this case is covered by the House of Lords decision in James v Eastleigh Borough Council [1990] 2 AC 751. Once it was recognised that the Council there might just as well have said that entry to its swimming pools was free to women, but not men, in the 60 65 age group, the direct discrimination against men became indisputable. The condition of pensionability was itself patently gender based. The position would surely have been different had the policy been instead to admit free, say, those who were in fact retired. That would not have involved direct discrimination and, if challenged as indirect discrimination, would surely have been capable of justification, certainly if free admittance was granted not only to those retired but also if the applicant could otherwise establish that he or she was of limited means. Mandatory retirement age and sex were there precisely coterminous. Even then, the case was decided only by the narrowest majority of the House overturning a unanimous Court of Appeal. The 1976 Act, unlike, for example, article 14 of the European Convention on Human Rights, draws a distinction between direct and indirect discrimination, only the latter being capable of justification. It therefore seems to me of the greatest importance not to expand the scope of direct discrimination and thereby place preferential treatment which could well be regarded as no more than indirectly discriminatory beyond the reach of possible justification. This is especially so where, as here, no one doubts the Chief Rabbis utmost good faith and that the manifest purpose of his policy is to give effect to the principles of Orthodox Judaism as universally recognised for millennia past. There is not the same exact correlation between membership of the Jewish religion and membership of the group regarded on the Mandla approach as being of Jewish ethnicity as there was between retirement age and sex in James v Eastleigh and I for my part would regard the Court of Appeals judgment as going further than that decision and as impermissibly expanding the scope of direct discrimination beyond its proper limits. As I have already indicated, E is not really seeking to prevent JFS from adopting oversubscription criteria which give priority to Jews but rather is asking for JFS to define Jews more expansively than Orthodox Jews in fact do. But it is, of course, the logic of his argument that JFSs policy must be regarded as racially discriminatory not merely because it rules out ethnic Jews like M who are not recognised as Jews by the OCR but also because it rules out all other racial groups whether or not they have any connection with Judaism at all. On this argument, it is strictly immaterial that E is Jewish or that Ms mother converted to Judaism. This policy could as well have been struck down at the suit of anyone desiring admission to the school. If the argument succeeds it follows that Jewish religious law as to who is a Jew (and as to what forms of conversion should be recognised) must henceforth be treated as irrelevant. Jewish schools in future, if oversubscribed, must decide on preference by reference only to outward manifestations of religious practice. The Court of Appeals judgment insists on a non Jewish definition of who is Jewish. Jewish schools, designated as such by the Minister and intended to foster a religion which for over 3000 years has defined membership largely by reference to descent, will be unable henceforth even to inquire whether one or both of the applicant childs parents are Jewish. (Yet is that so very different from a Catholic school asking if the child has been baptised? It is hardly likely to have been unless one at least of its parents was a Christian). The root question for the Court is simply this: can a Jewish faith school ever give preference to those who are members of the Jewish religion under Jewish law. I would answer: yes, it can. To hold the contrary would be to stigmatise Judaism as a directly racially discriminating religion. I would respectfully disagree with that conclusion. Indeed I would greatly regret it. On this issue of direct discrimination my views coincide entirely with those of Lord Rodger. I turn to the question of indirect discrimination. As already noted, it is obvious that JFSs policy involves those not recognised by the OCR as Jews being treated less favourably than those who are so recognised. It is rather less obvious, however, that this policy puts persons of the same race or ethnic or national origins as [M] at a particular disadvantage when compared with other persons and that it puts [M] at that disadvantage (section 1(1A)(a) and (b) of the 1976 Act). After all, as already observed, M is himself, although personally disadvantaged by the policy, a member of the very same ethnic group as the policy advantages. The view could, therefore, be taken that M is disadvantaged not by his ethnic origins but by his inability to satisfy the Orthodox religious test. Put that aside, however, and suppose that section 1(1A) is here engaged and that JFS must establish that its policy is a proportionate means of achieving a legitimate aim pursuant to section 1(1A)(c) as certainly they would need to do were this challenge brought, as theoretically it could have been, at the suit of a child in no way of Jewish ethnic origin. The legitimacy of JFSs aim is surely clear. Here is a designated faith school, understandably concerned to give preference to those children it recognises to be members of its religion, but so oversubscribed as to be unable to admit even all of these. The School Admissions Code expressly allows admission criteria based either on membership of a religion or on practice. JFS have chosen the former. Orthodox Jews regard education about the Jewish faith as a fundamental religious obligation. Unlike proselytising faiths, however, they believe that the duty to teach and learn applies only to members of the religion, because the obligations in question bind only them. JFSs purpose is to develop in those recognised by the OCR as Jewish an understanding and practice of the faith. The fact that many of those admitted do not practise the Jewish faith on their admission is intended and, indeed, welcomed. Such children are admitted and taught alongside children already committed to the Orthodox Jewish faith so as to enhance their level of religious knowledge and observance and in the hope and expectation that they may come to practise it. In short, to impose a religious practice test, besides being felt by many to be invasive, difficult to measure and open to abuse, would be contrary to the positive desire of schools like JFS to admit non observant as well as observant Jewish children. Ironically, moreover, to impose such a test would narrow, rather than widen, the character of the schools intake so as to make it appear more, rather than less, discriminatory. As the Court of Appeal itself noted (at para 44), those presently admitted come from a wide disparity of religious and cultural family backgrounds . even . from atheist or Catholic or Moslem families. Inevitably too, it would require the school to educate those not recognised as Jewish by Orthodox Jewish law at the expense of those who are. The Court of Appeals conclusion that the aim of JFSs admissions policy is illegitimate was based on its view that its purpose or inevitable effect is to make and enforce distinctions based on race or ethnicity (para 46), essentially a repetition of its earlier finding of direct race discrimination. In truth the Court of Appeal never addressed the questions of legitimate aim and proportionality on the assumption (the only basis on which indirect discrimination would fall to be considered) that the policy is not directly discriminatory. I turn finally, then, to the question of proportionality. Given JFSs legitimate aim of educating children recognised to be Jewish, is their policy of invariably giving preference to these children over those not so recognised a proportionate means of achieving that aim? Answering that question in the affirmative, Munby J, in the course of a lengthy, impressive and to my mind convincing judgment, said this: 200. Two quite separate considerations drive me to this conclusion. In the first place, the kind of admissions policy in question here is not, properly analysed, materially different from that which gives preference in admission to a Moslem school to those who were born Moslem or preference in admission to a Catholic school to those who have been baptised. But no one suggests that such policies, whatever their differential impact on different applicants, are other than a proportionate and lawful means of achieving a legitimate end. Why, [counsel] asks rhetorically, should it be any different in the case of Orthodox Jews? . I agree. Indeed, the point goes even wider than the two examples I have given for, as [counsel] submits, if Es case on this point is successful then it will probably render unlawful the admission arrangements in a very large number of faith schools of many different faiths and denominations. 201. The other point is that made both by the Schools Adjudicator and by [counsel for JFS]. Adopting some alternative admissions policy based on such factors as adherence or commitment to Judaism (even assuming that such a concept has any meaning for this purpose in Jewish religious law) would not be a means of achieving JFSs aims and objectives; on the contrary it would produce a different school ethos. If JFSs existing aims and objectives are legitimate, as they are, then a policy of giving preference to children who are Jewish applying Orthodox Jewish principles is, they say, necessary and proportionate indeed, as it seems to me, essential to achieve those aims . JFS exists as a school for Orthodox Jews. If it is to remain a school for Orthodox Jews it must retain its existing admissions policy; if it does not, it will cease to be a school for Orthodox Jews. Precisely. To this argument there is, and can be, no satisfactory answer. I find myself in full agreement with all of that. To ask why JFS should give preference to a Jewish child with little or no interest in Judaism whilst rejecting a committed child like M is to misunderstand the essential aim of an Orthodox Jewish school. This, as I have explained, is to fulfil its core religious duty: the education of members of its religion in the Orthodox faith, whether or not they practise it or will ever come to do so. It can no more be disproportionate to give priority to a Jewish child over that of a child, however sincere and committed, not recognised as Jewish than it would be to refuse to admit a boy to an oversubscribed all girls school. Whilst I respectfully agree with Lord Hopes judgment on the direct discrimination issue, I regretfully find myself differing from his conclusion on indirect discrimination. For my part I would have allowed JFSs appeal in its entirety. I understand Lord Hope to conclude that JFS have never addressed the question of proportionality and must now do so and devise a fresh policy allowing applications for admission by those not recognised as Jewish to be considered on an individual basis. Quite apart from the fact that this approach to my mind runs counter to the schools central aim, it seems to me fraught with difficulty. Quite how such a policy will be formulated and applied on a consistent basis is not easy to discern. That said, I regard it as altogether preferable to the new policy presently dictated by the Court of Appeals judgment: the imposition of a test for admission to an Orthodox Jewish school which is not Judaisms own test and which requires a focus (as Christianity does) on outward acts of religious practice and declarations of faith, ignoring whether the child is or is not Jewish as defined by Orthodox Jewish law. That outcome I could not contemplate with equanimity. On the United Synagogues costs appeal I agree entirely with Lord Hope. |
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